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 THE LIBRARY 
 
 OF 
 
 THE UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW
 
 CASES 
 
 ON 
 
 THE LAW OF TRUSTS 
 
 SELECTED FROM DECISIONS OF 
 
 ENGLISH AND AMERICAN COURTS 
 
 BY 
 
 THADDEUS DAVIS KENNESON 
 
 PROFESSOR OF LAW IN NEW YORK UNIVERSITY 
 
 AMERICAN CASEBOOK SERIES 
 JAMES BROWN SCOTT 
 
 GENERAL EDITOR 
 
 ST. PAUL 
 
 "WEST PUBLISHING COMPANY 
 1911
 
 In the notes, use has hcen made, by permission of the owners 
 of the copyright, of the notes in Ames' Cases on Trusts. 
 
 1911 
 
 Copyright, 1911 
 
 BY 
 
 WEST PUBLISHING COMPANY 
 (Ken.Tb.) 
 
 i i
 
 THE AMERICAN CASEBOOK 
 SERIES 
 
 For years past the science of law has been taught by lectures, the 
 use of text-books and more recently by the detailed study, in the 
 class-room, of selected cases. 
 
 Each method has its advocates, but it is generally agreed that the 
 lecture system should be discarded because in it the lecturer does 
 the work and the student is either a willing receptacle or offers a 
 passive resistance. It is not too much to say that the lecture system 
 is doomed. 
 
 Instruction by the means of text-books as a supplement or sub- 
 stitute for the formal lecture has made its formal entry into the educa- 
 tional world and obtains widely ; but the system is faulty and must pass 
 away as the exclusive means of studying and teaching law. It is an 
 improvement on the formal lecture in that the student works, but if it 
 cannot be said that he works to no purpose, it is a fact that he works 
 from the wrong end. The rule is learned without the reason, or both 
 rule and reason are stated in the abstract as the resultant rather than 
 as the process. If we forget the rule we cannot solve the problem ; if 
 we have learned to solve the problem it is a simple matter to formulate 
 a rule of our own. The text-book method may strengthen the mem- 
 ory ; it may not train the mind, nor does it necessarily strengthen it. 
 A text, if it be short, is at best a summary, and a summary presup- 
 poses previous knowledge. 
 
 If, however, law be considered as a science rather than a collection 
 of arbitrary rules and regulations, it follows that it should be studied 
 as a science. Thus to state the problem is to solve it ; the laboratory 
 method has displaced the lecture, and the text yields to the actual 
 experiment. The law reports are in more senses than one books of 
 experiments, and, by studying the actual case, the student co-operates 
 with the judge and works out the conclusion however complicated 
 the facts or the principles involved. A study of cases arranged his- 
 torically develops the knowledge of the law, and each case is seen to 
 be not an isolated fact but a necessary link in the chain of develop- 
 ment. The study of the case is clearly the most practical method, 
 for the student already does in his undergraduate days what he must 
 do all his life ; it is curiously the most theoretical and the most prac- 
 tical. For a discussion of the case in all its parts develops analysis, 
 the comparison of many cases establishes a general principle, and 
 
 (iii)
 
 IV PREFACE 
 
 the arrangement and classification of principles dealing with a sub- 
 ject make the law on that subject. 
 
 In this way TRAINING and knowledge, the means and the end of 
 legal study, go hand and hand. 
 
 The obvious advantages of the study of law by means of selected 
 cases make its universal adoption a mere question of time. 
 
 The only serious objections made to the case method are that it takes 
 too much time to give a student the requisite knowledge of the sub- 
 ject in this way and that the system loses sight of the difference be- 
 tween the preparation of the student and the lifelong training of the 
 lawyer. Many collections of cases seem open to these objections, 
 for they are so bulky that it is impossible to cover a particular sub- 
 ject with them in the time ordinarily allotted to it in the class. In 
 this way the student discusses only a part of a subject. His knowl- 
 edge is thorough as far as it goes, but it is incomplete and frag- 
 mentary. The knowledge of the subject as a whole is deliberately 
 sacrificed to training in a part of the subject. 
 
 It would seem axiomatic that the size of the casebook should cor- 
 respond in general to the amount of time at the disposal of instructor 
 and student. As the time element is, in most cases, a nonexpansive 
 quantity, it necessarily follows that, if only a half to two-thirds of the 
 cases in the present collections can be discussed in class, the pres- 
 ent casebooks are a third to a half too long. From a purely practical 
 and economic standpoint it is a mistake to ask students to pay for 
 1,200 pages when they can only use 600, and it must be remembered 
 that in many schools, and with many students in all schools, the mat- 
 ter of the cost of casebooks is important. Therefore, for purely 
 practical reasons, it is believed that there is a demand for casebooks 
 physically adapted and intended for use as a whole in the class-room. 
 
 But aside from this, as has been said, the existing plan sacrifices 
 knowledge to training. It is not denied that training is important, 
 nor that for a law student, considering the small amount of actual 
 knowledge the school can hope to give him in comparison with the 
 vast and daily growing body of the law, it is more important than 
 mere knowledge. It is, however, confidently asserted that knowledge 
 is, after all, not unimportant, and that, in the inevitable compromise 
 between training and knowledge, the present casebooks not only de- 
 vote too little attention relatively to the inculcation of knowledge, 
 but that they sacrifice unnecessarily knowledge to training. It is be- 
 lieved that a greater effort should be made to cover the general prin- 
 ciples of a given subject in the time allotted, even at the expense of 
 a considerable sacrifice of detail. But in this proposed readjustment 
 of the means to the end, the fundamental fact cannot be overlooked 
 that law is a developing science and that its present can only be un- 
 derstood through the medium of its past. It is recognized as im- 
 perative that a sufficient number of cases be given under each topic
 
 PREFACE V 
 
 treated to afford a basis for comparison and discrimination ; to show 
 the development of the law of the particular topic under discussion ; 
 and to afford the mental training for which the case system neces- 
 sarily stands. To take a familiar illustration: If it is proposed to 
 include in a casebook on Criminal Law one case on abortion, one on 
 libel, two on perjury, one on larceny from an office, and if in order to 
 do this it is necessary to limit the number of cases on specific intent to 
 such a degree as to leave too few on this topic to develop it fully 
 and to furnish the student with training, then the subjects of abor- 
 tion, libel, perjury, and larceny from an office should be wholly omit- 
 ted. The student must needs acquire an adequate knowledge of these 
 subjects, but the training already had in the underlying principles of 
 criminal law will render the acquisition of this knowledge compara- 
 tively easy. The exercise of a wise discretion would treat fundamen- 
 tals thoroughly : principle should not yield to detail. 
 
 Impressed by the excellence of the case system as a means of legal 
 education, but convinced that no satisfactory adjustment of the con- 
 flict between training and knowledge under existing time restrictions 
 has yet been found, the General Editor takes pleasure in announcing 
 a series of scholarly casebooks, prepared with special reference to 
 the needs and limitations of the class-room, on the fundamental sub- 
 jects of legal education, which, through a judicious rearrangement 
 of emphasis, shall provide adequate training combined with a thor- 
 ough knowledge of the general principles of the subject. The collec- 
 tion will develop the law historically and scientifically; English cases 
 will give the origin and development of the law in England ; Ameri- 
 can cases will trace its expansion and modification in America ; notes 
 and annotations will suggest phases omitted in the printed case. 
 Cumulative references will be avoided, for the footnote may not hope 
 to rival the digest. 
 
 The law will thus be presented as an organic growth, and the neces- 
 sary connection between the past and the present will be obvious. 
 
 The importance and difficulty of the subject as well as the time that 
 can properly be devoted to it will be carefully considered so that each 
 book may be completed within the time allotted to the particular sub- 
 ject. 
 
 It is equally obvious that some subjects are treated at too great 
 length, and that a less important subject demands briefer treatment. 
 A small book for a small subject. 
 
 In this way it will be alike possible for teacher and class to com- 
 plete each book instead of skimming it or neglecting whole sections ; 
 and more subjects may be elected by the student if presented in short- 
 er form based upon the relative importance of the subject and the 
 time allotted to its mastery. 
 
 Training and knowledge go hand in hand, and Training and Knowl- 
 edge are the keynotes of the series.
 
 Vl PKKFAi E 
 
 If it be granted that all, or nearly all, the studies required for ad- 
 mission to the bar should be studied in course by every student — and 
 the soundness of this contention can hardly be seriously doubted — it 
 follows necessarily that the preparation and publication of collections 
 of cases exactly adapted to the purpose would be a genuine and by 
 no means unimportant service to the cause of legal education. And 
 thi^ result can best he obtained by the preparation of a systematic 
 series of casebooks constructed upon a uniform plan under the super- 
 vision of an editor in chief. 
 
 For the basis of calculation the hour has been taken as the unit. The 
 General Editor's personal experience, supplemented by the experience 
 of others in the class-room, leads to the belief that approximately a 
 book of 400 pages may be covered by the average student in half a 
 year of two hours a week ; that a book of 600 pages may be discussed 
 in class in three hours for half a year; that a book of 800 pages may 
 be completed by the student in two hours a week throughout the year ; 
 and a class may reasonably hope to master a volume of 1,000 pages 
 in a year of three hours a week. The general rule will he subject to 
 some modifications in connection with particular topics on due con- 
 >ideration of their relative importance and difficulty, and the time 
 ordinarily allotted to them in the law school curriculum. 
 
 The following subjects are deemed essential in that a knowledge of 
 them (with the exception of International Law and General Juris- 
 prudence) is universally required for admission to the bar: 
 
 Administrative Law. Insurance. 
 
 Agency. International Law. 
 
 Bills and Notes. Jurisprudence. 
 
 Carriers. • Mortgages. 
 
 Contracts. Partnership. 
 
 Corporations. Personal Property, including 
 
 Constitutional Law. the Law of Bailment. 
 
 Criminal Law. -r> , -n i m Year. 
 
 _ . . , _, . Real Propertv. 1 2d 
 
 Criminal Procedure. " ( 3d 
 
 Common-Law Pleading. Public Corporations. 
 
 Conflict of Laws. Quasi Contracts. 
 
 Code Pleading. Sales. 
 
 Damages. Suretyship. 
 
 Domestic Relations. Torts. 
 
 Equity. Trusts. 
 
 Equity Pleading. Wills and Administration. 
 
 Evidence. 
 
 International Law is included in the list of essentials from its in- 
 trinsic importance in our system of law. As its principles are simple 
 in comparison with municipal law, as their application is less technical.
 
 PREFACE V" 
 
 and as the cases are generally interesting, it is thought that the book 
 may be larger than otherwise would be the case. 
 
 As an introduction to the series a book of Selections on General 
 Jurisprudence of about 500 pages is deemed essential to completeness. 
 
 The preparation of the casebooks has been intrusted to experienced 
 and well-known teachers of the various subjects included, so that the 
 experience of the class-room and the needs of the students will fur- 
 nish a sound basis of selection. 
 
 While a further list is contemplated of usual but relatively less im- 
 portant subjects as tested by the requirements for admission to the 
 bar, no announcement of them is made at present. 
 
 The following gentlemen of standing and repute in the profession 
 are at present actively engaged in the preparation of the various case- 
 books on the indicated subjects: 
 
 George W. Kirchwey, Dean of the Columbia University, School of 
 Law. Subject, Real Property. 
 
 Nathan Abbott, Professor of Law. Columbia University. (Formerly 
 Dean of the Stanford University Law School.) Subject, Per- 
 sonal Property. 
 
 Frank Irvine, Dean of the Cornell University School of Law. Sub- 
 ject, Evidence. 
 
 Harry S. Richards, Dean of the University of Wisconsin School of 
 Law. Subject, Corporations. 
 
 James Parker Hall, Dean of the University of Chicago School of Law. 
 Subject, Constitutional Lazv. 
 
 William R. Vance, Dean of the George Washington University Law 
 School. Subject, Insurance. 
 
 Charles M. Hepburn, Professor of Law, University of Indiana. Sub- 
 ject, Torts. 
 
 William E. Mikell, Professor of Law, University of Pennsylvania. 
 Subjects, Criminal Law and Criminal Procedure. 
 
 George P. Costigan, Jr., Professor of Law, Northwestern University 
 Law School. Subject, Wills and Administration. 
 
 Floyd R. Mechem, Professor of Law, Chicago University. Subject, 
 Damages. (Co-author with Barry Gilbert.) 
 
 Barry Gilbert, Professor of Law, University of Illinois. Subject, 
 Damages. (Co-author with Floyd R. Mechem.) 
 
 Thaddeus D. Kenneson, Professor of Law, University of New York. 
 Subject, Trusts. 
 
 Charles Thaddeus Terry, Professor of Law, Columbia University. 
 Subject, Contracts.
 
 viii PREFACE 
 
 Albert M. Kales, Professor of Law, Northwestern University. Sub- 
 ject, Persons. 
 
 Edwin C. Goddard, Professor of Law, University of Michigan. Sub- 
 ject, Agency. 
 ird L. Smith, Professor of Law, University of Wisconsin. Sub- 
 ject, Bills and Notes. (Co-author with Wm. Underhill Moore.) 
 
 Wm. Underhill Moore, Professor of Law, University of Wisconsin. 
 Subject, Bills and Notes. (Co-author with Howard L. Smith.) 
 
 Edward S. Thurston, Professor of Law, George Washington Univer- 
 sity. Subject, Quasi Contracts. 
 
 Crawford D. Hening, Professor of Law, University of Pennsylvania. 
 Subject, Suretyship. 
 
 Clarke B. Whittier, Professor of Law, University of Chicago. Sub- 
 ject, Pleading. 
 
 Eugene A. Gilmore, Professor of Law, University of Wisconsin. 
 Subject, Partnership. 
 
 Ernst Freund, Professor of Law, University of Chicago. Subject, 
 
 A dm ini strati: e Law. 
 Frederick Green, Professor of Law, University of Illinois. Subject, 
 
 Carriers. 
 
 Ernest G. Lorenzen, Professor of Law, George Washington Univer- 
 sity. Subject, Conflict of Lazvs. 
 
 Frederic C. Woodward, Dean of the Stanford University Law School. 
 Subject, Sales. 
 
 James Brown Scott, Professor of Law, George Washington Univer- 
 sity ; formerly Professor of Law, Columbia University, New 
 York City. Subjects, International Law ; General Jurisprudence; 
 Equity. 
 
 James Brown Scott, 
 Washington, D. C., September, 1911. General Editor. 
 
 Following are the books of the Series now published, or in press: 
 
 Administrative Law Partnership 
 
 Bills and Notes Persons 
 
 Carriers Pleading 
 
 Conflict of Laws Suretyship 
 
 Criminal Law Trusts 
 
 Criminal Procedure Wills and Administration 
 
 Damages
 
 PREFACE 
 
 In some cases the statement of facts has been wholly omitted, in oth- 
 ers abbreviated by omissions, and in still others entirely rewritten. 
 With few exceptions the arguments of counsel have been omitted. 
 Many of the opinions have been abbreviated by omissions, but in no 
 instance has the original language been changed. The author wishes 
 to acknowledge his great indebtedness to James Barr Ames, late Dean 
 of the Harvard Law School, in whose death all legal scholars must 
 feel an irreparable loss. 
 
 Thaddeus D. Kenneson. 
 October 1, 1911. 
 
 (ix)*
 
 TABLE OF CONTENTS 
 
 CHAPTER I 
 
 The Nature and Requisites of Tkusts 
 
 Section Pag ! ! 
 
 1. The Essentials of Every Trust 
 
 2. The Creation of Trusts \ 
 
 3. The Language Necessary to the < Jreation of a Trust 16 
 
 4. Consideration ~ 
 
 5. The Subject-Matter of a Trust £* 
 
 6. The Cestui que Trust ' ' 
 
 7. The Trustee *£ 
 
 8. Notice to the Cestui que Trust ^1 
 
 9. The Statute of Frauds •*_ 
 
 10. The Statute of Wills J" ' 
 
 11. Revocability of Trusts 11U 
 
 CHAPTER II 
 The Nature of the Cestui que Trust's Interest 
 
 1. His Claim is Purely Equitable, so Long as the Relation of Trustee 
 
 and Cestui que Trust Exists HI 
 
 2. Cestui que Trust is a Claimant Against the Trustee Personally, Not 
 
 Against the Trust Res 116 
 
 I. His Claim is Enforceable Wherever the Trustee may be, 
 
 Without Respect to the Situs of the Trust Res 116 
 
 II. Cestui que Trust has No Remedies, Legal or Equitable. Di- 
 rectly Against a Stranger 119 
 
 III. A Cestui que Trust of an Obligation Cannot Discharge the 
 
 Obligor I 34 
 
 IV. When Cestui que Trust" s Equitable Interest may be Forfeited 
 
 by Inaction or Laches of the Trustee Causing a Forfeiture 
 
 of the Trustee's Legal Interest 1-10 
 
 V. The Owner of the Legal Title. Not of the Equitable Interest 
 —that is, the Trustee, Not the Cestui que Trust— can Vote 
 
 as Owner of Trust Res I 46 
 
 VI. The Trustee. Not the Cestui que Trust, has the Burdens of 
 
 Ownership 14" 
 
 CHAPTER III 
 Transfer of the Respective Interests of Trustee and Cestui que Trust 
 
 1. By Act of the Party J53 
 
 I. By Act of the Trustee ' •'•_' 
 
 II. By Act of the Cestui que Trust 1* :> 
 
 2. By Death -,['] 
 
 I. Death of Trustee , -'. '. 
 
 II. Death of Cestui que Trust 206 
 
 3. By Forfeiture ^iq 
 
 4. By Disseisin 
 
 Ken.Tr. (xi)
 
 Xll TABLE OF CONTENTS 
 
 Section Page 
 
 5. By Marriage 223 
 
 I. Marriage of the Trustee 223 
 
 II. Marriage of the Cestui que Trusi Rights of Wife 224 
 
 III. Marriage of Cestui que Trust — Rights of Husband 227 
 
 6. By Bankruptcy 230 
 
 I. Bankruptcy of the Trustee 236 
 
 1 1. Bankruptcy of the Cestui que Trust 237 
 
 7. By Act of Creditors 260 
 
 1. < Ireditors of Trustee 200 
 
 II. Creditors of the Cestui que Trust 309 
 
 CHAPTER IV 
 Extinguishment of a Tbust 329 
 
 CHAPTER V 
 
 The Duties of a Trustee 
 
 1. To Convey the Trust Res as the Cestui que Trust may Direct 335 
 
 2. Trustee's Duty to Put Cestui que Trust in Possession of the Trust 
 
 Estate 359 
 
 ::. The Trustee's Duty to Give Information ;is to the Trust Estate.... 369 
 
 4. The Trustee's Duties of Management of the Trust Estate :17»'> 
 
 I. The Trustee's Duty to Take the Steps Necessary to Secure 
 
 the Trust Estate 376 
 
 II. The Trusree's Duty to Convert into Money so Much of the 
 
 Trust Estate as is Not in a Proper State of Investment.. ■>'- ) 
 
 III. The Trustee's Duty to invest the Trust Funds 417 
 
 IT. Consequences of Failure of the Trustee Properly to Invest 
 
 the Trust Estate 454 
 
 5. The Trustee's Duty :is to the Custody of the Trust Estate 463 
 
 6. Who may Execute a Trust 472 
 
 CHAPTER VI 
 
 Constructive Trusts and Equitable Liens— Tracing Property 
 Wrongfully Appropriated into Its Substitute 513 
 
 CHAPTER VII 
 Constructive Trusts and the Statute of Frauds 577 
 
 CHAPTER VIII 
 Trusts and titr Statute of Limitations 602
 
 TABLE OF CASES 
 
 [CASES cited in footnotes ABE indicated by italics. WHERE SMALL CAT! rALS 
 ARE USED, THE CASE IS REFERRED TO IN THE TEXT] 
 
 Page 
 
 Adams v. Taunton 472 
 
 Aldrich v. Aldrich 16 
 
 Alger v. Scott 74 
 
 American Sugar Refining Co. v. 
 
 Fancher 530 
 
 Anonymous 9, 24, 203, 4S4 
 
 Arguello, In re 426 
 
 Ash v. Gallon 38 
 
 Aston v. Smallman 207 
 
 Attorney General v. Duke of 
 
 Leeds 204 
 
 Attorney General v. Launderfield 91 
 
 Baker v. Disbrow 
 
 Bartlett v. Bartlett 
 
 Barton v. Briscoe 
 
 Bath Sav. Inst. v. llathorn 
 
 Bayley v. Rlansell 
 
 Beach v. Beach 
 
 Beard v. Beard 
 
 Belchier, Ex parte 
 
 Bennet v. Box 
 
 Bill v. Cureton 
 
 Bingham v. Goshen Nat. Bank... 
 
 Blauvelt's Estate, In re 
 
 Bohle v. Hasselbroch 
 
 Bonesteel v. Bonesteel 
 
 Bostock v. Floyer 
 
 Boustead v. Cooper 
 
 Bovey v. Smith 155. 
 
 Boyle v. Boyle 
 
 Bradley v. I [ughes 
 
 Breton v. Wooll ven 
 
 Breton's Estate, In re 
 
 Brickenkamp v. Rees 
 
 Bristow v. Pegge 
 
 Brogden, In re 
 
 Brook v. Brook 
 
 Brown v. Gellatly 
 
 Brown v. J I iggs 
 
 Brown v. Pierce 
 
 Bullock, In re 
 
 Burchard v. Hubbard 
 
 Burchett v. Durdant 
 
 Burgess v. Wheate 
 
 Burt v. Bowles , 
 
 Busk v. Aldam 
 
 461 
 206 
 239 
 
 97 
 4S3 
 114 
 
 64 
 4S7 
 309 
 110 
 158 
 43:; 
 522 
 539 
 489 
 406 
 514 
 
 84 
 234 
 
 66 
 
 66 
 485 
 120 
 3S4 
 
 92 
 404 
 
 21 
 274 
 256 
 176 
 
 39 
 210 
 577 
 353 
 
 Page 
 
 Callard v. Oallard 32 
 
 Campbell \\ Dearborn Gt» L 
 
 Campbell v. Drake 524 
 
 Caney v. Bond 383 
 
 Cann v. Cann 425 
 
 Carpenter v. Carpenter 4D7 
 
 Carritt v. Real & Personal Ad- 
 vance Co 172 
 
 Cathorpe, Ex parte 431 
 
 Ceames v. Irving 113 
 
 Chaplin v. Chaplin 225 
 
 ( 'hay tor, In re 40.1 
 
 Christy v. Courtenay 326 
 
 Chudleigh's Case 205 
 
 City of Baltimore v. Stirling 1.">1 
 
 Clack v. Holland 306 
 
 Claflin v. Claflin 34 1 
 
 Claussen v. La Franz 229 
 
 Clayton v. Rose 142 
 
 Clopton v. Gholson 2s."» 
 
 Clough v. Clough 53 
 
 Colburn v. Broughton 220 
 
 ('"It v. Colt 224 
 
 con tec v. Lyons 11!) 
 
 Cook v. Gregson 324 
 
 Cooke v. Crawford 179 
 
 Cooper v. Day 383 
 
 Cooper-Dean v. Stevens 82 
 
 ( 'ornwell v. Deck 164 
 
 Cotton v. Cotton 134 
 
 Cox v. Walker 119 
 
 Cox v. Williams 364 
 
 Cox's Creditors, Case of 323 
 
 Creed v. Colville 312 
 
 Creveling v. Fritts 15"> 
 
 Cross v. Sprigg 42 
 
 Curran v. Green 93 
 
 Da Hey v. New Haven 90 
 
 Davis, Appeal of 443 
 
 Davis v. Charles River Branch R. 
 
 Co 122 
 
 Daw v. Newborough 39 
 
 Jhurkins r. Penrhyn 
 
 Dean, In re 82 
 
 Dearie v. Hall 185 
 
 Denike v. Harris 428 
 
 Ken.Tr. 
 
 (xiii)
 
 XIV 
 
 TABLE OF CASKS 
 
 I Abbs v. Goren 
 
 I rickerson v. Mays 
 
 I dllam v. Praia 
 
 1 >iln>w v. Bone 
 
 i times v. Scott 
 
 I >ixon v. < laldwell 
 
 I >i\<>n v. Harrison 
 
 Dixon \ . Hill 
 
 Dodds v. Hills 
 
 1 ex (i. mil Bristow v. Pegge. . . . 
 
 1 >uiiy \ . Sherratl 
 
 1 iiiwd v. Tucker 
 
 I lowse v. Gorton 
 
 Drovers' & Mechanics' Nat. Bank 
 
 v. Roller 
 
 i ►ubost, Ex parte 
 
 Dueber Watch Case Mfg. Co. V. 
 
 Daugherty 
 
 I iinulas v. Dutens 
 
 Dyson v. Simmons 
 
 Pag« 
 
 l'.is 
 1 I 
 
 219 
 
 400 
 55 I 
 
 :;s 
 ir,7 
 It is 
 120 
 473 
 
 L3 
 302 
 
 Page 
 
 Grayburn v. Clarkson 395 
 
 Gutman v. Buckler 476 
 
 571 
 39 
 
 L65 
 327 
 267 
 
 Earl of Worcester v. Finch 219 
 
 Edwards v. Edwards 413 
 
 Edwards v. Jones 59 
 
 Eldridge v. Turner i v -- 
 
 Elford, in re 236 
 
 Ellison v. Ellison 47 
 
 Evangelical Synod of North Amer- 
 ica v. Schoeneicb 567 
 
 Everet t v. I >rew 281 
 
 I [aigb v. Kaye 
 
 Hall, Mailer of 
 
 Hail. mi's Estate, in re 
 
 I [arden v. Parsons 
 
 I [arding v. < Uyn 
 
 Hardin's Ex'rs v. Harrington. .. 
 
 Harney v. First Nat. Bank 
 
 I [arris v. < la [nes 
 
 Harrison v. Forth 
 
 Harvard College v. Ainory 
 
 Hal ion v. .May 
 
 Hayes v. < (alley 
 
 I lead v. Lord Teynhani 
 
 Hemming v. Neil L91 
 
 lle\t v. Porcher 
 
 Mix v. Attorney General 
 
 Holmes v. Dring 
 
 Holroyd V. Marshall 
 
 HopgOOd v. Parkin 
 
 1 [ornsby v. Leo 
 
 I [orsley v. Fawcett 
 
 Hosk in's Trusts. In re 
 
 Howe v. Earl of Dartmouth.... 
 
 Hughes v. Empson 
 
 Hulme v. Hulme 
 
 Humphreys v. Bui ler 
 
 Fairchild v. Rasdall 
 
 Fant v. Dunbar 
 
 Fearn v. Mayers 
 
 F( U 1/ r. Hooper 
 
 Ferrars v. < Jherry 
 
 Festorazzi v. St. Joseph's Catholic 
 
 < Jhurch of Mobile 
 
 Field v. Field 
 
 Fletcher v. Fletcher 
 
 Fletcher v. Fletcher 
 
 I Mid v. Batley 
 
 Foster v. Cockerell 
 
 Frampton v. Gerrard 
 
 Frankenfield, Appeal of 
 
 Freedman's Savings & Trust Co. 
 
 v. Earle 
 
 5S4 
 520 
 288 
 118 
 513 
 
 87 
 
 470 
 
 (;«) 
 
 77 
 
 346 
 
 L88 
 
 Jack's Appeal 
 
 Jackson v. Hobhouse 
 
 Jackson V. Stevens 
 
 Jacob v. Lucas 
 
 Jefferys v. Jefferys 
 
 Jenkins Century Cases. 244, Case 
 
 XXX. 1580 
 
 Barnes' Adm'r 
 
 In re 
 
 Jones 
 
 420 
 313 
 
 Garland, Ex parte 
 
 ( tarnish V. Went worth 
 
 < Jell v. Vermedun 
 
 i rennys, Ex parte 
 
 aimer's Legatees v. Gilnn 
 
 Ex'rs 
 
 Good v. Lickorisb 
 
 Goodson v. Ellisson 
 
 Gorton, In re 
 
 Goshen Nat Bank v. Bingham. 
 
 i rosling v. Gosling 
 
 Gott v. Nairne 
 
 Graves v. Dolphin 
 
 292 
 
 21 
 
 202 
 
 236 
 
 7! i 
 256 
 336 
 :wi 
 L58 
 342 
 
 79 
 24* 
 
 Jewell V 
 Johnson. 
 Jones v. 
 Jones r. Locke 
 Jones V. Morlev 
 Jones v. 
 Josselyn 
 
 Powles .... 
 
 v. Josselyn. 
 
 5M 
 I 15 
 .-).->7 
 -117 
 20 
 157 
 27 s 
 270 
 155 
 445 
 348 
 352 
 341 
 255 
 380 
 203 
 419 
 270 
 490 
 032 
 
 130 
 353 
 3X9 
 3,93 
 484 
 537 
 
 433 
 237 
 115 
 
 376 
 47 
 
 30 
 
 74 
 
 296 
 
 188 
 
 42 
 
 22 
 
 161 
 
 341 
 
 Kane v. Bloodgood 002 
 
 King v. Boys 94 
 
 King v. sir John Daccombe's 
 
 20S 
 
 King v. Talbot 437 
 
 King's Attorney v. Sir George 
 
 Sands 208 
 
 King ,V Co. v. Hill 121 
 
 Kinmontn v. Brigham 396 
 
 Finland v. Finland r>43 
 
 Knatehbull v. Hallett ",57 
 
 Fane v. Dighton 9 
 
 l.ashniar. In re 358 
 
 Law's Estate, Iu re 421 
 
 Ledbetter v. Anderson 321
 
 TABLE OF CASES 
 
 XV 
 
 Pago 
 
 Lee v. Wilson 371 
 
 Lichfield v. Baker 395 
 
 Lloyd v. Lloiid 79 
 
 Lord Compton's Case 219 
 
 Lord Grey v. Colvile Oil 
 
 Loring v. Hildreth 9(5 
 
 Loud v. Winchester 370 
 
 Low v. Bouverie 369 
 
 Lowther v. CSarlton 513 
 
 Lucan, In re 74 
 
 McCinin r. Randall L19 
 
 M< Knight v. McKnight 466 
 
 Martin v. Funk 5 
 
 Mason v. Mason 140 
 
 Massey v. Fisher 564 
 
 Massie v. Watts 116 
 
 Mast & Co. v. Henry 541 
 
 Matthews v. Thompson -".02 
 
 Mayer v. Mordecai 137 
 
 Megod's Case Ill 
 
 Mercantile Trust Co. v. St. Louis 
 
 & S. F. R. Co 561 
 
 Meux v. Bell 188 
 
 Mews v. Mews 65 
 
 Miller v. Lerch Ill 
 
 Mitchell's Case 147 
 
 Moody v. Pent old 358 
 
 Moore v. Jervis 179 
 
 Moore v. Metropolitan Nat. Bank 169 
 
 Morgan v. Kansas Pac. R. Co.... 128 
 
 Morgan v. Morgan 227 
 
 Morice v. Bishop of Durham 77 
 
 Morley v. Morley 463 
 
 Morris v. Murphey & Co 142 
 
 Morris v. Wallace 451 
 
 Mortimer v. Ireland 478 
 
 Morton, In re 4S2 
 
 Meyer v. Hinman 270 
 
 Mussett v. Bingle 79 
 
 Xash v. Preston 223 
 
 Neil, In re 197, 255 
 
 Nevil v. Saunders 36 
 
 Newton v. Porter 526 
 
 Wichols v. Eaton 200 
 
 Nims v. Ford 1 25 
 
 Noel v. Jevon 224 
 
 Norbury v. Norbury 431 
 
 North v. Champornoon 185 
 
 North Shore Staten Island Ferry , 
 
 Co.. In re 140 
 
 Norton v. Phelps 290 
 
 Norwegian Charcoal Iron Co., In 
 
 re 147 
 
 O'Brien v. Jackson 282 
 
 Offly v. Warde 134 
 
 Ogle. Ex parte 387 
 
 Oliver, In re 410 
 
 O'Malley v. Gerth 150 
 
 Page 
 
 Onslow v. Wallis 355 
 
 Osborne to Roiclctt I s " 
 
 Ownes v. Ownes 91 
 
 Pale v. Michell 231 
 
 Parker v. Johnson I s " 
 
 Parrott, In re 93 
 
 Parsons, Ex parte 187 
 
 Partington, lure 199 
 
 Partington v. Allen 199 
 
 Pawlett v. Attorney General 216 
 
 Pearson v. Amicable Assur. Office 57 
 
 /'carson v. Lane 336 
 
 People v. Townsend 153 
 
 Phillips v. Phillips 18, L93 
 
 Pilling, In re 387 
 
 Pinkett v. Wright 179 
 
 Porter v. Woodruff 4:;.". 
 
 Postlethwaite, In re 37:; 
 
 Postlethwaite v. Rickman 07-". 
 
 Prat v. Colt 310 
 
 President and Fellows of Vale 
 
 College 90 
 
 Priest v. Uppleby 432 
 
 Putnam v. Story 188 
 
 Pye, Ex parte 39 
 
 Reichenbach v. Quin 86 
 
 Rice v. Burnett 35 
 
 Rickman, In re 370 
 
 Robes v. Bent 154 
 
 Robinson v. Robinson 454 
 
 Rogers v. Eagle Fire Ins. Co. of 
 
 New York 24 
 
 Rose v. Hatch 1 
 
 Ross v. Duncan 88 
 
 Salmon, In re 432 
 
 Sambach v. Dalston 3S 
 
 Saunders v. Dehew 158 
 
 Scale* V. Maude 42 
 
 Schultz's Appeal 107 
 
 Scott v. Scholey 323 
 
 Selby v. Alston 329 
 
 Shaler v. Trowbridge 514 
 
 Sharington v. Strotton 25 
 
 Sharpe v. Earl of Scarborough... 324 
 
 Shearman v. Robinson 290 
 
 Sir Charles Cox's Creditors, Case 
 
 of 323 
 
 Shinning v. Style 63 
 
 Smith, Ex parte 387 
 
 Smith v. Smith 204 
 
 Smith v. Snow 331 
 
 Smith & Son v. Towers 24!) 
 
 Spaulding v. Kemlrick 183 
 
 Speakman v. Tatem 385 
 
 Speight v. Gaunt 49 I 
 
 Stearns v. Palmer 119 
 
 Stephens Case 2" 
 
 Stephens v. Bally 200
 
 XVI 
 
 TABLE OF CASES 
 
 Page 
 
 strirart, Matter of 15] 
 
 siith v. Lookabill 2G0, 262 
 
 Stokes r. ('furl: 347 
 
 Stone v. Hackett 56 
 
 Straubenzee, in re 40G 
 
 Strickland v. Siimons 289 
 
 Swale v. Swale 474 
 
 Symson v. Turner 38 
 
 Taylor v. Haygarth 213 
 
 Taylor v. Huber's Ex'rs 33S 
 
 Taylor v. Taylor 362 
 
 Taylor v. Vale L':; 
 
 Thomassen v. Van Wyngaarden. . . 135 
 
 Thompson v. Thompson 332 
 
 Tidd v. Lister 359 
 
 Tierney v. "Wood 102 
 
 Tillott, In re :;71 
 
 Titley v. Wolstenholme 481 
 
 Tourville v. Naish 156 
 
 Truesdell v. Bourke 550 
 
 Tudor v. Samyne 231 
 
 Tullett v. Armstrong 241 
 
 Tynan v. Warren 105 
 
 Tyrrel's Case 37 
 
 Uruguay Cent. & II. R. Co. of 
 Monte Video, In re 123 
 
 Varner's Appeal 95 
 
 Voyle v. Hughes 49 
 
 Wadd v. Hazelton 61 
 
 Wadsworth, In re 473 
 
 Walker v. Crews 54 
 
 Page 
 
 Walker v. Symonds 41 s 
 
 Want r. Campian 433 
 
 Ward v. Kitchen 448 
 
 Warner v. Bates l 
 
 Watkins v. l/olman 118 
 
 Watson v. Thompson 517 
 
 Walts v. Ball 225 
 
 Wati.s v. Turner 335 
 
 Webb v. Jonas 432 
 
 West v. Wyl lies 300 
 
 Western It. Co. v. Nolan 120 
 
 Weston v. Danvers 202 
 
 Wheatley v. Purr 41 
 
 Wheeler v. Kirtland 543 
 
 While v. White 484 
 
 White v. Wilson 27*7 
 
 Wigg v. Wigg 156 
 
 Wilkins v. Sibley 199 
 
 Williams v. Ingersoll 18S 
 
 Wilmot v. Pike 190 
 
 Wilson v. Oliver 410 
 
 Wiltshire v. Rabbits 190 
 
 Woodman v. Morrel 9 
 
 Woodruff v. Woodruff 95 
 
 Woods, In re 405 
 
 Worrall r. Harford 289 
 
 Wright v. Bates 11 
 
 Wytham v. Waterhouse 231 
 
 Wythes, In re 366 
 
 Year Book 15 Hen. \TI, fol. 12, pi. 
 
 23 no 
 
 Tear Book 27 Hen. VIII, foi. 8, 
 
 pi. 22 22 
 
 Zimmerman v. Kinkle 132
 
 CASES ON THE LAW OF 
 TRUSTS. 
 
 CHAPTER I. 
 THE NATURE AND REQUISITES OF TRUSTS. 
 
 SECTION 1.— THE ESSENTIALS OF EVERY TRUST. 
 
 To constitute a valid trust three things are necessary, viz. : A trus- 
 tee, ^another person, the beneficianyiand property, and without each 
 of the three a trust cannot exist. — Earl, J., in ROSE v. HATCH 
 (1891) 125 N. Y. 427, 431, 432, 26 N. E. 467. 
 
 SECTION 2.— THE CREATION OF TRUSTS. 1 
 
 WARNER v. BATES. 
 
 (Supreme Judicial Court of Massachusetts, 18G7. OS Mass. 274.) 
 
 Bill in equity filed September 4, 1865, by a son of Sarah I. Bates, 
 deceased, seeking a decree to enforce performance by the respondent, 
 his stepfather, of a trust created by her will. 
 
 1 A trust is what Dean Langdell in 1 Harvard Law Review, 50, 65-70, has 
 described as an "equitable personal obligation." The creation of every trust 
 is the creation of an obligation and a right. The obligation is imposed upon 
 the trustee in favor of the cestui que trust in respect of the trust res. The 
 right is vested in the cestui que trust and enables him to enforce the obliga- 
 tion so imposed upon the trustee. Every equitable obligation like every legal 
 obligation is created by the state and enforced by its judicial tribunals. It 
 may be said with sufficient accuracy that every trust is created by equity it- 
 self and enforced by a court of equity. In creating some trusts the object of 
 equity seems to be to effect the actual or presumed intention of the parties. 
 In creating other trusts the object of equity seems to be to effect what it con 
 siders justice without regard to the intention of the parties. The cases un 
 der this subdivision are intended to enforce this distinction. 
 Kex.Tu.— 1
 
 2 THE NATURE AND REQUISITES OF TRUSTS. (Cll. 1 
 
 The bill alleged that on December 12, 1833, the deceased, a widow, 
 having a daughter and two sons, of whom complainant was one, and 
 owning property to the amount of more than one hundred thousand 
 dollars, was married to respondent and her property secured by a set- 
 tlement from any marital right or claim which otherwise he might 
 have thereto: that thereafter, until her death on May 17, 1859, she 
 and respondent, with these children, and with another daughter, the 
 issue of this marriage, lived together as one family in her house, 
 where she and her children had formerly resided ; that the expenses 
 of maintaining the family in a liberal style suitable to their circum- 
 stances were defrayed chiefly from the income of her property, the 
 respondent having but little property of his own, but acting as the 
 head of the family, having the general care thereof, and managing 
 the funds for its maintenance ; and that she left a will of which she 
 named the respondent sole executor, and an estate of which there 
 was a large residue after paying her debts. 
 
 The will was set forth in the bill and disposed of the estate during 
 respondent's life as follows: 
 
 "I give and bequeath unto my husband, George Bates aforesaid, 
 the use, income and improvement of all the estate, real, personal and 
 mixed, of which I shall die seized and possessed, for and during 
 the term of his natural life, in the full confidence that upon my de- 
 cease he will, as he has heretofore done, continue to give and afford 
 my children'' [enumerating them], "such protection, comfort and 
 support as they or either of them may stand in need of." 
 
 Upon the respondent's death, it gave one-half of the estate to com- 
 plainant and his brother; and the other half to three persons upon 
 certain trusts for the two daughters. 
 
 The bill further alleged that, after the death of testatrix, respond- 
 ent took possession of the estate ; that complainant with his brother 
 and unmarried sister continued to reside in the house as before, and 
 to receive from the respondent, without payment or charge therefor, 
 the benefits and privileges which children of their condition usually 
 receive in their own families, until, on or about April 1, 18G3, re- 
 spondent, in complainant's absence, removed complainant's effects 
 from the house, and ever since forbade and prevented him from com- 
 ing into it, and neglected and refused to give him the said benefits 
 and privileges which he had before enjoyed, or make him any reason- 
 able compensation instead thereof. The bill then alleged his means 
 of support and that they were wholly inadequate thereto; that he 
 stood in need of such support as he had been accustomed to receive 
 in his -mother's lifetime; and that the respondent, though well aware 
 thereof and often requested therefor, refused to give it. Respondent 
 filed a general demurrer and the case was reserved by Chapman, J., 
 for the consideration of the full court. 
 
 Bigklow, C. J. We see no sufficient ground for calling in ques- 
 tion the wisdom or policy of the rule of construction uniformly ap-
 
 Sec. 2) THE CREATION OF TRUSTS. 3 
 
 plied to wills in the courts in England and in most of the United 
 States, that words of entreaty, recommendation or wish, addressed by 
 a testat or to a devisee or legatee, will make him a trustee for the 
 person or persons in whose favor such expressions are used, provid- 
 ed testator has pointed out with clearness and certainty the objects 
 of the trust, and the subject matter on which it is to attach or from 
 which it is to arise and be administered. The criticisms whirl) have 
 been sometimes applied to this rule by text writers and in judicial 
 opinions will be found to rest mainly on its applications in particu- 
 lar cases, and not to involve a doubt of the correctness of the rule it- 
 self as a sound principle of construction. Indeed, we cannot under- 
 stand the force or validity of the objections urged against it, if care 
 is taken to keep it in subordination to the primary and cardinal rule 
 that the intent of the testator is to govern, and to apply it only where 
 the creation of a trust will clearly subserve that intent. It may some- 
 times be difficult to gather that intent, and there is always a tendency 
 to construe words as obligatory in furtherance of a result which ac- 
 cords with a plain moral duty on the part of a devisee or legatee, and 
 with what it may be supposed the testator would do if he could con- 
 trol his action. But difficulties of this nature, which are inherent 
 in the subject matter, can always be readily overcome by bearing in 
 mind and rigidly applying in all such cases the test, that to create a 
 trust it must clearly appear that the testator intended to govern and 
 control the conduct of the party to whom the language of the will 
 is addressed, and did not design it as an expression or indication 
 of that which the testator thought would be a reasonable exercise of 
 the discretion which he intended to repose in the legatee or devisee. 
 If the objects of the supposed trust are certain and definite; if the 
 property to which it is to attach is clearly pointed out; if the 
 relations and situation of the testator and the supposed cestuis que 
 trust are such as to indicate a strong intent and motive on the part 
 of the testator in making them partakers of his bounty; and above 
 all, if the recommendatory or precatory clause is so expressed as to 
 warrant the inference that it was designed to be peremptory on the 
 donee; the just and reasonable interpretation is, that a trust is creat- 
 ed, which is obligatory and can be enforced in equity as against the 
 trustee by those in whose behalf the beneficial use of the gift was in- 
 tended. [Authorities cited.] 
 
 Turning now to the clause of the will which is the subject of the 
 present controversy, it seems to us that it does not leave the sup- 
 port of the children of the testatrix to the discretion of the re- 
 spondent, to be afforded or withheld at his pleasure, but that the 
 devise to him was made on the trust that he should furnish such 
 support so long as he lived and received the income of her property. 
 The objects of the trust are distinctly named. The nature and ex- 
 tent of the trust is clearly stated and defined. It was such a sum of 
 money as might be necessary to the comfort and support of each
 
 4 THE NATURE A\l» REQUISITES OF TRUSTS. (Cll. 1 
 
 one of the children of the testatrix. Xor is the amount of the bcne- 
 ficial interest left indefinite or without a standard by which it can he 
 measured. It is to he such comfort and support "as they or either 
 of them may stand in need of." The extent of such a beneficial inter- 
 est can be ascertained and enforced by suitable proceedings either 
 at law or in equity. Thorp v. Owen, 5 Hare, 607, 610. Sanderson's 
 Trust, 3 Kay & Johns. 497- 507. Parwell v. Jacobs, 4 Mass. 634. In 
 the last case, it was held by this court that an action at law would 
 lie against an executor who was directed by the testator to furnish 
 support to a person in whose behalf the suit was brought. But in 
 the present case, the phrase "comfort and support" is made more 
 definite and certain by an express reference in the terms of the gift 
 to the continuance of a previously existing state of things in the fam- 
 ily of the testatrix and her husband, in which the children of the 
 former had resided and received support during her life. Nor is 
 it to be overlooked that the language addressed to the respondent in 
 the clause of the will under consideration is not confined to words ex- 
 pressive of a wish or recommendation only, but the property is given 
 to the respondent "in the full confidence" that he will afford to the 
 children of the testatrix adequate support. Although these words 
 would not necessarily create a trust in a case where a different in- 
 tent is clearly indicated, they are nevertheless strong and significant 
 to show that such was the purpose of the testatrix, when taken in 
 connection with other facts and circumstances which have a like tend- 
 ency. Wright v. Atkins, 17 Ves. 255, 258, 261. Meredith v. Hen- 
 eage, 1 Sim. 542, 556. 
 
 We think it also worthy of remark in that connection that it is not 
 left to the respondent to determine the amount or extent of the 
 support which he was to afford to the children. The gift to him is 
 not in confidence that he will give them such support as he may think 
 proper, or as in his judgment they may need, but to such an extent 
 as they shall in fact "stand in need of." It was to be measured, not 
 by the exercise of his discretion in the matter, but by the actual 
 wants of the children. 
 
 The view which we have taken of the construction of the clause 
 of the will by which the property of the testatrix is given to the re- 
 spondent for his life is greatly strengthened when we take into con- 
 sideration the relations of all the parties toward each other, the na- 
 ture and condition of the property which was the subject of the gift, 
 and the ultimate disposition which was made of it by the will after 
 the death of the respondent. The objects for whose comfort and 
 support the testatrix was aiming to provide were her own children, 
 three of them by a former husband, and one by the respondent. 
 They had always lived in the family of the testatrix and her husband, 
 and received all needful support as members thereof; they had no 
 property of their own ; and, if they were deprived after her death 
 during the life of respondent of all benefit of the estate of their
 
 Sec. 2) THE CREATION OF TRUSTS. 5 
 
 mother, from which the support of the family had been chiefly drawn 
 during her life, they would not only lose the support which they had 
 previously enjoyed, but would be in danger of being left without ade- 
 quate means of support, and without habits or abilities which would 
 enable them to obtain a livelihood. To these children she gives the 
 entire beneficial interest in her whole estate after the death of her 
 husband. Is it reasonable to suppose that under such circumstan- 
 ces she intended that these children, who were so clearly the chief 
 objects of her bounty, should be left during the lifetime of her hus- 
 band without any such right or interest in her estate as would en- 
 able them to enforce a claim for support in the event that, from al- 
 ienation of feeling, imbecility of mind, or any other like cause, the 
 respondent should be unwilling or unable to comply with her wish 
 or to exercise a discretion in their behalf? 
 
 It is suggested that in other clauses of the will, in which she cre- 
 ates a trust in favor of her daughters for their respective shares of 
 her estate, of which they are to have the entire income after the 
 death of her husband, she does not use words of entreaty, request and 
 recommendation, but apt and technical words by which to establish a 
 trust in their behalf. But we think this suggestion is not entitled to 
 much weight. She might well express herself in a different language 
 when addressing her husband from that which she would use toward 
 strangers, and at the same time intend a similar result. Words of 
 confidence, entreaty and recommendation were natural and appro- 
 priate when used to express the will of a testatrix who intended to 
 direct and control the conduct of her husband in a matter in which 
 the right to give directions and to control belonged to her. In such 
 a case, the words used by Lord Loughborough are applicable : "Where 
 a person recommends to another who is independent of him, there is 
 nothing imperative; but if he recommends that to be done by a per- 
 son whom he has a right to order to do it, the mode is only civility.'' 
 Malim v. Keighley, 2 Ves. Jr. 333, 529. 
 
 After a careful consideration of the case, we are of opinion that 
 the will creates a trust in favor of the complainant, which it is our 
 duty, sitting as a court of equity, to enforce. Decree accordingly. 
 
 MARTIN v. FUNK, Adm'r, and Others. 
 (Court of Appeals of New York, 1878. 75 X- Y. 134, ::i Am. Rep. 446.) 
 
 The defendants appeal from a General Term judgment of the 
 Supreme Court which affirmed a Special Term judgment for plaintiff. 
 
 Church, C. J. 1 The intestate Mrs. Boone, in L866, deposited in 
 the Citizens' Savings Bank $500, declaring at the time that she want- 
 ed the account to be in trust for Lillie Willard, who is the plaintiff. 
 
 i Part of the opinion is omitted.
 
 6 THE NATURE AND REQUISITES OF TRUSTS. (Cll. 1 
 
 The account was so entered, and a pass-book delivered to the intes- 
 tate, which contained these entries: "The Citizens' Savings Bank in 
 account with Susan Boone, in trust for Lillie YYillard. 18GC, March 
 23. $500." 
 
 A deposit of the same amount, and in the same manner, was made 
 in trust for Kate Willard, now Mrs. Brown. This money belonged to 
 the intestate at the time of the deposits. The plaintiff and Mrs. 
 Brown are sisters, and were at the time, of the age respectively of 
 eighteen and twenty, and were distant relatives of the intestate, their 
 mother being a second cousin. The intestate retained possession 
 of the pass-books until her death in 1875, and the plaintiff and her 
 sister were ignorant of the deposits until after that event. The 
 money remained in the bank with its accumulated interest until the 
 death of the intestate except that she drew out one year's interest. 
 Mrs. Brown assigned to the plaintiff her interest in the deposit pur- 
 porting to have been made for her benefit, and the action is brought 
 against the administrator of the intestate and the bank for the deliv- 
 ery of the pass-books and the recovery of the money. * * * It is 
 clear that a person sui juris, acting freely and with full knowledge 
 has the power to make a voluntary gift of the whole or any part of 
 his property, while it is well settled that a mere intention, whether ex- 
 pressed or not is not sufficient, and a voluntary promise to make a gift 
 is nudum pactum, and of no binding force. (Kekewich v. Manning, 
 50 Kng. Ch. 175, and cases cited.) The act constituting the transfer 
 must be consummated, and not remain incomplete, or rest in mere in- 
 tention, and this is the rule whether the gift is by delivery only, or 
 by the creation of a trust in a third person, or in creating the donor 
 himself a trustee. Enough must be done to pass the title, although 
 when a trust is declared, whether in a third person or the donor, it 
 is not essential that the property should be actually possessed by the 
 cestui que trust, nor is it even essential that the latter should be in- 
 formed of the trust. * * * 
 
 The contention of the defendant is that the transaction did not 
 transfer the property and that there was no sufficient declaration of 
 trust and that by retaining the pass-books the intestate never part- 
 ed with the control of the property. If what she did was sufficient 
 to constitute herself a trustee, it must follow that whatever control 
 she retained would be exercised as trustee, and the right to exercise 
 it would not be necessarily inconsistent with the completeness of the 
 trust. * * * 
 
 No particular form of words is necessary to constitute a trust, 
 while the act or words relied upon must be unequivocal, implying that 
 the person holds the property as trustee for another. 
 
 Let us now consider the case in hand. In form at least the title 
 to the money was changed from the intestate individually, to her as 
 trustee. She stated to the bank that she desired the money to be thus 
 deposited. It was so done by her direction, and she took a voucher
 
 Sec. 2) THE CREATION OF TRUSTS. 7 
 
 to herself in trust for the plaintiff. Upon these facts what other in- 
 tent can be imputed to the intestate than such as her acts and decla- 
 rations imported, and did they not import a trust? There was no 
 contingengcy or uncertainty in the circumstances, and I am unable to 
 see wherein it was incomplete. The money was deposited unqualified- 
 ly and absolutely in trust, and the intestate was the trustee. It would 
 scarcely have been stronger, if she had written in the • k, "I 
 
 hereby declare that I have deposited this money for the benefit of the 
 plaintiff and I hold the same as trustee for her." 
 
 This would have been a plain declaration of trust, and accompanied 
 as it was with a formal transfer to herself in the capacity of trustee 
 would have been deemed sufficient under the most rigid rules to be 
 found in any of the authorities. It seems to me that this was the nec- 
 essary legal intendment of the transaction, and that it was sufficient 
 to pass the title. The retention of the pass-book was not necessarily 
 inconsistent with this construction. She must be deemed to have re- 
 tained it as trustee. The book was not the property, but only the 
 voucher for the property which after the deposit consisted of the debt 
 against the bank. * * * 
 
 As notice to the cestui que trust was not necessary, and as the re- 
 tention of the pass-books was not inconsistent with the completeness 
 of the act, the case is peculiarly one to be determined by this test; 
 did the intestate constitute herself a trustee? After a careful con- 
 sideration of the case in connection with the established rules appli- 
 cable to the subject, and the authorities, I think this question must 
 be answered in the affirmative. It was not done in express formal 
 terms, but such is the fair legal import of the transaction. * * * 
 
 Judgment affirmed. 
 
 DILROW v. BONE. 
 (In Chancery, before Vice Chancellor Sir John Stuart, 1862. 3 Giffard, 538.) 
 
 By an indenture dated June 30, 1835, between Edmund Bone and 
 Mary, his wife, of the one part, and John Fulleck and Richard Hear- 
 sey, of the other part, after reciting that by a previous indenture 
 and fine levied in pursuance thereof certain lands had been conveyed 
 to William Hogflesh and his heirs upon such trusts as Edmund Bone 
 and Mary, his wife, should by deed appoint and that they were de- 
 sirous of exercising said power, the said Edmund Bone and Mary, 
 his wife, did appoint that, immediately after the decease of the sur- 
 vivor of them, all said lands should go, remain and be "unto and to 
 the use of the said John Fulleck and said Richard Hearsey, their ex- 
 ecutors, administrators and assigns" upon trust to sell and divide the 
 proceeds into seven equal parts and to pay one part to each of the 
 seven children of Edmund and Mary Bone respectively. 
 
 Mary Bone died in 1836 and Edmund Bone in lSb'O. Shortly aft-
 
 F 
 
 8 THE NATURE AND REQUISITES OF TRUSTS. (Cll. 1 
 
 cr his death the present trustees proceeded to a sale when, upon in- 
 vestigation of the title, it was found that (as the bill alleged), "by 
 mistake or inadvertence" the estate was limited after the death of the 
 survivor of the two settlors to the trustees, their "executors, adminis- 
 trators, and assigns" only, and not their "heirs," so that the legal 
 estate was now vested in the infant defendant William Bone, as heir 
 of William Bone deceased, the' eldest son of Edmund Bone, the set- 
 tlor. This bill was tiled by the six surviving children of Edmund and 
 Mary Bone against the infant heir and trustees to have the infant 
 heir declared a trustee of the hereditament comprised in the indenture 
 of June 30, L835, and the legal estate vested in him vested in said 
 trustees upon the trusts of said indenture, or the said indenture, if 
 'necessary, rectified. 
 
 Tin: Vice Chancellor. The instrument, which contains a clear 
 declaration of trust, professes to operate by an appointment of trus- 
 tees in exercise of a power, and it also contains clear and distinct 
 words of conveyance in a further witnessing part. It is impossible to 
 say that by the operation of those words of conveyance some legal 
 estate did not pass from the settlor. Upon the intention apparent 
 from the whole scope of the deed and its language it is certain that 
 the intention was to give an absolute legal estate to the two persons 
 who are named as trustees, and upon whose legal estate the trust 
 is grafted. Lord Eldon, in the case of Ellison v. Ellison [6 Yes. 656— 
 662], says: "I take the distinction to be, that if you want the assist- 
 ance of the Court to constitute you cestui que trust, and the instru- 
 ment is voluntary, you shall not have that assistance for the purpose 
 of constituting you cestui que trust, as upon a covenant to transfer 
 stock, etc.; if it rests on covenant, and is purely voluntary, this Court 
 will not execute that voluntary covenant; but if the party has com- 
 pletely transferred stock, etc., though it is voluntary, yet, the legal 
 conveyance being effectually made, — the equitable interest will be 
 enforced by this Court." It is true that Lord Eldon says, "has com- 
 pletely transferred or completely conveyed ;" but I cannot under- 
 stand upon what principle it can be said that, if there was a transmu- 
 tation of possession — there being a determinate estate created in in- 
 telligible terms, but with this effect, that what upon the whole scope 
 or the instrument was intended to vest the fee simple in the trust 
 conveyed only the freehold for life — this Court should decline to en- 
 force the performance of the trust. I consider it, therefore, my duty 
 in this case to give the relief in substance, as prayed by the bill. I do 
 not think it necessary to go at length into the authorities that have 
 been cited, because there were two cases before me not long ago: 
 Airey v. Hall [3 Sm. & Giff. 315], and Yoyle v. Hughes [2 Sm. & 
 Giff. 18], in which I endeavored to distinguish some of the various 
 decisions which had been made on the subject of voluntary gifts. 
 The declaration will be that the heir of William Bone is a trustee, 
 and there will be an order that the legal estate may be vested in
 
 Sec. 2) THE CREATION OP TRUSTS. «* 
 
 trustees to be appointed by the court. In my opinion a trust is ^o at- 
 tached to the property in this case that the infant heir of the set 
 tlor hulds the estate with this trust attached to it in his hands. 
 
 ANONYMOUS. 
 
 (In Chancery, before T.onts Commissioners Trevor, Rawllnson and Hutchins, 
 L692. Freeman's Chancery Cases, 123.) 
 
 If a man makes a conveyance to A. in consideration of money paid 
 by B., A. is but a trustee for B. by virtue of this resulting trust not- 
 withstanding the statute of frauds and perjuries, although no trust hi' 
 declared in writing. 
 
 WOODMAN v. MORREL, and Wife. 
 
 fin Chancery, before Justice Atkins, 1078. Freeman's Chancery Reports. 32.) 
 
 And in this case, these differences were taken: 1. Where a man 
 purchaseth land in the name of a stranger, and of a child ; for in the 
 first case it is presumed a trust for the purchaser; but in the latter, 
 the presumption is, that it is a provision for the child, if there be no 
 declaration of the father to the contrary. 
 
 LANE and Others v. DIGHTON and Others. 
 
 (In Chancery, before the Master of the Rolls, Sir Thomas Clarke. 17(52. Am- 
 bler, 400.) 
 
 By indenture of 16th July, 1748, made after the marriage of John 
 Dighton with the said Elizabeth, her fortune, which was personalty, 
 and amounted to more than £8000, was assigned to four persons up- 
 on trust, to pay the interest to him for life, and then to his wife for 
 life, and then the principal to their children, as they or the survivor 
 should appoint : and in default of appointment, to all of them. On 
 24th January. 1754, Dighton bought at an auction an estate in Ox- 
 fordshire, called Sherborne-Woods, for fliGOO, and made a deposit of 
 i(i(;u. Mr. Dighton, not having sufficient of his own, prevailed on 
 the trustees to let him have £1010. 10s. of the trust money to make up 
 the £50 10., the balance of the purchase price. He was let into pos- 
 session of the estate and afterwards received a conveyance of it. He 
 also bought another estate, at Ascot, in Oxfordshire. He died intes- 
 tate on 1st January, 1701. 
 
 The bill was brought for payment of debts, and to have the set- 
 tlement made good out of the personal estate and distribution of the
 
 10 THE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 residue. The widow and younger children, by their answer, said that 
 part of the trust money had been laid out in the purchase of Sher- 
 borne-Woods and Ascot Estate, and ought to be considered as the 
 trust money. 
 
 The cause came on to be heard on May 8th, 1761, by consent be- 
 fore Sir Thomas Clarke, Master of the Rolls, when the question, 
 whether the estate can be charged with any part of the trust money? 
 was debated. 
 
 On the part of the plaintiff, James Lucy Dighton, it was argued by 
 Mr. Capper, That if trustee- lays out trust money in land, the court 
 will charge the land with it, upon admission of the trustees, but will 
 not receive evidence to prove it ; for that would be contrary to the 
 statute of frauds, which requires trusts of lands to be in writing, un- 
 less by operation of law : as if land is bought in the name of A., evi- 
 dence may be given that the purchase money was paid by B.; that is 
 a trust raised by operation of law ; and the cases of Kirk v. Webb, 
 Prec. in Chancery, 84, and of Halcot v. Marchent, Prec. Ch. 168, 
 were cited as authorities on the general principle. It was further 
 said, that if evidence could be received, it ought to prove precise- 
 ly in what land the money was laid out. That in this case it is only 
 loosely said, that the trust money was from time to time laid out in 
 land. 
 
 On the other side it was argued by me, on the behalf of the de- 
 fendants, that the evidence ought to be read, and that it is sufficient to 
 ground an inquiry, if not to make an immediate decree. 
 
 His Honour, after taking time for consideration, on 8th June fol- 
 lowing gave his opinion: 
 
 The general question is, whether the court can follow the trust 
 money into land, consistently with the statute of frauds and perju- 
 ries, and the cases determined upon it? It divides itself into two 
 questions: 1st, Whether the evidence can be received? 2d, Wheth- 
 er it is sufficient, if received? 
 
 For the plaintiffs were cited the cases of Kirk v. Webb, and Hal- 
 cot v. Marchent, and the reason upon which those cases were deter- 
 mined ; that is, that there must be an express trust in writing to af- 
 fect lands, and that evidence cannot be received. The only cases ex- 
 cepted in the statute are, operation of law, and extinguishment : as 
 if A. buys land in the name of B., A. may prove that he paid the con- 
 sideration, and there will be a resulting trust for him: so where 
 there is a declaration as to part of the land, the rest results. 
 
 On the other side was cited Ryal v. Ryal, in Ch. 4th February, 1739. 
 In that case compassion took place, and inquiry was directed, whether 
 any of the money was laid out in land. In Jones v. Jones, 10th July, 
 1752, the same inquiry was directed. In Hardacre v. Massenger, 10th 
 March, 1753, Sir John Strange declared the land liable, without di- 
 recting an inquiry. If it was res integra, I should think the evidence 
 not admissible within the statute. But I must not be wiser than my
 
 SeC. 2) TIIE CREATION OF TRUSTS. 11 
 
 predecessors; therefore refer it to the Master to inquire whether any, 
 and what part of the trust money, was laid out in the purchase of the 
 Sherborne-Woods and Ascot estate, or either, and which of them. 
 
 The cause coming on for further directions on 27th January, L762, 
 his Honour decreed as follows: It appearing by the .Master's report, 
 that the sum of £4010. 10s. Id. part of the trust money, or funds, 
 being part of the portion of the defendant Elizabeth Dighton, agreed 
 to be secured by her marriage articles of lGth July, 1718, was invest- 
 ed by John Dighton, her husband, together with other money of his 
 own, in the purchase of Sherborne-Woods estate, declare, that the 
 same ought to be considered in the same plight and condition as if 
 the same had not been invested, and to be subject to the trusts and 
 limitations in the said articles. 
 
 WRIGHT v. BATES and NILES. 
 (Supreme Court of Vermont, 1841. 13 Vt. 341.) 
 
 This was an appeal from a decree of the Court of Chancery, allow- 
 ing the plaintiff to redeem certain lands. 
 
 Wright borrowed of the defendant. Bates, $300 and on May 2. 
 1821, made a deed of certain land to him absolute in form. Wright 
 continued in possession of the land. On June 2(5. 183 1, Bates con- 
 veyed the land to the defendant, Niles. Niles brought an action of 
 ejectment against Wright and secured judgment at the June Term 
 of the Bennington County Court in 1836. 
 
 Wright then brought this bill in equity alleging that the deed to 
 Bates was given as a mortgage to secure the payment of $325 and 
 that Bates agreed to reconvey the land to him on being paid $325 ; 
 that Niles bought the land of Bates with notice of plaintiff's rights ; 
 that the plaintiff on August 16, 1836, tendered the amount due. The 
 bill prayed that Niles be decreed to reconvey to the plaintiff the mort- 
 gaged premises on payment of the amount due and that the action 
 of ejectment be enjoined and for further relief. 
 
 Bennett, J. 1 This case comes before this court by an appeal from 
 the court of chancery. The object of the orator is to be let in to re- 
 deem, and the first question presented for our consideration is, wheth- 
 er the deed from Wright to Bates is to be treated as a mortgage, be- 
 tween the immediate parties. It is well settled law, in this state, that 
 a court of chancery will treat an absolute deed of real estate, given 
 to secure the payment of a debt, as a mortgage, as between the im- 
 mediate parties, especially if the grantor continues to remain in pos- 
 session, though the defeasance rests wholly in parol. Campbell v. 
 Worthington, 6 Vt. R. 418. Baxter v. Willey, 9 Vt. R. 280, 31 Am. 
 Dec. 623. When there is an attempt to set up such an instrument 
 as an absolute conveyance, there is a fraudulent application or use 
 
 i Tart of the opinion is omitted.
 
 12 THE NATURE AND REQUISITES OF TRUSTS. (Cll. 1 
 
 made of it; and this is a proper ground upon which chancery may 
 proceed. Though Bates, in his answer, denies that the deed was giv- 
 en or accepted as a mortgage, or that any parol agreement was made, 
 at the time of its execution, that it should he considered otherwise 
 than as an absolute conveyance, yet. from the testimony of Dan forth, 
 we learn that he, in the spring of 1821, went with the orator to Bates, 
 to assist him in getting a loan of three hundred dollars, and that 
 Bates agreed to accomodate him with the loan, provided the orator 
 would secure him with a deed of the lands described in the bill, 
 and pay him an interest of twenty-five dollars a year for the use of 
 the money, which proposition was then agreed to, though the writ- 
 ings were not then made. A short time after this, the witness says, 
 he was informed by both parties, that the agreement had been car- 
 ried into effect. Samuel Wright also testifies that in the spring of 
 1823 he was employed to draw the lease set forth in the answer of 
 Bates ; and that at that time he learned from him that, at some previ- 
 ous time, he had let the orator have $325, and that he took a deed 
 of the premises in question, and promised to give him a time to re- 
 deem them in, hut that no time was fixed, and he wanted it done in 
 the lease. When, in addition to this, we see that the value of the 
 property, as shown by a great number of witnesses, was, in 1821, 
 about $1000, and that the orator had been, for a great length of time, 
 permitted to remain in possession, we can have no reasonable doubt 
 that this land was conveyed as a security for the money advanced, and 
 
 that, in equity, the conveyance should be treated as a mortgage. 
 * * * 
 
 Niles, in his answer, admits that he was informed by the orator, a 
 short time before Bates conveyed to him, that he (Bates) was bound 
 to reconvey the premises to him upon the payment of a given sum 
 of money, and that he was still indebted to Bates, on account of the 
 lands conveyed in about the sum of nine hundred dollars, and it ap- 
 pears that Wright had remained in the quiet possession from 1821 
 down to 1836, when Niles commenced his action of ejectment against 
 him. Upon this state of facts it is evident that Niles can stand in no 
 better situation than Bates. The fact that- Wright remained in the 
 open, peaceable, and exclusive possession and improvement of the 
 land conveyed to Bates, for so great a length of time, is sufficient 
 of itself, to affect Niles with notice of the orator's right of redemp- 
 tion. Rublee v. Mead, 2 Vt. R. 544. Griswold v. Smith, 10 Vt. R. 
 452. Niles, then, having purchased with notice of Wright's equity, 
 must come in subject to it. So far as Wright is concerned, it is a 
 purchase mala fide. * * * 
 
 Xiles is the immediate grantee of Bates, and his rights are de- 
 pendent upon those of his grantor. If he is affected with notice, he 
 takes the title, subject to all the equities that existed against Bates.
 
 Sec. vj THE CREATION OF TRUSTS. 13 
 
 DOWD v. TUCKER. 
 (Supremo Court of Errors of Connecticut, 1874. 11 Conn. 197.) 
 
 Bill in equity to compel the conveyance of real estate. The follow- 
 ing Facts were found by a committee: 
 
 The petitioner is a niece, and the respondenl a nephew of Frai 
 M. Hayden, who died Sept. 3rd, L870. 
 
 On the 27th day of May, 1863, Mrs. Hayden made a will, by which 
 she gave all her property to the respondent, which will, after her 
 death, was proved as her last will and testament. 
 
 At the time of her death die was the owner of one-half of a dwell- 
 ing house and lot, worth §7oQ, being the property in dispute between 
 the parties. 
 
 About two weeks before her death Mrs. Hay den desired and in- 
 tended to give to the petitioner her part of the dwelling house, and 
 to change her will accordingly, but was unwilling to do so without 
 the consent of the respondent. The petitioner thereupon caused a 
 codicil to be prepared giving to the petitioner the dwelling house. 
 This codicil was presented to her, upon which she, without signing 
 it, expressed a desire to see the respondent. The respondent was 
 then called into the room, and she informed him that she wanted to 
 give her half of the dwelling house to the petitioner, if he was will- 
 ing, and asked him if he was willing, saying again that she wanted 
 to do so. The respondent replied that she was weak, and that she 
 need not trouble herself to sign the paper, but that he would deed 
 the property to the petitioner and would do just as she wanted to 
 have him. The testatrix expressed herself satisfied that the respond- 
 ent would do as he agreed, and did not sign the codicil. This inter- 
 view was on Sunday, about 2 o'clock in the afternoon. Mrs. Hayden 
 at that time was capable of making a will. 
 
 After the death of Mrs. Hayden the petitioner demanded of the 
 respondent that he should execute to her a deed of the premises in 
 question; but he refused, and has ever since refused to do so. The 
 respondent is now in possession of the property, claiming it as his 
 own and denying that the petitioner has any rights or interest there- 
 in. 
 
 Upon these facts the case was reserved for the advice of this 
 court. 
 
 Park. C. J. 1 This case is clearly one of fraud. * * * 
 
 But it is unnecessary to pursue this question of fraud, for the case 
 otherwise is palpably one where the respondent holds the property in 
 trust for the petitioner, whether he made the promise in good or bad 
 faith. If A, knowing that B is about to convey certain real estate to 
 C, which the latter has purchased of him, shonld say to B, "Convey 
 
 ' Part of the opinion is omitted.
 
 14 THE NATURE AND REQUISITES <>F TRUSTS. (Ch. 1 
 
 the property to me and T will convey it to C." and B should accede 
 to the request, and convey the property to A, no one would question 
 hut that A would hold the property in trust for C. Is this case any 
 different in principle' Mrs. Hayden was on the point of giving this 
 property to tin- petitioner by the execution of a codicil to her will, 
 which had been prepared. The respondent knowing the fact, said to 
 her in effect . "Lei me have the property by the will you have already 
 executed and I will convey it to the petitioner." The respondent hy 
 this promise obtained the property. It would seem that no argument 
 need he made to show that he holds it in trust. 
 
 But it is said that she did not intend to execute the codicil unless 
 the respondent was willing that she should do so. We do not so 
 understand the report of the committee. But grant that it was so; 
 did he not in the plainest and most unmistakable language give her 
 to understand that he was willing? What did she desire to have done? 
 She wanted the petitioner to have the property. What request did 
 she make of the respondent? She asked him if he was willing that" 
 the petitioner should have it. Whether the conveyance was to be 
 made in one form or another was of no consequence, and formed no 
 part of the substance of the inquiry, although he took it for granted 
 that she intended to do it by executing the codicil that lay before 
 her, which was in fact her intention. What reply did he make? He 
 said that she was weak, that she need not trouble herself to sign the 
 paper (meaning the codicil), that he would deed the property to the 
 petitioner, and would do just as she wanted to have him; that is, I 
 will do just what you ask my consent to have done; therefore do 
 not trouble yourself in your weak condition to execute the codicil. 
 If this language does not convey a consent that the petitioner should 
 have the property, then language in any form of words would fail to 
 express the idea. 
 
 It follows therefore that the respondent obtained the property in 
 question by his promise to convey the same to the petitioner, and con- 
 sequently we think he is bound in equity and good conscience to 
 make the conveyance. 
 
 We advise the Superior Court to grant the prayer of the petition. 
 
 DICKERSON and Others v. MAYS. 
 (Supreme Court of Mississippi, 1882. GO Miss. 388.) 
 
 Appeal from the Chancery Court of Benton County. 
 
 The bill filed in this suit on the 14th of November, 1870, by Mrs. 
 Mary F. Mays against G. N. Dickerson, G. D. Dickerson and H. L,. 
 Machem, alleges substantially the following facts: In 1871, John 
 II. Machem purchased of L,. J. McDonald a house and lot in the town 
 of Ashland, Benton County, which he intended for the use and benefit
 
 Sec. 2) tiii: creation of trusts. 15 
 
 of the complainant, Mary F. Mays, and her brother IT. L. Machem, 
 who were his children. J. II. Machem paid for the property and put 
 Mary F. Mays and her brother in possession of it; but by accident 
 or neglect no conveyance was taken from McDonald ; in November, 
 1873, the complainant and her brother made a parol contract with 
 G. N. Dickerson to exchange this house and lot in Ashland for a 
 house and lot in the town of Salem, Benton Comity, and a tract of 
 land in the same county. Pursuant to the contract McDonald by 
 instructions of complainant and her brother conveyed the house and 
 lot in Ashland by direction of G. N. Dickerson to his son G. D. Dick- 
 erson. G. N. Dickerson took possession of the Ashland property, but 
 refused to convey to complainant and her brother the property he 
 agreed to convey. H. L. Machem sold his interest in the property 
 to complainant. J. PI. Machem the father died in 1872. 
 
 The prayer of the bill is for "a decree divesting all right, title 
 and interest of the said defendants in and to the said house and 
 lot in the town of Ashland, or the property which the said Dickerson 
 was to convey for said house and lot, out of them and each of them 
 and vesting the same in a commissioner of the court, with full power 
 to convey the same to your oratrix," etc. and for general relief. 
 
 H. L. Machem made no defense. The Dickersons demurred on the 
 ground that the contract of exchange could not be enforced because 
 not in writing. The demurrer was overruled and the defendants 
 answered. Proof was taken and on final hearing a decree was ren- 
 dered vesting the title to the Ashland property in a commissioner, 
 with direction to convey the same to complainant, unless G. N. Dick- 
 erson should within thirty days convey to her the property which he 
 had agreed to exchange for the Ashland property. From that de- 
 cree the Dickersons appealed. 
 
 Kimbrough & McDonald, for the appellee. 
 
 In this case the fraudulent grantee should be made to hold title as 
 trustee for benefit of injured party. 
 
 Campbell, C. J., delivered the opinion of the court. 
 
 The Statute of Frauds presents no obstacle to the bill, which does 
 not seek the enforcement of a parol agreement for the sale of land, 
 but the cancellation of a conveyance which it is inequitable for the de- 
 fendant to hold. There was no just objection to the bill, and the de- 
 murrer was rightfully overruled. The evidence supports the decree, 
 and it is affirmed.
 
 1G THE NATURE AND REQUISITES OF TRUSTS. (Cll. 1 
 
 HON -.—TIM- T. VNGUAGE NECESSARY TO THE CREA- 
 TI( )\ < >F A TRUST. 
 
 ALDRICH v. ALDRICH, Executor, and Others. 
 (Supreme Judicial Courl of Massachusetts, 1898. 172 Mass. km. r,i x. E. 440.) 
 
 Bill in equity, filed May 6, 1898, in the Superior Court, by a son of 
 P. Emory Aldrich, to establish a trust under the will of his father. 
 
 The hill alleged that the testator died on March 14, 1895, leaving 
 a will by which he gave '"all the rest and residue of my estate, after 
 the payment of debts," to his wife. After appointing her executrix, 
 he proceeded : "I give all my estate to my said wife to the 
 end that she may he able to maintain a home for herself, and one 
 where she can receive all our dear children, as we have heen accustom- 
 ed to do during our joint lives. I am confident she will manage with 
 good discretion and fidelity what is committed to her, and that when 
 she shall no longer need the property it will be equally divided among 
 all our children, or their representatives." The widow died on De- 
 cember 25, 1897, leaving a will by which she provided: "After the 
 payment of all debts and charges it is my wish so to provide that the 
 remainder of my property may .suffice if possible to maintain the 
 house where we have so long lived happily, for those of my chil- 
 dren who may need it, without attempting to control their disposition 
 of it as may to them seem best." After a few small legacies, includ- 
 ing one thousand dollars to Charles F. Aldrich, a son, who was nam- 
 ed executor, and one thousand dollars to said Charles in trust for the 
 plaintiff, the testatrix further provided : "All the rest, residue, and 
 remainder of my property of every nature, I give, devise and be- 
 queath to my three daughters * * * in equal shares, to have 
 and to hold to them their heirs and assigns forever." 
 
 The widow died possessed of the personal property left her by 
 her husband's will, except the income thereof, which she spent dur- 
 ing her life. The plaintiff received during the life of the testatrix 
 no part of the testator's property either real or personal, and the one 
 thousand dollars left to him in trust was less than one-fifth of the 
 property owned by her when she made her will, and at her death 
 exclusive of what came to her by the will of her husband, and less 
 than one-fifth of the personal property so left by him, and less than 
 one-fifth of the real estate left by him. The prayer was that an ac- 
 count might be taken, and that the executor might be directed to hold 
 the property as trustee, and to pay over to the plaintiff one-fifth of 
 the same.
 
 Sec. 3) LANGUAGE NECESSARY TO CREATE TRUST. 17 
 
 Hearing before Dewey, J., who reserved the case for the consid- 
 eration of this court. * 
 
 Morton, J. If the testator had intended to create a trust in favor 
 of his children at his widow's death, there can be no doubt that he 
 knew how to do it in clear and unmistakable terms, and it is almost 
 inconceivable that, if such was his purpose, he should have express- 
 ed himself in the manner in which he has done. 
 
 There is no doubt that words of recommendation, or of confidence, 
 entreaty, hope, or desire, have been held sufficient under some circum- 
 stances' to create a trust. But, speaking generally, this was because 
 in such cases such a construction was supposed to carry out the in- 
 tention of the testator. If an arbitrary rule seems to have been laid 
 down at one time in regard to what would constitute a precatory 
 trust, there can be no doubt, we think, that the tendency of later de- 
 cisions has been, if not to relax the rule thus laid down, at least not 
 to extend it. Hess v. Singler, 114 Mass. 56. Lambe v. Eames, L. 
 R. 10 Eq. 267; S. C. 6 Ch. App. 597. 
 
 In the present case there is what clearly would constitute in law, if 
 it stood alone, an absolute gift of the estate to the wife. Then fol- 
 lows, after one or two intervening clauses, the one on which the 
 plaintiff relies. This was intended by the testator, it seems to us, to 
 express his reason for the gift to his wife and his confidence in her, 
 and not to cut down or affect the absolute character of the gift which 
 he had previously made to her. It is true that he says in substance 
 that he expects that the property, when she shall no longer need it, 
 will be divided equally between the children and their representatives. 
 But there is nothing which renders it obligatory on her to do this, and 
 therefore one of the features of a precatory trust is wanting. [Cases 
 cited.] 
 
 The cases which we have cited do not resemble in all respects the 
 one at bar, and there are English and American cases which seem to 
 support the view for which the plaintiff contends. But the question 
 is, whether, taking the will as a whole, it was the intention of the tes- 
 tator to create a trust, and we are of opinion that it was not, and that 
 the construction which we have adopted is in harmony with the more 
 recent English and American cases. 
 
 Bill dismissed. 
 
 i Part of the statement ot the case is omitted. 
 Ken.Tb— 2
 
 18 THE NATURE AND REQUISITES OP TRUSTS. (Ch. 1 
 
 PHILLIPS, as Executrix, v. PHILLIPS and Others, as Executors. 
 
 (Court of Appeals of New York. 1889. 112 N. Y. 107. 19 N. E. 411, S Am. St. 
 
 Rep. 737.) 
 
 Defendants appeal from a General Term judgment of the Supreme 
 Court which affirmed a Special Term judgment in favor of plaintiff. 
 
 Finch, J. 1 The will to be construed was written by the testator 
 himself, and while extremely brief and simple, presents a problem not 
 altogether easy of solution. 
 
 Its terms give to the testator's wife the whole of his property, real 
 and personal, name her as executrix, and then proceed as follows: 
 "If she find it always convenient to pay my sister Caroline Buck the 
 sum of three hundred dollars a year, and also to give my brother, 
 Edwin W., during his life the interest on ten thousand dollars (or 
 seven hundred dollars per year), I wish it to be done." The widow 
 has paid the annuity to the sister regularly, but that to the brother 
 for a single year only. During the years succeeding, no payment was 
 made, and this action is brought by the executrix for a construc- 
 tion of the will and to determine whether she is bound to make the 
 payments withheld. It is admitted by formal stipulation that the 
 contingency described in the will has in fact happened during the 
 three years after 1883, and that the financial situation of the widow 
 during the years of her refusal was such that it was entirely conveni- 
 ient for her to have paid the disputed allowance, and that she refused 
 payment not on that account, but from motives of her own with 
 which she claimed the courts have no concern, and about which 
 they are not at liberty to inquire. The General Term has sustain- 
 ed her contention upon an opinion of the trial judge, very patiently 
 and carefully prepared, and from which we depart only upon convic- 
 tions that we are unable to resist. 
 
 The real intention of the testator was one of two things. He 
 meant to make the annuities to his brother and sister dependent upon 
 the existence of a specific fact, or upon the choice and will of his de- 
 visee. If they rest upon the former they become a gift from him; if 
 upon the latter, they have no existence outside of the choice of the 
 widow. * * * 
 
 One suggestion made on behalf of the appellants is, that the fram- 
 ing of the condition or contingency shows that the provision for the 
 brother and sister was not meant to be dependent upon the absolute 
 and uncontrolled choice of the wife. If that had been testator's pur- 
 pose, the condition interposed was both needless and misleading. 
 Without it she would be left to give the allowance or not as she 
 pleased, and could suffer no inconvenience at the hands of the testator. 
 But with it the inference is that the contingency provided for was 
 the only one intended to excuse payment. That contingency was an 
 
 i Part of the opinion is omitted.
 
 Sec. 3) LANGUAGE NECESSARY TO CREATE TRUST. 10 
 
 actual fact to happen or not to happen along the line of the future, 
 and independent of the mere volition or choice of the general devisee. 
 "If she find it always convenient" are the words. "If she find it;" 
 that is, if experience shows it; if the facts at the tirhe of payment 
 prove to he such; if her financial condition as it shall then exist en- 
 ahles her to pay easily. The expression contemplates, not her choice 
 or preference, but her pecuniary situation after the experience or 
 managment of one or more years, and it indicates his purpose to have 
 been to charge the annuities upon the sweeping gift to his wife, pro- 
 vided, and provided only, that in her experience of the future it 
 should turn out that the payment of those charges would occasion her 
 no inconvenience. 
 
 "If she find it always convenient;" that is on each occasion, at the 
 date of every payment. * * * In these words of the testator 
 his purpose and intention, I think, is sufficiently disclosed. He did 
 not mean to make the payment of the annuities dependent upon the 
 mere choice or will of his wife, but upon her ability to pay them 
 without inconvenience to herself. Given that ability, he says : "I 
 wish it to be done." The words are not, I wish her to do it, or I 
 hope she will feel it to be her duty, or I trust she will see the pro- 
 priety of such payment to be made, but I, the testator, dealing with 
 my own bounty to her, "I wish it to be done ;" it is my wish, not 
 hers, that I put behind the annuities. It is observable, also, that in 
 the gift to his wife he does not add words that could seem inconsist- 
 ent with a subsequent charge upon it, as, for her own use and benefit, 
 or to her and her heirs forever, but leaves the path to a trust or a 
 charge unobstructed so far as possible. 
 
 It is perfectly well settled that what are denominated precatory 
 words, expressive of a wish or desire, may, in given instances, cre- 
 ate a trust or impose a charge. * * * The primary question in 
 every case is the intention of the testator, and whether in the use 
 of precatory words he meant merely to advise or influence the dis- 
 cretion of the devisee, or himself to control or direct the disposition 
 intended. In such a case we must look at the whole will, so far as it 
 bears upon the inquiry, and the use of the words "I wish" or "I de- 
 sire" is by no means conclusive. They serve to raise the question, but' 
 not necessarily to decide it. We are convinced that in the present 
 case the testator meant to charge upon the gift to the wife the an- 
 nuities to his sister and brother, provided, only, that their payment 
 should not occasion her inconvenience. The legacy to the brother 
 should be computed at $700 per year. 
 
 The judgment should be reversed, and judgment rendered for the 
 defendant, construing the will in accordance with this opinion.
 
 20 THE NAT1 RE AND REQUISITES OF TRUSTS. (Cll. 1 
 
 HARDING v. GLYN. 
 
 (In Chancery, before the Master of the Rolls, Bon. John Vorney, 1739. 1 
 
 Atkyns, 469.) 
 
 Nicholas Harding in 1701 made his will, and thereby gave "to 
 Elizabeth, his wife, all his estate, leases, and interesl in his house in 
 Hatton Garden, and all the goods, furniture, and chattels therein at 
 the time of his death, and also all his plate, linen, jewels, and other 
 wearing-apparel, but did desire her at or before her death to give such 
 leases, house, furniture, goods and chattels, plate and jewels, unto 
 and amongst such of his own relations as she should think most de- 
 serving and approve of," and made his wife executrix, and died the 
 23d of January, 1736, without issue. 
 
 Elizabeth, his widow, made her will on the 12th of June, 17:57, 
 "and thereby gave all her estate, right, title and interest to Henry 
 Swindell in the house in Hatton Garden, which her husband had be- 
 queathed to her in the manner aforesaid; and after giving several 
 legacies, becpteathed the residue of her personal estate to the defend- 
 ant Glyn and two other persons, and made them executors," and 
 soon after died, without having given at or before her death the 
 goods in the said house, or without having disposed of any of her 
 husband's jewels, to his relations. 
 
 The plaintiff's insisting that Elizabeth Harding had no property in 
 die said furniture and jewels but for life, with a limited power of 
 disposing of the same to her husband's relations, which she has not 
 done, brought their bill in order that they might be distributed 
 amongst his relations, according to the rule of distribution of intes- 
 tates' effects. 
 
 Master of THE Rolls. The first question is, if this is vested ab- 
 solutely in the wife? .And the second, if it is to be considered as un- 
 disposed of, after her death, who are entitled to it? 
 
 As to the first, it is clear the wife was intended to take only bene- 
 ficially during her life; there are no technical words in a will, but 
 the manifest intent of the testator is to take place, and the words 
 "willing" or "desiring" have been frequently construed to amount to 
 a trust, Eacles et ux. v. England et ux., '! Vern. !(>(>; and the only 
 doubt arises upon the persons who are to take after her. 
 
 Where the uncertainty is such that it is impossible for the court 
 to determine what persons are meant, it is very strong for the court 
 to construe it only as a recommendation to the first devisee, and make 
 it absolute as to him; but here the word "relations" is a legal de- 
 scription, and this is a devise to such relations, and operates as a 
 trust in the wife, by way of power of naming and apportioning, and 
 her non-performance of the power shall not make the devise void y 
 but the power shall devolve on the court; and though this is not to 
 pass by virtue of the statute of distributions, yet that is a good rule
 
 Sec. 4) CONSIDERATION. 21 
 
 for the court to go by. And therefore I think it ought to be divided 
 among such of the relations of the testator Nicholas Harding, who 
 were his next of kin at her death ; and do order that so much of the 
 said household goods in Hatton Garden, and other personal estate 
 of the said testator Nicholas Harding, devised by his will to the said 
 Elizabeth Harding, his wife, which she did not dispose of according to 
 the power given her thereby, in case the same remains in specie, or the 
 value thereof, be delivered to the next of kin of the said testator Nich- 
 olas Harding, to be divided equally amongst them, to take place from 
 the time of the death of the said Elizabeth Harding. 1 
 
 SECTION 4.— CONSIDERATION. 
 
 Note, uses are raised either by transmutation of the estate, as by 
 fine, feoffment, common recovery, etc. or out of the state of the own- 
 er of the land, by bargain and sale, by deed indented and enrolled, or 
 by covenant upon lawful consideration. — Co. Lit. 271b. 
 
 It is clear, uses may be raised two ways: 1. By transmutation of 
 the estate. 2. Without transmutation of the estate. 
 
 Those that arise by transmutation: as by fine, feoffment, recovery. 
 Those that arise without transmutation, and that but two ways: 1. 
 By bargain and sale. 2. By covenant to stand seized to uses. 
 
 This is to be observed in raising of uses, that they that arise by 
 way of covenant, or bargain and sale, there must be a consideration 
 to raise them; but they that arise by way of transmutation of pos- 
 session may arise without any consideration at all. — Earle, Serjeant, 
 arg. in Garnish v. Wentworth, Carter's Common Pleas Reports, 137, 
 143 (1666). 
 
 See Lib. 2, Doctor & Student, fol. 100. A man can [not] commence 
 an use without bargain, livery of seisin, or recompense; for it can- 
 not be by bare grant or covenant without recompense, where the 
 grantor himself is seized of the land in possession; but if a man 
 makes a feoffment in fee to the use of the feoffee and his heirs with- 
 out recompense, yet the feoffee is seized to his own use; but if a 
 man makes a feoffment to his use, so that a use be in esse, he may- 
 grant to the feoffee to be seized to his own use without recompense 
 
 i See comment of Lord Eldon on this case in Brown v. Higgs, 8 Ves. Jr. 
 501, 571 (18C3).
 
 22 THE N Ail BE ami REQUISITES OF TRUSTS. (Ch. 1 
 
 and well J for there was a use in esse before. Contra where a man 
 seized in fee to his own use, grants to another that he will be seized 
 to his use without bargain or recompense. Note a diversity; and 
 the same it seems of a consideration. — Brooke's Abridgment, Feoff- 
 ments al Uses, pi. hi. 
 
 For as I have said, a use is nothing but a trust, which trust one 
 can sell or give at his pleasure. For I say thai there is no doubt 
 hut if 1 sell to you my use, now upon the sale the use is changed to 
 you from my person; so I understand if I say to you "I give you my 
 use of such lands to you," by those words you have the use; for the 
 use does not pass as the land passes, for land cannot pass without 
 livery, but a use by bare words. * * * And so by the same rea- 
 son that a use can pass by words, by the same reason it can pass 
 by devise.— Per York, Y. B. 27 Hen. VIII, fol. 8, pi. 22. 
 
 There are several ways in the law for declaring of uses, whether 
 upon transmutation of possession, or without it. If an use be de- 
 clared to be on transmutation of possession, as in a fine or feoffment, 
 there needs no agreement whatever; it is sufficient for the party on 
 the transmutation to declare, that the use shall be to such party, and of 
 such an estate ; but if an use arise without transmutation of posses- 
 sion, the use then does not arise by virtue of any declaration or ap- 
 pointment, but there must be some precedent obligation to oblige the 
 party declaring the use, which must be founded on some considera- 
 tion ; for a use, having its foundation generally on grounds of equity, 
 could not be relieved in chancery, without transmutation of posses- 
 sion, or an agreement founded on a consideration; and therefore if 
 bargain and sale were made of a man's land on the payment of money, 
 the use would have raised, without deed, by parol. But if the use was 
 in consideration of blood, then it could not arise by parol agreement, 
 without a deed; because that agreement was not an obliging agree- 
 ment, it wanted a consideration; and therefore to make it an oblig- 
 ing agreement there was a necessity of a dvvd: but where there was a 
 transmutation of possession, there needed no deed, hut only the 
 bare appointment of the party. — Per Holt, Chief Justice, Jones v. 
 Morley, 12 Modern, 159 (King's Bench, 1697). 
 
 2 ROTXK'S ABRIDGMENT, 781 (F), USES, pi. 1, 2, 3. 
 
 If a feoffment be made at this day without any consideration ex- 
 pressed, it shall be to the use of the feoffor. 
 
 So if a man suffer a common recovery without limiting to whose
 
 Sec. 4) CONSIDERATION. 23 
 
 use it shall be, or expressing a consideration, it shall be to the use of 
 the recoveror. 
 
 The law is the same of a fine. 
 
 NOTE. 
 
 (Benloe, 27, pi. 112. 1535.) 
 
 Note by all the justices and sergeants in the Common Pleas, that 
 if a man enfeoffs another in fee of land by deed without any consid- 
 eration to be held to the use of the feoffee himself as recited in the 
 deed and yet the feoffee permit the feoffor to take the profits of the 
 land for several years afterwards, still the feoffee shall be adjudged 
 to have the right to said lands in fee, and not the feoffor, because the 
 use was limited to him by the deed which was a good consideration. 
 
 STEPHENS CASE. 
 
 (In the Common Pleas, 1588. 1 Leonard. 138, pi. 188.) 
 
 In an ejectione firm?e the case was, that the father covenanted with 
 one A that in consideration of a marriage to be had betwixt the son 
 of the covenantor and the daughter of A that he before such a day 
 would levy a fine, which fine should be to the uses of the son and 
 daughter in tail for the jointure of the daughter. The fine is levied 
 according to the uses aforesaid; the father dieth, but in the fine no 
 mention is made of any marriage had; and upon that matter the 
 court was clear of opinion, that notwithstanding that the marriage 
 was not accomplished, yet the estate tail was well enough executed 
 in the son and daughter, for the fine without any consideration doth 
 carry the uses, but without a fine such a consideration would not rai^c 
 such an use without accomplishment of the marriage, for the con- 
 sideration executed ought to produce the use. But in this case the 
 uses are perfected by the fine, and A upon the matter might have 
 had covenant against the father to have the fine before the marriage. 
 
 TAYLOR v. VALE. 
 
 (In the Queen's Bench, 15S9. 1 Croke. Eliz. 106.) 
 
 Replevin. The case was upon demurrer. Yale, having a rent charge 
 in fee by indenture, which was enrolled within six months, giveth and 
 granteth it to Hall, in fee and there was no attornment. 
 
 Nota. In truth, the case was, that he for a certain sum of money 
 giveth, granteth, and selleth the rent, &c. But it was pleaded only, 
 that he by indenture dedit et concessit.
 
 L'l THE NATURE A.ND REQUISITES OF TRUSTS. (Ch. 1 
 
 And it was ruled without any argument, that the rent without at- 
 tornment passeth not, being only by way of grant, and not of bargain 
 or sale j although the deed was enrolled.— But W'ray said, that if by 
 indenture, in consideration of a certain sum of money, dedit.et con- 
 cessil and tlie deed is enrolled, this shall pass the rent without at- 
 tornment, though there he no words of bargain and sale. — And the 
 plaintiff had judgment. 
 
 2 ROLLE'S ABRIDGMENT, 783 (H), USES, pi. 5, 6, 7. 
 
 Consideration of ancient acquaintance, or of being chamber- fellows 
 or entire friends, will not raise an use. 
 
 So consideration of great familiarity or long acquaintance with 
 him, or that they were scholars together in their youth, will not raise 
 an use. 
 
 So if A in consideration that B was bound in a recognizance for 
 him, bargains and sells land to the other, this is not good. 
 
 ANONYMOUS. 
 
 (In the Common Pleas, KITS. 2 Ventris. H.".) 
 
 In an ejectment upon a special verdict the sole point was. whether 
 a lease for a year, upon no other consideration than reserving a 
 pepper-corn, if it be demanded, shall work as a bargain and sale, and 
 so to make the lessee capable of a release. 
 
 And it was resolved that it should, and that the reservation made a 
 sufficient consideration to raise an use, as by bargain and sale. Vide 
 10 Co. in Sutton's Hospital's case. 
 
 i The. efficacy of a bargain and sale appears never to have depended 
 I upon the amount of the consideration; and if any pecuniary consid- 
 eration whatever is expressed in the deed, it is not necessary to 
 prove actual payment, neither will the bargainor or his heirs or dev- 
 isees be permitted to show that nothing was in fact paid. In the 
 ordinary case of a bargain and sale by a lease for years, on which to 
 found the common law conveyance of a release by the owner of the 
 reversion, it has been held that the reservation of a pepper-corn rent, 
 to be paid, if demanded, was sufficient to raise the use.— Walworth, 
 Ch., in Rogers v. Eagle Fire Ins. Company of New York, 9 Wend. 
 611, G31 (1832) citing Barker v. Keete, Freem. Com. L. R., 250, 2 
 Mod. 249 ; s. c, 2 Vent. 35.
 
 Sec. 4) CONSIDERATION. -•"' 
 
 2 ROLLE'S ABRIDGMENT, 784 (I), USES, pi. 5, 6. 
 
 In consideration of certain money given by B. a man may cove- 
 nant to stand seized to the use of A. for life, remainder to C. in t'< 
 for here it is clear that the money was given for both estates ; and 
 though A. and C. are strangers to the gift of money, still they are 
 sufficiently privy as if it was given for them. 
 
 So in consideration of certain money given by B. a man may 
 
 covenant to stand seized to the use of B. for life, remainder to C. in 
 
 fee, or with divers remainders for the money was given for all the 
 
 estates. 1 
 
 
 
 SHARINGTON and PLEDAIX v. STROTTON and Others. 
 (In the Queen's Bench, 1565. 1 Plowden. 208.) 
 
 Trespass quare clansnm fregit, March 20, 1564. The defendant 
 pleaded that the place in which the trespass was supposed to be done 
 was part of the Manor of Bremell, in the county of Wilts, of which 
 one Andrew Baynton was seised in his demesne as of fee; that be- 
 ing so seised, before the alleged trespass, an indenture was made be- 
 tween the said Andrew Baynton and Edward Baynton, his brother, 
 by which, after expressing his intention that the land might con- 
 tinue and remain to those of the blood and name of Baynton therein 
 named, he for said cause and for the good will, fraternal love and 
 favor which he bore Edward his brother and his other brothers there- 
 in named, covenanted and granted that he and his heirs should thence- 
 forth stand and be seised thereof to the use of himself for life and 
 after his death to the use of Edward Baynton and Agnes his wife 
 for their lives with divers remainders over. Andrew died February 
 21, 1564. Edward and his wife entered and claimed as legal tenants 
 for life under said indenture and the Statute of Uses. Defendants 
 justified the alleged trespass as servants of Edward and Agnes. 
 Plaintiffs demurred to this plea and defendants joined in the de- 
 murrer. 
 
 And the matter was argued in Michaelmas Term, in the 7th and 
 8th years of Queen Eliz., by Fleetwood and Wray on the part of the 
 plaintiffs, and by Thomas Bromley and an apprentice of the Middle 
 Temple on the part of the defendants. 
 
 And those who argued on behalf of the plaintiffs said that the 
 matter of the bar was insufficient, and that there was no use here 
 made by this indenture, nor was any possession conveyed to the said 
 Edward Baynton and Agnes by the Statute of Uses upon this cove- 
 nant and agreement by the indenture. For they said, first it is to be 
 considered that Andrew Baynton, at the time of making the inden- 
 
 i See, also, Same's Case, 2 Rolle's Ahr. 791, Uses, pi. 2 (Exchequer, 1609)
 
 26 Tin: nature and requisites of trusts. (Ch. 1 
 
 turc, was seised of the said manor in fee simple, clear of all estates 
 and interests of any stranger therein, and if he intended to make a 
 stranger have a use in it, he ought to have taken one of these Jwo 
 ways to raise such use. The one is, to part with the possession, by the 
 c ircumst ances required by the common law, to the use intended, as 
 to mak e a feoffment, to levy a fine, or to suffer a recovery of the 
 land to the use intended; and this way the common law is satisfied, 
 as well as the party also who has the use, for the circumstances of 
 the common law are pnrsned, and the use is no more than a confi- 
 dence annexed to the estate which the person parts with, and when 
 he parts with the estate by his own consent, he may make it upon con- 
 fidence, and this way the use is properly made. The other way is,_to 
 keep the land in his hands without parting with it, and yet to do such 
 a thing as shall make the possession to be to the use of another, and 
 that cannot be unless the thing done imports in itself a good and snffi- 
 cTent consideration to make the possession be to the use of another, 
 which -hall be upon a contract, or upon a covenant or grant on con- 
 sideration. As if a man is seised of land in fee, and bargains and 
 sells the land to another in consideration of a certain sum paid to 
 him. or agreed to be paid at a certain day, here is a contract and 
 the bargainor shall be seised to the use of the bargainee by the 
 course of the common law, because he has done an act upon consider- 
 ation, that is, he has bargained the land for money; and inasmuch 
 as he hath the money, or security for it, it is reasonable that the bar- 
 gainee should have something for it, and the land he cannot have 
 as his own, because he had not livery of seisin, and therefore reason 
 has necessarily vested the use in him, which is but a right in con- 
 science to have the profits, and to have the land ordered according 
 to his will; and if the bargainor will not permit him so to have it, 
 reason vest- in the bargainee a title to compel him by the Judge of 
 conscience to do it. So is it in the case of a covenant upon consid- 
 eration, as if I promise and agree with another that, if he will marry 
 my daughter, he shall have my land from thenceforth, and he does 
 so, there he shall have a use in my land, and I shall be seised to his 
 use, because a thing is done wdiereby I have benefit; viz. the other 
 has married my daughter, whose advancement in the world is a sat- 
 isfaction and comfort to me, and therefore this is a good considera- 
 tion to make him have a use in my land. So that a good considera- 
 tion is always requisite to create a use de novo in the land of another, 
 where there is no transmutation of the possession of the land. Then 
 in our case here, inasmuch as Andrew Baynton was seised of the land 
 in fee simple, and intended to raise uses in it without any transmuta- 
 tion of the possession, which lie cannot do by the course of the com- 
 mon law, unless the circumstances pursued in the raising of such 
 uses import a good and sufficient consideration to support the same, 
 for this reason we ought to weigh the considerations here, and see 
 what substance they have in the law. And the causes contained in
 
 Sec. 4) consummation. 27 
 
 the indenture are three; first, a desire which he had that the lands 
 might come, remain, and descend to the heirs males of his body 
 limited in the indenture; secondly, his intent that the lands should 
 continue and remain to such of the blood and name of Baynton as are 
 named in the indenture; thirdly, the good will and brotherly love and 
 favor which he bore to his brother Edward Baynton, and to his other 
 brothers. And these are all the considerations for the matter in the 
 rehearsal, viz. that the said Andrew had no issue male, and that he 
 was determined and resolved how his manors and lands should re- 
 main and be as well in his lifetime as after his death, is no considera- 
 tion at all, but the want of issue male is the cause that moved him to 
 resolve, and the resolution is but a demonstration of his mind, and 
 none of them is any consideration, for the considerations are the three 
 before mentioned. And as to the first, viz. his desire that the lands 
 might come to the heirs males of his body, this does not seem to be 
 any consideration to the father, for the father has no gain or advan- 
 tage by it, but the heirs males of his body. And the consideration 
 ought to be to him that is seised of the land, for if he has no recom- 
 pense there is no cause why the use of his land should pass. And 
 none of the considerations contain a recompense here, for the con- 
 tinuance of the land in his blood and name of Baynton is no recom- 
 pense to him, nor cause worthy to raise a use ; no more is the brotherly 
 love and favor which he bore to Edward Baynton, or to his other 
 brothers, for although these causes induce affection, yet every affec- 
 tion is not a sufficient cause to alter the use. For if a man grants 
 to J. S. that in consideration of their long acquaintance, or of their 
 great familiarity, or of their being scholars together in their youth, 
 or upon such like considerations, he will stand seised of his land to 
 his use, this will not change the use, for such considerations are not 
 looked upon in the law as worthy to raise a use, because they don't 
 import any value or recompense. For if upon consideration that you 
 are my familiar friend or acquaintance, or my brother, I promise to 
 pay you £20. at such a day, you shall not have an action upon the 
 case, or an action of debt for it, for it is but a nude and barren con- 
 tract, et ex nudo pacto non oritur actio, and there is no sufficient 
 cause for the payment, nor is anything done or given on the one 
 part, for you were my brother or my acquaintance before, and so 
 will you be afterwards; so that nothing is newly done on the one 
 part, as is requisite in contracts, and also in covenants upon con- 
 sideration. As if I sell my horse to you for money or other recom- 
 pense, here is a thing given on both sides, for the one gives the horse, 
 and the other the money, or other recompense, and therefore it is a 
 good contract. So is it in the case of a covenant upon consideration, 
 as if I covenant with you, that if you will marry my daughter you 
 shall have my land, or I shall be seised to your use; here is an act 
 on both parts, for you are to marry my daughter, and for that I 
 grant to you the use; so that there is an act done, and a cause arising
 
 28 THE NATURE AND REQUISITES OP TRUSTS. (Ch. 1 
 
 newly on each part. But in the principal case there is no such thing, 
 for the issue male of Andrew Baynton should have been his issue 
 male, and his name and hlood should have been his name and blood, 
 and his brothers should have been his brothers, and fraternal love 
 should have been between them, if this covenant or grant had not 
 been made, so that all this was before the indenture or covenant, and 
 should have hem after the time of the indenture or covenant, if the 
 same had not been made. Wherefore no new thing is here done or 
 caused by the one side, and there is no cause here hut what would have 
 been if no such covenant or indenture had been made.' > But the com- 
 mon law requires that there should be a new cause, whereof the 
 countrv may have intelligence or knowledge for the trial of it, if 
 need be, so that it is necessary for the puhlic weal. For livery of 
 seisin was first invented as an act of notoriety, whereby people might 
 have knowledge of estates, and be more able to try them, if they 
 should be empanelled on a jury; and by the like reason when a use 
 shall pass, there ought to be, by the common law, a contract, or a 
 public and notorious consideration to a covenant, which may cause 
 the country to have knowledge of the use for the better trial thereof, 
 if it should be necessary. And such was the intention of the Parlia- 
 ment in 27 Henry VIII. when they made the Act that the possession 
 should be where the use was, one of the great causes of making 
 which Act was to remove ignorance, and that the country might 
 know in whom the estate of the land was. And the like considera- 
 tion they had in making the Act of Enrolments, which restrains es- 
 tates of freehold from passing by bargain and sale, except it be by 
 writing indented enrolled within six months. And if uses might be 
 so easily raised by covenants upon such considerations as these here 
 are, where no act or thing apparent is done whereof the country may 
 have notice, it would destroy the effect of the said Statute of Uses, 
 and would he pernicious to the public weal, and make it very difficult 
 for the people to know who were the owners of lands and tenements. 
 And it is to he presumed that the makers of the said Act of Enrol- 
 ments did not take the common law to be so, for if they had they 
 would have remedied it in this case, as well as they did in the case 
 of a bargain and sale, which is much more notorious than a covenant 
 upon such secret consideration, where no apparent act or thing is 
 done to inform the country of the alteration of the estate in the 
 land; and forasmuch as they did not add any remedy to it, it is an 
 argument that they did not take the law to be that uses might pass 
 upon such covenants without notorious considerations. But if the 
 use had been in esse, it might well enough have passed to a stranger 
 by the grant of cestui que use without any consideration; for the 
 cestui cpie use may as well give or grant his use without considera- 
 tion, as he may his horse or other chattel, and he may also devise 
 it, but to create it de novo out of lands cannot be done without good 
 consideration. And to this purpose they alleged the opinions oi
 
 Sec. 4) CONSIDERATION. 29 
 
 Read and Tremail, two of the Justices of the King's Bench, in the 
 case of an office traversed in 21 Henry VII. and the case there put 
 by Read, fol. 19, was also cited, viz. it was covenanted by indenture 
 between Sir John Mordant and his wife, and one T. that the said T. 
 should have the land to him and to his heirs of his body, and that for 
 default of such issue, the lands should remain to Sir John Mordant 
 and his wife in fee, and it was adjudged that he should not have any 
 use by force of the indenture, as it is there rehearsed by Read, but 
 they were put to their action of covenant. So here no use shall be 
 raised upon these considerations, for they are utterly ineffectual to 
 such purpose, and then if no use could be raised by the common law, 
 from thence it follows that the statute does not execute any posses- 
 sion here, for it executes no possession but where there was a use 
 before; for which reason the bar is not good, but the plaintiffs shall 
 recover. And many other things were said, and many cases put to 
 enforce this argument, which I have omitted, my design being only 
 to show briefly the principal reasons thereof. 
 
 On the contrary Thomas Bromley and the said Apprentice argued 
 for the defendants. 1 The Apprentice divided the matter into two 
 distinct points. First, whether the grant and agreement upon these 
 considerations (admitting it had been without deed or writing) had 
 been sufficient to raise the uses according to the agreement or not. 
 Secondly, admitting the considerations to be insufficient if they had 
 been without deed, or admitting that there were no considerations 
 at all, if nevertheless the uses shall be raised here, inasmuch as the 
 agreement thereunto is by deed. 
 
 And as to the first point, which contains the considerations, he 
 said that the considerations are in number four, and each of them is 
 several', and he made several points of them, and argued to them 
 severally. The first is, the affection of the said i\ndrew Baynton 
 for his heirs males which he should beget on the body of Frances 
 Lee, and his provision in the estate made for their security accord- 
 ingly. * * * The second consideration is the continuance of the 
 land in the name of Baynton, and this seems to be a good considera- 
 tion to raise a use. * * * The third consideration here is, the 
 brotherly love, and continuance of the land in such of the blood of 
 the said Andrew as are mentioned in the indenture, viz. his brothers. 
 * * * The fourth consideration is the marriage had between Ed- 
 ward Baynton and Agnes his wife ; for the use is limited after the 
 death of Andrew to Edward Baynton and Agnes his wife, for term 
 of their lives. * * * 
 
 Then as to the second point, admitting the considerations to be in- 
 sufficient, or admitting that no considerations had been expressed, yet 
 the covenant of itself, without consideration, is sufficient to raise the 
 uses. And in order to understand this the better, let us see what 
 
 i Part of the argument for defendants herein is omitted.
 
 ;;U THE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 advantage the party here shall have by the deed, if the deed be not 
 sufficient to raise the uses. And it seems clearly that he shall have 
 none. For he cam o1 have an action of covenant upon the deed, be- 
 cause there is nothing executory here; for Andrew has covenanted 
 with Edward that he and all persons seised of the land shall from 
 thenceforth stand and be seised to the uses limited. And if they did 
 not stand seised; there is no default in Andrew, but in the law, for he 
 -ranted that from thenceforth, viz. immediately, he would be seised, 
 and no default can be charged in him if he did nol stand seised. Nor 
 ran Edward have an action of covenant against him, for an action of 
 covenant shall never be brought, but where it is covenanted that a 
 thing shall be done in time to come, or that it was done in time past. 
 And, Sir, bv the law of this land there are two ways of making 
 contracts or agreements for lands or chattels. The one is, by words, 
 which is the inferior method: the other is, by writing, which is the 
 superior. And because words are oftentimes spoken by men unad- 
 visedly and without deliberation, the law has provided that a contract 
 by words shall not bind without consideration. As if I promise to 
 give you £20. to make your sale de novo, here you shall not have an 
 action against me for the £20., as it is affirmed in the said case in 
 17 Edward IV., for it is a mule pact, et ex nudo pacto non oritur actio. 
 And the reason is, because it is by words which pass from men light- 
 ly and inconsiderately, but where the agreement is by deed, there is 
 more time for deliberation. For when a man passes a thing by 
 deed, first there is the determination of the mind to do it, and upon 
 that he causes it to be written, which is one part of deliberation, and 
 afterwards he puts his seal to it, which is another part of deliberation, 
 and lastly he delivers the writing as his deed, which is the consum- 
 mation of his resolution; and by the delivery of the deed from him 
 that makes it to him to whom it is made, he gives his assent to part 
 with the thing contained in the deed to him to whom he delivers the 
 deed, and this delivery is as a ceremony in law, signifying fully 
 his good will that the thing in the deed should pass from him to the 
 other. So that there is great deliberation used in the making of 
 deed-, for which reason they are received as a lien final to the party, 
 and are adjudged to bind the party without examining upon what 
 cause or consideration they were made. And therefore in the case 
 put in IT Edward IV. put it thus, that I by deed promise to give you 
 £20. to make your sale de novo, here you shall have an action of debt 
 upon this deed, and the consideration is not examinable, for in the 
 deed there is a sufficient consideration, viz. the will of the party that 
 made the deed. And so where a carpenter, by parol without writing, 
 undertook to build a new house, and for the not doing of it the 
 party in 11 Henry IV. brought an action of covenant against the 
 carpenter, there it does not appear that he should have anything for 
 building the house, and it was adjudged that the plaintiff should take 
 nothing by his writ: but if it had been by specialty, it would have
 
 Sec. 4) CONSIDERATION. 31 
 
 been otherwise ; and so it is there held by Thirning, causa qua supra. 
 So in 45 Edward III. in debt, the plaintiff counted that a covenant 
 was made between him and the defendant, that the plaintiff should 
 marry the defendant's daughter, and that the defendant should be 
 bound to him in £100., and he said that he had married his daughter; 
 and the count was challenged, because this debt is demanded upon a 
 contract touching matrimony, which ought to be in Court Christian ; 
 but notwithstanding this, forasmuch as he demanded a debt upon a 
 deed, whereby it was become a lay contract, he was put to answer : 
 but otherwise it would have been if it had been without deed, as it is 
 there put; and 14 Edward IV. and also 17 Edward IV. are, that if 
 it be without deed the action does not lie, because the marriage, which 
 is the consideration, is a thing spiritual ; which books are contrary to 
 the opinion of Thorp in the said case in 22 Ass. Plow., fol. 305. So 
 that where it is by deed, the cause or consideration is not inquirable, 
 nor is it to be weighed, but the party ought only to answer to the deed, 
 and if he confesses it to be his deed, he shall be bound, for every 
 deed imports in itself a consideration, viz. the will of him that made 
 it, and therefore where the agreement is by deed it shall never be 
 called a nudum pactum. And in an action of debt upon an obliga- 
 tion, the consideration upon which the party made the deed is not to 
 be inquired, for it is sufficient to say that it was his will to make the 
 deed. And so inasmuch as in the principal case it is agreed that the 
 uses might be raised by the deed if there had been a consideration 
 in it, and here there is a consideration contained in the deed, viz. 
 the will of Andrew Baynton, which is sufficient of itself, for this 
 reason the uses shall be raised thereby; and if this should not be 
 sufficient to raise them, yet they should have been raised by other 
 considerations, if they had been without deed, whereas here they are 
 by deed, and so they shall be raised a fortiori. For which reasons 
 they prayed judgment that the plaintiffs might be barred. And many 
 other things were said, and cases put to enforce these arguments. 
 
 And after these arguments the Court took time to deliberate un- 
 til Hilary Term, and from thence until Easter Term, and from 
 thence until this present Trinity Term, in the eighth year of the 
 reign of the present Queen, and the defendants now prayed judgment. 
 And Corbet, Justice, said that he and all his companions had resolv- 
 ed that judgment should be given against the plaintiffs. For it seemed 
 to them that the considerations of the continuance of the land in the 
 name and blood, and of brotherly love, were sufficient to raise the 
 uses limited. But, he said, as my Lord Chief Justice is not now 
 present, you must move it again when he is present, and you shall 
 have judgment. And afterwards, at another day, Catline. Chief 
 Justice, being present, the Apprentice prayed judgment. And Cat- 
 line and the Court were agreed that judgment should be entered 
 against the plaintiffs, and he ordered Haywood, the Prothonotary, 
 to enter it And the Apprentice said, may it please your Lordship
 
 32 THE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 to show us, for our learning, the causes of your judgment. And Cat- 
 line said, it seems to us that the affection of the said Andrew for the 
 p rovision of the heirs males which he should beget, and his desire 
 that the land should continue in the blood and name of Bay nton, and 
 the brotherly love which he bore to his brothers, are sufficient con- 
 s ideration s to rais.e the uses in the land. And where you said in your 
 argument naturae vis maxima, 1 say natura bis maxima, and it is the 
 greatest consideration that can be to raise a use. But as to the other 
 consideration moved in the argument, viz. of the marriage had be- 
 tween Edward Baynton and Agnes, the record does not prove this, 
 nor is it so averred, and it shall not he so intended, and therefore I 
 don't regard it, but the other causes and considerations are effectual, 
 and those which moved us to our judgment. Wherefore judgment 
 was griven for the defendants. 
 
 CALLARD v. CAIXARD. 
 
 (In the Queen's Bench and Exchequer Chamber, 1593. Moore, 687, pi. 050.) 
 
 Tn ejectione firmae upon a demise by Eustace Callard. And upon 
 not guilty pleaded it was found by special verdict that Thomas Cal- 
 lard was seized in fee, and in consideration of the marriage of Eu- 
 stace, his son and heir apparent, Being upon the land spoke these 
 words to the said Eustace, viz.: "Eustace stand forth, I do here, 
 reserving an estate for mine own and my wife's life, give unto thee 
 and thine heirs forever, those my lands and Barton of Southcot." 
 And afterwards Thomas enfeoffed Richard the defendant, his young- 
 er son, in fee, with warranty and died. Eustace entered and made a 
 demise to the plaintiff who entered, and the defendant ejected him. 
 I pon which special verdict, after long debate in the Queen's Bench 
 judgment was given for the plaintiff, upon which the defendant 
 brought a writ of error in the Exchequer Chamber, and here the 
 judgment was reversed at Hilary Term in the year 39 Eliz. Note 
 that in the Queen's Bench, Popham, C. J., held strongly that the 
 consideration of blood raised a use to Eustace without writing, and 
 so he had the possession by 27 Hen. VIII. But Gawdy, Fenner and 
 Clench contra to this opinion, yet in the final judgment they agreed, 
 because they took the words to amount to a feoffment with livery 
 being upon the land, and the use to be to the feoffor and his wife 
 for life, and then to Eustace and his heirs. But note that in the 
 Exchequer Chamber, Ewen took the law in the same manner as the 
 puisne justices in the Queen's Bench, and that the judgment ought 
 to be affirmed for this reason. But he was against Popham that the 
 use would not arise without writing. Beamont took it as a feoff- 
 ment to Eustace in fee and the reservation to the father and his 
 wife void for repugnancy; and therefore wished to have the judg-
 
 Sec. 4) CONSIDERATION. 33 
 
 ment affirmed; and he also was against Popham. But all the other 
 ("ustices, viz., Anderson, Pyrryam, Clerk, Walmesley and Owen all 
 agreed, that there was no feoffment executed, because the intent was - 
 repugnant to the law. that is, to pass an estate to Eustace reserving 
 a particular estate to himself and his wife. And a use it could not b i 
 because the purpose was not to raise a use without an estate executed. 
 but by an estate executed which could not take effect. And they all 
 agreed that if it was a use vet it could not arise upon natural affee 
 tion without a deed. Note that the witnesses that proved the words 
 to the jury were attainted of perjury in the Star Chamber, at Easter 
 Term, 40 Eliz. 
 
 FRAMPTON v. GERRARD. 
 
 (In the Queen's Bench, 1G01. 2 Rolle's Abridgment, 78o (K), Uses, pi. 4; 791, 
 
 pi. 1.) 
 
 Per Curiam. If a man covenant in consideration of blood and of 
 the marriage of his bastard daughter to stand seized to the use of the 
 bastard daughter : this is not a good consideration to raise a use, for 
 in law she is not his daughter, but filia populi. 
 
 If a man levies a fine of certain land and covenants by indenture 
 in consideration of the marriage of his bastard daughter that the 
 conusee shall stand seized to the use of the daughter, though that is 
 not a good consideration to raise an use by way of covenant, yet it 
 is sufficient upon a fine, for the will of the party is sufficient for this 
 without consideration. 
 
 2 ROLLE'S ABRIDGMENT, (I), USES, pi. 5. 
 
 If a man in consideration that B. will marry his daughter covenants 
 to stand seized to the use of B. and his daughter, remainder to C, 
 this is a void remainder to C. because he is a stranger to the consid- 
 eration. 1 
 
 i See, also. Fox v. Wilcocks, 2 Rolle's Abr. 7S3 (H), Uses, pi. 4. 
 
 The cestui que trust is not a stranger to the consideration, if (1) nearly 
 related by blood to the covenantor, e. g. a son or grandson. Bonde v. Edmunds, 
 2 Rolle's Abr. 782, 783 (H), Uses, pi. 3 ; 2 Rolle's Abr. 784 (I), Uses. pi. .".. 1 : 
 2 Rolle's Abr. 785 (K), Uses, pi. 6, 8; Cross v. Fausteuditch, Cro. Jac. ISO; 
 a daughter. 2 Rolle's Abr. 784 (I), Uses, pi. 2, 5; brother of covenantor, Shar- 
 ington v. Strotton, Plowd. 298; nephew, Englefield's Case, 7 Co. R. 116; or if 
 (2) connected by marriage with the covenantor, e. g. wife of covenantor, Be- 
 dell's Case, 7 Co. R. 40a; Burgoine v. Burgoine, :22 Yin. Abr. (N), Uses, pi. in: 
 Co. Lit. 112a ; wife of covenantor's son, Anon. 13 Co. R. IS; Corbyn v. Corbyn, 
 2 Rolle's Abr. 784 (I), Uses, pi. 4; Bould v. Winston, 2 Rolle's Abr. ,M (I), 
 Uses, pi. 3; husband of covenantor's daughter. L' Rolle's Abr. 784 (I), Uses, pi. 
 2; wife of covenantor's brother, 2 Rolle's Abr. TS3 (I), Uses, pi. 1. 
 
 The cestui que trust need not be the covenantee. Cross v. Fausrenditch, Cro. 
 Jac. ISO; Bedell's Case, 7 Co. R. 41a; llarpur's Case, 11 Co. R. 24G ; Buckler 
 v. Syinons, 2 Rolle's Abr. 788, Uses. 
 
 If the cestui que trust be the covenantor's wife, she cannot be the cove- 
 Is; en. Tk. —3
 
 34 TIIK NATURE AND REQUISITES OF TKL'STS. (Cll. 1 
 
 THE STATUTE OF USES, 27 HEN. VIII, c. 10 (1535). 
 
 This statute enacts that where any person or persons stand or be 
 seized or at any time hereafter shall happen to be seized, of and in 
 any honours, castles, manors, lands, tenements, rents, services, re- 
 version-, remainders or other hereditaments, to the use, confidence or 
 trust of any other person or persons or of any body politick by reason 
 of any bargain, sale, feoffment, fine, recovery, covenant, contract, 
 agreement, will or otherwise, by any manner means whatsoever it be: 
 that in every such case, all and every such person and persons, and 
 bodies politick, that have or hereafter shall have any such use, con- 
 fidence or trust, in fee-simple fee-tail, for term of life or for years, 
 or otherwise, or any use, confidence or trust in remainder or reverter, 
 shall from henceforth stand and be seized, deemed and adjudged in 
 lawful seizin, estate and possession of and in the same honours, castles, 
 manors, lands, tenements, rents, services, reversions, remainders and 
 hereditaments, with their appurtenances, to all intents, constructions 
 and purposes in the law, of and in such like estates as they had pr_ 
 shall have in use, trust or confidence of or in the same; and that the 
 estate, title, right and possession that was in such person or persons 
 that were, or hereafter shall be seized of any lands, tenements or 
 hereditaments, to the use, confidence or trust of any such person or 
 persons, or of any body politick, be from henceforth clearly deemed 
 and adjudged to be in him or them that have, or hereafter shall 
 have, such use, confidence or trust, after such quality, manner, form 
 and condition as they had before, in or to the use, confidence or trust, 
 that was in them. 
 
 STATUTE OF INROIXMENTS, 27 HEN. VIII, c. 16. 
 
 Enacts that from July 31, 153G, no manors, lands, tenements or 
 other hereditaments shall pass, alter or change from one to another, 
 whereby any estate of inheritance or freehold shall be made or take 
 effect in any person or persons, or any use thereof to be made, by 
 reason only of any bargain and sale thereof, except the same bargain 
 and sale be made by writing, indented, sealed, and inrolled in one of 
 the King's courts of record at Westminster etc. * * * the same 
 inrollment to be had and made within six months next after the date 
 of the same writings indented. 
 
 In St. 27 Hen. VITT. c. 10, all the conveyances are mentioned, not 
 one word of a consideration in the whole statute, that is left to the 
 judgment of the law; therefore the law hath construed that statute 
 
 nanteo. A husband and wife at common law were one, and therefore the hus- 
 band could not covenant with himself. Co. Lit. 112a.
 
 Sec. 4) CONSIDERATION. 35 
 
 according to the rules of the common law for considerations ; for at 
 common law, that passeth by transmutation of possession, it is so 
 since, and what before the statute could not pass without valuable 
 consideration, so it is since, and not directed by any statute. Plowd. 
 Comment, fol. 301, Sharington's Case. Good consideration is requi- 
 site to create a novel use, where there is no transmutation of pi i 
 sion. The reason why such constructions are made, may be because 
 such conveyances by transmutation of possession are done more sol- 
 emnly and publicly, as in Plowd. 302. Boynton's Case. Therefore 
 the Statute of Inrollments was made, that men might know the own- 
 ers and the tenants to the Praecipe. And the law hath allowed consid- 
 eration of natural affection and marriage sufficient to raise an use, 
 Dyer fol. 33Gb. Bee and Carlton's Case, 11 Rep. fol. 7Gb, tells 
 you what a consideration is, it is a meritorious cause requiring a mu- 
 tual recompense in fact or in law ; in Boynton's Case cited before, ac- 
 quaintance and great familiarity are not sufficient to raise an use. 
 In every promise which gives any cause of action, there must be a 
 consideration, that must be either beneficial to him that made the 
 promise, or prejudicial to him that brings the action. My Lord 
 Bacon in his reading upon the Statute of Uses, hath a good observa- 
 tion, though Uses are accounted light, yet they are ponderous, and 
 nothing but a good consideration can raise them up. There are no 
 considerations now at this day to raise uses upon covenants, but natu- 
 ral love and affection which is for advancement of blood, or consid- 
 eration of marriage, which is the joining of blood and marriage to- 
 gether; other considerations, as money for land, or land for land, 
 though the words be [stand seized to uses] yet they are Bargains and 
 Sales, and without enrollment they raise no use. As you may see in 
 1 Leonard 201, at the end of my Lord Paget's Case, Coke's Com- 
 ment, upon the Statute of Enrollments, p. 672 Plowd. Comment. 
 303, and in many other books. — Per Brome, Serjeant, arg. Carter's 
 Common Pleas Reports, 137, 138-139. 
 
 The second word material is the word "seized" ; this excludes chat- 
 tels—Lord Bacon, Statute of Uses, 43 (Rowe's Ed.). 
 
 Neither the Statute of Uses, nor the 10th section of the Statute of 
 Frauds, embrace personal property. — Dunkin, Ch., in Rice v. Bur- 
 nett, 1 Speer's Eq. 579, 588, 42 Am. Dec. 336 (1844). 1 
 
 i See, also, Watson, Trustee, v. Pitts, 2 McMul. 298 (1S42).
 
 36 THE NAM BE AM) REQUISITES OF TRUSTS. (Ch. 1 
 
 JENKINS CENTURY CASES, 244, CASE XXX, 1580. 
 
 An husband possessed of a lease for years, a ssign s it to B in trust 
 for himself and his wife; the husband cannot assign this trust, for a 
 trusl is nothing in law; and uses being abolished and joined to the 
 possessions, this trust cannot be said to be an use; for if so, the 27 
 II. 8 of transferring uses into possession, would be to no purpose; 
 for this statute requires a seisin to the use, hut there is only a pos- 
 session in a lessee for years. Assignments of trusts beget strife and 
 maintenance, and are void in law. 
 
 By the judges of both Uenches. 
 
 NEVIL v. SAUNDERS. 
 (In Chancery, bof<>r<> Lord Chancellor Jeffreys, 1686. 1 Vernon, Ch. 41.">.) 
 
 Lands were given by will to trustees and their heirs, in trust for 
 Anne the defendant's wife and her heirs, and that the trustees should 
 from time to time pay and dispose of the rents and profits to the 
 said Anne, or to such person or persons as she by any writing under 
 her hand, as well during coverture as being sole, should order or ap- 
 point the same, without the intermeddling of her husband, whom he 
 willed should have no benefit or disposal thereof; and as to the in- 
 heritance of the premises in trust for such person or persons, and for 
 such use and estates, as the said Anne by any writing purporting 
 her will, or other writing under her hand, should appoint; and for 
 want of such appointment, in trust for her and her heirs. 
 
 The question was, whether this was an use executed by the statute, 
 or a bare trust for the wife : and the court held it to be a trust only, 
 and not an use executed by the statute. 
 
 BROOKE'S ABRIDGMENT, FEOFFMENT AL USES, pi. 40, 
 
 1532. 
 
 A man makes a feoffment in fee to four to his use, and the feoffees 
 make a gift in tail to a stranger without consideration who has no 
 notice of the first use to hold to the use of the cestui que use and his 
 heir-, the tenant in tail shall not be seized to the first use, but to his 
 own use, for the statute of West. 2, c. 1, directs that voluntas dona- 
 toris in omnibus observetur, that a man should refer his will to the 
 law and not the law to his will, and so here there is tenure between 
 the donor and the donee, which is a consideration that the tenant in 
 tail shall be seized to his own use, and the same law of tenant for
 
 Sec. 4) CONSIDERATION. 37 
 
 term of vears and for term of life, there fealty is due and where a 
 rent is reserved, there though a use be expressed to the use of the 
 donor or lessor, yet this is a consideration that the donee or lessee 
 shall have it to his own use; and the same law where a man sells his 
 land for £20. by indenture, and executes an estate to his own use; 
 this is a void limitation of the use, for the law, by the consideration 
 of money, makes the land to remain in the vendee. 
 
 TYRREL'S CASE. 
 
 (In the Court of Wards, 1557. 2 Dyer, 155a, pi. 20.) 
 
 Jane Tyrrel, widow, for the sum of four hundred pounds paid by 
 G. Tyrrel her son and heir apparent, by indenture enrolled in chan- 
 cery in the 4th year of Edw. VI, bargained, sold, gave, granted, cove- 
 nanted, and concluded to the said G. Tyrrel all her manors, lands, 
 tenements, etc. to have and to hold the said etc. to the said G. T. and 
 his heirs forever, to the use of the said Jane during her life, without 
 impeachment of waste ; and immediately after her decease to the use 
 of the said G. T. and the heirs of his body lawfully begotten; and in 
 default of such issue, to the use of the heirs of the said Jane forever. 
 Quaere well whether the limitation of those uses upon the habendum 
 are not void and impertinent, because an use cannot be springing, 
 drawn, or reserved out of an use, as appears prima facie? And here 
 it ought to be first an use transferred to the vendee before that any 
 freehold or inheritance in the land can be vested in him by the en- 
 rollment, etc. And this case has been doubted in the Common Pleas 
 before now: ideo quaere legem. But all the judges of C. B. and 
 Saunders, Chief Justice, thought that the limitation of uses above 
 is void, etc. for suppose the Statute of Inrollments [cap. 16] had 
 never been made, but only the Statute of Uses [cap. 10], in 27 Hen. 
 VIII, then the case above could not be, because an use cannot be in- 
 gendered of an use, etc. 
 
 The reason why the use to Jane Tyrrel was void is thus stated by 
 Anderson in 1 And. 37, pi. 96 : "For the bargain for money implies 
 in it a use, and the limitation of the other use is merely contrary, 
 for by this means lL.e use in fee which is in the bargainee in fee alone 
 will be destroyed if the law were not as before [the statute]." 
 
 In Dillam v. Frain, 1 And. 309, 313, Anderson, citing Tyrrel's 
 Case, says: "This limitation of the use is utterly void because by 
 the sale for money the use appears and to limit another (though the 
 other use appear by deed) is merely repugnant and they cannot stand 
 together." He refers to Brooke's Abr. Feoffments al Uses, 40. 1 
 
 i See, also. Anderson in Crumwel v. Andros, 2 And. G9, 81.
 
 38 TUB NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 SAMBACH v. D ALSTON. 
 
 (In Chancery. 1634. Tothill, 189.) 
 
 Because one use cannot be raised out of another, yet ordered, and 
 the defendant ordered to pass according to the intent. 
 
 ASH v. GALLEN. 
 
 (In Chancery, before Lord Keeper Bridgman and Justice Windham, inc»8. 1 
 
 < Jhancery < !ases, 1 14.) 
 
 It was declared, that a use upon a use will not rise by bargain and 
 sale. Dyer, 155, and Chudleigh's Case, 1 Co. Rep. 283. 
 
 But for the plaintiff it was insisted, that though a use could not 
 rise as a use upon a use, yet as a trust it would in equity. 
 
 A case was ordered to be made, but the parties agreed among 
 themselves, and it was not argued at all. 
 
 DIXON v. HARRISON. 
 (Tn Common Pleas, 1669. Vaughan's Reports, 36, 50.) 
 
 VAUGHAN, Ch. J. The intent of the Statute of 27 Hen. VIII, c. 10. 
 which was to bring together the possession and the use, when the 
 use was to one or more persons, and the possession in one or more 
 other separate persons, was soon after the statute 1 wholly declined, 
 upon what good construction or reference I know not. 
 
 For now the use (by the name of trust) which were one and the 
 same before the statute, remains separately in some persons, and the 
 possession separately in others, as it did before the statute, and are 
 not brought together but by decree in chancery, or the voluntary con- 
 veyance of the possessor of the land, to cestui que trust. 
 
 SYMSON v. TURNER. 
 
 (Tn Chancery, 1700. 1 Equity Cases Abridged, ".s. ,.) 
 
 But notwithstanding this statute [St. 27 Hen. VIII, c. 10] there 
 are three ways of creating an use or a trust, which still remains as at 
 common law, and is a creature of the court of equity, and subject only 
 
 i Dean Ames In an article, "The Origin of Uses and Trusts," LM Harvard 
 Law Review, 261, has traced the evolution of the use upon a use into the 
 modern trust, and has shown that the Statute of Uses "so far accomplished 
 its purpose that for a century there was no such thing as the separate exist- 
 ence in any form of the equitable use in land."
 
 Sec. 4) CONSIDERATION. 39 
 
 to their control and direction : 1st, Where a man seized in fee 
 raises a term for years, and limits it in trust for A. etc., for this the 
 statute cannot execute, the termor not being seized. 2dly, Where 
 lands are limited to the use of A. in trust to permit B. to receive the 
 rents and profits; for the statute can only execute the first use. 3dly, 
 Where lands are limited to trustees to receive and pay over the rents 
 and profits to such and such persons ; for here the lands must re- 
 main in them to answer these purposes; and these points were 
 agreed to. 
 
 
 DAW v. NEWBOROUGH. 
 (In Common Pleas, 1715. Comyns, 242, pi. 135.) 
 
 King, Ch. J. And when the estate is limited to Thomas and his 
 heirs, to the use of, etc., the use must of necessity arise out of the 
 estate of the feoffee, etc. to the use, etc. and therefore, if it be to the 
 use of Thomas and his heirs, and after to the use others, this will 
 be an use upon an use which will never be allowed by the rules of 
 law ; for the use is only a liberty or authority to take the profits, but 
 two cannot severally take the profits of the same land, therefore 
 there cannot be an use upon an use. 
 
 But this is now allowed by way of trust in a court of equity. 
 
 It was agreed that a devise might be to the use of another. — 1 
 Leon. 253 (1591). Burchett v. Durdant, 2 Ventris, 311, 312 (1691) 
 ace. 1 
 
 Ex parte PYE. 
 
 Ex parte DUBOST. 
 
 (In Chancery, before Lord Chancellor Eldon, 1811. 18 Ves. Jr. 140.) 
 
 William Mowbray, by his will dated the 10th of April, 1806, gave 
 to Marie Genevieve Garos the sum of £2,500 sterling for her own use 
 over which her husband was to have no power. 
 
 The testator died on the 8th of June, 1809. His widow became a 
 lunatic; the petitioner, Pye, was the committee under the commis- 
 sion, and, upon her death, took out administration to her, and admin- 
 istration de bonis non to the testator. 
 
 i Though the statute of wills (St. 32 Hen. viii, c. 1) was not passed till 1540, 
 five years after the statute of uses, it has been hold that the latter statu te 
 applies to a devise of land to a use and that the statute may transfer the 
 fegal title to the cestui que use. See Sugdeu on Powers (7th Ed.) star pages 
 171-173.
 
 Ill THE NATURE AND REQUISITES OP TRUSTS. (Ch. 1 
 
 The Master's report stated that, by a letter written by the testator 
 to Christopher Dubost, in Paris, on the 25th of November 1807, the 
 testator authorized him to purchase in France an annuity of £100 
 for the benefit of the said Marie Genevieve Garos for her life, and 
 to draw on him for £1,500 on account of such purchase; and under 
 that authority Dubost purchased an annuity of that value; but that, 
 as she wa-. married at the time, and also deranged, the annuity was 
 rjurchased in the name of the testator; and the testator sent to Du- 
 bost, by his desire, a power of attorney, authorizing him to tra n s fe r 
 to Marie Genevieve Garos the said annuity, dated the 10th of June, 
 
 The report further found, upon the affidavit of Dubost and the 
 copy of the deed, that the first intimation he received of the death 
 of the testator, who died in June, ISO!), was in November, 1809; and 
 that, in ignorance of such death, Dubost, on the 21st of October, 
 1809, exercised the power vested in him, by executing to Marie Gene- 
 vieve Garos, her late husband being then dead, and she of sound 
 mind, a deed of gift of the said annuity; and the Master found 
 that, by the law of France, if an attorney be ignorant of the death 
 of the partv who has given the power of attorney, whatever he has 
 done while ignorant of such death is valid. The Master, therefore, 
 stated his opinion that the annuity was no part of the personal es- 
 tate of William Mowbray. 
 
 The first 1 petition prayed that so much of the report as certifies 
 the French annuity to lie no part of the testator's personal estate may 
 be set aside; and that it may be declared that the said annuity is 
 part of his personal estate. 
 
 Sir Arthur Piggott, Mr. Richards, Mr. Wingfield, Mr. Home, and 
 Mr. Wear, for different parties, in support of the first petition. The 
 French annuity being purchased in the testator's name, and no third 
 person interposed as a trustee, the interest could not be transferred 
 from him without certain acts, which were not done at the time of 
 his death. It was therefore competent to him, during his life, to 
 change his purpose, and to make some other provision for this lady 
 by funds in this country; conceiving, perhaps, that she might re- 
 turn here. The authority given to purchase this annuity could not 
 have been enforced against him during his life by a person claiming 
 as a volunteer; nor can it be established against his estate after his 
 death, the act which would have given the benefit of it against the 
 personal representative not having been completed. Where a ques- 
 tion is to be decided by a foreign law, the first step is an inquiry by 
 tlie Master to ascertain what is the law of that country. 
 
 Sir Samuel Komilly and Mr. Bell, contra. 
 
 The Lord CHANCELLOR. The other question involves not only 
 the construction of the French law, and the point whether that has 
 
 i Only so much of the case is given as relates to the first petition.
 
 Sec. 4) CONSIDERATION. 41 
 
 been sufficiently investigated, but farther, whether the power of at- 
 torney amounts here to a declaration of trust. It is clear that this 
 court will not assist a volunteer; yet, if the act is completed , though 
 voluntary, the court will act upon it. It has been decided that, upon 
 an agreement to transfer stock, this court will not interpose; but if 
 the party had declared himself to be the trustee of that stock, it be- 
 comes the property of the cestui (pie trust without more; and the 
 court will act upon it. 
 
 June 113th. Tin; Lord Cuancku.or. These petitions call for the 
 decision of points of more importance and difficulty than I should 
 wish to decide in this way, if the case was not pressed upon the 
 court. With regard to the French annuity, the Master has stated his 
 opinion as to the French law, perhaps without sufficient authority, or 
 sufficient inquiry into the effect of it, as applicable to the precise cir- 
 cumstances of this case ; but it is not necessary to pursue that, as 
 upon the documents before me it does appear that though in one 
 sense this may be represented as the testator's personal estate, .yeL, 
 he has committed to writing what seems to me a sufficient declara- 
 tion that he held this part of the estate in trust for the annuitant. 
 
 Under his judgment, the order was pronounced dismissing the 
 first petition. 
 
 
 WHEATLEY v. PURR. 
 
 (In Chancery, before the Master of the Rolls, Lord Langdale, 1837. 1 Keen. 
 
 551.) 
 
 September 1, 1835, Harriet Oliver made her will and named the 
 defendant Purr as executor. July 1, 1833 she deposited with her 
 bankers, Oakes & Co., £'-2000. This sum was entered in the books of 
 the bankers to the account of Harriet Oliver as trustee for John 
 Richardson Wheatley, Mary YVheatley and Harriet Wheatley, and . 
 the following promissory note was given by them for it : 
 
 "Sudbury Bank, July 1st, 1833. Fourteen days after sight I 
 promise to pay Mrs. Harriet Oliver, trustee for John Richardson 
 Wheatley, Mary Wheatley and Harriet Wheatley, or order, two thou- 
 sand pounds, with interest at 2 r o per cent. For Oakes, Brown, 
 Moore & Hanbury. [Signed] Daniel Hanbury." 
 
 A receipt for this promissory note was signed by Mrs. Oliver, 
 and given to the bankers. 
 
 Harriet Oliver died January 7, 1834, possessed of said promis- 
 sory note. Her will was proved by James Purr. He received pay- 
 ment of the £2000. and interest from Oakes & Co. and invested the 
 same in 3 per cent, consols. 
 
 This bill was filed by the infant plaintiffs, by John Wheatley 
 their father and next friend, and prayed a declaration that Harriet 
 Oliver was a trustee of the £2000. and interest for plaintiffs, and that
 
 
 42 THE NATURE AND REQUISITES OF TRUSTS. (Cll. 1 
 
 such sum and interest be paid to the Accountant General in trust 
 for the benefit of plaintiffs or the stock in which the same had been 
 invested transferred into his name. 
 
 The MASTER OF THE ROLLS. The question is, whether in the acts 
 done by Mrs. < 'liver, for the purpose of constituting herself a trustee 
 for the benefit of Mrs. Wheatley's infant children, anything was 
 wanting to accomplish her purpose. I am of opinion that she did 
 constitute herself a trustee for the infant children, and that a trust 
 was completely declared so as to give to the plaintiffs a title to the 
 relief which they claim. Upon the death of Mrs. Oliver, the hankers 
 were called upon to pay the money by her executor, who had un- 
 doubtedly a right to claim it, in his character of legal personal repre- 
 sentative, upon whom, if Mrs. Oliver was a trustee, the trust devolv- 
 ed. The executor received the money, as part of the general as- 
 sets of the testator. Those assets it was his duty to defend against 
 the claim of the plaintiffs, until their right should be ascertained, 
 and he has acted very properly, therefore, in refusing to part with 
 the fund, without the authority of this Court. 1 
 
 CROSS v. SPRIGG. 
 
 (In Chancery, before Vice Chancellor Sir James Wigram. 1840. H TTare, 552.) 
 
 A suit for the administration of the estate of the testator, Thomas 
 Cross. A reference was directed to inquire whether the defendant 
 John Gilbert was liable to pay any part of the £1000 appearing, by 
 the report, to be due from him, as surety for William Gilbert, and, 
 if so, to certify the amount due for principal and interest. The Mas- 
 ter found that the testator lent William Gilbert £1000 upon his 
 bond, dated the 3d of December, 1838, for the purpose of establish- 
 ing him in business, in partnership with another person ; that John 
 Gilbert and one West were sureties in the bond, each for £333. 6s. 8d. 
 and interest, with a condition that no proceedings should be taken 
 
 i "Even if it were a declaration of trust, it would be invalid for want of 
 consideration. Merc declaration of trust by the owner of property, in favor 
 of a volunteer, is Inoperative, and tins court will not interfere in such a ease. 
 The case is different Where there has been a Change of legal ownership, and so 
 a trust has beep constituted; and then the court will inquire what the trusts- 
 are. But there is uo authority in favor of the defendant's contention." — Lord 
 Chancellor Cranworth, in Scales v. Maude, 6 Do <}., Macn. & G. 43, 51 (1855). 
 
 When the chancellor's attention was called to this dictum ton years later 
 in Jones v. Locke, I,. R. l Oh. App. Cas. 25, 28, he said that the dictum at- 
 tributed to him in Scales v. Maude must have had reference to the Special 
 circumstances of the ease, and, though he considered the decision in that 
 case to be right, the dictum was clearly wrong as a general statement of 
 the law; that there could be no doubt that there might be a valid declaration 
 of trust in favor of a volunteer. 
 
 The validity of a voluntary declaration of trust, made after the analogy of 
 a covenant to stand seised, is now almost universally recognized.
 
 Sec. 4) CONSIDERATION. 43 
 
 to enforce payment against John Gilbert and West, until three 
 months' notice should have been given to them, their executors etc. ; 
 that in September, 1840, William Gilbert and his partner dissolved 
 their partnership, and their creditors agreed to accept a composition 
 of lis. in the pound on their debts; that the testator agreed to b§ 
 come surety for the payment of such composition, and agreed with 
 William Gilbert to relinquish and give up the bond debt, and all in- 
 terest that had accrued thereon, and promised him to deliver up the 
 l)Diid to be cancelled, but did not do so, because, as he told William 
 Gilbert, he could not find such bond; thai the testator never applied 
 for the payment of the principal or interest on the bond, and a short 
 time before his death he gave William Gilbert £60. and told him that 
 such sum and all other monies which he had received from him (the 
 testator), and had not repaid, were to be considered as gifts. And 
 the .Master found, that, under the circumstances aforesaid, the de- 
 fendant John Gilbert was not liable to pay any part of the said £1000. 
 and interest. 
 
 Several exceptions were taken to this report. 
 
 Vice Chancellor. The question raised by the exceptions in this 
 case was, whether William Gilbert, the obligor in a bond for £1000., 
 was liable for the amount of such bond to the defendant Harriet 
 Clara Sprigg, the widow and administratrix of Cross, the obligee in 
 the bond and the testator in the cause; and this general question 
 resolved itself into two — first, whether the testator's declarations jus- 
 tified the conclusion, that he had abandoned all intention of recover- 
 ing upon the bond, and intended that the obligor should no longer be 
 liable upon it; and, secondly, if that were answered in the affirmative, 
 what were the consequences in respect to the liability of the obligor? 
 
 Assuming the first question to be answered in the affirmative, I had 
 no hesitation in holding, at the close of the argument, that the debt 
 remained at law, and to that opinion I adhere. I was also of opinion, 
 that, if the debt remained at law, it must remain in equity unless some 
 special grounds were laid for a different conclusion; and I was of 
 opinion, that a mere intention on the part of the testator, which he 
 might at any time have changed, not to sue upon the bond, would 
 not give such an equity. But, as the case of Flower v. Marten [2 
 Myl. & Cr. 459] appeared to have escaped the recollection of counsel, 
 I requested that the exceptions might be spoken to, by one counsel 
 on a side, with reference to some of the principles which the Lord 
 Chancellor laid down in that case, and upon which the cases there 
 referred to were decided. This was accordingly done, and I have 
 now to state the grounds upon which I have come to the conclusion, 
 that the obligor, having, in this case, no defense at law, has none in 
 equity. 
 
 In Wekett v. Raby [2 Bro. P. C. 386, Toml. Ed.], Raby was in- 
 debted to the testator, Mr. Piggott, on a bond for securing £335. 5s. 
 Mr. Piggott made his will, and appointed the appellant, Mary, his
 
 44 TIIE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 executrix and residuary legatee, and died about two years afterwards. 
 J n his last sickness, and a few days only before his death, he said 
 to the appellant, Mary, "I have Raby's bond, which I keep; I don't 
 deliver it up, for I may live to want it more than he; but when I die, 
 he shall have it; he shall not be asked or troubled for it." After 
 the death of the testator, Raby asked Mary to make him a present of 
 the bond, but did not pretend to have any right to it ; her answer 
 was "You may be easy — it is safe in my hands;" she afterwards add- 
 ed. "If I marry, I will deliver the bond to you the night before.'* 
 Mary having afterwards put the bond in suit, Lord Macclesfield, up- 
 on Raby's bill, ordered the bond to be cancelled, and the Hou<e of 
 Lords confirmed that decree. The circumstances of that case bring 
 it within the principle examined by the Vice Chancellor in Padmore 
 v. Gunning [7 Sim. 644], and to that principle the decision in Wekett 
 v. Raby is referred by the Lord Chancellor in the case of Byrn v. 
 Godfrey. It would have been a fraud in the residuary legatee to en- 
 force the bond. The decision did not proceed upon the ground of re- 
 lease. 
 
 Richards v. Syms [2 Eq. Ca. Ab. 617] decided that a creditor, 
 whose debt was secured by a bond and mortgage, released the debt by 
 delivering up the bond and mortgage with the declared intention of 
 releasing the debt ; but that, I apprehend, was considered by Lord 
 1 [ardwicke as a legal and not merely as an equitable discharge, and; 
 moreover, was a different thing from the mere declaration of inten- 
 tion to forgive a debt. Lord Hardwicke seemed, at first, to be of 
 opinion, that it was an equity which could only be enforced if the 
 creditor was plaintiff; but he afterwards said it was otherwise, for 
 that the law was with the debtor. 
 
 In Aston v. Pye [5 Yes. 350, n.], cited in a note on Eden v. Smyth, 
 and commented upon by the Lord Chancellor, in Byrn v. Godfrey, 
 and in Eden v. Smyth, the following entry was made in the books of 
 the testator, the payee of a note: "Pye pays no interest, nor shall I 
 ever take the principal, unless greatly distressed." The testator died. 
 The case came before Lord Kenyon, at the Rolls, upon the question, 
 whether the debt was subsisting, and Lord Kenyon sent the parties 
 to law. It does not appear that Lord Kenyon, or Lord Loughborough 
 noticing this case, thought that the maker of the note could have any 
 equity, if the law was against him, as it was held to be. 
 
 Byrn v. Godfrey [4 Yes. 6] is the next case. In that case the tes- 
 tator held a promissory note for £200. He frequently told his execu- 
 tor that he never meant to call for payment of the note, and made a 
 statement to that effect the day before his death. Lord Loughborough 
 said, that the case relied upon was not a release, so that he could say 
 that the debt was gone by the act of the party to whom the money 
 was due; nor was it a legacy; and the bill was dismissed, so far as 
 it prayed that the note might be cancelled. In that case Lord Lough- 
 borough referred to Wekett v. Raby and Aston v. Pye, and the case
 
 Sec. 1) CONSIDERATION. 45 
 
 of Richards v. Syms before Lord Hardwicke to which I have already 
 referred. 
 
 The next case is Eden v. Smyth [5 Ves. 341]. In that case the 
 question was, whether a legatee was entitled to his legacy discha 
 of a debt he owed testator. Letters and declarations of the testator 
 were given in evidence, and also accounts of the testator, and memo- 
 randa in his handwriting; and, upon the evidence, the court held, 
 that the debt was discharged. The judge who decided this case was 
 the same who decided Byrn v. Godfrey, which was cited; and it is 
 not to be assumed, that he intended, in Eden v. Smyth, to act upon 
 a different principle from that upon which he decided Byrn v. God- 
 frcv. In Eden v. Smyth the Lord Chancellor did that which, per- 
 haps, would be considered questionable at this day; he entered into 
 an inquiry, what the testator, at the time of making his will, consid- 
 ered or intended to consider his fortune as consisting of, as distin- 
 guished from what it actually consisted of. But it is unnecessary 
 to rely upon this, for it is manifest that Lord Loughborough's judg- 
 ment did not proceed upon any distinction between legal and equita- 
 ble discharges of a debt. His judgment was, that the debt was gone 
 at law. 
 
 Reeves v. Brymer [G Yes. 516] is a most important case. Nothing 
 could be more explicit or certain than the intention of the obligee to 
 discharge the obligor. Lord Alvanley thought it a hard case and 
 desired to find the means of having the obligor discharged. But 
 he would do nothing, except give the parties leave to proceed at law. 
 Eden v. Smyth and Aston v. Pye were cited, and Lord Alvanley's 
 observations show that he considered Eden v. Smyth as proceeding 
 upon the same grounds as I have. 
 
 Gilbert v. Wetherell [2 S. & S. 251] is not a very clear case. It 
 was a transaction between father and son. The father had lent the 
 son £10,000 and took his promissory note for it ; an account was 
 afterwards settled between them, by which it appeared, that more than 
 £9,000. was due upon the note. Further transactions took place, 
 by which it was said the son became further indebted to his father. 
 The father, shortly before his death, burned the promissory note in 
 the presence of a witness, saying at the time, "Now Thomas owes me 
 £11,000." Sir John Leech said, that the circumstances under which 
 the note had been destroyed amounted to an equitable release of the 
 debt, but that the sum of £9,000 and upwards, which remained due 
 by the account stated, must be considered as an advancement. None 
 of the preceding cases were cited; and this is, I believe, the first case 
 in which the principle is laid down, (if it be there laid down,) that 
 voluntary transactions on the part of an obligee, which at law are 
 inoperative, create an equity in favor of the debtor to be discharged 
 from his debt. But the case cannot be an authority for any abstract 
 proposition; for Sir John Leech held, that the transaction converted
 
 46 THE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 the debt into an advancement. Tt is impossible to treat the case as 
 not depending upon the relation between the obligor and the obligee. 
 
 The only case which has made me doubl my conclusion is that of 
 Flower v. Marten [2 My. & Cr. 459] which contains language on the 
 part of the Lord Chancellor, expressive, it is said, of his opinion, that 
 where a creditor by his conduct shows an intention to abandon his 
 rights as a creditor, and treat the debt as a gift to the debtor, equity 
 will not permit the debt to be enforced. If I understood the case 
 as deciding any such abstract proposition, I should unhesitatingly 
 follow it. but I do not understand that such is the effect of the 
 judgment. 
 
 The cases which the Lord Chancellor adverts to as governing his 
 decision, are Wekett v. Raby and Eden v. Smyth, which certainly es- 
 tablish no such abstract proposition; and the judgment of the Lord 
 Chancellor throughout, by a pointed reference to the peculiar circum- 
 stances attending the creation of the debt, and the relation in which 
 the debtor and creditor stood to each other, shows that he did not 
 found his judgment upon any such proposition. The case before 
 me is the case of a creditor declaring (not to his debtor) his intention 
 not to sue upon a bond ; for I have no evidence of the alleged era- 
 sure of the bond in the testator's books, and I do not propose to make 
 that erasure the subject of inquiry, as it would not alter my opinion 
 if it were proved; and if the case rested here, I should hold that the 
 debtor remained liable on his bond. 
 
 But it was said, that the defendant Harriet Clara Sprigg admits 
 that she heard the testator say, that the bond was not to be enforced, 
 and that she, as residuary legatee for life, is within the principle of 
 Wekett v. Raby. The utmost extent to which that observation would 
 carry the case is this, that Harriet Clara Sprigg could not during 
 her life claim the interest of the bond; but that is not the question 
 I have now to decide. 
 
 The ground on which I proceed is, that, if in this case obligor has 
 no defense at law, he has none in equity. The legal question may 
 be tried by an action, if he desires it. 1 
 
 i The holder of an obligation may make a jrift of the same to the obligor, 
 in whole or in part, by extinguishing the obligation in whole or in part. The 
 extinguishment may in the ease of any obligation be effected by the delivery 
 to the obligor of a release under seal. Stearns v. Tappin, 5 Drier (N. Y.) 294 
 (1856); Wain v. Wain. 58 N. J. L. 640, 34 Ati. IOCS (1896). 
 
 If the obligation be a specialty, the extinguishment may be effected in sev- 
 eral other wars: (1) By delivering the instrument to the obligor. Slade v. 
 Mutrie, L56 Mass. IP. 30 N. E. 168 (1892); Stewart v. Hidden. Ki Min. 43 (Gil. 
 29) (1868); Vanderbeck v. Vanderbeck, 30 N. J. Eq., 265, 270 (1878) Ellsworth 
 v. Fogg, 35 Vt. 355 (1862); Larkin v. Hardenbrook, 90 N. Y. 333, l.'i Am. Rep. 
 L76 (1882). (2) By physically destroying the Instrument. Bank of D. S. v. 
 Sill 5 Conn. 106, Hi (1823). (3) By a cancellation of the instrument. 
 rglesias v. River Plate Bank, L. R. 3 C. P. D. 60 (1S77).
 
 Sec. 4) CONSIDERATION. 47 
 
 JEFFERYS v. JEFFERYS. 
 (In Chancery, before Lord Chancellor Cottenham, L841. Craig & Phillips, 138.) 
 
 [ohn reffervs executed certain indentures of lease and release of 
 the Hith and 17th of September, 1834, whereby, in consideration of 
 the natural love and affection which he had for his daughters, and 
 for divers other good considerations, he conveyed certain freehold 
 hereditaments, and covenanted to surrender certain copyhold heredita- 
 ments, to Bowden and Thorn, upon trust, after his death to sell the 
 same and after paying from the proceeds certain encumbrances to 
 stand possessed of the residue of such moneys upon certain trusts 
 for his daughters. 
 
 Tohn Jcfferys never surrendered the copyholds, and died in 1836 
 leaving a will by which he gave a part of the above mentioned free- 
 hold and copyhold estates to his wife, Isabella, who, shortly after 
 his death, was admitted to part of the copyhold estates. 
 
 In July, 1837, his daughters filed this bill against their mother and 
 trustees praying that the trust be carried into execution and that the 
 mother be decreed to surrender the copyholds to which she had been 
 admitted to the trustees. 
 
 The Lord Chancellor. The title of the plaintiffs to the free- 
 hold is complete; and they may have a decree for carrying the settle- 
 ment into effect so far as the freeholds are eoncerned. With respect 
 to the copyholds, I have no doubt that the court will not execute a 
 voluntary contract; and my impression is, that the principle of the 
 court to withhold its assistance from a volunteer applies equally, 
 whether he seeks to have the benefit of a contract, a covenant, or 
 a settlement. As, however, the decision in Ellis v. Nimmo [Lloyd & 
 G. Rep. T. Sugd. 333] is entitled to the highest consideration, I will 
 not dispose of this case absolutely, without looking at a former case, 
 in which I had occasion to refer to that decision. L T nless I alter 
 the opinion I have expressed, the bill must be dismissed with costs, 
 so far as the copyholds are concerned. 
 
 On this day his lordship said he had looked at the case alluded to, 
 and that he saw no reason for altering the opinion he had before ex- 
 pressed. 
 
 ELLISON v. ELLISON. 
 
 (In Chancery, before Lord Chancellor Eldon, 1802. 6 Ves. Jr. 656.) 
 
 A lease of certain collieries for 31 years was made to Charles Wren 
 and others. By indenture dated July 1, 1791, it was declared that 
 Wren should stand possessed of the lease in trust as to one moiety 
 for Ellison. 
 
 By a n, indenture da ted Tune 18, 1796, Ellison assigned his interest 
 in -aid collieries and the stock, etc. to Wren in trust for Ellison for
 
 -48 'llli: NATURE AMi Ui'.ol ISITKS OF TRUSTS. (Ch. 1 
 
 life and after his death upon other trusts. This indenture contained 
 a power to revoke the trusts so created. 
 
 By an indenture dated July :'», 179%, Wren assigned to Ellison one 
 undivided moiety of all the said collieries demised to him, with a like 
 share of the St< »ck. 
 
 Ellison by will dated June 22, 1796, gave all the residue of his pcr- 
 sonal estate to his wife and Wren upon certain trusts and appointed 
 them his executors. 
 
 Ellison died in 1798, leaving a wife and ten children him surviving; 
 one of which Charles K. died in 1799, an infant. Wren also died in 
 1799. The bill was filed by the testator's widow and Margaret Clav- 
 ering, one of the cestuis que trust in the deed of June IS, 17%, pray- 
 ing that the trusts of that deed might be established and new trustees 
 appointed. 
 
 The younger children by their answer submitted, whether the trusts 
 of that deed were not varied or revoked by the indenture of July 3, 
 1797, from Wren to Ellison. 
 
 Mr. Steele and Mr. W. Agar for the younger children. The sub- 
 sequent deed is an implied revocation. What use could there be in 
 that deed but to give Ellison the absolute estate; which is quite in- 
 consistent with the trusts of the former deed ; which are very special, 
 and give a large discretion? An instrument may be revoked by an- 
 other, though not taking notice of the former, but only making a 
 disposition inconsistent with it. * * * There is no instance, in 
 which a voluntary deed, defective, and not effectual at law, has been 
 aided in this Court; and though this is in some respects in favor of 
 a wife and children, one of the parties claiming under it is a volunteer; 
 and it is opposed by nine out of ten children. This deed, like that in 
 Coleman v. Sarrel [1 Ves. Jr. 50], cannot be proceeded upon at law. 
 But, if the trust was originally well created, yet if the subject gets 
 back, and is vested in the author of the trust, the objection lies. 
 
 Lord Chancellor [Eldon]. 1 I had no doubt, that from the mo- 
 ment of executing the first deed, supposing it not to have been for 
 a wife and children, but for pure volunteers, those volunteers might 
 have fded a bill in equity on the ground of their interests in that in- 
 strument ; making the trustees and the author of the deed parties. I 
 take the distinction to he, that if you want the assistance of the Court 
 to constitute you cestui que trust, and the instrument is voluntary, 
 y< >u shall not have that assistance for the purpose of constituting you 
 cestui que trust; as upon a covenant to transfer stock, etc., if it rests 
 in covenant, and is purely voluntary, this Court will not execute that 
 voluntary covenant: but if the party has completely transferred stock, 
 etc. though it is voluntary, yet the legal conveyance being effectually 
 made, the equitable interest will be enforced by this Court. That dis- 
 tinction was clearly taken in Coleman v. Sarrel, independent of the 
 
 i Part of the argument of counsel, us also of the opinion, is omitted.
 
 Sec. 4) CONSIDERATION. 40 
 
 vicious consideration. I stated the objection, that the deed was vol- 
 untary: and the Lord Chancellor went with me so far as to consider 
 it a good objection to executing what remained in covenant. But if 
 the actual transfer is made, that constitutes the relation between trus- 
 tee and cestui que trust, though voluntary, and without good or meri- 
 torious consideration; and it is clear in that case, that if the stock- 
 had been actually transferred, unless the transfer was affected by the 
 turpitude of the consideration, the Court would have executed it 
 against the trustees and the author of the trust. 
 
 In this case therefore the person claiming under the settlement 
 might maintain a suit, notwithstanding any objection made to it, as 
 being voluntary. * * * 
 
 But it was put for the defendant thus ; that though the instrument 
 would have been executed originally, if the subject got back by ac- 
 cident into the author of the trust, and was vested in him, then the 
 objection will lie in the same manner, as if the instrument was volun- 
 tary. I doubt that for many reasons : the trust being once well cre- 
 ated ; and whether it would apply at all, where the trust was original- 
 ly well created ; and did not rest merely in engagement to create it. 
 Suppose, Wren had died ; and had made Ellison his executor : it 
 would be extraordinary to hold, that though an execution would be 
 decreed against him as executor, yet, happening to be also author of 
 the trust, therefore an end was to be put to the interest of the cestui 
 que trust. * * * I think, therefore, upon the whole, this trust 
 does remain notwithstanding this re-assignment of the legal estate 
 to_ Ellison. * * * 
 
 Upon the whole therefore this relief must be granted; though I 
 agree, that, if it rested in covenant, the personal representative might 
 have put them to their legal remedies, he cannot, where the character 
 of trust attached upon the estate, while in Wren ; which character of 
 trust therefore should adhere to the estate in Ellison. 
 
 VOYLE v. HUGHES. 
 
 (In Chancery, before Vice Chancellor Sir John Stuart, 1854. 2 Smale & Gif- 
 
 fard, 18.) 
 
 The Vice Chancellor. 1 The question in this case is as to the 
 validity of a voluntary assignment by deed, duly executed, of a re- 
 versionary interest in a sum of money in the public funds, standing 
 in the names of the trustees of the settlement under which the as- 
 signor was entitled. According to the decision in the case of Meek 
 v. Kettlewell [1 Hare, 464; s. c, on appeal, 1 Ph. 342], as affirmed 
 on appeal, this instrument is to be treated, not as an assignment but 
 
 i Part of the opinion is omitted. 
 Ken.Tb. — 4
 
 50 THE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 as a mere agreement ; and being voluntary, and without any valuable 
 consideration to support it, it confers no right on the seeming as- 
 signee to which this Court can give effect. The soundness of the doc- 
 trine which treats a deed of assignment, complete in form, as a mere 
 agreement, although it in terms assigns and transfers an equitable re- 
 versionary interest in personal property, and which denies to it in 
 this Court, if voluntary, any effect as a transfer of the right to prop- 
 erty, has been much questioned. If that doctrine is to prevail, it de- 
 prives the owners of reversionary personal property of the right of 
 alienation by one legitimate mode. As abridging the right of aliena- 
 tion, it materially lessens the value to its owners of the enormous and 
 increasing amount of reversionary personal property. Fortunately, 
 in the recent case of Kekewich v. Manning [1 De G., Mac. & G. 
 176], a more liberal and enlightened view of the law upon this sub- 
 ject was taken. In the present case, the question arises in a simple 
 form. Under the trusts of the marriage settlement of 1820 the sum 
 of £3900. 3 per cent. Consolidated Rank Annuities was vested in the 
 names of trustees (of whom the defendant Tooke is the survivor), 
 upon trust, after the death of Admiral Noble, and in case his wife 
 should die in his lifetime without issue, and without appointing the 
 fund (all of which events happened) for her next of kin, according 
 to the statute of distributions, and as if she had died unmarried and 
 intestate. In 1840 Mrs. Noble died, so that upon her death her next 
 of kin had a vested interest, subject only to the life estate of Ad- 
 miral Noble, who died in 1851. After Mrs. Noble's death in 1810, 
 Mrs. Kiirner, one of her next of kin, having thus a vested interest in 
 one-fifth of the fund, subject only to Admiral Noble's life estate, ex- 
 ecuted the deed of assignment under which the plaintiffs claim.. The 
 assignment is by deed dated the 8th day of November, 1840. It re- 
 cites the title of Mrs. Kiirner under the settlement, and is in form an 
 absolute assignment by Mrs. Kiirner of her one-fifth of the trust 
 fund to Caroline Sarah Noble, and gave her a power of attorney to 
 receive it from the trustees. The deed contains a covenant for fur- 
 ther assurance and quiet enjoyment. The consideration expressed in 
 the deed is natural love and affection; but, as Caroline Sarah Noble 
 was a daughter of the admiral by a former marriage, there was no re- 
 lationship in blood to Mrs. Kiirner; the assignment, therefore, is 
 purely voluntary. Mrs. Kiirner, the assignor, herself transmitted 
 the deed to Mr. Tooke, the trustee, who gave a copy of it to Miss 
 Noble. It has been argued, that, as this assignment is purely volun- 
 tary, it is a mere agreement, without any consideration to support it ; 
 that it is imperfect as a gift ; imperfect, too, as a declaration of trust, 
 and must wholly fail. Each of these three objections assumes an 
 imperfection in the assignment, which is unfounded in fact; it is not 
 an agreement, it is an absolute assignment by deed, purporting to 
 transfer the estate or interest of the assignor to the assignee. As 
 between them the transaction is complete ; notice was given to the
 
 Sec. 4) CONSIDERATION. 51 
 
 trustee, and that notice completed the transaction as to third parties; 
 it established the right of the assignee on any question of priority, 
 and protected her against any fraudulent receipt by the assignor. 
 All this carries the transaction beyond mere agreement. 
 
 Nevertheless, Lord Hardwicke and other Judges have said that 
 the assignment of reversionary personal property, for valuable con- 
 sideration, "operates by way of agreement or contract, amounting, 
 in the consideration of the Court, to this, that one agrees with the 
 other to transfer and make good that right or interest." To treat 
 an actual assignment by deed as a mere agreement, was a device re- 
 sorted to in the earlier efforts to get rid of the legal doctrine, "that 
 no possibility, right, title nor thing in action shall be granted or as- 
 signed to strangers." 
 
 The progress of law as a science, keeping pace, although not uni- 
 formly, with the advancement of civilization and wealth, has sanc- 
 tioned modes of alienation and enjoyment of property, both real 
 and personal, which were prohibited by the common law. During the 
 successive steps of this progress, strange anomalies occasionally pre- 
 vailed. Contingent and executory interests in chattels or personal 
 estate were allowed to pass by testamentary disposition before con- 
 tingent inheritable interests in land. It is only by modern decisions 
 that the same power of testamentary disposition, before allowed to 
 chattels personal, was extended to inheritable contingent interests 
 and possibilities. That a valid voluntary disposition of contingent 
 and executory or reversionary interests and possibilities might be 
 made by will, but not by deed, was an anomaly which could not long 
 be tolerated. Even before assignments of reversionary interests, pos- 
 sibilities and expectancies of personal property were supported on 
 the ground of agreements or by force only of a valuable considera- 
 tion ; more than one great Judge of this Court had endeavored to 
 get rid of the strict rule of law. 
 
 Lord Chancellor Cowper, in the case of Thomas v. Freeman [2 
 Vern. 563], says: "It is a notion that has obtained at law, that a 
 possibility is not assignable, but no reason for it if res integra; but 
 the law is not so unreasonable but to allow that it may be released." 
 And that same Judge, soon after, in Crouch v. Martin [Id. 595], 
 held that a chose in action is assignable in equity upon a consideration 
 paid. In the case of Lord Carteret v. Paschal [3 P. Wms. 197] 
 it was carried further, for it was said to be admitted on all sides, 
 that, if a man in his own right be entitled to a bond or other chose 
 in action, he may assign it without any consideration. But this view- 
 was not constantly adhered to ; and there are several subsequent 
 cases in which a valuable consideration was held necessary to support 
 an assignment of mere personal property. Even after the decisions in 
 Sloane v. Cadogan [Sugd. Vend. & Pur. App. 24] by Sir W. Grant, 
 and Fortescue v. Barnett [3 My. & K. 36] by Sir John Leach, it was 
 held by Sir James Wigram and Lord Lyndhurst, in the case of
 
 ."2 THE NATURE AND REQ1 [SITES OF TRUSTS. (Cll. 1 
 
 Meek v. Kcttlewell [1 Hare, 464; S. C. 1 Ph. 342], that the want 
 of valuable consideration to support the assignment made it inef- 
 fectual in equity. The more recent decision, in the case of Kekewich 
 v. Manning, in which the authorities were reviewed, and in which 
 the assignment was held to be valid, notwithstanding the want of 
 valuable consideration, is sufficiently supported by authority, and rests 
 on a sound and intelligible principle. The argument which treats the 
 deed of assignment as a mere agreement or executory instrument, 
 rests on this, that the property is not transferable at law. But if 
 that be a reason for treating the deed not as an actual conveyance, 
 which it purports to be, why should it not as well apply to all con- 
 veyances of equitable interests in real or personal estate, which are 
 not transferable or conusable at law? 
 
 The deed of assignment being a perfect instrument, there is no 
 room for the argument against its effectiveness founded on the doc- 
 trine that an incomplete gift is invalid in equity. In the case of An- 
 trobus v. Smith [12 Ves. 39], and Edwards v. Jones [1 My. & Cr. 
 226], there was no deed of assignment, no completeness in the trans- 
 action. In Antrobus v. Smith the prayer of the bill was, that a 
 proper deed of assignment might be executed. 
 
 As to treating an assignment by deed as a declaration of trust, or 
 refusing to it any operation because it cannot be properly treated as a 
 declaration of trust, there seems no legitimate ground for such an 
 argument. If a deed of actual assignment of an equitable interest 
 has any operation in equity as divesting the assignor of his equitable 
 right, it is an operation no more in the nature of declaring a trust 
 than any other actual conveyance of any equitable estate or interest 
 in real or personal property. Therefore, there seems no other just 
 view of this case than that which treats the instrument as an actual 
 deed of assignment, and not as a mere agreement or executory in- 
 strument. And, if in the case of an assignment of an equitable re- 
 versionary interest in personalty for valuable consideration, the as- 
 signment, being by deed, transfers the property from the assignor to 
 the assignee, and is not a mere agreement, the actual assignment by 
 deed of the same kind of property, without any valuable considera- 
 tion, is not a mere agreement, and is not merely executory, but is 
 an actual transfer of an equitable right. This puts it beyond the in- 
 firmity of an incomplete gift, or the case of a right resting merely in 
 contract, which requires a valuable consideration to induce a Court 
 of Equity to interfere. * * * 
 
 Upon the whole, my opinion is, that, by force of the deed of assign- 
 ment, the equitable right was transferred by Mrs. Kiirner to Miss 
 Noble; that the transaction was completed by Mrs. Kiirner's execu- 
 tion of the deed, and that no valuable consideration was necessary to 
 support the assignment. The plaintiffs, therefore, are entitled to a 
 decree for the transfer of the fund.
 
 Sec. 4) CONSIDERATION. 53 
 
 CLOUGH v. CLOUGH. 
 
 (Supreme Court of Massachusetts, 1875. 117 Mass. 83.) 
 
 Contract for money had and received. Trial in the Superior 
 Court, before Aldrich, J., who allowed a bill of exceptions substan- 
 tially as follows : 
 
 The plaintiff is the widow of Charles H. Clough and administra- 
 trix of his estate ; he left a minor son, a mother, one sister and sev- 
 eral brothers, including- the defendant. The defendant admitted that 
 he had received from the intestate $400 as a donatio causa mortis; 
 that intestate, during his last sickness and a few days before his death 
 gave and delivered to him the $400 in trust for his minor son, with 
 instructions to invest and hold the same till the son should be twenty- 
 one and then to pay the same with all accumulations to the son; but 
 should the son die before twenty-one to pay the same in equal parts 
 to intestate's mother and only sister; that he accepted the trust, 
 took the money and retained it till after decedent's death and then de- 
 posited it in a savings bank, in his own name, as trustee for the minor 
 son, where the money has ever since remained. 
 
 Plaintiff requested the court to charge "that if they found that 
 the deceased directed the defendant in case he died to keep the money 
 and give it to the child if he lived to be twenty-one years of age, and, 
 if he did not, to divide it between the mother and sister of the deceas- 
 ed, that would not be in law a gift to the child, mother or sister; and 
 that such a disposition could only be made by will." 
 
 The judge declined this request and told the jury that personal 
 property might be so given and delivered to one in trust for another 
 for a particular purpose, that it would be good as a donatio causa 
 mortis; and that in the present case if the jury should find, upon 
 the evidence, that the intestate, in contemplation of impending death, 
 did give and deliver to the defendant the $400 in trust to be paid over 
 as contended by the defendant, and that the defendant accepted the 
 trust and at the same time received the money and retained it in his 
 possession until the death of his brother a few days after this trans- 
 action, and then deposited the money as he had testified, that would 
 constitute a valid donatio causa mortis, and vest the property in the 
 defendant as such trustee; and that if they so found, it would be 
 their duty to return a verdict for the defendant upon this part of the 
 case. The jury found for the defendant, and to the instructions 
 and refusal to instruct the plaintiff alleged exceptions. 
 
 Gray, C. J. Upon the facts which must have been found by the jury 
 under the instructions of the court, the legal title in the subject of 
 the gift vested in the donee, subject to no condition or contingency 
 but the death of the donor. The fact that the donee took it for third 
 persons upon a trust, the terms and limitations of which were pre- 
 scribed by the donor and might vary according to subsequent events,
 
 54 TIIE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 did not affect the validity of the gift as a donatio mortis causa. Hills 
 v. Hills, 8 M. & W. 401. Sessions v. Moseley, 4 Cush 87. Borne- 
 man v. Sidlinger, 15 Maine, r."', 33 Am. Dec. 626, and 21 Maine, 
 185. Dresser v. Dresser, 46 Maine, 48. 1 Story Eq. Jur. (11th 
 Ed.) § 607e. 
 
 Exceptions overruled. 1 
 
 WALKER, Guardian, v. CREWS. 
 (Supreme Court of Alabama, 1882. 73 Ala. 412.) 
 
 Appeal from Barbour Chancery Court. 
 
 On March 12, 1867, Arthur Crews executed a deed of gift to his 
 infant daughter, Ella Corine Crews, purporting by its terms to 
 "give, grant and convey" to her certain designated promissory notes, 
 made by divers third parties for money loaned, payable to him in 
 January' and February, 18G8. Arthur Crews died January 31, 1872. 
 A son, John E. Crews, was appointed administrator and as such dis- 
 tributed the estate. 
 
 This bill was filed January 15, 1880, by David L. Walker, as 
 guardian for Ella Corine Crews, against the said John E. Crews and 
 the other heirs and distributees of the estate to recover the amount 
 of the notes so given which had been collected and the proceeds of 
 which had been distributed. The bill was dismissed by the Chan- 
 cellor at the hearing. 
 
 Stone, J. 2 The title to personal property given by deed is trans- 
 ferred by a delivery of the deed, without a delivery of the property. 
 When the deed is delivered, the gift is irrevocable, and the subse- 
 quent possession of the donor does not impair its validity. * * * 
 
 It is contended for appellee that the gift in the present case is exec- 
 utory, and that the decree of the chancellor must be affirmed on the 
 authority of Borum v. King, 37 Ala. 606. So far as the note of 
 $475 on Wm. B. Borum mentioned in that case, is concerned, it is 
 difficult to draw a distinction between the provisions of the two deeds, 
 which can benefit the complainant in this case. If there be a differ- 
 ence, it is in favor of the grandchild Borum under the deed of Mr. 
 King. That deed contains words of present, absolute gift and convey- 
 ance, with a superadded provision, appointing the donor's son, Harvey 
 King, his (donor's) special agent, and guardian of his said grand- 
 child (donee), to manage and control the beforementioned sum of 
 money to the best advantage of said grandson; and authorized the 
 
 i A f.'ift causa mortis of roal estate cannot be made. Reeves v. Howard, 118 
 Iowa. 121. 129, !>1 X. W. Six; iIikil'i; Wentworth v. Shibles. 89 Maine, 107, 
 3(5 At! 10S (lSDiH; Oil more, Admx. v. Whitesides, Adm'r, Dudley iS. C.) Eq. 
 14 18, 31 Am. Dec. 563 (1837); Johnson v. Col ley, 101 Va. 414, 41G, 44 S. E. 
 721, 99 Am. St. Rep. 884 (1903); Meach v. Meach, 24 Vt. 591, 595 (1852). 
 
 2 Part of the opinion is omitted.
 
 Sec. 4) CONSIDERATION. 55 
 
 said Harvey, if he thought proper, to expend the interest in clothing 
 and educating the grandson. There was a disposition of the money 
 over, in the event the grandchild died without lawful issue. This 
 court ruled, that, in as much as the legal title to the note — the right 
 to sue in the grantee's name — was not conveyed, the gift was not 
 perfected, and the donee could not maintain an action for its re- 
 covery. 
 
 It was said in Connor v. Trawick, 37 Ala. 289, 79 Am. Dec. 58, 
 that a gift by deed delivered is an executed gift, without the actual 
 delivery of the thing given. The delivery of the deed is the equiva- 
 lent of the manual delivery of the subject of the gift. Such is the 
 acknowledged rule. 3 Wait's Ac. & Def. 499. The gift in Borum 
 v. King was by deed delivered, the symbol and equivalent of the actu- 
 al delivery of the note. Under the ruling in that case the title and 
 right to the note would not have passed, if the note itself had been 
 delivered, without indorsement to Borum, the donee. We apprehend 
 this lays down too technical a rule. The true sense of the principle 
 is, that dominion over the thing shall be parted with, and not that the 
 technical right to maintain an action in the name of the donee shall 
 be conferred. What will amount to delivery, so as to perfect a gift, 
 is not always one and the same thing. Much depends on the quality 
 and condition of the thing given. The delivery should be as com- 
 plete as the circumstances will reasonably permit; nothing more. 
 * * * If we adhere to the ruling in Borum v. King, we affirm, 
 not only that an absolute parting with dominion is necessary to per- 
 fect a gift, but, when the subject of the gift is a promissory note or 
 similar security, to make it valuable and binding, the donor must go 
 further and guaranty the payment of the note by his indorsement, 
 unless he have presence of mind to limit the effect of his indorse- 
 ment. In Jones v. Deyer, 16 Ala. 221, this court said: "A voluntary 
 gift may be made inter vivos of a promissory note payable to the 
 order of the donor, by delivery merely, without endorsement or other 
 writing." Grover v. Grover, 24 Pick. (Mass.) 261, 35 Am. Dec. 
 319, and Elam v. Keen, 4 Leigh (Va.) 333, 26 Am. Dec. 322, sup- 
 port this doctrine. * * * As to the promissory note given by 
 Mr. King to his grandson, Borum, we think this court fell into an 
 error, and to that extent that case is overruled. 
 
 [The decree of the Chancellor was reversed and a decree rendered 
 declaring complainant entitled to relief.] 3 
 
 3 The principal ease is one of an absolute Rift and not of a Rift in trust; 
 but the requisites of an absolute gift and of a gift in trust are the same. 
 See note at end of this section.
 
 56 THE NATURE AM' REQUISITES OF TRUSTS. (Cll. 1 
 
 STONE v. HACKETT, Executor, and Others. 
 (Supreme Judicial Court of Massachusetts, 1858. 12 Gray, 227.) 
 
 Bill in equity, in the nature of a bill of interpleader, to obtain 
 the instructions' of the court in the disposition of shares of stock held 
 by the plaintiff tinder a written declaration of trust. 
 
 About December 1, 1853, Dr. Kittredge, having previously purchas- 
 ed the stock and taken certificates thereof in the name of Harriet 
 P. Kittredge, or Harriet Kittredge, trustee (who had previously 
 signed a similar declaration of trusts, and afterwards died) sent the 
 certificates of stock, with blank transfers indorsed upon them and 
 signed by Harriet P. Kittredge, to the plaintiff, with a declaration 
 of trust, which he requested her to sign and return it to him, and she 
 did so. The plaintiff never paid any consideration for the shares, 
 and the dividends thereon were paid to Dr. Kittredge during his life. 
 
 Dr. Kittredge died in February, 1854, domiciled in New Hampshire. 
 Dr. Kittredge's widow waived the provision made for her in her 
 husband's will and claimed her statutory share, namely dower and 
 one third of all his estate after payment of debts and expenses. 
 
 After Dr. Kittredge's death and before filing this bill, plaintiff fill- 
 ed up, as of December 1, 1853, the blank transfers indorsed on the 
 backs of the certificates of stock and demanded new certificates; 
 but the corporations declined to issue them. 
 
 Dr. Kittredge's widow, one of the defendants, answered that the 
 stock enumerated in the declaration of trust was never transfer- 
 red or delivered to plaintiff, and that such transfer, if made, was 
 testamentary in nature, designed to avoid the effect of the laws of 
 New Hampshire, and, as to her, fraudulent and void. 
 
 Bigklow, J. x The key to the solution of the question raised in 
 this case is to be found in the equitable principle, now well established 
 and uniformly acted on by courts of chancery, that a voluntary gift 
 or conveyance of property in trust, when fully completed and execut- 
 ed, will be regarded as valid, and its provisions will be enforced and 
 carried into effect against all persons except creditors or bona fide 
 purchasers without notice. It is certainly true that a court of equity 
 will lend no assistance towards perfecting a voluntary contract or 
 agreement for the creation of a trust, nor regard it as binding so long 
 as it remains executory. But it is equally true that if such an agree- 
 ment or contract be executed by a conveyance of property in trust, 
 so that nothing remains to be done by the grantor or donor to com- 
 plete the transfer of title, the relation of trustee and cestui que trust 
 is deemed to be established, and the equitable rights and interests 
 arising out of the conveyance, though made without consideration, 
 will be enforced in equity. [Cases cited.] 
 
 i Part of the opinion is omitted.
 
 Sec. 4) CONSIDERATION. 57 
 
 The application of the principle established by these authorities is 
 entirely decisive of the rights and duties of the parties to this suit. 
 The conveyance or transfer of the shares to the plaintiff in her capaci- 
 ty as trustee was full and complete and vested in her the legal title 
 to the property. No further act was to be done by the original 
 owner of the shares to consummate the plaintiff's title. As between 
 the parties, the delivery of the certificates of stock, with the assign- 
 ments of some of them, and the power of attorney to transfer the 
 others, was equivalent to a complete transfer of the shares. Nor is 
 it at all material to the validity of the plaintiff's title, that transfers 
 of the shares had not been recorded in the books of the different 
 corporations and new certificates of stock taken out by her. That 
 was not necessary to the conveyance of the legal title as between the 
 donor and the plaintiff. This is well settled by the authorities in 
 this state. * * * There was then a legal transfer of the prop- 
 erty, fully executed to the plaintiff. There was also a full and ex- 
 plicit declaration of trust, executed by her and delivered to the 
 grantee, by which she accepted the gift and took on herself the exe- 
 cution of the trusts which he intended to establish. Nothing there- 
 fore was left in fieri. The transaction was a completely executed 
 transfer of property, and fully created a trust, which, according to 
 the principle already cited, a court of equity is bound to recognize 
 and enforce. 
 
 It was suggested by the learned counsel for the widow that the 
 donor never parted with his power or dominion over the property, 
 because he retained a right to annul or revoke the trust. But this 
 seems to us quite immaterial. A power of revocation is perfectly 
 consistent with the creation of a valid trust. It does not in any de- 
 gree affect the legal title to the property. That "passes to the donee 
 and remains vested for the purposes of the trust, notwithstanding 
 the existence of a right to revoke it. If this right is never exercised 
 according to the terms in which it is reserved, as in the case at bar, 
 until after the death of the donor, it can have no effect on the validity 
 of the trusts or the rights of the trustee to hold the property. 2 
 
 PEARSON v. AMICABLE ASSURANCE OFFICE and Others. 
 
 (In Chancery, before the Master of the Rolls, Sir John Roniilly. 1S59. 27 
 
 Beavan, 220.) 
 
 On June 19, 1828, the defendant, the Amicable Society, issued to 
 George Townsend a policy of insurance on his life for £3000. Sep- 
 tember 15, 1828, he by deed assigned the policy to two trustees upon 
 certain trusts for his father, mother, brothers and sisters. The deed 
 contained the usual irrevocable power of attorney and a covenant for 
 
 2 See note at end of this section.
 
 58 THE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 further assurance. Townsend died in 1857. The trustees claimed 
 the amount of the policy. The executors resisted this claim, and 
 notified the company not to pay the trustees. The trustees brought 
 this suit against the Society and the executors, praying a declaration 
 that the plaintiffs were entitled to the moneys payable on the policy 
 and to apply it on the trusts of the deed of 1828. 
 
 The assurance company paid the amount into court and were dis- 
 missed before the hearing but without prejudice to any question. 
 
 Mr. Selwyn and Mr. Hardy for the plaintiffs. The case is govern- 
 ed by Fortescue v. Barnett [3 Myl. & K. 36], which is precisely in 
 point. If this be not a perfect voluntary settlement of the policy 
 it would be impossible to make one, however meritorious might be the 
 object. 
 
 Mr. R. Palmer, Mr. Speed and Mr. Fischer for the defendants. 
 It is now settled, by a series of authorities, that this court will not 
 assist a volunteer under a voluntary settlement to perfect the gift. 
 Either the gift is perfect or it is not. In the former case the plain- 
 tiffs have no right to come into equity; by taking that step they show 
 that the settlement is not perfect, and that the aid of this court is re- 
 quired to make it effectual. 
 
 The Master of the Rolls. 1 No person can state too strongly to 
 command my assent the proposition, that if a voluntary assignment of 
 any property is imperfect and incomplete, and the assistance of a 
 court of equity is required to give effect to it, this court will not in- 
 terfere to perfect the instrument. 
 
 I also fully admit, that in these cases there is a distinction between 
 that species of instrument which, by assignment, passes the prop- 
 erty, and that which simply operates as a declaration of trust, and I 
 agree that this is not a declaration of trust. The question is, wheth- 
 er this is a complete instrument, or whether it requires the assist- 
 ance of a court of equity for its enforcement? I am of opinion that 
 it is a complete and perfect instrument, and I will state why I think 
 so. 
 
 If this were an assignment of the policy for value, and the pur- 
 chaser had come to this court for its assistance to render the assign- 
 ment more complete what would remain to be done? The assignor 
 would say: "What can I do more than I have already done? If you 
 had told me, out of court, what further assurance or what further 
 deed or assignment to make this instrument more complete I would 
 have executed it." The question, whether anything remains to be 
 done to complete the assignment of a policy, is exactly the same, 
 whether it arises upon a voluntary instrument or upon one for valu- 
 able consideration : whether it be one or the other, the question 
 must be, what is there that the assignee can require the assignor to 
 do to make the instrument more complete. The error in the argu- 
 
 i Part of the opinion is omitted.
 
 Sec. 4) CONSIDERATION. 59 
 
 ment of the defendants is this: It is assumed that this is a suit in 
 which an assignee has come here to ask the aid of the court in making 
 this instrument more complete; but he does nothing of the sort. It 
 is said by the defendants, "if the plaintiffs do not require the assist- 
 ance of this court, why do they not proceed at law ;" but the proceed- 
 ing suggested in this case would be against the executors ; this is not 
 a suit against the executors, it is a suit against the insurance com- 
 pany. * * * 
 
 The plaintiffs say our instrument is perfect and complete, we do 
 not ask for any relief against the executors, why should we not have 
 the money? The insurance office is right in paying it to us; it is 
 for the executors to make out their claim. The question is, whether 
 the executors can make out any claim. If the assignment had been 
 made for value, it is clear that the assignor could not have prevented 
 the assignee from using his name in suing the insurance company, if 
 they had resisted the demand, and this court could not, and would not, 
 have allowed the assignor to say his name should not be made use of. 
 The executors can stand in no better situation than the assignor ; this 
 court would not have prevented the assignee from making use of the 
 name of the assignor, if the insurance company had resisted payment. 
 But here the power of attorney is voluntary; it is irrevocable and 
 in the form usual in all these instruments, and this court will not al- 
 low the grantor to contradict his deed. The court will not assist a 
 volunteer, but it does not say, on the other hand, that it will assist 
 an assignor in defeating his voluntary deed. The argument has been 
 founded on the supposition that by this suit the trustees are asking 
 the assistance of a court of equity; but in truth they come here only 
 to resist the executors of the assignor, who have raised a claim which 
 the assignor was not himself entitled to raise, and which they, stand- 
 ing in his shoes, are not entitled to raise, but which nevertheless 
 makes it impossible for the plaintiff to receive the money until the 
 claim of the executors is disposed of. 
 
 Decree for the plaintiffs with costs. 2 
 
 EDWARDS v. JONES. 
 
 (In Chancer v. before Vice Chancellor Sir Lancelot Shadwell, 1835. 7 Simons' 
 
 Reports, 325.) 
 
 The bill which was filed on the 30th of May, 1833, stated that 
 John Nathaniel Williams, late of Castle Hill, in the County of Cardi- 
 gan, executed and gave to Mary distance a bond, dated the 27th of 
 September, 1819, for securing the repayment, with interest, of £300. 
 lent to him by Mary Custance and that he executed and gave to her 
 another bond^ dated the 27th day of December, 1828, for securing 
 
 2 See note at end of this section.
 
 00 Tin: NATURE AND REQUISITES OF TRUSTS. (Cll. 1 
 
 the payment, with interest, of £123. 15s., which had become due for 
 arrears of interest on the former bond; that Mary distance was 
 aunt to and had a great affection for the plaintiff; and, at different 
 tijnes, had expressed an intention to give or leave to the plaintiff 
 the money due on the bonds; that the bonds were fastened together 
 by a pin, and that Mary distance, on the 25th of May, 1830, being a 
 few days before her death and during her last illness, signed a mem- 
 orandum on the back of the first bond, to the following effect: "I 
 Mary Custance, of the Town of Aberyswith in the County of Cardi- 
 gan, widow, do hereby assign and transfer the within bond or obliga- 
 tion, and all my right, title and interest thereto, unto and to the use 
 of my niece, Esther Edwards of Llanilar in the said County of Cardi- 
 gan, widow, with full power and authority for the said Esther Ed- 
 wards to sue for and recover the amount thereof and all interest now 
 due or hereafter to become due thereon; as witness my hand this 
 2t5th May, 1830;" that Mary Custance, immediately after signing 
 the same, caused the bonds to be delivered to the plaintiff, intending 
 that the plaintiff should be entitled thereto and to the moneys se- 
 cured thereby in case of and after her death, and expressed herself 
 to that effect; that Mary Custance died on the 30th of May, 1830, 
 having made her will, dated the 30th of May, 1829, which did not 
 mention the bonds or dispose of the residue of her property; and 
 she thereby appointed the defendant her executor; that the testa- 
 trix's personal estate was more than sufficient to pay her debts and 
 legacies ; that the bonds and the money due thereon, were well given 
 to the plaintiff by the testatrix, either as a gift, or as a donatio mor- 
 tis causa; that the defendant had prevailed upon Williams to give 
 him a new bond for the money secured by the two former bonds, and 
 had given Williams a bond of indemnity; that Williams died in 
 January, 1832, having appointed his wife, Sarah Elizabeth Williams, 
 his executrix; and, in April, 1833, she paid the amount due on the 
 new bond to the defendant. 
 
 The bill prayed for a declaration that the plaintiff was entitled to 
 the principal and interest due on the two first bonds and that the 
 defendant was a trustee thereof for her, and that the defendant might 
 be decreed to pay to the plaintiff what he had received from Sarah 
 Elizabeth Williams. 
 
 The Vice Chancellor. In this case the plaintiff seeks relief with 
 respect to a gift, or, as she calls it, a donatio mortis causa of two 
 bonds. If the case made by this bill were a case of mere gift, this 
 court, clearly, would not interfere; for the. delivery of a bond, by 
 the obligee, to a third person, would give the bond to that third per- 
 son, as against the obligee; yet it would not confer on the donee an 
 absolute right to recover upon the bond. I take it to be perfectly 
 plain that, if the obligee in a bond delivers it to a stranger, and, aft- 
 erwards, thinks proper to release the obligor, the debt will be de- 
 stroyed. I admit that if the obligee gives the bond to a stranger,
 
 Sec. 4) CONSIDERATION. 61 
 
 and the stranger chooses to destroy it, the debt will be destroyed ; 
 for the obligee meant to give, to the stranger, the same dominion 
 over the bond that he himself had ; and, as his own destruction of 
 the bond would be the destruction of the debt, so the destruction by 
 the donee, would, equally, destroy the debt. Again, if, after the 
 bond has been delivered, the obligor thinks proper to pay the amount 
 of it to the obligee, the donee cannot file a bill or support an action 
 against the donor for the amount of the money so paid. The e 
 therefore, of the gift of the bond, is to leave the donee at liberty to 
 do just so much as the mere having possession of the bond would 
 enable him to do, that is, he cannot sustain a bill in equity against 
 the representative of the obligee for the purpose of recovering the 
 amount; and, therefore, if the plaintiff rested her claim upon the gift 
 only, this court would not interfere on her behalf. 
 
 [The Vice Chancellor then concluded that no donatio mortis causa 
 was proved and dismissed the bill.] 1 
 
 
 WADD v. HAZELTON and Others, as Executors. 
 
 (Court of Appeals of New York, 1893. 137 N. Y. 215, 33 N. E. 143, 21 L. R. A. 
 G93, 33 Am. St. Rep. 707.) 
 
 Defendants appeal from a General Term judgment of the Supreme 
 Court which affirmed a judgment for plaintiff, entered on the report 
 of referee. 
 
 This action was commenced to procure a judgment directing the 
 defendants to surrender to the plaintiff a certain bond and mortgage « 
 for $2,000, which plaintiff alleged belonged to her. She claimed title 
 by virtue of an assignment from the then owner of the bond and 
 mortgage, one Albert Hill, executed a short time prior to his death. 
 This assignment, though signed by Albert Hill, was never delivered. 
 
 Peckham, J. 2 Whether the plaintiff claims the bond and mort- 
 gage by virtue of an absolute gift to her from the testator, evidenced 
 by the assignment, or whether she claims through the assignment as 
 a declaration of trust, is somewhat difficult to determine from her 
 complaint. The referee has taken the latter position and has found 
 that the testator constituted himself a trustee by reason of his exe- 
 cution and retention of the assignment. We think there is no founda- 
 tion in the evidence for the claim of an absolute gift. 
 
 There is no proof of a delivery or of any executed intention to make 
 a gift, and the papers themselves are found among those of the tes- 
 tator at the time of his decease. * * * 
 
 We are also of the opinion that no trust was proved. 
 
 i Affirmed by Lord Chancellor Cottingham in 1 Myl. & Cr. 226 (1S36). 
 See note at end of this section. 
 2 Part of the opinion is omitted.
 
 62 THE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 While it is true that no particular form of words is necessary to 
 create a trust of this nature, and while it may be created by parol 
 or in writing, and may be implied from the acts or words of the per- 
 son creating it. yet it is also true that there must be evidence of such 
 acts done or words used on the part of the creator of the alleged 
 trust, that the intention to create it arises as a necessary inference 
 therefrom and is unequivocal; the implication arising from the evi- 
 dence must be that the person holds the property as trustee for an- 
 other. The acts must be of that character which will admit of no 
 other interpretation than that such legal rights as the settlor re- 
 tains are held by him as trustee for the donee; the settlor must either 
 transfer the property to a trustee or declare that he holds it himself 
 in trust. An intention to give, evidenced by a writing, may be most 
 satisfactorily established and yet the intended gift may fail because 
 no delivery is proved. And where an intention to give absolutely is 
 evidenced by a writing which fails because of its nondelivery, the 
 court will not and cannot give effect to an intended absolute gift by 
 construing it to be a declaration of trust and valid, therefore, without 
 a delivery. These principles have been decided in this court and 
 must be regarded as settled. (Martin v. Funk, 75 N. Y. 134, 31 
 Am. Rep. 44G; Young v. Young, 80 N. Y. 423, 36 Am. Rep. 634 ; 
 Matter of Crawford, 113 N. Y. 560, 21 N. E. 692, 5 L. R. A. 71; 
 Beaver v. Beaver, 117 N. Y. 421, 22 N. E. 940, 6 L. R. A. 403, 1.1 
 Am. St. Rep. 531 ; Id., 137 N. Y. 59, 32 N. E. 998.) It is true that 
 in Richardson v. Richardson (L. R. 3 Eq. Cas. 686) Vice Chancellor 
 W. Page Wood does say, in speaking of Ex parte Pye (18 Ves. 
 140), that the holding in that case amounted to a decision that an in- 
 strument executed as a present and complete assignment (not being 
 a mere covenant to assign on a future day) is equivalent to a declara- 
 tion of trust. The expression was unfavorably criticised by Jessel, 
 M. R., in Richards v. Delbridge (L. R. 18 Eq. Cas. 11), while in 
 Baddeley v. Baddeley (L. R. 9 Ch. Div. 113), Vice Chancellor Mal- 
 ins says he is not disposed to disagree with Richardson v. Richardson, 
 notwithstanding the remarks of Sir George Jessel in Richards v. 
 Delbridge. 
 
 In this court, however, and in the case already cited of Young v. 
 Young, this doctrine is substantially repudiated. We are of opinion 
 that no such rule obtains or ought to obtain in this state. An in- 
 tended absolute gift by way of a written assignment, which cannot 
 take effect because of the absence of delivery, ought not to he enforc- 
 ed as a declaration of trust when there is no such declaration and 
 when there is no evidence of an intention to create a trust. (Milroy 
 v. Lord. 4 D. F. & J. 274.) * * * 
 
 Judgment reversed.
 
 Sec. 4) CONSIDERATION. 63 
 
 SLANNING and Others v. STYLE. 
 (In Chancery, before Lord Chancellor Talbot, 1734. 3 P. Wins. 334.) 
 
 Three sisters and their husbands, claiming as residuary legatees 
 under the will of Robert Style, brought their bill against his widow 
 for divers goods of the testator detained by her, which were not 
 given her by the said will ; and the widow preferred her bill for 
 goods detained by the executors, and which (as was alleged) she 
 was entitled to by the will. 
 
 Another thing insisted upon on behalf of the defendant, the wid- 
 ow, was, that the testator allowed his first wife to dispose and 
 make profit of all such butter, eggs, poultry, pigs, fruit and other 
 trivial matters arising from the said farm (over and besides what 
 was used in the family) for her own separate use, calling it her pin- 
 money; and upon the death of the first wife, and until the testator 
 married the defendant, Style, the testator's sister, the defendant, 
 Pelling, kept his house, and had the same allowance, which was 
 also continued to the defendant, the widow, after her marriage, 
 by way of pin-money; and it was proved in the cause that her hus- 
 band, whenever any person came to buy any fowls, pigs, &c, would 
 say he had nothing to do with those things, which were his wife's; 
 and that he also confessed, that, having been making a purchase of 
 about £1,000. value and wanting some money, he had been obliged to 
 borrow about £100. of his wife to make up the purchase money; 
 therefore now the widow claimed to be paid this £100. 
 
 To which it was answered, that here was no deed touching this 
 agreement, nor any writing whatsoever, whereby to raise a separate 
 property in a feme covert, which was what the law did not favor ; that 
 it was no more than a connivance or permission, that the wife should 
 take these things and continue to enjoy them during his (the hus- 
 band's) pleasure, which pleasure was determined by his death ; be- 
 sides, this agreement, being after marriage, was but a voluntary 
 one, for which a court of equity usually leaves the party to take his 
 remedy at law; and that, in truth, the husband's borrowing this 
 £100. of his wife was no more than borrowing his own money. 
 
 But the Lord Chancellor decreed that the widow, the defendant, 
 was well entitled to come in for this £100. as a creditor before the 
 Master, observing that the courts of equity have taken notice of 
 and allowed feme coverts to have separate interests by their hus- 
 bands' agreement; and this £100. being the wife's savings, and here 
 being evidence that the husband agreed thereto, it seemed but a rea- 
 sonable encouragement to the wife's frugality, and such agreement 
 would be of little avail were it to determine by the husband's death; 
 that it was the strongest proof of the husband's consent, that the wife 
 should have a separate property in the money arising by these sav- 
 ings, in that he had applied to her and prevailed with her to lend hira
 
 64 THE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 this sum; in which case he did not lay claim to it as his own, but 
 submitted to borrow it as her money. 
 
 Wherefore, and especially as lure was no creditor of the hus- 
 band to contend with, it was ordered that the wife should be allowed 
 to come in for this £100. as a creditor before the Master; and the 
 court cited the case of Calmady v. Calmady [2 Eq. Cas. Abr. 469], 
 where there was the like agreement made betwixt the husband and 
 wife, that upon every renewal of a lease by the husband two guineas 
 should be paid by the tenant to the wife, and this was allowed to be 
 her separate money. 
 
 BEARD v. BEARD. 
 (In Chancery, before Lord chancellor Hardwicke, 1744. 3 Atkyns, 72.) 
 
 The plaintiff's husband, a freeman of London, being at variance 
 with his wife, in January, 1739, by his will, executed at a tavern, 
 gives all his estate, real and personal to his brother, and makes him 
 his executor. 
 
 In November, 1740, by a deed poll, he gives and grants unto his 
 wife all his substance which he now has or may hereafter have. 
 
 The bill was brought by the wife, who insists upon the deed poll, 
 and that the will was revoked by this subsequent act of the husband in 
 his lifetime. 
 
 The counsel for the plaintiff cited Boughton v. Boughton, the 5th 
 of December, 1739 [1 Atk. 625], and Hervey v. Hervey, November 
 12, 1739 [1 Atk. 561]. 
 
 Lord Chancellor. 1 A man here has done two very unreasonable 
 acts; if it should happen one trips up the heels of the other, it is a 
 very fortunate thing to set everything right again. 
 
 A wife appears here to be unprovided for, both before and after 
 marriage. 
 
 A will is made at a tavern, probably in a passion, for the husband 
 was parted from his wife at that time, by which he gives his whole 
 estate to his brother. 
 
 Afterwards he is guilty of another unreasonable act, — a gift to his 
 wife, by deed poll, of all his substance. 
 
 'I'lie question is, Which is to take effect? 
 
 The latter cannot take effect as a grant or deed of gift to the wife, 
 because the law will not permit a man to make a grant or conveyance 
 to the wife in his lifetime, neither will this court suffer the wife to 
 have the whole of the husband's estate while he is living, for it is 
 not in the nature of a provision, which is all the wife is entitled 
 
 ffi *T* *> *l* 
 
 i Part of the opinion is omitted.
 
 Sec. 4) CONSIDERATION. 65 
 
 He declared, likewise, that the will was revoked as to all the per- 
 sonal estate by the deed poll, and yet it cannot take effect as a gift or 
 grant of such personal estate to the plaintiff, but the said personal 
 estate must be distributed. 2 
 
 MEWS v. MEWS. 
 
 (In Chancery, before the Master of the Rolls, Sir John Romilly, 1S52. 15 
 
 Beavan, 529.) 
 
 William Mews (deceased), carried on the business of a farmer, 
 with his brother John Mews (a bachelor), at Apton Hall, in Essex, 
 where they resided together, having one joint establishment. William 
 attended principally to the farming, and exclusively to the accounts, 
 acting as cashier; John devoted himself to the stock and sales; and 
 the plaintiff, Harriet Mews, the wife of William kept the house, and 
 superintended the management and sale of the butter, eggs and 
 poultry. 
 
 It appeared that in 1835, the plaintiff Harriet Mews placed in the 
 hands of Messrs. Eastman and Hill a sum of £90. at interest, and 
 they opened a separate account in her name in their books. This 
 sum was afterwards increased by addition from the produce of the 
 butter, eggs and poultry, and ultimately amounted to £557. 8s. 
 
 William and John Mews both died. In 1851 Harriet Mews institut- 
 ed this suit against the re presentativ es of John Mews, and sou-lit to 
 have it declared that she was entitled to this sum, with interest, and to 
 make the estate of John Mews liable for the same. 
 
 The Master of the Rolls. 3 Having had an opportunity of read- 
 ing the evidence very carefully, I have come to the conclusion that 
 there is not sufficient evidence to establish a gift from the husband 
 to the wife. * * * 
 
 1 entertain no doubt that there may be a gift made by a husband 
 to his wife, which though bad at law, would be supported in equity. 
 * * * Lord Hardwicke, in the case of Lucas v. Lucas [1 Atk. 
 271], which has been referred to, distinctly states, that "in this 
 Court, gifts between husband and wife have often been supported, 
 though the law does not allow the property to pass." Though the 
 property does not pass at law, yet, in equity, a husband being the 
 
 2 A gift causa mortis, however, might he made directly by a husband to 
 his wife. Miller v. Miller, 3 P. Wms. 356 (1735) ; Lawson v. Lawson. 1 V. 
 Wms. 441 (1718); Walter v. Hodge, 2 Swanston, 92 (ISIS); Whitney v. Wheel- 
 er, 116 Mass. 490 (1S75) ; Meach v. Meach, 24 Vt. 591, 596, 597 (1852). 
 
 3 Part of the opinion is omitted. 
 
 Ken.Tr.— 5
 
 66 THE NATURE AND REQUISITES OF TRUSTS. (Cll. 1 
 
 owner at law, may become a trustee for his wife; and if by clear 
 and irrevocable acts he ha-- made himself such trustee, the gift to 
 his wife will be conclusive. - 
 
 In re BRETON'S ESTATE. 
 BRETON v. WOOLLVEN. 
 
 (In Chanoerv. before Vice Chancellor Sir Charles Hall. 1881. L. R. 17 Ch. 
 
 Div. 416.) 
 
 Frederick Breton, the testator, intermarried with the plaintiff in 
 January, 1868. 
 
 The testator having previously purchased some furniture, on the 
 22d of April, 1868, wrote and handed to his wife the following 
 paper : 
 
 "This is to certify that there being now at Messrs. Maple & Co., 
 145 Tottenham Court Road, one hundred pounds worth of furniture 
 belonging to me, I give the same to my dear wife Agnes A. Breton, 
 absolutelv and unreservedly, for her own use and benefit. 
 
 "Haxell's Hotel, Strand. London, April 22d, 1S68. 
 
 "Fredk. Breton, Major Rl. Wilts Militia." 
 
 The testator, having purchased some plate and plated articles, 
 wrote to the plaintiff thus : 
 
 "London, June 1st, 1868. 
 
 "My dearest Wife: I this day make you a present of the plate, 
 &C, now at Mappin and Webb's, and which they arc taking care of 
 for me, for vour sole use and benefit. The sum I paid for it is £59. 
 7s. lOd. 
 
 "Ever yr affecte husband. Fredk. Breton." 
 
 The testator and his wife subsequently hired a house at Forest 
 Hill, where they went to reside, and thereupon the furniture, plate, 
 and plated articles were removed thither. Other furniture and house- 
 hold goods purchased by or belonging to the testator were placed 
 in the same house, and on the 18th of June, 1868, he wrote and handed 
 the following to the plaintiff: 
 
 "My dearest Wife : Having previously made over to you for your 
 sole use and benefit a certain amount of furniture, plate, etc., I now 
 present you with everything, furniture, linen, etc., plate, china and 
 glass, and all jewelry now belonging to me at No. 1 Dulwich Villas, 
 Devonshire Road, Forest Hill. All this to be yours and yours only 
 from this date, June eighteenth, 1868. This gift from 
 
 "Yr ever affecte husband, Fredk. Breton." 
 
 2 Grant v. Grant, 34 Beav. 023 (1S65) ace.
 
 Sec. 4) CONSIDERATION. IJ7 
 
 The testator and his wife subsequently went to reside in a house 
 in the Belvedere Road, where they lived at the time of his death. 
 To that house all the furniture, plate and plated and other articles 
 and goods were taken from the house at Forest Hill. While the 
 testator and his wife resided together at the two houses, the articles 
 mentioned were used in the ordinary way, and from time to time 
 various additions were made thereto by the testator; but during 
 his life he always, as alleged, spoke of all the furniture and other 
 articles and goods, and the said additions thereto^ as being the sole 
 property of his wife, and often referred to the useful provision for 
 her comfort which she would have therein and by means thereof 
 after his death. 
 
 The trustees and executors having insisted that all the said jew- 
 elry, furniture, plate and plated and other articles and goods, and 
 the said additions thereto, formed part of the testator's estate, the 
 widow brought this action to have it ascertained and declared wheth- 
 er the same, or any and wdiich of them, or any and what parts thereof, 
 belonged to her or formed part of the testator's estate; and if nec- 
 essary an administration of the trusts by the Court. 
 
 Hall, V. C. I am unable to support this gift to the plaintiff, the 
 wife, as a trust declared by her husband in her favor. I am very 
 sorry for it, because it is a monstrous state of the law which prevents 
 effect being given to such a gift. I think that the difficulty in the 
 case is occasioned by two or three of the decisions which have been 
 referred to, and which seem to favor the contention that these paper 
 writings can be supported as a declaration of trust by the husband in 
 favor of his wife. It was submitted that the husband must be taken 
 to have intended, knowing what the law is, to constitute himself a 
 trustee for her, that being the only way of giving effect to the paper 
 writings, i. e., as other trustees were not appointed, he must be held 
 to have constituted himself a trustee. That argument appears to me 
 to come to this, that in every case of an imperfect gift on the part 
 of the alleged donor, if the gift be not effectual by reason of an in- 
 complete transfer of the property from the alleged donor to the in- 
 tended donee, or to some person who is to be a trustee for the intend- 
 ed donee, the Court must give effect to the donation by holding that 
 the alleged donor was a trustee, as it must be considered that he 
 knew the law, and that if he did not effectuate his object in the one 
 way in which it would have been valid, it must be done in another. 
 But in truth, in the one case as well as in the other, whether a wife 
 or a stranger be the object of the gift, it is manifest from the trans- 
 action taken by itself that the alleged donor was mistaken as regards 
 the proper and legal mode of effectuating that which he intended to 
 do. It is plain that the husband was mistaken, and it is not necessary 
 to impute to him that he meant to make the gift in an ineffectual way. 
 Looking at the documents, they are a contradiction of any intention 
 on his part to do that.
 
 G8 THE NATURE AND REQ1 [SITES OF TRUSTS. (Ch. 1 
 
 The case of Grant v. Grant [34 Bcav. G23] was that of a gift to a 
 wife, and if the late Master of the Rolls had based his judgment on 
 that ground, supporting it as being a special and peculiar case, and 
 creating a different law as applicahle to husband and wife in every 
 case, I should have nothing more to do than to follow that decision. 
 But it is plain, from the reasons given for the decision, that it was 
 meant to be applicable to every other case of the kind, and not mere- 
 ly to that of husband and wife. No other cases of a gift by a hus- 
 band to his wife have been referred to excepting the two recent deci- 
 sions of Vice Chancellor Malins in the case of Baddeley v. Baddeley 
 ['.» Ch. Div. 113], and of Vice Chancellor Bacon in the case of Fox 
 v. Hawks [13 Ch. Div. 822]. As to the former case, I observe that 
 Vice Chancellor Malins said that the law was correctly stated in the 
 case of Grant v. Grant, and that he was not disposed to disagree with 
 the judgments in Richardson v. Richardson [L. R. 3 Eq. 686], and 
 in Morgan v. Malleson [L. R. 10 Eq. 475], notwithstanding the 
 remarks of the Master of the Rolls in the case of Richards v. Del- 
 bridge [L. R. 18 Eq. 4]. That being so, there is, as Vice Chancellor 
 Malins seems to have meant there should be a clear difference of 
 opinion between himself and the Master of the Rolls upon this ques- 
 tion, because he adopted the decision in the two cases of Richardson 
 v. Richardson and Morgan v. Malleson, — decisions which the Master 
 of the Rolls would not follow. That being so, I must look at all the 
 authorities and endeavor to find a correct statement of the law on 
 the subject. I consider that the principal authority in these cases is 
 that of the case of Milroy v. Lord [4 De G., F. & J. 264], where 
 there is a very clear and elaborate statement of the law by the late 
 Lord Justice Turner. A portion of the judgment of the Lord Justice 
 was quoted by the Master of the Rolls in Richards v. Delbridge, and 
 there is much in it which is, I think, applicable to this case. The 
 Lord Justice, after stating that under the circumstances of the case 
 before him it would be difficult not to feel a strong disposition to give 
 effect to the settlement to the fullest extent, said, "But in order to 
 render the settlement binding, one or the other of these modes" — 
 i. e., transfer of the property or declaration of trust — "must, as I un- 
 derstand the law of this Court, be resorted to, for there is no equity 
 in this court to perfect an imperfect gift." What I am asked to do 
 in this case is to read that sentence as having introduced into it the 
 words, "except as to a gift from husband to wife." The Lord Justice 
 Turner also said, "The cases, I think, go further to this extent, that 
 if the settlement is intended to be effectuated by one of the modes to 
 which I have referred, the Court will not give effect to it by applying 
 another of those modes." To give effect to this gift I must introduce 
 the word, "except in the case of a wife." The Lord Justice proceed- 
 ed to say, "If it is intended to take effect by transfer, the Court will 
 not hold the intended transfer to operate as a declaration of trust, for 
 then every imperfect instrument would be made effectual by being
 
 Sec. 4) CONSIDERATION. 69 
 
 converted into a perfect trust ;" and he added that it must be plainly 
 shown that it was the purpose of the settlement, or the intention of 
 the settlor, to constitute himself a trustee. It is clear in this case- 
 that it was not so intended. It was not the purpose or meaning of 
 the husband in writing these letters to constitute himself a trustee 
 for his wife. I can well understand in such a case a husband saying 
 to his wife, "I mean to give you this as your own, but when you ask 
 me to be a trustee for you I must respectfully decline. I do not want 
 to be involved in a trust of that kind or in any trust." Therefore it 
 appears to me that, notwithstanding the decisions of Vice Chancellor 
 Malins and Vice Chancellor Bacon in the two cases which have been 
 observed upon — and here I may just state that the case before Vice 
 Chancellor Bacon of Fox v. Hawks had many special circumstances 
 in it which are not unlikely to have influenced his mind in arriving 
 at the conclusion to which he came — I must hold that the furniture, 
 plate, and other particulars, excepting the jewelry, do not belong to 
 the plaintiff, but form part of the late husband's estate. 
 
 FLETCHER v. FLETCHER. 
 
 (In Chancery, before Vice Chancellor Sir James Wigrarn, 1844. 4 Hare. 07.) 
 
 The bill was filed by Jacob, a natural son of the testator, Ellis 
 Fletcher, for the payment, by the defendants, his executors, out of 
 the assets, of a sum of £60,000. with interest thereon, from the ex- 
 piration of twelve months from the decease of the testator. The 
 claim was founded upon a voluntary deed, executed by the testator, 
 between four and five years before his death, which was thenceforth 
 retained by the testator in his own possession, without having been 
 communicated either to the trustees appointed in the deed, or, so far 
 as it appeared to the plaintiff or the other parties interested under it, 
 and which was ultimately discovered some years after the death of 
 the testator, by a person the executors employed to make a schedule 
 of his papers, by whom it was found, wrapped together with an ex- 
 amined copy of the same deed, in a brown paper parcel. 
 
 [By the indenture in question dated September 1, 1829, made be- 
 tween Ellis Fletcher and five trustees, he covenanted with them that 
 his heirs, executors or administrators should in twelve months after 
 his death pay said trustees £60,000. to be held by them upon certain 
 trusts, the last of which in the events that had occurred was to pay 
 the plaintiff on his attaining twenty-one said sum of £60,000. with 
 any arrears of interest thereon.] 
 
 The testator died April 26, 1834. Plaintiff attained the age of 
 twenty-one in September, 1843. The bill prayed that the indenture 
 might be established ; that plaintiff might be declared entitled to have
 
 70 THE NATURE AM) REQUISITES OF TRUSTS. (Ch. 1 
 
 the £60,000. and interest and that the defendants, the executors, pay 
 the plaintiff what should be due him. 
 
 The executors admitted assets. The surviving trustees in their 
 answer said that they had not accepted or acted in the trusts of the 
 indenture, but were willing to act as the Court should direct. 
 
 Mr. Romilly and Mr. Webster, for the plaintiff, submitted first that 
 the deed though voluntary, was yet complete and effectually created 
 a trust for the object of it; leaving nothing for the Court to perfect. 
 
 Mr. Tinney and Mr. Follett, for the infant children of the testator, 
 contended that the deed was at the most executory, and, heing found- 
 ed on no valuable consideration, the Court would not interfere to give 
 effect to the instrument. 
 
 VlCE ChancELI/JR. 1 According to the authorities, I cannot, I ad- 
 mit, do anything to perfect the liability of the author of the trust, 
 if it is not already perfect. This covenant, however, is already per- 
 fect. The covenantor is liable at law, and the Court is not called up- 
 on to do any act to perfect it. One question made in argument has 
 hern, whether there can be a trust of a covenant the benefit of which 
 shall belong to a third party; but I cannot think there is any diffi- 
 culty in that. Suppose, in the case of a personal covenant to pay a 
 certain annual sum for the benefit of a third person, the trustee were 
 to bring an action against the covenantor; would he be afterwards 
 allowed to say he was not a trustee? If he cannot do so after once 
 acknowledging the trust, then there is a case in which there is a trust 
 of a covenant for another. In the case of Clough v. Lambert [10 
 Sim. 174] the question arose; the point does not appear to have 
 been taken during the argument but the Vice Chancellor of Eng- 
 land was of opinion that the covenant bound the party; that the 
 cestui |uc trust was entitled to the benefit of it; and that the mere 
 intervention of a trustee made no difference. The proposition, there- 
 fore, that in no case can there be a trust of a covenant, is clearly too 
 large, and the real question is, whether the relation of trustee and 
 cestui que trust is established in the present case. * * * 
 
 If the trustees have in this case accepted the trust, I think the deci- 
 sion in Clough v. Lambert applies; and if they have not accepted 
 the trust, I scarcely think that fact can make a difference. It is an 
 extraordinary proposition that nothing being wanted to perfect the 
 liability of the estate to pay the debt, the plaintiff has no right in 
 equity to obtain the benefit of the trust. 
 
 ' Part of the opinion is omitted.
 
 Sec. 4) CONSIDERATION. 71 
 
 NOTE. 
 Gifts. 
 
 Gifts are intor vivos, causa mortis, or by last will. The requisites of a Rift 
 are, of course, the same whe ther in trust or not. 
 
 Real Estate. As we have seen, a gift causa mortis of real estate cannol 
 be made. A gifl of real estate, therefore , must be inter vivos or by last will, 
 and cannot lie perfect unless the donee be vested with the legal title, or at 
 least Save the right to call for it without further action by the donor. 
 
 Legal Choses i.n Possession, 6b Tangible Chatti ls. a gjfj of a tangible 
 chattel may be inter vivos, causa niorl is, or by last will. It cannoj he per.- 
 fect unless the legal title be vested in the donee. The ordinary way of mak- 
 ing sucE a gifl is by delivering the chattel to the donee with the intention of 
 passing to him the title. Faxon v. Durant, 9 Mete. (Mass.) 339 (1845). 
 
 A gift of a chattel may, however, bfl made by a delivery of a dfifid of iiift 
 without a delivery of the chattel. Gifts inter vivos: Bunn v. Winthrop, 1 
 Johns, cii. ::l'!i iisir,,; Davis, Adm'r, v. Garrett, 91 Tenn. 147, 18 S. W. 113 
 (1892). Gifts causa mortis: Meach v. Meach, 24 Vt. 591 (1852). 
 
 Legal Choses in Action. How is a perfect gift of a legal chose in action 
 made? It is for the most part in dealing with gifts of choses iu action that 
 variety of decision has developed. 
 
 The legal title to sonic choses in action may be transferred. The legal title, 
 for example, to a bill of exchange or promissory note payable to bearer may 
 be transferred by a delivery of the instrument with the intent of passing the 
 title. So the legal title to a bill of exchange or promissory note payable to 
 order may be transferred by indorsing and delivering the instrument with like 
 intent. But the legal title to many choses in action is incapable of transfer. 
 The assignment, so called, of such a chose in action, is not a true assignment. 
 The assignee does not get the legal title and cannot sue in his own name. He 
 gets, not the legal title, hut a power of attorney, which enables him to sue 
 the obligor in a court of law in the assignor's name and to retain for his 
 own use what he may collect. The courts frequently speak of such an assign- 
 ment as an equitable assignment. The expression lacks accuracy, as the righl 
 to sue given by such an assignment is a right to sue in a court of law, not in a 
 court of equity. Hammond v. Messenger, 9 Sim. :S27 (1S3S) ; Hayward v. An- 
 drews, 106 U. S. 672, 1 Sup. Ct. 544, 27 L. Ed. 271 (1882) ; Walker v. Brooks, 
 125 .Mass. 241 (1S78). 
 
 The law of the assignment of choses in action has been a growth. In Co. 
 Lit. 232a, we read: "A man may give or grant his deed to another, and such 
 grant by parol is good. And it is also implied, that if a man hath an obliga- 
 tion, though he cannot grant the thing in action, yet he may give or grant 
 the deed, viz. the parchment and wax to another, who may cancel and use the 
 same at his pleasure." 
 
 In Coke's time an assignment of a chose in action was deemed valid onlyj 
 when made to a creditor on account of a precedent debt. Y. B. H. T. 15 Hen. 
 VII, 2, pi. 3; Brooke's Abridgment, Chose in Action, pi. 3; South v. Marsh. 3 
 Leon. 2.34. pi. 320 (1590); Harvey v. Bateman, Nov. .".2 (1600). If made by 
 way of gift, the assignment was invalid. South v. Marsh, 3 Leon. 234, pi. 320 
 (1590). So if made to a vendee. Y. B. 37 Hen. VI, 13. pi. 3; Harvey v. Bate- 
 man, Noy, 52 (1600); Jenkin's Century Cases. 108. pi. 7. 
 
 Equity maintained the same distinction as late as p;77. Freeman's Ch. 145. 
 In Lord Carteret v. I'asehal. 3 P. Wins. 1!>7 (1733), the validity of a voluntary 
 assignment of a chese in action was said to be admitted on all sides. And in 
 Row v. Dawson, l Yes. Sr. 331. 332 (1719). Lord Chancellor Bardwlcke said 
 that, though the law did not admit an assignment of a chose in action, the 
 court of chancery did. and that in the case of a bond it might be assigned 
 in equity for valuable consideration and the assignment be good, though no 
 special form were used. 
 
 Furthermore in Coke's time the assignee who would sue at law in his as- 
 signor's name must have an express power of attorney. Mallory v. Lane, Cro. 
 .lac. 342 (1615). An implied power of attorney was a thing then unknown. 
 All this is now changed. A power of attorney in favor of a vendee or donee
 
 72 THE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 is as valid as if in favor of a creditor, and it need not be express, but may 
 I... Implied fn>iii circumstances. See Dean Ames, 1 Harvard Law Rev. G, and 
 3 Harvard Law Rev. 340, 341. 
 
 Greater consistency might have been secured had the courts agreed that to 
 a perfect L-il't of a chose in action it is enough that the donee obtain a power 
 of attorney entitling him to sue at law in the assignor's name, even though the 
 le-ai title to the particular chose In action may be capable of transfer. 
 
 Vabious Kims oi Legal Choses in Action. (1) Bonds. In Snellgrove v. 
 Baily, 3 Atk. 214 (1744), Lord Chancellor Bardwicke held that a gift causa 
 mortis Of a bond mighl lie made by a mere delivery of the bond without writ- 
 ing. So iii Duffield v. Elwes, 1 Bligh, N. It. 407 (1827). the House of Lords 
 held thai a gifl .ansa mortis of a bond and mortgage might be made by mere 
 delivery of the same without writing. 
 
 In Edwards v. Jones, l Myl. & Cr. 226 (1836), Lord Chancellor Cottenham 
 held that a gift of a bond inter vivos could not be made by a delivery of the 
 bond, even though accompanied by an express power of attorney indorsed 
 thereon. No justification appears for this distinction botween gifts of bonds 
 causa mortis and inter vivos. The doctrine of Edwards v. Jones leads to this 
 unfortunate result: The donee of a bond has the legal title to it as a chattel, 
 Inn cannot sue at law in the obligor's name to collect the debt; the donor can- 
 not recover the bond from the donee, and yet for want of it is remediless 
 againsl the obligor. 
 
 In the United States this result is .avoided by treating gifts inter vivos and 
 gifts causa mortis alike. The mere delivery of the bond, without writing, not 
 only gives the donee the legal title to the bond as a chattel, but confers on him 
 an implied power of attorney to sue at. law tin' obligor in the assignor's name. 
 Gifts causa mortis: Waring, Adm'r. v. Edmonds, 11 Md. 424 (i857) ; Wells, 
 Adm'r, v. Tucker and Wife. 3 Bin. (Pa.) 366 (1811). Gifts inter vivos: Ham 
 v. Keen. 4 Leigh (Va.i 333, 20 Am. Dec 322 lis:;;;); Hunter v. Hunter. 10 
 Barb. (X. Y.) 631 (1855) ; Gannon v. McGuire, 160 N. Y. 470, 55 N. E. 7, 73 Am. 
 St. Rep. 694 (1899). 
 
 The delivery of a deed of gift of a bond, without a delivery of the bond, 
 should be effectual to pass the legal title to the bond as a chattel, and also to 
 confer upon the donee a power of attorney to sue in the assignor's name. See 
 Brownlow & Goldesborough, 40; Drakeford v. Wilks, 3 Atk. 539 (1747). 
 
 (2) Life Insurance Policies. A perfect gift inter vivos of a life insurance 
 policy may be made by a delivery of the policy without writing. .Marcus v. 
 St. Louis Mut. Life Ins. Co., 68 X. Y. 625 (1877); McGlynn v. Curry, 82 App. 
 Div. 431, 81 N. Y. Supp. 855 (1003); Travelers' Ins. Co. of Hartford, Conn., v. 
 Grant, Adm'r, 54 N. J. Eq. 208, 33 Atl. 1060 (1896). 
 
 A gift causa mortis of a life insurance policy may be made by a mere de- 
 liverv of the policy without writing. Witt, Adm'r, v. Amis, 1 B. & S. 109 
 (1861); Amis v. Witt. :;:; Beav. 619 (1864). 
 
 The delivery of a deed of gift of a policy of life insurance is as effectual as 
 the delivery of the policy of insurance itself. Gifts inter vivos: PorteSCUe v. 
 Barnett, .".Myl. & K. 36 (1834); Pearson v. Amicable Assurance Office, 27 
 Beav. 229 (1859). Gifts causa mortis: Williams, Adm'r, v. Guile, 117 X. Y. 
 343, 22 N. E. 1071, 6 L. It. A. 3(10 (1889). In the last case, however, the policy 
 as well as the deed of gift were delivered to the donee. 
 
 (.".) Promissory Notes. A perfect gift inter vivos of a promissory note pay- 
 able to the order of the donor may be made by a delivery of the note to the 
 donee, without indorsement and without, writing. Wing v. Merchant. 57 Me. 
 :•>;; (1869); Grover v. Grover, 24 Pick. 201. 35 Am. Dec. 319 (1835); Hopkins v. 
 Manchester. 16 B. I. 663, 1!) Atl. 213. 7 L. It. A. 387 (1889); Corle v. Monk- 
 house. 50 X T . J. Eq. T>37, 25 Atl. 157 (1892). A perfect gift causa mortis of 
 such a note may be made in the same manner. Bates v. Kempton, 7 Gray 
 iMass.i 382 (1856). 
 
 That a gift inter vivos of a promissory note payable to the donor's order 
 mav be made by a delivery of a deed of gift without a delivery of the note 
 was held in Walker v. Crews. 73 Ala. 412 (1882). 
 
 A gift inter vivos of the donor's own promissory note payable to the donee 
 or otder cannot be made. Warren' v. Durfee. 12G Mass. 338 (1870); Bartlett, 
 Petitioner, 163 Mass. 509, 515, 40 N. E. 809 (1895); Holliday v. Atkinson, 5 B. 
 & C. 50] (1826).
 
 Sec. 4) CONSIDERATION. 73 
 
 Nor can a gift causa mortis of such a note be made. Parish v. Stone, 14 
 Pick. (Mass.) IPS, 25 Am. Dec. 378 (1833); Harris v. Clark, 3 N. Y. 93, 51 Am. 
 Dec. 352 (1849). 
 
 A gift causa mortis of a promissory note payable to the donor's order can 
 be made by a delivery of the note without writing. Veal v. Veal, 27 Beav. 303 
 (1859). 
 
 A gift causa mortis of a promissory note and mortgage, made by a de- 
 livery of the note and mortgage to the donee, is good. Borneman v. Sidli 
 15 Me. 429, 33 Am. Dec. (520 (1839). 
 
 But in McIIugh v. O'Connor, 91 Ala. 243, 9 South. 165 (1S91) a delivery of 
 a mortgage without the note was held to be ineffectual as a gift of the note. 
 
 (4) Shares of Stock. A gift inter vivos of stock may be made by a delivery 
 of the certificate with an express power of attorney. Cushman v. Thayer 
 Mfg. Jewelry Company, 70 N. Y. 3G5, 32 Am. Rep. 315 (1879) ; Walker v. Dixon 
 Crucible Co., 47 N. J. Eq. 342. 20 Atl. SS5 (1890); Matthews v. Hoagland, 48 
 N. J. Eq. 455, 21 Atl. 1054 (1S'.)1). 
 
 A gift inter vivos of stock may be made by a delivery of the certificate with- 
 out auv express power of attorney. First Nat. Bank of Richmond v. Holland, 
 99 Va. 495, 39 S. E. 12(!. 55 L. R. A. 155, 80 Am. St. Rep. 89S (1901); Common- 
 wealth v. Compton, 137 Pa. 13S. 20 Atl. 417 (1890); Leyson v. Davis, 17 Mont. 
 220, 42 Pac. 775. 31 I,. R. A. 429 (1895). 
 
 A gift causa mortis of stock may be made by a delivery of the certificate 
 without an express power of attorney. Walsh v. Sexton, 55 Barb. (N. Y.) 251 
 (1809). 
 
 A gift causa mortis of stock may be made by a delivery of a deed of gift 
 without a delivery of the certificate. Grymes v. Hone, 49 N. Y. 17, 10 Am. 
 Rep. 313 (1872). 
 
 In De Caumont v. Bogert, 30 Hun, 382 (1885), the donor, who owned shares 
 of stock for which certificates had not been issued, by voluntary deeds assign- 
 ed the same to different persons, and it was held that the gifts were valid as 
 against the donor's legal representative. 
 
 In England a difference of opinion seems to exist as to what is essential to 
 constitute a gift of shares of stock. In Milroy v. Lord, 4 De G., F. & J., 204 
 (1802), and Bridge v. Bridge, 10 Beav. 315, 321 (1852), it was considered neces- 
 sary to a perfect gift that the donee should have the legal title by being reg- 
 istered as owner upon the books of the company. In Kiddill v. Farnell, 3 
 Smale & G. 428 (1857), Vice Chancellor Stuart thought that the gift was per- 
 fect if the donee had a power of attorney giving him the right to force the 
 registration of his name upon the books of the company as owner. The same 
 view was taken in Ireland in the case of West v. West, L. R. 9 Ir. Ch. 121 
 (1S82). 
 
 (5) Savings Bank Books. A gift inter vivos of a savings bank book may be 
 made by a delivery with an express power of attorney. Kimball v. Lelaud, 110 
 Mass. 325 (1872); Foss v. Lowell Five Cents Savings Bank, 111 Mass. 2S5 
 (1873). 
 
 A gift inter vivos of a savings bank book may be made by a delivery of the 
 book without any writing. Camp's Appeal. 30 Conn. SS, 4 Am. Rep. 39* (1869) : 
 Hill v. Stevenson, 03 Me. 304, 18 Am. Rep. 231 (1873) ; Polley v. Hicks, 58 Ohio 
 St. 218, 50 N. E. 809, 41 L. R. A. 85S (1898) ; Providence Institution for Savings 
 v. Taft, 14 R. I. 502 (1884) ; Watson v. Watson. 09 Vt. 243. 39 Atl. 201 (189G). 
 
 A gift causa mortis of a savings bank book may be made by a delivery of 
 the book with an express power of attorney. Sheedy v. Roach, 124 Mass. 472, 
 20 Am. Rep. 080 (1878). It may also be made by a delivery of the book with- 
 out any express power of attorney. Ridden v. Thrall, 125 N. Y. 572, 20 N. E. 
 627, 11 L. R, A. 084, 21 Am. St. Rep. 758 (1891) ; Pierce v. Boston Five Cents 
 Savings Bank, 129 Mass. 425, 37 Am. Rep. 371 (1S80) ; Tillinghast v. Wheaton, 
 8 R. I. 530, 5 Am. Rep. 021, 94 Am. Dec. 126 (1S67). 
 
 In Jones v. Weakley, 99 Ala. 441, 12 South. 420, 19 L. R. A. 700, 42 Am. St. 
 Rep. 84 (1893) it was held that the delivery of a pass book upon an ordinary 
 bank of deposit was not a gift of the deposit. 
 
 (0) Certificates of Deposit. A gift causa mortis of a certificate of deposit 
 may be made by a delivery of it unindorsed. Westerlo v. De Witt, 30 N. Y. 
 340, 93 Am. Dec. 517 (1867) ; Moore v. Moore, L. R. 18 Eq. 474 (1S74) ; In re 
 Dillon, L. R. 44 Ch. Div. 70 (189(f). A doubt is suggested in Re Dillon as to
 
 74 THE NATURE AM> REQUISITES OF TRUSTS. (Ch. 1 
 
 whether a gift Inter vivos of a certificate of deposil can be made by a delivery 
 
 Of if unini]M|--c 1 | 
 
 (7) Lottery Tickets. A gift of a lottery ticket may be made by a delivery el" it 
 without writing, inter viv.-s: Grangiac v. Arden, u» Johns. (N. Y.) 293 (1813). 
 < :1 usa mortis: Gold v. Rutland. 1 Eq. Ab. 346 (1719). 
 
 (8) /' rri,, < , „ r ,■ Tally. Causa mortis: Jones v. Selby, Prec Ch. .".<»<) (semble). 
 
 (9) Judgments. It is said thai a gifl of a judgment may lie made without a 
 written assign ment and by a delivery of tin- same. Mack v. Mack, 3 Hun, 
 ::•_•:'. (1874)1 Presumably what is meant is by a delivery ei' a copy of the 
 ludgment. It is doubtful whether a j^i ft of a judgment: can be so made in 
 England. See Patterson v. Williams, LI. & G. t. Pi. 95 (1834). 
 
 What has I u said as to the gifl of a chose in action is limited t>> a gift 
 
 of the whole of a Chose in action. A gifl of part of a chose in action dees net 
 create a power of attorney, and give the so-called assignee a right to sue in 
 i he assignor's name in a common-law court, The operation of an assignment 
 of a pari of a legal chose in action is to create an equitable charge enforceable 
 only in a courl of equity, and to the creation of such a charge a consideration 
 is necessary. Alger v. Sett, 54 N. Y. 14 (1873). 
 
 Eqi ii \i-.i i Choses in Action. That a cestui que trust could make an as- 
 signment by way of gifl of his interest, whether present or reversionary, 
 seen s to en settled by the decision of Lord Eldon in Ellison v. Ellison, 
 
 6 Ves. Jr 656 (1802), and of Sir William Grant in Sloane v. Cadogan, Sugden 
 V. iV P. (10th Ed.) Appendix, 66 (1808). The principles involved in these deci- 
 sions seem to 'nave been disregarded for a time in England. See Meek v. Ket- 
 tlewell, 5 Hare. 464 (1842), affirmed 1 1'hillips. 343 (1843). The case of Keke- 
 wich v. Manning, 1 l>e G., Macn. & (i. 176 (1851), did much to restore the law 
 as left by Lord Eldon and Sir William Grant. To-day a cestui que trust may 
 wiihont doubl make a gratuitous assignment of fife whole of his equitable in- 
 terest, whether presenl or reversionary. 
 
 Here, also, what has been said in reference to the assignment is limited to 
 the assignment of the whole of the cestui que trust's interest. An assignment 
 of a pari of a cestui que trust's interest creates but an equitable charge, and 
 is not valid without a consideration. In re Lucan, Ii. R. 45 Ch. Div. 470 (IN'.nO. 
 
 A distinction should be noted between a gift by will of real estate and of 
 personal property. The title to real estate passes by the will directly to the 
 devisee. The title to personal property always passes to the executor, and 
 the legatee in trust deriv'es Ids title from the executor. Lockinan v. Reilly, 
 95 N. Y. 04, 72(1884). 
 
 
 
 SECTION 5.— THE SUBJECT-MATTER OF A TRUST. 
 
 JEWELL v. BARNES' ADMINISTRATOR. 
 
 (Court of Appeals of Kentucky, 1901. 110 Ky. 329, Gl S. W. 3G0, 53 L. R. 
 
 A. 377.) 
 
 Hobson, J. 1 Appellant, Robert M. Jewell, filed this suit against 
 the appellees, the Louisville Trust Company, as the administrator 
 with the will annexed, and S. S. Barnes, the residuary devisee of 
 C. I'. Barnes, deceased. The court below sustained a demurrer to his 
 petition, and, he failing to plead further, dismissed the action. The 
 only question on the appeal is, therefore, did the petition state a 
 cause of action? 
 
 i Pari of the opinion is omitted.
 
 Sec. 5) THE SUBJECT-MATTER OF A TRUST. 75 
 
 It was alleged in the petition that C. P. Barnes was at the time of 
 his death, and had been for many years theretofore, engaged in busi- 
 ness as a jeweler, with his brother, J. B. Barnes under the firm name 
 of C. P. Barnes & Co.; that the business was a large one, and C. P. 
 Barnes became a wealthy man; that in the year 1877, when appel- 
 lant was a small boy, the deceased took him into his employ and 
 treated him as if he had been his own son, often promising him an 
 interest in the business; that appellant started with a small salary, 
 which was increased from time to time until the death of the de- 
 ceased, when he was receiving $20 a week; that the deceased died, 
 leaving a will which was duly admitted to probate, and by the seventh 
 clause of the will the testator provided for him in the following lan- 
 guage: "I desire that my friend Robert M. Jewell be retained in 
 the employ of the firm on such liberal terms as his long and faithful 
 service entitles him to." It is also alleged that on February 23, 
 1895, within a month after the death of the testator, against his pro- 
 test, his salary was cut down from $20 to $15 a week, and three 
 years later, on February 26, 1898, to $13.50 a week; that about two 
 months after this, without fault on his part, he was discharged; 
 against his protest, and had been unable to earn anything like $20 a 
 week from the time of his discharge to the filing of the suit; that 
 appellees w r ere running the store with great profit, and it was incum- 
 bent on them, under the will, to keep him in their employment at $20 
 a week; that his wages for the time amounted to $4,780, and he had 
 only received $3,045.70, leaving a balance due him of $1,734.30; 
 that C. P. Barnes was the owner of a larger interest in the firm than 
 his brother, J. B. Barnes, and by his will gave to his brother enough 
 of his holdings in the firm to make the brother and the testator's wid- 
 ow, appellee, S. S. Barnes, equal partners in the business; that they 
 continued the business under the same firm name from the death of 
 the testator, on February 5, 1895, until May 19, 1897, when the 
 brother, J. B. Barnes, sold out his interest in the firm to the widow, 
 appellee, S. S. Barnes; and that she has continued the business under 
 the name of C. P. Barnes & Co. It will be observed that 'the brother, 
 J. B. Barnes, is not sued. The suit is brought against the personal 
 representative and the widow, as residuary devisee. It will be also 
 observed that, although appellant's salary was cut down to $15 soon 
 after the testator's death, he continued with the firm and continued 
 to accept the salary that was paid him ; and things remained in this 
 shape until after J. B. Barnes sold out, and appellee S. S. Barnes 
 took charge of the business in her own right, after the dissolution of 
 that firm, and appellant continued to work for her and to accept the 
 reduced salary from her until he was discharged by her something 
 like a year afterwards. 
 
 It is insisted for appellant with great earnestness that the will 
 creates a precatory trust in his favor, and that he is entitled under the 
 will to his wages at $20 per week. The will does not fix the salary
 
 7G THE NATURE AND REQUISITES OF TRUSTS. (Cll. 1 
 
 that appellant is to receive if retained in the employ of the firm, nor 
 does it require that he shall be retained. The language imports no 
 more than an expression of the testator's desire, and the clause was, 
 no doubt, put in this shape so as not to embarrass the devisees in the 
 management of their affairs. The will contemplated that the broth- 
 er and wife of the testator, as a firm, would continue the business; 
 and to this firm the testator expressed the desire that it would retain 
 appellant in its employ on such liberal terms as his long and faithful 
 service entitled him to. The amount of compensation is expressly 
 left to the firm, and no desire is expressed as to anything that should 
 be done after that firm went out of business. The suit here is not 
 against that firm, and if this action can be maintained, the clause 
 in question will amount, in substance, to a charge of an annuity up- 
 on the widow, appellee, S. S. Barnes, in favor of appellant, unless 
 die quits the business. The testator clearly intended no such result. 
 In Shaw v. Lawless, 5 Clark & 1\, 129, the testator expressed his 
 "particular desire" that the devisee, when he received the property, 
 should continue 1,. "in the receipt and management thereof, and like- 
 wise employ and retain him in the receipt, agency and management 
 of the rents," at the usual fees allowed to agents, for this reason, as 
 expressed in the will: "He having acted for me since I became 
 possessed of said estate, fully to my satisfaction." It was held that 
 no precatory trust resulted. Among other things, the Lord Chancel- 
 lor said: "All cases upon a subject like this must proceed on a con- 
 sideration of what was the intention of the testator. Now, the first 
 observation that strikes one with reference to that matter is that 
 during the life of the testator Lawless was his agent. But then he 
 was agent only during the testator's pleasure, and by the terms of 
 the will the testator desired that he should continue in the agency. 
 Is that desire to be considered a command? If so, for what length 
 of time is he to continue. * * * If Lawless is the equitable 
 incumbrancer to the amount of one-twentieth part of the income of 
 the estate, he has a clear interest in the residue, for he might take 
 one-twentieth part of the residue; he might file a bill in chancery in 
 order to control the application of the residue and claim to be abso- 
 lutely invested in what he is entitled to receive, namely, this one- 
 twentieth part." So, here, if the clause in question created a preca- 
 tory trust, appellant would have been entitled to maintain a bill in 
 equity to protect his rights and prevent the firm from taking any 
 steps that might imperil his annuity. Such a right might render the 
 estate of the devisee materially less valuable, and make appellant to 
 no small extent, the real beneficiary under the will. The case above 
 referred to was followed in Foster v. Elsley, 19 Ch. Div. 518, and Fin- 
 den v. Stephens, 22 Eng. Ch. 142. See, also, Perry, Trusts, § 123. 
 The firm composed of the widow and the brother were not required 
 to continue the business. They might close it out at pleasure. If
 
 Sec. G) THE CESTUI QUE TRUST. 77 
 
 they had sold to a stranger, clearly no trust would have attached in 
 favor of appellant to the assets in their hands received from the sale. 
 When the brother sold to the widow, he was acquit of all responsi- 
 bility. It was not the testator's purpose to create a permanent charge 
 on the corpus of the estate in the hands of the devisees; and the 
 widow after her purchase was under no obligation to keep appellant 
 indefinitely in her service, regardless of the amount of the business 
 she did, or other circumstances affecting her interest. Judgment af- 
 firmed. 2 
 
 SECTION G.— THE CESTUI QUE TRUST/ 
 
 MORICE v. BISHOP OF DURHAM. 
 
 (In Chancery, before the Master of the Rolls, Sir William Grant, 1S04. 9 
 
 Ves. Jr. 399.) 
 
 Ann Cracherode, by her will, dated the 16th of April, 1801, and 
 duly executed to pass real estate, after giving several legacies to her 
 next of kin and others, some of which she directed to be paid out of 
 the produce of her real estate, directed to be sold, bequeathed all her 
 personal estate to the Bishop of Durham, his executors, &c, upon 
 trust to pay her debts and legacies, &c. ; and to dispose of the ulti- 
 mate residue to such objects of benevolence and liberality as the 
 Bishop of Durham in his own discretion shall most approve of; and 
 she appointed the Bishop her sole executor. 
 
 The bill was filed by the next of kin to have the will established 
 except as to the residuary bequest, and that such bequest may be 
 declared void. The Attorney General was made a defendant. The 
 
 2 The trust res may be realty or personalty. A chose in action as well as 
 a chose in possession may form the trust res. Fletcher v. Fletcher, 4 Hare, 
 67 (1S44) ; Fogg v. Middleton, 2 Hill, Ch. (S. C.) 591 (1S37). 
 
 Purely personal rights cannot be held in trust, such as a peerage or office. 
 The right of either party to a contract of marriage, doubtless, could not be 
 made the subject of a trust. On grounds of public policy some rights that are 
 assignable are in some jurisdictions forbidden to be made the subject of a 
 trust. 
 
 s The cases in this section should be read in connection with two papers. S 
 "The Failure of the 'Tilden Trust,' " by Dean Ames, 5 Harvard Law Review,! 
 389, aud "Gifts for a Noncharitable Purpose," by Prof. Gray, 13 Harvard Law ( 
 Review, 509; the first attacking and the second supporting the doctriue of) 
 Morice v. Bishop of Durham. 
 
 A direct result of Deau Ames' criticism of the decision in the Case of the 
 Tilden Will, 130 N. Y. 29, 28 N. E. 880. 14 L. R. A. 33, 27 Am. St. Rep. 4S7 
 (1891), was the passage by the Legislature of New York of chapter 701, p. 
 1748. Laws 1893 (amended by chapter 291. p. 751, Laws 1901), which restored 
 the English law of charitable trusts. The principal case, however, still re- 
 mains the law of New York, and makes a definite cestui necessary to the va- 
 lidity of a noncharitable trust.
 
 78 THE NATURE A M • KKQUISITES OF TRUSTS. (Ch. 1 
 
 Bishop by his answer, expressly disclaimed any beneficial interest in 
 himself pers< mally. 
 
 Tin: M asti.k oi- the Rolls. 1 The only question is, whether the 
 trust, upon which the residue of the personal estate is bequeathed, be 
 a trust for charitable purposes. That it is upon some trust, and not 
 for the personal benefit of the Bishop, is clear from the words of the 
 will, and is admitted by bis Lordship, who expressly disclaim- any 
 beneficial interest. That it is a trust, unless it be of a charitable na- 
 ture, too indefinite to be executed by this court, has not been, and 
 cannot be, denied. There can be no trust over the exercise of which 
 this court will not assume a control; for an uncontrollable power of 
 disposition would be ownership, and not trust. If there be a clear 
 trust, but for uncertain objects, the property, that is the subject of 
 the trust, is undisposed of, and the benefit of such trust must result 
 to those, to whom the law gives the ownership in default of disposi- 
 tion by the former owner. But this doctrine does not hold good with 
 regard to trusts for charity. Every other trust must have a definite 
 object. There must be somebody, in whose favor the court can de- 
 cree performance. But it is now settled, upon authority, which it is 
 too late to controvert, that where a charitable purpose is expressed, 
 however general, the bequest will not fail on account of the uncer- 
 tainty of the object; but the particular mode of application will be 
 directed by the King in some cases, in others by this court. 
 
 Then is this a trust for charity? Do purposes of liberality and 
 benevolence mean the same as objects of charity? That word in its 
 widest sense denotes all the good affections men ought to bear to- 
 wards each other ; in its most restricted and common sense, relief of 
 the poor. In neither of these senses is it employed in this court. 
 Here its signification is derived chiefly from the Statute of Elizabeth 
 [St. -13 Eliz. c. 1]. Those purposes are considered charitable, which 
 that Statute enumerates, or which by analogies are deemed within its 
 spirit and intendment : and to some such purpose every bequest to 
 charity generally shall be applied. But it is clear liberality and be- 
 nevolence can find numberless objects, not involved in that Statute in 
 the largest construction of it. The use of the word "charitable" 
 seems to have been purposely avoided in this will, in order to leave 
 the bishop the most unrestrained discretion. Supposing, the uncer- 
 tainty of the trust no objection to its validity, could it be contended 
 to be an abuse of the trust to employ this fund upon objects, which 
 all mankind would allow to be objects of liberality and benevolence; 
 though not to be said, in the language of this court, to be objects 
 also of charity? By what rule of construction could it be said, all 
 objects of liberality and benevolence are excluded, which do not fall 
 within the Statute of Elizabeth? The question is, not whether he 
 may not apply it upon purposes strictly charitable, but whether he is 
 
 i Part of tho opinion is omitted.
 
 Sec. G) THE CESTUI QUE TRUST. 79 
 
 bound so to apply it. * * * The trusts may be completely ex- 
 ecuted without bestowing any part of this residue upon purposes 
 strictly charitable. The residue therefore cannot be said to be given 
 to charitable purposes; and, as the trust is too indefinite to be dis- 
 posed of to any other purpose it follows that the residue remains 
 undisposed of; and must be distributed among the next of kin. 2 
 
 MUSSETT v. BINGLE. 
 
 (In the High Court of Justice, Chancery Division, before Vice Chancellor Sir 
 Charles Hall, 1876. Wkly. Notes [187G] 170.) 
 
 In this cause, which now came on upon further consideration, 
 the testator had by his will directed his executors to apply £300 in 
 erecting a monument to his wife's first husband, and also to invest 
 £200 and apply the interest in keeping up the monument. It was 
 admitted that the latter direction was bad, 3 and the question argued 
 was whether the former direction was good. 
 
 The trustees were ready to carry out the testator's wishes, but 
 some of the beneficiaries contended that the first direction was void 
 as purely "honorary." 
 
 The Vice Chancellor said that the direction to the executors 
 was a perfectly good one, and one which they were ready to perform, 
 and it must be performed accordingly. 4 
 
 GOTT v. NAIRNE. 
 
 (In the High Court of Justice, Chancery Division, before Vice Chancellor Sir 
 Charles Hall, 1876. 35 Law Times Reports. 209.) 
 
 Demurrer. William Gott, by a codicil to his will, bequeathed to 
 R. Nairne and T. W. Nelson the sum of £12.000., upon trust that 
 they or the survivor of them, or the executors or administrators of 
 
 2 Affirmed on appeal by Lord Chancellor Eldon, 10 Yes. Jr. 522. 
 
 s Previous to the decision in Lloyd v. Lloyd. 2 Sim. N. S. 255 (1S52), a gift 
 for the repair of a monument was considered a gift tor a charitable purpose, 
 and therefore valid, though to last for all time. That case, which held that 
 such a gift was not for a charitable purpose, has been generally followed. 
 
 4 The cost of erecting a monument to a dead man is part of his funeral 
 expense, and to be justified as such. Fite v. Peasley. 12 Lea (Tenn.i 328 
 (18S3); McGlinsey's Appeal, 14 S. & R. (Pa.) 64. 66 (1826); Fairman's Appeal. 
 30 Conn. 205, 209 (1861) ; Killebrew v. Murphy. 3 Heisk. (Tenn.) 546. 558 
 (1871); Detwiller v. Hartman. 37 N. J. Eq. : > »47 (1883). 
 
 In Gilmer's Legatees v. Gilmer's Executors, 42 Ala. 9 (1S6S), a bequest for 
 the erection of monuments to the memory "of Gen. Stonewall Jackson, of 
 Virginia, and Cols. Thomas Cobb and Bartow, of Georgia." was held valid. 
 This, however, may be sustained as a gift for a charitable purpose. 
 
 The question involved in the principal case seems quite different. It was 
 not a question of funeral expense.
 
 80 THE nan RE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 such survivor, should, as soon as conveniently might he after the tes- 
 tator's decease, but nevertheless at their sole and absolute discretion, 
 invest the whole or such part as they should think fit of the said sum 
 of £12,000. in the purchase of an advowson and right of patronage 
 of, in. and to some ecclesiastical henefice in England, with the right 
 of' next presentation thereto. And the testator directed that until 
 his son, John Gott, should he duly presented to and inducted into 
 son iastical benefice which should produce a net annual in- 
 
 come of £1,000. at the least (after deducting the necessary charges 
 and outgoings in respect thereof), or should previously depart this 
 life, the trustees should nominate to the said ecclesiastical benefice, 
 when and so often as any vacancy should occur, such fit and proper 
 person a- they might in their uncontrolled discretion select or choose 
 for that purpose. Subject as aforesaid, the trustees were to stand 
 possessed of the advowson and right of presentation in trust for John 
 Gott, his heirs and assigns. The testator also directed that until the 
 £12,000., or such part of it as the trustees should think fit, had been 
 invested as aforesaid, they should invest it in specified securities, and 
 for the term of twenty-one years from the date of his death, accumu- 
 late it and the income thereof, by way of compound interest. And he 
 declared that such accumulated fund should be applicable to the pur- 
 chase of the advowson, and that the interest of the £12,000. and the_ ac- 
 cumulations thereof, together with the securities in which they might 
 be invested at the expiration of the twenty-one years, should, so far 
 as they had not been laid out in the purchase of the advowson, belong 
 and be paid to John Gott, his executors or administrators. Provided, 
 however, that if John Gott should die or be inducted into some ecclesi- 
 a>tical benefice of the annual value aforesaid before the trustees had 
 entered into any contract for the purchase of an advowson, or if any 
 part of the £12,000., or the accumulations thereof, should remain un- 
 disposed of after completing such contract, then the £12,000. and the 
 accumulations thereof, or so much of the same as should remain un- 
 disposed of, should belong and be paid to John Gott, his executors 
 or administrators. 
 
 The testator died in 1863. The trustees had received the £12,000. 
 and invested it and the accumulations as directed, but no purchase of 
 an advowson had been made. 
 
 John Gott, the son, had been presented to the vicarage of Leeds, 
 and it was in dispute between the trustees and himself whether or 
 not the benefice was worth a clear £1,000. a year. 
 
 The action was brought by John Gott against the trustees. 
 The statement of claims set out the above-mentioned facts, but 
 claimed to have the trust fund handed over to the plaintiff, irrespec- 
 tive of any question as to the value of his present living. 
 The defendants demurred generally. 
 
 G. Hastings, Q. C., and Kekewich, for the demurrer. The de- 
 fendants do not decline to carry out the trust created by this will.
 
 Sec. 6) THE CESTUI QUE TRUST. 81 
 
 The plaintiff, therefore, cannot claim this fund, unless he can show 
 that he is the exclusive object of the trust. But it is clear that the 
 trustees may, at any time until the expiration of twenty-one years 
 from the testator's death, create a cestui que trust by purchasing an 
 advowson and presenting some person other than the plaintiff to it. 
 The case is like that of Mussett v. Bingle, where a bequest to erect 
 a tombstone was upheld, the trustees being willing to carry it out. 
 They cited Harbin v. Masterman [25 L. T. Rep. N. S. 200, L. R. 12 
 Eq. 559], and Talbot v. Jevers [L. R. 20 Eq. 255]. 
 
 Dickinson, Q. C, and Ingle Joyce for the plaintiff. Both the fund 
 and the advowson belong to the plaintiff, subject to the direction to 
 accumulate the interest on the fund and the purchase of and presenta- 
 tion to an advowson. As to the accumulation, it is clear that where 
 there is a simple direction to accumulate a fund and give it to A. 
 twenty-one years hence, he, if of full age, is entitled to receive it at 
 once. As to the purchase of the advowson, there are a series of 
 cases of which Gosling v. Gosling [John. 2G5] is the most important, 
 showing that the legatee in such a case is entitled to have the fund 
 at once, unless the testator has shown a clear intention that someone 
 shall have the enjoyment of it in the meantime. Here the testator's 
 object was evidently to benefit the plaintiff alone, it being clear that 
 there was no other person whom he specially wished to benefit. 
 There is no trust for any person except the plaintiff, no person who 
 now or at any time can call upon the trustees to purchase a living. 
 Harbin v. Masterman is in our favor, for there the Vice Chancellor 
 would have divided the fund amongst the residuary legatees, had 
 they not been charities. They cited Thomson v. Shakespeare [John. 
 612, 1 De G., F. & J.] ; Lewin on Trusts (6th Ed.) 94. 
 
 The Vice Chancellor. In this case the trustees disclaim any 
 beneficial interest in the fund in question, but do not say that they are 
 unwilling to perform the trust. They do not look upon this trust 
 as beneficial to themselves, but — there being something to be done, 
 perfectly legal — the trustees are desirous to do it. The plaintiff, then, 
 not having shown that the trusts are simply and solely for his benefit, 
 and such as he has a right to put an end to, the demurrer must be al- 
 lowed. I see no reason why the trustees should not be allowed to 
 carry out this trust. And it is to be observed, that they are to nomi- 
 nate to the benefice, when purchased, "when and so often as any va- 
 cancy shall occur." So that even if they purcbased an advowson 
 and presented the plaintiff himself to it, that would not at once put 
 an end to their trust. Moreover, it does not follow that the whole 
 fund would be expended in purchasing the advowson. The demur- 
 rer must, consequently, be allowed ; but the plaintiff "will have leave 
 to amend, and thus raise the question of the net value of his present 
 benefice. 
 
 Ken.Tb.— 6
 
 82 THE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 In re DEAN. 
 
 COOPER-DEAN v. STEVENS. 
 
 (In the High Courl of Justice, Chancery Division, L889. L. R. 41 Cli. Div. 552.) 
 
 William Clapcott Dean, by his will dated the 12th of November, 
 1887, devised all his freehold estates, subject to and charged with 
 certain annuities, and with an annuity of £750. thereinafter mention- 
 ed to his trustees, and to a term of fifty years thereinafter granted 
 to his trustees, to the use of his trustees, for the term of one year 
 from the day preceding his death, upon certain trusts, and, subject 
 thereto, to the use of James Cooper (the plaintiff) for his life, with 
 remainder to the use of the plaintiff's first and other sons, successive- 
 ly in tail male, with remainders over. The will continued: "I give 
 to my trustees my eight horses and ponies (excluding cart horses) 
 at Littledown, and also my hounds in the kennels there. And I 
 charge my freehold estates hereinbefore demised and devised, in pri- 
 ority to all other charges created by this my will, with the payment to 
 my trustees for the term of fifty years commencing from my death, 
 if any of the said horses and hounds shall so long live, of an annual 
 sum of £750. And I declare that my trustees shall apply the said an- 
 nual sum payable to them under this clause in the maintenance of the 
 said horses and hounds for the time being living, and in maintaining 
 the stables, kennels and buildings now inhabited by the said animals 
 in such condition of repair as my trustees may deem fit; but this 
 condition shall not imply any obligation on my trustees to leave the 
 said stables, kennels, and buildings in a state of repair at the deter- 
 mination of the said term ; but I declare that my trustees shall not 
 be bound to render any account of the application or expenditure of 
 the said sum of £750., and any part thereof remaining unapplied shah 
 be dealt with by them at their sole discretion." * * * 
 
 The testator died on the 3d of December, 1887. This was an origi- 
 nating summons by James Cooper, who had assumed the name of 
 Dean, as plaintiff, against the trustees of the will, asking a declara- 
 tion that the gift of the £750. a year to the defendants for the pur- 
 poses mentioned in the will was invalid, or, in the alternative, a decla- 
 ration that the plaintiff was entitled under the trusts of the will to the 
 balance from time to time in any year, commencing from the testa- 
 tor's death, of the £750., after making provision for the maintenance 
 of the testator's horses, hounds, stables, kennels, and buildings men- 
 tioned in his will. 
 
 North, J. 1 The first question is as to the validity of the provision 
 made by the testator in favor of his horses and dogs. It is said that 
 it is not valid; because (for this is the principal ground upon which 
 it is put) neither a horse nor a dog could enforce the trust; and 
 
 i Part of the statement of the case, as also of the opinion, is omitted.
 
 Sec. 6) THE CESTUI QUE TRUST. 83 
 
 there is no person who could enforce it. It is obviously not a chari- 
 ty, because it is intended for the benefit of the particular animals 
 mentioned, and not for the benefit of animals generally, and it is 
 quite distinguishable from the gift made in a subsequent part of the 
 will to the Royal Society for the Prevention of Cruelty to Animals, 
 which may well be a charity. In my opinion this provision for the 
 particular horses and hounds referred to in the will is not, in any 
 sense, a charity, and, if it were, of course the whole gift would fail, 
 because it is a gift of an annuity arising out of land alone. But, in 
 my opinion, as it is not a charity, there is nothing in the fact that 
 the annuity arises out of land to prevent its being a good gift. 
 
 Then it is said, that there is no cestui que trust who can enforce 
 the trust, and that the Court will not recognize a trust unless it is 
 capable of being enforced by someone. I do not assent to that view. 
 There is not the least doubt that a man may, if he pleases, give a 
 legacy to trustees, upon trust to apply it in erecting a monument 
 to himself, either in a church or in a church yard, or even in uncon- 
 secrated ground, and I am not aware that such a trust is in any way 
 invalid, although it is difficult to say who would be the cestui que 
 trust of the monument. In the same way, I know of nothing to pre- 
 vent a gift of a sum of money to trustees, upon trust to apply it for 
 the repair of such a monument. In my opinion such a trust would 
 be good, although the testator must be careful to limit the time for 
 which it is to last, because as it is not a charitable trust, unless it is 
 to come to an end within the limits fixed by the rule against perpetu- 
 ities, it would be illegal. But a trust to lay out a certain sum in 
 building a monument, and the gift of another sum in trust to apply 
 the same to keeping that monument in repair, say for ten years, is, 
 in my opinion, a perfectly good trust, although I do not see who 
 could ask the Court to enforce it. If persons beneficially interested 
 in the estate could do so, then the present plaintiff can do so ; but if 
 such persons could not enforce the trust, still it cannot be said that 
 the trust must fail because there is no one who can actively enforce it. 
 
 Is there then anything illegal or obnoxious to the law in the nature 
 of the provision, that is, in the fact that it is not for human beings, 
 but for horses and dogs? It is clearly settled by authority that a 
 charity may be established for the benefit of horses and dogs, and 
 therefore the making of a provision for horses and dogs, which is 
 not a charity, cannot of itself be obnoxious to the law, provided, of 
 course, that it is not to last for too long a period. Then there is 
 what I consider an express authority on this point in Mitford v. Rey- 
 nolds. * * * 
 
 It is impossible to suppose that, from the beginning to the end of 
 these proceedings, the question whether the gift was good or bad 
 was never brought to the attention of all the learned judges before 
 whom the case came. I do not indeed find that any formal discus- 
 sion took place upon it. This may have been because all the parties
 
 84 THK XAII Ui: AND REQUISITES OF TRUSTS. (Ch. 1 
 
 agreed upon the point, or it may have been disposed of by the judge 
 in the course of the argument. But it is impossible to suppose that 
 the matter was not fully present to the learned counsel who argued 
 the case, or to the various judges before whom it came, and that they 
 did not treat the gift as valid. The point must have been raised, be- 
 cause the fund out of which it was to take effect (if it were good) 
 was given to a charity. It was the duty of the counsel for the Gov- 
 ernor General and the East Indian Government to raise the point on 
 behalf of the charity, if there was anything in it, because the charity 
 would have taken so much more, if the provision for the horses were 
 invalid. That being so, I think that I may treat that case as a deci- 
 sion by very high authority that such a provision is good, and, if I 
 had felt any doubt about the point myself, I should have considered 
 that authority as settling it, so far as I am concerned. There is noth- 
 ing, therefore, in my opinion, to make the provision for the testa- 
 tor's horses and dogs void. 
 
 Then the next question is this: The gift is of an annuity of £750., 
 during the lives and life (to put it shortly) of the horses and dogs, 
 and the survivors or survivor of them, and of course a time would ar- 
 rive when the provision which the testator thought right to make for 
 all the animals would be much more than sufficient for the three or 
 the two or the one which might survive. The annuity is to cease 
 entirely when the last survivor dies, and it is obvious that nothing 
 like that sum could or would be applied for the benefit of the animals 
 when they became greatly reduced in number. The question is, 
 whether the annuity was given for the trustees beneficially. In my 
 opinion it was not given to them beneficially. * * * 
 
 I must, therefore, declare that the trustees do not take the surplus 
 beneficially, but, upon the question whether the surplus belongs to 
 the heir at law or to the devisee of the real estate, by reason of its 
 not being raisable out of the estate. I say nothing in the absence of 
 the heir at law. 2 
 
 BOYLE v BOYLE. 
 
 iln Chancery, before Vice Chancellor Hedges E. Chatterton, 1877. Ir. R. 11 
 
 Eq. 433.) 
 
 Suit to administer the assets of Daniel Boyle. Hearing on further 
 consideration. By his will, dated the 26th of March, 1871, Daniel 
 Boyle, the deceased, after several pecuniary bequests, devised and 
 bequeathed the residue of his real and personal estate to his executors, 
 upon the following trust: "upon trust that they shall apply the 
 
 2 The gift was concededly not for a charitable "purpose, yet it might last for 
 
 50 years, or more than 2] years after tlie death of all human beings in life 
 at tbe decease of tbe testator.
 
 Sec. 6) THE CESTUI QUE TRUST. 85 
 
 residue of my estate to works of charity, such as masses for the 
 eternal repose of my soul, and whatever else they may judge mosl 
 charitable." 
 
 The Vice Chancellor. The next-of-kin of the testator contend 
 that this gift is void for uncertainty. It would, of course, have been 
 impossible to support this contention, but for the occurrence of the 
 words pointing to masses, as otherwise there was an express general 
 charitable intention which could be executed or controlled by this 
 court. It has, however, been established by the case of Attorney 
 General v. Delaney [Ir. R. 10 Eq. 104] that a legacy for masses is 
 not a legacy for a charitable purpose in the sense in which this court 
 considers gifts for charity. The testator consequently has shown that 
 he does not use the expression "works of charity" in its legal ac- 
 ceptation, for. by his own interpretation of it, he extends it to a pur- 
 pose not charitable. If the gift were valid, it would have been open 
 to the executors to apply the whole subject of the gift to this purpose 
 — that is to say, otherwise than for charity. I had occasion in the re- 
 cent case of Copinger v. Crehane [Ir. R. 11 Eq. 420] to consider the 
 authorities upon the subject of uncertain gifts not exclusively chari- 
 table, and I need only now say that, in my opinion, the rule is that 
 when the purpose of a testamentary gift is uncertain, and the gift, 
 if not charitable, would therefore fail, and it appears sufficiently that 
 the legatee is not intended to take beneficially, but upon trust, it will 
 be supported by this court, and carried out when the terms of the 
 gift are such that the legatee is bound to apply it wholly to purposes 
 specifically charitable; but that when there is a discretion given to 
 the legatee to apply it to charitable purposes, and also to purposes 
 not charitable, and the trust is indefinite, the gift fails, and the bene- 
 fit of the trust results to the residuary legatees or next-of-kin, as the 
 case may be. The question is not. as Sir William Grant says, wheth- 
 er the trustee may not apply it upon purposes strictly charitable, but 
 whether he is bound so to apply it. Here, from the terms of the 
 gift, the executors are at liberty to apply any part of it, or the whole 
 of it, to purposes not charitable in the legal acceptation. It is not a 
 case within the principle on which Doyley v. The Attorney General 
 [4 Vin. Abr. 285] and Salusbury v. Denton [3 K. & J. 529] were 
 decided, for it is not a gift to certain definite objects and to charitable 
 purposes, in which case the subject of it may be divided between the 
 two. Here, the executors were not bound to apply any part upon 
 purposes strictly charitable and the trust is altogether of an indefi- 
 nite character. I am, therefore, of opinion, that upon this ground 
 the gift fails.
 
 86 THE NATUEB AND REQUISITES OF TRUSTS. (Ch. 1 
 
 RKTCI1KNBACH v. QUIN. 
 
 (In the Iliph Court of Justice, Chancery Division, Ireland, before Vice Chan- 
 cellor Hedges E. Chatterton, 1888. L. R. 21, Ir. 138.) 
 
 Jane Cowley, by her will, dated the 30th October, 1881, devised 
 and bequeathed all her property to the defendants, upon the trusts 
 therein declared; and, after giving certain other directions in respect 
 thereof, proceeded: "And whatever interest I have in the lands of 
 Newcastle, County Dublin, and in the premises in Bridgefoot Street, 
 Dublin, now forming a portion of Darcy's Brewery, I direct that the 
 same shall be sold after my decease, if not previously disposed of," 
 and out of the amount realized thereby, after payment of the ex- 
 penses of such sale, I direct my trustees to apply £100. towards hav- 
 ing masses offered up in public in Ireland for the repose of my soul 
 and the souls of my father, mother, brother, and sisters, and of my 
 servant Anne Hagerty, and apply the balance towards such chari- 
 table purposes in Ireland as my trustees shall select." And the tes- 
 tatrix appointed the defendants executors of her said will. 
 
 The testatrix died on the 16th June, 1882, and on the 24th July, 
 1882, probate of her will was granted to the defendants. 
 
 Anne Hagerty survived the testatrix. 
 
 An action was brought by certain legatees under the said will for 
 the purpose of having the trusts thereof carried out and the personal 
 estate of the testatrix administered, and a decree was, on the 4th 
 March, 1885, made to that effect. 
 
 The case now came before the Court on further consideration of 
 the Chief Clerk's certificate, and a question arose as to the validity 
 of the bequest for masses. 
 
 The Vice Chancellor. I am of opinion that there is no attempt 
 to create a perpetuity by the trust in reference to the £ 100. for mass- 
 es. There is a direction in the will that the lands of Newcastle and' 
 the testatrix's premises in Bridgefoot Street should be sold, and that 
 out of the amount realized her trustees should apply £100. towards 
 having masses offered up in public in Ireland for the repose of her 
 soul and the souls of the other persons mentioned. 
 
 I do not consider that there is any attempt here to create a per- 
 petuity, and on that ground — and I wish it be understood that on 
 that point only I give a decision — I shall declare that the gift is 
 valid. 1 
 
 i The Vice Chancellor seems to have overlooked the ground of his decision 
 In Boyle v. Boyle, supra, p. 84.
 
 Sec. 6) THE CESTUI QUE TRUST. 87 
 
 FESTORAZZI and Others v. ST. JOSEPH'S CATHOLIC 
 CHURCH OF MOBILE and Others. 
 
 (Supreme Court of Alabama, 1894. 104 Ala. 327. 18 South. 394, 25 L. It. A. 
 3G0, 53 Am. St. Rep. 48.) 
 
 Appeal from the chancery court of Mobile. 
 
 The bill was filed by the appellants, Sylvester Festorazzi and Ama- 
 bile Muscat, as executors of the estate of Joseph Peter, deceased, 
 and prayed to have the will of their testator construed, and to be 
 directed as to how to distribute the estate. 
 
 The second and third items of the will were as follows : "Second. 
 I give and bequeath to the Roman Catholic Cathedral in the city of 
 Mobile, the sum of three thousand dollars, the same to be used in 
 solemn masses for the repose of my soul." "Third. I give and be- 
 queath to the Roman Catholic Church of Saint Joseph in the city of 
 Mobile, the sum of two thousand dollars, also to be used in solemn 
 masses for the repose of my soul." The Catholic Cathedral made no 
 answer to the bill, and a decree pro confesso was entered against it. 
 
 The St. Joseph's Catholic Church answered the bill, and filed a 
 cross-bill, setting up its claim to the legacy of two thousand dollars 
 bequeathed to it by the will. To the cross-bill of the St. Joseph's 
 Catholic Church the executors demurred, on the ground that the 
 said St. Joseph's Catholic Church of Mobile was not entitled to the 
 relief prayed for in said cross-bill against the said executors, because 
 it does not appear from said cross-bill that the complainant therein 
 is entitled to the enforcement of said legacy under the laws of Ala- 
 bama. This demurrer was overruled. 
 
 On the final submission of the cause, the Chancellor decreed that 
 the bequest made to the said St. Joseph's Catholic Church of Mobile 
 was a legal and valid bequest and directed that the executors pay 
 the same out of the money in their hands belonging to the testator's 
 estate. The executors appealed from this decree, and assigned the 
 same as error. 
 
 Head, J. The validity of the bequest brought to our view, in this 
 case, must be upheld, if at all upon one of three propositions, viz. : 
 
 1. That it is a direct bequest to the church for its general uses. 
 
 2. That it creates a charitable use. 
 
 3. That it creates a valid private trust. 
 
 [The court held the first and third propositions to be untenable.] 
 Third: It is not valid as a private trust, for the want of a living 
 beneficiary. A trust in form, with none to enjoy or enforce the use, 
 is no trust. Argument is unnecessary to show that there is no imag- 
 inable being possessing power to enforce the use declared in this be-l 
 quest. The executor cannot do it, for he succeeds only to the proper- 
 ty rights of the testator. His powers and functions do not, and can-
 
 88 THE NATURE AND REQUISITES OP TRUSTS. (Ch. 1 
 
 not, extend to the well being of the soul of his testator. As said by 
 appellants' ounsd, "If the church should recover this bequest and 
 apply it to paying it- debts, repairing its building, supporting its 
 priests and paying the expenses of their ceremonies, the purpose of 
 .the bequest would be clearly violated. Bui what living person is au- 
 thorized to call the trustee to an account for the misuse of the fund?" 
 Reversed and remanded. 3 
 
 BRICKED, C. J., dissenting. 
 
 ROSS and ROSS v. DUNCAN and Others. 
 
 (Superior Court of Chancery of .Mississippi, before Chancellor Robert II. Buck- 
 aer, 1839. 1 Freem. Ch. 587.) 
 
 The Chancellor. The complainants bring this suit as the heirs 
 and distributees of Margaret A. Reed, deceased. The allegations of 
 the bill, so far as the demurrer is concerned, are : 
 
 That Mrs. Reed, about the 14th June, 1838, made her last will 
 and testament, appointing the defendants her executors, to whom 
 she devised and bequeathed the most of her estate, consisting in part 
 of a large number of negro slaves; that said devises and bequests 
 were made upon the secret trust and confidence that the negroes 
 should be taken by the defendants as the executors of the will to 
 Liberia, there to remain free, etc. A letter from the testatrix of even 
 date with the will is referred to in the bill, which it is alleged is 
 declarative and expressive of the secret trust aforesaid. It is al- 
 leged that this secret trust is in violation of the laws of Mississippi, 
 and was intended to evade and defraud the statute which prohibits 
 the emancipation of slaves by last will and testament, except under 
 the restrictions therein enumerated. The complainants pray that the 
 will be set aside, that the estate may be decreed to them, etc. To 
 this bill there is a general demurrer, which at once presents the ques- 
 tion of the validity of the will as coupled with the alleged secret 
 trust. If the trust be an illegal one, it can make no difference wheth- 
 er it be tacit or express; the same consequences must follow it in 
 either character. I shall therefore elect to consider the will as hav- 
 ing upon its face a devise and bequest to the defendants upon the 
 express trust that the negroes therein mentioned should be taken to 
 Liberia, there to remain free. Several collateral questions were made 
 on the argument, all of which it is believed resolve themselves into 
 
 i Sim. Holland v. Alcock, 108 N. V. 312, 322 324, 10 N. E. mi. 1! Am. St. Rep. 
 420 (1888); O'Connor v. Gifford, 117 X. V. 275, 280, e1 seq., 22 N. K. L036 (1889). 
 
 In England a trust for saying masses is void as a trust for a superstitious 
 use. Wesl v. Shuttleworth, 12 Myl. & K. 684, 697 (1835). 
 
 A trust I'm- saying masses is imt regarded as a trust Cor ;i charitable use 
 excepl in Massachusetts, Schouler, Petitioner, i.".i Mass., 426 (1883); and 
 IVuusvlvania. khvmor - s Appeal, 93 Pa. 142, 39 Am. Rep. 736 (18S0).
 
 Sec. 6) THE CESTUI QUE TRUST. 
 
 89 
 
 this plain and broad proposition: Is a will made within this State, 
 by one of its citizens, in which negro slaves are bequeathed upon the 
 trust that they shall be taken to Liberia, on the coast of Africa, there 
 to remain, void, as being in fraud and violation of our laws, and in 
 contravention of their policy upon the subject of domestic slav- 
 
 erv ? * * * 
 
 It is difficult to conceive how an act done in Liberia, according to 
 its laws, should involve a violation of those of this State. The rule 
 that every contract, act, or agreement is to be governed by the laws 
 of the place where the execution or performance is to take place, is 
 one of universal application. The execution of the trust in this case, 
 according to the allegations of the bill, is to take place in Liberia. 
 The laws of that place, then, according to the rule, must decide up- 
 on its legality. The ground was taken, that, as the negroes for whoseJ t 
 benefit the trust was raised, can maintain no suit in our courts to enj 
 force it, and there being no one who can enforce it, the trust, it is in- 
 sisted, is therefore void. The conclusion does not necessarily follow 
 from the premises. A trust may be created which may be perfectly 
 consistent with the law, and yet the law may have pointed out no 
 mode of enforcement; still it would not interpose to prevent it, but 
 would leave its execution to the voluntary action of the trustee. A 
 person may convey his property upon what trust or condition he 
 pleases, so that it be not against law ; and the Court would only inter- 
 fere at the instance of the heirs or distributees of the grantor or tes- 
 tator, when there had been a failure or refusal to perform the condi- 
 tion or trust. These principles, I think, are plainly deducible from the 
 case in Philadelphia Baptist Ass'n v. Hart, 4 Wheaton, 35, 4 L. Ed. 
 499. * * * 
 
 The demurrer must be sustained and the bill dismissed. 1 
 
 i See Hooper v. Hooper, 32 Ala. 6G9 (1858) ; Cleland v. Waters. 10 Ga. 35 
 (1S55). 
 
 Prof. Gray calls attention to the fact that in all the slaveholding states (save 
 Louisiana, in which the civil law prevailed), except Alabama, Georgia, and 
 Mississippi, a slave had a standing in court to enforce his emancipation. 
 
 Who may be a Cestui que Trust. In almost all jurisdictions any person, 
 artificial or natural, may at this day be a cestui que trust. Formerly aliens 
 and slaves were exceptions to this rule. 
 
 (T) Miens. An alien could take, but could not hold, as cestui que trust. 
 where the trust res was real estate. The sovereign became at once entitled to 
 the benefit of the trust, and could enforce its rights in a court of equity. Har- 
 row v. Wadkin, 24 Beav. 1 (1857); Hubbard v. Goodwin. 3 Leigh (Va.) 402 
 (1832). Where the trust res was personalty, there never was any objection to 
 an alien taking and holding; as cestui que trust. Craig v. Leslie, 3 Wheat. .".•',;. 
 4 L. Ed. 400 (1818). 
 
 (2) Slaves. A slave could not lie a cestui que trust. Haywood v. Craven. 
 2 Law Repos. (N. C.) 557 (1816) : Cunningham v. Cunningham, Taylor & Con- 
 ference (N. C.) 353 (1801). The trust was void, and the trustee became a con- 
 structive trustee for the creator of the trust or his representative. Craig v. 
 Beatty, 11 S. C. 375 (1S7S).
 
 90 TIIE NATURE AND REQUISITES OF TRUSTS. (Cll. 1 
 
 SECTION 7.— THE TRUSTEE. 
 
 PRESIDENT AND FELLOWS OF YALE COLLEGE and Others. 
 
 (Supreme Court of Errors of Connecticut, 1890. 07 Conn. 2. - 57, 34 Atl. 1036.) 
 
 Appeal from probate. 
 
 Philip Marett left a will by which he devised property to trustees 
 and provided that, after the death of his wife and daughter, the re- 
 mainder of the trust property should be distributed to seven different 
 legatees. One of the legacies was in these words : "One-tenth part 
 to the State of Connecticut, in trust, the income to be applied toward 
 the maintenance of any institution for the care and relief of idiots, 
 imbeciles or feeble-minded persons." 
 
 The will contained this provision : "Should any of the trusts not 
 be accepted the amount intended therefor shall be proportionately dis- 
 tributed in augmentation of such as may be accepted." 
 
 The State refused to accept the trust. The trustees then applied 
 to the Probate Court to appoint a trustee in place of the State. The 
 Probate Court made an order appointing a trustee. Yale College 
 and the other legatees appealed therefrom to the Superior Court of 
 New Haven county and that court reserved the case for the consid- 
 eration of the Supreme Court. 
 
 1 Iamersley, J. 1 The testator has named a trustee competent to ac- 
 cept the trust. The State has power to accept a gift in trust to apply 
 the income thereof towards the maintenance of some institution for 
 the care and relief of idiots. The maintenance of such an institution, 
 either directly under immediate State supervision, or indirectly 
 through annual aid given to an existing institution, is a lawful exer- 
 cise of governmental power and duty. * * * A gift to the State 
 in trtist to apply the same in executing a lawful governmental func- 
 tion, is a valid gift. Whatever may be thought of the policy of accept- 
 ing such gifts, there can be no doubt of the power of the State to ac- 
 cept or refuse. The State has refused to accept the trust in question ; 
 and the plain language, as well as the clear intent of the will, require 
 the trustees to distribute the amount intended for such non-accepted 
 trust proportionately in augmentation of the trusts that have been 
 /accepted. There is nothing equivocal in the language : nothing 
 
 doubtful as to the intent. There is no occasion for construction. 
 
 | The court advised the Superior Court to render judgment revers- 
 ing the order of the Probate Court.] 2 
 
 i Part of the opinion is omitted. 
 
 2 Had the state been incompetent to act as trustee, the order appealed from 
 would have been proper. Dailey v. City of New Haven, 00 Conn. 314, 22 Atl. 
 '.Mr,, 14 L. R. A. 09 (1891). 
 
 Compare Shoemaker v. Board of Commissioners of Grant County, 30 Ind.
 
 Sec. 7) THE TRUSTEE. 91 
 
 ATTORNEY GENERAL v. LAUNDERFIELD. 
 
 (In Chancery, before Lord Chancellor Hardwicke, 1743. 3 Swanston, 410.) 
 
 Note, in this case the Attorney-General argued, that as corpora- 
 tions could not be seized to an use at law, no more could they be 
 trustees, but should have the lands to their own use, divested and 
 freed from the trust. 1 Co. 122a. Chudleigh's Case. 
 
 But the Chancellor would not let him go on; nothing being clear- j 
 er than that corporations can be trustees. 1 
 
 OWNES v. OWNES and Others. 
 (Court of Chancery of New Jersey, 1872. 23 N. J. Eq. 60.) 
 
 The Chancellor [Abraham O. Zabriskie]. 2 This suit is by the 
 complainant, against the widow and heirs of her deceased son, James 
 H. Ownes, for the conveyance of certain lands in the city of New 
 Brunswick, held by her son in trust for her, as she alleges. These 
 lands were conveyed by her to her son by deed dated May 21st, 1855, 
 and by a declaration of trust, bearing date on the same day, executed 
 by James H. Ownes, under his hand and seal, attested by a subscrib- 
 ing witness, were declared to be held in trust for the complainant, 
 
 175, 1S4 (1S71) ; Bedford v. Bedford, 99 Ky. 273, 290, 35 S. W. 926 (1896) ; Pin- 
 son v. Ivey, 1 Yerger (Tenn.) 296, 309, 324-326 (1830). 
 
 The statement that the crown or a state cannot be a trustee means no more 
 than that the cestui cannot compel performance of the trust by bill in equity. 
 "The king shall not be seized to another's use, because he is not compellable 
 to perform the confidence." Dillon v. Frame, Popham, 70, 72. 
 
 The cestui's proper course is to sue by petition — in England, to the crown ; 
 in this country, to Congress or the Legislature. 
 
 A grantee of the sovereign takes subject to the trust. Winona & St. Peter 
 R. Co. v. St. Paul & Sioux City R. Co., 20 Minn. 179, 2 N. W. 489 (1879) ; Pin- 
 son v. Ivey, 1 Yerg. (Tenn.) 296 (1830). 
 
 The state's title to the property, and consequently the cestui's claim, will be 
 barred by the statute of limitations, as if a private individual had been trus- 
 tee. Miller v. State, 3S Ala. 600 (1863) ; Molton v. Henderson, 62 Ala. 426, 
 434 (187S). 
 
 i In Dillon v. Fraine, Popham, 70. 72, the reason why a corporation could 
 not be seised to a use was stated to be "because it is a dead body, although it 
 consist of natural persons ; and in this dead body a confidence cannot be put, 
 but in bodies natural." 
 
 In Webb v. Neal. 5 Allen (Mass.) 575 (1863), the court appointed the city 
 of Salem, Mass., a testamentary trustee in place of persons declining to act. 
 
 It was held, in In re Franklin's Estate, 150 Pa. 437, 24 Atl. 626, 30 Am. St. 
 Rep. 817 (1S92), that the city of Philadelphia could not be a trustee of a purely 
 private trust. In Gloucester v. Osborn, 1 H. L. Cas. 272, 2S5 (1S47), Lord 
 Lvndhurst expressed the opinion that a municipal corporation might take 
 property in trust for the benefit of individuals and for purposes altogether 
 private. See remarks of Sharswood, J., on this statement in Philadelphia v. 
 Fox, 64 Pa. 169 (1870). Compare Higginson v. Turner, 171 Mass. 5S6. 51 N. E. 
 172 (1S9S), and city of Boston v. Doyle, 184 Mass. 373, 68 N. E. 851 (1903). 
 2 Part of the opinion is omitted.
 
 92 THE NATURE AM) REQUISITES OF TRUSTS. (Ch. 1 
 
 and on the agreement to convey the same to her or any person whom 
 she should appoint. It concluded with these words: "It being clear- 
 ly understood by me that I merely hold the said property in trust for 
 said purpose, and that 1 have no property or interest therein, except 
 as such trustee." * * :;: 
 
 The declaration if valid vested the beneficial title to the land in 
 the complainant as cestui que trust, and left the hare legal estate in 
 James as trustee, and upon his dying intestate, the legal estate vest- 
 id in his heirs or heir-at-law. The suit is against his widow and his 
 three children — two daughters and one son, all infants — for a con- 
 veyance of the property to the complainant as the cestui que trust. 
 * * * 
 
 But Tames, at the time of this conveyance and declaration of trust, 
 was an infant, only nineteen years of age. The conveyance or de- 
 claration of trust by an infant, by a deed actually delivered, is void- 
 ahle, hut not void. This was so held by Lord Mansfield, in Zouch 
 v. Parsons, 3 Burr. 1794. He held a deed of bargain and sale de- 
 livered by an infant voidable, and not void. * * * 
 
 An infant, after coming of age, may by his acts, confirm a v oidable 
 deed. Many acts of James, after his majority, recognizing the fact 
 that he held this property in trust for his mother, are shown. He 
 took her directions about fencing and repairing it. He collected the 
 rents and paid them to her. He mortgaged the property for her 
 benefit, and acknowledged, repeatedly that he held it in trust for 
 her. I think the evidence is amply sufficient to show that he con- 
 firmed this deed by his act for years after he came of age. * * * 
 
 The trust being thus established, the complainant is entitled to a 
 decree that the defendants, the widow and children of James, con- 
 vey to her the legal estate. 2 
 
 BROOK v. BROOK. 
 
 (In Chancery, before the Master of the Rolls, Lord Langdale, 1S39. 1 Beavan, 
 
 531.) 
 
 In this case new trustees were to be appointed. 
 
 Mr. Stinton asked that Miss B. might be at liberty to propose 
 herself as trustee before the Master. 
 
 The Master of the Roles declined, saying that it was not the 
 usual practice, and it might lead to inconvenience in case of her mar- 
 riage, when her husband would have the power of interfering with 
 the trust. 3 
 
 2 See .Tovon v. Bush, 1 Vern. P>42 (1(585). 
 
 3 An unmarried woman was appointed trustee in In re Campbell's Trust, 31 
 Beav. 176 (1862), and In re Barkley, L. R. '•» Ch. App. Cas. 720 (1874). In In 
 
 re Dickinson's Trusts, Wkly. Notes (1892), in appointing an unmarried 
 
 woman a trustee, Farwell, J., said that the position of women had consider-
 
 Sec. 7) THE TRUSTEE. 93 
 
 In re PARROTT. 
 
 (In Chancery, before Vice Chancellor, sir Charles Hall, 1881. Wkly. Notes 
 
 [1881] 158.) 
 
 This was a petition for the appointment of new trustees of a will, 
 on the hearing of which, a short time since the Court had d lined to 
 appoint one of the proposed new trustees upon the ground that he was 
 the husband of a feme covert, who was entitled under the will to prop- 
 erty for her separate use during her life. All the beneficiaries 
 under the will who were in existence, except one, who was out of 
 the jurisdiction (service upon whom had been dispensed with) were 
 co-petitioners, and the husband of the feme covert was a respondent. 
 
 Gayer, for the petitioners now mentioned the petition again, and 
 produced evidence that all endeavors to procure another trustee in- 
 stead of the husband had been unsuccessful, and that it was the 
 desire of the wife that the husband should be appointed, and stated 
 that the husband would give an undertaking that in case he at any 
 time became a sole trustee he would appoint another trustee to act 
 with him. 
 
 Latham, for the respondents, did not oppose. 
 
 The Vice Chancellor made an order appointing the husband a 
 trustee as prayed, directing that in the case he should become sole 
 trustee a new trustee should forthwith be appointed, and that if nec- 
 essary an application in chambers must be made for that purpose. 1 
 
 CURRAN v. GREEN and Wife. 
 (Supreme Court of Rhode Island, 1893. 18 R. I. 329, 27 Atl. 596.) 
 
 Bill in equity for the removal of a trustee and an injunction. 
 
 John Curran by his will directed his executor to sell his real es- 
 tate and such of his personal property as his wife might not choose 
 to keep, and, after paying all his debts and expenses, to transfer the 
 residue to his daughter, Sarah Green, in trust to pay certain an- 
 nuities and in a certain event he gave the rest and residue of his es- 
 tate to her subject to certain payments. 
 
 PER Curiam. While the court would be reluctant to appoint a 
 married woman or a cestui que trust as a trustee, it is a very differ- 
 ably altered since Brook v. Brook was decided. He had frequently appointed 
 unmarried women in chambers. See Gibson's Case, 1 Bland, Ch. 138, 17 Am. 
 Dec. 257 (1827). 
 
 i In re Hattat, IS W. R. 416 (1S70) ; In re Davis' Trusts, L. R. 12 Eq. Cas. 
 214 (1871); Milbank v. Crane, 25 How. Prac. 193 (1863). 
 
 It was formerly the rule in South Carolina not to appoint the husband of a 
 cestui que trust a trustee, either alone or with others. Ex parte Hunter, Rice, 
 Eq. (S. C.) 293 (1839) ; Dean v. Lanford, 9 Rich. Eq. (S. C.) 423. 427 (1S57). 
 
 An appointment by a cestui que trust of her husband as trustee under a 
 power of appointment has been held valid. Tweedv v. Urquhart, 30 Ga. 446 
 (1860) ; Stearns v. Fraleigh, 39 Fla. 603, 23 South. 18, 39 L. R. A. 705 (1S97).
 
 94 THE NAT1 RE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 ent matter to remove a trustee from office on account of these dis- 
 qualifications which do not absolutely render a person incapable of 
 acting as a trustee The respondent, Mrs. Green, was appointed* 
 trustee under the will of her father, John Curran, by the testator 
 himself, because of the confidence he felt in her capacity and honesty. 
 So far as appears she has done nothing to show that she is not com- 
 petent to perform the duties of the trust or that the trust estate 
 will not be safe in her hands. There is, therefore, no sufficient 
 ground to warrant her removal from the trust, especially as she 
 offers to furnish a satisfactory bond to secure the faithful perform- 
 ance of the trust. 1 
 
 KING v. BOYS and Another. 
 
 (In the Court of Queen's Bench, 1569. 3 Dyer, 2S3b.) 
 
 One T. King enfeoffed one Joseph Boys, an alien and Forcet of 
 Gray's Inn, to the use of himself and his wife in tail, remainder to 
 his right heirs. Whether the Queen be entitled to a moiety of the 
 land immediately, or not, was the question. And it seems that if an 
 office be found of it, the Queen shall have the moiety by her pre- 
 rogative to her own use, and the other use in this moiety is gone 
 forever. 2 
 
 i In Milbank v. Crane, 25 How. Prae. 103 (18G3), a married woman was 
 appointed trustee by the court. 
 
 A married woman may be a trustee for her own husband. Resulting trusts: 
 Milner v. Freeman, 40 Ark. G2 (1SS2); Pool v. Phillips, 167 111. 432, 47 N. E. 
 758 (1897); Darrier v. Harrier, 58 Mo. 222 (1874); Persons v. Persons. LM X. 
 J. Eq. 2">0 (1874). Express trust: Moore v. Cottingham, 90 Ind. 239 (1883). 
 
 At common law a married woman, who was a trustee, was under the same 
 disabilities in conveying title to the trust property as in conveying title to 
 property held in her own right. Co. Lit. 112a, Hargrave's note 6; 1 Fonbl. Eq. 
 92; Dundas v. Biddle, 2 Barr (Pa.) 1G0 (1845). 
 
 The husband had to be joined as plaintiff in suits by her and as defendant 
 in suits againsl her. Still and Wife v. Ruby, 35 Pa. 373 (1860); People v. 
 Webster. 10 Wend. (N. Y.) 555 (1833); Kingsman v. Kingsman, L. R. 6 Q. B. 
 D. 122. 128 (1880). 
 
 The husband was liable for breaches of the trust committed by his wife 
 during; coverture. Phillips v. Richardson, 4 J. J. Marsh. (Kv.) 212 (1830) ; U. 
 S. Trust Co. v. Sedgwick, 97 U. S. 304, 309, 24 L. Ed. 954 (1877). 
 
 In England and generally in the ITnited States the disabilities of married 
 women have been removed by legislation, and they can now act as freely as 
 unmarried women, and their husbands are no [pnger liable for their breaches 
 of trust. See Claussen v. La Franz, 1 Iowa. 226 (1855). 
 
 2 This was a trust of realty. The alien trustee's title to realty was good 
 against all except the sovereign, and he could convey a title good as to all 
 except the sovereign. Ferguson v. Franklins. 6 Munf. (Va.) 305 (1819). His 
 transferee's title would be no better against the sovereign than his own. Fish 
 v. Klein. 2 Mer. 431 (1817). 
 
 In England and most jurisdictions In tlje United States the disability of 
 aliens to hold real estate has been removed. In In re Hill, W. N. (1874) 228, 
 aliens were appointed trustees of real estate situated in England. 
 
 An alien is capable of taking and holding personal propertv in trust. Lewin, 
 Trusts (8th Ed.) 40; Perry, Trusts (5th Ed.) § 56; Kerr v. White, 52 Ga. 362, 
 3t>0 (1874).
 
 Sec. 7) THE TRUSTEE. 95 
 
 WOODRUFF v. WOODRUFF and Others. 
 
 (Court of Chancery of New Jersey, 1888. 44 N. J. Eq. 340, 1G Atl. 4, 1 L. R 
 
 A. 380.) 
 
 Patrick Woodruff died in December, 1886, leaving a daughter, 
 Louisa C. Woodruff, his only child, him surviving. By his will he 
 
 devised to Charles P. Stratton a farm called "Oaklands" in trust 
 for the use and benefit of his said daughter and her issue. Stratton 
 died in the testator's lifetime. 
 
 The Chancellor [Alexander T. McGill]. As Mr. Stratton, to J L^^cu^ &l 
 whom the lands^were devised in trust, died before the testator, the 
 title to the farm descended to Louisa C. Woodruff as heir at law 
 of her father, Patrick, but charged with the trust established by the 
 will. Lewin on Trusts (8th Ed.) 833; Perry on Trusts, § 38. From 
 the character of that trust, it seems to me that a trustee should now 
 be appointed in the place of Mr Stratton. I will order a reference 
 to a Master, to ascertain who will be a fit and proper person to re- j 
 ceive the appointment, and what security the person selected should * 
 be required to give. 
 
 VARNER'S Appeal. 
 (Supreme Court of Pennsylvania, 1S75. 80 Pa. 140.) 
 
 Appeal from the Orphans' Court of Allegheny county. 
 
 Appeal from the decree of distribution of the estate of Thomas 
 McClurg, deceased. 
 
 By his will, dated March 13, 1873, the deceased gave, devised and 
 bequeathed one third part of the residue of his estate to his sister, 
 Matilda C. Varner, wife o_f_Melchor Yarner, for her sole and sep- 
 arate use, ajid so that her_s. aid husband s hall not have any control 
 o ver or use ^f_the_same^Jaer heirs and assigns forever. He named his 
 sister, Mary Ann McClurg, sole executrix. 
 
 Upon the settlement of the account of the executrix she had, as 
 residuary estate, $19,335.24 for distribution. Mj3 4 _JV_ajm4r^aime_d 
 that she was entitled to receryeMier share without the intervention 
 of a trustee. 
 
 The Orphans' Court ordered her share paid to a trustee to be 
 thereafter appointed. Mrs. Varner appealed to the Supreme Court. 
 
 PER Curiam. It is very clear that the will of Thomas McClurg 
 gives to Mrs. Varner an estate for her sole and separate use, in the 
 residuary estate, free from any control over or use of the same by her 
 husband. Her husband being alive, this created a trust in equity to 
 preserve the estate for her separate use, so that its control coul 
 not be exercised by her husband. Though no trustee was named 
 equity will raise one, jn order to effectuate the intention of the tes- 
 
 I
 
 9G THE NATURE AND REQUISITES OF TRUSTS. (Cll. 1 
 
 tator. Hence, it was the duty of the Orphans' Court, which proceeds 
 according to the principles of equity, to preserve the use by provid- 
 ing that the estate should not be paid into her own bands, and there- 
 by enable her to dispose of it contrary to the trust. 
 Decree affirmed. 
 
 LOR1XG and Another v. HILDRETH and Others. 
 
 (Supreme Judicial Courl of Massachusetts, 1898. 170 Mass. 328, 49 N. E. 652, 
 40 L. R. A. 127, til Am. St. Rep. 301.) 
 
 Bill in equity to remove a cloud upon the title to certain land in 
 Salem. 
 
 Hearing before Holmes, J., who, at the request of the parties, re- 
 ported the case for the consideration of the full court. 
 
 Allkx, J. 1 This is atbill in equity to remove a cloud upon the title 
 to land in the possession of the plaintiffs *\vho claim to be the owners 
 thereof. The cloud consists in the record of a deed of trust from the 
 late George B. Loring to the late John A. Loring.lin trust, "during 
 the life of Anna S. Loring, wife of said George 15. Loring, and of 
 Sally P. Loring, the daughter of said George B. Loring, to pay over 
 to them one half part to each of the net rents and profits thereof; 
 and at the death of either of them, the said Anna S. or Sally P. Lor- 
 ing, to convey her one half share in the said estate to her heirs at 
 law, or to make such disposition of it as she shall direct by will." 
 There were further provisions, not now material. This deed was 
 signed and put on record by said George B. Loring, and it was also 
 signed by said Anna S. Loring, to release dower and homestead, 
 but it was never accepted by the grantee, and, upon the facts found 
 at the hearing, it was never delivered. * * * 
 
 It is also contended by the defendants, that, although the deed of 
 trust was never delivered, still the execution and recording of it by 
 Air. Loring amounted to a sufficient declaration of trust. It is con- 
 ceded that, under the late English cases, there was no sufficient 
 declaration of trust to be enforced against Air. Loring, or persons 
 deriving title from him. Milroy v. Lord, 4 De G. F. & J. 264. 
 Richards v. Delbridge, L. R. 18 Eq. 11. Aloore v. Moore, L. R. 13 
 F.q. i;i. In re Breton's Estate, 17 Ch. D. 410. Re Shield. 53 1.. 
 T. (X. S.) 5. Bottle v. Knocker, Hi L. J. Ch. 159. Ex parte Todd, 
 19 Q. I'.. I'. b^<i. But it is contended that these decisions proceed 
 upon too narrow a ground, and that, although the trust deed of Air. 
 Loring shows no intention to make himself a trustee, and although" 
 there was no valuable consideration, yet that he intended to affect 
 the property with a trust, and that this intention ought to be carried 
 out. 'Jdie answer to this view is, that the deed shows no intention 
 
 i Part of the opinion is omitted.
 
 Sec. 8) NOTICE TO THE CESTUI QUE TEU8T. 07 
 
 to create a trust, except in the manner provided. If his intention 
 could not be carried out modo et forma, then so far as appears, tfii 
 was no intention. The trust failed, because there was no intention] 
 to create one, which can be carried out. It often happens that chari-' 
 table trusts fail because they cannot be carried out in the mode in- 
 tended, if there was no intention that they should be carried out in 
 any other mode. See Teele v. Bishop of Derry, 168 Mass. 341, 
 N. E. 422, 38 L. R. A. 629, GO Am. St. Rep. 401, and cases there 
 cited. So here. (The deed shows no intention outside of the model 
 and form adopted by the deed; and this fails, because the deed itself) 
 was never delivered.) In Adams v. Adams, 21 Wall. 185, 22 L. Ed. 
 504, the court resorted to testimony outside of the deed itself to 
 ascertain the grantor's intention, and there found an intention to 
 create a trust. If resort were had in the present case to outside cir- 
 cumstances, no support is found for the view that the grantor intend- 
 ed to create a trust independently of the deed. Numerous decisions 
 from other States are cited for the plaintiff, which confirm us in the 
 view, that we should not undertake to complete and carry out the 
 trust, which the donor himself clearly abandoned. 
 Decree for the plaintiffs. - 
 
 SECTION 8.— NOTICE TO THE CESTUI QUE TRUST. 
 
 BATH SAVINGS INSTITUTION v. HATHORN, Administrator, 
 
 and Another. 
 
 (Supreme Judicial Court of Maine. 1895. 8S Me. 122, 33 Atl. 83G. 32 L. R. A. 
 ::77. .11 Am. St. Rep. 382.) 
 
 This was a bill of interpleader brought by the Bath Savings In- 
 stitution against the defendant Hathorn, as administrator of the es- 
 tate of Henry Walker, deceased, and Alice B. Files, to determine the 
 title to a certain deposit in that institution. 
 
 Henry Walker died October 2, 1891. On July 1, 1882, he de- 
 posited $700 in the Bath Savings Institution in his own name, but 
 "in trust for Alice B. Files" and took out a depositor's book in that 
 form. He retained possession of the bank book till his death, never 
 drew any part of the principal or interest, but took the book to the 
 bank occasionally to have the accrued dividends added. He never in- 
 formed Alice B. Files of the deposit; but informed at least two other 
 
 2 See Adams v. Adams. 121 Wall. 185, 22 L. Ed. 504 (1S74), and King v. Don- 
 nelly. 5 Paige (N. Y.) 40 (1835). 
 
 Ken.Tr.— 7
 
 98 THE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 persons of the deposit, one of whom informed Alice B. Files of the 
 same. 
 
 HASKELL, J. 1 Ray v. Simmons. 11 R. I. 266, 23 Am. Rep. 447. is 
 in point. One Hosworth deposited money in a savings bank in his 
 own name as trustee for a step-daughter. He did not tell her what 
 lie had done, nor show her the pass book. He kept that himself. Aft- 
 er his death the court held that the step-daughter was entitled to the 
 money — that the transaction constituted a trust in her favor. 
 
 So is Martin v. Funk, 75 N. Y. 134, 31 Am. Rep. 446. Susan 
 Boone deposited $500 in a savings bank "in trust for Lillie Willard." 
 Susan kept the pass book and Lillie had no knowledge of it until 
 after Susan's death. Want of notice to Lillie and the retention of 
 the pass book by Susan were urged in defense ; but the court held a 
 gift in trust complete. This is an exhaustive case, and contains a re- 
 view of authorities by Chief Justice Church prior to 1878. 
 
 So is Minor v. Rogers, 40 Conn. 512, 16 Am. Rep. 69. A widow 
 deposited $250 in her own name "as trustee of William A. Minor," 
 the child of a neighbor. The child knew nothing of the deposit until 
 after the depositor's death, and meantime did not have possession of 
 the pass book, and the court held the trust complete, and allowed a 
 recoverv of the money from the depositor's executor. 
 
 So is Re Gaffney's Estate, 146 Pa. 49, 23 Atl. 163. It appeared 
 that Hugh Gaffney deposited $560 in his own name as trustee for 
 Polly Kim, and the court held the entry itself prima facie evidence 
 of the trust, and, unexplained sufficient to uphold it. 
 
 In Gerrish v. New Bedford Institution, supra [128 Mass. 159, 35 
 Am. Rep. 365], the court says: "No particular form of words is re- 
 quired to create a trust in another, or to make the party himself 
 a trustee for the benefit of another ; that it is enough for the latter 
 purpose if it be unequivocally declared in writing — or orally if the 
 property be personal — that it is held in trust for the person named ; 
 that when the trust is thus created it is effectual to transfer the bene- 
 ficial interest and operates as a gift perfected by delivery." 
 
 The same case holds that notice to the beneficiary is unnecessary 
 where the transaction is clear, but when ambiguous, or susceptible of 
 different interpretations, it removes the doubt and is decisive of the 
 purpose of the donor. Some of the earlier Massachusetts cases 
 seem to hold notice to the beneficiary essential to the validity of a 
 trust, but when considered in the light of this case, rather consider 
 the notice a controlling than an essential element in the creation of 
 a voluntary trust. The prevailing doctrine now is that notice is un- 
 necessary, but when shown has controlling effect. 
 
 In this case the entry, "in trust for," is of clear and unmistakable 
 import and sufficient to create a prima facie trust. It might have 
 been controlled by evidence that would have shown a contrary inten- 
 
 i Part of the opinion is omitted.
 
 Sec. 9) THE STATUTE OF FRAUDS. 99 
 
 tion, but such evidence is wholly wanting. Moreover, all the decla- 
 rations, acts and conduct of the donor are consistent with the pre- 
 sumption arising from the entry itself, and show it expresses the 
 true import of the transaction and creates a completed trust in favor 
 of the donee. 
 
 Decree accordingly. 
 
 SECTION 9.— THE STATUTE OF FRAUDS. 
 
 STATUTE 29 CHARLES II, CHAPTER 3, SECTIONS 7, 8, 
 
 AND 9, 1676. 
 
 8 Statutes at Large, 40G. 
 
 VII. And be it further enacted by the authority aforesaid, That 
 from and after the said four and twentieth day of June all declara- 
 tions or creations of trusts or confidences of any lands, tenements or 
 hereditaments, shall be manifested and proved by some writing, sign- 
 ed by the party who is by law enabled to declare such trust, or by 
 his last will in writing, or else they shall be utterly void and of none 
 effect. 
 
 VIII. Provided always, That where any conveyance shall be made 
 of any lands or tenements by which a trust or confidence shall or 
 may arise or result by the implication or construction of law, or be 
 transferred or extinguished by an act or operation of law, then and 
 in every such case such trust or confidence shall be of the like force 
 and effect as the same would have been if this statute had not been 
 made; anything hereinbefore contained to the contrary notwithstand- 
 ing. 
 
 IX. And be it further enacted, That all grants and assignments of 
 any trust or confidence shall likewise be in writing, signed by the par- 
 ty granting or assigning the same, or by such last will or devise, 
 or else shall likewise be wholly void and of none effect. 1 
 
 i American Statutes. — The seventh section of the English statute has 
 either been declared in force or in substance enacted in the following juris- 
 dictions: 
 
 Arkansas.— Kirby's Digest of Statutes (1904) § 3666. 
 
 District of Columbia. — Same as Maryland, of which it was once part. 
 
 Florida.— General Statutes (1906) § 2452. 
 
 Illinois.— Kurd's Revised Statutes (1906) c. 59, § 9. 
 
 Maryland. — Alexander's British Statutes (1870) p. 546. 
 
 Missouri.— Revised Statutes (1899) § 3416 (Ann. St. 1906. p. 1949). 
 
 New Jersey.— General Statutes (1709-1895) vol. 2. p. 1603, § 3. 
 
 New York. — Laws 1896, p. 592. c. 547. § 207. 
 
 Pennsylvania. — Stewart's Purdon's Digest (1905) pp. 1 7">7, 1758, § 3. 
 
 Rhode Island. — The English statute of frauds was declared in force in 
 Rhode Island by an act of 1749. See 16 R. I. 584, r>SV. See, also. Genera!
 
 100 THE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 A question of fraud, that is, whether the trust was really created 
 at the time of the execution of the instrument, or deed, to which the 
 manifestation of the trust refers, is always an open question. Sup- 
 Laws of i:. 1. (1896) c. 202, § i'. declaring certain declarations of trust of land 
 roid .-is to certain persons unless acknowledged and recorded. 
 Hi Carolina. Civil Code (1902) p. 990, § 2583. 
 
 In the following jurisdictions trusts of land must be "created or declared" 
 in writing: 
 
 California.— Civil Code (1906) § 852. 
 
 Georgia.— Civil Code (1895) § 3153. 
 
 Maine. Revised Statutes (1903) c. 7.".. § 14. 
 
 Massachusetts. Revised Laws (1902) c. 117, § 1. 
 
 Montana.— Civil Code (1895) § 1311. 
 
 New Hampshire.- Public Statutes (Iftoi) c. 137, § 13. 
 
 South Dakota.— Civil Code (1903) § 302. 
 
 Vermont.— Public statutes (1906) c. 121, § 2583. 
 
 In the following jurisdictions trusts must be "created or declared by deed 
 or conveyance in writing": 
 
 Colorado. Mills' Annotated statutes (1891) § 2019. 
 
 Michigan.— Compiled Laws (1897) p. 2902, § 6. 
 
 Minnesota.— Revised Laws (1905) c. 68, § 3487. 
 
 Nebraska.— Cobbey's Annotated Statutes (1907) vol. 2, § G022. 
 
 Nevada.— Cutting's Compiled Laws (1900) § 2694. 
 
 New York.— Laws 1896, p. 592, c. 547, § 207. 
 
 Utah. Compiled Laws (1907) tit. 77, § 2461. 
 
 Wisconsin.— Sanborn & Berryman's Annotated Statutes (1898) c. 104, § 2302. 
 
 In the following jurisdictions trusts must be "created or declared by a 
 conveyance or other instrument in writing": 
 
 Alaska. — Carter's Annotated Alaska Codes. Code of Civil Procedure, § 1046. 
 
 California.— Code of Civil Procedure (1000) § 1971. 
 
 Idaho.— Civil Code (1901) § 2400. 
 
 In the following jurisdictions trusts must be ''created" or "created and de- 
 clared" in writing: 
 
 Alabama.— Code (1007) § 3412. 
 
 Indiana.— Horner's Annotated Statutes (1901) § 2969. 
 
 Kansas. — Dassicr's General Statutes (1901) § 7S7.~> ; General Statutes (1003) 
 
 § Still'. 
 
 Oregon. — Bellinger & Cotton's Annotated Codes & Statutes (1902) vol. 1, 
 c. 9, § 793. 
 
 In one jurisdiction "declarations or. creations of trusts * * * must be 
 executed in the same manner as deeds of conveyance": 
 
 Iowa.- Annotated Code (1897) § 2018. 
 
 In one jurisdiction declarations or creations of trusts must be made and 
 manifested by writing, and the writing must be acknowledged or proved as 
 other writings, and must be lodged for record with the clerk of the chancery 
 court of the proper county, to be recorded and to take effect only from the 
 time of being lodged for record: 
 
 Mississippi.— Code (1906) § 1780. 
 
 In the following jurisdictions there is no statute making a writing essential 
 to the validity of a trust of land: 
 
 Arizona Oklahoma 
 
 ( !onnecticut Tennessee 
 
 Delaware Texas 
 
 Kentucky Virginia 
 
 New Mexico West Virginia 
 
 Nortb Carolina Wyoming 
 
 Ohio 
 
 In these jurisdictions trusts of land, it would seem, may be both created and 
 manifested and proved orally. This view prevails in most of them. 
 
 The decisions to the contrary in Connecticut and Kentucky are indefensible. 
 Dean v. Dean. 6 Conn. 285 (1826); Chiles v. Woodson, 2 Bibb (Ky.) 71 (1810). 
 
 In North Carolina a trust created after the analogy of a feoffment to uses
 
 Sec. 9) THE STATUTE OF FRAUDS. 10 1 
 
 pose a judgment, or some other lien, had attached to the property 
 in the interval between the execution of the deed and the declaration 
 of trust, it would have been necessary in order to defeat such lien, 
 to show that the trust was bona fide created at the time of the execu- 
 tion of the deed. This, however, might be done by parol; because 
 the statute does not require that the trust should be created, but only 
 manifested in writing. * * * It was this principle — that a decla- 
 ration of trust might have a retroactive effect, and refer back to the 
 time when the trust was created — that was decided by Lord Cowper, 
 
 may be both created and manifested and proved orally. Shelton v. Shelton, 5 
 
 Jones, Eq. (X. C.) 202 (lN.V.ii Hut a trust created after the analogy of a bar- 
 gain and sale, or a covenanl to stand seised, must be created by deed. Pitt- 
 man v Pittman, 107 X. C. 159, 12 S. E. 61, 11 L. R. A. 450 (1890). 
 
 In West Virginia a trust In favor of a third person may be both created 
 and manifested and proved orally; but if created in favor of a grantor it 
 must be manifested and proved by writing. Troll v. Carter, 15 W. Ya. 5<;7 
 (1879). 
 
 When a trust of land need not be created, but only "manifested and proved," 
 by writing, it may be established by a subsequent admission of the trust 
 contained in any writing signed by the party to be charged. Forster v. Hale, 
 3 Ves. Jr. 696, 707 (1798). This case is followed wherever the seventh section 
 of the English statute or its equivalent is in force. 
 
 Statutes requiring a trust of land to be "created or declared" in writing 
 have received a like interpretation. McClellan v. McClellan, 65 Me. 500 (1S7G). 
 
 So, when a trust of land must be "created or declared by a deed or con- 
 veyance in writing," the deed or conveyance may be made subsequent to the 
 creation of the oral trust. Wright v. Douglass. 7 X. Y. 564 (1853). 
 
 When a trust of land must be "created" or "created and declared" in writ- 
 ing, a subsequent admission in writing would seem insufficient. In Richard- 
 son v. Woodbury, 43 Me. 200, 212 (1857), the court so decided, interpreting the 
 statute of that state then in force. The contrary was decided in Gaylord 
 v. Lafayette, 115 Ind. 423, 428, 17 N. E. 899 (1888). The question was left 
 undecided in Patton v. Beecher, 62 Ala. 57!). 587 (1878). See Bibb v. Hunter, 
 79 Ala. 351, 356 (1885); Wiggs v. Winn, 127 Ala. 621, 29 South. 96 (1900). 
 
 As the subsequent writing operates by way of admission, it makes no dif- 
 ference with what intention it is made. Bates v. Hurd, 65 Me. 180 (1876) ; 
 McClellan v. McClellan, 65 Me. 500 (1876). Arguing by analogy from the in- 
 terpretation placed upon the seventeenth section of the stature of frauds in 
 Bailey v. Sweeting, 9 C. B. (N. S.) 843 (1872), Wilkinson v. Evans, L. R. 1 
 C. P. 407 (1806), and Buxton v. Rust, L. R. 7 Ex. 279 (1872), we should con- 
 clude that the subsequent writing would be sufficient if it admits the trust, 
 though it disclaims all liability. But if the defendant in a bill in equity to 
 enforce an oral trust in his answer admits the oral trust, still he may set up 
 the statute as a bar to the recovery. Whiting v. Gould, 2 Wis. 552, 593 
 (1853); Dean v. Dean, 9 N. J. Eq. 425, 427 (1853); Tynan v. Warren. 53 N. -I 
 Eq. 313. 315. 33 Atl. 596 (1895); Warren v. Tynan. 54 X. J. Eq. 402, 404, 34 
 Atl. 1065 (1896). If the defendant admits in his answer the oral trust, but 
 does not set up the statute as a defense, plaintiff will be entitled to have the 
 trust executed. McLaurie v. Partlow, 5". 111. 340, 345 (1870); Patton v. 
 Chamberlain. -14 Mich. .". 5 X. W. 1037 (1880); Woods v. Dille, 11 Ohio, 455 
 (1842); Whiting v. Gould, 2 Wis. 552, 593 (1853). 
 
 The writing must contain all the terms of the trust. Smith v. Matthews, .". 
 De G., F. & J. 139 (1860). 
 
 The terms of the trust need not be contained in one document, but may he 
 gathered from several papers, if connected physically or by reference of one 
 to another, or if on their face referring to the same transaction. Loring v. 
 Palmer. IIS U. S. 321, 6 Sup. Ct. L073, :•.(> L. Ed. 211 (1886); McClellan v. 
 McClellan, 6.-, Me. 500 (1876). 
 
 It is sufficient that the writing be sinned, unless cxpres-sly required to be 
 subscribed.
 
 102 THE NATURE A.ND REQUISITES OF TRUSTS. (Ch. 1 
 
 in Ambrose v. Ambrose (1 P. Wms. 321) and prevented the custom 
 of London from interposing, and giving to the widow the interest 
 of the trust fund as personal estate. -Chancellor Williamson in Smith 
 v. Howell, 3 Stockton (N. J.) 349, 358-359. 1 
 
 TIERNEY v. WOOD. 
 
 (In Chancery, before the Master of the Rolls, Sir John Romilly, 1854. 19 
 
 Beavan, 3:30.) 
 
 In January, 1836, Alexander Wood purchased a house, a close of 
 land and premises, situate at Little Hampton, in Sussex, for the sum 
 of £490. They were conveyed to the plaintiff Tierney in fee. who 
 admitted he held them in trust for Wood. 
 
 About the same time, Wood transferred a sum of stock into the 
 plaintiff's name, but by his direction the plaintiff afterwards sold it 
 out, and delivered the proceeds of the sale to Wood. 
 
 Soon after the purchase of the house, land, and premise?, Wood 
 delivered to the plaintiff a paper writing, signed by him, and dated 
 January, 1837, in these words: 
 
 "1 hereby desire that, after my death, the stock now in the Bank 
 of England, with the house and land now belonging to me at Little 
 Hampton, shall be held by you, as you at present hold it, for the 
 benefit of my wife, Elizabeth Wood, during her life, and that after 
 her death the same shall continue to be held by you as aforesaid, for 
 the sole benefit of my daughter Mary W r ood, in such sort, that it 
 shall be wholly and entirely free from all control of any person with 
 whom she may intermarry. I further desire that, in case my said 
 daughter Mary should leave issue by any marriage which she may 
 contract, the whole of the above property shall pass to such issue, in 
 such manner as she may direct; but that, in case she should die with- 
 out issue, the whole of the above property shall be equally divided 
 among the lawful issue of my son Alexander Wood, born after 1834, 
 he to have the interest and profits arising from the property during 
 his life. If my son should die without issue, I desire that all the 
 property may be sold, and the money be equally divided among my 
 
 ■ [fa trustee holding land on an oral trust, though he cannot be forced to 
 execute it. voluntarily executes it. his creditors, at least provided they have 
 obtained no lien thereon, cannot object; that is, the trust, though created 
 orallv is valid, although it cannot he enforced for want of the necessary evi- 
 dence. Foote v. Bryant, 17 X. Y. 544 (1872) ; Bork v. Martin, 132 N. Y. 280, 30 
 X. K. r.sl. 28 Am. St. Rep. 570 (1892). 
 
 In some jurisdictions a conveyance would be allowed to stand, though made 
 after judgment creditors had obtained a lien upon the land. Finney v. Fel- 
 lows, 15 Vt. 525 (1843). 
 
 There arc authorities contra. Connor v. Follansbee, 59 X. II. 124 (1879); 
 Skinner v. James, G9 Wis. 005, 35 X. W. 37 (1887).
 
 Sec. 9) THE STATUTE OF FRAUDS. 103 
 
 late brother's children now living at Old Craig," &c. "After the 
 death of my wife, I wish my son Alexander to be paid £100. in money, 
 or to be paid £5. a year during his life. If my son Alexander and my 
 daughter Mary have both issue, let the property be equally divided 
 among them; if they have no issue, give £100. to such charity as Mr. 
 Jones' at St. Leonards. Let my son have my books on gardening, 
 my shirts, or any of my clothes that may be of use to him, if he de- 
 sire to have them. Alexander Wood. 
 
 "January, 1837. 
 "To the Rev. M. A. Tierney." 
 
 Alexander Wood, the elder, died in 1844, intestate, and the plain- 
 tiff allowed Mrs. Wood, his widow, to receive the rents of the prem- 
 ises, till her death in June, 1853. 
 
 Alexander Wood, the son and heir at law of Alexander Wood the 
 elder, and Mary Wood, the daughter, were living; but the latter 
 has never been married, and questions having arisen as to the rights 
 of the parties interested in the property of Alexander Wood the 
 elder, and as to the effect of the paper writing, the plaintiff instituted 
 the suit to obtain the opinion of the court thereon. 
 
 The Master of the Rolls was of opinion that Mary Wood took an 
 estate tail, but reserved his judgment as to the validity of the decla- 
 ration of trust. 
 
 The Master of the Rolls. The question is, whether the docu- 
 ment dated in January, 1837, created a good declaration of trust 
 within the seventh section of the Statute of Frauds. That clause 
 is in these words, or to this effect : That after the 24th of June, 
 1677, all declarations or creations of trusts or confidences of any 
 lands, tenements or hereditaments, shall be manifested and proved 
 by some writing, signed by the party who is by law enabled to de- 
 clare such trust, or by his last will in writing, or else they shall be 
 utterly void and of none effect. 
 
 The first question raised is, whether Alexander Wood is the per- 
 son who is, by law, enabled to declare the trusts of these lands. 
 
 The second question is, whether if he be, this is a declaration of 
 trust, and such a one as can be acted upon. 
 
 There is no question but that on the purchase of this property by 
 Alexander Wood, and the conveyance thereof to the Rev. M. A. 
 Tierney, a resulting trust arose in favor of Alexander Wood, which, 
 as it is expressly excepted by the eighth section of the Statute of 
 Frauds, does not require to be evidenced by any writing. In the 
 year 1836, therefore and previous to the signing of this document, 
 the property in question was vested in M. A. Tierney, in fee, in trust 
 for Alexander Wood, in fee simple. Alexander Wood, therefore, 
 was the beneficial owner of this property, and Mr. Tierney had the 
 mere naked legal interest in it. A distinction may be raised be- 
 tween the person who is by law enabled to declare, and the person
 
 L04 THE NA'l I RE A.ND REQ1 [SITES OP TRUSTS. (Ch. 1 
 
 who is by law entitled to create the trust. I consider, in the first 
 place, who was by law entitled to create a trust in this property; 
 and, first, I examine what, in such a state of things, would have been 
 the effect of this document, so far as it relates to the stock, which 
 had been transferred into the name of M. A. Tierney, if this had not 
 been sold out afterwards by the direction of Alexander Wood, and 
 i he direction to pay the dividends had been complied with by Tier- 
 ney. The remit would have been that the relation of trustee and 
 cestui que trust between Tierney and the person mentioned in the 
 instrument would have been completed, so far as that stock was 
 concerned, and the fact that the document had been a voluntary act 
 on the part of Wood would not have prevented this court from acting 
 upon it. The case of Ex parte Pye and Dubost [18 Ves. Jr. 140], 
 and the authorities referred to in Bridge v. Bridge [1G Beavan, 315], 
 decided by myself, establish this proposition. Those authorities show 
 that the proper person to create the trust in personal property is 
 the person in whom the beneficial interest of the property is vested; 
 and the trust being created by the beneficial owner, the trustee is 
 bound, and, if disposed to refuse, may be compelled, to obey it. 
 
 I am at a loss to find any reason which should cause this docu- 
 ment to be effectual as a declaration of trust, so far as the stock is 
 concerned, and not so, so far as the land is concerned. It is obvious 
 that in both cases the person enabled by law to declare the trusts is 
 the same. In the case before me, there can be no doubt that, if Mr. 
 Tierney had, in pursuance of this paper, signed a document to the 
 same effect, stating that he held the property on the trusts therein 
 mentioned, the trusts would, apart from any question on the con- 
 struction of the document, have been fully and completely declared ; 
 and it is also clear, that if the trustee had declared that he held the 
 property on any trusts not recogniz.ed or sanctioned by Alexander 
 Wood, the beneficial owner, such declaration of trust would have 
 been insufficient and unavailing, and would have given no inter- 
 est to the supposed cestui que trust. A declaration of trust in 
 writing by Tierney following that of Wood would therefore have 
 been merely formal, and would have been valid only so far as it 
 followed his instructions, and would have been void to the extent, it 
 any, that it departed from his directions. I think that the fair con- 
 clusion to be drawn from these considerations is, that the person to 
 create the trust, and the person who is by law enabled to declare the 
 trust, arc one and the same; and that, consequently, the ben eficial 
 owner is the person by law enabled to declare the trust. 
 
 This is confirmed by the expression in the clause in the statute 
 which relates to "the last will in writing." which can only apply to 
 the beneficial owner. It may also be observed, that if the statute had 
 intended that no trust should be valid, unless evidenced by a writing 
 signed by the trustees, the simple and obvious course would have
 
 Sec. 9) THE STATUTE OF FRAUDS. 105 
 
 been to have so stated it ; but the expression used is not "the trustee," 
 but "the person by law enabled to declare the trust." That person is, 
 I think, the beneficial owner; and I am of opinion that, apart from 
 any question of the construction of the document, the fact of its hav- 
 ing been signed by Wood, the beneficial owner, transmitted by him to 
 Tierney, the legal owner, and by him acted upon, constitutes it a 
 sufficient declaration of trust within the seventh clause of the statute, 
 so far as that clause requires it to be signed "by the party who is 
 by law enabled to declare such trust." 
 
 The next question is, whether the document itself, apart from 
 the signature, is or purports to be a declaration of trust at all. It is 
 contended that, if anything, it is a will imperfectly executed, that it 
 contains no direction as to the present application of the rents, and 
 that the rest of its contents savor of the directions contained in a 
 will rather than of a direction how to apply the rents of the property; 
 for that it is not to take effect till after the death of Alexander Wood, 
 and that it contains directions for sale and the like, inconsistent with 
 the nature and duties of the trust which M. A. Tierney had accepted. 
 There is, undoubtedly, some force in these observations; but, on the 
 whole, I think that this may be treated as a valid declaration of trust. 
 Although it does not declare the whole trust, it declares the trust of 
 a part, and it leaves the resulting trust untouched, except where it 
 expressly interferes therewith. If this document had directed Mr. 
 Tierney to pay the rent to Mr. Wood during his life, and had then 
 proceeded as it does, this objection could not, in my opinion, have 
 been sustained; but this omission is not sufficient to destroy the 
 character of the rest of the interest, which unless where it otherwise 
 disposes of the beneficial interest in the property, leaves it untouched, 
 under the resulting trust vested in Mr. Wood. I am of opinion, 
 therefore, that a good trust was evidenced by this writing within the 
 Statute of Frauds. 
 
 The only remaining question is the interest which Mary Wood 
 takes in the land so held in trust for her, and my opinion is that she 
 takes an estate tail. 1 
 
 TYNAN v. WARREN and Wife. 
 
 (Court of Chancery of New Jersey, 1805. 53 N. J. Eq. 313, 31 Atl. 500.) 
 
 Green, V. C. 2 This bill is to establish a trust. * * * 
 The answer of defendant admits that the property was sold by the 
 sheriff to Tynan and Warren; that each advanced one-half of the 
 
 i See Rycroft v. Christy, 3 Beav. 238 (1840) ; Bentley v. Mackay, 15 Beav, 
 12 (1851) ; Kronheim v. Johnson, L. R. 7 Ch. Div. GO (1877). 
 2 Part of the opinion is omitted.
 
 
 1IHJ TnK NATURE A.ND REQUISITES OF TRUSTS. (Ch. 1 
 
 amount paid on the sale ; that it was arranged between complainant 
 and defendant that they should procure a loan of $3,500 from the 
 Paterson Savings Institution on the property to pay the balance of 
 the purchase money and other expenses; that the deed was made out 
 in defendant's name at the suggestion of the complainant, and it was 
 agreed that In-, die defendant, "should hold the title to said land in 
 trust for the equal benefit of himself and complainant, subject to the 
 said mortgage of $3,500 * * * until a purchaser could be found 
 for it." 
 
 The defendant thus does not deny the allegation of the bill that the 
 title was put in his name, to be held by him in trust for himself and 
 complainant, but expressly admits that he did agree to take the title 
 to hold the same in trust for the equal benefit of himself and com- 
 plainant, until a purchaser could be found for it. 
 
 This is an express trust. It is not one raised by law from the 
 circumstances of the case, but created, and its terms and conditions 
 fixed, by the express agreement of the parties. * * * 
 
 The defendant claims by his answer that the trust is no longer sub- 
 sisting because the complainant relinquished his interest in the prop- 
 erty in consideration of defendant's assumption of certain claims. 
 These allegations of the answer are put in issue by the general repli- 
 cation, and the parties as witnesses tell different stories. It is, how- 
 ever, admitted that the agreement, whatever it was, was a vernal 
 one — could it, if it was even as stated in the answer, have the effect 
 defendant claims for it? It being admitted that the defendant took 
 the title to the whole property on an agreement to hold it for the 
 joint benefit of himself and complainant, he was the legal owner, 
 subject as to an undivided one-half to a trust in favor of the com- 
 plainant. As to this one-half, there was a legal estate in the defend- 
 ant and an equitable estate in the complainant. The latter might not 
 be able to enforce it, as has been shown, and this was probably what 
 Mr. Williams meant by saying no papers were necessary. But de- 
 fendant could not acquire complainant's equitable interest as he 
 claims to have done by his answer through a parol agreement. This 
 would be a transfer of a trust estate, and section 4 of the Statute 
 of Frauds provides that "all grants and assignments of any trust or 
 confidence shall be in writing signed by the party granting or assign- 
 ing the same, or by his or her last will in writing, or else shall be 
 utterly void and of no effect." This is substantially section 9 of the 
 English Act. Chief Justice Marshall in Hughes v. Moore, 7 Craneh, 
 176, at page 191 [3 L. Ed. 307], says: "The court can perceive no 
 distinction between the sale of land to which a man has only an equi- 
 table title, and the sale of land to which he has a legal title ; they 
 are equally within the statute." * * * 
 
 It is unnecessary, therefore, to ascertain which version of this
 
 Sec. 10) THE STATUTE OF WILLS. 107 
 
 parol agreement is correct, as it, whatever it was, was inoperative to 
 transfer complainant's equitable title to defendant. 
 Decree for complainant. 2 
 
 SECTION 10.— THE STATUTE OF WILLS. 
 
 SCHULTZ'S APPEAL. 
 
 (Supreme Court of Pennsylvania, 1876. SO Pa. 396.) 
 
 Appeal from the Orphans' Court of Montgomery County. In the 
 distribution of estate of Frederick Schultz, deceased. 
 
 Decedent died September 13, 1872 having made a will dated Sep- 
 tember 6, 1872, in which he appointed Jonathan Krause executor. 
 
 After directing the payment of his debts, etc., the only other pro- 
 vision was: "As touching all the rest, residue and remainder of my 
 estate, real, personal and mixed, I give, devise and bequeath the same 
 unto Reuben Yeakle, now of Cleveland, Ohio, and his heirs and as- 
 signs forever." 
 
 August 11, 1874, the executor settled an account of his adminis- 
 tration showing in his hands a balance of $10,043.57. Charles T. 
 Miller, Esq., was appointed auditor to distribute the balance. He 
 awarded the fund to Reuben Yeakle. The next of kin filed excep- 
 tions to the report. The court overruled the exceptions, confirmed 
 the report and decreed distribution as reported by the auditor. 
 
 George Schultz and others, the next of kin of Frederick Schultz, 
 appealed to the Supreme Court. 
 
 Mr. Justice Sharswood delivered the opinion of the court, Janu- 
 ary 31, 1876. 
 
 The very able and exhaustive opinions, as well of the auditor as 
 of the learned court below, have relieved us from an examination of 
 the English decisions upon the Mortmain Act of that country. They 
 undoubtedly throw a clear and strong light upon the question pre- 
 sented upon this record. They establish two positions: 1. That if 
 an absolute estate is devised, but upon a secret trust assented to by 
 the devisee, either expressly or impliedly, by knowledge and silence 
 before the death of the testator, a court of equity will fasten a trust 
 
 2 This case was reversed, 54 N. J. Eq. 402, 34 Atl. 1065, but upon grounds 
 not affecting the foregoing reasoning. 
 
 Chattels real are within the statute. Skett v. Whitmore, Freein. Ch. 280 
 <170o). 
 
 Chattels personal are not within the statute. The statute deals with lands, 
 tenements, and hereditaments. A trust of a chattel personal can therefore 
 be both created and manifested and proved orally. The authorities to this 
 effect are legion.
 
 108 THE NATURE AND REQUISITES OF TRUSTS. (Ch. 1 
 
 on him on the ground of fraud, and consequently the Statute of 
 Mortmain will avoid the devise if the trust is in favor of a charity. 
 But 2. If the devisee have no part in the devise, and no knowledge of 
 
 it until after the death of the testator, there is no ground upon which 
 equity can fasten such a trust on him, even though, after it comes 
 to his knowledge, he should express an intention of conforming to 
 the wishes of the testator. The latter proposition applies directly to 
 the case now before us. Reuben Yeakle, the legatee named in the 
 will, was not present when the instrument was executed, lie had 
 no communication with the testator, directly or indirectly, upon the 
 subject. The testator had long intended to leave his estate for chari- 
 table purposes. On his death-bed he sent for a scrivener, and express- 
 ed to him his wish to have his property so disposed of after his 
 death. He was informed that if he should die within thirty days, 
 such a disposition would be ineffectual, but that he might make an 
 absolute bequest to some individual, upon the confidence and belief 
 that when he should be informed of his wishes, he would, of his own 
 accord, carry them out. This plan was adopted, and upon the sug- 
 gestion of one of the bystanders, Reuben Yeakle, the bishop of the 
 church to which the decedent belonged, was chosen by him. It is 
 clear, not only from the evidence, but from the verdict of the jury in 
 the issue of devisavit vel non, that no undue influence was exercised 
 to procure the will. It was the testator's own free and voluntary act, 
 and he was told "that he could dispose of his property to a particular 
 person unconditionally, and if that man would do it, then he could 
 put it to those places where he wanted it; but that would be entire- 
 ly at his option ; he could do it or not." Reuben Yeakle was not in- 
 formed of the will until some time after the death of the testator. 
 When informed of it he declared his intention to appropriate the 
 money as the testator wished it to be. He said, when examined as a 
 witness before the auditor: "I have not seen the will, but if it gives 
 me the absolute right to the property without condition, I should con- 
 sider that I had the legal right to do with the property as I pleased. 
 I draw 7 a distinction in this between the legal and moral right." 
 
 We are unshackled by authority upon this question. The English 
 precedents upon the construction of their Statute of Mortmain are 
 not binding upon this court and with us the question is an entirclv 
 new one. By the eleventh section of the Act of Assemblv of April 
 2G, 1855 (P. L. 332), it is provided, "that no estate, real or personal, 
 shall hereafter be bequeathed, devised or conveyed to any body politic, 
 or to any person, in trust for religious or charitable uses except the 
 same be done by deed or will, attested by two credible and at the same 
 lime disinterested witnesses, at least one calendar month before the 
 death of the testator or alienor, and all dispositions of property con- 
 trary hereto shall be void, and go to the residuary legatee or devisee 
 next of kin or heirs according to law."
 
 Sec. 10) THE STATUTE OF WILLS. 109 
 
 It seems very clear that the bequest in the will of Frederick Schultz 
 to Reuben Yeakle is not within the words of the statute. There is 
 nothing in the circumstances to fasten a trust upon him. The statute 
 out of the way, the charities intended to be benefited would have had 
 no claim, legal or equitable, to enforce payment by him to them. He 
 would, in the eye of the law, be guilty of no fraud, legal or equitable, 
 either against them or the testator, if he should, even at this day, 
 change his intention and apply the money to some other use. Being 
 the absolute owner, under the will, the declaration of his intention, 
 would not be binding upon him. It is not, therefore, in the words of 
 the statute, a bequest "to a body politic or to any person in trust for 
 religious or charitable uses." Had Reuben Yeakle been present 
 when the will was executed, or the objects of the bequest been com- 
 municated to him before the testator's death, and he had held his 
 peace, there would have been some ground for fastening a trust up- 
 on him ex maleficio, as in Hoge v. Hoge, 1 Watts, 163, 26 Am. Dec. 
 52. But nothing of that kind can be pretended here. 
 
 It has been contended, however very strenuously, that as Edward 
 Schultz proposed Reuben Yeakle to the testator as the man, the 
 acceptance of Reuben Yeakle of the bequest recognized Edward 
 Schultz as his attorney, and ratified whatever he had said and done. 
 They urge the maxim, omnis ratihabitio retrotrahitur et mandato 
 pequiparatur. It is a very ingenious contention, but unfortunately for 
 the appellants, there is nothing in the evidence upon which it can be 
 built. Edward Schultz did not undertake for Reuben Yeakle; he 
 gave the testator no assurance that he would accept and carry out 
 his intentions when made known to him. He says : "I proposed 
 Reuben Yeakle, so far as I remember, for the man. Frederick then 
 agreed to Reuben Yeakle. Reuben Yeakle was considered to be an 
 honest man, and it was for this reason he was taken, and because he 
 was acquainted with these societies mentioned." "As far as I can rec- 
 ollect, I said, that through Yeakle his desire could be carried out in 
 the distribution of his property." "The object was to carry out the wish 
 of Frederick in that way. There was a chance to carry it out in that 
 way if the legatee was willing, and Reuben Yeakle was selected be- 
 cause it was thought he would agree to it." There is nothing in all 
 this which indicates any promise or assurance by Edward Schultz to 
 the testator that Reuben Yeakle would accept the bequest in trust for 
 the charities. There was the mere expression of an opinion, concur- 
 red in by the testator, that when the legatee came to understand the 
 object and purpose of the bequest to him, as an honest man he would 
 carry out the intention of the testator. 
 
 It is urged, however, that the whole plan is nothing but a contriv- 
 ance to evade the statute. No doubt such was the intention of the 
 testator. It is said that it is a fraud upon the law, and that the 
 bequest ought therefore to be declared void. But that overlooks the 
 fact that the absolute property in the subject of this bequest has vested
 
 110 THE NATURE AND REQUISITES OP TRUSTS. (Ch. 1 
 
 in the legatee, and that he is entirely innocent of any complicity in the 
 fraud of the testator. If the statute is practically repealed by this 
 construction it is evident that it must be for the Legislature to devise 
 and apply a remedy, not the judiciary, whose province is not jus dare 
 but jus dicere. Decree affirmed. 
 
 SECTION 11.— REVOCABILITY OF TRUSTS. 
 
 BILL v. CURETON. 
 
 (In Chancery, before the Master of the Rolls, Sir C. C. Pepys, 1S35. 2 Mylne 
 
 & Keen, 503.) 
 
 The Master of the Rolls. 1 The bill in this case is filed by the par- 
 ty who made a voluntary settlement of stock in 1827, the trusts ot 
 which I shall presently state, * * * and the object of the bill is, 
 to obtain the trust fund from the trustee, or, in other words, to de- 
 stroy the voluntary settlement. By the settlement of 1827, the stock 
 was transferred to trustees, and the trusts of it were declared to be 
 for the settlor till she should marry ; and upon her marriage, for 
 her separate use for life; and after her death, for her children, to be 
 equally divided among them; and in default of children, for her next 
 of kin. * * * 
 
 That a voluntary settlement, where the trust is actually created, is 
 binding upon the settlor, has been so long, and is so fully established, 
 that no attempt t< raise the question would probably have been now 
 made, were it not that the modern cases of Wallwyn v. Coutts [3 Mer. 
 707] and Garrard v. Lauderdale [3 Sim. 1] have been supposed to be 
 inconsistent with that doctrine. * * * 
 
 The grounds, upon which the Judges who decided those cases pro- 
 fessed to proceed, are sufficient to prevent their decisions from being 
 considered as authorities against the well established doctrine. * * * 
 
 The result is, that the author of this settlement is bound by it, and 
 is not entitled to the assistance of this court to relieve herself from 
 it. 2 
 
 i Part of the opinion is omitted. 
 
 2 The creator of a trust created after the analogy of a feoffment to uses 
 may retain the power to revoke the trust. Stone v. Hackett, 12 Gray (.Mass.) 
 227, 232 (185S) ; Van Cott v. Prentice, 104 N. Y. 45, 10 N. E. 257 (1887).
 
 SeC. 1) CLAIM PURELY EQUITABLE WHILE KELATIOJS EXISTS. Ill 
 
 CHAPTER II. 
 THE NATURE OF THE CESTUI QUE TRUST'S INTEREST. 
 
 SECTION 1.— HIS CLAIM IS PURELY EQUITABLE, SO 
 
 LONG AS THE RELATION OF TRUSTEE AND 
 
 CESTUI QUE TRUST EXISTS. 
 
 MEGOD'S CASE. 
 
 (Court of Queen's Bench, 1585. 4 Leonard. 22.".) 
 A enfeoffed B to the intent that B should convey the land to such 
 
 
 person as A should sell it. A sold it to C, to whom B refused to 
 convey the land; and thereupon he brought an action upon the case 
 against B. And by Wray, Chief Justice, and Gawdy, Justice, here 
 is a good consideration, for here is a trust, and that which is a good 
 consideration in the chancery is in this case sufficient. Shute, Jus- 
 tice, was of a contrary opinion. And afterwards judgment was given 
 for the plaintiff. 1 
 
 MILLER v. LERCH. 
 
 (Circuit Court of United States, Eastern District of Pennsylvania, 1848. 1 
 Wall. Jr. 210, Fed. Cas. No. 9,579.) 
 
 Peter Miller of Easton, devised an estate of about $300,000 to two 
 church corporations of that town, upon certain trusts which his heir 
 at law, the present plaintiff, contended were void, but which the cor- 
 porations asserted were charitable uses, and as such entitled to the 
 protection given to that class of gifts. A large part of the devise was 
 real estate, which the present action — one of ejectment — was brought 
 to recover. The question was, whether admitting the trust to be void, 
 the plaintiff had such a legal title as would enable him to recover 
 
 i Dicta to the same effect are found. Butler v. Butler. 2 Sid. 21 (1057); 
 Jevon v. Bush. 1 Vera. 342 (1685); Smith v. Jameson. 5 T. R. 001. G03 (1794). 
 
 The doctrine of the principal case and these dicta was long since exploded. 
 Forde v. Hoskins. 1 Rolle. 125 (1G15) ; Turner v. Sterling, Freeman, )."» (1671); 
 Barnadiston v. Soame, 6 How. St. Trials, 1063, 109S, 1107, 1108 (1697); Sturt 
 v. Mellish, 2 Atk. 610, 612 (1743); Holland v. Holland, 4 Ch. App. Cas. 440, 
 451 (1869).
 
 112 THE NATURE OP THE CESTUI QUE TRUSTS INTEREST. (Cll. 2 
 
 here in ejectment. In other words, whether the legal title was not in 
 the corporations, and whether the remedy of the heir was not by bill 
 
 in equity on the other side of this court. Both corporations were 
 created under an act of Legislature, which, with a supplement, em- 
 powered them to "take, receive and hold all and all manner of land, 
 to he employed and disposed of according to the objects, arti- 
 cles, and conditions" of their charters, "provided that the clear yearly 
 value or income of the messuages, etc." did not exceed $'2,000. 
 
 The charters gave no express power to hold lands in trust for pur- 
 poses not within the scope of their objects. 
 
 Mr. J. M. Porter and Mr. M. H. Jones in support of the action. 
 'flu- statutes of Mortmain apply to Pennsylvania corporations, what- 
 ever counsel may have said arguendo. 
 
 GRIER, J. 1 In England, under the statute of 9 Geo. II. c. 36, when 
 lands are devised to a charity, the trust not only is itself void, but it 
 vitiates the devise of the legal estate on which it was engrafted. And, 
 therefore, in such cases the heir may recover att law, except where 
 there are other trusts not charitable, which, of course, would entitle 
 the trustees to retain the estate, and oblige the heir to prosecute his 
 claim in equity. But this statute, which is usually, though rather in- 
 accurately, called "The statute of Mortmain" was never adopted in 
 Pennsylvania, nor is there to be found any similar provision in our 
 own legislation. It is, however, by virtue of this statute alone, and 
 not by any principle of the common law or provision of earlier stat- 
 utes, that courts of law in England treat the devise or gift as void, 
 and permit the heir to recover in them. * * * 
 
 I fully concur with those who refuse to admit that any of the Eng- 
 lish statutes of mortmain have, or ever had, any operation in Penn- 
 sylvania. * * * 
 
 It is enough for the purposes of the present case that these statutes 
 would not make void a conveyance in mortmain, but only expose the 
 land to forfeiture by the entry of the Commonwealth. It is there- 
 fore a doctrine well settled in Pennsylvania, that a corporation has 
 a right to purchase, hold and convey lands in this state without a li- 
 cense, until some act is done by the government, according to its own 
 laws, to vest the estate in itself. The fact, therefore, that the license 
 contained in the acts of incorporation limits the income of these cor- 
 porations to $2,000, cannot affect the present question, and it does 
 not avoid the devise in consequence of its being beyond the limits of 
 the license. The legal estate passes by the gift or devise to the cor- 
 poration, and is defeasible by the commonwealth alone. 
 
 The remedy therefore of the plaintiff should be by bill in equity, 
 and not by ejectment. If, on the hearing of the case in equity, the 
 court should be of opinion that the trusts limited on this devise are 
 
 i Part of the opinion is omitted-
 
 SeC. 1) CLAIM PURELY EQUITABLE WHILE RELATION' EXISTS. 113 
 
 such as a chancellor would not execute, it will treat the devisees as 
 trustees for the heirs at law or next of kin, and decree a conveyance 
 of the legal estate to them. Judgment accordingly. 2 
 
 CEARNES v. IRVING and STRATHERS. 
 (Supremo Court of Vermont, 1859. 31 Vt. 004.) 
 
 Account. The declaration set forth that the plaintiff and the de- 
 fendants were jointly interested in certain lands to the amount of 
 twenty thousand acres lying in McKeon county. Pennsylvania, the 
 legal title to which was in the defendant Irving, but who held it in 
 trust for the joint benefit of the plaintiff and the defendants, and 
 that the plaintiff and the defendants were jointly interested in the 
 profits arising from the sale of such lands ; that on or about the 1st 
 day of February, 1855, the defendants sold said land for the joint 
 profit and benefit of the plaintiff and defendants, for $25,000 in money 
 and $50,000 in the capital stock of the Rutland and Washington Rail- 
 road Company; and that the defendants thereby received from the 
 profits of said sale $10,000 in money and $20,000 worth of said stock 
 above their just share thereof, etc. etc., setting forth their refusal to 
 account therefor to the plaintiff. To this declaration the defendants 
 demurred generally. The demurrer was sustained and judgment ren- 
 dered_for the defendants to which the plaintiff excepted. 
 
 Ritdfield, Ch. J. The difficulty is that the plaintiff shows no legal 
 title to the property out of which the account arises. The very decla- 
 ration shows that his only claim of title is an equitable one. And in 
 such cases we regard it as perfectly well settled that the only proper 
 remedy is in a court of equity, where all mere trusts are of right cog- 
 nizable. 1 Story's Eq. Jur. §§ 453, 45 1. 
 
 It is perfectly well settled that at law the plaintiff could not have 
 recovered his proportion of the land. And if he had been in posses- 
 sion, the defendant Irving might have recovered the whole land 
 against the plaintiff. Beach v. Beach, 14 Vt. 28, 39 Am. Dec. 204. 
 And we are unable to perceive any better reason why the plaintiff 
 should maintain an action of account for the avails of the sale of 
 the land, than for his maintaining ejectment for the land. 
 
 Judgment affirmed. 3 
 
 2 A cestui caunot maintain detinue against his trustee for the trust res. 
 Redwood v. Riddick. 4 Munf. (Va.) 222 (1814). 
 
 3 A cestui cannot maintain trover against his trustee for a conversion of 
 the trust res. Jasper v. Hazen, 1 N. D. 75, 44 N. W. 1018 (1890) : Howard v. 
 Menifee, 5 Ark. GGS (184.°,) ; Louisville Trust Co. v. Stockton. 75 F. It. 62 (1896). 
 
 The trustee can maintain an action of trover against his cestui for the eon- 
 version of the trust res. Guphill v. Isbell, 8 Rich. Law ts. C.) -hi:; (1832). 
 This, of course, only in jurisdictions not allowing equitable picas. 
 
 Ken.Tb.— 8
 
 114 THE NATURE OF THE CESTUI Ql B TRUST'S INTEREST. (Ch. 2 
 
 BEACH v. BEACH. 
 
 (Supreme Court of Vermont, 1842. 14 Vt. 28, 39 Am. Deo. 204.) 
 
 Ejectment by trustee against cestui que trust. Plaintiff proved le- 
 gal title in himself. The court excluded evidence offered to show 
 plaintiff held the legal title in trust for defendant. 
 
 Williams, Ch. J. This is an action of ejectment in which the title 
 is to be decided, the judgment in which is conclusive against both the 
 plaintiff and defendant and their heirs. The question presented is, 
 whether, at law, the title of the cestui que trust shall prevail against 
 thai of the trustee. 
 
 In the action of ejectment, in England, when the right of posses- 
 sion, only, is determined, the plaintiff must be vested with the legal 
 title in order to maintain it, and no equitable title will answer. The 
 trustee may maintain this action against his cestui que trust. Read 
 v. Read, 8 Term, 118. In some of the states, where they have no 
 court of chancery, a cestui que trust has been permitted to recover 
 when chancery would direct a conveyance. But if it were so in this 
 state, it would not help the defendant. There is nothing in the facts 
 offered to be proved, which warrants the inference that a court of 
 chancery would direct a conveyance, though they might prevent the 
 plaintiff from disturbing the defendant's possession, unless it was to 
 accomplish the purposes of the trust. There are no dicta in the deci- 
 sions of any of the states, that the cestui que trust can, as against his 
 trustee, either maintain or defend an action of ejectment. 
 
 The evidence offered did not present a case where the jury would 
 have been directed to presume a conveyance. The plaintiff was under 
 no obligation to convey to the defendant ; but, on the contrary, the 
 grantor did not intend that the legal estate should vest in him, and 
 the plaintiff would have violated the trust had he made such a con- 
 veyance. 
 
 The principle is not different, if this was a resulting trust, except 
 that such trust might be proved by parol. If a trust resulted from 
 the fact that the purchase money was paid, six-sevenths by the father, 
 and one-seventh by the defendant, the very object of a suit might 
 have been to secure the portion due to the father. The trust, if any 
 existed in this case, could only be enforced in chancery. The judg- 
 ment of the County court is affirmed. 1 
 
 "But it is further objected that, if Brown is the trustee, the action 
 of ejectment will not lie, because a cestui (pie trust cannot compel an 
 execution of the trust in a court of law. 
 
 i A trustee can maintain detinue against his cestui for the trust res. Gunn. 
 Trustee v. Barrow, 17 Ala. 743 (1850); Newman v. Montgomery, G Miss. 742 
 (1841); except, of course, in jurisdictions allowing equitable pleas.
 
 Sec. 1) CLAIM PURELY EQUITABLE WHILE RELATION EXISTS. 115 
 
 "That such is the general rule at this day cannot be denied, not- 
 withstanding what was ruled in Lade v. Halford, B. X. P. 11", and 
 in Armstrong v. Pierce, 3 Burr. 1901, and a few other early c 
 to the effect that a cestui que trust, in ejectment, could not be non- 
 suited by a term outstanding in his trustee, and that a trustee, a plain- 
 tiff in ejectment, could not recover against his own cestui que trust. 
 
 "'The rule before those decisions was, and since then has been 
 fully re-established, that a cestui que trust cannot recover in eject- 
 ment against his trustee, unless a surrender to him of the legal es- 
 tate can be reasonably presumed. Doe v. Staple, 2 Term R. 68 1 ; Doe 
 v. Sybourn, 7 Term R. 2; Goodtitle v. Jones, 7 Term R. 45. 
 
 "The cestui que trust has no alternative but to bring his action 
 (against a stranger) in the name of his trustee. And the trustee, 
 as tenant of the legal estate, may recover in ejectment from his own 
 cestui que trust, who has no defense at law, but is only entitled to sue 
 out an injunction in equity. Annesly v. Simeon, 4 Madd. 390 ; Roe 
 v. Read, 8 Term R. 122, 123 ; Shine and Gough, 1 Ball & Beat. 445. 
 
 "Yet the surrender of a trust or the conveyance of the legal estate 
 may be presumed from circumstances, and that seems to have been 
 the ground of the opinions in Lade v. Halford and Armstrong v. 
 Pierce and the concurring authorities." — Per Haines, J., Brown v. 
 Combs, 29 N. J. Law, 36, 39, 40 (I860). 2 
 
 JACKSON v. STEVENS. 
 (Supreme Judicial Court of Massachusetts, 1871. 108 Mass. 94.) 
 
 Contract for money had and received. 
 
 Plaintiff borrowed $1,500 of defendant and with it paid for a 
 wood-lot, the legal title to which he caused to be conveyed to the de- 
 fendant as security for the loan until the same should be repaid, the 
 plaintiff agreeing to pay defendant on the loan the same rate of in- 
 terest the defendant was then receiving on his money which was in- 
 vested in government bonds and also to pay the defendant for his 
 time, trouble and risk. 
 
 Five or six months later the plaintiff found a purchaser for $2500. 
 The defendant conveyed title to the land to the purchaser, who paid 
 the plaintiff $500 and the defendant $2,000. Several days later the 
 plaintiff claimed of the defendant the balance of the $2,000 after de- 
 ducting the $1,500 and interest, etc. and the defendant refused to pay 
 the balance or any part of it. The plaintiff then began this action. 
 Verdict for the plaintiff and defendant alleged exceptions. 
 
 WELLS, J. Under the instructions given to the jury, their verdict 
 
 2 To-day in most jurisdictions the cestui que trust is not required to resort 
 co equity to enjoin the action brought against him by his trustee, but may 
 
 set up an ciiuitable pica in the law action itself.
 
 116 THE NATURE OF THE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 must be taken to have established three facts: 1. That the land was 
 purchased by or for the plaint ill. 2. That the purchase mone) paid 
 for it was the money of the plaintiff; having been borrowed by him 
 for that purpose from the defendant. 3. That the deed was taken to 
 the defendant as security for that loan. These facts constitute a re- 
 sulting trust. 
 
 So long as the trust remained unexecuted, it could be enforced 
 only in equity. But it has been executed by a sale and conveyance of 
 the land. The debt to the defendant and his expenses having been 
 satisfied from the proceeds, there remains a balance of money in his 
 hands which in equity and good conscience belongs to the plaintiff. 
 This he may recover in an action at law as for money had and re- 
 ceived. 
 
 SECTION 2.— CESTUI QUE TRUST IS A CLAIMANT 
 
 AGAINST THE TRUSTEE PERSONALLY, 
 
 NOT AGAINST THE TRUST RES. 
 
 I. His Claim is Enforceable Wherever the Trustee may be, 
 Without Respect to the Situs of the Trust Res. 
 
 MASSIE v. WATTS. 
 (Supreme Court of the United stales. 1810. G Cranch, 148, 3 L. E<1. 181.) 
 
 This was an appeal from the decree of the Circuit Court of the 
 United States, for the District of Kentucky, in a suit in equity 
 brought by Watts, a citizen of Virginia, against Massie, a citizen of 
 Kentucky, to compel the latter to convey to the former 1000 acres 
 of land in the state of Ohio, the defendant having obtained the legal 
 title with notice of the plaintiff's equitable title. Plaintiff claimed 
 as assignee of one Oneal. 
 
 Marshall, Ch. J., delivered the opinion of the court, as follows: x 
 
 This suit having been originally instituted, in the Court of Ken- 
 tucky, for the purpose of obtaining a conveyance for lands lying in 
 the state of Ohio, an objection was made by the plaintiff in error, 
 who was the defendant below, to the jurisdiction of the court by 
 which the decree was rendered. * * * 
 
 Was this cause to be considered as involving a naked question of 
 title ; was it, for example, a contest between Watts and Powell, the 
 jurisdiction of the Circuit Court of Kentucky would not be sus- 
 tained. But where the question changes its character, where the de- 
 fendant in the original action is liable to the plaintiff, either in con- 
 
 i Tart of the opinion is omitted.
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST RES. 117 
 
 sequence of contract, or as trustee, or as the holder of a legal title 
 acquired by any species of mala fides practiced on the plaintiff, the 
 principles of e quity giye a court jurisdiction wherever the person may 
 
 be found, and the circumstance, that a question of title may be in- 
 volved in the inquiry, and may even constitute the essential point on 
 which the case depends, does not seem sufficient to arrest that juris- 
 diction. 
 
 In the celebrated case of Penn v. Lord Baltimore [1 Yes. 111]. 
 the Chancellor of England decreed a specific performance of a con- 
 tract respecting lands lying in North America. The objection to the 
 jurisdiction of the court, in that case, as reported by Yesey, was 
 not that the lands lay without the jurisdiction of the court, but that, 
 in cases relating to boundaries between provinces, the jurisdiction 
 was exclusively in the king and council. It is in reference to this 
 objection, not to an objection that the lands were without his juris- 
 diction, that the Chancellor says, "This court, therefore, has no 
 original jurisdiction on the direct question of the original right of 
 boundaries." The reason why it had no original jurisdiction on 
 this direct question was, that the decision on the extent of those 
 grants, including dominion and political power, as well as proper- 
 ty, was exclusively reserved to the king and council. 
 " In a subsequent part of the opinion, where he treats of the objec- 
 tion to the jurisdiction of the court, arising from its inability to en- 
 force its decree in rem, he allows no weight to that argument. The 
 strict primary decree of a court of equity is, he says, in personam, 
 and may be enforced in all cases where the person is within its juris- 
 diction. In confirmation of this position he cites the practice of the 
 courts to decree respecting lands lying in Ireland and in the colonies, 
 if the person, against whom the decree was prayed, be found in 
 England. 
 
 In the case of Arglasse v. Muschamp, 1 Yernon, 75, the defendant, 
 residing in England, having fraudulently obtained a rent charge on 
 lands lying in Ireland, a bill was brought in England to set it aside. 
 To an objection made to the jurisdiction of the court the Chancellor 
 replied, "This is surely only a jest put upon the jurisdiction of this 
 court by the common lawyers; for when you go about to bind the 
 land and grant a sequestration to execute a decree, then they readily 
 tell you that the authority of this court is only to regulate a man's 
 conscience, and ought not to affect the estate, but that this court 
 must agere in personam only; and when, as in this case, you prose- 
 cute the person for a fraud, they tell you that you must not inter- 
 meddle here, because the fraud, though committed here, concerned 
 lands that lie in Ireland, which makes the jurisdiction local, and so 
 wholly elude the jurisdiction of this court." The Chancellor, in that 
 case, sustained his jurisdiction on principle, and on the authority of 
 Archer and Preston, in which case a contract made respecting lands 
 in Ireland, the title to which depended on the act of settlement, was
 
 118 THE NATURE OF Till: CEST1 l QUE TRUST'S [NTEREST. (Ch. 2 
 
 enforced in England, although the defendant was a resident of Ire- 
 land, and had only made a casual visit to England. On a rehear- 
 ing before Lord Keeper North this decree was affirmed. 
 
 In the case of The Earl of Kildare v. Sir Morrice Eustace and 
 Fitzgerald, 1 Vern. 419, it was determined that if the trustee live in 
 England, the Chancellor may enforce the trust, although the lands 
 lie in Ireland. 
 
 In the case of Toller v. Carteret, 2 Vern. 491, a bill was sustained 
 for the foreclosure of a mortgage of lands lying out of the jurisdic- 
 tion of the court, the person of the mortgagor being within it. 
 
 Subsequent to these decisions was the case of Penn against Lord 
 Baltimore, 1 Ves. Ill, in which the specific performance of a contract 
 for lands lying in North America was decreed in England. 
 
 Upon the authority of these cases, and of others which are to be 
 found in the books, as well as upon general principles, this court is 
 of opinion that, in a case of fraud, of trust, or of contract, the juris- 
 diction of a court of chancery is sustainable wherever the person be 
 found, although lands not within the jurisdiction of that court may 
 be affected by the decree. 
 
 The inquiry, therefore, will be, whether this be an unmixed ques- 
 tion of title, or a case of fraud, trust or contract. 2 
 
 -The court held (6 Cranch, 170, 3 L. Ed. 189) that Massie was a trustee 
 for plaintiff as assignee of Oneal and affirmed the decree of the Circuil Court. 
 See Arglasse v. Muschainp, l Vern. 75 (1682); The Earl of Kildare v. Sir 
 Morrice Eustace, 1 Vern. 405, 419 (1686). 
 
 In some jurisdictions, where a trustee refuses or neglects to transfer to the 
 cestui que trust pursuant to the decree of the court land held in trust, the 
 court is by statute empowered to appoint some officer to make the transfer in 
 place of the trustee. If the land is out of the jurisdiction of the court, a 
 conveyance by such an officer is ineffectual to pass the title. Burnley v. 
 Stevenson, 24 Ohio St. 474, 15 Am. Hep. G21 (1873); Watkins v. llolman, 16 
 Pet. 25, 10 L. Ed. 87:', (1S12). 
 
 "A court of Chancery, acting in personam, may well decree the conveyance 
 of land in anv other state, and may enforce their decree by process against 
 the defendant. I'.ut neither the decree itself, nor any conveyance under it, 
 except by the person in whom the title is vested, can operate beyond the 
 jurisdiction of the court."— Per Justice McLean, Watkins v. Holman, 16 Pet. 
 25, 57, 10 L. Ed. 873. . 
 
 If the trust res is within the jurisdiction of the court, a transfer by such 
 an officer pursuant to decree of the court is valid and operative. Felch v. 
 Hooper, 119 Mass. 52 (1S75). 
 
 Irrespective of statute, a court of equity cannol divest a person of title to 
 property and vest it in some one else. So if a court of equity removes a 
 trustee and appoints a successor the only way by which the new trustee can 
 acquire title to the property held in trust is by a conveyance to him by the 
 old trustee. , . , . _ .. 
 
 Speaking of the jurisdiction of the chancellor. Dean Langdell in his Equity 
 Pleading i^\ Ed. I 43) says: "Indeed, as a rule, the Chancellor, like the 
 lesiastical courts, had no jurisdiction in rem. and hence could only en- 
 force his orders or decrees by process in personam." 
 
 [ E note 1 i" the same section he adds: "This power of creating and ex- 
 tinguishing titles the chanceii.il' never had. nor claimed to have, except when 
 if was given by statute. It is true that he frequently directed the sale of 
 property, but it was by his control over the person of the owner, that he 
 made the sale effective— i. e., when the sale had been made he compelled the
 
 SeC. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST RES. H9 
 
 II. Cestui que Trust has No Remedies, Legal or Equitable, Di- 
 rectly Against a Stranger. 
 
 YEAR BOOK 15 HEN. VII, fol. 12, pi. 23. 
 
 (In the Common Pleas, 1 179.) 
 
 Note by the whole court. The feoffor upon confidence cannot 
 justify in his own name the taking of beasts damage feasant in lands 
 which" his feoffees have to his use, nor make avowry for damage 
 feasant in his own name, but in the name of his feoffees; otherwise 
 the trespasser would be twice punished. For by the common law the 
 feoffees upon confidence have an action against the feoffor as against 
 other strangers, if he enters upon the land without being enfeoffed 
 thereof. For by the common law the feoffor is but a trespasser 1 upon 
 the feoffee by his occupancy. And consequently the feoffor who is but 
 a trespasser cannot justify the taking of the beast of a stranger dam- 
 age feasant upon the land, as he cannot have the damages for the 
 trespass, but the feoffee. And the statute of R. Ill was not made 
 for advantage of the feoffors, but for the profit of others who pur- 
 chase from them. And so the power of the feoffor is not enlarged 
 by that statute except to enter and forthwith make feoffment. But 
 the judges agreed that a commoner can justify the taking of the 
 beasts of a stranger damage feasant upon the land by reason of the 
 legal interest he has. The feoffor cannot have an action against a 
 stranger for his trespass done upon the land because he is but a tres- 
 passer and is not like a disseizor for the feoffor shall not be called a 
 disseizor, unless he occupy against the will of the feoffee. 2 
 
 owner to execute a deed pursuant to the sale; and hence, when the owner 
 was out of the jurisdiction, or labored under any incapacity, e. g., that of in- 
 fancy, the chancellor was powerless. He could not even make the appoint- 
 ment of a new trustee effective, except by compelling the old trustee or his 
 heir, or whoever held the legal title, to convey to the now trustee. * * * 
 Indeed, it may be stated broadly that a decree in chancery has not in itself 
 (i. e., independently of what may be done under it) any legal operation what- 
 ever." 
 
 See Davant, Trustee v. Guerard, 1 Spears (S. C.) 242 (1843); also language 
 of Field, J., in McCann v. Randall. 147 Mass. SI, 98, 00. IT N. E. 75, Am. St. 
 Rep. 66G (1888). 
 
 Of course to-day in many jurisdictions the appointment ol a new trustee by 
 a court bavins jurisdiction vests the title to the trust property in the new 
 trustee without further action. Yet the operation of the court's decree is 
 limited to the trust property within the jurisdiction of the court. Contee v. 
 Lyons, 19 D. C. 207 (1800). 
 
 i Y. B. 4 Edw. IV, fol. 7, pi. 0, ace. 
 
 2 At the present day. however, any person in possession, and therefore a 
 cestui que trust, may 'maintain trespass quare clausum fregil for a wrongful 
 entry. Cox v. Walker, 20 Me. 504 (1S47) ; Stearns v. Palmer, 10 Mote. (Mass.) 
 32 (1845).
 
 ll'U TIIK NATURE OF THE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 DOE, on the Demise of BRISTOW, v. PEGGE. 
 iKiim's Bench, 1787. 1 Term Rep. 758, note "a.") 
 
 Ejectment was brought for a moiety of the manor of Winkburne, 
 
 &c, under the will of D. Burnell, as one of his co-heirs. By the tes- 
 tator's marriage settlement in 1748 two terms in trust were created: 
 one for ninety-nine years, to secure an annuity of £v!00. to his mother; 
 the other for one thousand years, for raising £.3,000. for his wife, in 
 case she should have no issue; the money to he raised out of the 
 rents and profits, or by sale or mortgage. The testator died in L7"3 I, 
 having no issue, and devised all his estates to trustees and their heirs, 
 to the use of them and their heirs in trust, after the death of his 
 widow, who was entitled to a life-estate under the marriage settle- 
 ment, for such person or persons as according to the laws of descent 
 should he his heirs-at-law, and the heirs of their bodies, to take as 
 tenants in common, &c, if more than one. The defendant filed a 
 bill in chancery in 1776 against all persons who were supposed to 
 have any claim as heirs-at-law, and against the trustees, and an is- 
 sue was directed under which he was found heir-at-law by descent 
 from a daughter of a common ancestor. The lessor of the plaintiff 
 also had filed a bill in 1783, his claim having never been known be- 
 fore; but upon the death of the widow he brought this ejectment, 
 and proved his pedigree from another daughter of the same com- 
 mon ancestor. At the trial the defendant set up these terms ; the tes- 
 tator's mother being still living, and her annuity regularly paid by the 
 receiver appointed by the Court of Chancery; the £15,000. having 
 likewise been raised for his widow, and the term assigned in mort- 
 gage. 
 
 Mr. Justice Heath, who tried the cause at the last assizes at Not- 
 tingham, nonsuited the plaintiff, with leave to move to set aside the 
 nonsuit, and enter a verdict for the plaintiff, if the court should be 
 of opinion that he w r as entitled to recover. 
 
 Upon the motion, it was stated that the receiver had been appointed 
 by the Court of Chancery during the life of the widow, and for such 
 premises only as her life-estate did not extend to; and that the les- 
 sor of the plaintiff did not desire to disturb the terms, but was ready 
 to partake of the charge. 
 
 Lord Mansfield, C. J. An ejectment is a fictitious remedy to try 
 the title to the possession of lands; it is of infinite consequence that 
 it should be adapted to attain the ends of justice, and not entangled in 
 the nets of form. Great difficulties have arisen as to the legal form 
 of passing land, from the modes of conveyancing in England since 
 the Statute of Uses. Trusts are a mode of conveyance peculiar to 
 this country. In all other countries, the person entitled has the
 
 SeC. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST RES. 1-1 
 
 right and possession in himself. But in England estates are vested 
 in trustees, on whose death it becomes difficult to find out their rep- 
 resentatives; and the owner cannot get a complete title. If it were 
 nccosary to take assignments of satisfied terms, terrible inconven- 
 iences would ensue from the representatives of the trustees nol 
 being to be found. Sir K. Northey's clerk was trustee of near half 
 of the great estates in the kingdom; on his death it was not known 
 who was his heir or representative. So that where a trust term is 
 a mere matter of form, and the deeds were muniments of another's 
 estate, it shall not be set up against the real owner. It is therefore 
 settled that a satisfied trust shall be taken to be a trust for the bene- 
 fit of the heir-at-law. A trust shall never be set up against him for 
 whom the trust was intended. It is a mere form of conveyance. 
 And it is admitted that, where the term is in trust for the benefit 
 of the lessor of the plaintiff, the defendant shall not set it up in eject- 
 ment as a bar to his recovery. 
 
 To go a step further: third persons may have titles, and therefore 
 the court say, that where there is a tenant in possession under a lease, 
 which is a bar to the recovery of the lessor, he being to recover by 
 the strength of his own title, yet to prevent this from being turned 
 improperly against the person entitled to the inheritance, whose right 
 is not disputed by the tenant, if the lessor dispute the property only 
 against another, and give notice to the tenant that he does not mean 
 to disturb his tenancy, the court will never suffer the tenant to set 
 up the lease as a bar to the recovery. 
 
 There is another distinction to be taken, whether, supposing a title 
 superior to that of the lessor of the plaintiff exists in a third person, 
 who might recover the possession against him, it lies in the mouth 
 of a defendant to say so in answer to an ejectment brought against 
 himself by a party having a better title than his own. I found this 
 point settled before I came into this court, that the court never suf- 
 fers a mortgagor to set up the title of a third person against his 
 mortgagee. For he made the mortgage, and it does not lie in his 
 mouth to say so, though such third person might have a right to 
 recover possession. Nor shall a tenant who has paid rent, and acted 
 as such, ever set up a superior title of a third person against his les- 
 sor, in bar of an ejectment brought by him; for the tenant derive> 
 his title from him. Laying down these principles, let us now see the 
 application of them to this case. There are disputes between the 
 plaintiff and the defendant, who are co-heirs: as such, the plaintiff 
 claims half of the property, and wishes to be admitted into posses- 
 sion of the premises with the defendant. He proves his descent. 
 Then what is the defence set up? A trust for a third person, an 
 annuity, is set up. The plaintiff admits the charge, and says that he 
 only claims subject to the incumbrances. The trustees do not as- 
 sert their title. Then shall others be admitted to set it uo? It is 

 
 ll'2 THK NATURE OF HIE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 clear that the other co-heirs shall not be permitted to dispute the 
 title with him. lie and the defendant have an equitable title as 
 tenants in common, and the plaintiff must recover a moiety. 1 
 
 DAVIS and Others v. CHARLES RIVER BRANCH RAILROAD 
 
 COMPANY. 
 (Supreme Judicial Courl of Massachusetts, 1853. 11 Cush. 506.) 
 
 Hearing before a sheriff's jury empanelled to assess damages to the 
 petitioners by the location of the respondent railroad. The evidence 
 showed that the legal title to the land taken by the respondent for its 
 road was in one John Robinson as trustee for petitioners and not in 
 the petitioners. The respondent objected that it did not appear that 
 the title to the premises was in the petitioners and requested the 
 sheriff so to instruct the jury, but he instructed them that they were 
 to render their verdict for the damages to the whole land, irrespective 
 of title ; that nothing was settled in this hearing as to the title. The 
 respondent excepted to this ruling and in the court of common pleas, 
 where the verdict for the petitioners was returned, moved to set it 
 aside for alleged errors of the sheriff in point of law. This motion 
 was granted and petitioners appealed. 
 
 Thomas. J." * * * 3. The legal title to the estate was in 
 John Robinson, the trustee. He should have been the petitioner, and 
 would have recovered the damages, to be disposed of under his trust. 
 The petitioners have not a title upon which the verdict can rest. 3 
 
 1 The other .justices, Willes, Ashurst, and Buller, concurred. The concurring 
 opinions of the last two are omitted. 
 
 Lord Mansfield was a distinguished equity lawyer before he became Chief 
 Justice of the King's Bench. His predilections Cor equity were such as readily 
 to lead him to confuse the boundaries of law and equity. It remained for 
 his successor, Lord Chief Justice Kenyon, to set the court right and once more 
 clearly to mark the boundary between the two. Ilodsen v. Staple. 2 T. R. 684 
 (1788); Goodtitle v. Jones, 7 T. R. 43 (1796); Roe v. Reade, 8 T. R. 118 (1799). 
 The views of Lord Kenyon have generally prevailed. 
 
 Speaking of Lord Mansfield's view, Mr. Lewin quotes the language used by 
 Lord Itedesdale in Shannon v. Bradstreet, 1 Sch. & Let'. 66: "Lord Mansfield 
 had on his mind prejudices derived from his familiarity with the Scotch law, 
 where law and equity are administered in the same court." Lewin. Trusts 
 (8th Ed.) 077. 
 
 In Pennsylvania a cestui que trust may maintain an action of ejectment 
 against a person other than his trustee. Kennedy v. Fury, 1 Pall. (I'a.) 72, 
 1 L. Ed. 4.: (1783). This decision, made at a time when the courts of Pennsyl- 
 vania had no equity jurisdiction, has continued the law of that state ever 
 since. The trustee, however, may also maintain an ejectment against any one 
 hut his cestui que trust or one claiming under the cestui que trust. Brolaskey 
 v. McClain, <;i Pa. lid, i<;4, p;r, nsti'j). 
 
 - Pari of the opinion is omitted. 
 
 3 Packard v. Old Colony Railroad Co., 1G8 Mass. 92, 46 N. E. 433 (JSU7) ace.
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST EES. 123 
 
 In rc URUGUAY CENTRAL AND HYGUERITAS RAILWAY 
 
 COMPANY OF MONTI'; VIDEO. 
 
 (High Court of Justice, Chancery Division, 1879. L. R. n Ch. Div. 372.) 
 
 Petition. 
 
 The Uruguay Central and Hygueritas Railway Company of Monte 
 Video, Limited was incorporated in L873. One of its objects was 
 to enter into and carry into effect a certain trust deed. £100. bond-, 
 to the aggregate amount of £113, 000. were issued by it and the peti- 
 tioner held six of them. Each bond contained this provision: "The 
 Uruguay Central and Hygueritas Railway Company of Monte Video, 
 Limited, in consideration of the sum of £100. owing by them on the 
 ■ ••:• 'irity of this bond, hereby covenant with the said George Wilken- 
 son Drabble, Lord Henry Gordon Lennox, and Loftus Fitzwygram, 
 their executors and administrators, that the company will, by the 
 operation of such cumulative sinking fund as mentioned below, pay 
 to the bearer hereof the sum of £100. on the 31st day of December, 
 1915, * * * and interest on the said sum of £100., so owing as 
 aforesaid, at the rate of £7. per cent, per annum from the 30th of June, 
 1874, until payment of the said principal sum." 
 
 The company made default in payment of the interest on their 
 bond debt; and a sum of £93. being due to the petitioner for ar- 
 rears of interest on his six bonds, he, after having served the usual 
 statutory demand, presented this petition to wind up the company, 
 alleging that it was insolvent. 
 
 Jicsskl, M. R. 1 I am not satisfied that the plaintiff is a creditor. 
 * * * In the absence of any authority I am not prepared to hold 
 that this form of document, this bond, makes the person who holds 
 the bond, or who holds the coupon, a creditor either at law or in 
 equity. * * * 
 
 It is a very peculiar document indeed, but that it was not intended 
 to make the company liable to be sued, I think is very plain. * * * 
 
 I cannot imagine that this document can give either the bearer of 
 the coupons as regards interest, or the bearer of the bond as regards 
 principal, an immediate right of action for money lent or money due. 
 It is not the meaning of the transaction. The whole transaction 
 means this, that both the share and the bond are issued as a mode of 
 securing to the person advancing the money for making the line 
 certain benefits and he takes the benefits as they are given to him. 
 That does not appear to me. as I said before, to create any direct debt 
 from the company. In fact it is hardly possible it can be so, because 
 the company is liable to pay the trustees under the deed, and they 
 cannot be sued twice over. Are they to have two actions brought. 
 one by the trustees, and the other by the holder of the coupon; and 
 
 i Part of the statement of the case, as also of the opinion, is omitted.
 
 
 124 TIIK NATURE OF THE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 are thev to be liable to every person who cuts a coupon off a bond 
 to an action, simply because he is the holder of a coupon? It does 
 not appear to me that it was the intention of the parties, which, after 
 all, is the governing rule in deciding questions of equitable debt, to 
 create a debt for which the holder of the coupon could sue directly. 
 I think, therefore, that the holder of the coupon, who claims now for 
 interest unpaid is not a creditor either at law or in equity within the 
 meaning of the Companies' Acts. Petition dismissed with costs. 2 
 
 KING & CO. v. HILL. 
 
 (Supreme Court of Alabama, isr,^. 20 Ala. 133.) 
 
 Error to the Circuit Court of Madison. 
 
 An execution in favor of the plaintiffs in error was levied on 
 certain slaves as the property of James W. Hill, the defendant in 
 execution. A claim was interposed by the said James W. Hill in the 
 name of his infant daughter, Mary Hill, and as her next friend, and 
 bond given to try the right of property agreeably to the statute. On 
 the trial of the claim suit the claimant introduced two deeds as evi- 
 dence, each of which conveyed a part of the negroes in controversy 
 to the said James W. Hill, as trustee, for the sole and separate use 
 and benefit of his said infant daughter, Mary Hill. The plaintiffs ob- 
 jected to the admission of these deeds, but their objection was over- 
 ruled, and they excepted. The plaintiffs asked the court to charge 
 the jury "that said deeds, if valid, conveyed the legal title to the 
 slaves in controversy to the said James W. Hill, in whose name alone 
 the claim to said slaves could be made or sustained ; and that upon 
 said evidence the jury could not find the issue for the claimant." 
 This charge was refused and the jury told "that the beneficial in- 
 terest being in Mary Hill, they might find for the claimant," to which 
 plaintiffs excepted. 
 
 DarGAN, C. J. 3 The sole question presented by the bill of excep- 
 tions is this : can the cestui que trust of personal property interpose 
 a claim under our statute to try the right of property? T am full}' 
 satisfied that he can not. A court of law can look alone to the legal 
 title. It cannot take cognizance of a trust ; and looking alone to the 
 legal title in the case before us, we find it in James \Y. Mill — not in 
 the claimant ; therefore her claim cannot prevail. * * * Judg- 
 ment reversed and cause remanded. 
 
 2 Where the holder of Income bonds of a railroad payable to bearer secured 
 
 by a trust mortgage, sued the railroad to recover interest without joining the 
 trustee, it was held on demurrer that the trustee Deed not he a party to the 
 suit. Spies v. Chicago & Eastern Illinois Railroad Co., 24 Blatchf. 280, 30 
 Fed. ::'.»t (1887). 
 a Part of the opinion is omitted.
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST RES. 125 
 
 NIMS, Administrator, v. FORD and Trustee. 
 (Supreme Judicial Court of Massachusetts, 1893. 159 Mass. 575, 35 N. E. I*" 1 I 
 
 Latiikop, J. The Berkshire Life Insurance Company, summoned 
 as trustee of the principal defendant, in 1861, in consideration of a 
 premium of forty dollars paid to it by Julia O. Ford, and of an an- 
 nual premium of a like sum to be paid to it on or before a certain 
 day in every year during the continuance of the policy, assured the 
 life of said Julia, in the amount of one thousand dollars, for the 
 term of life, "for the benefit of her husband," who is the principal 
 defendant in this case. The policy contains the following clause : 
 "And the said company do hereby promise and agree well and truly 
 to pay or cause to be paid, at their office, the said sum insured to 
 the above named party to whose benefit this insurance shall inure 
 whenever the same becomes due, his executors, administrators or as- 
 signs. 
 
 It appears from the answer of the trustee that Mrs. Ford died in 
 1891, and that the company has in its possession the proceeds of the 
 policy. The justice of the Superior Court who heard the case, has 
 found that Mrs. Ford paid all the premiums due upon the policy from 
 her separate funds ; and that the trustee never promised to pay the 
 principal defendant the sum due or to become due under the policy, 
 unless such promise is contained in the policy itself. The justice 
 ordered the trustee to be discharged, and the case is before us on an 
 appeal from this order. 
 
 To charge the insurance company as a trustee, it is necessary for 
 the plaintiff to show that the principal defendant has a legal cause 
 of action against it growing out of the policy, as the company has no 
 personal chattels in its possession belonging to the principal capable 
 of being seized and sold upon execution. Maine Ins. Co. v. Weeks, 7 
 Mass. 438. Field v. Crawford, 6 Gray, 116. 
 
 A merely equitable right is not attachable by the trustee process. 
 Massachusetts National Bank v. Bullock, 120 Mass. 86. See, also, 
 Folsom v.. Haskell, 11 Cush. 470. 
 
 In this case we fail to find any privity of contract between the 
 principal defendant and the insurance company, or anything which 
 would entitle the husband to maintain an action at law against the 
 company on the policy. Mrs. Ford and the company were the con- 
 tracting parties. The promise to pay to the husband was, by intend- 
 ment of law, made with her and not with him. I lis interest \\;i- a 
 purely equitable interest which, as we have seen, is not enough bo 
 cause the trustee to be charged. Campbell v. New England Insurance 
 Co., 98 Mass. 381, 400. North America Co. v. Wilson, 111 Mass.
 
 12G THE NATUKE OF THE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 542. Bailey v. New England Ins. Co., 114 Mass. 177, 19 Am. Rep. 
 329. Flynn v. Massachusetts Benefit Association, 152 Mass. 288, 
 25 X. K.'^IG. 1 
 
 WESTERN RAILROAD COMPANY v. NOLAN and Others, 
 
 Board of Assessors of the City of Albany. 
 
 (Commission of Appeals of New York, 1872. 48 N. Y. r>i3.) 
 
 Appeal from judgment of the General Term of the Supreme Court 
 in the third judicial district, affirming a judgment dismissing plain- 
 tiff's complaint. 
 
 The action was brought to restrain the defendants, as assessors of 
 the city of Albany, from assessing the sum of $500,000, for personal 
 property, against Joseph C. Y. Paige and Thomas YY. Olcott, trusters. 
 for the purpose of taxation. The said sum was held by Paige and 
 Olcott as trustees, under certain tri partite contracts, dated in 1840, 
 L841 and 1849, between the city of Albany of the first part, the Al- 
 bany and West Stockbridge Railroad Company, (a corporation of 
 the State of New York), of the second part, and the plaintiff (a cor- 
 poration of the State of Massachusetts), of the third part. Under 
 these contracts the city of Albany issued its bonds to the plaintiff for 
 $1,000,000. payable one-fourth in twenty-five years, one-half in thir- 
 ty years, and the remaining one-fourth in thirty-five years from June, 
 1840, with interest coupons ai six per cent, per annum, payable 
 semi-annually; the plaintiff agreeing to apply one-tenth of the pro- 
 ceeds of the bonds to the creation of a sinking fund, to be held, man- 
 aged and controlled by two trustees, one of whom should be the 
 chamberlain for the time being of the city of Albany, and the other 
 to be nominated by the plaintiff, who was required to keep the fund 
 invested, together with an additional one per centum on the amount 
 of the said bonds, to be contributed annually to the said fund by 
 the plaintiff, and accumulate the said fund for the purpose of retir- 
 ing the said bonds at maturity, paying the surplus to the said plain- 
 tiff. The residue of the proceeds of the said bonds the plaintiff 
 agreed to apply to the construction of the Albany and West Stock- 
 bridge Railroad, which completed a through line of railroad communi- 
 cation from the eastern terminus of the plaintiff's railroad in Massa- 
 chusetts to the city of Albany. The city of Albany also agreed to 
 subscribe for $1,000,000 in the stock of the Albany and West Stock- 
 bridge Railroad Company, to be held by said city in consideration of 
 the issue of said city bonds, of which stock the plaintiff was to become 
 
 1 An undisclosed principal is permitted to sue in his own name and at law 
 to enforce a contracl made with his agent. Dean Ames thinks that the un- 
 disclosed principal is a cestui que trusl and the agent his trustee, and that, 
 therefore, on principle, only the agenl should be allowed to enforce the con- 
 tract. Cast's on Trusts (2d Ed.) p. 258, note 1.
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST BES. 127 
 
 the owner as fast as it retired the said bonds; and the agreement 
 appears to contemplate that the plaintiff would become the lessee of 
 the said West Stockbridge Railroad, until the plaintiff became the 
 owner of said railroad by payment of the said city bonds; and the 
 plaintiff also agreed to pay the interest on the bonds as it became due, 
 as a rent for the use of the said West Stockbridge Railroad. This 
 agreement was carried into effect; the said bonds were issued, and 
 were outstanding at the commencement of the action ; and the said 
 sinking fund amounted, with all the animal payments of the plaintiff 
 thereto, and the accumulations thereon to $916,489.41, of which the 
 said Paige and Olcott were then in possession and the actual trustees. 
 This fund was invested by the trustees in the name of the plaintiff and 
 the city of Albany, on bond and mortgage to the amount $322,529, 
 and the residue in the stocks of the State and general government, 
 and in the bonds of the city and county of Albany, cash on hand, and 
 bonds of the New York Central Railroad Company. The judge, be- 
 fore whom the action was tried without a, jury, found that the de- 
 fendants were assessors of the city of Albany ; that, as such, they 
 had determined that the said fund was liable to taxation, and in pur- 
 suance of their determination, had entered in the assessment roll of 
 the said city the amount of $500,000 for personal property in the 
 names of Thomas W. Olcott and Joseph C. Y. Paige, trustees as 
 aforesaid. That the plaintiff had no other property in the city and 
 county of Albany, except office furniture of the value of fifty dollars. 
 That the plaintiff had, in due time, presented to the defendants, as as- 
 sessors, proof of the said facts, and requested them to strike the said 
 assessment from the assessment roll, and the assessors declined to ac- 
 cede to it, but determined to assess the said fund for the purposes 
 of taxation. That the defendants were not of sufficient pecuniary 
 responsibility to respond to the plaintiff in damages if it should be 
 determined that the said fund was not liable to taxation. That the 
 plaintiff is a foreign corporation, created under the laws of the State 
 of Massachusetts. 
 
 The plaintiff requested the judge to decide that the said fund was 
 not liable to be assessed for the purposes of taxation, and that the 
 plaintiff was entitled to an injunction restraining the defendants, as 
 assessors, from assessing the said fund for taxation, and from as- 
 sessing the said trustees for the said fund; that the said judge held 
 and decided that the plaintiff was not entitled to the relief demanded, 
 and adjudged that the complaint be dismissed with costs. The plain- 
 tiff duly excepted to such refusal to find as requested, and to the de- 
 cision so made by the said judge. 
 
 The defendants thereupon entered judgment, dismissing the com- 
 plaint, with costs. 
 
 Leonard, C. While the plaintiff has an important interest in the 
 sinking fund, it is not under its control or management, nor is the 
 title to it vested in it. It has such an interest as would enable it to
 
 * 
 
 L28 THE NATURE OF THE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 compel an accounting by the trustees, or maintain an action against 
 them for the correction of an abuse of the fund. The plaintiff has 
 agreed to indemnify the city of Albany from injury by losses to the 
 fund, and is thereby indirectly bound to maintain it, or to pay the 
 bonds, amounting to $1,000,000 with the interest; and the plaintiff 
 is also entitled to the amount of the trust funds remaining, after the 
 said bonds, with the interest, have been satisfied or paid. Perhaps 
 it might maintain an action against third parties for the protection 
 or defense of the fund, in case the trustee should, on request, refuse 
 to institute the proper action or proceedings for that purpose. The 
 plaintiff should be regarded as a cestui que trust, and interested in 
 the said fund. The trustees are the parties in whom the fund is 
 vested, and whose duty it is to maintain and defend it against wrong- 
 ful attack or injury tending to impair its safety or amount. The. titje. 
 to the fund being in them, neither the cestuis que trust nor the bene- 
 ficiaries can maintain an action in relation to it, as against third par- 
 ties, except in case the trustees refuse to perform their duty in that 
 respect, and then the trustees should be brought before the court as 
 parties defendant. There is nothing in the case proving any refusal 
 or reluctance on the pari of the trustees to perform any duty which 
 they ought to assume in vindicating the fund from illegal assessment 
 or taxation. The plaintiff has not, for these reasons, made any case 
 entitling it to bring this action. 
 
 
 .MORGAN v. KANSAS PACIFIC RAILWAY COMPANY and 
 
 Others. 
 
 (Circuit Court. S. D. of New York, 1882. 15 Fed. 55.) 
 
 Bill in equity by the holder of certain coupons attached to income 
 bonds of the Kansas Pacific Railway Company, for an accounting 
 and a decree of payment. The plaintiff sues "on behalf of himself 
 and all other holders of income bonds who may show themselves en- 
 titled to relief, and who shall in due time come in and ask relief by 
 and contribute to the expenses of this suit." Lewis, the trustee of the 
 bonds, was named as defendant to the bill, but was not served with 
 process, and did not appear in the cause. The bill averred a request 
 upon Lewis to bring this suit, but no proof of the averment was 
 offered at the hearing. 
 
 BlaTCHFORD, Justice. Benjamin W. Lewis is named in the bill as 
 a defendant. Process of subpoena is prayed against him in the bill. 
 The bill avers that '•(luring the several years last past the defendant 
 Benjamin W. Lewis has duly become sole trustee under said income 
 mortgage," and "has been requested to bring an action for the ac- 
 counting and injunction asked by the plaintiff herein, but he has neg- 
 lected and failed to bring such action or comply with said request,
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST RES. L29 
 
 and he is, therefore, made a defendant in this art inn." The an 
 of the Kansas Pacific Railway Company admits that "during several 
 years last past Benjamin \Y. Lewis has been the sole trustee' under said 
 income mortgage, but it has no knowledge or information sufficient 
 to form a belief as to whether or not he has been requested b) 
 plainant to bring an action for the accounting and injunction : 
 by complainant herein." This raises an issue as to the request to 
 Lewis. 
 
 Lewis, being the trustee under the mortgage, is the proper party 
 plaintiff in a suit of this character, and some good reason must ap- 
 pear of record why he does not sue as plaintiff; and, in such case, he 
 must he made defendant. The hill recognizes this necessity, and 
 hence makes the averments referred to. The averment as to the re- 
 quest to Lewis is controverted, but it is not proved on the part of 
 the plaintiff. It would be necessary to prove it, even though Lewis 
 was served with process or appeared. It is not alleged in the bill that 
 he is beyond the jurisdiction of the court, nor is that fact proved. The 
 bill, it is true, describes Lewis as "of the city of St. Louis," and as 
 "a citizen of the State of Missouri." But that is not sufficient. And 
 even if it were shown that Lewis was not and could not be found 
 within this district, to be served with process, there is nothing in sec- 
 tion 737 of the Revised Statutes (U. S. Comp. St. 1901, p. 587), 
 which makes it proper for the court to adjudicate the suit without the 
 presence of Lewis, because the issue as to whether Lewis refused to 
 sue, as stated, is one on which Lewis must be heard, and under section 
 737 he cannot be concluded or prejudiced by a decree rendered in his 
 absence. The statute cannot be construed so as to convert real parties 
 and necessary parties into no parties at all. There is, in this case no 
 suit to adjudicate unless Lewis be plaintiff, or unless, if he be de- 
 fendant, he he served or appear. Rule 4? in equity is to the same 
 purport. It makes it discretionary with the court to proceed as does 
 section 737. 
 
 For the foregoing reason, and without deciding expressly or im- 
 pliedly any other question raised in the case, the only disposition that 
 can now be made of the suit is to dismiss the bill, with costs, but 
 without prejudice to any other suit in any court. 1 
 
 i See Harlow v. Mister, 04 Miss. 25. 8 South. 164 (1886): Harvey v. Mc- 
 Donnell, 113 N. Y. 520, 21 N. K. 695 (1889); General Electric Co. v. La Grand 
 Electric Co., S7 Fed. 590, 31 C. C. A. 118 (189S). 
 Ken.Tb.— 9 

 
 130 THE NATURE OF THE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 HORSLEY v. FAWCETT. 
 
 (In Chancery, bofore the Master of the Rolls, Lord Langdale, 1849. 11 Bea- 
 
 v.-ui. 565.) 
 
 Tn 1796, a benefit society, called the "Helpmates Society" was es- 
 tablished, for securing annuities to aged persons, which was duly 
 enrolled under St. 33 Geo. Ill, c. 54. 
 
 For the purpose of dissolving said society under said act, a deed 
 of arrangement, dated October 6, 1823, was made between the an- 
 nuitants of the first part, the next of kin and personal representatives 
 of the deceased annuitants of the second part, the subscribers of the 
 society of the third part, and the plaintiff, Richard Horsley, and six 
 other persons (since deceased), of the fourth part, whereby all the 
 funds of the said society were vested in the plaintiff and the other 
 parties thereto of the fourth part, upon trust, after payment of costs, 
 to divide the funds, as far as the same should extend, between the 
 parties of the first, second and third parts respectively. 
 
 Upon the execution of this deed, it was arranged, that all monies 
 received by the trustees should, for safe custody, be deposited in the 
 hands of a banker. 
 
 Accordingly, another indenture, dated July 22, 1825, was made 
 between Richard Horsley and the other trustees of the deed of Octo- 
 ber 6, 1823, of the first part, John Dixon, banker, of the second part, 
 the defendants, Fawcett and Williams, of the third part, and James 
 Samuel Dane, an accountant, of the fourth part, whereby it was ar- 
 ranged, that all the- money received by the trustees should, when re- 
 ceived, be paid into the hands of Messrs. Dixon, the bankers; that 
 Dane, the accountant, should make a report of the persons entitled to 
 receive any part of the funds ; and that Dixon & Co. shou]d_pay 
 all cheques to such persons, which were to be drawn by Fawcett and 
 Williams, and countersigned by Ernst and Reeve (two of the parties 
 thereto of the first part). The trustees paid the funds amounting to 
 £19,219. to Dixon & Co. and they were placed to the credit of an 
 account entitled "the Helpmates Society Account." All but £700. 
 was paid out upon cheques drawn as required by the deed of 1825. 
 
 October 14, 1828, Fawcett and Williams, together with Ernst and 
 Reeve, invested this £?00. in their joint names in the purchase of 
 £809. 5s. consols and by investment of dividends, the sum increased 
 to £908. 9s. (Id. After the death of Reeve and Ernst and on July 18, 
 1845, Fawcett and Williams sold the stock and applied the proceeds, 
 £895. lis. lid. to their own use. 
 
 This bill was filed June 2, 1846, by Richard Horsley, the sole sur- 
 viving trustee against Fawcett, Williams and the representatives of 
 Reeve, Ernst and Dixon, praying an account of all the funds re- 
 ceived by Dixon tinder the deed of July, 1825, and that Fawcett and
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST RES. 131 
 
 Williams might be declared liable for all sums paid out upon cheques 
 improperly drawn and signed, and particularly the sum <>t £908. 9s. 
 6d. 3 per cents, and all sums improperly possessed, and that they might 
 make good the same. 
 
 Fawcett, by his answer, took an objection, for want of parties, in 
 the following form: "And this defendant says, thai it appears by I 
 complainant's amended bill of complaint, that all the members of the 
 'Helpmates Society,' who were members at the date and execution 
 of the said indentures, and the legal personal representatives of such 
 of them as have since died, are interested in the matters in question 
 in this suit, and necessary parties thereto. And this defendant is ad- 
 vised and submits, that the said amended bill of complaint is defective 
 for want of parties aforesaid." 
 
 The Master or the Rolls. If the object of this bill were to re- 
 cover the fund, with a view to its administration by the Court, the 
 parties beneficially interested must be represented. But it merely 
 seeks to recover the trust monies, so as to enable the trustee here- 
 after to distribute them, conformably with the trusts declared. If 
 is, therefore, unnecessary to bring before the court the parties bene- 
 ficially interested. 
 
 Overrule the objection. 1 
 
 i The doctrine of this case gen erally prevails. Bills to recover the trust 
 property from a person other than the cestui quo trust: Clark v. Fosdick, 
 IIS N. Y. 7. 22 N. E. 1111, 6 L, R. A. 132. 1G Am. St. Rep. 733 (1889) : Stevens 
 v. Bosch, 54 N. J. Eq. 59, 33 Atl. 293 (1895). Bills to foreclose: Holmes v. 
 Boyd, 90 Iiul. 332 (1883); Rinker v. Bissell, 90 Ind. 375 (18S3) ; Shaw v. Nor- 
 folk County Rd. Co.. 5 Gray (Mass.) 102 (1S55). Bills to redeem: Boyden v. 
 Partridge, 2 Gray (Mass.) 190 (1854). Bills for specific performance: Moale 
 v. Buchanan, 11 Gill & J. (Mel.) 314 (1840); Potts v. Thames Co., 15 Jur. hot 
 (1851). Bills to set aside a fraudulent deed of land: Lewis v. Whitten, 112 
 Mo. 31S, 20 S. W. 617 (1892). Bills to restrain a tort to realty: Smith v. 
 City of Tortland (C. C.) 30 Fed. Rep. 734 (1887). Bills to establish title un- 
 der the burnt records act of Illinois: Harding v. Fuller. 1 41 111. 308, 319, 30 
 N. E. 1053 (1892). Bills to partition real estate: Smith v. Gaines, 3S N. J. 
 Eq. 65, 69 (1884). 
 
 A contrary doctrine prevails in some jurisdictions. Bills to recover a trust 
 fund: Stillwell v. McNeely, 2 N. J. Eq. 305 (1840); Elmer v. Loper. 25 X. J. 
 Bq. 475 (1S75). Bills to foreclose: Chapman v. Hunt, 14 N. J. Eq. 149 (1861); 
 Jewell v. West Orange, 36 N. J. Eq. 403 (1883). If the cestui s are so numerou s 
 as u> make their joinder inconvenient they may be dispensed with. YVillink 
 v. Morris Canal & Banking Co., 4 N. J. Eq. 377 (1843); Williamson and Upton 
 v. New Jersey Southern Railroad Co.. 25 X. J. Eq. 13 (1874). 
 
 When cestui quo trust need not be joined as defendant, with trustee. 
 
 Bills to deprive trustee of trust res: Vetterlein v. Barnes, 124 r. S. 169, 
 8 Sup. Ct. 441, 31 L. Ed. 400 (1SSS) ; Kerrison v. Stewart. 93 U. S. 155, 23 L. 
 Ed. 843 (1876); Wakeman v. Grover. 4 Paige (N. Y.) 23 (1S32). Contra. Arm- 
 strong v. Armstrong, 19 X. J. Eq. 357, 360 (1868); Brokaw v. Brokaw, 41 X. 
 J. Eq. 215, 4 Atl. 66 (1886). Bills for, sjjacjfic performance; Van Doren v. 
 Robinson, 16 X. J. Eq. 256 (1863). Bills to redeem: Sweet v. Barker. 22 N. 
 J. Eq. 453 (1871). Contra. Woodward v. Wood, 19 Alabama. 213 (1851). Bills 
 to dissolve a partnership: Taylor v. Rockefeller. Fed. Cas. Xo. 13,802, IS A. 
 L. R. (X. S.) 20S (1879). 
 
 In a bill to foreclose a mortgage upon the trust res. it is thoughl that the 
 cestuis should be joined with the trustee, so as to raise the fund to prevent
 
 132 THE NATURE OF THE CESTUI QUE TRUST'S INTEREST. (Cll. 2 
 
 ZIMMERMAN and Others, as Executors, v. KINKLE, 
 Impleaded, etc. 
 
 (Court of Appeals of New York. L888. 108 X. Y. 282, 15 N. E. 407.) 
 
 Appeal from a final judgment of the General Term of the Supreme 
 
 Court, in the first judicial department, in favor of the plaintiffs, enter- 
 ed upon an order made February 1G, 1887, which reversed an order 
 of the Special Term, sustaining a demurrer by defendant Kinkle to 
 the complaint, and overruled said demurrer. 
 
 This action was in equity, for the cancellation of a bond and the 
 restoration of $5,000 belonging to the estate represented by the plain- 
 tiffs as executors, and which money they had placed in the hands of 
 Kinkle, one of the defendants, to indemnify him against liability 
 as surety upon the bond. 
 
 The complaint alleged in substance that the testator, William Zim- 
 merman, in his lifetime, Emil Dieckerhoff, Louis Raffioer and Adolph 
 Erbsloeh were co-partners in business, and that after the death of 
 Zimmerman a settlement of accounts relating to firm transactions, 
 was had between the plaintiffs on one side and the defendant Emil, 
 Louis and Adolph on the other, in which the latter wrongfully exact- 
 ed of the plaintiffs, and they, with the defendant George Kinkle, 
 executed a bond in the penal sum of $5,000 to the said Emil, Louis 
 and Adolph, upon condition that if the obligors should "keep in- 
 violate and confidential all the business transactions and dealings of 
 die late co-partnership firm of Dieckerhoff, Raffioer & Co. and of 
 Laron & Co., the predecessors of said first named firm, which may 
 ever at any time, in any wise have come, or which may hereafter come 
 to their knowledge, and shall also preserve and keep inviolate and 
 confidential the contents of correspondence and other writing relat- 
 ing thereto, and shall not disclose or divulge the same, then the obli- 
 gation to be void, otherwise to remain in full force and virtue" ; 
 that Kinkle signed as surety and, as such, demanded and received 
 from the plaintiffs the sum of $5,000, to be repaid with interest so 
 soon as his obligation upon the bond ceased; that the bond "was giv- 
 en for no consideration, but was wrongfully extorted from the plain- 
 tiffs and was signed, executed and delivered for an illegal and im- 
 moral purpose, against public policy and for the purpose of interfer- 
 ing with the administration of public justice, and to suppress evi- 
 dence of illegal, wrongful and unlawful acts on the part of the ob- 
 ligees therein named, all of which said defendant, George Kinkle, 
 well knew" ; that the money so demanded by Kinkle was trust-money 
 and was "received by him from the plaintiffs as the executors and 
 trustees of William Zimmerman, deceased." 
 
 foreclosure. Francis v. Harrison, L. R. 4:*, Ch. DIv. 183 (1889). Contra, Van 
 Vechten v. Terry, 2 Julius. Cli. (N. Y.) 197 (1816); New Jersey Franklinite Co. 
 v. Ames, 12 N. J. Eq. 507 (1859).
 
 
 Sec. 2) CLAIM AGAINST TBUSTEB,NOT AGAINST BBS. 133 
 
 The demurrer stated several grounds. 
 
 The Special Term sustained the demurrer upon the grounds (1) 
 that the consideration of the bond was illegal and criminal, and so 
 neither party could have relief; (2) that although an action might lie 
 against Kinkle to recover the money received by him, with knowl- 
 edge that it belonged to the estate, it could not be joined with an ac- 
 tion against the obligees of the bond. The General Term revi 
 the order of the Special Term, with leave to answer over. The de- 
 fendant did not accept that permission, and upon proof thereof final 
 judgment was entered. 
 
 Dan fort ii, J. There is nothing upon the face of the bond to im- 
 peach its validity, and whatever might be the real transaction be- 
 tween the parties it is to be made out by allegations and evidence. 
 The terms of the complaint show clearly enough that the bond is 
 founded on a consideration condemned both by morals and public 
 policy, and, therefore, the defendant claims that a party to it cannot 
 be relieved, but must be left to the consequences of the forbidden 
 transaction. How this might be if the action were by the plaintiffs 
 in their individual capacity, it is not necessary to inquire. They come 
 into court as executors of a deceased person and in a representative 
 character. If in delicto at all, they are not in pari delicto, and the 
 enforcement of the rule would secure to the defendant the enjoyment 
 of money which never belonged to his principals, and which did be- 
 long to the estate in the honest management of which the plaintiffs 
 also owed a duty to the testator's beneficiaries. Nor should the de- 
 fendant be heard to complain of this. He admits by his demurrer 
 that the money was trust money and that he received it from the 
 plaintiffs as executors and trustees. They had no power to part 
 with it for the purpose for which he received it, and in seeking to 
 recover it back they are merely performing a duty in the execution of 
 which a court of equity may properly assist. The principle which 
 justifies this conclusion, was applied in the recent case of Wetmore 
 v. Porter (92 N. Y. 76), where it was held, that wdioever receives 
 property knowing it to be the subject of a trust and to have been 
 transferred by the trustee in violation of his duty or power, takes it 
 subject to the right, not only of the cestui que trust, but also of the 
 trustee to reclaim possession or recover for its conversion. That case 
 also holds that in such an action it is not necessary to bring the 
 plaintiffs before the court in their individual character, and this 
 answers the objection that the omission to do so in this action makes 
 a defect of parties. In another aspect also the complaint is suffi- 
 cient. It charges that the bond "was given for no consideration, 
 but was extorted from the plaintiff^.*' and that the circumstances 
 were also known to the defendant. The defendant argues that the 
 averment as to the bond being wrongfully extorted from the plain- 
 tiffs, is a mere conclusion, and that no facts are stated. Against a de- 
 murrer the general statement is sufficient. It defines an unlawful
 
 L34 THE NATURE OF THE CESTUI QUE TRUST'S [NTEREST. (Ch. 2 
 
 method or process by which an object is accomplished or end attained, 
 and if not sufficiently definite or conclusive, the defendant's remedy 
 was by motion. (Marie v. Garrison, 83 N. Y. 14.) 
 
 Nor does the complaint improperly join two causes of action. It 
 narrates a single transaction in which all parties were concerned, and 
 while more than one cause may appear entitling the plaintiffs to the 
 relief sought, they only represent acts by the commission of which 
 the right to relief is made out. That some might have been omitted 
 and a cause of action remain, should not prejudice the plaintiffs. 
 The object of the suit is single — to have the money restored to the 
 funds from which it was taken. The right to that relief would follow 
 from the cancellation of the bond, but the presence of Kinkle as well 
 as that of the obligees was necessary to prevent further litigation and 
 have the various interests of the parties determined in one action. 
 This was the conclusion of the General Term. 
 
 The judgment appealed from should therefore be affirmed. 
 
 Judgment affirmed. 
 
 III. A Cestui que Trust of ax Obligation Cannot Discharge the 
 
 Obligor. 
 
 COTTON v. COTTON and ASHTON. 
 
 (Before Lord Commissioners Trevor, Rawlinson, and Hutchins, 1693. 2 Ver- 
 non. 290.) 
 
 The plaintiff being executor and residuary legatee to her former 
 husband, lends £100. to A. and B. and as security took a bond from 
 A. and B. in the name of J. S. in trust for herself, and afterwards 
 married B. one of the obligors, who died. The bill was to compel 
 payment of £100. 
 
 It was insisted by defendant's counsel, that the bond being a trust 
 for the wife, and she marrying one of the obligors, the marriage was 
 a release of the debt, and it was extinguished, as it could have been 
 in case the bond had been in her own name. Sed non allocatur. 
 
 
 OFFLY v. WARDE. 
 
 (King's Bench, 1668. 1 Levinz, 235.) 
 
 Debt on a single bill made to A. to the use of him and B. The 
 defendant pleads a release made to him by B. On which the plaintiff 
 demurs; and without difficulty, it was adjudged for the plaintiff, for 
 B. is no party to the deed and, therefore, can neither sue nor release
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST RES. 135 
 
 it; but it is an equitable trust for him, and suable in the chancery, if 
 A. will not let him have part of the money; and the book of Edw. 
 IV cited, that he might release in such a case, denied to be law. 1 
 
 
 THOMASSEN, Guardian, v. VAN WYNGAARDEX and Others. 
 (Supreme Court of Iowa, 1885. Go Iowa, GST, 22 X. W. 927.) 
 
 Action in equity to foreclose two mortgages. From the decree the 
 plaintiff appeals. 
 
 Si;i.\i:ks. J. 2 The defendant Wyngaarden executed the following 
 promissory note: 
 "$1,400. ' Pella, Iowa, November 11, 1878. 
 
 "Six years after date, for value received, I promise to pay to 
 Jantie Van Wyngaarden, in trust for Gertruda Geradina Thomassen, 
 Jana Thomassen, Wilhemina Thomassen, Johannes Thomassen and 
 Jan Thomassen, heirs of Maarke Thomassen, deceased, or order the 
 sum of fourteen hundred dollars, payable at the First Xational Bank, 
 Pella, Iowa, with interest payable annually, at the rate of six per 
 cent, per annum, from date until paid. Interest when due to become 
 principal and draw ten per cent, and an attorney fee of ten per cent 
 if suit is commenced on this note." 
 
 The mortgages were given to Jantie Van Wyngaarden in trust for ; 
 the beneficiaries named in the note and it is provided in the mort- 
 gages that the mortgagor "shall pay or cause to be paid to the said 
 Jantie Van Wyngaarden, in trust for the above named parties, her 
 executors and administrators, or assigns, the sum of $1100 with in- 
 terest thereon from date, according to the tenor and effect of the 
 promissory note above stated," then the mortgage to be void. 
 
 In March, 1881 Jantie Van Wyngaarden died and in June follow- 
 ing a portion of the land described in the mortgage was conveyed 
 to J. S. Polk, one of the defendants, and who bound himself to pay 
 the amount of the mortgage, with interest from January 1, L882. 
 It was pleaded as a defence that the interest up to that time had been 
 
 i A release of an obligation by a cestui que trust havin g the entire benefjcjjal 
 interest would bo effectual in equity. MeBriage v. Wright, 46 Mich. 265, 9 
 X. W. 273 (1881); Gait v. Smith, 145 Pa. 167, 22 Atl. 713 (1891). So in equity 
 payment by the obligor to such a cestui will bar -an action by the trustee. 
 Pratt v. Dow. 50 Mo. 81 (18G8) ; Smith v. Brown, 5 Rich. Eq. (S. O.) 293 (1853). 
 
 A release of an obligation by the trustee in wrong of the cestui que trust 
 was a good defense at common law. Equity would set aside such a release 
 where the obligor had acted in bad faith. Chicago & <i. W. R. Land Co. v. 
 Peck, 112 111. 408. 44.°. (1885); Insurance Co. v. Eutchinson, 121 X. .1. Bq. 107 
 (INTO). In some jurisdictions courts of law treat such a release as a nullity. 
 O'Reilly v. Miller, 52 Mo. 210 (1873). in other jurisdictions common-law 
 courts will strike out tbe defense of such a release on motion. Green v. 
 Beatty, 1 N. J. Law, 142 (1792). 
 
 - Part of the opinion is omitted.
 
 136 THE NATURE OF THE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 paid. The mortgages provided that, in the event the interest was 
 not paid as therein provided, then the whole debt became due. The 
 beneficiaries are grandchildren of Jantie Van Wyngaarden, and are 
 minors, and the plaintiff is their guardian. This suit was commenced 
 in March, 1882 and the court found that there was nothing due at 
 that time. * * * 
 
 I. Counsel for the appellant insist that there is no sufficient evi- 
 dence showing that the interest due on the note up to January, 1882, 
 has been paid. * * * 
 
 The defendants introduced in evidence a receipt in the following 
 words, and proved that it was executed by the trustee: 
 
 'Telia, Iowa, December 22, 1880. 
 
 "Received of Jan Van Wyngaarden the sum of one hundred and 
 forty-seven dollars, as interest on a certain note, secured by mort- 
 gage, to me given by the said Jan Van Wyngaarden in trust (for 
 the beneficiaries above named) ; this being in full up to January 1, 
 1882. "Jantie Van Wyngaarden." 
 
 Counsel for the plaintiff insist that the receipt is signed by the 
 trustee as an individual, and therefore the beneficiaries are not bound 
 thereby. But we think it fairly appears from the receipt itself that 
 the money was received by the trustee as such. It was paid to and 
 received by the person to whom it was payable by the terms of the 
 note, and she will be charged as having received it in her capacity as 
 trustee. 
 
 It is further insisted that at the time the receipt purports to have 
 been executed but one year's interest, or $84, was due, and that the 
 trustee was not authorized to receive the interest not due, and that 
 the beneficiaries are not bound by said receipt to any greater extent 
 than the interest then due. For the reasons hereafter stated, we do 
 not think this position is tenable. 
 
 Counsel further insist that the amount received, $147, was less 
 than the amount of interest due up to January, 1882 and therefore 
 that the court erred in finding that the interest up to that time had 
 been paid. It however is expressly stated in the receipt that the 
 amount then paid was in full of such interest, and it is immaterial 
 whether such amount was then paid or had been received at some 
 prior time. In the absence of fraud or collusion, for the reasons 
 hereafter stated, we think the trustee, as the legal owner of the note, 
 could receive the interest due or to become due at such times and in 
 such amounts as she saw proper; subject, however, to be held ac- 
 countable at the instance of the beneficiaries for the faithful per- 
 formance of the trust. 
 
 II. Counsel for the appellant insist that the trust created by the 
 execution of the notes and mortgages is a simple or dry trust, and 
 that the trustee in such a trust does not have the power to manage and 
 dispose of the trust estate, and therefore the beneficiaries are not 
 bound by what the trustee did. A simple or dry trust is defined to
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST RES. 137 
 
 be one "where property is vested in one person in trust for anoth' 
 and the nature of the trust, not being prescribed by the donor, is left 
 to the construction of the law." Perry, Trusts. § 520. "There can be 
 but few of these dry trusts; for, when there is no control, and no duty 
 to be performed by the trustee, it becomes a simple use, which the stat- 
 ute of uses executes in the cestui que trust, and he thus unite- both 
 the legal and beneficial estate in himself." 
 
 The trust under consideration is materially different; for it is so 
 far declared as to cast on the trustee a duty for the performance of 
 which she will be held accountable. It is made the duty of the trustee- 
 to receive and collect the interest and the principal when it becomes 
 due. The legal title to the note and mortgages is vested in the trus- 
 tee. It is her duty to preserve and protect the interest of the bene- 
 ficiaries, lint, in the absence of fraud or collusion, the trustee could 
 satisfy the mortgages and acknowledge satisfaction of the debt, 
 which would be binding on the beneficiaries. It is said that anyone 
 dealing with the trustee must see that money paid in the discharge 
 of the trust was properly appropriated; but we do not think this is 
 so, for the simple reason that the trustee was the legal owner of 
 the note, and authorized to receive payment of both the principal and 
 interest. An administrator in one sense is a trustee for the estate he 
 represents ; and yet he is the legal owner of the notes and mort- 
 gages belonging thereto. A person making him a payment is not 
 bound to see that the money is properly accounted for. 
 
 The rule, it seems to us, should be the same in the case under con- 
 sideration. 
 
 The decree of the Circuit Court must be affirmed. 
 
 MAYER v. MORDECAI and Others. 
 (Supreme Court of South Carolina, 1SG9. 1 S. C. [N. S.| 383, 7 Am. Rep. -?>■) 
 
 Before Carroll, Ch., at Charleston, March, 1868. 
 
 Under proceedings in the Court of Equity for Charleston District, 
 one of the Masters, by deed, dated 29th May, I860, assigned to the 
 defendant, Benjamin Mordecai, five bonds, secured by mortgages of 
 real estate, amounting, in the aggregate, to $8000, and upwards, and 
 about $4000 in cash, to be held by him "in trust, to invest the cash 
 aforesaid, and the proceeds of the bonds aforesaid, as soon as re- 
 ceived, in such manner as the said Benjamin Mordecai may think 
 proper, on consultation with the said Maurice Mayer, and Rachel 
 M., his wife, and the same being so invested, then in trust to per- 
 mit the said Maurice Mayer and Rachel M., his wife, to receive 
 the interest and income of the said settled property" for their use 
 "during their joint lives," with limitations over. 
 
 Thomas J. Kerr, Moses Goldsmith and Alonzo J. White, respective-
 
 138 THE NATUKE OF THE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 ly, were the parties obliged, in three of the five bonds, and these three 
 bonds, amounting in the aggregate to about $5000 were paid to Morde- 
 cai, in the years 1862 and 18G3, in Confederate Treasury notes; and 
 he invested the proceeds in notes and bonds of the Confederate States 
 of America. 
 
 In the course of the year 1860, Mayer and wife removed their 
 residence to the city of New York, and there remained until the close 
 of the recent war between the United States and the late Confederate 
 States of America. After June, 1861, and while the war continued, 
 all communication between the belligerent sections was cut off. Dur- 
 ing this period the defendant Mordecai collected three of the bonds 
 held by him as trustee, amounting in the aggregate to more than 
 $. r )000, and accepted payment in Confederate Treasury notes. The 
 great bulk of the moneys so collected he received during the year 
 1st;:;, and $1940.58 of that amount as late as the 10th of November 
 of that year. The proceeds of the bonds so received by him he in- 
 vested in the public securities of the late Confederate States, $3600 
 on the 23d July, 1863, in their 7.30 per cent. Treasury Notes, and 
 $2000 on the 10th November, 1863, in their 8 per cent. Treasury 
 Bonds. 
 
 The Chancellor held that the defendant Mordecai had incurred no 
 personal liability either by the collection of the bonds or by the in- 
 vestment of their proceeds in the public securities of the late Con- 
 federate States of America. 
 
 The plaintiff appealed. 
 
 MoSES, C. J. 1 When a trustee is not limited or directed by the 
 instrument under which he acts, and is left to the discretion of his 
 own judgment, our cases hold that his discretion must be exercised 
 with the same diligence and care that a prudent man would bestow on 
 his own concerns. * * * 
 
 What will constitute the care, and diligence thus exacted will de- 
 pend on the attendant circumstances. If the act, in itself, was an in- 
 cautious and imprudent one, it will not be sustained; and no aid de- 
 rived from the fact that the trustee was countenanced in it by the 
 participation of prudent men will give it sanction or support. 
 * * * 
 
 The collection of White's bond stands on a different footing from 
 that of Kerr's and Goldsmith's. Payment of it was tendered to him 
 in Confederate Treasury notes and we are to consider whether the 
 acceptance of it, in such currency, under the circumstances, is con- 
 sistent with the faithful discharge of the duty which he owed to those 
 whose interests were confided to him in a fiduciary capacity, at a time 
 when they were entirely incapable of contributing, by their presence or 
 their counsel, to the protection of them. The bond was secured by a 
 mortgage of real estate. According to the testimony, in May, 1862, 
 
 i Part of the opinion is omitted.
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST BBS. 139 
 
 when the first payment in Confederate currency was accepted, such 
 property was worth, in that currency, about fifty per cent, more 
 than it would have brought in gold before the war; and, in May, 
 1863, when the second paymenl was made, it was worth three times 
 as much. It was in evidence that, "no prudent person would have 
 sold property in 18G3 for the same amount, in dollars and cent-, that 
 he would have sold it for before the war, and receive payment in 
 Confederate money, or bonds representing on their fare that amount." 
 With knowledge of all this, he accepted, in a currency which was 
 not a legal tender, even under the Constitution or laws of the Con- 
 federate States, payment of the bond at the amount due on its face. 
 To say nothing of the want of all obligation to receive such currency. 
 can this act be recognized as one of ordinary prudence? The bond 
 and mortg age, as a marketable article, were worth much more than 
 he received. If he had sold them, they would have yielded a higher 
 amount, and his fund for investment in the securities in which he 
 appeared to have so much faith, although issued by a Government 
 waging war against that in the territory of which his cestui que trusts 
 were domiciled, would have been stdl larger. Regarded, even, as 
 a mere business operation, it exhibits, to no small extent, the char- 
 acteristics of neglect and indifference to his trust. * * * 
 
 What has been said in regard the bond of White, applies, with still 
 more force, to those of Kerr and Goldsmith. The trustee, under 
 the circumstances already referred to, invited or called them in, with- 
 out any offer of payment from the obligors. It is said, in the decree, 
 '"that, having a trust fund in charge which he could not dispose of, 
 as directed by the deed, he was for the time, substantially in the con- 
 dition of a trustee with funds as to the investment of which the in- 
 strument creating the trust gives no directions at all." 
 
 Is it in his power to seek relief from such inability, when it arose, 
 in a great measure, from his own voluntary act?. 
 
 That he sold, during the war, his own residence, in Charleston, 
 and invested largely in Confederate bonds, while it exhibits his great 
 faith in the ultimate establishment of the Government whose cur- 
 rency he so much favored, may be accepted as the evidence of a 
 patriotism so controlling as to absorb every selfish and interested 
 motive. He could do as he pleased with his own, but he had not the 
 right to risk, to the chances of the whirlpool, the means of others, 
 entrusted to his care and protection. 
 
 Although the trustee is not discharged from liability to account for 
 the three bonds, yet the mortgage, as against the original debtors can- 
 not be set up as of force. The legal title to the bonds was in him, 
 and with the investment of the proceeds they had no concern. If, 
 according to the ruling in this State, a vendee is not bound to see to 
 the application of the purchase money (Lining v. Peyton, 2 Desaus. 
 [S. C] 375; Laurens v. Lucas, (I Rich. Eq. 217), or a mortgagee un- 
 der the order of the Court, that the money is appropriated to the 
 
 ~r
 
 UO THE NATURE OF THE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 purpose for which the mortgage was taken (Spencer v. Bank of State, 
 Bail Eq. [S. C] 468), much less can a debtor who makes satisfaction 
 to the creditor, in a manner acceptable and agreed to by him, in the 
 form of actual payment, be held to such requisition. 
 
 Mr. Justice Inglis, in Austin v. Kinsman, 13 Rich. Eq. (S. C.) 2G5, 
 says, "a creditor, though entitled to demand payment in lawful mon- 
 ey, may waive his right and accept any substitute he pleases and his 
 voluntary acceptance of such substitute, as payment, makes it so." 
 
 If the satisfaction of the bonds was the result of a fraud between 
 the debtor and the trustee, or induced by an improper combination, to 
 the prejudice of the cestuis que trust, or if the debtor knew of, the in- 
 tended misapplication of the proceeds by the trustee, and in any way 
 wrongfully facilitated the accomplishment of that design, the instru- 
 ments would be set up as existing and binding. But no such proof 
 has been made in the case. On the contrary, as to the two principal 
 bonds, the trustee required the payment. There was no medium of 
 circulation but Confederate currency. This the trustee might have 
 rejected, but, so far from doing so, he sought payment in it. There is 
 no testimony showing any willful combination on the part of White, 
 Kerr or Goldsmith, with the trustee, that would justify an interfer- 
 ence to hold them responsible for the act for which alone he should 
 respond. 
 
 It is ordered and adjudged, that so much of the decree as dismiss- 
 es the bill, as to the said White, Kerr and Goldsmith, and directs the 
 payment of the costs, be affirmed. 
 
 That the decree of the Chancellor, as to the said Benjamin Morde- 
 cai, be set aside, and the case remanded to the Circuit Court, with 
 instructions for an order directing him to account, as trustee under 
 the said deed, on the principles hereinbefore set forth, and for all 
 proper orders necessary and requisite to carry out the judgment of 
 this court in the premises. 
 
 IV. When Cestui que Trust's Equitable Interest may be For- 
 feited by Inaction or Laches of the Trustee Causing 
 a Forfeiture of the Trustee's Legae Interest. 
 
 MASON and MASON & DIBBLE, Plaintiffs in Error, v. MASON, 
 
 Defendant in Error. 
 
 (Supreme Court of Georgia, 1SG3. 33 (2a. 43.">, S3 Am. Dec. 172.) 
 
 Demurrer, in Bibb Superior Court. The bill was filed April 12th, 
 1861. The court overruled the demurrer and the defendants except. 
 
 The complainant, Sarah Mason, formerly Sarah Brown, by her 
 next friend, E. A. Nisbet, brought this bill against her husband, An-
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST RES. 141 
 
 drew J. Mason, and the firm of Mason & Dibble, composed of Timo- 
 tny Mason and William Dibble. The bill stated thai before her mar- 
 riage a marriage contract was made between her and Andrew J. Ma- 
 son without the intervention of a trustee by which all the property 
 then belonging to her and all which she might he entitled to, at and 
 by the death of her mother, should he her separate ( State, anil in no 
 manner subject to her husband's debts, or disposition, save as provid- 
 ed for in the contract; that the contract gave the husband power, 
 with the consent of complainant, to sell the property, the proce< - 
 become a portion of the trust estate, and be suhject to the provisions 
 of the contract; that on Fehruary 5th, 1850, her husband sold a 
 negro, a part of the trust property, for $800 cash, and loaned the 
 money to Mason & Dibble, taking their promissory note therefor 
 dated Fehruary 5, 1850, payable to himself as trustee for complainant, 
 or hearer and due one day after date; that Mason & Dihble received 
 said money with full knowledge that it was raised by sale of the 
 negro and that the negro was trust property; that her husband had 
 been insolvent for years. The hill prayed that another trustee be ap- 
 pointed and that Mason & Dibble account with complainant for the 
 amount due on said note, and pay the same to the trustee appointed, 
 to be by him held for the uses and trust declared in the marriage 
 settlement. 
 
 Defendants demurred specially because the bill on its face showed 
 that the note was barred by the Statute of Limitations at the time the 
 hill was brought. 
 
 Jenkins, J. 1 * * * 2. But there is, in the second ground of 
 demurrer, a far more serious obstacle in the way of the complainant. 
 * * * It was conceded in the argument that as between the trus- 
 tee (payee of the note) and the makers, it is so barred. * * * 
 
 This is a case, in which the feme covert is seeking to enforce rights, 
 under a simple contract, between her trustee and a stranger, authoriz- 
 ed by the deed of trust, and which contract is actually barred by 
 the statute of limitations, and no special equity is alleged avoiding the 
 bar. It is not her contract. She was incapable of contracting when 
 it was made. She had a legal representative, appointed by herself, 
 before she became covert, and in anticipation of coverture, authoriz- 
 ed to make such contract. By him the contract was made, long subse- 
 quent to her coverture, and against him the statute commenced run- 
 ning so soon as the contract matured. The har was complete before 
 she asserted her equity, and in its assertion, she alleges no fraud, no 
 special circumstances modifying the action of the statute of limita- 
 tions upon the legal contract. * * * 
 
 The following points were also presented: "Cestui que trust can 
 follow the property in the hands of a purchaser, with notice of the 
 trust. If trustee fail to do his duty, or violate his trust, and sell 
 
 i Part of the opinion is oirntnd.
 
 142 THE NATURE OF THE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 the property, both he and his privy are liable to cestui que trust. 
 Purchasers with notice are privies to the trustee." 
 
 This is all good law, in its place, but has no application here. Ma- 
 son & Dibble had no connection whatever with any sale, rightful or 
 wrongful, of the negro. The trustee presented himself to them with 
 a certain fund which he said belonged to the trust estate, and which 
 complainant now says belonged to it. As such, they borrowed it, 
 giving a promissory note, payable to the trustee. We have said that, 
 according to the allegations in the bill, that was a legal transaction, 
 in no way violative of the trust. Upon that simple contract, then 
 rests their liability. If that be barred by the statute, without any er- 
 roneous practice on their part, their liability is at end. No construct- 
 ive trust is raised by the bill between complainant and Mason & Dib- 
 ble ; there is certainly no express trust. 
 
 The statute of limitations runs as between cestui que trust and 
 trustee on the one hand and strangers on the other. Hill on Trus- 
 tees, 736 and 738. That is this case, and on this special demurrer we 
 reverse the judgment of the court below. 2 
 
 MORRIS and Others v. MURPHEY & COMPANY. 
 (Supreme Court of Georgia, 1805. 95 Ga. 307, 22 S. E. G35, 51 Am. St. Rep. 81.) 
 
 Petition for injunction. Before Judge Hunt. Upson County. 
 October 20, 1894. 
 
 Atkinson, Justice. 3 In 1878 a judgment was obtained, and in 
 1879 an execution issued thereon. In 1882 another judgment by a 
 different plaintiff was recovered against the same defendant. In 18_9_3 
 the execution issued on the older judgment was levied on certain land 
 as the property of the defendant in execution, and he, between the 
 date of the rendition of the judgment and the date of the levy, hav- 
 ing died, the administrator upon his estate bled an affidavit of illegali- 
 ty to the execution, on the ground that the judgment which was the 
 basis of plaintiff's execution was dormant and that the same had not 
 been revived within the time allowed by law. Two other executions, 
 in all respects similar to the one then proceeding, were issued in 
 favor of the same plaintiff; but we do not deem it necessary to set 
 out in detail all the entries thereon nor proceedings thereunder, as 
 the same questions are involved with reference to each, and may be 
 fairly stated in our discussion of the questions arising upon a consid- 
 
 2 Molten v. Henderson, 02 Ala. 420 (1878), cestui a lunatic; Williams v. Otey, 
 8 Humph. (Tenn.) 563, 47 Am. Dec <»V2 (1847), cestui an infant. 
 
 If the trustee, however, be an infant, the statute of limitations will not run 
 against the cestui though the latter be sui juris. Claytou v. Rose, 87 N. C 
 Km;. 110-111 (1882). 
 
 3 Part of the opinion is omitted.
 
 Sec. 2) CLAIM AGAINST TRUSTEE,NOT AGAINST RES. It- 
 
 eration of one of them. The illegality thus filed came on to be heard ; 
 and, the administrator neither appearing in person nor by counsel, 
 the court, upon tender of issue by the plaintiff in execution, after 
 hearing evidence, rendered a judgment overruling the affidavit of il- 
 legality, the effect of which was an abjudication in favor of the valid- 
 ity of the judgment upon which said execution was issued. After- 
 wards, the plaintiff seeking to enforce this judgment, the plaintiff in 
 the junior execution above referred to, but whose judgment had in 
 the meantime become dormant, though the time allowed by law in 
 which it might be revived had not then elapsed, instituted e quitab le 
 proceedings and sought thereunder to enjoin the enforcement of the 
 judgment and execution then proceeding against said estate, upon the 
 same grounds that were made and set up in the affidavit of illegality 
 so filed by the administrator. Upon the hearing of the application, 
 the court granted an injunction. There were certain affidavit- intro- 
 duced upon the hearing, and as well certain documentary evidence ; 
 but as the questions which control this case arise upon the facts 
 hereinbefore stated, the consideration of this additional evidence is 
 not necessary to a correct determination of this case. 
 
 1. The grant of this injunction and the exception to its allowance 
 present for the adjudication of this court the question as to whether 
 all creditors of an estate, either by judgment or otherwise, are so 
 far in privity with an administrator thereof as that a judgment in 
 favor of one of such creditors against the administrator is conclusive 
 upon all questions adjudicated thereby as between himself and other 
 creditors. It is a well recognized and universal rule of law. that 
 judgments unexcepted to and unreversed are, upon all matters which 
 were or ought to have been adjudicated thereby, conclusive as be-/ 
 tween the parties thereto and their privies in estate. * * * The 
 administrator is in law the personal representative of the deceased. 
 He is, for all practical purposes involving the administration of his 
 affairs, a legal substitute for the deceased. Clothed as a trustee with 
 the duty of administering all the assets which may come into his 
 hands, and applying the same under the statute of distributions, it is 
 his duty to represent the estate in any litigation in which it may be- 
 come involved, to prosecute suits in favor of and defend suits against 
 the estate he represents. He is the party chosen of the law to whom 
 these interests are committed. No person other than he. for or on 
 behalf of the estate, can in his own name as matter of right prosecute 
 or defend a suit in which his estate is interested as plaintiff on the 
 one hand or defendant on the other. The administrator with respect 
 to such matters stands upon the same footing as the deceased. It will 
 not be seriously insisted that a judgment rendered against a person 
 in his lifetime, with due notice of the pendency of the action, fairly 
 rendered, and to which no exception was by him taken, could there- 
 alter be called in question by a creditor of such person. No more
 
 144 TIIE NATURE OF THE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 can it justly be said that his estate would not be equally bound where 
 a judgment, under similar circumstances, has been rendered against 
 his administrator. In contests which arise between the administrator 
 and third persons who are indebted to the estate, the administrator 
 represents all persons who may be interested therein, either as heirs 
 or creditors. As against persons preferring claims against the estate, 
 the administrator likewise stands as the representative of the estate 
 and its interests, for and on account of heirs at law and all other 
 creditors. Through him alone can they reduce to present possession 
 any of the credits or assets of the deceased, or make the same avail- 
 able for the purpose of distribution. If this were not true, and on 
 the contrary each individual creditor and heir at law were authorized 
 in his own name to bring suits and collect assets, no man could afford 
 to submit to a judgment rendered against them at the suit of an ad- 
 ministrator; because the acquiescence therein might subject him to 
 further suit at the instance of any other person who might conceive 
 that he had a claim against the estate. So persons indebted to the 
 estate could never pay the administrator, for fear some outside cred- 
 itor, upon his own account, might bring a suit against him. To hold 
 that each individual creditor might upon his own behalf proceed with 
 the collection of his debt from the debtors of the estate without the 
 intervention of the administrator, would involve the whole affair in 
 the most inextricable confusion; for if one creditor could so assert 
 his right outside of the administrator, another could do so, and a 
 man who was so unfortunate as to find himself the debtor of an es- 
 tate, would in every individual instance be compelled to file a bill of 
 interpleader to determine whether he should pay the money and wdio 
 was entitled to receive it. The law avoids all this confusion by nomi- 
 nating the administrator in advance as the stake-holder, and compels 
 creditors through him, as against the estate and its debtors, to enforce 
 their demands. It is only through the administrator that a creditor 
 can compel the payment of debts due the estate, for the reason that 
 there is no direct privity between individual creditors and debtors 
 of an estate. The only privity existing between the administrator 
 and a debtor of the estate is such as results from the pre-existing re- 
 lation between the intestate and the debtor, and privity of some sort 
 is essential to the maintenance of an action. Inasmuch as it is the 
 duty of the administrator to collect the assets of the intestate, and in- 
 asmuch as outside creditors are not authorized to interfere with the 
 collection of such assets, it is the corresponding duty of the adminis- 
 trator to defend all suits that may be brought against the estate. It 
 thus being his duty for and on account of the estate to prosecute 
 and defend such suits as its interest might seem to require, and he 
 being not only a proper but an indispensable party thereto, it were ill 
 to say that the judgment would have no binding force as against the 
 estate If it be binding upon the estate, it must of necessity be bind-
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST RES. 145 
 
 ing upon creditors who could have no interest except such as was 
 derived from their privity with the administrator. An outside cred- 
 itor, if he can do so at all, can only interfere as a party in such litiga- 
 tion when he shows that, because of some wrongful act of the admin- 
 istrator, his debt is likely to be imperilled. So that in this ca.se it was 
 the duty of this administrator, when a creditor of the estate sought 
 to subject this land under a pre-existing judgment to the payment of 
 his debt, and when he conceived that he had good cause for so doing, 
 to have filed this affidavit of illegality. It was his duty to have prose- 
 cuted it to a successful determination, if that could have been accom- 
 plished. Failing in that, the, judgment over ruling the affidavit of il- 
 legality must be taken as binding upon the administrator upon the 
 point made in that affidavit; and inasmuch as no person other than 
 the administrator has any right to interfere, then this complainant 
 cannot be heard to impeach the judgment with which the administra- 
 tor was himself satisfied. Of course this whole argument proceeds 
 upon the idea that this judgment was fairly rendered. If the adminis- 
 trator and one creditor permit a collusive judgment to be taken 
 which may operate as a fraud upon other creditors, they may for that 
 reason impeach and set it aside. Such creditors may also have their 
 election to proceed against the administrator and his bondsmen. But 
 in this case there is no intimation that this judgment is void for any 
 such reason. If, without collusion with the plaintiff in execution 
 who is a creditor, the administrator negligently permit a judgment 
 to be rendered against him to the prejudice of the other creditors, 
 then the administrator and his bondsmen might be answerable to such 
 creditors. So far, however, as this record discloses, the administrator 
 filed this affidavit of illegality in good faith, intending to insist upon 
 it, but simply, for some reason not disclosed by the record, failed to 
 be present when it was tried and did not except to the rendition of the 
 judgment thereon. He is simply in the situation of a defendant in 
 execution who has permitted judgment to be rendered against him 
 by default. P'or this reason alone a judgment cannot be impeached 
 or set aside. If void for any other reason, that reason must be al- 
 leged and proved. The effect of this disposition of the affidavit of 
 illegality is to adjudicate that the judgment which was enjoined was, 
 as against the attack made by the equitable petition, a valid subsisting 
 judgment and entitled according to its priority to participate in the 
 distribution of this estate. Upon this question the administrator, in 
 behalf of all concerned, had been fully heard, and we hold that both 
 heirs and creditors are concluded. 2 * * * 
 
 2 While this is not a case of technical trust, yet the principle involved is the 
 same. 
 
 Ken.Tr.— 10
 
 146 THE NATURE OF THE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 V. The Owner of the Legal Title, Not of the Equitable In- 
 terest — that is, the Trustee, Not the Cestui hue Trust — 
 can Vote as Owner of Trust Res. 
 
 In the Matter of the NORTH SHORE STATEN ISLAND FERRY 
 
 COMPANY. 
 
 (Supreme Court, General Term. Second Judicial District. 1872. G3 Barb. 55G.) 
 
 Appeal from an order made at a Special Term, setting aside and 
 declaring null and void an election of directors of the North Shore 
 Staten Island Ferry Company. 
 
 George W. Wilson died April 15, 1872. His widow, Adele M. 
 Wilson, and Mortimer L. Fowler were on April 23, 1872, appointed 
 administratrix and administrator. The North Shore Staten Island 
 Ferry Company was a corporation incorporated by chapter 135, Laws 
 of 1853 of the State of New York, with a capital stock of 12,500 
 shares. At the death of George W. Wilson 5528 of said shares stood 
 in his name. May 2, 1872, the annual election of fifteen directors was 
 held. Fowler attended and produced a certificate of the Surrogate 
 of the appointment of Mrs. Wilson and himself as administratrix and 
 administrator and endorsed on said certificate a power of attorney 
 from Mrs. Wilson to Fowler to vote said stock at said election. He 
 offered to vote said stock and objection was made (1) that Fowler's 
 name as administrator did not appear on the transfer book; and (2) 
 that George W. Wilson was not the real owner of the stock standing 
 in his name and he was refused the right to vote said stock. Certain 
 persons were declared elected directors. Had not Fowler's vote 
 been rejected none of said persons except one would have been 
 elected. 
 
 An order was made to show cause why the election should not be 
 set aside and a new election of directors had. The Special Term 
 adjudged that the inspectors erred in not receiving the vote of Fowl- 
 er and set aside the election and ordered a new one. 
 
 On appeal the Special Term order was affirmed. 
 
 Gilbert, J. The statute under which this company was incorporat- 
 ed (3 Edm. Stat. p. 872) provides that the stock of the company 
 shall be deemed personal estate (section 10), and that each stockhold- 
 er shall be entitled to as many votes as he owns shares of stock in 
 said company (section 4). 
 
 Upon the death of Mr. Wilson, the intestate, and the appointment 
 of Mr. Fowler and Mrs. Wilson as administrators of his goods, etc., 
 and their acceptance of the trust, the latter became, by operation of 
 law, vested with the legal title to the stock in question, and conse- 
 quently stockholders of the company, representing the estate of the
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST IMS. 
 
 147 
 
 decedent. As such they had all the rights appertaining to the owner- 
 ship of the stock, one of which was the right of voting at elections 
 of directors of the company. (People v. Tibbets, I Cowen, 364. 
 Bailey v. Hollister, 26 X. V. 112. Middlebrook v. Merchants' Bank, 
 :; ECeyes, 135.) 
 
 No formal transfer on the hooks was necessary to give this right. 
 
 The fact that the decedent held the stock subject to a trust or duty 
 in Favor of others doc- m it affect the question. 
 
 Tlu' right to vote follows the legal ownership, and the corporation 
 has nothing to do with the equities hetween the owner and third 
 p ersons. 
 
 Upon the death of a trustee of personal property, the trust de- 
 volves upon his representative. And as to everybody except the ces- 
 tui que trust, the latter is absolute owner. ( Bunn v. Vaughan, 3 
 ECeyes, 345. Ex parte Willcocks, 7 Cowen, 402, IT Am. Dec. 525.) 
 As trustee, however, he owes the duty of active management for the 
 protection and preservation of the trust estate. Where that consists 
 of stock in a corporation the duty of voting at elections of directors 
 thereof is too plain for argument. 
 
 The order appealed from should be affirmed, with costs. 
 
 VI. The Trustee, Not the Cestui que Trust,iias the Burdens 
 
 of Ownership. 
 
 In re NORWEGIAN CHARCOAL IRON COMPANY. 
 MITCHELL'S CASE. 
 
 (In Chancery, before the Master of the Rolls, Sir John Romilly, 1S70. L. R. 
 
 9 Eq. Cas. 3G3.) 
 
 The Norwegian Charcoal Iron Company, Limited, was registered 
 under the Companies Act, in 18G2, on the 1st of September, 1864. 
 James Mitchell applied for and obtained an allotment of 10U shares 
 and he paid £700. in respect of calls thereon. 
 
 On the 6th of August, 18G5. he executed a transfer of 80 of those 
 shares, for a nominal consideration, to Francis Henry Vandyke, who 
 was at the time an infant, and a clerk in the office of Mr. George 
 Forster, a stock broker, and the transfer was duly registered. There 
 was some evidence to show that at this time the shares might have 
 been sold in the market for value, but it was contended that the ob- 
 ject of the transfer was to escape liability. It was a matter of dis- 
 pute whether the transfer was out and out. Vandyke alleging that 
 he took the >hare> simply as trustee for James Mitchell, and upon an 
 express promise by him that the shares should in a short time be
 
 148 THE NATURE OF THE CESTUI QUE TRUST'S INTEREST. (Cll. 2 
 
 taken out of Vandyke's name. James Mitchell died in May, 1866. 
 On the 13th of September. 1866, Vandyke attained the age of twen- 
 ty-one years. Shortly afterwards legal proceedings were taken by 
 the company for the purpose of recovering from Vandyke the ar- 
 rears of calls due on his shares, and he being in pecuniary difficulties, 
 and having no means of meeting the company's demands, applied 
 to William Mitchell, one of the executors of James Mitchell for as- 
 sistance, and received some small sums of money from him. Vandyke 
 alleged that these sums were given to enable him to keep out of the 
 way df proceedings by the company, and to suspend taking any steps 
 to repudiate the shares until some arrangement could be come to with 
 reference thereto; William Mitchell, on the other hand, alleged 
 that the sums were given out of charity. Subsequently further ap- 
 plications were made to him on behalf of the company for payment of 
 the calls on the shares ; but he neither paid the calls nor took any 
 Steps to repudiate his liability in respect thereof. 
 
 ( )n the 226 of June, 1868, the 80 shares were declared forfeited for 
 non-payment of calls. 
 
 By a resolution passed the 28th of June, and confirmed on the 9th 
 of July, 1868, it was resolved that the company should be wound up 
 voluntarily. 
 
 Two summonses were taken out, one by Vandyke and the other 
 by the liquidator, seeking to rectify the register by substituting the 
 names of the executors of James Mitchell as the holders of these 80 
 shares for the name of Vandyke. 
 
 By the articles of association the directors were empowered to re- 
 ject the transfer only in the case of the transferror being indebted to 
 the company. At the date of the transfer to Vandyke, James Mitchell 
 was not so indebted. 
 
 The Court was of opinion that Vandyke was a trustee for Mitchell; 
 and that the company were aware, when they registered the transfer, 
 that Vandyke was an infant, and also that there was some arrange- 
 ment between him and Mitchell with respect to the shares. 
 
 Lord Romiixy, M. R. In this case certain shares are taken by an 
 infant and arc transferred to him. The company have full opportu- 
 nity of knowing that he is an infant, and, in fact, they know every- 
 thing about him. After he attains the age of twenty-one he is per- 
 fectly well aware that these shares are standing in his own name, 
 and he remains for two years doing nothing whatever, receiving ap- 
 plications from the company, but never repudiating the shares. Now 
 I have held that if a person becomes adult, either immediately after 
 the winding-up or immediately before, and takes no step, that he can- 
 not be blamed for so doing, because he cannot tell whether the com- 
 pany intend to enforce their claim against him and, that therefore he 
 is not bound, till >ome steps are taken, to resist his being a share- 
 holder in the company ; that when he remains for two years and is
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST RES. 149 
 
 constantly applying to the executors of the person who had trans- 
 ferred the shares to him, he is hound to tell the company that he re- 
 pudiates the shares and will have nothing to do with them. 
 
 Then I think the contention of the official liquidator fails in this 
 respect. The distinction is very properly drawn between a person 
 who wants to get rid of his shares because the company happens to 
 be a failing company, and a person who wishes to put them in the 
 name of a trustee. This takes place not tin frequently in many of 
 these companies, as the company refuses to acknowledge any trusts. 
 Now, Mr. Mitchell takes these shares and transfers a large number 
 of them (80 I think) into the name of the infant, with the knowledge 
 of the infant, the infant being perfectly aware of it, and allowing 
 the thing to be done. I have considered the question whether he could 
 repudiate them or not, but now comes the question whether that is a 
 valid transaction. For that purpose the question of infancy does not 
 arise; it is the same question exactly as it would be between two 
 adult parties. One person may, if he pleases, become a trustee for 
 another. He knows the consequences of so doing. He knows that 
 he becomes personally liable for the calls, and that he is personally 
 liable to be made a contributory. There are two sets of rights; one 
 is as between himself and the person whom I may call the cestui que 
 trust, and the other is as between himself and the company. As be- 
 tween himself and the company he is a shareholder and a contribu- 
 tory and cannot resist anything; but as between himself and the per- 
 solTfor whose benefit he agreed to take them he has a right over as 
 against him ; that is to say, he has a right to call upon him who is the 
 real owner of the shares to make good any sums of money which he 
 may have to pay for the calls or for contribution or the like. Conse- 
 quently he may be entitled to come against Mr. Mitchell's estate to 
 make good anything which he will have to pay in the course of this 
 liquidation to the company; but that does not prevent him from be- 
 ing the contributory to the company, or from, in his own person, 
 making good those sums which he may be properly called upon to 
 pay; and the company cannot come against the person in whose 
 name they do not stand by reason of an assignment made between 
 two other persons which they have not opposed or resisted, and of 
 which they know a great deal. Whether they could have opposed 
 it at the time is not the question now. 
 
 The result is, that I must keep him on the list of contributories as 
 he remains at present, and that I must dismiss the application.
 
 150 . THE NATURE OF THE CESTUI QUE TRUST'S INTEREST. (Ch. 2 
 
 O'MALLEY, Defendant in Error, v. GERTH and Others, Plaintiffs 
 
 in Error. 
 
 (Court of Errors and Appeals of New Jersey, 1902. 67 N. J. Law. 610, 52 am. 
 
 563.) 
 
 In Tort. On error to the Essex County Circuit Court. 
 
 Fort, J. 1 The defendant in error is a policeman of the City of 
 Newark. " While on duty, on the 29th day of April, L900, he was pass- 
 ing through Campbell Street and stepped on a cover over a coal-hole. 
 The cover turned and he fell astride it into the hole and was serious- 
 ly injured. 
 
 The premises in front of which the coal-hole was were the proper- 
 ty of Julius Gerth in his lifetime. By his will this property was 
 made a part of the residue of his estate, and was left in trust to his 
 executors to let and rent it and to collect the rents accruing from 
 the same, and, after paying taxes, insurance, repairs and other char- 
 ges, to pay the net surplus to the testator's widow. The executors 
 have a power of sale. The three defendants are named as executors' 
 in the will, and all qualified. 
 
 The accident occurred through the faulty condition of the coal-hole, 
 owing, undoubtedly, to the spreading of a cracked flag-stone in which 
 the rim of the lid or cover rested. Because of the enlargement of 
 the hole the lid at times would get in a position where it would slip 
 in the hole and turn upon its edge from pressure, and it did so when 
 the defendant in error stepped upon it. Whether the defendants had 
 knowledge of this condition of the hole and lid, and whether they had 
 failed to repair within a reasonable time after notice thereof, was left 
 to the jury as a question of fact which they must find in the affirma- 
 tive before the verdict could be for the plaintiff. They so found. 
 
 The additional lines of defence relied upon were : * ;: * 
 
 Second: That the damage resulted from a defect in the sidewalk, 
 and that the City was charged with its repair, and it alone was liable 
 for injuries resulting from non-repair. , 
 
 Third: That if the defendants were liable, they could not be held 
 as individuals, but only as executors or trustees, their title to the 
 property being solely one of trust. * * * 
 
 The second proposition is not tenable. Even if the City could be 
 made liable in a case like this, it is still an undoubted legal rule that 
 the owner of the premises, or the occupant thereof, or both, are lia- 
 ble. The maintenance of a trap like this upon a sidewalk in front of 
 one's premises is a nuisance. Busw. Per. Inj. § 187; Cooley, Torts, 
 748; Davenport v. Ruckman, 37 N. Y. 568; Durant v. Palmer, 5 
 Dutcher (N. J.) 544. 
 
 i Part of the opinion is omitted.
 
 Sec. 2) CLAIM AGAINST TRUSTEE, NOT AGAINST RES. 151 
 
 Nor is the position that the defendants in this case cannot be held I 
 as individuals sustainable. 
 
 The cases cited by counsel for the defendants were cases where 
 receivers of railroads appointed by the court were sued as individuals 
 for injuries happening to passengers or others upon trains operated 
 under the receivership and within the line of their duty. The case 
 of Cardot v. Barney, 63 N. Y. 281, 20 Am. Rep. 533, which was of 
 this character, was relied upon by the defendant's counsel to sustain 
 his contention'. In Kain v. Smith, 80 N. Y. 458, that case was distin- 
 guished from cases of the class before us, and the rule in the class of 
 cases where the trust is one voluntarily assumed is fully stated. A 
 party having independent control is liable for the acts of persons un- 
 der his control whether of contract or tort. Rogers v. Wheeler, 43 
 N. Y. 598. 
 
 Trustees for the benefit of bondholders of a railway who assume 
 duties under the terms of their trusteeship are personally liable for 
 torts arising from negligence or misconduct of the employees op- 
 erating the road under them. Sprague v. Smith, 29 Vt. 421, 70 Am. 
 Dec. 424. 
 
 The fact is unimportant that the defendants were acting as trus- 
 tees, or in a representative capacity, in the care or control of the 
 property. An action in a case of this kind lies against them as indi- 
 viduals. Whether they may have indemnity out of the trust estate 
 is of no concern as to third parties. Mason v. Pomeroy, 151 Mass. 
 164, 167, 24 N. E. 202, 7 L. R. A. 771; Odd Fellows v. McAllister, 
 153 Mass. 292, 297, 26 N. E. 862, 11 L. R. A. 172. 
 
 Judgment unanimously affirmed. 2 
 
 MAYOR AND CITY COUNCIL OF BALTIMORE v. STIRL- 
 ING AND RIDGELY, Trustees. 
 
 (Court of Appeals of Maryland, 1868. 29 Md. 48.) 
 
 Appeal from the Superior Court of Baltimore City. 
 
 Suit by Baltimore City to recover $1101.91 alleged to be due by 
 the defendants, as trustees, of the estate of Nicholas G. Ridgely for 
 the benefit of Eliza E. Ridgely during her life for city taxes for the 
 years 1863, 1864 and 1865. The trustee, Ridgely, resided in Balti- 
 more County, and the other trustee, Stirling, was a resident of Balti- 
 more City. This suit was instituted to determine whether the taxes 
 in question were payable to the appellant or to the Commissioners of 
 Baltimore County, both claiming them. 
 
 2 The trustee, and not the cestui que trust, is indictable for a nuisance. 
 People v. Townsend, 3 Hill (N. Y.) 479 (1S42).
 
 L52 THE NATURE OF THE CESTUI QUE TRUST'S [NTEREST. (Cll. 2 
 
 A pro forma judgmenl was entered by agreement for the defend- 
 ant^ and the plaintiff appealed. 
 
 BRENT, J., delivered the opinion of the court. 1 
 
 This court in the case of Latrobe v. Mayor and City Council of 
 Baltimore, L9 Md. 13, having settled the doctrine, that the residence 
 of the trustee, and nol that of the cestui que trust decides the situs for 
 taxation upon property of the description mentioned in the record, 
 the only question presented by this appeal arises from the fact, that 
 in this case there arc two trustees, one of whom resides in Baltimore 
 City, and the other in Baltimore County. 
 
 The tax laws of the State do not expressly provide for such a case 
 and our decision must be made to rest upon what we regard to he 
 equity and right. The property is certainly not liable to a double 
 tax. If the whole of it were taxable in Baltimore City, under the 
 authority of Latrobe v. the Mayor etc. of Baltimore, it would, under 
 the same authority, be also taxable in Baltimore County. This cannot 
 be. We think it should be taxed one-half as of the place of resi- 
 dence of each trustee, — that is, one-half should be taxed to the 
 trustee residing in Baltimore City and the other half to the trustee 
 residing in Baltimore County. * * * 
 
 Judgment reversed. 
 
 i Part of the opinion is omitted.
 
 Sec. 1) BY ACT OF THE PARTY. 153 
 
 CHAPTER III. 
 
 TRANSFER OF THE RESPECTIVE INTERESTS OF 
 TRUSTEE AND CESTUI QUE TRUST. 
 
 SECTION 1.— BY ACT OF THE PARTY. 1 
 I. By Act of the Trustee. 
 
 
 Vavasour, J., said that the subpoena began in the time of Edward 
 III; but this was always against the feoffee upon confidence him- 
 self, for against his heir the subpoena was never allowed until the 
 time of Henry VI and in this point the law was changed by Fortes- 
 cue, Chief Justice. — Keilwey, 42, pi. 7. 
 
 If the feoffee makes a feoffment over the feoffor has no remedy 
 against his feoffee; the same law if he dies, the heir of the feoffee 
 is seized, as it seems to me, to his own use, for the confidence which 
 the feoffor put in the person of his feoffee, cannot descend to his 
 heir, nor pass to the feoffee of his feoffee, but he is feoffee to his 
 own use as the law was taken until the time of Henry IV; but if 
 the second feoffee has notice of the use those in the chancery will 
 reform this at this day by subpoena and the heir of the feoffee upon 
 confidence was seized to his own use until the commencement of the 
 reign of Edward IV (Henry IV?) and then commenced the sub- 
 poena against the heir and against the feoffee of the feoffee. — Keil- 
 wey, 46, pi. 2, per Frowike, J. 
 
 BROOKE'S ABRIDGEMENT, FEOFFMENTS AL. USES, fol. 
 
 329, pi. 10. 
 
 Replevin. The defendant avowed for a rent charge, for that J. 
 D. and J. B. were seized of 40 acres of land in fee to the use of R. 
 N. by the gift of R. and granted a rent to Alice, the wife of R., for 
 
 i In connection with the cases in this section the student should read an 
 article by Dean Ames, "Purchaser for Value without Notice," 1 Harvard Law 
 Review, 1.
 
 1-54 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 her life with clause of distress and he distrained and avowed this as 
 a distress from the land charged. The plaintiff said that J. D. and J. 
 B. were seized in fee to the use of W. X. and granted the rent to the 
 
 said Alice, she having notice of the said use and J D. and J. P.. en- 
 feoffed II. and then W. X., the cestui que use released to said H. 
 his right in the land, without this that J. D. and J. B. were seized 
 to the use of the said R. X. And the defendant demurred in law to 
 the bar to the avowry and the question is whether the rent shall be 
 to the use of the cestui que use as the land was or to the use of the 
 grantee, By Pollard, Brook and Fitzherbert. Justices, the rent shall 
 he to the use of the cestui que use and then the release of the cestui' 
 que use to the feoffees extinguished the rent by the Statute of 1 
 Rich. Ill, which provides thai the release of the cestui que use shall 
 be good against him and his heirs, and the feoffees and their heirs. 
 * * * p er Fitzherbert, J. If a man makes a feoffment without 
 consideration, the feoffee shall be seized to the use of the feoffor or 
 to the use to which the feoffor was seized. * * * Per Brook, J. 
 If a feoffee to use make a feoffment upon consideration to him who 
 has no notice of the use, that shall change the use. * * * Pol- 
 lard, J. Feoffees to use enfeoff others without consideration, this 
 is to the first use, but if made upon consideration and to him who 
 has no notice of the use the use is changed. (11 Hen. VIII, 4.) 
 
 ROBES v. BENT AND COCK. 
 
 fin Chancery, before Lord Keeper Egerton, 1599. Moore, 552.) 
 
 In chancery the case was this. Robes purchased a copyhold of in- 
 heritance in the name of Bent and another in trust, Robes himself 
 being a villain. Bent surrenders his moiety to the use of his son, the 
 other died seized. The son of Bent and the heir of the other for 
 money sold the copyhold which was worth /SO. for £50. to Cock who 
 had no notice of the trust. Robes sued by subpeena the son of 
 Pent and the heir of the other and also Cock. It was determined by 
 Egerton, Lord Keeper, that Robes should recover the £50. of Bent 
 and the heir of the other and that Cock should hold in peace. But 
 if notice had been proved in Cock, Robes should have had the land. 
 No recompense for the excess of value was given against the ven- 
 dors, because no fraud. And Egerton vouched a case of 31 Hen. 
 VI of which he had a copy from the tower that a feoffee to use sold 
 the land and died ; and a decree in chancery was made by advice 
 of all the judges of England that the cestui que use should have the 
 rnonev of the executors of the feoffee.
 
 SeC. 1) BY ACT OF THE PARTY. 155 
 
 HARRISON v. FORTH. 
 (In Chancery, 1695. Precedents in Chancery, 51.) 
 
 The Master of the Rolls [Sir John Trevor] was of opinion in 
 this case, that if A. purchases an estate, with notice of an incum- 
 brance, or that it is redeemable, and then sells it to B. who has no 
 notice ; who afterwards sells it to C. who has notice ; that by this, 
 the first notice to A. the first purchaser, is thereby revived, and that 
 C. the last purchaser shall he liable to the incumbrance or redemption, 
 as if it had never been in the hands of one who had no notice. 
 
 Afterwards, on appeal to my Lord Keeper [Sir John Somers], 
 it being' urged, that in such case an innocent purchaser without no- 
 tice may be forced to keep his estate, and cannot sell it, and shall be 
 accountable for all the profits received ab initio, his Lordship held, 
 that though A. and C. had notice, yet if B. had no notice, the plain- 
 tiff could not be relieved against the defendant C, and ordered C. to 
 be examined on interrogatories, if he ever saw the conveyance from 
 the plaintiff to her sisters, and then to be tried if the defendant C. 
 paid any, and what consideration for the lands ; and if B. had notice 
 at the time of his purchase that it was redeemable; for if he had not, 
 the plaintiff could not be relieved, though A. and C. had notice. 
 
 
 BOVEY v. SMITH. 
 
 (In Chancery, before Lord Chancellor Nottingham and Lord Chief Justice 
 North, 16S2. 1 Vernon, 60.) 
 
 A trustee having sold the land to a stranger, that had no notice 
 of the trust and a fine with proclamations and five years past, the 
 trustee afterwards, for valuable consideration really paid purchases 
 these lands again of the vendee. And it was decreed by the Lord 
 Chancellor with the concurring opinion of the Lord Chief Justice 
 North, that the trustee notwithstanding the fine, proclamations, and 
 non-claim for five years, should stand seized in trust as at first, as if 
 the land had never been sold nor any fine levied. 1 
 
 i If the trustee in parting with the title to the trust res commits no breach 
 of trust, and subsequently reacquires title to it, he will hold the same free 
 from any obligation to his cestui que trust. Creveling v. Fritts, 34 N. J. 
 Eq. 134, 135 (1881). 
 
 If a trustee in breach of trust transfers the trust res to a donee who has 
 no notice of the trust, and the donee transfers the property while still igno- 
 rant of his donor's fraud, he is not accountable to the cestui que trust for the 
 value of the property. Bonesteel v. Bonesteel, 30 Wis. 516 (1ST2). He may 
 also purchase the property from a subsequent bona fide purchaser for value 
 and hold the same free from any obligation to the cestui que trust. Mast v. 
 Henry, 05 Iowa, 193, 21 N. W. 559 (1SS4). 
 
 The common statement that a bona fide transferee without value of the 
 trust res is in the same position as if he had notice of the cestui's rights, 
 therefore, needs some qualification.
 
 1T.G TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 TOURVILLE v. NAISH. 
 (In Chancery, before Lord Chancellor Talbot, it:: t. 3 P. Wms. 307.) 
 
 A. purchased an estate, and having paid down a part of the pur- 
 chase money, gave bond for the residue. The plaintiff had an equi- 
 table lien on the purchased premises, of which the defendant alleged 
 he had no notice at the time of making his purchase, but was ap- 
 prised thereof before payment of the money due on the bond. And 
 it wa^ ci intended that this notice was not material since the giving 
 of the bond was as payment; and the purchaser, after he had given 
 his bond for payment of the purchase money, is hound at all events 
 to proceed, and cannot plead at law that there is any equitable in- 
 cumbrance on his purchased premises. 
 
 Lord Chancellor. If the person who has a lien in equity on the 
 premises, gives notice before actual payment of the purchase money, 
 it is sufficient ; and though the purchaser has no remedy at law 
 against the payment of the residue, for which he gave his bond, yet 
 he would be entitled to relief in equity, on bringing his bill and, 
 showing, that though he has given his bond for payment of the 
 residue of his purchase money, yet, now he has notice of an incum- 
 brance under which circumstances the court would stop payment of the 
 money due on the bond. 
 
 WIGG v. WIGG. 
 
 (In Chancery, before Lord Chancellor Hardwicke, 1739. 1 Atkyns, ?S2.) 
 
 Lands descended to the heir-at-law subject to an equitable charge 
 and he sold them to a purchaser for a valuable consideration. In a 
 suit by those having the equitable charge the question was, whether 
 this was a continuing charge on the lands in the hands of the pur- 
 chaser. 
 
 Lord Chancellor. I think the plaintiffs have a strong case both 
 for their legacies and interest. 
 
 There are three questions : 
 
 First, if the plaintiffs have any continuing charge on the lands. 
 
 Secondly, if they are proper to come into this court. 
 
 Thirdly, if there is sufficient notice to affect the purchaser. 
 
 [The first two questions were answered in the affirmative.] 
 
 As to the third question, of notice to the purchaser, it appears he 
 had notice, for though he had no notice before he paid his money, 
 vet he had notice before the execution of the conveyance, and it 
 is all but one transaction.
 
 Sec. 1) BY ACT OF THE PARTY. 157 
 
 DIXON v. HILL and Another. 
 (Supreme Court of Michigan, 1858. 5 Midi. 404.) 
 
 Error to Calhoun Circuit. 
 
 August 2, 1856, ArzaJLewis made a general assignment for the 
 benefit of creditors to George H. French, which was fraudulent 
 upon its face as it authorized a sale of the assigned property on 
 credit. Frcjach_jQJi September 24, 1856, agreed to sell the property 
 to Hill & Mahoney, who were to pay down $250 and give their joint 
 note for $250 payable in three months and for the balance their 
 notes in four equal payments, at twelve, eighteen, twenty-four and 
 thirty months and were to take possession the next morning. They 
 so took possession and began the inventory and sale of the goocIs7 
 
 October 3, 1856, Dixon, as Sheriff .of Calhoun County, on a writ 
 -in .iavor of Culver, Foote and Wilkie attached -the— goods in the 
 possession of Hill & Mahoney. Hill & Mahoney had then paid French 
 nothing and had given no notes. After the attachment the $250 were 
 paid and the notes given. Hill & Mahoney replevied the goods from 
 the Sheriff". 
 
 On the trial of the replevin suit, the Sheriff having justified under 
 the attachment, the court charged the jury: "That if the jury should 
 find that the plaintiffs obliged themselves to pay French, the assignee, 
 the purchase price of the goods in question, whether by writing or 
 parol, the possession having been given to the plaintiffs, that would be 
 a valuable consideration." To this defendant excepted. Verdict for 
 plaintiffs, judgment thereon and writ of error by defendant. 
 
 Campbell, J. 1 No one but a purchaser for a valuable considera- 
 tion can claim title to property which has been fraudulently assigned, 
 against the action of an attaching creditor. Such purchasers are 
 protected upon the equitable principle that they should not be depriv- 
 ed of that which they have honestly, and without notice of any fraud, 
 bought and paid for in fair dealing with the person holding the legal 
 title. But the consideration must, in all cases, be actually passed be- ), 
 fore notice. Unless payment has been actually made in some shape, 
 the authorities are quite clear that the purchase will not be upheld. 
 In equity, a purchaser is protected to the extent of the payments 
 actually made, 2 and no further, even where future payments are 
 provided for, unless those are secured in such a manner that the 
 purchaser cannot be relieved against them. This could only happen 
 where he gives negotiable paper ; for upon a debt not negotiable, the 
 failure of title would exonerate him. * * * In the case before 
 us, no consideration whatever had been paid or secured. Such a 
 
 J Tart of the opinion is omitted. 
 
 2 In some jurisdictions the purchaser may keep the property bought, sub- 
 ject to a lien for the unpaid purchase price in favor of the equitable incum- 
 brancer. Hardin's Executors v. Harrington, 11 Bush (Ky.) 307, 374 (1875).
 
 158 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 purchase cannot avail, either at law or in equity, against the remedies 
 of creditors. The court erred in making the charge in favor of its 
 validity. Judgment reversed and new trial granted. 
 
 SAUNDERS v. DEHEW. 
 
 (In Chancery, before Lords Commissioners, Sir .!<>lni Trevor. Sir William 
 Rawlinson, and Sir George Hutchins, 1692. 12 Vernon, 271.) 
 
 Anne Bayly, being possessed of a term for years, makes a volun- 
 tary settlement thereof, in trust for herself for life, remainder to her 
 daughter Isabella Barnes for life, remainder to the children of Isa- 
 bella, by Mr. Barnes, her then husband. Isabella, for £200.. mort- 
 gages the lands in question to the plaintiff, who pretends he had no 
 notice of the settlement; Isabella in the mortgage deed, being called 
 the daughter and heir of John Bayly. The plaintiff hearing of it gets 
 an assignment of the term from the trustees. 
 
 Per Curiam. Though a purchaser may buy in an incumbrance, or 
 lav hold on any plank to protect himself, yet he shall not pr otec t 
 himself by the taking a conveyance from a trustee after he had no- 
 tice of the trust, for by taking a conveyance with notice of the trust, 
 he himself becomes the trustee, and must not, to get a plank to save 
 himself, be guilty of a breach of trust. And the plaintiff's bill being 
 brought against the children of Isabella to foreclose them, the court 
 refused so to do, saying, if he might be suffered to protect himself, 
 by thus getting in the legal estate, thev would not carry it on by a 
 decree in equity to foreclose. 
 
 GOSHEN NATIONAL BANK v. WILLIAM BINGHAM and 
 
 Others. 
 
 WILLIAM BINGHAM and Others v. GOSHEN NATIONAL 
 
 BANK. 
 
 (Court of Appeals of New York, Second Division, 1890. 118 N. Y. 349, 23 N. 
 E. 180, 7 L. It. A. 595, 1(5 Am. St. Rep. 765.) 
 
 Appeals from judgments rendered by the General Term of the 
 Supreme Court in the first judicial department, entered upon orders 
 made March 31, 1887, which affirmed a judgment in the action first 
 above entitled in favor of the defendants and a judgment in action 
 second above entitled in favor of plaintiffs, both of which were en- 
 tered upon the reports of a referee. 
 
 On November 27, 1884, Benjamin D. Brown applied to the cashier 
 of the Goshen National Bank, appellant, at Goshen, N. Y., to cash a 
 sight draft for $1 7,000, drawn by him upon the firm of William
 
 SeC. 1) BY ACT OF THE PARTY. 159 
 
 Bingham & Co. of New York, the individual members of which firm 
 are the respondents, accompanied by a quantity of the bonds of the 
 West Point Manufacturing- Company, of the face -value of $17,000. 
 Brown represented that he had negotiated a sale of these bonds at 
 their face value with William Bingham & Co.; that they had directed 
 him to draw upon them at sight for $17,000, the draft to be accom- 
 panied by the bonds, and that the draft would be paid upon presenta- 
 tion. Such representations were absolutely false. The bonds had 
 no market value. Brown was a bankrupt and had no funds in the 
 bank except such as resulted from the credit given him upon the 
 faith of the draft on Bingham & Co., accompanied by the bonds. 
 The cashier of the Goshen National Bank, relying upon such repre- 
 sentations, cashed the draft for the $17,000, and placed the proceeds 
 to the credit of Brown upon the books of the bank. He gave Brown 
 sight drafts on New York for $12,000, and certified a check drawn 
 by Brown to his own order, dated November 26, 1884, for $5,000. 
 On the morning of November 28th, Brown called at the office of 
 William Bingham & Co., and stated that he wanted to get some 
 currency. Mr. Bingham passed the check to the firm's cashier direct- 
 ing him to give Brown currency for the amount. The cashier gave 
 him a check drawn on the Corn Exchange Bank for $5,000. Brown 
 had the check cashed at the Corn Exchange Bank. He also had the 
 New York drafts cashed, amounting to $12,000, which he had ob- 
 tained from the Goshen National Bank. After procuring the checks 
 and drafts to be cashed, he fled to Canada where he remained at the 
 time of the trial of these actions. When Bingham & Co. took from 
 Brown the check certified by the Goshen National Bank it was not 
 indorsed. 
 
 The referee found in the action second entitled that "at the time 
 of the transfer of the said certified check by Brown to the plaintiffs, 
 it was intended both by Brown and the plaintiffs that said certified 
 check should be indorsed by Brown, and it was supposed by both 
 parties that he had so indorsed it, and if the plaintiffs had known that 
 it was not indorsed they would not have paid the consideration there- 
 for." 
 
 He found in the action first entitled, "that Brown made no state- 
 ment to the defendants, or to either of them at the time of the trans- 
 fer of the check that such check was indorsed." 
 
 And "prior to the commencement of the action of replevin the 
 defendants never requested Brown to indorse said check." 
 
 While Bingham & Co. held the check in question unindorsed, a 
 demand for its return to the bank, accompanied by a full explanation 
 of the circumstances under which the certification was obtained, was 
 made upon Bingham & Co., in behalf of the bank and upon their re- 
 fusal to return it, an action to recover its possession was commenced 
 bv the bank against Bingham & Co.
 
 1G0 TRANSFER OF RESPECTIVE [NTERESTS OF TARTIES. (Ch. 3 
 
 That action is, firstly, above entitled. 
 
 Subsequently, and on December 16th, Bingham & Co. obtained from 
 
 Brown a power of attorney to indorse the check. Pursuant thereto 
 the check was indorsed and payment thereafter demanded of the 
 bank. 
 
 This was refused, and thereupon the action, secondly above en- 
 tided, was commenced by Bingham & Co., to recover the amount of 
 the check. 
 
 Parker, J. 1 As against Brown, to whose order the check was 
 payable, the bank had a good defense. But it conld not defeat a 
 recovery by a bona fide holder to whom the check had been indorsed 
 for value. By an oversight on the part of both Brown and Bingham 
 & Co. the check was accepted and cashed without the indorsement of 
 the payee. Before the authority to indorse the name of the payee 
 upon the check was procured and its subsequent indorsement thereon, 
 Bingham & Co. had notice of the fraud which constituted a defense 
 for the bank as against Brown. Can the recovery had be sustained? 
 
 It is too well settled by authority, both in England and in this 
 country, to permit of questioning, that the purchaser of a draft or 
 check, who obtains title without an indorsement by the payee, holds 
 it subject to all equities and defenses existing between the original 
 parties even though he has paid full consideration, without notice 
 of the existence of such equities and defenses. * * * 
 
 This rule is onlv applicable to negotiable instruments which are 
 negotiated according to the law-merchant. 
 
 When, as in this case, such an instrument is transferred but with- 
 out an indorsement, it is treated as a chose in action assigned to the 
 purchaser. The assignee acquires all the title of the assignor and 
 may maintain an action thereon in his own name. And like all other 
 choses in action it is subject to all the equities and defenses existing 
 in favor of the maker or acceptor against the previous holder. 
 
 Trior to the indorsement of this check, therefore, Bingham & 
 Co. were subject to the defense existing in favor of the bank as 
 against Brown, the payee. 
 
 Evidence of an intention on the part of the payee to indorse does 
 not aid the plaintiff. It is the act of indorsement, and not the inten- 
 tion, which negotiates the instrument, and it cannot be said that the 
 intent constitutes the act. 
 
 The effect of the indorsement made after notice to Bingham & Co. 
 of the bank's defense must now be considered. Did it relate back 
 to the time of the transfer, so as to constitute the plaintiffs holders 
 by indorsement as of that kind? 
 
 While the referee finds that it was intended by both Brown and 
 the plaintiffs that the check should be indorsed, and it was supposed 
 that he had so indorsed it, he also finds that Brown made no state- 
 
 i Part of the opinion is omitted.
 
 SeC.l) BY ACT OF THE PARTX. 101 
 
 ment to the effect that the check was indorsed ; neither did the de- 
 fendants request Brown to indorse it. There was, therefore, no 
 agreement to indorse. Nothing whatever was said upon the subject. 
 Before Brown did agree to indorse the plaintiffs had notice of the 
 bank's defense. Indeed, it had commenced an action to recover pos- 
 session of the check. 
 
 It would seem, therefore, that having taken title by assignment, 
 for such was the legal effect of the transaction, by reason of which 
 the defense of the bank against Brown became effectual as a de- 
 fense against a recovery on the check in the hands of the plaintiffs as 
 well, that Brown, and Bingham & Co., could not, by any subsequent 
 agreement or act, so change the legal character of the transfer as to 
 affect the equities and rights which had accrued to the bank. That the 
 subsequent act of indorsement could not relate back so as to destroy 
 the intervennig rights and remedies of a third party. 
 
 This position is supported by authority. * * * 
 
 The views expressed especially relate to the action of Bingham & 
 Co. against the bank and call for a reversal of the judgment. 
 
 We are of the opinion that the action brought by the bank against 
 Bingham & Co. to recover possession of the check cannot be maintain- 
 ed and in that case the judgment should be affirmed. 
 
 
 JONES v. POWLES. 
 
 (In Chancery, before the Master of the Rolls, Sir John Leach, 1833. 3 Mylne 
 
 & Keen, 581.) 
 
 7 <■■■ 
 
 By indentures of lease and release, dated respectively the 21st and 
 32d of December, 1800, John Jones, a hatter in Hereford, mortgaged 
 a freehold house and premises, situate in High Street, in that city, of 
 which he was seized in fee, to William Holbrook and his heirs, to 
 secure the sum of £200., advanced to him by Holbrook, with interest. 
 
 John Jones paid off the mortgage and all arrears of interest in > 
 the month of August, 1808, and at the same time took from Holbrook 
 a memorandum, which was indorsed upon the mortgage deed, ac- 
 knowledging such payment ; but he never obtained a reconveyance of 
 the property, and at the time of his death, which took place in the 
 month of May, 1814, the legal estate in the mortgaged premises re- 
 mained outstanding in Holbrook. Immediately upon the death of 
 John Jones, one Benjamin Meredith, who had been his shopman and 
 assisted him in his business, produced and proved in the proper Ec- 
 clesiastical Court an instrument purporting to be the will of John 
 Jones, by virtue of which he obtained undisturbed possession of the 
 messuage and premises comprised in the mortgage. This instru- 
 Ken.Tr.— 11 

 
 162 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Cll. 3 
 
 merit was in the following' words: "The will and testament of John 
 Jones, hatter, dated Septemher 12, 1802. I do hereby will and be- 
 queath, after all my just debts and funeral expenses are paid, the 
 whole of my real and personal property to my assistant Mr. Benja- 
 min Meredith. In testimony of which witness my hand : John 
 Jones. Witnesses: John Cowmeadow, Henry Hill, Thomas Jones." 
 
 Meredith, shortly after the death of John Jones, had occasion to 
 borrow a sum of £300. from one Hall, upon the security of the proper- 
 ty in question ; and, accordingly, in consideration of £300. lent to Mere- 
 dith by Hall, Holbrook, as trustee of the legal estate for Meredith, and, 
 at his request, joined with Meredith in a deed, dated the 2d of Febru- 
 ary. 1815, by which the messuage and premises in High Street were 
 conveyed to Hall, his heirs and assigns, subject to redemption upon 
 payment of the £300. and interest. 
 
 Meredith died in the month of April, 1815, having devised the 
 equity of redemption of the mortgaged premises to his wife Susannah, 
 in fee; and by divers mesne conveyances the title to that equity of 
 redemption became in the month of March, 1821, vested in a person 
 of the name of James Jones in fee. 
 
 In the month of October in that year, one Watkins, at the request 
 of James Jones, paid off the £300. then due upon the mortgage to 
 I [all, and, in consideration of the money so paid, the mortgaged prem- 
 ises were, at the same time, conveyed by Hall and Jones to Watkins, 
 subject to redemption by Jones, on payment of the £300. and in- 
 terest; and that sum was, by a subsequent transaction in September, 
 1822, increased to £600. 
 
 Soon after the period of the last mentioned transactions, James 
 Jones and Watkins having entered into copartnership, they applied to 
 John Povvles for a loan of £450., and Powles having advanced the 
 money, Watkins with the consent of his partner Jones, deposited with 
 Powles the mortgage deed, and all the title deeds relating to the 
 property, by way of security for his advances. Powles having aft- 
 erwards lent them further sums, he was eventually let into possession 
 as mortgagee, and he continued in possession until the month of 
 April, L828, when he died, leaving the defendant, Sarah Powles, his 
 widow, whom he appointed as executrix, and to whom he devised 
 all his mortgages and trust estates. 
 , Upon the death of her husband, Sarah Powles entered into pos- 
 
 ;sion, and made further advances to Jones and Watkins, on the 
 security of the same property, to the amount, in the whole, of £2000. ; 
 and in the month of September, 1830, James Jones and Watkins, by 
 a deed which recited that Sarah Powles had contracted for the pur- 
 chase of this estate for £1200., and that she was to retain that sum 
 in part discharge of the moneys due to her from Jones and Watkins, 
 it was witnessed that, in consideration of £1200, and of the discharge 
 given by Watkins to Jones from the £<i00. due to him, Watkins and
 
 Sec. 1) BY ACT OF THE PARTY. 1 0.'{ 
 
 Jones conveyed and released the house and premises to Sarah Po\vl< 
 her heirs and assigns, forever. 
 
 In the month of July, 1831, the present hill was filed hy David 
 Jones and Sarah his wife, against Sarah Powles. The bill alleged 
 that John Jones died intestate, leaving the plaintiff, Sarah Jones, his 
 heiress-at-law; that John Jones never made any will duly executed 
 and attested to pass real estate by devise, and that the signature and 
 the attestations of the witnesses to the pretended will were forged or 
 fictitious; and it prayed that the plaintiffs might he permitted to re- 
 deem the estate, on payment of what should be found due in respect 
 of the mortgage; and also, if necessary, that an issue might be di- 
 rected for the purpose of trying whether John Jones made any valid 
 devise of the property in question. 
 
 The defendant having put in her answer, setting forth her title, 
 as it has been already stated, the plaintiffs filed a supplemental bill, 
 in which they detailed the history of the several mortgage transac- 
 tions, as before mentioned, and alleged that the defendant was in pos- 
 session and enjoyment of, and claimed to be entitled to the premises 
 not as mortgagee, but as absolute owner under the forged will. The 
 supplemental bill further stated that, at the instance of the plaintiffs, 
 the administration with the pretended will annexed, obtained by 
 Meredith, had been declared void by the Ecclesiastical Court, and 
 fresh letters of administration granted to the plaintiff, Sarah Jones. 
 It then charged that the defendant had notice of the forgery, and 
 prayed the same relief as if these matters had been stated in the 
 original bill. 
 
 The defendant, by her answer to the supplemental bill, admitted 
 that the mortgage to Holbrook was paid off in the life time of John 
 Jones, binijthat_Jlie_legal. estate was not reconveyed at his death; and 
 she claimed to be entitled to absolute ownership of the house and 
 premises, as a purchaser for valuable consideration, without notice 
 of the forgery; and she denied the title of the plaintiff Sarah Jones, 
 as the heiress-at-law of John Jones. 
 
 At the hearing of the cause the Master of the Rolls directed that 
 the bill should be retained for twelve months, with liberty to the 
 plaintiffs, in the meantime, to begin an action of ejectment to recover 
 possession of the premises; and the defendant was not to set up the 
 Statute of Limitations, or the legal estate in the premises, which was 
 outstanding in William Holbrook at the death of John Jones, and 
 which had subsequently been conveyed to the defendant. 
 
 An action of ejectment was accordingly brought, and was tried at 
 the last Spring assizes for the county of Hereford, when the plain- 
 tiffs recovered a verdict, having fully established, by their evidence, 
 that the pretended will of John Jones was a forgery, and that the 
 plaintiff Sarah Jones was his heiress-at-law. 
 
 The evidence in the cause established that, in the month of lulv.
 
 164 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 1835, notice was given to John Powles, the mortgagee, and the de- 
 endant Sarah, his wife, by a solicitor acting on behalf of a party who 
 claimed to be the heir of John Jones, that he had received instruc- 
 tions to institute legal proceedings for the purpose of setting aside 
 the will, on the ground that it was a forgery. 
 
 The cause now came on for further directions upon the equity re- 
 served. 
 
 Tin: MASTER of the Rolls. The defendant is a purchaser for 
 valuable consideration from persons claiming title under Meredith, 
 who entered into possession of the property in question as the devisee 
 of Jones the rightful owner. 
 
 The legal estate was outstanding in a satisfied mortgagee under 
 [ones; and the mortgagee, by direction of Meredith, whom he be- 
 lieved to be such devisee, conveyed the legal estate to Hall, by way 
 of better security to Hall for money advanced by him, by way of 
 mortgage, to Meredith. Meredith died in possession having devised 
 the property to his wife, who devised to the parties under whom the 
 defendant claims as a purchaser for valuable consideration. The 
 conveya nce to Hall by the satisfied mortgagee of Jones, recites the 
 fact of the mortgage, and that it was satisfied, and that Meredith 
 was the devisee of Jones, and that the conveyance of the legal estate 
 to Hall was made by the direction of Meredith. Meredith, therefore, 
 and those who claim as volunteers under him, could have no title 
 against the plaintiff as heir at law of Jones. 
 
 The question is, whether the defendant, claiming as a purchaser for 
 valuable consideration without notice of the plaintiff's title as heir, 
 can protect herself by the legal estate which she has acquired by the 
 conveyance from Hall. 
 
 My impression at the opening of this case was, that the protection 
 of the legal estate extended only to cases where the title of the pur- 
 chaser for valuable consideration without notice was impeached by 
 reason of some secret act or matter done by the vendor, or those 
 under whom he claimed; but upon full consideration of all the au- 
 thorities which have been referred to and the dicta of judges and 
 text-writers, and the principles upon which the rule is grounded, I 
 am of opinion that the protection of the legal estate is to be extended, 
 not merely to cases in which the title of the purchaser for valuable 
 consideration without notice is impeachable by reason of a secret act_ 
 ■ lone, but also to cases in which it is impeached by reason of the false- 
 hood of a fact of title asserted by the vendor or those under whom 
 he claims, where such asserted title is clothed with possession ; and 
 the falsehood of the fact asserted could not have been detected by 
 reasonable diligence. 
 
 This is the situation in which the defendant stands. There was no 
 reasonable ground for suspicion that the will was forged; a long
 
 SeC.l) BY ACT OF THE PABTY. 
 
 1 65 
 
 possession had followed the alleged devise, and no reasonable dili- 
 gence could have lead to a discovery of this forgery. 
 
 1 muM therefore declare, that as to all sums of money advanced by 
 the defendant on the security of this property previously to notice of 
 the forgery, she is to be considered as a purchaser for valuable con- 
 sideration without notice; and the accounts between the parties must 
 be taken upon that principle. 
 
 DUEBER WATCH CASE MANUFACTURING COMPANY v. 
 DAUGHERTY and Others. 
 
 (Supreme Court of Ohio, 1900. G2 Ohio St. 589, 57 N. E. 455.) 
 
 Error to the Circuit Court of Stark County. 
 
 This was a suit by plaintiffs below claiming to be pledgees of cer- 
 tain stock, against the company issuing it, for a sale of the stock and 
 an application of the proceeds to their claim, the company itself claim- 
 ing to own the stock and refusing to recognize the plaintiffs' right to 
 it by a transfer of it on the books of the company. Judgment was 
 rendered in the common pleas in favor of the plaintiffs, which on 
 error, was affirmed by the Circuit Court. On November 23, 1891, 
 the plaintiffs, Daugherty and Michner, for the accommodation of John 
 A. Coburn and James W. Dulaney, endorsed a note for $1000, pay- 
 able to the City National Bank of Akron. Coburn agreed and prom- 
 ised at the time, in order to secure the plaintiffs against loss, that he 
 would transfer and assign to them a certain certificate of stock he 
 then owned in the company. On January 7, 1892, he did assign and 
 transfer the stock to the plaintiffs with authority to have the same 
 transferred to them on the books of the company. The plaintiffs 
 were compelled to pay the note and have been only partially indemni- 
 fied; and there is still due them something over $200. 
 
 The company by answer and cross petition stated in substance that 
 the corporation had transferred without consideration to Coburn 
 four shares of its stock so as to qualify him to act as a director; that 
 this stock was to be surrendered when his services as a director were 
 not required; that he had left the State of Ohio and ceased to be 
 eligible as a director because of nonresidence in the state; that he 
 had promised to return and reassign said stock, but had failed to do 
 so; that before plaintiffs acquired said stock they knew it belonged 
 to the defendant. The defendant prayed that the stock be declared 
 to belong to it and that plaintiffs be declared to have no interest in 
 it and be ordered to transfer the same to the defendant. 
 
 The evidence clearly disclosed that whilst at the time the note 
 was given and the agreement to transfer the stock was made, Novem- 
 ber 23, 1891, the plaintiffs had no knowledge of the claim of the com- 
 pany to be the equitable owner of the stock, yet at, and some time
 
 1G6 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 before, it was transferred to them by assignment they had such knowl- 
 edge. 
 
 The claim of the company was that Coburn was simply a nominal 
 share holder, with no real interest whatever in the stock held by 
 him. 
 
 MlNSHALL, T- 1 These questions arise upon the case: 1. Did the 
 agreement to transfer give to the plaintiffs any equitable interest in 
 the stock? 2. Tf so, was their equity superior in merit to that of the 
 compam ' J . 3. Did the assignment of the stock made January 7, 1892, 
 with knowledge of the claim of the company, give them a superior 
 right to the latter, though the equities were equal? 4. Can the com- 
 pany, under the circumstances disclosed by the answer, be heard to 
 make a claim to the stock against an innocent third person? * * * 
 •.'. The question then arises, was this equity superior to that of the 
 company based on the agreement with Coburn for a reassignment of 
 the stock? It is the undoubted rule that as between equities that are 
 equal in merit, the one that is prior in point of time is prior in right. 
 So that before the priorities of competing equities can be determined, 
 their respective merits must be considered, and if it be found that the 
 latter equity is superior in this regard, it must be awarded priority in 
 right. Hume v. Dixon, 37 Ohio St. 66; Campbell v. Sidwell, Gl 
 Ohio St. 179, 55 X. E. CO!). * * * 
 
 Whilst every case must be decided upon its own peculiar facts, and 
 it will be difficult to give a more definite rule than is given in Hume 
 v. Dixon, adopting the principle of that case and the solution of this 
 one is not difficult. For purposes of its own, and which we need not 
 here comment upon, it placed the legal title to the stock in question in 
 Coburn. He held a certificate to the effect that he owned it. On the 
 faith of what this certificate purported and on the promise to transfer 
 it in a week as collateral security, the plaintiffs accommodated the prin- 
 cipals on the note by becoming their sureties. The principals have 
 not fully indemnified them. Unless they are permitted to avail them- 
 selves of this collateral they may suffer a loss. 'IV) permit, under the 
 circumstances this secret equity, if it may properly be termed one, to 
 be asserted as prior in right to that of the plaintiffs, tends to shock 
 the natural sense of justice. One who. for his own purposes, ] .laces 
 the legal title to his property in another, must take the hazard of 
 any loss that may result from his dealing with it as his own, so far as 
 innocent third persons arc concerned. On principles of natural jus- 
 tice his equity is inferior to that of any person wdio acquires in good 
 faith any title to the property. 
 
 3. It is now generally conceded that the assignment of a certificate 
 of stock with power of attorney to have it transferred on the books 
 of the company, gives to the assignee the status of a legal owner of 
 the stock. It conforms to the practice and general understanding of 
 
 i Part of the opinion is omitted.
 
 SeC.l) BY ACT OF THE PARTT. 107 
 
 the commercial world. Pomeroy, Eq. § 710; Railway Co. v. Bank, 
 56 Ohio St. 351, 383, \: X. E. 249, fc3 I.. R. A. -,;:. Hence, on 
 January 7, 1892, when the stock was assigned by Coburn to the plain 
 tiffs and delivered to them, the}- became clothed with what is regarded 
 as the legal title, or in other words, held as against the company a 
 title by estoppel to the stock superior to any ngHt of the company to 
 >et n]> in its own favor a secret equity. Cook on Stockholders. § 
 I III. It is true that at this time they had knowledge of the claim of 
 the company, but had no such knowledge at the time the agreement 
 was made for the transfer. And here it will be observed that the 
 claim of the company was not that of an innocent purchaser for value. 
 Its claim is that of a mere equity for a reconveyance, prior in time, 
 to the equity of the plaintiffs. The contest is simply between equities. 
 In such cases the settled doctrine is stated by Pomeroy to be, "That 
 if a second or other subsequent holder, who would otherwise be post- 
 poned to the earlier ones, obtains the legal estate, or acquires the 
 best right to call for the legal estate he thereby secures an advantage 
 which entitles him to priority. It is absolutely essential, however, 
 that he should have acquired his equitable interest without any notice 
 of the prior claims." Pomeroy, Eq. §§ 727, 729; Adams, Eq. 161, 
 162. The language of the last author is: "It has been already stat- 
 ed that in order to avoid the postponement of the latter equity, free- 
 dom from notice is indispensable. The notice, however here referred 
 to, is a notice existing at the acquirement of the equity, not a notice 
 at the completion of the right. The latter purchaser or incumbrancer, 
 on payment of his money, becomes an honest claimant in equity, and 
 is entitled, if he can, to protect his claim. But he is not bound to look 
 for protection until he has ascertained that danger exists; and his 
 right to obtain it will continue, notwithstanding the institution of a 
 suit to settle the priorities of the conflicting claimants." The plain- 
 tiffs seem to be clearly within the rule here stated. They had no 
 knowledge of the company's claim when they acquired their equity, 
 and had a right to protect it by taking an assignment of the stock 
 for that purpose, which they did on January 7, 1802, though at the 
 time they had knowledge of the company's claim. This gives to 
 them an unquestioned priority over the company, and the right to a 
 sale of the stock for the satisfaction of their claim. Gibler v. Trimble, 
 supra [14 Ohio, 323]. This case clearly supports the doctrine that 
 where the equity is acquired without notice, the owner may protect 
 himself against an earlier equity by acquiring the legal title, though, 
 at the time of so doing, he had notice of the earlier equity. 2 
 
 - The discussion of the lirst and fourth questions is omitted. The court af- 
 firmed.
 
 108 TRANSFEB OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 DODDS v. HILLS. 
 
 (In Chancery, before Vice Chancellor sir W. Page Wood, 1865. 2 Hemming & 
 
 Miller. 424.) 
 
 The plaintiff was a married woman (suing by next friend), upon 
 whom certain shares in the Whittle Dean Water Company had been 
 settled for her separate use. The shares stood in the name of Henry 
 Hills, as sole trustee having formerly stood (as the share certificate 
 showed) in his name jointly with that of another person. 
 
 On the 19th of September, 1857, Hills obtained an advance from 
 the defendant. Smith, out of the funds of a club of which Smith 
 was secretary; as security for which he executed a transfer of the 
 said trust shares, and handed the same, together with the certificate 
 of the shares, to Smith. He also gave a promissory note to the 
 treasurer of the club. 
 
 Further advances were made by Smith, partly out of the funds of 
 the same and another club of which also Smith was secretary, and 
 partly out of his own moneys; and it was verbally arranged between 
 Hills and Smith that the shares should be held by Smith as security 
 for these further sums. The security of the shares appeared to have 
 been given to Smith personally to indemnify him, and not directly 
 as a security to the clubs. At the time when these advances were 
 made, Smith had no notice of the trust, or that the shares were not the 
 absolute property of Hills. Hills regularly received the dividends, 
 and paid them over to the plaintiff. 
 
 On the 7th of June, 1863, Hills absconded; and on the 30th of 
 June a petition in bankruptcy was filed, under which he was declared 
 bankrupt. 
 
 On the 14th of June, 18G3, the plaintiff and her husband informed 
 Smith that Hills held the shares upon trust for the plaintiff. 
 
 On the 19th of June, 1863, Smith sent the transfer, with the certifi- 
 cate, to the secretary of the company for registration, and the shares 
 were on the following day registered in the name of Smith. 
 
 The Whittle Dean Water Company was constituted by act of Par- 
 liament, with which the Companies Clauses Consolidation Act was 
 incorporated. 
 
 The bill prayed that the transfer of the shares might be set aside; 
 or, in the alternative, that the plaintiff might be let in to redeem. 
 
 Vice Chancellor Sir W. Pack Wood. 1 It is impossible to give the 
 plaintiff any relief against this transfer. It is a case of great hard- 
 ship upon the plaintiff; but the defendant Smith does not appear to 
 me to be in any way answerable for that. The shares stood in the 
 name of Hills apparently as absolute owner; and he purported, as 
 such owner, to transfer them to Smith by way of security. There 
 is some obscurity in the evidence, as to whether Smith took the 
 
 i Part of the opinion is omitted.
 
 SeC. 1) BY ACT OF THE TARTY. 1G9 
 
 shares as representing- the different clubs; but the real effect of the 
 evidence is, I think, that the security was given personally to Smith 
 himself, which somewhat simplifies the case. After the transfer was 
 given to Smith, Hills continued to receive the dividends ; and the 
 arrangement seems to have been this: Smith, being responsible to 
 his societies for the money, required Hills to give him by way of 
 indemnity, such a power over the shares as would enable him, Smith, 
 whenever he pleased, to make himself legal owner. That Hills did, 
 by executing a transfer, and Smith allowed him to remain on the 
 register and receive the dividends as long as he made no default in 
 respect of the advances, being content as mortgagee with the power 
 given to him of registering the transfer. When this arrangement 
 was made, Smith had no notice of the trust; and, after having re- 
 ceived notice, he registered the transfer. At the time of the transfer 
 he acquired the power to register himself as owner of the shares. 
 Hills could not displace the equity thus acquired, nor was anything 
 further necessary to be done on his part to complete the transaction. 
 Although it is true that, as between him and the company. Smith did 
 not become the owner until after registration, nothing but his own 
 act was necessary to make him complete master of the shares. His 
 position was like that of a person to whom an estate is conveyed, to 
 become legally vested on the performance of some condition, such as 
 the making of a demand, or the like ; and in such a case, notice of a 
 trust would not prevent the subsequent performance or effect of this 
 condition. 
 
 It was suggested that the transfer could not be completed without 
 a breach of trust; but that is not so. After the notice, Smith did not 
 require Hills to commit any breach of trust, or to do anything. It is 
 the case of a person advancing money on an equitable security with- 
 out notice of a trust, and afterwards getting in the legal estate, and 
 no more involves a breach of trust than when a mere incumbrancer 
 gets in the legal estate as tabula in naufragio. * * * There was 
 nothing unreasonable in allowing the mortgagor to hold until it be- 
 came necessary to enforce the power of taking actual possession. 
 
 The plaintiff is of course entitled to redeem, and there will be the 
 usual decree for account and redemption. 
 
 
 LEVI MOORE v. METROPOLITAN NATIONAL BANK. 
 
 (Court of Appeals of New York, 1S73. 55 N. Y. 41, 14 Am. Hop. 173.) 
 
 Appeal from judgment of the General Term of the Supreme Court 
 in the third judicial department, affirming a judgment in favor of de- 
 fendant, the Metropolitan Bank, entered upon an order dismissing 
 the complaint as to it, upon trial of issues of fact settled herein to be 
 tried by a jury.
 
 170 TRANSFER OF RESPECTIVE [NTERESTS OF PARTIES. (Ch. 3 
 
 This action was brought to restrain defendants from disposing of 
 and to recover possession of a certificate of indebtedness of the State 
 of New York for $10,000, issued by the new capitol commissioner? 
 under chapter 830 of the Laws of 1868. Issues were settled and di- 
 rected to be tried by a jury. 
 
 It appeared, upon the trial that the certificate in question was de- 
 livered by plaintiff to defendant Miller with an assignment thereon, 
 as follows : 
 "$10,000. 
 
 "For value received, I hereby transfer, assign and set over to 
 Isaac Miller the within described amount, say ten thousand dollars. 
 
 "Levi Moore." 
 
 This assignment and delivery was induced by false representations 
 upon the part of Miller as to his responsibility. Miller applied to 
 plaintiff for a loan of $7,000 and relying upon such representations 
 the latter delivered to him the certificate so assigned, receiving there- 
 for two notes amounting to $7,000 and Miller's check for $3,000, 
 and under the agreement that Miller should get the certificate cashed 
 in New York, paying the $3,000 out of the proceeds. In case it was 
 not cashed in three weeks, the certificate was to be returned and the 
 check and notes taken up. The certificate was not cashed in the 
 three weeks. Upon the trial before the jury, plaintiff introduced in 
 evidence the certificate with said assignment thereon, and also a 
 similar assignment from Miller to defendant, the Metropolitan Na- 
 tional Bank, dated November 22, 1868. At the close of the evidence 
 the counsel for the bank moved for a dismissal of the complaint as 
 to it upon the ground, among others, that upon the plaintiff's proofs 
 the bank was, prima facie a bona fide purchaser for value of the cer- 
 tificates from Miller, and so was entitled to hold the certificate ; which 
 motion was granted and plaintiff excepted. 
 
 Grovkr, J. 1 The judge erred in ordering a dismissal of the com- 
 plaint against the bank. * * * But a reversal of the judgment 
 in favor of the bank upon this ground merely, will leave the real and 
 only question litigated between the plaintiff and the bank undisposed of. 
 This should be avoided, if it is presented by the case in a manner 
 enabling the court to determine it. That question is, whether the 
 bank, having in good faith taken a transfer of the certificate from 
 Miller as security for his note, given to it at the time for money then 
 loaned by the bank to him, acquired a title to the certificate, valid as 
 against the plaintiff, as security for the money so loaned. It is 
 clear that it acquired nothing more, as against the plaintiff or Miller. 
 * * * The case shows that the plaintiff executed an absolute 
 transfer of the certificate written thereon to Miller, and delivered 
 the same to him. It further shows that Miller, in making the pur- 
 chase, practiced such a fraud upon the plaintiff as would authorize 
 
 i Part <>f the opinion is omitted.
 
 Sec. 1) BY ACT OF Till'. PARTY. 171 
 
 him to rescind the contract, as to him, and that he did, upon the dis- 
 covery of such fraud, elect to rescind the same. The question is thus 
 presented whether a bona fide purchaser of a chose in action, not 
 negotiable, from one to whom the owner has transferred the apparent 
 absolute ownership, upon the faith of such ownership obtains a 
 valid title as against such owner, although his vendor had not such 
 title. The counsel for the plaintiff insists that this precise qu< 
 was decided against the title acquired by Mich purchaser, by this 
 court, in Bush v. Lathrop (22 X. Y. 535), where it was held that 
 equities existing between the assignor and assignee of a chose in ac- 
 tion, not negotiable, attend the title transferred to a subsequent as- 
 signee for value, without notice, — that the latter takes the exact 
 position of his vendor. The counsel for the hank, to sustain its title, 
 cites McNeil v. Tenth National Bank ( hi X. Y. 325, : Am. Rep. 
 341). In this it was held that, where the owner of corporate stocks 
 conferred upon another an apparent title to or power of disposition 
 over it, he is estopped from asserting his title as against an innocent 
 third part)- who has acquired title in good faith from such apparent 
 owner. It is obvious that both these cases cannot be upheld, unless 
 there shall be found to be a distinction between the acquisition of 
 title to stocks in a corporation and choses in action not negotiable. 
 * * * Why should the owner of a horse or of bank shares, who 
 has given to another an absolute written transfer of all his right 
 thereto for some purpose other than that of passing the title, be pre- 
 cluded, as against a bona fide purchaser from such person, from as- 
 serting his title, while, under the same state of facts he may reclaim 
 from such purchaser a bond and mortgage or a certificate of indebted- 
 ness like the one in question? As to the former he is estopped, while 
 as to the latter the same state of facts, it is insisted, will work no such 
 result. The counsel for the plaintiff insists that such distinction 
 should be made, for the reason that the purchaser of corporate shares 
 and chattels from the apparent owner obtains a legal title which is 
 valid and may be asserted in a court of law, while the assignee of a 
 chose in action, not negotiable at common law obtained an equitable 
 title only ; and that the equity of the former owner, being prior in 
 time to that acquired by the purchaser, is superior thereto, the rule 
 in equity being that, where the equities are equal, the first in time 
 shall prevail; but upon what ground the same state of facts that 
 will estop a party from the assertion of a legal title will not ajso 
 estop him from the assertion of an equitable one the counsel fails to 
 show, for the very good reason that no such ground exists. It is so 
 obvious that the estoppel should, upon principle apply to the latter 
 equally with the former, that a distinction can only be justified upon 
 authority. * * * It follows that the bank, if it made the loan in 
 good faith to Miller, upon the credit of the certificate, acquired a 
 title thereto valid against the plaintiff to the extent of the loan, from
 
 172 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 the papers it appears that the certificate, at the time, amounted to 
 something more than the loan to Miller by the bank. This excess be- 
 longs to the plaintiff. * * * 
 
 The judgment in favor of the bank must be reversed and new 
 trial ordered, costs of the appeal to abide the final judgment for 
 costs in the cause. 2 
 
 CARRITT v. REAL & PERSONAL ADVANCE COMPANY. 
 
 (High Court of Justice, Chancery Division, 1889. L. K. 42 Ch. Div. 2G3.) 
 
 By an indenture of lease, dated the 23d of January, 1880, and 
 made between Batty, of the first part and Scoley of the other part, 
 a certain messuage and premises were demised to Scoley for the term 
 of ninety-seven and one-half years, from the 25th December, 1879, at 
 the rent and subject to the covenants and conditions therein contained. 
 
 By an indenture of mortgage dated the 23d of August, 1880, and 
 made between Scoley of the first part and Carter of the other part, 
 the said messuage and house were demised to Carter for the residue 
 of the term (except the last day thereof) subject to a provision for re- 
 demption on payment by Scoley to Carter of the principal sum of 
 £500. and interest as therein mentioned. 
 
 On the 2d of April, 1881, Scoley executed a further charge on the 
 premises in favor of Carter for securing a further advance of £50. 
 
 By an indenture dated the 21th of February, 1886, and made be- 
 tween Scoley of the first part and Chuck of the other part, after re- 
 citing the above mentioned lease, mortgage and further charge, and 
 that the principal sums thereby secured were still owing, but that all 
 interest had been paid, and that Scoley had agreed with Chuck for 
 the sale to him of the said premises, subject to the mortgage and 
 further charge and the principal moneys and interest thereby secured, 
 at the price of £13 1., it was witnessed that in pursuance of the as- 
 signment and in consideration of the sum of £181. paid by Chuck to 
 Scoley (the receipt of which sum Scoley thereby acknowledged), Scoley 
 
 f! 
 2 The assignment from plaintiff to Moore did not pass the legal title to the 
 
 certificate of indebtedness; at mosl it gave him a power of attorney which at 
 
 the ',,ini law would have authorized him to sue in a court of law in the 
 
 assignor's name to collect the obligation. What was the effort of Moore's 
 
 assignmenl to the bank? it did not pass the legal title because Moore did not 
 
 have the legal title to pass, it was not, it is submitted, the creation of a now 
 
 power of attorney, nor was it an assignment of the existing power of attorney 
 
 held by Moore. It was. If anything, the substitution of the bank as attorney 
 
 in the old power of attorney in Moore's place. If this be true, the question 
 
 arises whether Mo,, re had by virtue of his power of attorney the implied 
 
 right to substitute the bank as attorney in his own place. If he had, could the 
 
 bank by virtue of the fact that it paid Moore a valuable consideration for 
 
 the substitution and had no notice of the fraud by which Moore had secured 
 
 the power of attorney stand in a better position than Moore and have the 
 
 right as against the plaintiff to collect the debt and repay itself its advance in 
 
 full? See 1 Harvard Law Review, 7, 8.
 
 Sec. 1; BY ACT OF Till: PAETT. 1~ :; 
 
 as beneficial owner conveyed the premises to Chuck, to hold the same 
 to Chuck for the residue of the term of years created by the above 
 lease, at the rent and subject to the covenants by and in the lease 
 reserved and contained, and to the said mortgage and further cha: . 
 and the £550. and interest thereby secured. And the indenture con- 
 tained a covenant by Chuck to pay the rent reserved by the lease of 
 the 23d of January, 1880, and observe and perform the covenants 
 and conditions therein contained and keep Scoley indemnified against 
 all claims and demands on account thereof. 
 
 The assignment of Scoley to Chuck was made to him solely as 
 trustee for Frederick Carritt and the plaintiff, who were then in 
 partnership as solicitors, and who paid the whole of the consideration 
 which was paid to Scoley in respect of such assignment. It was the 
 fact, however, that no money passed, but Messrs. Carritt having a 
 claim against Scoley, it had been arranged that Scoley should con- 
 . vey the equity of redemption in the property in consideration of the 
 release of that claim. 
 
 By an agreement dated the 29th of April, 1886, and made between 
 Chuck of the first part and Frederick Carritt and the plaintiff of the 
 other part, Chuck agreed that he would assign or dispose of the prem- 
 ises as Frederick Carritt and the plaintiff should from time to time 
 direct, and that in the meantime the premises subject to the said in- 
 cumbrances, should be held by Chuck in trust only for Frederick Car- 
 rit and plaintiff. 
 
 In the month of March, 1887, Chuck applied to the defendants for 
 a loan of £50. upon the security of the equity of redemption in the 
 above premises, and represented to them that he was the owner of 
 the house, subject to a mortgage of £550. The defendants, relying 
 upon his representations and the fact of the assignment of the 24th 
 of February, 1886, being in his possession, advanced him the sum of 
 £50., which was secured to them by an equitable charge by demise 
 of the equity of redemption in the premises for the whole term less 
 one day, dated the 30th of March, 188 7, and by a promissory note. 
 At the time of the execution of the mortgage Chuck deposited with 
 the defendants the assignment of the 24th of February, 1886. lie 
 afterwards absconded. 
 
 The plaintiff by his statement of claim alleged that he and Fred- 
 erick Carritt retained the assignment of the 24th of February, 1886, 
 till the same was wrongfully and feloniously abstracted from their 
 custody by Chuck, and that the abstraction was not discovered by the 
 plaintiff and his partner, or either of them, till after Chuck had de- 
 livered the assignment to the defendants; that in April, 1887, Fred- 
 erick Carritt retired from the partner-hip, and thereupon all his in- 
 terest in the premises vested in the plaintiff, wdio continued to act as 
 Carter's solicitor; and further, that Chuck entered into the transac- 
 tion with the defendants fraudulently, and in breach of trust, and that 
 the defendants took no assignment of the premises, nor anv written
 
 174 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 document conveying to them any interest therein, and neglected to 
 make proper inquiries, or investigate the title before making the ad- 
 vance. It appeared, however, that the defendants besides their equi- 
 table charge took a statutory declaration from Chuck that he had 
 not charged or surrendered his interest in the property. 
 
 The plaintiff claimed a declaration that the defendants had no in- 
 terest or claim un the premises, and delivery up of all documents re- 
 lating thereto. 
 
 Witnesses were examined on both sides, but the evidence went 
 chieflv to the question of negligence as to the custody of the deed of 
 the 24th of February, 1886. 
 
 ChiTTY, T- The question is one of priority arising between the 
 plaintiff and the defendants, each of whom has only an equitable 
 title so far as any question falls to be decided by me. The plaintiff 
 alleges and rightly, that he is first in point of time. The defendants, 
 who come second, say that in the circumstances of the case priority 
 ought to be ascribed to them. 
 
 The property dealt with is leasehold, demised for an ordinary 
 building term; and the legal estate is outstanding in a mortgagee, 
 that mortgage having been created by a demise for the residue of the 
 original term except the last day. Subject to that demise, the original 
 term remains vested in Chuck. 
 
 The plaintiff's title stands thus: Messrs. Carritt (a firm of solicit- 
 ors, of whom the plaintiff Mr. Carritt, is now the representative, the 
 partnership having been dissolved) had a claim against Scoley, and 
 it was arranged that Scoley should convey the equity of redemption 
 in the property that I have mentioned in consideration of the release 
 of that claim. It was considered "not convenient" by Messrs. Car- 
 ritt to take the deed in their own name; but having a confidential 
 clerk named Chuck, they proposed to take the deed in his name as 
 trustee for them. The transaction assumed the form (and there is 
 nothing in the evidence to show that the form does not correctly 
 represent the true transaction) of a sale of the equity of redemption 
 at the price of the amount of the claim. The deed of assignment, 
 which is in the common form, is an assignment by Scoley to Chuck. 
 Some little time after, Chuck executed a deed of trust in favor of 
 Messrs. Carritt, the trust not appearing in any way on the face of 
 the assignment. Subsequently Chuck, being in possession of the 
 deed of assignment, went to the defendants and borrowed money 
 from them, giving them an equitable charge by the demise for the 
 original term less the last day. He acted ostensibly (but fraudulent- 
 ly) as if he were the owner of the property, subject only to the mort- 
 gage. The defendants did not investigate the title. If they had in- 
 vestigated the title, and Chuck had acted honestly, there would have 
 appeared on the abstract the declaration that Chuck had executed in 
 favor of Messrs. Carritt. Chuck made a statutory declaration, in 
 which he stated that he had not charged or incumbered "his interest"
 
 Seel) BY ACT OF Till: PARTY. IT." 
 
 in the equity of redemption. Except by not having investigated the 
 title, it is clear that the defendants took all reasonable precaution-. 
 They were satisfied that Chuck was a respectable man, and they did 
 not inquire of those in whose employment he was, Messrs. Carritt, 
 nor were they hound to do so. Chuck was introduced to them by a 
 person they knew; they had no reason to suspect Chuck's honesty; 
 and they accordingly advanced him the money, making the loan he- 
 asked for, and took from him a deed which created only an equitable 
 interest in them, and at the same time took from him the deed of as- 
 signment which had been executed by Scoley. 
 
 Now there was evidence in regard to the custody of the assign- 
 ment itself; the result is. in my opinion that Messrs. Carritt did 
 not establish that the deed of assignment was ever placed in either 
 one of their safes. The plaintiff said, and said truly, that it was the 
 duty of Chuck to put the deed of assignment, as well as the deed of 
 trust, in one of their safes; but Mr. Carritt, who gave his evidence 
 very fairly, was unable to show that the deeds or either of them, had 
 ever been in their custody in that sense. I must take it as a fact that 
 they allowed Chuck, in whom they had the greatest confidence, to re- 
 main in possession of the deed and they took no precaution with 
 reference to the declaration of trust, although their not keeping the 
 deed of trust away from the hands of Chuck is an immaterial fact in 
 the case. The point made for the defendant is that the plaintiff al- 
 lowed Chuck to have possession of the deed of assignment. 
 
 Now the case, therefore, as between the plaintiff and the defend- 
 ants, is this : the defendants claim through a trustee for the plaintiff. 
 The law allows a man for convenience, being the absolute owner, to 
 take a conveyance of land, or a transfer of stock, or an assignment 
 of a lease, or indeed any other property, instead of to himself, to a 
 trustee to hold for him; and though it may not be prudent to allow 
 the indicia of title, the title-deed, the stock certificate, or the like, to 
 remain with the trustee, yet it is clear law that the deeds, or certificates 
 of title, or other the indicia of title, are lawfully and rightfully in the 
 custody of the trustee. I say it is not altogether prudent for the 
 equitable owner to leave the deed in the hands of his trustee because 
 in many cases the trustee has the legal title also; and taking the 
 case, for instance, of stock, he can make a perfect assignment of 
 stock to a purchaser for value, who takes it without any notice, and 
 thereby obtains a good title against the equitable owner, for whom 
 the transferror held the stock merely as trustee. But the cestui que 
 trust, the absolute equitable owner, has at least some safeguard in 
 a case of that kind if he keeps the certificate in his own possession, 
 because the trustee then has a greater difficulty in procuring the trans- 
 fer to be registered in the books of the company. Still 1 go hack to 
 the proposition that there is no negligence on the part of a cestui que 
 trust in allowing all the instruments of title to remain in the custody 
 of the trustee.
 
 17<; TRANSFER OF RESPECTIVE INTERESTS OF TARTIES. (Ch. 3 
 
 Then I come to the law of the case, and it appears to me that this 
 case is covered by the decision of the House of Lords in the case of 
 Shropshire Union Railways and Canal Company v. Reg. [L. R. 7 
 II. L. 496]. After having carefully read the speeches delivered to 
 the House on that occasion, T take this proposition from Lord Cairns' 
 address, which appears to give the ground upon which the House of 
 Lords decided. He says [page 510]: "The present appears to me 
 to be simply the case of an ordinary trustee holding property of the 
 kind in question For a cestui que trust and an incumbrance created 
 by the trustee, which can only carry to that fresh incumbrancer such 
 interest as the trustee could give. The trustee could not give an in- 
 terest as against the cestui que trust, and, therefore it appears to 
 me that the incumbrancer now represented by the plaintiff in the 
 mandamus, is not entitled to have the transfer in the company's books 
 of the stock in question." In his address Lord Cairns deals with 
 the proposition, upon which I have heard considerable argument 
 at the bar, whereby it was sought to establish a difference between 
 the case of a trustee holding for a married woman, child or the like, 
 and the case where, for the mere purpose of convenience, the absolute 
 owner procures a person to act, and simply creates the trust for the 
 purpose of his own convenience; and that distinction, Lord Cairns 
 holds, cannot be maintained. He had the case before him of the 
 absolute owners having put the stock in the name of a trustee. It is 
 true that in that case Lord Cairns says, on the facts, that the persons 
 who had created the trust, being a corporation, could not hold in 
 their own name; but when his address is considered from beginning 
 to end, it will be seen that no distinction on that ground can be re- 
 lied on. The result is, so far as I have gone, that the fraudulent 
 act of Chuck does not displace the equitable title of the plaintiff. 
 Judgment for plaintiff. 1 
 
 BURCHARD v. HUBBARD and Others. 
 (Supreme Court of Ohio, L842. 11 Ohio, 31G.) 
 
 This was a bill in chancery from the County of Sandusky. 
 
 In November, 1822, a patent issued to Elizabeth Whitaker for 
 twelve hundred and eighty acres of land, being the "Whitaker re- 
 serve," in Sandusky County. June 3, 1823, Elizabeth Whitaker con- 
 veyed it to George F. Whitaker in fee. October 10, 1823, George F. 
 conveyed in fee 190 acres, including the land in controversy, to Isaac 
 Whitaker. October 12, 1823, Isaac mortgaged the 190 acres to James 
 Whitaker to secure the payment August 12, 1832, of $400 with inter- 
 est annually. 
 
 i Cave v. Cave, L. R. 15 Ch. Div. 639 I L880) ace. Contra IVnny v. Watts, 2 
 De G. & Sin. 501, 521 (1848) ; Lane v. Jackson, 20 Beav. 535 (1855).
 
 JSeC. 1) BY ACT OF THE PARTY. 177 
 
 Part of this 190 acres was sold at a tax sale in December, 1831, 
 to R. Dickinson, who received a tax deed . Shortly after Did 
 agreed to hold the land for Isaac's benefit and to reconvey to him up- 
 on reimbursement of the amount paid and disbursements. Dickinson 
 transferred to George F. this tax title by deed dated January 15, 
 1834, to be held upon the same terms as it had been by Dickinson. 
 
 In March. 1835. Burch ard agreed to purchase this tract of 190 
 acres from George F. Whi taker for $800, with Dickinson's assent, but 
 upon condition that the sale should be approved by James and Isaac. 
 It was approved of with the understanding that $200 should be in- 
 vested in wild lands for Isaac's benefit. Dickinson, being a lawyer, 
 was consulted as to the best mode of transmitting the title. He ad- 
 vised that, instead of conveying directly to the complainant Burchard, 
 Isaac should make a deed to George F. in whom it was supposed the 
 tax title was already vested, and that George F. Whitaker should 
 then convey to Burchard, who would thus derive a perfect and unen- 
 cumbered title. 
 
 April 12, 1835, a deed to George F. was made by Isaac, and left 
 in Dickinson's hands, by whom it was retained until July, 1835, when 
 it, together with a release of the mortgage by Isaac, was delivered 
 to Burchard, and they were by him recorded August 14th. On No- 
 vember 3, 1835, George F. Whitaker executed a deed in fee for the 
 land to complainant. 
 
 But, in the meantime, George F. Whitaker, July 15, 1834, had sold 
 this same tract of land for $700 to defendant Hubbard, to whom in 
 June. 1835, he made a deed in fee for 150 acres of the west part of 
 the 100 acres. This deed was recorded June 26, 1835. In 1838, 
 Hubbard sold and conveyed to Brooks. Neither Hubbard nor Brooks 
 had any actual notice of the transactions of George F. Whitaker with 
 the complainant, but they were informed and believed that George 
 F. had a perfect title. The complainant had no notice of the transac- 
 tion between George F. and Hubbard. 
 
 The bill is filed by Burchard, setting forth his title, and praying to 
 be quieted therein. The defendants, Hubbard and Brooks, answer 
 denying all notice of Burchard's interest, and claim that they are bona 
 fide purchasers, and have an equity prior to the complainant's, for 
 which they claim protection. 
 
 Birchard, J. The first question in this case grows out of a tax 
 sale, and the decision of it will settle the merits of this controversy. 
 [The tax title was held invalid.] 
 
 Whether the subsequent passing of the legal title, through George 
 F. Whitaker, will inure to the benefit of Hubbard, by reason of the 
 covenants contained in Whitaker's deed, is the material and remaining 
 question in the case. It will be observed, that a mere naked legal 
 title was all that ever passed through him. Burchard was the pur- 
 chaser, and the title was conveyed to George F. Whitaker, as a mat- 
 Kkn.Tr— 12 

 
 178 TRANSFER OF RF.Sl'Ki TI VE INTERESTS OF PARTIES. (Ch. 3 
 
 ter of convenience. Taking the title, then, as between the two, the 
 law constituted George F. a mere trustee of the naked legal title. A 
 trust resulted to Burchard, whose money was paid to the bona fide 
 owner. Had George F. Whitaker acquired for himself the legal and 
 equitable title, he would, by reason of the warranty contained in his 
 1. have been estopped at law from denying the title to Hubbard; 
 and, in chancery his conveyance to Hubbard would have been bind- 
 ing on his conscience. 
 
 We are asked to extend and apply this rule, as against the com- 
 plainant. To do so, in the state of facts here existing, would be 
 pushing it beyond reason. The equity of the complainant is equal to 
 that of the respondents. He had no notice of their rights; his pur- 
 chase did the respondents no harm ; it did not mislead them. The 
 deed, in fact, was not delivered to George F. Whitaker. but went into 
 the hands of Dickinson, the agent and attorney of the complainant, 
 who received it, and delivered it to the complainant, by whom it was 
 put on record. If the doctrine of estoppel could apply, it would vest 
 no better title in Hubbard than George F. Whitaker himself acquired ; 
 that is, a trust estate. 
 
 In equity, he who is prior in time, other things being equal, hath 
 the better right. Tried by this rule, complainant has the better equity 
 in the lands. He purchased of the rightful owner, and paid his mon- 
 ey. Hubbard bought of a stranger to the title. His payments were 
 completed, on the 24th of June, 1835, at which time he took his deed, 
 from a stranger who had nothing but a void tax title. This created 
 no equity to the lands then owned by Isaac Whitaker. Before this 
 time, complainant had become interested in the land by purchase, and 
 payment of the money to Isaac, the real owner. 
 
 True, the deed from Isaac to George F. Whitaker, bears date the 
 12th day of April, 1835, but it was not delivered until the August fol- 
 lowing. The acknowledgment bears date the 10th of August, and 
 Hubbard in his answer, says he had no knowledge of it. Hubbard's 
 equity in the land, if he have any, can only date from the time George 
 F. Whitaker received a legal title. It commenced with the delivery 
 of Isaac's deed to George F. Whitaker ; not with the delivery of 
 George's deed to Hubbard. Before this, Burchard had acquired an 
 equity which chancery would have enforced as against Isaac, the real 
 owner. And it would be strange, if Isaac's subsequent deed, given 
 without consideration on the part of George F., could, by operation 
 of law, vest a title that would defeat him. 
 
 Is it doubted, if George F. had refused to convey, under these 
 circumstances, that equity would have compelled him? He having 
 made such conveyance, it must be held operative, and Burchard's 
 equity being prior in time, his title should be quieted. ■
 
 Sec. 1) BY ACT OF THE PARTY. 179 
 
 MOORE v. JERVIS. 
 
 (In Chancery, before Vice Chancellor Sir Lancelot Shadwell, 1845. 2 Coll- 
 
 yer, 60.) 
 
 The Vice Chancellor. Charles Timmis placed in the hands of 
 the defendant, Mr. Jervis, by way of loan, at interest, a sum of £800. 
 and upwards, and took his promissory note for it, payable to Charles 
 Timmis only, not to Charles Timmis or his order. This sum, for 
 I think the evidence of identity quite sufficient, was trust money, 
 which Timmis held as trustee for the benefit of other persons, but 
 so that, as to a certain proportion, Timmis had himself a beneficial 
 interest. The trust was known at the time to Mr. Jervis, but did 
 not appear on the face of the note — which gave no notice that the 
 payee was not the only person interested in the money, though, per- 
 haps, the circumstance, that he could not negotiate it, so as to con- 
 fer on an indorsee a right to bring an action upon it against Mr. Jer- 
 vis in the indorsee's own name, may be thought of a nature to give 
 rise to inquiry. Each must be taken to have been aware, that this 
 investment was, as it was, a plainly irregular one, and a plain breach 
 of trust, not less so, by reason that the borrower was a gentleman 
 of fortune and respectability. 
 
 Timmis, being thus the holder of the note, indorses it, and de- 
 posits it with the plaintiff, a banker, as a security for money lent, and 
 to be lent, to him by the plaintiff. This of course was a breach of 
 trust, but it does not appear that the plaintiff had any notice of the 
 title to the note, save such as ex facie it afforded. The plaintiff, 
 however, acquired only an equitable title, and therefore no better 
 title to the note, or the money secured by it, than Timmis could right- 
 fully confer, and, consequently no title as against those for whom he 
 was a trustee. 1 
 
 PINKETT v. WRIGHT. 
 
 (In Chancery, before Vice Chancellor Sir James Wigram, 1S42. 2 Hare. 120.) 
 
 By a settlement, dated the 3d of April, 1828, Francis Johnson 
 vested certain foreign stocks in John Wright and Henry Robinson, 
 upon trusts, under which, the plaintiffs, and some of the defendants, 
 were beneficially interested. These stocks were later converted into 
 £21,000. consols. Subsequently consols amounting to £5,000. were 
 sold and the proceeds invested in 1G0 shares, of £100. each, of the 
 capital of the Provincial Bank of Ireland. On July 9, 1830, John- 
 son, Wright and Robinson executed a declaration of trust, indorsed 
 
 i The English rule prevails in several jurisdictions in the United States, es- 
 pecially in New York, where the decisions of Chancellor Kent, contra, havc 
 been overruled.
 
 180 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 on the settlement, declaring that Wright, as to said 160 shares was a 
 trustee upon the trusts of the settlement. Johnson died in 1833, and 
 the defendant Reynolds was his executor. From October, 1837, un- 
 til his bankruptcy, Wright had 225 shares of the stock of the Pro- 
 vincial Bank of Ireland standing in his name. The Provincial Bank 
 had allotted a number of additional shares of £10. each, by way of 
 bonus, to the original shares; but no question arose as to them, it 
 being admitted that they would follow the original shares. 
 
 January 1, 1840, Wright, being indebted to the Provincial Bank, 
 agreed to assign 100 shares of the 225 shares to the bank as security 
 by letter reading as follows : 
 
 "To the Directors of the Provincial Bank of Ireland — Gentle- 
 men : As security for the sum of £4,000. held by me on loan from 
 the bank, I hereby oblige myself to transfer unto the name of any 
 one of your number, whenever you shall desire it, 100 shares of £100. 
 each, of the stock of the Provincial Bank of Ireland now standing in 
 my name. John Wright." 
 
 November 23, 1840, Wright and his partners, bankers in London, 
 stopped payment. November 24, 1840, plaintiff's solicitor notified the 
 bank of the claim of the parties interested under the settlement of 
 April 3, 1828, to the said 100 shares. December 17, 1840, a fiat in 
 bankruptcy issued against Wright and assignees were appointed. 
 
 The bill was filed by the plaintiffs interested under the settlement 
 against the trustees, the Provincial Bank (by R. Murray, their pub- 
 lic officer), the assignees in bankruptcy and others praying the ap- 
 pointment of new trustees of the settlement, that the said 160 shares 
 and 32 additional shares, standing in Wright's name, might be trans- 
 ferred to such new trustees; and that, if necessary, the interests of 
 the other defendants in the shares standing in Wright's name, might 
 be ascertained and declared. 
 
 \ in-; Chanckij.or. 1 ::: * * Secondly, I shall consider the 
 claims of the plaintiffs and the bank. * * * The next point I 
 propose to consider is, that which was rested upon the relation in 
 which it was said that Wright and the bank stood towards each other 
 as partners. * * * 
 
 I conclude, for the reasons I have stated, that the bank is not en- 
 titled to a priority over the plaintiffs, in respect of any general rule 
 of law arising out of the partnership contract between the bank and 
 Wright. I conclude, in effect, that in respect of all dealings between 
 the bank and a proprietor, for or in respect of his shares, the bank 
 must be considered as a stranger, dealing in like manner, would be. 
 The bank must establish its right to, or lien upon, the shares of a 
 proprietor, by special contract, as a stranger would be compellable 
 to do. 
 
 i Part of the opinion is omitted.
 
 Sec. 1) BY ACT OF Till: PARTY. 181 
 
 The question then is, whether the bank has established a priority 
 over the plaintiffs, by the specific contract between Wright and the 
 b ank of tne 1st of January, 1840. 
 
 That the bank has established an interest in Wright's shares, as 
 against Wright and his assignees, admits of no doubt. 
 The claim of priority over the plaintiffs, however, depends upon oth- 
 er considerations. The claim was rested upon the suggestion, that 
 the bank had the legal interest in, or control over, Wright's shares, 
 both as holders of the capital in the concern, and by the power the 
 bank has to refuse to permit a transfer of the shares; and it was 
 said, that the equities between the plaintiffs and the bank were the 
 same, and that a Court of Equity would allow the bank to retain 
 any advantage which its position gave it. My answer to this argu- 
 ment will be found in the observations I have already made. From 
 October, 1837, to the 1st of January, 1840, Wright was a trustee 
 for the plaintiffs of 160, part of 225 shares, standing in his name. 
 I have already stated the grounds upon which I consider the shares 
 comprised within the trusts of the settlement of 1828 to be identified 
 with those comprehended in the 225 that stood in Wright's name on 
 the 1st of January, 1840. When Wright, therefore, on that day, 
 agreed to pledge 100 shares to the bank as security for his private 
 debt, he agreed, to the extent of 35 of those shares, to pledge shares 
 of which he was a trustee for the plaintiffs. This he could not be 
 either compelled by the bank, or permitted by this Court, to do, un- 
 less the bank (considered as a stranger advancing money upon the 
 100 shares it claims) could establish a better equity than that of the' 
 plaintiffs, to call for a transfer of the 35 shares in dispute. For the 
 reasons I have already stated, I cannot consider the bank as standing 
 in a better situation than a stranger would stand, in respect of any 
 contract with a proprietor for the transfer of his shares. Now, I can 
 discover no satisfactory ground upon which, as between the plain^ 
 tiffs and the bank, I can deprive the former of that priority which 
 time and dates prima facie give them. The persons to whom the se- 
 curity is given by Wright, on behalf of the company, are the directors 
 of the company. Wright, who is the author of the wrong of which 
 the plaintiffs complain, by a letter addressed to the directors of the 
 company, of whom he is one, engages that property, of which he is 
 trustee, shall be transferred to himself and his co-directors; and that, 
 for purposes in which he is beneficially interested. I think that the 
 position of the parties (no transfer having been made) is sufficient 
 to leave the plaintiffs in possession of the original priority which time 
 alone would give them. 
 
 In coming to the conclusion which I have stated, I do not rely 
 upon the doctrine of constructive notice arising from Wright's posi- 
 tion, either as a partner, or a director. The directors who took the
 
 1S2 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 security from Wright are purchasers of trust property; one of whom 
 knew that it was trust property. Admitting, for the purposes of 
 the argument, but not farther, that the plaintiffs had not perfected 
 their equitable title by notice to the hank (if T can consider the hank 
 as unaffected by notice). T think, under such circumstances, the 
 claims of the plaintiffs cannot be postponed to that of the bank. But 
 I by no means admit that any such notice to the bank was necessary 
 to perfect the plaintiffs' equity, as against a subsequent cquitahle in- 
 cumbrancer. On the contrary, having- come to the conclusion that 
 the hank has not any lien upon Wright's shares, resulting from their 
 partnership relation, I think the plaintiffs' cquitahle title was perfect- 
 ed by the deed of trust executed by the trustees of the settlement in 
 July, 18.30, without notice to the bank or any other person. The 
 trust in favor of the plaintiffs was perfected; and the bank is in the 
 situation of a person taking a subsequent equitable incumbrance on 
 the property. 2 
 
 
 
 
 ELDRIDGE and Another v. TURNER, by His Next Friend, etc. 
 (Supreme Court of Alabama, 1X47. 11 Ala. 1040.) 
 
 The defendant in error filed his bill against John M. Eldridge, 
 Henry B. Turner and James W. Camp. Camp sold his interest in a 
 stallion to Henry B. Turner, who in consideration therefor made a 
 note promising to pay said Camp for the use of the defendant in er- 
 ror $500. Subsequently Camp endorsed this note to Eldridge who 
 sued the maker and obtained judgment. The bill prayed an injunc- 
 tion to restrain the collection of all the judgment hut the costs; that 
 the defendant therein be a trustee for the complainant in respect to 
 the amount due and to become due on the judgment; and that such 
 other relief as might be proper be granted. An injunction was grant- 
 ed accordingly. 
 
 Pending the suit Camp died, but the suit was not revived against 
 his representatives. 
 
 The Chancellor was of opinion that Camp became a trustee for 
 the complainant, as soon as the note was made and delivered to him; 
 that the difficulty of collecting the money from Camp or Eldridge', 
 if the latter should collect the money on his judgment, was sufficient 
 to vest the Court of Chancery with jurisdiction. Therefore it was 
 considered that the bill not being revived against the representatives 
 of Camp abate as to him; and it was ordered and adjudged that the 
 injunction be perpetuated. 
 
 COLLIER, C. J. 3 We cannot think that the bill in this case is want- 
 ing in equity. The inducement of the maker of the note, it is al- 
 
 2 Afiirmed by House of Lords, 12 CI. & F. 764 (1846). 
 s Part of the opinion is omitted. 

 
 SeC. 1) BY ACT OF THE PARTY. 
 
 183 
 
 leged, was not only to obtain the payee's interest in the horse which 
 they held as joint property, but to lend his aid in promoting the 
 bounty in favor of his son. * * * Conceding that Camp's inter- 
 est in the horse was worth $500, or even more, yet if he sold it under 
 a stipulation with the purchaser that he would take his note for that 
 amount, agreeing upon its face that the money should be paid for the 
 benefit of an infant son of the vendee, the vendor, by the acceptance 
 of the note, and delivery of the horse, became a trustee for the son. 
 * * * If, under such circumstances, the vendor could exempt 
 himself from the performance of the trust, then he might success- 
 fully practice a fraud on the maker of the note, who but for the 
 destination the money was to receive, never would have entered into 
 the contract. 
 
 The indorsement of the note by the payee to Eldridge, though for 
 a full consideration, cannot affect the rights of the beneficiary. Up- 
 on its face it purports to be an undertaking to pay for the use of the 
 complainant (Turner v. Eldridge, 6 Ala. 821), and of course inform- 
 ed the endorsee what was the character of the security he received. 
 
 Assuming the case made by the bill to be true and the indorsement 
 of the note was a breach of trust on the part of Camp, which author- 
 ized the cestui que trust to come in equity and assert his right to the 
 money. To make that right effectual and as expeditious as might be, 
 it was allowable to pray an injunction to re-train the indorsee in the 
 enforcement of the judgment. 
 
 The object of the bill in this case is, to secure a trust fund in the 
 hands of the defendant, Turner,' and as secondary and ancillary to 
 this object, a judgment against the holder of the fund is sought to be 
 enjoined. 
 
 [The Court held that the cause should not have been heard without 
 bringing in the personal representatives of Camp and reversed the 
 decree and remanded the cause that the defect of parties- might be 
 remedied.] 
 
 SPAULDING, Receiver, v. KENDRICK and Another. 
 (Supreme Judicial Court of Massachusetts, 1898. 172 Mass. 71, 51 N. E. 453.) 
 
 Bill in equity, by the receiver of the Stockbridge Savings Bank, to 
 recover the sum of five thousand dollars, the property of the bank, al- 
 leged to have been misappropriated by Frederick A. Hobbs, a former 
 receiver of the bank, who had been removed from his office. Trial 
 in the Superior Court, before Lilly, J-, who found for the defendant 
 Kendrick, who alone defended and the plaintiff alleged exceptions. 
 The facts appear in the opinion. 
 
 Knowlton, J. 1 The bill alleges that the sum of $5000 was taken 
 by Hobbs from the funds in his hands as receiver, and sent to Wil- 
 
 i Part of the opinion is omitted- 

 
 IS-i TRANSFER 01' RESPECTIVE [NTERESTS OF PARTIES. (Ch. 3 
 
 liam A. Dickinson of Amherst in the form of a draft, ami by him 
 delivered to one James I. Cooper, who received it as the attorney of 
 the defendant Kendrick, and turned it over to him. The plaintiff 
 discontinued his suit as against all the defendants except Kendrick 
 and Hobbs, and Kendrick alone defends. Kendrick and one Stock- 
 bridge were sureties for Hobbs upon a bond given by him as trustee 
 under the will of one Dickinson, in the sum of $8000, and previously 
 to the receipt of the money Kendrick had fded a petition in the Pro- 
 bate Court asking to be relieved from further liability on the bond. 
 
 We may assume upon the evidence that the money belonged to the 
 bank, and was misappropriated by Hobbs. There was evidence to 
 warrant the finding of the judge, that the defendant Kendrick had 
 no knowledge that the money was other than the property of Hobbs, 
 and that he received it through his attorney in good faith, and as 
 security for a liability of a greater amount than $5000 and on account 
 thereof forbore to prosecute his petition for relief as surety on the 
 bond of Hobbs. The evidence warranted a finding that this receipt 
 of it was the same in legal effect as if it had been put into his pos- 
 session by Hobbs with his own hand, to be held as security against 
 loss as surety on the bond. The evidence tended to show that the 
 draft was sent to "Sir. Dickinson to be held and used as such se- 
 curitv. and that, if the delivery of it to Mr. Cooper was not expressly 
 authorized by Hobbs, it was within the general purpose of Hobbs, 
 and was soon afterwards known to him and ratified by him. 
 
 The law of the case is settled by numerous decisions. If a thief 
 gives stolen money, or negotiable securities before their maturity, 
 in payment of his debt, or as security for it, to one who in good 
 faith receives the money or securities as belonging to him, the creditor 
 can hold the property as against the true owner. As between the 
 payor and payee there is no mistake which affects the validity of the 
 transaction. One receiving money or other negotiable securities in 
 payment of or as security for an existing debt is not bound to inquire 
 wliere the money or securities were obtained. It is better that money 
 or a negotiable security, passing from hand to hand to one who right- 
 ly receives it for a valuable consideration, should carry on its face 
 its own credentials. * * * It has often been decided in this Com- 
 monwealth that a pre-existing debt is a valuable consideration for a 
 payment made or a security given on account of it. * * * 
 
 Exceptions overruled.
 
 Sec. 1) BY ACT OF THE PARTY. 185 
 
 IT. By Act of the Cestui que Trust. 
 
 FRANCIS NORTH v. CHAMPERNOON and Others. 
 (In Chancery, before Lord Chancellor Nottingham, 1GS1. 2 Chancery Cases, 78.) 
 
 Sir Francis North purchased lands in Essex; the fee of some part 
 of the lands were in trustees but the trust was, after debts paid, to 
 Richard Allington in tail with other remainders over. Richard Al- 
 lington the cestui que trust in tail suffered a common recovery with 
 double voucher to bar the remainders over limited by way of trust, 
 but no legal tenant to the praecipe, for the freehold was in the trus- 
 tees who were no parties to the recovery. And the great question 
 was whether the recovery did bar the remainders in trust, for the 
 plaintiff's title was under that recovery. 
 
 The decree is in these words: His Lordship upon long debate of 
 the matter, on hearing what was alleged by counsel on either side 
 touching the same, declared, that he was fully satisfied that the said 
 recovery did sufficiently bar all remainders depending upon the es- 
 tate tail of Richard Allington, who suffered the same, it being a gen- 
 eral rule, that any legal conveyance or assurance by a cestui que trust 
 shall have the same effect and operation upon the trust, as it should 
 have had upon the estate in law in case the trustees had executed 
 their trust. 
 
 DEARLE v. HALL. 
 
 (In Chancery, before Lord Chancellor Lyndhurst, 1827. 3 Russell. 1.) 
 
 The Lord Chancellor. The cases of Dearie v. Hall and Lov- 
 eridge v. Cooper were decided by Sir Thomas Plumer ; and from his 
 decree there is in each of them an appeal, which stands for judg- 
 ment. As the two cases depend upon the same principle, though the 
 facts are, to a certain degree, different, the better course will be to 
 dispose of both together; and as Dearie v. Hall was the first of the 
 two which came before the court below, though it was not argued on 
 appeal till after Loveridge v. Cooper had been heard, I shall first di- 
 rect my attention to the facts on which it depends. 
 
 Zachariah Brown was entitled, during his life, to about £93. a year, 
 being the interest arising from a share of the residue of his father's 
 estate, which, in pursuance of the directions in his father's will, had 
 been converted into money, and invested in the names of the execu- 
 tors and trustees. Among those executors and trustees was a solicit- 
 or by the name of Unthank, who took the principal share in the man- 
 agement of the trust. Zachariah Brown, being in distress for money, 
 
 / t,v/tr. 

 
 186 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 in consideration of the sum of £204., granted to Dearie, one of the 
 plaintiffs in the suit, an annuity of £37. a year, secured by a deed 
 of covenant and a warrant of attorney of the grantor and a surety; 
 and, by way of collateral security. Brown assigned to Dearie all his 
 interest in the yearly sum of £93. ; but neither Dearie nor Brown gave 
 any notice of this assignment to the trustees under the father's will. 
 
 Shortly afterwards, a similar transaction took place between 
 Brown and the other plaintiff, Sherring, to whom an annuity of £27. 
 a year was granted. The securities were of a similar description ; 
 and. on this occasion, as on the former, no notice was given to the 
 trustees. 
 
 These transactions took place in 1808 and 1S09. The annuities 
 were regularly paid till June, 1811 ; and then, for the first time, de- 
 fault was made in payment. 
 
 Notwithstanding this circumstance, Brown in 1812, publicly adver- 
 tised for sale his interest in the property under his father's will. Hall, 
 attracted by the advertisement, entered through his solicitor Mr. Pat- 
 ten, into a treaty of purchase; and it appears from the correspond- 
 ence between Mr. Patten and Mr. Unthank that the former exercised 
 due caution in the transaction, and made every proper inquiry con- 
 cerning the nature of Brown's title, the extent of any incumbrances 
 affecting the property, and all other circumstances of which it was 
 fit that a purchaser should be apprised. No intimation was given to 
 Hall of the existence of any previous assignment; and, his solicitor 
 being satisfied, he advanced his money for the purchase of Brown's 
 interest, and that interest was regularly assigned to him. Mr. Pat- 
 ten requested Unthank to join in the deed; but Mr. Unthank said, 
 "I do not choose to join in the deed ; and it is unnecessary for me to 
 do so, because Z. Brown has an absolute right to this property, and 
 may deal with it as he pleases." The first half-year's interest, sub- 
 ject to some deductions, which the trustees were entitled to make, 
 was duly paid to Hall ; and, shortly afterwards Hall for the first time 
 ascertained that the property had been regularly assigned, in 1808 
 and 1809, to Dearie and to Sherring. 
 
 Sir Thomas Plumer was of opinion that the plaintiffs had no right 
 to the assistance of a Court of equity to enforce their claim to the 
 property as against the defendant Hall, and that, having neglected to 
 give the trustees notice of their assignments, and having enabled Z. 
 Brown to commit this fraud, they could not come into this court to 
 avail themselves of the priority of their assignments in point of time, 
 in order to defeat the right of a person who had acted as Hall had 
 acted, and who, if the prior assignments were to prevail against him, 
 would necessarily sustain a great loss. In that opinion I concur. 
 
 It was said that there was no authority for the decision of the 
 Master of the Rolls, — no case in point to support it; and certainly 
 it does not appear that the precise question has ever been determined,
 
 SeC. 1) BY ACT OF THE PARTY. 187 
 
 or that it has been even brought before the court, except, perhaps, so 
 far as it may have been discussed in a non-reported case of Wright 
 v. Lord Dorchester. But the case is not new in principle. Where 
 personal property is assigned, delivery is necessary to complete the 
 transaction, not as between the vendor and vendee, but as to third 
 persons, in order that they may not be deceived by apparent posse - 
 sion and ownership remaining- in a person, who, in fact is not the 
 owner. This doctrine is not confined to chattels in possessioiij but 
 extends to choses in action, bonds, etc.; in Ryall v. Rowles [1 Ves. 
 Sr. 318] it is expressly applied to bonds, simple contract debts, and 
 other choses in action. It is true that Ryall v. Rowles was a case in 
 bankruptcy; but the Lord Chancellor called to his assistance Lord 
 Chief Justice Lee, Lord Chief Baron Parker, and Mr. Justice Bur- 
 nett; so that the principle on which the court there acted must be 
 considered as having received most authoritative sanction. These 
 eminent individuals, and particularly the Lord Chief Baron and Mr. 
 Justice Burnett, did not, in the view which they took of the question 
 before them, confine themselves to the case of bankruptcy, but stated 
 grounds of judgment which are of general application. Lord Chief 
 Baron Parker says, that, on the assignment of a bond debt, the bond 
 should be delivered, and notice given to the debtor; and he adds, 
 that, with respect to simple contract debts, for which no securities are 
 holden, such as book debts for instance, notice of the assignment 
 should be given to the debtor, in order to take away from the debtor 
 the right of making payment to the assignor, and to take away from 
 the assignor the power and disposition over the thing assigned. 1 
 Ves. Sr. 367 ; 2 Atk. 177. In cases like the present, the act of giving 
 the trustee notice is, in a certain degree taking possession of the fund ; 
 it is going as far toward equitable possession as it is possible to go; 
 for, after notice given, the trustee of the fund becomes a trustee for 
 the assignee who has given him notice. It is upon these grounds that 
 I am disposed to come to the same conclusion with the late Master of 
 the Rolls. 
 
 I have alluded to a case of Wright v. Lord Dorchester, which was 
 cited as an authority in support of the opinion of the Master of the 
 Rolls. In that case, a person of the name of Charles Sturt was en- 
 titled to the dividends of certain stock, which stood in the names of 
 Lord Dorchester and another trustee. In 1793 Sturt applied to 
 Messrs. Wright & Co., bankers at Norwich, for an advance of money, 
 and, in consideration of the moneys which they advanced to him, 
 granted to them two annuities, and assigned his interest in the stock 
 as a security for the payment. No notice was given by Messrs. 
 Wright & Co. to the trustees. It would appear that Sturt afterwards 
 applied to one of the defendants, Brown, to purchase his life interest 
 in the stock; Brown then made inquiry of the trustees, and they 
 stated that they had no notice of any incumbrance on the fund : up-
 
 l. ssi TRANSFER OF RESPECTIVE [NTERESTS OF PARTIES. (Ch. 3 
 
 on this B. completed the purchase, and received the dividends for up- 
 wards of six years. Messrs. Wright then filed a hill, and obtained an 
 injunction, restraining the transfer of the fund or the payment of the 
 dividends; hut, on the answer of Brown, disclosing the facts with 
 respect to his purchase, Lord Eldon dissolved that injunction. At 
 the same time, however, that he dissolved the injunction, he dissolved 
 it only on condition that Brown should give security to refund the 
 money, if, after hearing, the Court should give judgment in favor of 
 any of the other parties. That case was attended also with this par- 
 ticular circumstance, that the party who pledged the fund stated by 
 his answer that, when he executed the security to Wright 61' Co.. he 
 considered that the pledge was meant to extend only to certain 
 real estates. For these reasons I do not rely on the case of Wright 
 v. Lord Dorchester as an authority ; I rest on the general principle 
 to which I have referred; and, on that principle, I am of opinion 
 that the plaintiffs are not entitled to come into a Court of equity for 
 relief against the defendant Hall. The decree must, therefore, be af- 
 firmed and the deposit paid to Hall. 
 
 The case of Loveridge v. Cooper [3 Russ. 30], though the circum- 
 stances are somewhat different, is the same in principle with Dearie 
 v. Hall and must follow the same decision. 1 
 
 JONES v. JONES. 
 
 (In Chancorv, before Vice Chancellor Sir Lancelot Shadwell, 1838. 8 Simons, 
 
 633.) 
 
 Thomas Jones by will dated May 25, 1815, devised his freeholds in 
 trust to pay the rents thereof to Sarah Harvey for her life, and 
 after her decease in trust for Mary Whitworth and Eliza Whitworth, 
 their heirs and assigns. James Whitworth by will dated December 
 7, 1821, devised a freehold messuage in trust for Eliza Whitworth 
 for life, with remainders over. 
 
 In 1S22, Frederick Lewis Brown married Eliza Whitworth and by 
 marriage articles Eliza Whitworth conveyed the remainder in fee ex- 
 pectant upon the death of Sarah Harvey in one-half of the premises 
 devised by Thomas Jones to trustees to such uses, after the marriage, 
 
 i In the principal case the last purchaser before purchasing made Inquiry of 
 tlic trustee as to the existence of prior incumbrances and made his purchase 
 after being assured there were none. 
 
 In Foster v. Cockerell, 9 Bligh's N. R. 332 (1835), the second purchaser pur- 
 chased without Inquiry but was given priority over a prior purchaser simply 
 because he was the first to notify the trustee. In Meux v. Bell, 1 Hare. 73 
 (1841), at pages SG and 87, will be found by Vice Chancellor Wigram the best 
 Statement of the reasons in support of this position. 
 
 In England an assignee in bankruptcy is in the same position as any other 
 assignee. The English rule prevails in many states in this country, but there 
 are several in which it does not hold. Putnam v. Story, 132 Mass. 203 (1882); 
 Williams v. Ingersoll, 89 N. Y. 508, 523 (1882).
 
 SeC. 1) BY ACT OF THE PARTY. 189 
 
 as Frederick Lewis Brown and Eliza should from time to time joint- 
 ly appoint, with divers limitations over. 
 
 In November, 1825, Brown and wife borrowed £060. of Jane James 
 and transferred her interest in all the devised estate as security. In 
 1826, they borrowed of' lohn Jon es £500. and transferred to him Mrs. 
 Brown's interest in the same premises as security. Jones had no 
 notice of the prior incumbrance and made before loaning the money 
 inquiries of the trustees under the will of Thomas Jones and James 
 Whitworth as to the existence of incumbrances. Later in 1826, they 
 borrowed of J ohn Harris £8 00. and transferred to him her interest 
 in said premises as security. Before making the loan Harris made 
 due inquiry for previous incumbrances and was informed of the in- 
 cumbrance of Jane James, now vested by assignment in the defend- 
 ants, Thomas Taylor Webb and David Jones, but not of the incum- 
 brance of John Jones. 
 
 A reference to a Master to report incumbrances and state their pri- 
 orities was had and he reported the priorities as follows: First the 
 mortgage vested in Webb and David Jones; second the mortgage to 
 Tohn Harris and third the mortgage to John Jones and now vested 
 in plaintiffs. To this report the plaintiffs excepted. 
 
 The Vice Chancellor, after stating the substance of the report, 
 continued thus : x 
 
 To this report an exception is taken by the parties who claim un- 
 der John Jones, insisting on their priority over Harris ; and the ques- 
 tion is whether the report is right. 
 
 At law the rule clearly is that different conveyances of the same 
 tenement, take effect according to their priority in time. If a 
 man seized in fee, first grants one term of years and then another 
 term, the second termor cannot enter till the first term has ceased 
 by effluxion of time, surrender or otherwise. So, if freehold inter- 
 ests are carved out of the fee by different conveyances, the estate of 
 the second grantee cannot take effect in possession, till the estate of 
 the first has, in some measure, ceased. The effect of different con- 
 veyances is the same as if different successive estates were granted by 
 the same conveyance, first in possession and then in remainder. Equi- 
 ty follows the law; and, where the legal estate is outstanding, con- 
 veyances of the equitable interest are construed and treated, in a 
 Court of equity, in the same manner as conveyances of the legal es- 
 tate are construed and treated at law. * * * The fact is that 
 upon Harris' answer and before the Master as well as in the argu- 
 ment at the bar, the case of Harris was attempted to be put upon the 
 decisions in Dearie y. Hall [3 Russ. 1], Loveridge v. Cooper [3 Russ. 
 30], and Foster v. Blackstone [1 Mylne & Keene, 297], decided by 
 Sir John Leach and afterwards by the House of Lords. But, in each 
 of those cases, the subject of discussion was a chose in action. * * * 
 
 i Part of the opinion is omitted-
 
 190 TRANSFER OF RESPECTIVE [NTERESTS OF PARTIES. (Ch. 3 
 
 The case before me is a case of real estate, not of a chose in action. 
 John Jones, the first incumbrancer on the equity of redemption, took 
 his title by the conveyances of January, 1826; and notice or posses- 
 sion was not necessary to complete his title. Harris took his title by 
 a subsequent conveyance, and merely gave a notice, which did not 
 and could not affect Jones. No fraud whatever can be im puted to 
 Jones. He made some inquiry and was misled. lie was the innocent 
 subject of fraud, and not the doer of it; and, in my opinion, the ex- 
 ception must be sustained. 
 
 WILTSHIRE v. RABBITS. 
 
 (In Chancery, before Vice Chancellor Sir Lancelot Shadwell, 1844. 14 Si- 
 mons. 7G.) 
 
 George Rabbits by will dated August 9, 1822, bequeathed to Cicero 
 Rabbits and George Bethell, leaseholds upon trust and charged them 
 with payment of an annuity of £45. to his daughter, Frances, wife 
 of Thomas Tovey for her separate use. By indenture dated June 30, 
 1800, Mr. and Mrs. Tovey mortgaged the annuity to Thomas Wilt- 
 shire to secure £.100. and interest. Some years previously they had 
 made a similar mortgage to Thomas Munday. Plaintiffs, Wiltshire's 
 executors, claim priority over Munday on the ground that Wiltshire 
 gave notice of his security first. 
 
 The Vice Chancellor. It is important to keep up the distinction 
 between choses in action and chattel or freehold interests; and my 
 opinion is tbat the effect of this will was to pass the legal interest 
 in the leasehold estates, to the trustees, in trust for the testator's son 
 for life, with remainder to his children; but charged with an annui- 
 ty of £45. a year for the separate use of Mrs. Tovey; and that that 
 is a chattel interest in equity, and not a chose in action, nor subject 
 to any of the rules established with regard to assignments of choses 
 in action. The consequence is that the person who took the first se- 
 curity, is entitled to priority over the person who took the second, 
 notwithstanding the latter may have been beforehand with the for- 
 mer, in giving the trustees notice of his security. 
 
 WILMOT v. PIKE. 
 
 (In Chancery, before Vice Chancellor Sir Jan es Wigram, 1845. 5 Hare, 14.) 
 
 In 1824, Washington Pike mortgaged a parcel of land to John 
 Smith to secure £700. and interest. This mortgage was subsequently- 
 transferred to John Fearne. In May, 1820, Washington Pike con- 
 veyed to John Flewker the premises comprised in the first mortgage 
 and also a second parcel of land by way of mortgage to secure £000.
 
 SeC. 1) BY ACT OF THE PARTY. 191 
 
 loaned to Washington Pike by Sir Robert Wilmot. This mortgage 
 contained a power of sale. 
 
 Sir Robert Wilmot died in 1834 and appointed plaintiffs his ex- 
 ecutors. In 1815 Washington Pike borrowed of plaintiffs £400. and 
 gave them his""bond therefor and an indenture by which he covenant- 
 ed if the £400. was not paid by March 3rd next Flewker should sell 
 the lands and from the proceeds pay the three sums of £700., £G00. 
 and £400. 
 
 In 1840 Washington Pike borrowed £300. from Flewker and mort- 
 gaged alTof said premises to him as security. Flewker advanced this 
 £300. and took said mortgage as security in ignorance of the loan by 
 the plaintiffs of the £400. 
 
 In 1844 the executors of Sir Robert Wilmot filed their bill praying 
 a sale of the mortgaged premises and the application of the proceeds 
 in payment of the first mortgage of £700., and then in satisfaction of 
 the subsequent mortgages of £600. and £400. to Sir Robert Wilmot 
 and the plaintiffs. 
 
 By his answer Flewker claimed priority of his mortgage over the 
 third mortgage given to secure the £400. to the plaintiffs. 
 
 Vice Chancellor. 1 At the time the bill was filed, the legal estate 
 in the property comprised in the first mortgage of June, 1834, was 
 vested in Fearne, as first mortgagee, for securing £700. The proper- 
 ty which was the subject of that mortgage, and also additional prop- 
 erty, consisting of about 600 square yards of land, comprised in the 
 deed of May, 1826, was vested in Flewker, as trustee, for securing 
 £600. and interest to Sir Robert Wilmot. Flewker. therefore, as 
 trustee, was second mortgagee of the property comprised in the first 
 mortgage and first mortgagee of the additional property comprised* 
 in the mortgage of May, 1826. The question in the cause arises be- 
 tween the third and fourth mortgages of July, 1835, and July, 1840, 
 respectively. 
 
 The defendant Flewker insists, that neither Fearne. the first mort- 
 gagee, nor himself as mortgagee in trust, had notice of the third mort- 
 gage at the time he advanced his money upon, and took the fourth 
 mortgage: and he claims priority over the third mortgagee upon 
 that ground. 
 
 In support of the argument he relies upon Dearie v. Hall [3 Russ. 
 1], Loveridge v. Cooper [3 Russ. 30], and Foster v. Blackstone [9 
 Bligh, N. R. 332]. He has also made a second point, namely, that, 
 if his fourth mortgage is not entitled to priority over the third mort- 
 gage to the full extent, he is, at all events, entitled to such priority 
 to the extent of the additional property comprised in the mortgage of 
 May, 1826; and for this he relies upon the general proposition that 
 he has the legal estate in that additional property, and had no notice 
 of the third mortgage at the time he advanced his money on the fourth. 
 
 i Part of the opinion is omitted.
 
 192 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Gl. 3 
 
 Now, with respect to the first point made by the defendant, I do 
 not of course presume, at this day to question the authority of the 
 cases upon which the defendant has relied. * * * However, in 
 Jones v. Jones [8 Sim. 633], an attempt was made to apply Dearie 
 v. Hall and the other cases to equitable interests in land; but the 
 Vice Chancellor, upon the undoubted authority of cases to which he 
 referred, showed that those cases had no application to cases of equi- 
 table interests in land; and with this opinion agree all the modern 
 text-books. 
 
 The only question, therefore, in my opinion, is, whether the interest 
 of Sir Robert W'ilmot, under the mortgage of May, 1826, is to be 
 considered as an interest in land, or an interest in money, to be pro- 
 duced by the sale of land. My opinion is. that his interest is that of 
 a second mortgagee of the equity of redemption of the property in 
 mortgage, notwithstanding the form of the security gives his trustee 
 power of sale. * * * I think, therefore, upon the authority of 
 the cases I have referred to, that the first point must be decided in 
 the plaintiffs' favor. 
 
 Upon the second point made by the defendant Flewker, my opinion 
 after some fluctuation, is, that the defendant is right. Suppose Flew- 
 ker had sold under the power contained in the second mortgage as 
 he had clearly a right to do, and, after retaining in his hands the 
 sums of £700. and £G00. to answer the respective claims of the first 
 mortgagee and of Sir Robert Wilmot, to have paid over the surplus 
 to Washington Pike, — could it be said that, by so doing, he had ren- 
 dered himself liable for a breach of trust? It clearly could not. And 
 again, if, instead of the sale which I have supposed, Washington 
 I 'ike had contracted with the executors of Sir Robert Wilmot for a 
 third mortgage to them, of which Flewker had no notice; and sup- 
 pose, that, before the completion of that transaction, there had been 
 a deed between Washington Pike of the first part, Flewker of the 
 second part, and a fourth mortgagee, of the third part, by which 
 Washington Pike had assigned over the equity of redemption of the 
 estate to the fourth mortgagee, for the purpose of securing the 
 payment of his debt; and that Flewker had then declared himself a 
 trustee for that fourth person. Assuming, for a moment, that the 
 effect of such a deed would have been to give the new mortgagee a 
 priority over Sir Robert Wilmot's executors, I apprehend that it 
 would clearly have been no breach of trust. Sir Robert Wilmot's 
 executors not having given any notice to Flewker, the latter would 
 have been justified in declaring such trusts of the surplus as Pike 
 ould direct. Then the question is, whether the effect of such a 
 deed would have been to give a priority to the fourth mortgagee. 
 Xow, the general rule — the rule relied on by Mr. Wood as to equi- 
 table interests in land, — is the rule, "Qui prior est in tempore potior 
 est in jure," and I have, on the former point, decided that neither the 
 omission of one mortgagee to give notice nor the activity of the other.
 
 SeC.l) BY ACT OF THE PARTY. 193 
 
 would in the circumstances of that case, give the second mortgagee 
 priority over the first. But, if a first incumbrancer lias a declaration 
 of trust only by the borrower, and none by the trustee, and the 
 second incumbrancer lias a formal mortgage of the equity of redemp- 
 tion, and the trustee is a party to the deed, and declares himself a 
 trustee for the second incumbrancer, will not that declaration by the 
 trustee give the second priority over the first? I think the second 
 would, in that case, have a better right to call for the legal estate than 
 the fir st"; and if it would be so in the case of a stranger, I think the 
 trustee cannot be preclud ed by his situation, as trustee from claiming 
 the benefit of the legal estate without notice. His^case, however, 
 might perhaps, be supported upon the simple ground that he had the 
 legal estate, and advanced his money without notice, leaving every 
 trust of which he had notice untouched by his present claim. * * * 
 
 PHILLIPS v. PHILLIPS. 
 
 (In Chancery, before Lord Chancellor Westbury, 1861. 4 De Gex, Fisher & 
 
 Jones, 208.) 
 
 The Lord Chancellor. When I reserved my judgment at the 
 conclusion of the argument in this case, it was rather out of respect 
 to that argument than from a feeling of any difficulty with regard to 
 the question that had been so strenuously contested before me. 
 
 The case is a very simple one. The plaintiff claims as the grantee 
 of an annuity granted by a deed dated in the month of February, 
 1820, to issue out of certain lands in the County of Monmouth, se- 
 cured by powers of distress and entry. The annuity or rent charge 
 .iYas-not to arise until the death of one Rebecca Phillips, who died in 
 the month of December, 1839 and the first payment of the annuity 
 became due on the 8th of March, 1810. 
 
 The case was argued on both sides on the admitted basis that 
 the legal estate was outstanding in certain incumbrancers and is still 
 outstanding. Subject to the annuity the grantor was entitled in fee 
 simple in equity. In February, 1821, the grantor intermarried with 
 one Mary Phillips. On the occasion of that marriage, a settlement 
 dated in February, 1821, was executed and under this deed the de- 
 fendants claim : and claim, therefore, as purchasers for a valuable 
 consideration. No payment has ever been made in respect of the an- 
 nuity. 
 
 The bill was filed within twenty years, and seeks the ordinary re- 
 lief applicable to the case. The defendants by their answer insist 
 that the deed was voluntary, and therefore void under the Statute of 
 Elizabeth, as against them in their character as purchasers for valu- 
 able consideration, and they also insist upon the Statute of Limita- 
 Ken.Tr. — 13
 
 194 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Cll. 3 
 
 tions. But in the answer the defence of purchase for valuable con- 
 sideration without notice is not attempted to be raised. 
 
 At the hearing, an affidavit of Mary Phillips and another person 
 
 was produced denying the fact of notice of the annuity at the time 
 of the grant and at the time of the creation of the marriage settle 
 meiit, and the contention at the bar was that the defence of purchase 
 for valuable consideration without notice was available for the de- 
 fendants under these circumstances and ought to be allowed as a 
 bar to the claim by the court. The Vice Chancellor in his judgment 
 refused to admit the defence of purchase for valuable consideration 
 without notice, and I entirely agree with him in the conclusion that 
 such a defence requires to be pleaded by the answer, more specially 
 where an answer has been put in. 
 
 But I do not mean to rest my decision upon that particular ground 
 because I have permitted the argument to proceed with reference to 
 the general proposition, which was maintained before me with great 
 energy and learning, viz. that the doctrine of the Court of Equity was 
 tli i s, that it would give no relief whatever to any claimant against a 
 purchaser for valuable consideration without notice. It was urged 
 upon me that authority to this effect was to be found in some recent 
 decisions of this court, and particularly in the case decided at the 
 Rolls of the Attorney General v. Wilkins [17 Beav. 285], 
 
 I undoubtedly was struck with the novelty and extent of the doc- 
 trine that was thus advanced, and in order to deal with the argument 
 it becomes necessary to revert to elementary principles. I take it to 
 be a clear proposition that every conveyance of an equitable interest 
 is an innocent conveyance, that is to say, the grant of a person enti- 
 tled merely in equity passes only that which he is justly entitled to, 
 and no more. If, therefore, a person seized of an equitable estate 
 (the legal estate being outstanding), makes an assurance by way of 
 mortgage or grants an annuity, and afterwards conveys the whole es- 
 tate to a purchaser, he can grant to the purchaser that which he has, 
 viz. the estate subject to the mortgage or annuity, and no more. The 
 subsequent grantee takes only that which is left in the grantor. 
 Hence grantees and incumbrancers claiming in equity take and are 
 ranked according to the dates of their securities; and the maxim ap- 
 plies, ''Qui prior est tempore potior est jure." The first grantee 
 is potior ; that is, potentior. He has a better and superior — because 
 a prior — equity. The first grantee has a right to be paid first, and 
 it is quite immaterial whether the subsequent incumbrancers at the 
 time when they took their securities and paid their money had notice 
 of the first incumbrance or not. These elementary rules are recogniz- 
 ed in the case of Brace v. Duchess of Marlborough | "2 I'. Wins. 1!)1 |, 
 and they are further illustrated by the familiar doctrine of the court 
 as to tacking securities. It is well known that if there are three in- 
 cumbrancers, and the third incumbrancer, at the time of his incum-
 
 SeC. 1) BY ACT OF THE PARTY. 195 
 
 brance and payment of his money, had no notice of the second incum- 
 brance, then, if the first mortgagee or incumbrance has the legal es- 
 tate, and the third pays him off, and takes an assignment of his se- 
 curity and a conveyance of the legal estate, he is entitled to tack his 
 third mortgage to the first mortgage which he has acquired, and to 
 exclude the intermediate incumbrancer. But this doctrine is limited 
 to the case where the first mortgagee has the legal title; for if the 
 first mortgagee has not the legal title, the third does not by the trans- 
 fer obtain the legal title, and the third mortgage by payment off of 
 the first acquires no priority over the second. Now, the defence of 
 a purchaser for valuable consideration is the creature of a court of 
 equity, and it can never be used in a manner at variance with the ele- 
 mentary rules which have already been stated. It seems at first to 
 have been used as a shield against the claim in equity of persons hav- 
 ing a legal title. Bassett v. Nosworthy [Finch, 102] is, if not the 
 earliest, the best early reported case on the subject. There the plain- 
 tiff claimed under a legal title, and this circumstance, together with 
 the maxim which I have referred to, probably gave rise to the no- 
 tion that this defence was good only against the legal title. But 
 there appear to be three cases in which the use of this defence is 
 most familiar : 
 
 First, where an application is made to an auxiliary jurisdiction of 
 the court by the possessor of a legal title, as by an heir at law (which 
 was the case in Bassett v. Nosworthy) or by a tenant for life for the 
 delivery of title deeds (which was the case of Wallwyn v. Lee [9 
 Ves. 24], and the defendant pleads that he is a bona fide purchaser for 
 valuable consideration without notice. In such a case the defence is 
 good, and the reason given is that as against the purchaser for valu- 
 able consideration without notice the court gives no assistance; that is, 
 no assistance to the legal title. But this rule does not apply where the 
 court exercises a legal jurisdiction concurrently with courts oi law. 
 Thus it was decided by Lord Thurlow in Williams v. Lambe [3 B. C. 
 C. 264], that the defence could not be pleaded to a bill for dower; 
 and Sir J. Leach, in Collins v. Archer [1 Russ. & Mylne, 284], that 
 it was no answer to a bill for tithes. In those cases the court of equi- 
 ty was not asked to give the plaintiff any equitable as distinguished 
 from legal relief. 
 
 The second class of cases is the ordinary one of several purchasers 
 or incumbrancers each claiming in equity, and one who is later and 
 last in time succeeds in obtaining an outstanding legal estate not held 
 upon existing trusts or a judgment, or any other legal advantage the 
 possession of which may be a protection to himself or an embarrass- 
 ment to other claimants. He will not be deprived of this advantage 
 by a court of equity. To a bill filed against him for this purpose by 
 a' prior purchaser, or incumbrancer, the defendant may maintain the 
 plea of purchase of valuable consideration without notice; for the 
 principle is, that a court of equity will not disarm a purchaser, that is,
 
 
 196 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 will not take from him the shield of any legal advantage. This is the 
 common doctrine of the tabula in naufragio. 
 
 Thirdly, where there are circumstances that give rise to an equity 
 as distinguished from an equitable estate, — as, for example, an equity 
 to set aside a deed for fraud, or to correct ii for mistake, — and the 
 purchaser under the instrument maintains the plea of purchase for 
 valuable consideration without notice, the court will not interfere. 
 
 Now these are the three cases in which the defence in question is 
 most commonly found. None of them involve the case that is now 
 before me. 
 
 It was indeed said at the bar that the defendants, being in posses- 
 sion, had a legal advantage in respect of the possession, of which they 
 ought not to be deprived. But that is to confound the subject of 
 adjudication with the means of determining it. The possession is the 
 thing which is the subject of controversy, and is to be awarded by 
 the court to one or to the other. But the subject of controversy, and 
 the means of determining the right to that subject are perfectly dif- 
 ferent. The argument, in fact, amounts to this : "I ought not be 
 deprived of possession, because I have possession." The purchaser 
 will not be deprived of anything that gives him a legal, right to the 
 possession, but the possession itself must not be confounded with the 
 right to it. 
 
 The case, therefore, that I have to decide is, the ordinary case of 
 a person claiming under an innocent equitable conveyance that interest 
 which existed in the grantor at the time when that conveyance was 
 made, lint, as I have already said, that interest was diminished by the 
 estate that had been previously granted to the annuitant, and as there 
 was no ground for pretending that the deed creating the annuity was 
 a voluntary deed, so there is no ground whatever for contending that 
 the estate of the person taking under the subsequent marriage settle- 
 ment is not to be treated by this court, being an equitable estate, as 
 subject to the antecedent annuity, just as effectually as if the annuity 
 itself had been noticed and excepted out of the operation of the sub- 
 sequent instrument. 
 
 I have no difficulty, therefore, in holding that the plea of purchase 
 for valuable consideration is upon principle not at all applicable to 
 the case before me, even if I could take notice of it as having been 
 rightly and regularly raised. 
 
 We next come to examine the authorities upon which the defence 
 relies. Now, undoubtedly, I cannot assent to some observations which 
 I find attributed to the Master of the Rolls in the report of the case 
 of the .Attorney General v. Wilkins; but to the decision of that case, 
 as explained by his Honor in the subsequent case of Colyer v. Finch 
 [19 Beav. 500], I see no reasonable objection, and the principles that 
 I have here been referring to are fully explained and acted on by the 
 Master of the Rolls in the case of Colyer v. Finch. It is impossible, 
 therefore, to suppose that he intended to lay down anything in the
 
 Sec. 1) BY ACT OF THE PARTY. 197 
 
 case of the Attorney General v. Wilkins, which is at variance with 
 the ordinary rules of the court as I have already explained them, or 
 which could give countenance to the argument that has been raised 
 before me at the bar. 
 
 I have consequently no difficulty in holding that the decree of his 
 Honor, the Vice Chancellor, is right upon the grounds on which he 
 placed it in the court below, and that also it would have been right 
 if he had considered the grounds which have been urged before me 
 in support of this petition of rehearing. I therefore affirm the decree 
 and dismiss the petition of rehearing. 
 
 C a 
 Tn re NEIL. 
 
 HEMMING v. NEIL. 
 
 (High Court of Justice, Chancery Division, 1890. 62 Law Times Reports, 649.) 
 
 Adjourned summons. 
 
 James Neil, who died in 1888, by his will dated November 8, 1ST.*), 
 devised and bequeathed all his real and personal estate to trustees in 
 trust to sell and convert into money and to invest the proceeds in in- 
 vestments therein authorized and stand possessed of one-seventh part 
 upon trust during the life of his son Philip to pay and apply the 
 whole or any part of the income or accumulations of income for the 
 support, maintenance, or education, or otherwise for the benefit of 
 his son Philip, his wife and children, in such manner in all respects 
 as his trustees should in their uncontrolled discretion think fit and to 
 accumulate any residue of the income. 
 
 By indentures dated August 1, 1889, and August 14, 1889, Philip 
 Neil mortgaged his interest to one R. C. A. Hemming to secure two 
 sums of sixty pounds each. August 15, 1889, the trustees were noti- 
 fied of these assignments. The trustees continued to pay Philip week- 
 ly sums on account of the income of his share. 
 
 R. C. A. Hemming claimed to be entitled to an order for an account 
 of the income of the share of Philip Neil since August 15, 1SS9 and 
 of all payments made since that date, and that they be ordered to re- 
 coup him the aggregate amount of all such payments. 
 
 Kekewich, J. Mr. Renshaw argued that the intention of the testa- 
 tor was that there should be an application of a competent part only of 
 the income of the son Philip Neil's share towards his support and 
 maintenance, and he referred to Re Sanderson's Trust (3 Kay & 
 Johns. 497). I have looked at the will in that case, and I find that 
 the direction was every year during the life of the testator's brother 
 to pay and apply the whole or any part of the rents, issues, and prof- 
 its of the testator's real and personal estate and effects for and to- 
 wards the maintenance, attendance, and comfort of the brother.
 
 198 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (C-h. 3 
 
 But in the present will there is a direction to accumulate all the resi- 
 due of the income not applied under the discretionary trust for 
 
 maintenance. 
 
 There was no such direction in the will in Re Sanderson's Trust 
 (ubi sup.). Accordingly my mind is entirely set al rest as regards 
 that objection. There is a distinct statement by the testator that the 
 whole or any part of the income or accumulations of income of the 
 share of his son Philip Neil may he applied for the support, mainte- 
 nance, or education, or otherwise, for the benefit of that son, his wife 
 and children, in such manner in all respects as the trustees shall in 
 their uncontrolled discretion think fit. That conclusively shows that 
 the trustees may exercise discretion whether they -hall apply the whole 
 or part only of the income. On that part of the case, therefore, my 
 opinion is against the plaintiff. Then comes the second point. It 
 appears that some moneys have been paid to or for the benefit of 
 Philip Neil, since notice of the assignments of his interc-t was given 
 to the solicitors for the trustees of the will, and the plaintiff seeks 
 to make the trustees liable in respect of the payments so made. In 
 determining that question the word which will guide me is the word 
 "benefit" in the direction to the trustees to pay or apply the whole or 
 an) part of the income of his share. Philip is entitled to assign noth- 
 ing but his beneficial interest under the will of the testator. Money 
 paid to him or to any person on his behalf — excluding such a special 
 case as that put by Cotton, L. J., in Re Coleman, Henry v. Strong 
 I 60 L. T. Rep. [N. S.| 127, 39 Ch. Div. 1 13)— is necessarily part of 
 his beneficial interest. Mr. MacSweeny says that the money is not 
 his until it is actually paid to him. I think that argument is more in- 
 genious than sound. I think that it must be assumed that money paid 
 by the trustees to him or to any person in his behalf was his in their 
 irrevocable determination immediately before the payment. At that 
 period of time they had notice and were affected with notice of the as- 
 signment. I think, therefore, the trustees are liable to pay to the 
 plaintiff all moneys which have been paid by them to Philip Xeil 
 or to any person on his behalf, since the receipt by the trustees of 
 the notice of the charge. An account must he taken of moneys so 
 paid unless the parties can agree upon the amount. 
 
 DIBBS v. GOREX. 
 
 an Chnwrrv boforo tho Master of the K<>lls. Lord Langdale, 1849. 11 Bea- 
 
 van. is:;.) 
 
 In 1815, the testator made his will, giving his property to trustees 
 on certain trusts for his children and grandchildren. He died in 1816 
 and the trustees, acting on their own notion of the effect of the trusts, 
 proceeded in their performance. In 1836, a bill was filed for the ad- 
 ministration, and it was then found, that the trustees had acted under
 
 SeC. 1) BY ACT OF THE PARTY. 100 
 
 an erroneous view of the effect of the will; and it was so declared 
 by the decree made in January, L84JL. 
 
 It turned out, that two of the testator's children, Henrietta and 
 John, had each received from the trustees the sum of £111., part of 
 the trust property, to which they were not entitled, and that two oth- 
 er children, (.diaries and Robert, had also received £is2. to which they 
 were not, under the will, entitled. 
 
 These children were entitled to other interests under the will. 
 
 In 1828, John had assigned his interest under the will to Mac- 
 dougal for valuable consideration. 
 
 Mr. Turner and Mr. Chandless now asked, that the sums so er- 
 roneously paid might be repaid out of the other funds coming to the 
 testator's children, and for a lien. They cited Priddy v. Rose [3 Mer. 
 86]. 
 
 Mr. Sheffield, for Maedougal, the assignee of John, argued that this 
 equity did not apply to the assignee of John's interest. In Priddy v. 
 Rose no notice was given to the trustee of the fund and Sir W. Grant 
 relied on that fact. 
 
 The Master of the Rolls. 1 Where a trustee takes on himself to 
 act upon his own authority, and pays to the parties beneficially inter- 
 ested sums to which they are not entitled, it becomes necessary for 
 this court, to enforce the execution of the trust, by recovering back the 
 sum thus received contrary to the trusts. * * * 
 
 Some of the parties have received a portion of the estate, to which 
 they are not entitled. I cannot allow them to retain it. 
 
 The plaintiff is entitled to have these sums deducted from the shares 
 of John and his assignee, and of Henrietta and Charles, with a declara- 
 tion, that, until those sums have been recouped, they form a lien on the 
 other moneys which may become due to them under the will. 
 
 WILKINS v. SIBLEY. 
 
 (In Chancery, before Vice Chancellor Sir John Stuart, 1SG3. 4 Giffard, 442.) 
 
 By a settlement dated the 9th and 10th October, 1828, executed on 
 the marriage of Mr. and Mrs. Draper, a sum of i'^TOO. 3 per cent, 
 bank annuities was vested in Francis and Joseph Wilkins, upon trust, 
 after marriage to pay the income to Mrs. Draper for life; after her 
 death one moiety of the income to Mr. Draper for life; and, if no 
 children of the marriage, to pay for Mr. Draper's life the other moiety 
 of the income to Ann Wilkins, her mother, if then living, and, if not, 
 then to the said Francis and Joseph Wilkins for their own use in 
 equal shares; after the death of both Mr. and Mrs. Draper the whole 
 income to Ann Wilkins for life, if living, or, if not, to the said Francis 
 and Joseph Wilkins for their own vise in equal shares. 
 
 i Part of the opinion is omitted.
 
 200 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 Mrs. Draper died in July, 1845, without ever having had issue. 
 Joseph Wilkins, the trustee, died in November, 1846, testate, leaving 
 four infant children and bequeathing all his personal estate to the plain- 
 tit'^. Letitia Coles Wilkins and John Bailey, whom he appointed ex- 
 ecutors and trustees upon certain trusts for his wife and children. 
 
 Ann Wilkins died in ISIS; and soon after her death Francis Wil- 
 kins sold half of the stock and divided the proceeds between himself 
 and the plaintiffs, leaving £1350. 3 per cent, annuities standing in his 
 name. 
 
 In January, 1855, Francis Wilkins mortgaged certain real estate 
 to the defendant, Robert Sibley, to secure £700. and interest, and in 
 April. ISM, he assigned to Sibley a moiety of the sum of £1350. stock 
 as further security for the £700. and a further advance of £350 . May 
 5, L851, Sibley obtained a distringas on a moiety of the sum of £1350. 
 bank annuities. Francis Wilkins in July. 1852, without the knowl- 
 edge of plaintiffs sold out the sum of £675. and applied the proceeds 
 to 'his own use and afterwards absconded. This sum was subsequently 
 reduced by payment of costs to £(>12. 3s. 
 
 Mr. Draper died in 1860. Plaintiffs then claimed to be absolutely 
 entitled to this sum of £612! The defendant, Robert Sibley, claimed 
 the stock as assignee of Francis Wilkins. 
 
 The bill was filed for the administration of the trusts of the settle- 
 ment. 
 
 Tin- Vice Chancellor. 1 If a trustee who has also himself an in- 
 terest in the trust fund assigns his beneficial interest therein, and then 
 commits a breach of trust by abstracting any part of the trust fund, 
 the other cestuis (pie trust, as against the assignee of the trustee's 
 beneficial interest, have a clear equity to have the fund under the con- 
 trol of the Court applied to make good that breach of trust. In the 
 c£se of Morris v. Livie [1 Y. & C. C. C. 380] that principle was estab- 
 lished, and it is a doctrine recognized by many anterior cases. In the 
 case of Hopkins v. Gowar fl Moll. 561] the same question occurred. 
 The question there was as to a devastavit. Sir A. Hart says: "If 
 an executor assigns his legacy and afterwards is guilty of a devastavit, 
 the Court will lay its hand on the legacy, disregarding the assign- 
 ment. Even if he was a stranger, the assignee of such a legatee takes 
 only what the decree shall adjudge to him; and if an executor mis- 
 ' conducts himself so that when the accounts are finally wound up he 
 is subject to costs, the assignee of his legacy must bear the conse- 
 quence." 
 
 According to that view of the law, at the time when the defendant 
 Sibley proceeded to put a distringas on the stock, the stock upon which 
 he was going to apply the distringas was subject to the equity claimed 
 by the bill. That proposition cannot be questioned. But the argument 
 here has turned principally upon the effect of the distringas. I have 
 
 i Part of the opinion is omitted.
 
 Sec. 2) BY DEATH. 201 
 
 been unable to see upon what possible ground the distringas in any 
 degree relieved the fund on which it was placed from the equity 
 which attached to it before the distringas was issued. 
 
 The purpose of a distringas is to prevent a fund being dealt with 
 without the person who issued it having an opportunity of asserting 
 his claim. Here, then, it seems to me the fund in question was clear- 
 ly liable to the equity of the plaintiff at the time when the defendant 
 Sibley went to the bank with this distringas. 
 
 It has been said that the effect of a distringas is precisely the same 
 as if this fund had been taken out of the name of one trustee and put 
 into the name of another trustee. If that had been really done, other 
 considerations would arise; but, practically, the distringas had no such 
 effect ; the effect was to give to Sibley an opportunity to establish his 
 right to the fund in a Court of Equity. 
 
 It was the dutv of the defendant Sibley to see, he being entitled to 
 half the fund, that he took his assignment subject to the equity of the 
 plaintiff. A distringas has no effect whatever as against the assignor, 
 but the party must take subject to the same equity as before. The 
 assignment can only be taken as operating like other deeds between 
 assignor and assignee. 
 
 On a full view of the whole case I must hold that the effect of a 
 distringas was not to take away the equity which so existed in another 
 person, in respect, not of that share, but of the other share. 
 
 SECTION 2.— BY DEATH. 
 I. Death of Trustee. 
 
 FITZHERBERT'S ABRIDGMENT, SUBPCENA, pi. 8, 14. 
 
 Note. Choke said that he had once sued a subpoena against the heir 
 of feoffee and the matter was long debated ; and the opinion of the 
 chancellor and all the justices was that it did not lie against the heir, 
 and so he sued a bill to Parliament for it. Quaere if against the execu- 
 tor. Trinity, 8 Edw. IV, fol. G. 
 
 Note that a subpoena lies against the heir of the feoffee who sur- 
 vives. Michaelmas, 14 Edw. IV. 1 
 
 i See Y. B. 22 Edw. IV, fol. 6, pi. 18. 
 
 "For if he [the feoffee] makes a feoffment over the feoffor has no remedy 
 against the feoffee. The law is the same if he dies. The heir of the feoffee is 
 seised, as it seems to me. to his own use; for the confidence which the feoffor 
 puts in the person of his feoffee cannot descend to his heir, nor pass to the 
 feoffee of the feoffee; but he is feoffee to his own use as the law was taken
 
 202 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 WESTON v. DANVERS. 
 
 (In Chancery, L584. Toth. L05.) 
 
 The heir is not in equity bound to assure land, which his father bar- 
 gained and took money for. 
 
 GELL v. VERMEDUN. 
 
 (In Chancery, 1694. Freem. Ch. 109.) 
 
 The defendant's ancestor, to whom he is heir, articled in his life- 
 time for the sale of certain lands, which by the articles he covenanted 
 to convey, but did not covenant for him and his heirs: and the ques- 
 tion was whether the heir should be bound to perform this agreement. 
 And held that he should, inasmuch as his ancestor, after the sealing 
 
 till the tii »f Hen. TV. But if the second feoffee has notice of the use, those 
 
 in the chancery will a1 this day reform this by subpoena, and the heir of the 
 feoffee upon confidence was seised to his own use till the commencement of 
 Edw. I v and then began the subpoena against the heir and against the feoffee 
 of the feoffee." -Keilwey, in. Erowike, J. 
 
 At the present day, when the subject-matter of the trust is real estate and 
 the trustee dies intestate leaving an heir, the heir takes the title subject to 
 the trust. Zabriskie v. Morris ..v Ks>ex U. K. Co.. :',:: X. .1. Eq. 22 (1880); Ap- 
 peal of Carlisle and .Means, 9 Watts (Pa.) 331 (1840) : Baird's Appeal, 3 Watts 
 & S. (Pa.) 459 (1842); Walkins v. Specht, 7 Cold. (Tenn.) 585 (1870); Abbott, 
 Adm'r, Petitioner, 55 .Me. 580 (1868). 
 
 When the subject of the trust is personal property, the title passes to the 
 h-L r al representative of the trustee subject to the trust. Wheatley v. Purr, 1 
 Keen. 553 (1837); Veil v. Adm'rs of Mitchel, 4 Wash. C. C. 10.",, Fed. Cas. No. 
 
 16,908 (1821); B le v. Citizens' Bank, 84 N. Y. 83, 38 Am. Rep. 498 (1881); 
 
 Dick v. Pitchford, HI N. C 480 (1837). 
 
 When there are two or more trustees, they hold the title as joint tenants, 
 and on the death of one it survives to the others. Lane v. Dehenham, 11 Hare, 
 iss lis.",::): Saunders v. Sdiinaelzle, •}!> Cal. 59 (1S74) ; Gutman v. Buckler, 69 
 Md. 7. i:; At I. •;:;:, (1888). 
 
 To-day, in England, real estate on the death of a sole trustee vests in his 
 personal representative as if i,t were a chattel real. Land Transfer Act 1897 
 (St. 60 & 61 Vict. C 65) § 1. subsec. 1. Subsection 4 of section 1 excludes land 
 
 of copyhold tenure or customary freehold in any case in which an admittance 
 
 or any act of the lord of the manor is necessary to perfect the title of a pur- 
 chaser from a customary tenant. 
 
 In some jurisdictions, where a sole trustee dies, the trust vests in the court. 
 M< Don-aid's Adm'r v. Carey, 38 Ala. 320 (1862); Read v. Rowan, 107 Ala. 366, 
 is South. I'll (1895); Collier v. Blake, L4 Kan. 250 (1875). In New York this 
 rule was formerly limited to trusts of real estate. 1 Rev. St. (1st Ed.) p. 730, 
 pt. 2. c l. tit. 2. § 68; Bucklin v. Bucklin, 1 Abb. Dec 242 (1864); Bunn v. 
 Vaughn, 1 Abb. Dec. 2o.' > > (1S<>7). It is now extended to trusts of personalty. 
 Laws L902, p. 423, c. L50. 
 
 In some jurisdictions the law of primogeniture still applies to land held in 
 trust; tin- abolition by statute of the law of primogeniture applying only to 
 lands held beneficially. I'.oston Franklinite Co. v. Condit, 1!> N. J. IOq. 394 
 (1869) : Jenks v. Backhouse, 1 Bin. (Pa.) 91 (1803) ; Martin v. Price, 2 Rich. Ey.. 
 (S. C.) 412, 17U (1S40).
 
 Sec. 2) BY DEATH. 
 
 203 
 
 of the said articles, was in the nature of a trustee for the plaintiff of 
 those lands, which trust with the said lands descended to the heir; 
 and decreed accordingly. 2 
 
 STEPHENS v. BAILY. 
 (Th Chancery, before Tyrrill, J., L665. Nels. V"',.) 
 
 Lessee for another man's life contracts with the plaintiff for a sum 
 of money to convey an estate to him, but dies before the conveyance 
 WJiS perfected. 
 
 The defendant, being the heir of the lessee per auter vie, enters, and 
 holds the land as special occupant; and, a bill being brought against 
 Him to perfect the assurance, he demurred to it, and it was insisted for 
 him that he was in possession as an occupant, and so was not privy 
 to his father, who made the contract. 
 
 But it being referred to Justice Tyrrill, he certified that, having ad- 
 vised with the judges, he was of opinion that the defendant ought to 
 answer; and so it was ordered. 
 
 ANONYMOUS. 
 (In Chancery, 1672. Freem. Ch. 155.) 
 
 Tenant of frank tenement descendible agrees to sell to B., and B. 
 pays him part of the purchase money; the vendor dies, and his heir 
 enters ; the vendee exhibits his bill against him to have his contract 
 executed. Resolved, by the Lord Keeper Bridgman and others, that 
 the plaintiff shall not be relieved; for the heir is but special occupant. 
 and does not claim under his father, and therefore the covenant or 
 agreement of his father shall not oblige him to a conveyance of the 
 land. 3 
 
 HIX v. ATTORNEY GENERAL and Another. 
 
 (In Exchequer, 1601. Ilardres, 17G.) 
 
 Upon English bill the case was that Sir William Hix put £100. out 
 at interest to the defendant, and took bond in the name of one Toomes, 
 who afterwards became a felo de se; and now the plaintiff was re- 
 lieved against the King upon this trust in equity, upon St. 33 Hen. 
 VIII, c 39. Sed qusere whether that statute extends to any equity 
 
 - A portion of the case is omitted. 
 
 s An occupant shall not be seised to any use: per Brudnell, J. Brooke's 
 Abr. Feoffments al Uses, pi. 10.
 
 204 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 against the King otherwise than in case of pleas by way of discharge. 
 But it was likewise decreed in this cause that the plaintiff should be 
 saved harmless from all others. 
 
 ATTORNEY GENERAL v. DUKE OF LEEDS. 
 
 (In Chancery, before the Master of the Rolls, Sir John Leach, 1S33. 2 Mylne 
 
 & K. 34::.) 
 
 In the year 1S07 Benjamin Clarkson purchased of Lord Lowther 
 a copyhold estate, held of the manor of Wakefield, for the sum of 
 £.'V?10. ; but, being unable to pay the whole of the purchase money, 
 he borrowed of John Crosse a sum of £1,150., and paid the full price 
 to Lord Lowther. The copyhold estate was surrendered to Crosse 
 and his heirs; and Crosse was thereupon duly admitted. Crosse 
 died in the year 1816, having by his will given all the residue of his 
 personal property of what kind or nature soever, whether in the funds, 
 on mortgage, or other securities, to the plaintiff George Buxton, whom 
 he appointed his executor, upon trust to sell out such part of his prop- 
 erty as consisted of stock, and expend the produce, together with all 
 his other property, in furthering and promoting the cause of true re- 
 ligion among the inhabitants of Great Britain and Ireland. This de- 
 vise being, as far as it affected his interest in the copyhold estate, 
 void by the statute of mortmain, and Crosse having been illegitimate, 
 the Crown claimed to be entitled to the £1,150, which Crosse had ad- 
 vanced to Clarkson upon the security of the copyhold estate. 
 
 A bill was filed by the executor of Crosse against the Attorney Gen- 
 eral for an account of the testator's personal estate ; and, by an or- 
 der made in that cause, it was declared that so much of the testator's 
 estate as was placed out on, or arose from mortgages, belonged to 
 the Crown, and that the residue thereof was given to charitable uses; 
 and by a subsequent order the court directed that the Attorney Gen- 
 eral should be at liberty to institute a suit for the purpose of establish- 
 ing the title of the Crown to the said mortgages, and to use the name 
 of the executor of Crosse as a coplaintiff in such suit. 
 
 The present suit, by way of information and bill, was accordingly 
 instituted by the Attorney General and the executor of Crosse against 
 the Duke of Leeds, who claimed to be entitled by escheat to the copy- 
 hold premises in question as lord of the manor, against Sarah Clark- 
 son, the widow and executrix of Benjamin Clarkson, to whom the 
 Duke of Leeds had made a regrant of the copyhold premises, and 
 against Alfred Clarkson, the infant son and customary heir of the 
 mortgagor. The information and bill prayed that the defendants Sar- 
 ah Clarkson and Alfred Clarkson might be decreed to pay to the At- 
 torney General and the plaintiff the mortgage money and interest, 
 or concur in a sale of the premises for the payment of the same, and
 
 Sec. 2) by death. 205 
 
 that the Duke of Leeds might be declared to be a trustee for his Maj- 
 esty and for the person or persons entitled to the equity of redemp 
 tion in the mortgaged premises. 
 
 The Attorney General and Mr. Wray, in support of the informa- 
 tion and bill. 
 
 Tmc MASTER OF the Rolls considered the case too clear to re- 
 quire any argument in support of the title of the lord of the manor 
 for whom Tdr. Pemberton appeared. 
 
 The Attorney General declined making any further observations in 
 support of the information. 
 
 The Master of the Rolls.. Upon the facts of this case it 
 appears that Crosse was, by the effect of the surrender to him. a 
 trustee of the copyhold estate for himself to the extent of £1,150., 
 and for Clarkson and his heirs after satisfying that sum. It was set- 
 tled by the case of Burgess v. Wheate, 1 W. Bl. 123, that a cestui que 
 trust has no title as against the lord who claims by escheat upon the 
 death of a trustee without an heir. The decision in Burgess v. Wheate 
 proceeded upon the principle, derived from the old feudal notion, that 
 no tenant can be imposed upon the lord without his consent; and if 
 a trust of a copyhold could be created as against the lord, it must 
 necessarily follow that the lord might be entirely ignorant who was 
 in truth the actual and beneficial tenant of the copyhold. It is for 
 this reason that, in all mortgages of copyhold property, the surrender 
 is upon the court roll expressed to be conditional, and to determine 
 upon the repayment of the mortgage money. In this case the sur- 
 render was absolute. There was nothing upon the court roll to give 
 the lord notice of a condition, nor is there any proof that the steward 
 or deputy steward was aware of the real nature of the transaction. 
 
 The Duke of Leeds was therefore well entitled to enter upon the 
 copyhold as an escheat upon the death of Crosse the apparent tenant 
 to the lord without an heir. 
 
 Information and bill dismissed, but without costs. 4 
 
 * "A feoffee upon a trust at this day commits treason or felony; the land is 
 lost and escheats, and the trust is extinct; for the King or lord by escheat 
 cannot be seised to an use or trust; for they are in the post, and are para- 
 mount the confidence.''— Jenkins. Fourth Century, c. 92. See, also, Jenkins. 
 Fifth Century, c 1, and Sixth Century, c. 30. 
 
 When a sole trustee of real estate dies in England to-day. the legal title does 
 not escheat, but vests in his personal representative as if it were a chattel 
 real. Land Transfer Act 1807 (St. 60 & CI Vict. <•. 65) i? 1. Subsection 4 of 
 section 1 excepts lands of copyhold tenure and customary freehold in certain 
 cases. 
 
 Uses. — The King or lord, taking by escheat for failure of heirs of a 
 feoffee to uses, was not bound by the use. Brooke's AJbr. Feoffments al 
 Lscs. ill. 10, 40; Dillam v. Frain. 1 And. 309, ::14; Y. B. 11 Hen. Vlll. fol. 
 4, pi. 5. 
 
 In Chudleigh's Case, Coke, 122a (15S9-9r>), Lord Coke said: "The lord by 
 escheat, or lord of a villain, or who enters for mortmain, or who recovers in a 
 cessavit, etc., shall not stand seised to an use. because he is in by title para- 
 mount to the use, sc. by force of a condition in law tacitly annexed to the land 
 at the time of the creation of the seignory. and the tenancy came in lieu of
 
 L'UG TEANSFEB OF RESPECTIVE INTEEESTS OF PARTIES. (Ch. 3 
 
 II. Death of Cestui que Trust. 
 
 If a man enfeoff A. to his use and declare his will and then A. sells 
 to R. and enfeoffs him, still, if A. gives notice to R. of the intent of 
 the first feoffment, he shall he forced by subpoena to perform the will. 
 1 1" a tenant in borough English enfeoff two to the use of himself and 
 his heirs, the younger son shall have the subpoena and not the eldest. 
 If a man make a feoffment in trust of land descended to him on the 
 part of his mother and dies without issue without declaring his will, 
 the heir on the part of the mother shall have the subpoena. But if 
 tenant in tail make a feoffment to his own use and die without issue 
 without declaring his will, he in the reversion shall have the subpoena; 
 but if tenant in tail, remainder over, make a feoffment in trust with- 
 out declaring his will and die without issue, he in the remainder shall 
 have the use. Quaere. I hit if husband and wife are seised in 
 right of the wife and the husband make a feoffment without declar- 
 ing his will, the wife shall not have the subpoena. The reason seems 
 to be that when a man makes a feoffment without consideration and 
 expresses no use, the feoffment is by the law intended to be to the 
 use of the feoffor and his heirs; so it seems to me that the cestui que 
 in the reversion and in the remainder supra shall not have a subpoena, 
 hut a formedon and the wife a cui in vita. — Brooke's Abr. Feoffment 
 al Uses, 32, citing 5 Edw. IV, 7. 5 
 
 his seignory which he had to his own use: and the writ of escheat saith, and 
 which ad ipsum revert i debent tanqu' escaeta sua. And also they are not in 
 in the per, that is to say, in privity of the estate to which the use was annexed, 
 hut in the post." Pophani, <". J., at page 139b, said: "The reason why the 
 lord by escheat, or the lord of a villain, should not stand seised to an use, is 
 because the title of the lord is by reason of his elder title, and that grows. 
 either by reason of the seignory of the lord, or of tin- villain, which title 
 is higher and elder than the use or confidence is; and therefore should not 
 be subject to it.*' 
 
 5 Sec Y. 1'.. 5 Edw. IV. fol. 7. pi. 1G; Y. B. 21 Edw. IV, fol. 24. pi. 10; Y. 
 B. i>7 Ben. VIII, fol. 9, pi. 22. 
 
 A husband, entitled by statute to the personal property of his wife dying 
 intestate, is entitled "to her equitable personal estate in the same manner as 
 her legal personal estate." — Bartletl v. Bartlett, 137 .Mass. 156 (1884). 
 
 "If. by a custom of a manor, land in fee oughl to descend to the eldest 
 daughter only, excluding the other daughters, there being no son. and a 
 trust in equity descends to the heir, this shall go to the eldest daughter only. 
 
 to he relieved thereupon in equity, according to the cust for the land. I*. 
 
 in Car. II. B, between .(ones and Lady Reusbie. The said custom found in 
 I'.. K. by a jury at bar. and thereupon the same term decreed in chancery that 
 the trust shall go t<> the eldest daughter alone.'" -22 Yin. Abr. Uses (D), pi. 7. 
 
 "The possessio fratris of an use follows the analogy of descents at law. 
 And so if ;i man. seised in fee of an use. had issue a son and a daughter 
 by one venter, and a son by another venter, and devises it for years, and 
 dies during the term, the daughter shall have it. and not the son; otherwise, 
 it had been if he had devised it for life."— 22 Yin. Abr. Uses (D) pi. 8.
 
 Sec. 2) BY DEATH. 207 
 
 ASTON and Another v. SMALLMAN and Another. 
 (In Chancery, before Lord Keeper Oowper, 1706. - Vera. 556.) 
 
 John Smith, heing possessed of a lease for years which he held of 
 the Lord Kilmnrry, died intestate, leaving two daughters Eleanor and 
 Mary. Tonna, their grandfather, and Dodd, the administrator of 
 John Smith, surrender the old lease, and take a new one from the 
 Lady Kilmnrry to Tonna, the grandfather, and Dodd, the administra- 
 tor, for ninety-nine years, if the two daughters and one John Leach, 
 any or either of them, should so long live; but in trust, nevertheless, 
 for the two daughters. Eleanor married Bradburne and died, and 
 left three children. The defendant Smallman claimed under Elean- 
 or in a course of administration, and had also got an assignment of 
 the lease from the executor of Tonna, the surviving trustee. The 
 plaintiffs claimed under Mary as administrators de bonis non to her, 
 who survived her sister Eleanor, and brought their bill to compel the 
 defendant Smallman to account for profits, and to assign the term to 
 them. 
 
 The question was, Whether Mary, as joint tenant with her sister 
 Eleanor, and surviving her, became entitled to the whole term by sur- 
 vivorship. 
 
 For the defendant it was insisted that, in this case, there ought not 
 to be any survivorship allowed in equity ; and as authorities cited 
 the cases of Cox and Quaintock, 2 Ch. Cas. 238, and of Billingsley and 
 Shore, 1 Vern. 482, and Draper's case, 2 Par. Chanc. Rep. 64. 
 
 Lord Keeper. A trust of a term must go as the term at law 
 would have done by the like limitations; and as survivorship would 
 have taken place at law, it must do so in equity ; and decreed the de- 
 fendant to account for profits from the death of Eleanor, and to as- 
 sign the term to the plaintiffs, or as they should appoint. 
 
 BROOKE'S ABRIDGMENT, FEOFFMENTS AL USES. pi. 34. 
 
 There are landlord and tenant; the tenant enfeoffs J. S. without 
 declaring his will ; the cestui que use commits a felony and is attaint- 
 ed. The lord shall not have a subpoena to have the land, and it seems 
 the heir shall not have it, for there is a corruption of the blood and. 
 therefore, it seems that the feoffees shall keep it to their own use. — 
 5 Edw. IV, 7. 6 
 
 6 See Countess de Bedford, 2 And. 200; Jenkins, Fourth Century, c. 92; 
 Sixth Century, c. 30.
 
 L'US TRANSFER OF RESPECTIVE) INTERESTS OF PARTIES. (I'll. 3 
 
 THE KING v. EXECUT< >RS OF SIR JOHN DACCOMBE. 
 
 (In Excheqiu r, L618. Cro. Jac. 512.) 
 
 King James made a lease to Sir John Daccombe and others of the 
 provision of wines for his Majesty's house for ten years, in trust for 
 the Earl of Somerset. They made a lease for all the term except one 
 monthj rendering nine hundred pounds a year. The Earl of Somerset 
 
 being afterwards attainted of felony, the question was, whether the 
 trust which was for the said Earl was forfeited to the King by this 
 attainder. And it was referred to all the justices of England, by 
 command from the King, to be considered of, and to certify their 
 opinions. 
 
 T.wi-iKi.D Chief Baron, now delivered all their opinions to be that 
 this trust was forfeited to the King, and that the executor shall be 
 compelled in equity to assign the residue of the term and the rent to 
 the King. And he cited a case to be adjudged, 24 Eli/-., where one 
 Birket had given bond in another's name, and was afterwards out- 
 lawed, that the King should have this bond; and that in 21 Kliz. one 
 Armstrong, being lessee for years, assigned the lease to another in 
 trust for himself, and, being attainted of felony, this trust was for- 
 feited to the King. But he said they all held, and so it was resolved 
 in another case, that a trust in a freehold was not forfeited upon at- 
 tainder of treason. 
 
 Xote. This case I had from the report of Humphrey Davenport, 
 who was of counsel in this case. 
 
 KING'S ATTORNEY v. SIR GEORGE SANDS. 
 
 (In Exchequer, 1669. Freem. Ch. 129.) 
 
 Sir Ralph Freeman purchased a lease for years of several manors ; 
 afterwards he purchased the inheritance thereof, in the name of Sir 
 George Sands, being his son-in-law, in trust for Sir Ralph and his 
 heirs; afterwards Sir Ralph made his will, and made Mr. Freeman 
 his executor, and appointed that his said executor and Sir George 
 Sands should convey part to Freeman Sands, and part to George 
 Sands, the two sons of Sir George Sands, and their heirs ; the resi- 
 due to all the sons of Sir George Sands, by his then lady (Sir Ralph's 
 daughter), and their heirs, who should be living at the time of his 
 death, and then died. Sir George Sands, at the time of the death 
 of Sir Ralph, had only Freeman Sands (who soon after died without 
 issue) and the said George Sands; but afterwards Sir George had 
 issue another son, called Freeman Sands. Mr. Freeman, the execu- 
 tor, refused the executorship, whereupon administration was grant- 
 ed to Sir George Sands ; afterwards, no conveyance being made ei- 
 ther of the lease or of the reversion by Sir George Sands, wdio had
 
 Sec. 2) BY DEATH. • 209 
 
 both in trust, according to the will, Freeman Sands killed George, 
 his brother, and was afterwards attainted of murder. 
 
 The question was, whether any of those trusts, either of the lease 
 or of the reversion, that were so in Sir George, in trust as afor< 
 were forfeited to the King, of whom the lands were holden, by this 
 felony and attainder; who, by the King's attorney sued Sir George 
 on the equity side of the Exchequer to answer the profits to the King, 
 supposing those trusts to be forfeited by the felony and attainder. 
 
 The case was several times argued at the bar, and this term Chief 
 Baron Hale and Baron Turner (Rainsford being removed into 
 the King's Bench, and Atkins disabled by age) both agreed that this 
 trust was not forfeited. 
 
 In their arguments it was agreed, cestui que trust in fee, or fee 
 tail, forfeit the same by attainder of treason, and the estate to be exe- 
 cuted to the King in a court of equity, by 27 Hen. VIII, 10, and 33 
 Hen. VIII. 
 
 2. An alien cestui que trust of any estate, the estate belongs to 
 the King; which, the Chief Baron said, was the opinion of the judg- 
 es in Holland's Case [Aleyn, 14], 23 Car. I; and that an alien can- 
 not purchase but for the King's use, and that he was of counsel in 
 the case. See the case reported in Style, 20, 40. 
 
 3. As to the King's debt, by the common law, and by the practice 
 of this court, which is of the common law, cestui que trust being in- 
 debted to the King, the King shall have execution of his debt on this 
 trust; for before the statute made, 4 Hen. VII, 17, and 19 Hen. VII, 
 ."), in the time of Hen. VI, there be precedents in this court, that the 
 writ of extendi fac. for the levying of the King's debt, was of the 
 debtor's land, or of any other land of which any other person was 
 seised to his use, and this was the reason of Sir Edward Cooke's Case 
 [2 Rolle, 294], where the interest of the King's debt did attach upon 
 the power of the King's debtor to revoke a settlement made of his 
 estate; and Pasch. 4 Jac. Ford's security, taken in trust for a recu- 
 sant, was liable to the King's debt of £20. per North; so that where 
 the King's debtor hath the profitable part of the estate, the King shall 
 not lose his debt by any fiction. 
 
 4. It was agreed that the trust of the reversion would not be for- 
 feited for felony ; which the court held clear, and cited for authori- 
 ties Marquis of Winchester's Case [3 Coke, 1] ; Ford & Sheldon's 
 Case, 12 Coke 1, 2; 5 Edw. IV, 7; Lord Darcy's Case. 2 Cro. 513; 
 St. 33 Hen. VIII. And if the inheritance be forfeited for felony, it 
 must be to the lord by escheat, which cannot be, because he hath ces- 
 tui que estate for his tenant; and that no trust of an heir is forfeited 
 for felony, appears by 27 Hen. VIII, 10, and there is no wrong to 
 the lord as long as he hath a tenant, and therefore till the statute of 
 19 Hen. VII, 15, the lord could not seize the lands of which his vil- 
 
 Ken.Tr.— 14
 
 L'10 TEANSFBB <>F RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 loin was cestui que trust ; and if it be demanded what shall become 
 ai his trust, as if tenant in fee of a rem charge dieth without heir, 
 it is answered, the land shall be discharged of this trust, as if tenant 
 in f«.e of a rent charge die without heir, or be attainted, the land is 
 discharged. 
 
 Trust of a lease for years in gross may be forfeited by felony, or 
 outlawry in a personal action. Earl of Somerset's Case; Dacomb's 
 Case, 3 Cro. Jac. 512; Balington's Case. 
 
 Lease for years, if it be of never so long continuance, if it be as- 
 signed in trust for J. S. and his heirs, yet it shall go to his executors : 
 yet trusts are ruled according to the style and course of courts of 
 equity. 
 
 A real chattel in law survives to the husband, but not the trust 
 [Freem. C. C. c. 32, p. 29, note 3] of a chattel real. Co. Lit. Cap. 
 Remit. 351. 
 
 Cestui que trust of an inheritance binds himself and his heirs in a 
 bond, this tru^t is not assets to the heir; though it hath since been 
 questioned in the Lord Chancellor Hyde's time: but clearly the trust 
 of a lease for years is assets to charge an executor in equity. 
 
 So a trust assigned over to wait upon the inheritance, though of a 
 term shall go to the heirs, and heirs of the body, because a shadow 
 kept on foot for a special purpose; and this hath a great resemblance 
 to the case of charters, which go with the inheritance to the heir, 
 but if granted over, the parchment and wax shall go to the grantee 
 and his executors. 4 lien. VII, 10. 
 
 And in the present case no trust of the chattel is forfeited to the 
 King, because the lease for years was not in Freeman, who was at- 
 tainted of felony, nor the trust in him as a chattel, for that he must 
 have been executor and administrator of George, the son. 
 
 And here it was Sir Ralph's intent that the lease and inheritance 
 should be confounded, and not kept separate; and, again, Freeman 
 could have this trust but as heir to George, and as long as he hath 
 the inheritance in him, and no longer, but it shall go to the heir as 
 charters, nomine pcenae, patronage by foundership, etc. ; and the mis- 
 chief otherwise would be great, to have such waiting terms forfeited 
 by outlawry. And so judgment was given against the king's attorney. 
 
 BURGESS v. WHEATE. 
 
 (In Chancery, before Lord Keeper Eenley, Lord Chief Justice Mansfield, and 
 the .Master of the Rolls, Sir Thomas Clarke, I7r>;>. l W. Bl. 12^.) 
 
 Lord Keeper. 7 * * * I. First I shall take notice of the claim 
 of the Crown, because several of the arguments I shall make use of 
 
 7 The opinion of the Lord Keeper is much abridged, and the concurring opin- 
 ion of the Master of the Rolls, Sir Thomas Clarke, and the dissenting opinion 
 of Lord Chief Justice Mansfield are omitted.
 
 Sec. 2) BY DEATH. 211 
 
 on that, will tend to support the opinion I shall give on the other 
 claims. The question on the information is, whether the cestui que 
 trust dying without heirs, the trust is escheated to the Crown, so that 
 the lands may be recovered in a court of equity by the Crown, or wheth- 
 er the trustee shall hold them for his own benefit. [States the case.] 
 On 11 January, 1718, Mrs. Harding conveys to trustees (of whom 
 Sir F. Page was the survivor) the lands in question, in tru>t for .\!r-. 
 Harding, her heirs and assigns, to the intent that she should appoinl 
 such estates thereout, and to such [persons] as she should think prop- 
 er. Airs I larding dies without making any appointment, and with- 
 out heirs ex parte paterna. The information charges, that the trus- 
 tee took no benefit, but only for Elizabeth Harding, and to be sub- 
 ject to her appointment; and that she being dead sans heirs on the 
 father's side, and having made no disposition of the estate, that Sir 
 F. Page could take no estate for his own benefit by the deed or the 
 fine, but takes it for the benefit of his Majesty, who stands in the place 
 of the heir, and that the premises are escheated to his Majesty. The 
 question, therefore, is entirely a question of tenure, and not of for- 
 feiture. 
 
 I shall consider, first, the right of lords to escheat at law; second- 
 ly, whether they have received a different modification in a court 
 of equity ; thirdly, the arguments used in support of the information ; 
 and from the whole draw this conclusion, that the Crown has in this 
 case no equity. 
 
 1. I shall consider the law of escheat, as settled by the municipal 
 writers in the law, and reporters, and shall not regard what the law 
 was in other countries ; as they seem founded and calculated for em- 
 pire and vassalage, to which I hope in this country we shall never 
 be subject. * * * The legal right of escheat with us arises from 
 the law of infeoffment to the tenant and his heirs, and then it return- 
 ed to the lord, if the tenant died without heirs. The extension of 
 the feoffment from the person of the tenant to the heirs special of 
 his body, and then to his heirs and assigns, is accurately traced in a 
 treatise of tenures by a learned hand [Sir M. Wright]. This reduces 
 the condition of the reversion to this single event, viz. Ob defectum 
 tenentis de jure. F. N. B. 337. A writ of escheat lies where the ten- 
 ant in fee of any lands or tenements holds them of another, and tenant 
 dies seised without heirs general or special, the lord shall have the 
 land : because he shall have it in lieu of his services. The books are 
 uniform, that in the case only of tenants, dying without heir, the es- 
 cheat took place. As long as tenant or his heir, or, by his implied 
 assent, another continued in possession by title, that prevented es- 
 cheat. The law had no regard to the tenant's right to the land, but 
 in right of his seisin. All these instances show, that where there was 
 a tenant actually seised, though he had no right to the tenements, 
 and though the person who had the right died without heirs, yet the
 
 212 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 escheat was prevented. For if the lord has a tenant to perform the 
 services, the land cannot revert in demesne. * * * 
 
 2. The next consideration is, whether a court of equity can con- 
 sider it in a different light. Now, when the tenant did not die seis- 
 ed, and a proper legal tenant by title continued, and consequently, the 
 lord's seignory and services continued; can this court say to the lord, 
 "Your seignory is extinguished," and to the tenant, "Your tenancy 
 is so, too," though both are legal rights now subsisting at law? In 
 consideration of uses with regard to escheats, equity has proceeded 
 on the same principle as the law, wdiere there was a tenant of the 
 land that performed the services. And I don't find this court had 
 any regard to the merum jus of the tenant. Now, the reason why 
 there was no escheat on the death of cestui que use in equity seems 
 to be this (and it is a reason equally applicable to uses and trusts), 
 that the court had nothing to issue a subpoena upon, no equity, noth- 
 ing to decree upon ; and every person must bring an equity with him 
 for the court to found its jurisdiction upon. It seems to me he could 
 have no equity in the case of a use, or as owner of a trust, for this 
 plain reason : An use before the statute could not be extended far- 
 ther than the interest in the estate which the creator of the use could 
 have enjoyed; as if the creator of the use had a fee simple in the 
 land, he could take back no more interest in the use, either declared 
 or resulting, than he had in the land; if he makes a feoffment, and 
 declares no uses, it results to him in fee, which is to him, his heirs 
 and assigns. The consequence is, that the moment he dies without 
 heirs or assigns, there was no use remaining. How, then, can you 
 come here for a subpoena (whether he took back the same or a differ- 
 ent use) to execute a use or trust which was absolutely extinct? That 
 seems to me the plain and substantial reason why, in this case (wheth- 
 er you call it a use or a trust), there was no basis on which to found 
 a subpoena. * * * 
 
 My objection to the claim in the information is, not that it is to have 
 a trust executed as if it were land, but it is to claim the execution of 
 a trust, that does not exist. If there was a trust, I should consider 
 it merely as an estate, and determine accordingly. But the creation of 
 a trust can never affect the right of a third person. The trustee has 
 the burden and the legal privilege. Can this court say it is a nulli- 
 ty? and yet it must be so said, to take it from the trustee. Servetur 
 ad imum. But it cannot be said it is a nullity in that respect, as to a 
 trust accepted. The conveyance shall subject the trustee to all the 
 fruits of tenure. Though he has continued subject to all burdens 
 when the trust subsisted, yet now it is said, as Airs. Harding is dead, 
 you shall be considered so no longer. As between trustee and ces- 
 tui que trust, to say it is a nullity must be with this restriction, that 
 he shall take no beneficial interest that the cestui que trust can en- 
 joy. But any other he may. And therefore in respect to members,
 
 Sec. 2) BY DEATH. 
 
 213 
 
 sheriffs, coroners, the trustee was the person who had the righl to 
 exercise it; and the Legislature was forced to interpose, before the 
 cestui que trust could have or enjoy that valuable privilege. [St. 7 
 & 8 Wm. Ill, c. 25, '§ 7. 1 * * :: 
 
 Now it appears to me that at law there can be no escheat, while there 
 is a tenant de jure. In equity there could he none, while trusts were 
 called uses, and a trust and a use are exactly the same. How, then, 
 can I say the lord shall lose his escheat, when any man for his own 
 convenience puts his estate in trust? It seems, if I were to do so, 
 that I should give law and equity, and not pronounce upon law and 
 equity. * * * 
 
 Original bill dismissed as to all the rest, and the information on the 
 part of the crown dismissed totally. 8 
 
 TAYLOR v. HAYGARTH. 
 
 (In Chancery, before Vice Chancellor Sir Lancelot Shadwell, 1844. 14 Sim. 8.) 
 
 Sarah Whittell. the testatrix in the cause, by her will, dated in Au- 
 gust, 1837, after giving £100. to each of her executors, and legacies 
 of different amounts to other persons, gave all the rest of her prop- 
 erty, real as well as personal, to the defendants, Haygarth, Dobson 
 and Watson, their heirs, executors, etc., in trust to sell the same, ab- 
 solutely, immediately after her death ; and, for that purpose, to make 
 contracts, transfers and conveyances, and to give discharges for the 
 purchase money ; and to invest the surplus, after paying the expenses 
 of the sale, in their names, in the usual securities, and, out of the in- 
 come, to pay certain annuities; and, subject thereto, to stand posses- 
 sed of the capital in trust for such person or persons as she should di- 
 rect by any codicil to her will; and she empowered the trustees to 
 lease her real estates, from time to time, until they should be sold, for 
 twenty-one years, if they should think fit so to do; and she appoint- 
 ed Haygarth, Dobson and Watson to be the executors of her will. 
 
 The testatrix died in January, 1838, seised and possessed of free- 
 hold, copyhold and personal estate, but without having made any codi- 
 cil; 'and, as she was illegitimate and never had married, she left nei- 
 ther heir nor next of kin. 
 
 Her personal estate was more than sufficient to pay her funeral and 
 testamentary expenses, debts and legacies, and to provide funds for 
 payment of the annuities given by her will: the trustees, however, 
 sold her real estate, and invested the greater part of the proceeds in 
 the purchase of stock in their own names. 
 
 s By the Intestates' Estates Act 1884 (St. IT & 48 Vict. c. 71) § 4. trust estates 
 in England were for The first time made subject to escheat.
 
 214 CRANSPER OF RESPECTIVE INTERESTS OF PARTIES. (Cll. 3 
 
 At the hearing of the cause for further directions , the question was 
 whether the residue of the personal estate and the proceeds of sale 
 of the real estate, belonged to the Crown or to the trustees. 
 
 Mr. Walker and Mr. K. E. Montague appeared for the plaintiff. 
 
 Mr. Twiss and Mr. Wray appeared for the Attorney General. 
 
 Air. Teed and Mr. F. II. Hall appeared for Haygarth and Dub- 
 son, and Mr. Koe and Air. Chandless for Watson. 
 
 Mr. Cooke appeared for another defendant. 
 
 On Air. Wray rising to reply, 
 
 The Vkt. CHANCELLOR said: I will not trouble you to address any 
 argument to me respecting that part of the testatrix's property which 
 was personalty at her death. 
 
 The three executors not only have legacies of equal amount given 
 to tlu-m; but the personal property is bequeathed to them in trust; 
 and, as it is so bequeathed, they are precluded 'from claiming it for 
 their own benefit, notwithstanding no trust is declared. 
 
 Lord Thurlow concludes his judgment in Middleton v. Spicer [1 
 Bro. C. C. 201] in the following words: "The executors being ex- 
 cluded and no relations to be found, I consider the executors as much 
 trustees for the Crown, as they would have been for any of the next 
 of kin, if these could have been discovered." Those words are strict- 
 ly applicable to the present case ; and, therefore, I am of opinion that 
 the Crown is entitled to the testatrix's undisposed-of personal estate. 
 
 That being my clear opinion, I will thank you to confine yourself, 
 in your reply, to that portion of the testatrix's property which was 
 real estate at her death; and to which the position laid down by Lord 
 Loughborough in Walker v. Denne [2 Ves. Jr. 185] seems to be ap- 
 plicable, namely, that the Crown comes under no head of equity. 
 
 [The argument of Air. Wray in reply is omitted.] 
 
 The Vice Chancellor. This case has been argued for three days; 
 so that I have had time to consider it and the authorities that bear 
 upon it, which, in fact, are not numerous, but lie in a very small com- 
 pass. 
 
 The construction of the will seems to be exceedingly simple and 
 clear; and I have not the slightest doubt that, if any person had been 
 named in a codicil, as an object of the trust created by the will, that 
 person would have had a right to call for a conversion of the estate; 
 and it would have been a mere matter of course for this court to de- 
 cree the estate to be sold ; my opinion being that the whole legal fee 
 simple is vested in the devisees in trust; and that what is called the 
 power of leasing was intended only to be used from time to time, un- 
 til, in the opinion of the devisees in trust, a proper occasion had aris- 
 en for selling the estate. 
 
 It turns out that the testatrix did not make any codicil, and that 
 she left neither next of kin nor heir ; and I have already expressed 
 an opinion, which, I think, is fully warranted by Middleton v. Spi-
 
 Sec. 2) by death. 215 
 
 cer, that the Crown is entitled to that part of the testatrix's property 
 which was personal estate at the time of her death. 
 
 The only question that remains to be disposed of relates to the real 
 estate. Now, whatever opinion might have been originally entertain- 
 ed about Burgess v. Wheate, 1 W. Bl. 123, it has remained unreversed 
 for more than eighty years; and, consequently, it must be considered 
 as binding upon the court. It is observable it was not the decision 
 of one judge against another; but of Lord Keeper Henley and Sir 
 Thomas Clarke, M. R., against the opinion of Lord Mansfield. The 
 Master of the Rolls and the Lord Keeper argued upon a point of 
 equity against the Chief Justice of the King's Bench. The case was 
 nothing more than this. A legal estate was vested in a trustee, in 
 trust for A. who died without an heir ; and it was held that the trus- 
 tee might hold for his own benefit; the Crown having no equity to 
 claim on the ground of escheat. That was held by the Lord Keeper 
 Henley and Sir Thomas Clarke against the opinion of Lord Mansfield; 
 and, in deciding the present case, I must take it to be the law. 
 
 Now it was said that, inasmuch as there was, clearly, a direction, 
 in the will, that the real estate should be sold, therefore the Crown is 
 entitled to the money that might have arisen from the sale. Upon that 
 point I referred to Walker v. Denne not so much for the decision as 
 for the sake of the positive proposition which is laid down by Lord 
 Loughborough in that case. His lordship says: "Then is there any 
 reason to raise an equity to convert the money into a different species 
 of property in order to create a different effect? There is no person 
 claiming under the will of the testator appearing to insist that it shall 
 be considered as that wdiich de facto it is not. The Crown comes un- 
 der no head of equity. I think it would be a great stretch even if that 
 circumstance of the option was wanting; but, with that circumstance. 
 to convert it for the Crown is too extraordinary for a court of equi- 
 ty." Therefore the broad proposition is that the Crown comes under 
 no head of equity. 
 
 The distinction between the case of Middleton v. Spicer and the 
 case now before me is that in the case of Middleton v. Spicer the sub- 
 ject of dispute was personal estate. It was a mere chattel real ; and 
 there is no doubt that, by the law of the land, the Crown is entitled 
 to the undisposed-of personal estate of any person who happens to 
 die without next of kin. There the property at the death of the tes- 
 tatrix did not require that there should be any act of a court of equi- 
 ty to give a foundation to the right of the Crown; but the Crown"> 
 right was independent of a court of equity. But here, in order to give 
 a right to the Crown, it is absolutely necessary that the equity should 
 be enforced, or at least enforceable, for the purpose of converting the 
 freehold estate in fee simple into property of the description of per- 
 sonalty ; and the real question is whether, attending to the authorities, 
 there is an equity to compel the conversion for the Crown. Xow I 

 
 216 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 have the authority of the opinion expressed by Lord Loughborough 
 against the existence of any such equity; and, without assuming to 
 myself the jurisdiction of the House of Lords, and entering into the 
 question whether the decision of Lord Chancellor Brougham in Hench- 
 man v. The Attorney General [2 Sim. & S. 498] is right or wrong, it 
 is quite sufficient for me to say that, in making the decision which 
 he did, he evidently referred to and relied upon the opinion express- 
 ed in the case of Walker v. Denne. 
 
 Then, as far as the question about the legal estate goes, I have the 
 decision of a court of equity that the Crown shall not take by escheat. 
 And I have the opinion of two Lord Chancellors in succession that 
 there is no equity for the Crown to call for a conversion of the land, 
 in order that it may take the produce of it. I admit that, if there 
 had been any next of kin of this lady living at her death, who after- 
 wards died without next of kin, then the principle of Middleton v. 
 Spicer would directly have applied. Because the Crown would have 
 come in, in the place of the next of kin of an individual, who had a 
 clear right, in equity, to call for the conversion of the real estate. 
 
 The point seems to me to be so clear upon the authorities that I 
 have thought it my duty to give my opinion upon it without delay; 
 and, having regard to what was said by Lord Loughborough in Walk- 
 er v. Denne, and by Lord Brougham, in reference to it, in Henchman 
 v. The Attorney General, my opinion is that the Crown has no equi- 
 ty to take, from the devisees, the produce of the real estate which they 
 have sold of their own authority. 
 
 The result is that, after providing for the payment of the annuities 
 given by the will and for the costs of the parties, out of the personal 
 estate and the proceeds of the sale of the real estate, pro rata, the 
 remainder of the personal estate will belong to Her Majesty by vir- 
 tue of her prerogative, and must be paid to such person as Her Maj- 
 esty shall appoint under her sign manual ; and the remainder of the 
 proceeds of the sale of the real estate will belong to the defendants 
 JIavgarth, Dobson and Watson, and must be paid to them in equal 
 third parts. 
 
 SECTION 3.— BY FORFEITURE. 
 
 TAWLETT v. ATTORNEY GENERAL. 
 
 (In Exchequer, l<»<'>7. Hardres, 405.) 
 
 In a bill to redeem a mortgage, the case appeared to be thus, viz. : 
 The plaintiff had mortgaged lands in fee to one Ludlow for security 
 of £3,000. with interest, and bound himself in a statute and recog-
 
 Sec. 3) BY FORFEITURE. 217 
 
 nizance to perform the covenants of the mortgage, and to pay the 
 money with interest at a certain day. The day past, the money un- 
 paid. The mortgagee by his will devised all his goods, chattels, debts, 
 and personal estate, his debts and legacies bring paid, to his i 
 utor, and dies. Edmund Ludlow, son and heir of the mortgagee, is 
 attainted of high treason by the new act of 12 Car. II. The King 
 seizes; and the executor extends the plaintiff's lands upon th 
 cognizance, who thereupon exhibits his bill against the King and the 
 executor, and in it suggests that he could not pay the money at the 
 day at the place appointed, viz. in the Strand in Middlesex, by rea- 
 son of the plague; and that afterwards the mortgagee accepted the 
 interest, and waived the forfeiture. And the question now upon a 
 demurrer to the bill was, whether or no the plaintiff could have any 
 remed\ against the King, to have a redemption? 
 
 Uai.k, Chief Baron. This is a case of great concern, and deserves 
 great consideration. It was made a question in this present Parlia- 
 ment in the House of Lords, in the Earl of Cleveland's Case, first, 
 whether or no there be a right of redemption in this case against the 
 King? And, secondly, if there be, what remedy must be taken? And 
 I answered, as I take the law to be, that in natural justice redemption 
 of a mortgage lies against the King. But to the other question I made 
 no answer; because I took it to be a point of great importance. Bui 
 I am of opinion, that the King cannot be compelled to reconvey ; but 
 that an amoveas manum only lies in such case. And this is all that 
 can be done, if a trustee forfeit the estate. And it is to be considered 
 here, whether or no there be a right of redemption against the lord 
 by escheat (for so the King is in here, and not by his prerogative). 
 and how the course of chancery is in case of the redemption of 
 mortgages, who shall redeem, and against whom. I agree the case 
 of a statute merchant, for he comes in merely by the party, viz. by 
 the act of the party, and the remedy that the law gives thereupon ; 
 and it is worth inquiring how the precedents are, where a trustee for 
 years is outlawed, and the lands seized, what remedy the cestui que 
 trust has there? But admitting that case, yet it may be otherwise in 
 case of a fee simple ; as cestui que trust for years may forfeit his 
 interest for felony ; but cestui que trust in fee cannot ; and I agree 
 the case in 3 Edw. III. And I conceive that a mortgage is not mere- 
 ly a trust, but a title in equity. And the matter of redemption, it 
 seems, is not the main business in the case ; for Mr. Attorney Gen- 
 eral offers to give way to a redemption, upon payment of the mon- 
 ey ; but the point is, who shall have the money, whether the executor 
 and devisee, or the King? for both contend for it. 
 
 And the Chief Baron further said: If the condition of a mortgage 
 be to re-enter upon payment of the money to the executors or admin- 
 istrators, there without doubt the heir should not have the money 
 after forfeiture; because the mortgagee looked upon it only as a chat-
 
 218 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 tel; though if the word "heirs" were inserted into the condition, it 
 would be more a question. But he said, he took the law to be the 
 same in both cases. Yef he delivered no opinion in the principal case, 
 but ordered a case to be made of it. And the cause was adjourned. 
 
 Afterwards in Hilary term, in annis 19 & 20 Car. 11, it was argued 
 again by counsel on both sides; and much to the same effect as be- 
 fore. And again the king's counsel insisted, that a mortgagor was 
 not relievable against the King in equity: 
 
 First, because the King is not liable to a trust; and a mortgage for- 
 feited is of the same nature. 
 
 Secondly, because by the escheat the ancient right and tenure is 
 destroyed, and the King is in jure coronae. 
 
 Thirdly, estates in dower, frank bank, tenancies by the curtesy, 
 and of disseisors, are not liable to trusts, because they are in the post; 
 otherwise of occupancies. 
 
 ]•< mrthly, the chancery has no jurisdiction over the King's con- 
 science, but over the consciences of subjects only ; for that it is a pow- 
 er delegated by the King to the Chancellor, to exercise the King's 
 equitable authority betwixt subject and subject. Nor is it within the 
 statute of 33 Hen. VIII, c 30, for equity against the king in the Ex- 
 chequer. And they cited Abbot of Bury v. Bokenham, 1 Dyer, 8 ; King 
 v. Boys, 3 Dyer, 283; W'ikes' Case, Lane, 51; Lathbury v. Humfry, 
 Yelv. 115; Bowie's Case, 11 Cote, 79. 
 
 IIalK, Chief Baron. There is a diversity betwixt a trust and a pow- 
 er of redemption ; for a trust is created by the contract of the party, 
 and he may direct it as he pleaseth ; and he may provide for the exe- 
 cution of it, and therefore one that comes in in the post shall not be 
 liable to it without express mention made by the party; and the rules 
 for executing a trust have often varied, and therefore they only are 
 bound by it, who come in in privity of estate. A tenant in dower is 
 bound by it, because she is in in the per, but not a tenant by the cur- 
 tesy, who is in the post. So all who come in in privity of estate, or 
 with notice, or without a consideration. But a power of redemption 
 is an equitable right inherent in the land, and binds all persons in the 
 post, or otherwise. Because it is an ancient right, which the party 
 is entitled to in equity. And although by the escheat the tenure is 
 extinguished, that will be nothing to the purpose, because the party 
 may be recompensed for that by the court, by a decree for rent, or 
 part of the land itself, or some other satisfaction. And it is of such 
 consideration in the eye of the law\ that the law takes notice of it, 
 and makes it assignable and devisable. 
 
 But the most considerable things in the case are: 
 
 First, that the King is in actual possession, and cannot be removed 
 in equity by an amoveas manum. as he may at law. 
 
 Secondly, whether there will not be a diversity betwixt the estate of 
 a ward and an escheat: for in cases of wardships, the Court of Wards
 
 Sec. 1) r.v DISSEISIN. 21!) 
 
 had jurisdiction by the 33 of Hen. VIII, hut in this case here i 
 actual inheritance in the King. 
 
 Thirdly, the statute of 33 Hen. VIII, c. 30. is to be considered, which 
 gives relief in equity against the King. And I conceive clearly, that in 
 this case the executor would he relieved against tin- heir for the m 
 because in common estimation it is but a personal estate. 
 
 But Baron ATKYNS was strongly of opinion that the party ought 
 in this case to be relieved against the King, because the King is the 
 fountain and head of justice and equity; and it shall not be presum- 
 ed that he will be defective in either. And it would derogate from 
 the King's honor to imagine, that what is equity against a common 
 person, should not be equity against him. 
 
 SECTION 4.— BY DISSEISIN. 
 
 LORD COMPTON'S CASE. 
 
 (Common Bench, 1587. 2 Leon. 211.) 
 
 Note by Axni'usox, Chief Justice, that if cestui que use, after the 
 statute of 1 Rich. Ill, leaseth for years and afterwards the feoffees 
 release unto the lessee and his heirs, having notice of the use, that 
 this release is unto the first use. But where the feoffees are disseis- 
 ed and they release unto the disseisor, although they (he?) have no- 
 tice of the use, the same is to the use of the disseisor, and that no sub- 
 poena lieth against such a disseisor. See 11 Edw. IV, 8. 9 
 
 If one disseise a feoffee to use, the disseisor will not be seised to 
 the use, though he have notice. — Dillam v. Frain, 1 And. 309, 314. 
 
 First, that if there were any disseisin, that nothing passed to the 
 plaintiff either in right or equity, for the disseisor was subject to no 
 trust, nor any subpoena was maintainable against him, not only be- 
 cause he was in the post, but because the right of inheritance or free- 
 hold was determinable at the common law and not in the chancery, 
 neither had cestui que use (while he had his being) any remedy in 
 that case. — First Resolution of the Judges in Earl of Worcester v. 
 Finch. 4 Inst. 85. 
 
 e Same Case, 3 Leon. 196.
 
 L'1'0 TRANSFER OF RESPECTIVE [NTERESTS OF PARTIES. (Ch. 3 
 
 COLBURN and Others v. BROUGHTON and Others. 
 (Supreme Courl of Alabama, L846. 9 Ala. 351.) 
 
 Writ of Error to the Court of Chancery for the Fifth District. 
 
 Martha J. is the wife of James K. Colburn, and t lie other complain- 
 ants are her children by him. December 25, L829, John B. Bradford, 
 the father of Mrs. Colburn, conveyed certain real estate to William 
 C. Coolidge in trust for the separate use of Mrs. Colburn for life, 
 and, should James B. Colburn die in her lifetime, then to convey the 
 same to her for life and to the heirs of her body, by said James, in 
 remainder. December 30, 182!>, Bradford conveyed to Coolidge cer- 
 tain slaves in trust for the separate use of Mrs. Colburn for her life, 
 and after her decease to be the absolute property of her children by 
 J. B. Colburn. 
 
 December 25, 1839, Colburn, the husband, conveyed to Coolidge 
 certain other slaves in trust for the separate use of Airs. Colburn dur- 
 ing her life and to the heirs of the bodies of James B. and Martha, 
 in remainder, and, should they die without heirs, then the trustee to 
 convey to the right heirs of the husband, in such manner as he should 
 by last will appoint. 
 
 At the October term, 1835, one Smith was appointed as trustee in 
 place of Coolidge. Smith resigned in November, 1838, and on No- 
 vember 30th Thomas Gaillard was appointed to act till the ensuing 
 term of the circuit court of Monroe county, when the appointment 
 might be confirmed or otherwise. Previous to the sitting of that court 
 the Legislature divested it of jurisdiction, and the appointment, be- 
 ing temporary, expired, leaving Mrs. Colburn without a legal trus- 
 tee to manage the trust property. 
 
 Kdward S. Broughton, sheriff of Monroe county, by virtue of his 
 office, became administrator de bonis non of the estate of William C. 
 Coolidge, and obtained judgment against Colburn at the July term, 
 1839, for upwards of $10,000, execution upon which issued July 1»i, 
 ls.l'.i, under color of which the coroner forcibly took possession of the 
 slaves and other personal property of the trust estate and evicted Mr. 
 Gaillard the then acting trustee. The property was sold and the sev- 
 eral persons named as defendants, became the purchasers and pos- 
 session was delivered to them. 
 
 The bill prayed that the several deeds of trust be established and 
 the trusts carried into execution, and an account taken of the trust 
 estate that came to the hands of Coolidge, in his lifetime, and into 
 that of the defendant. Broughton, Colburn and the purchasers at 
 the sheriff's sale were made parties defendant. 
 
 The chancellor dismissed the bill, and his decree was assigned as 
 error.
 
 Sec. 4) BY DISSEISIN. 221 
 
 Goldtiiwaitk, T. 10 * * * 3. But there is a more serious ob- 
 jection yet to the bill, so far as the individual purchasers at the cor- 
 oner's sale are connected with it. We readily concede that a pur- 
 chaser of trust property from or under the trustee, with notice of the 
 trust, is himself chargeable in equity as a trustee. But here there is 
 nothing to connect these individuals with the trustee, and they claim 
 adversely to him; it is not his title which they held, or one derived 
 through him, but their claim if good at all is so entirely independent 
 of the trust deed. To insist that equity can take jurisdiction of a 
 title thus disputed would invest it with cognizance of all disputes con- 
 cerning property upon which a trust had ever been created. 
 
 It is entirely evident that the property held in trust is as much the 
 subject of inquiry as that which is not. but it is too common a mistake 
 to suppose the creation of a trust carries the property itself into equi- 
 ty. The law usually provides a different and more appropriate for- 
 um to determine conflicting and adverse titles to the property. We 
 fully recognize the rule that a purchaser of trust property from or un- 
 der the trustee, with notice of the trust, is himself chargeable in equi- 
 ty as a trustee. [Williamson v. Bank, 7 Ala. 906, 42 Am. Dec. GIT.] 
 But, according to the allegations of the bill, Broughton never had pos- 
 session of the property sold, as the administrator of Coolidge, and was 
 not therefore affected by the obligations which his intestate had as- 
 sumed with relation to it. He obtains a judgment against Colburn, 
 and directs a levy upon property which that person is supposed to own. 
 In doing this, we apprehend he stands as any other plaintiff who 
 wrongfully directs a levy, and is responsible to the injured party in 
 trespass or trover. The title sold under his execution was not the title 
 of Coolidge, the trustee, but that of a third person, which, if defec- 
 tive, invests the purchaser with one that is of the same nature. What- 
 ever may be the merits of this title, the purchaser, it is evident, does 
 not derive it from the trustee, either mediately or immediately, and 
 in no sense can be said to be in collusion with or holding under him. 
 In point of fact, the whole case, as to these purchasers, makes it ap- 
 parent they claim adversely to the trust estate, and in spite of it. It 
 is then, as to all the defendants except the husband, an attempt to lit- 
 igate the title to personal property in a court of equity. We know of 
 no condition of facts under which a court of this description can de- 
 termine such a question. Doubtless a cestui que trust may go into 
 equity to prevent a sale of the trust estate, until the right can be as- 
 serted elsewhere. To this effect is Calhoun v. Cozens, :? Ala. I'.'S. 
 where an injunction was sustained by a feme covert to restrain a hus- 
 band's creditor from selling her separate estate. Here, however, the 
 property has already been converted, and the suit is to regain or have 
 satisfaction for it, from persons who neither claim under nor are in 
 privity with the trustee. 
 
 io Part of the opinion is omitted.
 
 222 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 4. The mere circumstance that a trust is created upon certain prop- 
 erty does not invest a court of chancery with jurisdiction to determine 
 tin.' disputes which may arise with respect to the title to that proper- 
 ty. If it was so, every cestui que trust might sue in equity, instead of 
 In- trustee at law for injuries done to it. Lord Redesdale said a ces- 
 tui que trust is always barred by length of time operating against the 
 trustee. Tf the latter does not enter, and the cestui que trust does not 
 compel him to enter as to the person claiming paramount, the cestui 
 que trust is barred. [Hovenden v. Lord Annesly, 2 Sch. & L. 629.] 
 And Lord of Hardwicke had before held the rule applied only as be- 
 tween cestui que trust and trustee, and not between them on the one 
 m<!c and a stranger on the other. [Lewellen v. Mackworth, 2 Eq. Cas. 
 Abr. 579.] In Finch's Case, 4 Inst. 85, so long ago as the reign of 
 Elizabeth, it was resolved by all the judges that a disseisor was sub- 
 ject to no trust, nor any subpoena was maintainable against him; not 
 only because he was in the post, but because the right of inheritance 
 or freehold was determinable at the common law, and not in chancery ; 
 neither had the cestui que trust any remedy in that case. To the same 
 effect is Mr. Sugden, in his edition of Gilbert on Uses, 429, note G, 
 who there says that persons claiming the legal estate by an actual dis- 
 seisin, without collusion with the trustee, will not be bound by the 
 trust. Therefore, if J. oust A., who is a trustee for B., and the claim 
 is not made in due time, A. will be barred, and his cestui que trust with 
 him, although J. had notice of the trust. These citations seem con- 
 clusive to show that the creation of a trust has no effect to draw the 
 contests with respect to the title of the property to a court of chan- 
 cery, and that it is only persons who are trustees, or who claim un- 
 der such, or by collusion with them, who are accountable to the ces- 
 tui que trust. 
 
 Decree affirmed. 11 
 
 ii Uses.— In Chudleigh's Case, 1 Coke, 113b, at l.°»r>T» (1589-95), Popham, 
 
 C. J., said: "•And the reason why a disseisor should not stand seised to a 
 use was because cestui que use had no remedy by the common law for any 
 use, I nit his remedy was only in chancery, and, because the right of a free- 
 hold or inheritance could not be determined in chancery, his title should not 
 ho drawn into examination there; and for this reason a disseisor shall not be 
 compelled in the chancery to execute an estate to cestui que use, hut cestui 
 que use shall compel his feoffees in the court of chancery to enter upon the 
 disseisor, or to recover the land against him at the common law, and then 
 the chancery will compel the feoffees to execute the estate according to the 
 use, and the chancellor ought to direct uses according to the rules of tin 
 common law."
 
 Sec. 5) BY MARRIAGE. 
 
 SECTION 5.— BY MARRIAGE. 
 I. Marriage of the Trustee. 
 
 223 
 
 NASH v. TRESTON. 
 
 (King's Bench, 1G31. 4 Cro. Car. 100.) 
 
 A bill in chancery was referred to Jones, Justice, and myself, to con- 
 sider whether one should be relieved against dower demanded, etc. 
 
 The case appeared to be, that J. S. being seised in fee, by indenture 
 inrolled bargains and sells to the husband for one hundred and twenty 
 pounds, in consideration, that he shall redemise it to him and his wife 
 for their lives, rendering a peppercorn ; and with a condition, that if 
 he paid the one hundred and twenty pi mnds at the end of twenty \ 
 the bargain and sale shall be void. He redemiseth it accordingly and 
 dies ; his wife brings dower. 
 
 The question was, whether the plaintiff shall be relieved against this 
 title of dower? 
 
 We conceived it to be against equity, and the agreement of the hus- 
 band at the time of the purchase, that she should have it against the 
 lessees; for it was intended that they should have it redemised imme- 
 diately to them, as soon as they parted with it ; and it is but in nature 
 of a mortgage: and upon a mortgage, if land be redeemed, the wife of 
 the mortgagee shall not have dower. And if a husband take a fine 
 sur cognizance de droit come ceo, and render arrear, although it was 
 once the husband's, yet his wife shall not have dower ; for it is in him 
 and out of him quasi uno flatu, and by one and the same act. Yet in 
 this case we conceived, that by the law she is to have dower ; for, 
 by the bargain and sale, the land is vested in the husband, and thereby 
 his wife entitled to have dower; and when he redemises it upon the 
 former agreement, yet the lessees are to receive it subject to this title 
 of dower; and it was his folly that he did not conjoin another with the 
 bargainee, as is the ancient course in mortgages. And when she is 
 dowable by act or rule in law, a court of equity shall not bar her to 
 claim her dower ; for it is against the rule of law, viz. : "Where no 
 fraud or covin is, a court of equity will not relieve." And upon con- 
 ference with other the Justices at Sergeants Inn upon this question, 
 who were of the same judgment, we certified our opinion to the Court 
 of Chancery, that the wife of the bargainee was to have dower, and 
 that a court of equity ought not to preclude her thereof.
 
 224 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 NOEL v. JEVON. 
 
 (Id Chancery, before Lord Chancellor Nottingham, 1078. Freem. Ch. 43.) 
 
 The bill was to be relieved against the defendant's dower, her hus- 
 band being only a trustee; and it appearing that the husband was but 
 a trustee, the defendant was barred of her dower, contrary to the opin- 
 ion of Nash v. Preston [4 Cro. Car. 190] ; and so it was said is the 
 constant practice of the court now. 12 
 
 II. Marriage of the Cestui que Trust — Rights of Wife. 
 
 COLT v. COLT. 
 
 flu Chancery, 1664, 1665. 1 Ch. R. 2.14.) 
 
 The plaintiff claims a third part of the said trust for her dower. 
 This court, to so much of the plaintiff's bill as relates to the dower of 
 the plaintiff Elizabeth claimed by her out of the said trust, ordered that 
 the said bill be dismissed. 13 
 
 12 See Bevnnt v. Pope, Freem. Ch. 71 (1681); Ilinton v. Hinton, 2 Ves. Sr. 
 631 (1755); Dean's Heirs v. Mitchell's Heirs. 4 J. J. Marsh. (Ky.) 411 (1830); 
 Firestone v. Firestone, 2 Ohio St. 410 (1853) ; Bopp v. Fox, 63 111. 540 (1872). 
 
 A wife has no homestead interest in land held by a husband as trustee. 
 Osborn v. Strachan, 32 Kan. 52, 3 Pac. 7G7 (18S4). 
 
 I i utesy. — A husband is not entitled to curtesy in lands held by his wife in 
 trust. King v. Bushnell, 121 111. 656, 13 N. E. 245 (1887); Chew v. Commis- 
 sioners, 5 Rawle (Pa.) ICO (1835). 
 
 Uses. — The wife of a feoffee to uses was entitled to dower. Y. B. 14 Hen. 
 VIII, fol. 4, pi. 5; Brooke's Abr. Feoffments al Uses, pi. 10. 40. The husband 
 of l he feoffee to uses was entitled to curtesy. Brooke's Abr. Feoffments al 
 Uses, pi. 10, 40. 
 
 is The wife had no dower in an equity of redemption. Dixon v. Sayille, 1 
 Pro. C. C. .".L't'i ( 1 TX-'i). The wife had no customary dower in a copyhold held 
 in trust by her husband. Godwin y. Winsniore, 2 Atk. 525 (1742). The widow 
 of a cestui que trust of a copyhold was not entitled to freebeuch. Forder v. 
 Wade. 4 Pro. C. C. 521 (1793). 
 
 To-day in most jurisdictions dower in equitable interests is allowed by stat- 
 ute. The former rule still prevails in Delaware. Massachusetts, and New 
 Hampshire. Cornog v. Cornog, 3 Del. Ch. 4<>7 (1809); Seaman v. Harmon, 192 
 Mass. 5, 78 X. E3. 301 (1906); llallett v. Parker, GO N. II. 134, 30 Atl. 583 
 (1897). Frequently dower is allowed in an equity of redemption, though not 
 in other equitable interests. Cornog v. Cornog, 3 Del. Ch. 407 (1SG0) ; Lobdell 
 v. Hayes. 4 Allen (Mass.) 187 (1862). No dower in an equity of redemption 
 is allowed in the District of Columbia. In re Thompson's Estate, 6 Maekey 
 (D. C.) ."»:'.<; (INNS). In New York dower is allowed in such equitable interests 
 oidy as the hushand retains at his death. Hawley v. James, 5 Paige, 318, 453, 
 454 (1835) ; In re Ransom (D. C.) 17 Fed. 3ol (.1883).
 
 Sec. 5) BY MARRIAGE. 225 
 
 CHAPLIN v. CHAPLIN. 
 (In Chancery, before Lord Chancellor Talbot, 1733. 3 P. Wms. 229.) 
 
 The legal estate of a rent in fee was in trustees, in trust for Por- 
 ter Chaplin in tail male; on his dying, the trusl of this estate tail 
 descended to his only son Sir John Chaplin in tail, the husband of 
 the plaintiff the Lady Chaplin, who (inter alia) brought her hill for 
 her dower of this rent. 
 
 Loud Ciianxkli.or Talbot. By the preamhle of the statute of 
 uses it is recited that by means of these uses the wife was defeated 
 of her dower, by which it appears that the wife of cestuy que use 
 was not dowable at common law; and if so, then, as at common law 
 an use was the same as a trust is now, it follows, that the wife can 
 no more be endowed of a trust now, than at common law. and be- 
 fore the statute, she could be endowed of a use; so that here was 
 the opinion of the whole Parliament in the point: that it had been 
 the common practice of conveyancers, agreeable hereto, to place the 
 legal estate in trustees on purpose to prevent dower; wherefore it 
 would be of the most dangerous consequence to titles, and throw 
 things into confusion, contrary to former opinions, and the advice 
 of so many eminent and learned men, to let in the claim of dower 
 upon trust estates; that he took it to be settled, that the husband 
 should be tenant by the curtesy of a trust, though the wife could 
 not have dower thereof ; for which diversity, as he could see no rea- 
 son, so neither should he have made it; but since it had prevailed, 
 he would not alter it; that there did not appear to be so much as 
 one single case, where abstracting from all other circumstances, 
 it had been determined there should be dower of a trust. For which 
 reason, his lordship dismissed the bill as to such part of it as claim- 
 ed dower of the trust of this rent. 14 
 
 WATTS et al. v. BALL et al. 
 
 (In Chancery, before Lord Chancellor Cowper. 1T0S. 1 P. Wms. 10<v) 
 
 The case in effect was: One seized of lands in fee had two 
 daughters, and devised his lands to trustees in fee, in trust to pay 
 his debts, and to convey the surplus to his daughters equally. 
 
 14 See D'Arcy v. Blake, 2 Seh. & L. 3S7 (1805). 
 
 The widow of a cestui que use was not entitled to dower. T. B. 13 lion. 
 VII. fol. 7. pi. 3; Crumwel v. Andres, 2 And. 69, 75 (1597); Dillam v. Frain, 
 1 And. 309, 321; Perkins, 349; Doctor & Sin, lent. Dial. 11. C. 22; Vernon's 
 Case, 4 Coke, 1 a, 1 b (1572); Preamble to Statute of Uses, J. Ben. VIII, 
 c. 10. 
 
 Ken.Tb.— 15
 
 L'L'O TRANSFER OF RESPECTIVE INTERESTS OF FARTIES. (Ch. 3 
 
 The younger daughter married and died, leaving an infant son 
 and her husband surviving. 
 
 The eldest daughter brought a bill for a partition ; and the only 
 question was, whether the husband of the younger daughter should 
 have an estate for life conveyed to him, as tenant by the curtesy? 
 
 The husband in his answer had sworn that he married the young- 
 er daughter, upon a presumption that she was seized in fee of a le- 
 gal estate in the moiety ; that at the time of the marriage she was 
 in the actual receipt of the profits of such moiety; and it was admit- 
 ted that this trust was not discovered until after the death of the 
 younger daughter, nor until it was agreed that a partition should be 
 made. 
 
 Decreed by Lord Chanceixor that trust estates were to be gov- 
 erned by the same rules, and were within the same reason, as legal 
 estates; and as the husband should have been tenant by the cur- 
 tesy, had it been a legal estate, so should he be of this trust estate ; 
 and if there were not the same rules of property in all courts, all 
 things would be, as it were, at sea, and under the greatest incertainty. 
 
 His lordship added that, this being a case of some difficulty, he 
 could have wished it had not come before him as a cause by con- 
 sent ; but his opinion was that the husband ought to be tenant by 
 the curtesy, and the rather because it appeared that he, upon his 
 marriage did conceive and presume his wife to be seized of a le- 
 gal estate in the moiety, and had reason to think so, she being in pos- 
 session thereof. 
 
 Wherefore it was decreed that an estate for life in a moiety in 
 severalty should be conveyed by the trustees to the husband, with 
 remainder in fee to his son. 
 
 In this cause Mr. How (who was for the husband) cited the case 
 of Sweetapple v. Bindon, 2 Vern. 536, where money was devised 
 to be laid out for the benefit of a feme sole in the purchase of lands 
 in fee; the feme married, and had issue, and ( died, the husband sur- 
 viving; and decreed in equity that though the money was not in- 
 vested in a purchase during the life of the wife, yet in regard, in 
 this case, if it had been so laid out the husband would have been 
 truant by the curtesy, and that this was as land in equity, therefore 
 the husband was equally entitled. 15 
 
 i b a husband of a cestui que use was not entitled to curtesy. Brooke's 
 Al.r. Feoffments al Uses, pi. 10, 40; Doctor and Student Dial. II, Cb. 22; 
 Perkins, -ioT. 4G3; Preamble to Statute of Uses, 27 II. VIII, c. 10.
 
 Sec. 5) BY MABBIAGH. 227 
 
 III. Marriage of Cestui que Trust— Rights of Husband. 
 
 MORGAN v. MORGAN. 
 (In Chancery, before Vice Chancellor Sir John Leach, 1820. 5 Madd. 408.) 
 
 This was a bill filed by a son against his father, to avoid a con- 
 tract made between them, for the division of the price of lands to be 
 sold, upon the ground that the contract proceeded upon the notion that 
 the father was tenant for life of the lands, and the son tenant in 
 fee in remainder, though in truth the son, the plaintiff, was tenant 
 in fee in possession. 
 
 The lands in question had been the estate of the mother. 
 
 By a settlement made previous to the marriage of the father with 
 the mother, the estate of the mother was conveyed to trustees in 
 fee upon trust, for the sole and separate use of the mother for life, 
 with power to the mother to appoint the fee by deed or will, and, 
 for want of appointment, in trust for the mother, her heirs and as- 
 signs. The question was, wdiether the father, who survived the 
 mother, was entitled to be tenant by the curtesy against the son, 
 the mother having made no appointment. 
 
 Mr. Hart and Mr. Daniel, for the. plaintiff, admitted the general 
 rule was, that a husband was entitled to curtesy in the equitable 
 estate of his wife, but contended, that the rule did not apply in this 
 case, by reason, that during the life of the wife, the profits were 
 to be paid to her separate use, and they cited the case of Herle v. 
 Greenbank [3 Atk. 715] as directly in point. 
 
 Mr. Beames, for the defendant. 
 
 It will be conceded that courts of equity give the husband a ten- 
 ancy by the curtesy of a trust. Such courts have likewise held that 
 there should be curtesy of an equity of redemption, though the 
 mortgage was in fee, Cashbourn v. Scarf e and English [1 Atk. 603] ; 
 and where there was a bequest of £300. to be laid out in land, and 
 settled to the only use of M. and her children, the husband of M. " 
 was held entitled to curtesy, Sweetapple v. Bindon [2 Vern. 536] ; 
 so, where there was a devise to pay debts, and the surplus to be 
 conveyed to a feme, the husband was held entitled to a curtesy in 
 the surplus, Watts v. Ball [1 P. Wms. 107]. But it is contended 
 that, though the husband is entitled to a tenancy by curtesy of a 
 trust, the present is the excepted case, namely, where the property 
 is settled to the separate use of the wife; and for this they rely 
 on Herle v. Greenbank [3 Atk. 715]. That case, however, stand- 
 alone, and is not to be reconciled to Lord Hardwicke's general
 
 228 TRANSFER OF RESPECTIVE tNTERESTS OF PARTIES. (Ch. 3 
 
 doctrine in Roberts v. Dixwell [1 Atk. G07], where he says a de- 
 vise to the separate use would not bar the husband, because there 
 was, as here, a sort of seisin in the wife; nor is Herle v. Green- 
 bank to be reconciled to the doctrine of Cashbourn v. Scarfe, and 
 Sweetapple v. Bindon, and Watts v. Ball. If Merle v. Greenbank 
 be questionable, then there was in the removal of doubt a suffi- 
 cient consideration for the agreement of the 1 1th September, 1812, 
 and that agreement is good, as a family compromise, as in Stock- 
 ley v. Stockley [1 Ves. & B. 30] and in Stapilton v. Stapilton [1 
 Atk. 2], Cann v. Cann [1 P. Wins. 723] and other cases cited in 
 Stockley v. Stockley. 
 
 The Vice Chancellor. 10 It must be admitted that the two 
 cases of Herle v. Greenbank and Roberts v. Dixwell cannot be 
 reconciled, and between the conflicting opinions of Lord Hardwicke 
 recourse must be had to principle and analogy. At law the husband 
 i-; entitled to curtesy, wherever the wife, during the coverture, is 
 seised of an estate of inheritance, and has issue by the husband ca- 
 pable of that inheritance. 
 
 Kquity follows the law, in the quality of estates, and it is to be 
 stated generally that a husband will become tenant by the curtesy, 
 wherever the wife, during the coverture, is in possession of an equi- 
 table estate of inheritance, and has issue by the husband capable 
 of that inheritance. There is no doubt here that the wife had an 
 equitable estate of inheritance, notwithstanding the rents and prof- 
 it s were to be paid to her separate use for life. * * * The wife 
 was in possession of this equitable estate by receipt of the rents 
 and profits during the coverture, and, there being issue capable of 
 inheritance, the husband, according to the rule stated, must be en- 
 titled to the curtesy, unless it can be held that the direction that the 
 wife shall take the profits to her separate use amounts to an ex- 
 press intention to exclude him. At law, the husband cannot be 
 excluded from the enjoyment of property given to or settled upon 
 the wife ; but in equity he may, and this not only partially, as by a di- 
 rection to pay the rents and profits to the separate use of the wife 
 during coverture, but wholly, by a direction that, upon the death 
 of the wife, the inheritance shall descend to the heir of the wife, 
 and that the husband shall not be entitled to be tenant by the cur- 
 tesy. Such a provision was actually made in the case of Bennett 
 v. Davis [2 P. Wms. 316], and was acted upon by this court. Here 
 the husband is partially, and not wholly, excluded from the enjoy- 
 ment of his wife's property. This court would, according to the in- 
 tention of the settlement, have restrained him from all interfer- 
 ence with the rents and profits during the life of the wife, but there 
 being no further exclusion expressed in the settlement, the court 
 
 ic Part of the opinion is omitted.
 
 Sec. 5) BY MARRIAGE. 229 
 
 can have no authority to restrain him from enjoying his general 
 right as tenant by the curtesy in the equitable inheritance of his 
 wife. Bill dismissed. 17 
 
 CLAUSSEN v. LA FRANZ. 
 
 (Supreme Court of Iowa, 1855. 1 Iowa. 226.) 
 
 Action of right by plaintiff as the guardian of the minor chil- 
 dren of Peter C. Burmeister, deceased, against La Franz, to recov- 
 er the possession, and rents and profits, of certain real estate. In 
 1847 Burmeister agreed to buy a lot in the city of Davenport and 
 paid of the purchase money $100. He lived in the house on said 
 lot till his death, September 5, 1847, at which time no deed had 
 been executed by the vendor. Before Burmeister's death, with $400 
 furnished by him, Cook & Sargent bought from the United States 
 two quarter sections of land and took title in the same of George 
 B. Sargent. Sargent, after Burmeister's death, conveyed this land 
 to his widow, Maria E. Burmeister. She also, out of Burmeis- 
 ter's estate, paid $1,900, the balance of the purchase price of the 
 lot and took a deed in her own name. Soon after obtaining the 
 deeds for the land and lot she married defendant, and he thereup- 
 on took possession of said premises and has ever since continued 
 in possession and received the rents and profit. Shortly after her 
 marriage with defendant the said Maria E. on July G, 1853, made 
 her declaration of trust in behalf of said infant children and on 
 September 12, 1853, conveyed all of said premises to said children. 
 
 Defendant by his answer alleged that the premises were the prop- 
 erty of his wife, who was, at the time of their intermarriage, seised 
 of an estate of inheritance in fee simple, and that he had the right 
 to the rents and profits arising out of the same. 
 
 A replication was filed stating that the said Maria E., at the time 
 of said intermarriage and at the time of said declaration of trust 
 
 it See Follett v. Tyrer, 14 Sim. 123 (1S44) ; dishing v. Blake, 30 N. J. 
 Eq. ON!) (1879). 
 
 The husband may ho deprived of curtesy by an alienation of her inheritance 
 by the wife by deed or will. Cooper v. McDonald, L. R. 7 Gh. Div. 288 (1877) ; 
 Pool v. Blakie, 53 111. 495 (1870); unless prevented by statute, as in Soltan 
 v. Soltan, 93 Mo. 307, 6 S. W. 95 (1887). 
 
 The notion advanced by Sir John Leach that the creator of a trust lor the 
 separate use of the wife may exclude the husband from curtesy has been 
 approved by the courts of Kentucky and Pennsylvania. Rautenbusch v. Don- 
 aldson (Ky.) 18 S. W. 536 (1892); Cochran v. odlern. 4 Watts & S. 95, :\'j Am. 
 Dec CO (1S42) ; Rigler v. Cloud, 14 Pa. 361 (1850). There are dicta in other 
 Jurisdictions to the same effect, dishing v. Blake, 30 N. J. EJq. 689, 697 1 1879) ; 
 miinghast v. Coggeshall, 7 R. I. 383, 394 (1863); Baker v. Heiskell, 1 Cold. 
 (Tenn.) till. 643 (1860) ; Dugger v. Dugger, 84 Va. L30, 144. 4 S. K. 171 (1887). 
 This dictum, however, seems fully answered by what is said in Lewin's Law 
 of Trusts (11th Eng. Ed.) pp. 925, 926.
 
 230 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Cll. 3 
 
 and said conveyance to said heirs of Bnrmeister, held the said le- 
 gal title in trust for said heirs, and that by said conveyance the said 
 legal title passed to the wards of plaintiff. Verdict and judgment 
 for plaintiff. Defendant appealed. 
 
 Woodward, J. 18 * * * These facts and allegations constitute 
 the cause which we are to decide. And the facts may be thus brief- 
 tted. Burmeister, in his lifetime, contracted for the lot four, 
 paid part of the money, and took possession. After his death, the 
 widow paid the remainder of the money, and took a deed in her 
 own name. She also paid $400 for the land, and took a deed in 
 her own name. In both cases, the money she paid was money of 
 her husband. She then married, and afterwards declared, by deed, 
 that she held the property in trust for the plaintiff's wards, and then 
 conveyed it to them, her husband, La Franz, not joining in the deeds. 
 
 The defendant, her husband, now claims, that by virtue of the 
 marriage, he has a life interest in the property, which neither her 
 act, nor the law, can take away. He claims that at the time of the 
 marriage, she was seised in fee of this realty, and upon the mar- 
 riage, he became seised of a freehold estate, a vested estate, in the 
 wife's land. 
 
 Has the counsel for defendant overlooked one simple, but lead- 
 ing question: Was she seised in her own right? He has not no- 
 ticed this, but has seemed to assume, that the husband's marital 
 right overrides this consideration, and ousts every one else, if the 
 wife only held the legal title. But this question lies at the foun- 
 dation. The husband cannot get, by the marriage, more estate, nor 
 a better estate, than the wife had. If she had obtained it by fraud, 
 would the marriage heal the difficulty? If she held in trust, does 
 the marriage discharge the trust, or defeat it? If the title was de- 
 fective, doees the marriage perfect it? But it is said, that it is the 
 homestead. This does not make the title better. If your title to the 
 property is not good, your fixing the homestead there, will not mend 
 it. You may fix your homestead on a good title, but fixing it there, 
 will not make a good title. Thus all the rights of La Franz de- 
 pend entirely upon what his wife had at the time of the marriage. 
 Now, let us inquire, whether she did or did not hold as a trustee. 
 * * * 
 
 Mrs. Burmeister, then, being only a trustee, and holding the ti- 
 tle for others, what are the rights of her husband? They cannot 
 be greater than hers. He cannot have a more absolute estate, than 
 that on which his own hangs. His rights are exactly measured by 
 hers. He cannot be regarded as a bona fide purchaser for a con- 
 sideration, without notice. This is not like the English cases, in 
 which the chancellor has set aside an antenuptial conveyance of the 
 proposed wife, as a fraud on the husband. In those cases, she is 
 
 is Part of the opinion is omitted.
 
 Sec. 5) BY MARRIAGE. 
 
 231 
 
 supposed to be the real and actual owner of the estate. Whether 
 with or without notice, his rights are in that only which his wife 
 held as her own; in other words, his rights are in her property, 
 and not in another's. He says, that upon marriage he became seised 
 of a freehold, was entitled to receive the rents and profits in the 
 right of his wife, that she cannot convey without his joining her. 
 He applies to this case, the common law doctrine concerning the 
 husband's rights in the wife's own lands. Here is his error. * * * 
 Judgment affirmed. 
 
 WYTHAM v. WATERHOUSE. 
 
 (Queen's Bench, 1596. 1 Cro. Eliz. 4G6.) 
 
 A lease for years was granted to the defendant to the use of the 
 grantor's [grantee's?] sister, whom he afterwards should marry; 
 and he married her accordingly, and then died. The feme takes the 
 plaintiff to husband, and afterward she died. The defendant takes 
 administration of the plaintiff's wife's goods. The plaintiff sued the 
 defendant in chancery to have this term. And it was there decreed, 
 by the advice of all the justices of England, that neither the term nor 
 the use thereof appertained to the plaintiff. 19 
 
 PALE v. MICHELL. 
 
 (In Chancery, before Lord Chancellor Cowper, 1710. 2 Eq. Cas. Abr. 138.) 
 
 A term for 99 years determinable upon three lives is assigned to 
 A. and B. in trust for C, who married, and died. The question was, 
 whether this trust of a term goes to the husband who survived, 
 or to the wife's administrator? 
 
 Lord Chancellor held, clearly, that the trust of a term as well 
 as the term itself survives to the husband, and that he need not take 
 out administration. 
 
 TUDOR v. SAMYNE. 
 
 (In Chancery, before Lord Commissioners Trevor, Rawlinson, Hutchins, 1692. 
 
 2 Vern. 270.) 
 
 Dr. Sermon, the defendant's first husband, being possessed for 
 the residue of a term of thirty-one years, granted by Dr. Lamplugh, 
 in the year 1676, conveyed it over to trustees for the separate use 
 and benefit of the defendant his wife. She marries Samyne a sec- 
 
 19 Witham's Case. 4 Inst. 87 (1590).
 
 232 TRANSFER OF RESPECTIVE INTERESTS OF FARTIES. (Ch. 3 
 
 ond husband, who first mortgages this term to Vcnner, and he and 
 Venner assign to the plaintiff. 
 
 The bill was against the wife and her trustees, to compel them to 
 assign over the legal estate to the plaintiff. And decreed according- 
 ly ; for as the husband may dispose of a term for years, where the 
 legal estate was in his wife; so he may of the trust of a term, with- 
 out either the wife or the trustees joining; and Sir Edward Tur- 
 ner's Case [1 Vern. 7] cited, that a term assigned by the first hus- 
 band for the separate use of the wife, may be sold or disposed of 
 by the second husband. 
 
 HORNSBY v. LEE et al. 
 
 (In Chancery, before the Vice Chancellor, Sir Thomas Plumer, 1S1G. 2 
 
 Madd. 10.) 
 
 By indenture, 1st January, 1774, between Deacon and Collier, as- 
 signees of Baptist Darwin, a bankrupt (the father of the plaintiff), 
 of the first part; the said Baptist Darwin and S. Darwin, his wife 
 (the mother of the plaintiff), of the second part; and Mary Pet- 
 ty, R. Petty, J. Elliott, and G. Hooper, of the third part ; Deacon 
 and Collier granted etc. unto the said M. Petty, R. Petty, J. Elliott 
 and G. Hooper, £422. 6s. 3d., four per cents, together with the divi- 
 dends, to hold the same upon trust, to apply the dividends for the 
 separate use of S. Darwin during her life, and, after her death, 
 to apply the principal and dividends among all and every child and 
 children of the said B. Darwin, by the said S. Darwin, as should 
 be then living, in equal shares, payable at twenty-one ; but if ei- 
 ther of the children should die before his or their shares should be- 
 come payable, the shares of him, her or them so dying, to be paid 
 to the survivors; and if only one child who should live to attain 
 twenty-one, then the principal sum and the dividends to be paid to 
 such only child. By the same indenture, Deacon and Collier granted 
 etc. to the said M. Petty, R. Petty, J. Elliott, and G. Hooper, cer- 
 tain shares in a messuage, and all the assignees' right, title, and inter- 
 est in and to the real estate late of Richard Petty (the father of the 
 said S. Darwin), and the moiety, or half part of the share and pro- 
 portion of them the said assignees, of, in and to a certain sum of 
 £2,762. lis. 3d. upon the same trusts as were declared respecting 
 the £422. 6s. 3d. four per cents. 
 
 The plaintiff and Anne Alary Darwin were the only issue of Bap- 
 tist and Sarah Darwin. Baptist Darwin died in 1782. In 1787 the 
 plaintiff maried Nathaniel Hornsby, without a settlement, and in 
 February, 1799, the plaintiff and her husband assigned over a moiety 
 of their interest in the said trust funds upon the contingency of 
 the plaintiff surviving her mother, unto the defendant, John Park- 
 er, as a collateral security for the due payment of an annuity of
 
 Sec. 5) BY MARRIAGE. 233 
 
 £30. granted by the plaintiff's husband, Hornsby, to Parker during 
 his life, in consideration of £200. paid to Hornsby. 
 
 In 1790 Anne Mary Darwin married John Patten. 
 
 In 1801 Thomas Rolph and the defendant, George Lee, were ap- 
 pointed trustees, and the trust monies, which then consisted of £1,453. 
 15s. 6d. three per cents were transferred to them. 
 
 Anne Mary Patten died in 1807, and Sarah Darwin (the mother) 
 died early in February, 1814. 
 
 The plaintiff's husband, Hornsby, was confined in the King's Bench 
 Prison for debt, and in January, 1814, was discharged under the in- 
 solvent act, and his estate and effects vested in a clerk of the peace, 
 and the same were by him assigned to the defendant John Seton. 
 
 Hornsby afterwards, lGth February, 1814, died without having in- 
 stituted any proceedings, or done any act to reduce the trust fund 
 into possession in the short interval, a few days only, between the 
 widow's death and his own. 
 
 Thomas Rolph died 24th March, 1814. 
 
 The bill, stating these facts, prayed that the trust funds, with the 
 dividends, might be transferred to the plaintiff; or, if the court should 
 be of opinion that the defendants Parker and Seton, or either of 
 them, were entitled to them, then that the plaintiff might be decreed 
 to have a settlement out of the same. 
 
 The defendant Parker, by his answer, insisted, that the dividends 
 and interest of the moiety of the trust monies assigned to him, ought 
 to be applied pursuant to the trusts declared as to the same, in and 
 by the indenture of the 26th February, 1799 ; and stated, that £314. 
 3s. Gd. was due to him for ten years and a half arrears of the annuity, 
 and claimed to be paid the same out of the trust monies. 
 
 The defendant Seton, by his answer, submitted, that the trust 
 funds ought to be transferred to him as the assignee of the estate 
 and effects of Hornsby, for the benefit of himself and the rest of 
 the creditors. 
 
 The defendant Lee, the trustee, submitted to act as the court should 
 direct. 
 
 The Vice Chancellor. Independently of authority, let us con- 
 sider, upon principle, whether the husband's assignment of his wife's 
 contingent interest is good? The husband has a right to his wife's 
 choses in action, provided he reduces them into possession. Is a 
 deed, assigning a reversionary interest, a reduction into possession? 
 It is impossible actually to reduce a reversionary interest into pos- 
 session. Is it then a constructive reduction into possession? The 
 assignment puts the assignee of the husband in the same situation 
 as the husband ; and if the husband survives the wife, the assignee 
 is entitled to the property ; but here the husband died before the 
 wife, and the assignee therefore is not entitled to the property. 
 This is the manner in which this case strikes me, upon principle.
 
 234 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Cll. 3 
 
 According to Mitford v. Mitford [9 Ves. Jr. 87] it is clear that 
 the general assignment in bankruptcy dues not pass a reversionary 
 interest in the wife, she surviving her husband. It must be the 
 same as to the assignment under the insolvent debtors act; nor 
 do I see what answer can be given to the observation of Mr. Cooke, 
 that a particular assignee cannot be in a better situation than an as- 
 signee under the general assignment in bankruptcy. The case cit- 
 ed of Woollands v. Crowcher [12 Ves. Jr. 171] is strong to show 
 the insufficiency of the assignment to bar the wife's claim in case 
 she survives her husband. On principle and authority, the plaintiff 
 is entitled to this money. 
 
 BR \DLKY v. HUGHES. 
 
 (In Chancery, before Vice Chancellor Shadwell, 1836. 8 Sim. 140.) 
 
 By the settlement on the marriage of Moses Lemon with Maria 
 Solomon, the lady's father conveyed lands in Lancashire, to trus- 
 tor a term of 1.000 years in trust, yearly, during the life of 
 Maria Solomon, to raise £200., and to pay the same, by equal half- 
 yearly payments, on the 1st of June and the 1st of January, the 
 first payment to be made on such of the said days as should first 
 or next happen after the solemnization of the marriage, unto such 
 person or persons, and for such intents and purposes only as Maria 
 Solomon, by any writing or writings under her hand, from time to 
 time, notwithstanding her coverture, should direct or appoint, and, 
 in default of such appointment, to pay the same into the hands of 
 Maria Solomon for her sole and separate use and benefit (without 
 the same being subject to the debts, contracts, engagements, inter- 
 meddling or control of Moses Lemon) ; and the receipt and receipts 
 in writing of Maria Solomon, and of such person or persons as she 
 should, from time to time, appoint to receive all or any part of the 
 said annual sum, should from time to time, notwithstanding her cov- 
 erture, be good and effectual releases and discharges for such sums 
 of money, as, in such receipts and discharges, should be expressed 
 to be received. 
 
 The marriage took effect: and, afterwards, Moses Lemon died. 
 His widow then married J. B. Bradley, who, subsequently, took the 
 benefit of the insolvent debtors act. 
 
 The bill was filed by Mr. and Mrs. Bradley against the provision- 
 al assignee of the Insolvent Debtors Court, insisting that the defend- 
 ant was not entitled to any interest in the annuity, as the same was 
 granted to Mrs. Bradley by her father, during her life, notwith- 
 standing her coverture; and that such coverture was not intended 
 to apply to her marriage with Lemon alone, but to any marriage 
 she might subsequently contract, in the event of his death ; and
 
 Sec. 5) BY MARRIAGE. 
 
 235 
 
 that she was still entitled to the annuity, for her separate use during 
 her life; or that she was at all events, entitled to some settlement 
 or provision out of the annuity. 
 
 The Vice Chancellor. I remcmher when Benson v. Benson 
 [6 Sim. 12G] was before me I was a good deal pressed with what 
 was supposed to have been the meaning of the judgment in Mas- 
 sey v. Parker [2 Mylne & K. 174]. But it appeared to me that 1 
 could decide the case then before me, without either adopting or 
 contravening what was supposed to be the meaning of the Lord 
 Chancellor in that case; and I decided on the construction of the 
 will. The language that fell from me in Knight v. Knight [G Sim. 
 121] was used in consequence of wdiat was stated by the counsel 
 for the defendant. 
 
 It is now settled, by Woodmeston v. Walker [2 Russ. & M. 107], 
 Brown v. Pocock [6 Sim. 257], and other cases, that property may 
 be given for the separate use of a woman during a particular cov- 
 erture : but if it is meant to be given for her separate use, so as to 
 prevent her from alienating it, she may, before her marriage and if 
 she be adult, dispose of it. But if she be covert, then it will oper- 
 ate as a restriction on her alienating it during that coverture, but 
 not afterwards. 
 
 The other question is whether, by the death of the first husband. 
 the lady did not become entitled to the annuity of £200. for her own 
 use. And it appears to me that there is nothing, in the words of this 
 settlement, which restrains her from alienating the annuity. Aft- 
 er the death of the first husband, it is a trust for her, and then the 
 marital right of her second husband intervenes, and, therefore, the 
 assignee of that husband is entitled to the annuity. 
 
 I can conceive that words might be used which would, of neces- 
 sity, prevent the second husband from having any right to his wife's 
 property, as for instance, if the fund were given over in the event 
 of payment not being made into the hands of the woman. In that 
 case either she must take the fund, or it would go over. The words 
 in this case are words by virtue of which this lady, during her cov- 
 erture with Lemon, had the annuity for her separate use, and, aft- 
 er his death, it was held in trust for her. 
 
 Declare that the assignee is entitled to the annuity, subject to the 
 wife's equitable right to have a provision made out of it for her main- 
 tenance.
 
 236 TRANSFER OF RESFECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 SECTION 6.— BY BANKRUPTCY. 
 I. Bankruptcy of the Trustee. 
 
 Ex parte GENNYS. 
 
 In re ELFORD. 
 
 (In Bankruptcy, before Vice Chancellor Sbadwell, 1S29. 1 Mont. & M. 258.) 
 
 This petition prayed that the assignees might be directed to join 
 in conveyances to the purchasers of certain estates, of which the bank- 
 rupt was seised as trustee for the vendor. 
 
 The Vice Chancellor. I never before knew that under this 
 clause [6 Geo. IV, c. 16, § 79] it had been contended that a mere 
 trust estate becomes vested in the assignees ; and if my opinion be 
 now required, I have no hesitation in stating, that according to my 
 view of the law, both before and since the late act, an estate of 
 which a bankrupt is seised as a bare trustee does not pass to his 
 assignees. No case had been made out which calls upon the court 
 to interfere. If it had been suggested that the bankrupt had any 
 interest in the property, then the assignees might be necessary par- 
 ties : but according to what appears at present, the petition was not 
 founded upon any reasonable doubt, and must be dismissed with 
 costs. 20 
 
 20 See Ex parte Chion, 3 P. Wins. 187 note A (1721). 
 
 The English bankruptcy act of 18S3 (St. 4G & 47 Vict. c. 52. § 44) excludes 
 from property of the bankrupt divisible amongst his creditors, "property 
 held by the bankrupt on trust for any other person." The United Stales 
 bankruptcy acl (Act March 2, 1867, c. 17G, § 14, 14 Stat. 522; Rev. St. § 5053) 
 provided that no property held by the bankrupt in trust should pass by the 
 assignment. The act of 1898 (Act July 1. 1898, c. 541, 30 Stat. 544 [U. S. 
 Count. Si. 1901, p. 3418]) docs not repeat this provision, but would doubtless 
 receive the same construction. 
 
 The assignees of a bankrupt executor do not take the legal title to the 
 assets of the testator. Ex parte Ellis, 1 Atk. 101 (1742); Ex parte Butler, 1 
 Atk. 210 (1749); note by Lord Mansfield, '•'> Burr. 1369. So the assignees of 
 a bankrupt administrator do not take the legal title to the assets of the 
 intestate. Ex parte .Marsh. 1 Atk. 158 (1744). 
 
 It' the bankrupt, holding the legal title, has a share in the beneficial inter- 
 est, the legal title, it seems, will pass to the assignee in bankruptcy. Carvalho 
 v. Burn. 1 Barn. & Ado]. 382 (1833); Swepson v. Rouse, 65 X. G. 34, 6 Am. 
 Rep. 7:;.") (1871). This rule does QOl bold when the bankrupt is an express 
 trustee. Webster v. Scales, 4 Doug. 7 (1784). 
 
 It need hardly be added that assignees in bankruptcy, assignees in insolven- 
 cy, and assignees for the benefit of creditors are not purchasers for value, 
 and, therefore, fake the title to the assigned property subject to all the equi- 
 ties to which it was subject in the hands of the bankrupt, the insolvent, and 
 the assignor, respectively. 
 
 Trust property in possession of a bankrupt trustee does not pass to his 
 assignee under the English bankruptcy act as property left in the order and
 
 Sec. 6) BY BANKRUPTCY. 237 
 
 II. Bankruptcy of the Cestui que Trust. 21 
 
 JACKSON v. HOBHOUSE et al. 
 (In Chancery, before Lord Chancellor Eldon, 1817. 2 Mer. 483.) 
 
 The defendant Mary Cox being entitled to the sum of £6,000. un- 
 der the will of Samuel Neate (her late husband), of which will the 
 defendants Hobhouse, Moggridge, and Perkins were executors, by 
 a settlement made subsequent to her marriage with the defendant 
 George Cox, this sum was assigned to the executors, upon trust to 
 permit the wife to receive the interest during her life to her separ- 
 ate use. and after her death, in case her husband should survive her, 
 upon trust to pay the same to him during his life, and after the de- 
 cease of the survivor in trust for the children of the marriage, and 
 in case there should be no children, then for the survivor, his or 
 her executors, etc. The settlement contained a proviso against the 
 wife assigning or otherwise disposing of the interest of the said sum 
 in any mode of anticipation. 
 
 Cox and his wife being afterwards desirous to raise money by 
 way of annuity, and the defendant Leeke having agreed to purchase 
 of them an annuity, to be secured on the £6,000. provided some per- 
 son to be approved of by him would join with him in covenanting 
 for the payment, they applied to the plaintiff, who agreed to join 
 them accordingly, and by indenture dated the 29th of July, 1813, 
 to which the plaintiff was a party, it was witnessed that, in pursu- 
 ance of such agreement, and for the considerations therein mention- 
 ed, Cox and the plaintiff covenanted with Leeke for payment to him 
 of the annuity of £153. during the joint lives of Cox and his wife 
 and the life of the survivor, Mary Cox, the wife, appointing that the 
 defendants (the trustees in the settlement) should pay and apply the 
 yearly interest of the £6,000. during her life to Leeke, upon the trusts 
 thereinafter mentioned. And Cox and his wife thereby bargained and 
 sold to Leeke the said yearly interest during their respective lives, 
 and the principal sum to which the survivor would be entitled in the 
 event of there being no issue of the marriage ; upon trust, in the first 
 place, to pay himself (Leeke) the said annuity, and subject thereto upon 
 the trusts of the settlement. 
 
 disposition of the bankrupt by th« consent of the true owner. Copeman v. 
 Gallant, 1 P. Wins. 314 (1716); Great Eastern Ry. Co. v. Turner, L. R. 8 
 Ch. App. 149 (1871). 
 
 2i The cases in this subdivision will not be confined to bankruptcy, but 
 will include cases involving the rights of creditors proceeding by bills for 
 equitable execution and cases dealing with the cestui que trust's right volun- 
 tarily to alienate, as one principle pervades all. 

 
 U38 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 Notice of this assignment was given to the executors, and the an- 
 nuity was paid up to the 29th of October, 1813, only, since which 
 time no further payments were made, and the defendant Leeke 
 brought his action against the plaintiff upon the covenant, and re- 
 covered against him the sum of £356. for arrears of the annuity and 
 costs. 
 
 The plaintiff by his bill representing that the proviso in the set- 
 tlement against assigning by way of anticipation had been conceal- 
 ed from his knowledge previous to his becoming a party to the deed 
 of assignment (he having been induced to enter into the covenant 
 therein contained by an opinion of counsel taken upon an abstract 
 in which no mention was made of the proviso, and the deed of as- 
 signment itself omitting to state it) ; moreover charging the defend- 
 ant Airs. Cox with being privy to such fraudulent misrepresenta- 
 tion and concealment ; prayed an account of what had accrued due 
 on the £6,000. since the date of the indenture of the 29th of Ju- 
 ly, 1813, and that the defendant Cox and his wife, (who were out 
 of the jurisdiction,) and the executors, might be compelled to pay 
 to the plaintiff the £356. so recovered against him in said action, 
 and to pay to the defendant Leeke the residue of the interest of 
 the £6,000. upon the trusts of the indenture, and an injunction to 
 restrain the defendants (the executors) from parting with, or in 
 any manner disposing of, the said principal sum of £6,000., or the 
 interest thereof, and from making any payment on account there- 
 of to the defendants Cox and his wife, or to any person for their use. 
 
 The injunction was obtained upon an affidavit verifying the prin- 
 cipal allegations in the bill, but not to the extent of charging Mrs. 
 Cox as a party to the fraud committed ; and the charge was posi- 
 tively and expressly denied by her answer which came in after- 
 wards. A motion was now made, on behalf of Mrs. Cox, to dis- 
 solve the injunction. 
 
 Tup: Lord Chancellor. 22 For many years after I entered into 
 the profession, no such thing was known as a clause of restraint up- 
 on alienation of a wife's separate property by way of anticipation. 
 The terms of the power in JIulme v. Tenant [1 Bro. 16] will be 
 remembered; and there Lord Thurlow held, that the bond being 
 executed, the creditor was entitled to the benefit of its execution. 
 Yet it is obvious that such a determination must defeat the in- 
 tention with which the power was given. It was afterwards at- 
 tempted, in cases like Pybus v. Smith [3 Bro. 310] to be establish- 
 ed that the alienation must be eo modo with the pow r er given; that 
 the circumstance of a direction to pay the interest from time to 
 time into the proper hands of a married woman was enough to pre- 
 vent her from having any absolute disposing power over the proper- 
 ty, or any part, before the time of her own proper receipt of it. 
 
 z 2 Pari nf the opinion is omitted.
 
 Sec. 6) BY BANKUUrTCY. 2-3!) 
 
 But this attempt also was overruled. Lord Thurlow still contin- 
 ued to struggle hard that the wife might be brought into a situation 
 consistent with the manifest intention of the settlor; but he thought 
 the decisions too strong against it. At last, he began to alter his 
 opinion, first, in the case of Miss Watson, where he reasoned thus : 
 A feme covert, having power to alien, is a mere creature of equity 
 to the extent to which the settlement constitutes her a feme sole, 
 and no further ; and he therefore thought that the court might 
 modify the power of alienation by such a clause as that now under 
 consideration. Lord Alvanley, who followed, thought it a valid clause 
 [Sockett v. Wray, 4 Bro. 483], and so it has been considered ever 
 since. It is too late now to contend against the validity of a clause 
 in restraint of anticipation. 
 
 We come then to the question of fraud. * * * The charge 
 of fraud is not established. * * * There is, therefore, not enough 
 to support the injunction. 
 
 Injunction dissolved. 
 
 BARTON v. BRISCOE. 
 
 (In Chancery, before the Master of the Rolls, Sir Thomas Plumer, 1S22. 
 
 Jac. 603.) 
 
 By indentures dated in August, 1811, made upon the occasion of 
 the sale of certain estates belonging to James Barton, in which Ala- 
 rian Barton his wife joined for the purpose of relinquishing her right 
 of dower, two sums of £14,000. and of £5,833. 3 per cent, consols 
 were paid and transferred to trustees, upon trust to lay out the 
 same in the funds, or on real or government securities, with the con- 
 sent of Marian Barton, signified by some writing signed by her, not- 
 withstanding her coverture, and from time to time, with her consent, 
 during her life to vary the securities, and upon trust to pay the div- 
 idends, interest, and annual produce to such person or persons, 
 and for such intents and purposes, as she should from time to time, 
 notwithstanding her coverture, by any writing or writings signed 
 by her with her name, in her own handwriting, appoint ; but not 
 so as to deprive herself of the intended use or benefit thereof by 
 sale, mortgage, charge, or otherwise, in the way of anticipation ; 
 and for want of such direction, into her own proper hands for her 
 own separate and peculiar use and benefit, independently and ex- 
 clusively of the said James Barton, who was not to intermeddle 
 therewith, nor was the same to be liable to his control, debts, or in- 
 terference ; and it was declared that her receipts for the dividends 
 should, notwithstanding her coverture, be sufficient discharges ; and 
 after her death, upon trust to transfer the same to such person or 
 persons, etc. as the said Marian Barton by her will or codicil signed 
 by her, and attested by two witnesses, should appoint ; and in de-
 
 240 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 fault of such appointment, to transfer the same to Marian Milli- 
 cent Barton, the only child of the said Marian Barton and her hus- 
 band, for her own use and benefit. 
 
 James Barton had since died. Marian Millicent Barton had at- 
 tained twenty-, mi 1 . The bill was filed by her and her mother Mar- 
 ian Barton; stating that they had the absolute interest in the funds, 
 and were desirous that the trusts of the indentures of August, 1811, 
 should be determined, and praying that the funds might be trans- 
 ferred into the sole name of Marian Barton. 
 
 The Master OF the Rolls. The single point in this case is, 
 whether upon the consent of the plaintiffs, the mother and daugh- 
 ter, a transfer of the fund comprised in the settlement can be made, 
 the trustees requiring the sanction of the court before paying it 
 over to purposes not strictly according to the letter of the deed. 
 It made be urged against it, that there are words forbidding anti- 
 cipation, directing that the mother shall not deprive herself of the 
 use of the fund, and that she shall have during her whole life the 
 power of disposing of it by will and not otherwise; and that to 
 transfer it now would be directly contrary to these provisions. I 
 have not been able to find any authority; and the question is, there- 
 fore, to be decided, whether a clause against anticipation, which is 
 considered an obligatory and valid mode of preventing a married 
 woman from depriving herself of the benefit of property settled 
 (for it is too late to argue that now), becomes of no effect by the 
 coverture being determined, and the parties interested consenting 
 to a transfer. 
 
 In the case of a male, a similar attempt to restrain alienation would 
 be of no effect; that was decided in Brandon v. Robinson [18 Ves. 
 Jr. 429], where the words were nearly the same as here. The tes- 
 tator directed the interest to be paid to his son for life, and that 
 he should not have power to anticipate the growing payments; but 
 the Lord Chancellor was of opinion, that the son taking a life in- 
 terest, it followed as an incident, that he had an uncontrolled pow- 
 er of disposition over it, unless it was given over upon alienation, 
 or upon an attempt to alienate. In this case there is no gift over, 
 no other person having any interest; the equitable interest is abso- 
 lute in the plaintiffs. It is not distinguishable from Brandon v. 
 Robinson, except by the sex and coverture; and it cannot be said 
 that the law will permit restraints upon the rights of property in 
 the case of females which it will not permit in the case of males. 
 It is, however, to be considered, that this is a case of separate prop- 
 erty; and that restraints may be imposed on the alienation of sep- 
 arate property is now settled, more upon authority than principle, 
 beginning with what was done by Lord Thurlow in the case of Miss 
 Watson's settlement. At that time, however, there was considerable 
 doubt about it; for if a feme covert is permitted to hold separate
 
 Sec. 6) BY BANKRUPTCY. 241 
 
 property in the same manner as if she were a feme sole, it would 
 seem that it ought in equity to have those incidents which all other 
 property has. It is difficult to conceive how they can be taken away 
 from it, particularly when it is remembered, that the protection which 
 courts of equity afford to married women with respect to their prop- 
 erty not in settlement, they may if they please give up. Why, then, 
 should a larger protection be extended as to that over which a power 
 of disposition is given them? It is, however, too late to doubt the 
 validity of these restraints: the question is, whether they must not 
 be confined to the coverture. The power over separate property being 
 a creature of equity, it is said that equity may modify that power; 
 that reasoning, however, only applies during the coverture ; when the 
 married woman becomes discovert, she has the same power over her 
 property as other persons. The restraint, therefore, ought not to con- 
 tinue. The attempt to impose upon the power of alienation a fetter 
 unknown to the common law of England may be permitted to the ex- 
 tent to which that power is created by equity, but not further ; when 
 the coverture is gone, the reason on which the restraint is founded no 
 longer exists. 
 
 Supposing that to be so generally, is it not pretty plain that it was 
 in this case the intent of the parties so to confine the clause? The 
 object was to exclude the power of the husband; her receipts are, 
 therefore, to be discharges during the coverture ; it is not to be liable 
 to his debts ; and it seems as if all the anxiety was to protect her from 
 his control, which, by her having survived him, is now at an end. 
 
 Another point to be considered is with respect to the power the 
 settlement gives to the mother of disposing of these funds by will. 
 The question is, whether she can now deprive herself of it, and ab- 
 dicate it. Now the case of Smith v. Death [5 Madd. 371], and others 
 of that kind, have decided that a power of this description may be 
 parted with ; and there is, therefore, I apprehend, nothing to prevent 
 her from now releasing it, and thereby precluding herself from the 
 exercise of it. 
 
 TULLETT v. ARMSTRONG. 
 
 (In Chancery, before Lord Chancellor Cottenham, 1840. 4 Mylne & C. 377.) 
 
 Nathaniel Bradford, by his will, dated the 27th of March, 1820, 
 gave, devised, and bequeathed unto his daughter, Ann Bradford, ana 
 William Gates, and their respective heirs, executors, administrators, 
 and assigns, all and every his freehold, copyhold, and leasehold es- 
 tates, and all his personal estate ; to hold the same unto the said Ann 
 Bradford and William Gates, their heirs, executors, administrators and 
 Ken.Tb.— 16
 
 242 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 assigns respectively, according to the nature thereof, upon trust, to 
 stand seized and possessed of the same respectively, during the life of 
 the testator's wife, Ann Bradford, in trust for her; and from and 
 immediately after her decease, upon trust for— and the said testator 
 thereby gave and devised unto his said daughter, Aim Bradford. 
 amongst other things, his freehold messuage or tenement, and the 
 hereditaments and premises, situated in Church street. Brighton; to 
 hold the same, with the appurtenances, unto his said daughter Ann 
 Bradford, and her heirs and assigns. And from and immediately after 
 the decease of the said testator's said wife, upon trust for — and he 
 thereby gave and devised unto and equally between his daughter, Ann 
 Bradford, and his granddaughters Georgianna Pierpont and the de- 
 fendant Mrs. Armstrong, by her then name of Mary Augusta Tilt, a 
 copyhold messuage and premises, situate in Brighton Place; to hold 
 the same copyhold premises, and the appurtenances, unto and equally 
 between his said daughter, Ann Bradford, and his said granddaughters 
 Georgianna Pierpont and Mary Augusta Tilt, during their joint and 
 several lives, as tenants in common; and in such manner, that neither 
 his said daughter, nor his granddaughter, should anticipate, sell, as- 
 sign, or dispose of their several and respective life estates, so devised 
 to them in the said copyhold premises and the rents and produce 
 thereof; and so and in such manner, that neither any husband or hus- 
 bands of his said daughter or granddaughters, should have or acquire 
 any right in, or control over, the life estates or interest of his said 
 daughter or granddaughters respectively ; nor should the same be lia- 
 ble to the dehts, control, forfeiture, or engagements of any such hus- 
 band; and from and immediately after the decease of the survivor 
 of them, his said daughter and granddaughters, upon the trusts therein 
 mentioned. And from and immediately after the decease of his said 
 wife, upon trust for — and the said testator thereby gave, devised and 
 bequeathed unto the said Mary Augusta Tilt, one undivided moiety of 
 a copyhold messuage or tenement, hereditaments, and premises in East 
 street, Brighton; and also the entirety of a leasehold coach-house and 
 stable on the west side of Jubilee street, then in the occupation of 
 Patrick Conolly, or his under tenants, erected on a part or piece of 
 land holden by the said testator, under lease from John Paine, for a 
 term of ninety-nine years, as therein mentioned ; and also a piece or 
 parcel of leasehold land then used as a garden, and in the said tes- 
 tator', own occupation, situate on the north side of Jubilee street 
 aforesaid, adjoining to the said coach-house and stable, and being other 
 part of the -round holden by the said testator, under lease from John 
 Paine: to hold the same last-mentioned premises, with the appurte- 
 nances, to and to the use of the said Mary Augusta Tilt and her as- 
 signs, during her life, subject as therein mentioned, and with such 
 limitations or remainders over as therein mentioned; and after some
 
 Sec. 6) BY BANKRUPTCY. 24.'J 
 
 other bequests, the said testator directed and declared it to be his 
 will and intention, that the devises and bequests thereinbefore made by 
 him to his granddaughters, Georgianna Pierpont and Mary Augusta 
 Tilt, were so given and devised to them free, exonerated from, and 
 not subject to the rights, control, interference, debts, contracts and 
 engagements of any husband; and were to be taken and received by 
 the said Georgianna Pierpont and Mary Augusta Tilt, as if they were 
 sole and unmarried ; and so to be holden and enjoyed by them re- 
 spectively. 
 
 The testator died in 1820, leaving his wife Ann Bradford, his 
 daughter Ann Bradford, and his granddaughter Mary Augusta Tilt, 
 who was then unmarried, him surviving. 
 
 On the 25th of August, 1826, Ann Bradford the daughter, made 
 her will, and thereby, inter alia, gave and devised unto Nathaniel Brad- 
 ford and Nenyon Masters Bradford, therein described, from and after 
 the decease of the said testatrix's mother, Ann Bradford, all that the 
 said testatrix's messuage or tenement and premises, situate in Church 
 street, Brighton, aforesaid ; to hold the same unto the said Nathaniel 
 Bradford and N. M. Bradford, their heirs and assigns, upon trust, 
 that they her said trustees, or the survivor of them, or his heirs, should 
 receive and take the rents, issues, and profits thereof, and pay the same 
 unto her niece, the said Mary Augusta Tilt, during her natural life, 
 so and in such manner, as that the said Mary Augusta Tilt should not 
 sell or dispose of her life interest therein, or any part thereof, or lease 
 or borrow money thereon, by anticipation, mortgage, or otherwise ; 
 and so and in such manner as that the rents, issues and profits thereof 
 should not be subject to the right, control, or interference of any hus- 
 band whom the said Mary Augusta Tilt might marry; nor be liable to 
 his debts, contracts, forfeitures, or engagements ; and the said tes- 
 tatrix declared, that the receipt or receipts of her said niece only, 
 should be a good and sufficient discharge and discharges to her said 
 trustees or trustee, for the time being, for such rents and profits, or 
 for so much thereof as should in such receipts be expressed to have 
 been received ; and that any sale or disposition for raising money by 
 mortgage or otherwise, of or upon her said niece's life interest, should 
 be from time to time null and void ; and from and immediately after 
 the decease of the said Mary Augusta Tilt, upon trust for the children 
 of the said Mary Augusta Tilt, in the manner and for the estate 
 therein mentioned. 
 
 After the date of the will, and on the 23d of April, 1827, the leg- 
 atee, Mary Augusta Tilt, married the defendant, William Armstrong ; 
 and two days afterwards, on the 25th of April, the testatrix made a 
 codicil to her will, and thereby varied one devise in her will, but in 
 other respects confirmed the same; and she died in 1827. 
 
 The widow of Nathaniel Bradford, the first testator, died in Janu-
 
 I'll TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 ary, 1830; and then the gifts to Mary Augusta Tilt, under the two 
 wills, took effect in possession. 
 
 By an indenture dated the 20th of March, 1832, and made between 
 William Armstrong and Mary Augusta, his wife, of the one part, and 
 the plaintiff of the other part, after reciting the wills of Nathaniel 
 Bradford and Ann Bradford, in consideration of £300., paid by the 
 plaintiff to William Armstrong, they the said William Armstrong and 
 Mary Augusta, his wife, granted to the plaintiff, an annuity of £31. 
 17s. during the life of Mary Augusta Armstrong; and Mary Augusta 
 Armstrong, in exercise of the powers, etc., given to her by the wills 
 of Nathaniel Bradford and Ann Bradford, appointed the copyhold 
 messuage in Brighton Place, and also her moiety of the copyhold 
 messuage in East street, and the leasehold house in Jubilee street, and 
 the freehold in Church street, unto the plaintiff, during the life of 
 Mary Ann Armstrong, upon certain trusts, for securing the above- 
 mentioned annuity; and William Armstrong thereby covenanted that 
 he and his wife would surrender the copyholds upon the trusts afore- 
 said. 
 
 A similar deed was executed in September, 1832, to secure to the 
 plaintiff a further annuity. In January, 1835, William Armstrong 
 took the benefit of the insolvent debtors act, and the annuities being- 
 unpaid, the plaintiff filed his bill to obtain payment thereof, out of 
 the properties devised and bequeathed by the wills of Mr. and Miss 
 Bradford. 
 
 At the hearing the Master of the Rolls, Lord Langdale made a de- 
 cree for the plaintiff and the defendants appealed. 
 
 The Lord Chancellor. 23 The question raised in this case is as 
 to the clause against anticipation ; but I agree with the Master of the 
 Rolls in thinking, not only that it necessarily involves the question of 
 separate estate, which has been the subject of much discussion in the 
 profession, but that these two questions are identical as to the prin- 
 ciple which must regulate the decision upon them; by which I mean, 
 that if the case be of a separate estate without power of anticipation, 
 it must exist with that qualification or fetter, if it exist at all, and that 
 there is no principle upon which it can be held that the separate es- 
 tate operates during a coverture subsequent to the gift, but that the 
 provision against anticipation, with which the gift was qualified, does 
 not. It is obvious that such a rule would, in practice, defeat the in- 
 tention of the donor, and in many cases render the provision which 
 he had made for the protection of the object of his bounty the means 
 and instrument of depriving her of it. 
 
 When once it was established that the separate estate of a mar- 
 ried woman was to be so far enjoyed by her as a feme sole, as to 
 
 23 The statement of facts is taken from 1 Beavan, 1. A portion of the 
 
 opinion is omitted.
 
 Sec. 6) BY BANKRUPTCY. 24.") 
 
 bring with it all the incidents of property, and that she might there- 
 fore dispose of it as a feme sole might do, it was found that, to se- 
 cure to her the desired protection against the marital rights, it was 
 necessary to qualify and fetter the gift of the separate estate by 
 prohibiting anticipation. The power to do this was established by 
 authority, not now to be questioned, but which could only have been 
 founded upon the power of this court to model and qualify an inter- 
 est in property which it had itself created, without regard to those 
 rules which the law has established for regulating the enjoyment of 
 property in other cases. 
 
 If any rule, therefore, were now to be adopted, by which the sep- 
 arate estate should, in any cases, be divested of the protection of the 
 clause against anticipation, it would, in such cases, defeat the object 
 of the power so assumed. 
 
 A feme covert, with separate estate, not protected by a clause 
 against anticipation, is, in most cases, in a less secure situation 
 than if the property had been held for her simply upon trust. 
 In the latter case, this court, with the assistance of her trustees, 
 can effectually protect her ; in the other, her sole dependence must 
 be upon her husband not exercising that influence or control, which, 
 if exercised, would, in all probability, procure the destruction of her 
 separate estate. In the case of a gift of separate estate with a clause 
 against anticipation, the author of the gift supposes that he has ef- 
 fectually protected the wife against such influence or control. Up- 
 on what principle can it be that this court should subject her to it, and 
 by so doing defeat his purpose and completely alter the character and 
 security of his gift? The separate estate and the prohibition of an- 
 ticipation are equally creatures of equity, and equally inconsistent 
 with the ordinary rules of property. The one is only a restriction 
 and qualification of the other. The two must stand or fall togeth- 
 er. Indeed, I do not find any allusion, in any case, to the possibility 
 of the one surviving the other, until after the discussion as to the 
 continuing of the separate estate through a subsequent coverture 
 had commenced. In the consideration of the cases upon which I 
 am about to enter, I shall assume that there is no ground whatever 
 for the attempt which has been made in argument to separate the 
 two. Every authority, therefore, which bears upon the one, will 
 bear equally upon the other. 
 
 In a case of so much importance, and which has excited so much 
 interest, I have thought it my duty not only to consider every case 
 which has been referred to in argument, but to endeavor to obtain 
 all other information which was within my reach. I will first ex- 
 amine the cases which are supposed to support the proposition, 
 that the absolute interest of the woman which she unquestionably 
 possesses in property given for her separate use, though with a
 
 L'lfi TRANSFER OF RESPECTIVE tNTERESTS OF PARTIES. (Ch. 3 
 
 prohibition against anticipation, up to the moment of her subse- 
 quent marriage, becomes subject to all the qualifications and restric- 
 tions of the gift, upon such marriage. 
 
 [Here follows a detailed discussion of the cases.] 
 Such is the state of the authorities upon this very important question. 
 It is said to have been very generally understood in the profession 
 that the separate estate would continue to operate during a subse- 
 quent coverture, and that conveyancers have acted so extensively up- 
 on that supposition, that very many families are interested in the 
 decision of this question. That circumstance ought to have very 
 great attention paid to it. For the future it would not probably be 
 found difficult to obtain the desired security for the future wife by 
 other means, consistent with the well-established rules of proper- 
 ty; but the existing arrangements must depend upon the decision 
 of this case. 
 
 I have over and over again considered this subject, with a great 
 anxiety to find some principle of property consistent with the ex- 
 isting decisions, upon which the preservation of the separate estate 
 during a subsequent coverture could be supported. I have been anx- 
 ious to find- means of preserving it, not only to maintain those exist- 
 ing arrangements which have proceeded upon the ground of its val- 
 idity, hut because I think it desirable that the rule should, if pos- 
 sible, be established for the future, believing, as I do, that when a 
 marriage takes place, the wife having property settled to her separate 
 use, all the parties in general suppose that it will so continue during the 
 coverture. To permit the husband, therefore, to break through such 
 a settlement, and himself to receive the fund, would, in general, be 
 contrary to the intention of the parties, and unjust towards the wife. 
 This view of the case has led to a suggestion which has often been 
 made in argument, by which the object might he obtained without 
 violating any rule of property, namely, by supposing the husband, 
 marrying a woman with a property so settled, tacitly to assent to 
 such settlement, or at least to be bound by an equity not to dispute 
 it. 1 was for some time much disposed to adopt this view of the sub- 
 ject; and in all cases in which the husband was cognizant of the 
 fact,' there would be much of equitable principle to support the gift 
 or settlement against him; by putting the title of the wife upon such 
 enl of the husband assumes that, but for such assent, it would not 
 exist. It abandons the idea of the old separate estate continuing 
 through the subsequent coverture, and supposes a new separate 
 estate to arise from the act of the husband, li the title of the wife 
 were to rest upon that supposition, 1 fear that the remedy would he 
 very inadequate, and that question would constantly arise as to how far 
 the circumstances of each case would afford evidence of assent, or 
 raise this equity against the husband.
 
 Sec. 6) BY BANKRUPTCY. 247 
 
 After the most anxious consideration, I have come to the conclu- 
 sion that the jurisdiction which this court has assumed in similar 
 cases, justifies it in extending it to the protection of the separate es- 
 tate, with its qualification and restrictions attached to it, throughout 
 a subsequent coverture; and resting such jurisdiction upon the broad- 
 est foundation, and that the interests of society require that this 
 should be done. When this court first established the separate es- 
 tate, it violated the laws of property as between husband and wife; 
 but it was thought beneficial, and it prevailed. It being once set- 
 tled that a wife might enjoy separate estate as a feme sole, the laws 
 of property attached to this new estate ; and it was found, as part 
 of such law, that the power of alienation belonged to the wife, and 
 was destructive of the security intended for it. Equity again in- 
 terfered, and by another violation of the laws of property support- 
 ed the validity of the prohibition against alienation. 
 
 In the case now under consideration, if the aftertaken husband 
 be permitted to interfere with the property given or settled before 
 the marriage to the separate use of the wife, much of the benefit 
 and security of the rules which have been so established will be lost. 
 Why then should not equity in this case also interfere ; and if it 
 cannot protect the wife consistently with the ordinary rules of prop- 
 erty, extend its own rules with respect to the separate estate, so as 
 to secure to her the enjoyment of that estate which has been so 
 invented for her benefit? It is, no doubt, doing violence to the rules 
 of property, to say that property which, being given with qualifi- 
 cations and restrictions which are held to be void, belonged abso- 
 lutely to the woman up to the moment of her marriage, shall not be 
 subject to the ordinary rules of law as to the interest which the 
 husband is to take in it (and that is the sense, and the only sense, 
 in which the expression used in Massey v. Parker, 2 Mylne & K. 
 174, 'why may she not by the act of marriage give it to her hus- 
 band' is to be understood) ; but it is not a stronger act to prevent 
 the husband from interfering with such property, than it was orig- 
 inally to establish the separate estate, or to maintain the prohibition 
 against alienation. In doing this I feel that I have much to over- 
 come, of which the observations thrown out by myself, in Massey 
 v. Parker, is the only part of which I do not feel the important 
 weight. I have to contend with Lord Brougham's observations in 
 Woodmeston v. Walker [2 Russ. & M. 19; j, and the Vice Chan- 
 cellor's decisions in Newton v. Reid [4 Sim. 141], Brown v. Pocock 
 [2 Russ. & M. 210], Malcolm v. O'Callahan [5 L. J. N. S. 137], 
 Johnson v. Freeth [5 L. J. N. S. 143], and Davies v. Thornycroft 
 [6 Sim. 420], to which I have before adverted, and the doctrine now 
 established, though denied by Sir John Leach in Brown v. Pocock 
 and Woodmeston v. Walker, that before marriage, or after the cov- 
 erture has determined by the death of the husband, the settlement
 
 248 TRANSFER OF RESPECTIVE [NTERESTS OF PARTIES. (Cll. 3 
 
 or gift to the separate use, and the prohibition against anticipation, 
 arc wholly inoperative and void. 
 
 In establishing the validity of the separate estate with its qualifi- 
 cation, which constitutes its value, Unit is, the prohibition against 
 anticipation, I am not doing more than my predecessors, have done 
 for similar purposes, and I have much satisfaction in finding my- 
 self justified, upon the grounds 1 have stated, in doing what in me 
 lies to dissipate the alarm which lias prevailed lest the separate es- 
 tate should he held not to exist at all during the subsequent cover- 
 ture, or, what would in many cases be a greater evil, that it should 
 exist without the protection of the clause against alienation. 
 
 1 therefore affirm the decree appealed from. 
 
 GRAVES v. DOLPHIN. 
 
 (In Chancery, before the Vice Chancellor, Sir John Leach, 1S2G. 1 Simons, GS.) 
 
 The testator, Benjamin Graves, gave his real and personal estates 
 to trustees upon trust (amongst other things) to pay an annuity of 
 £500. to his son John Graves, for the term of his natural life, and then 
 proceeded thus : 
 
 "And my will further is, and I do direct and declare that the said 
 annuity, or yearly sum of £500., by me given to my son John Graves 
 for his life as aforesaid, is by me intended for his personal main- 
 tenance and support during the whole term of his natural life, and 
 shall not, nor shall any part thereof, on any account or pretence what- 
 soever, be subject or liable to the debts, engagements, charges or in- 
 cumbrances of him, my said son ; but that the same shall be, for the 
 purpose aforesaid, from time to time, as and when same shall from 
 time to time become due and payable, be paid over into the proper 
 hands of him, my said son, only, and not to any other person or per- 
 sons whomsoever; and 1 do further direct that the receipt or receipts 
 of him my said son only for such annuity shall be a good and sufficient 
 discharge, and several good and sufficient discharges to my said trus- 
 tees for the same." 
 
 John Graves having become a bankrupt, his assignees sold the an- 
 nuity to the defendant Freshfield: and the question in the cause was 
 whether the annuity past to the assignees by the assignment of the 
 commissioners. 
 
 Mr. ] fart and Mr. Wakefield, for John Graves, contended that the 
 annuity had not past to the assignees. They relied on the direction 
 in the will that the annuity should be from time to time paid into the 
 proper hands of John Graves, and that his receipts should be a suffi- 
 cient discharge for the same. 
 
 The Vick Ciiancku.ok. The testator might, if he had thought fit. 
 have made the annuity determinable by the bankruptcy of his son;
 
 Sec. 6) BY BANKRUPTCY. 249 
 
 but the policy of the law does not permit property to be so limited that 
 it shall continue in the enjoyment of the bankrupt, notwithstanding- his 
 bankruptcy. Declare that the defendant Freshfield is well entitled to 
 the annuity in question. 24 
 
 SMITH & SON v. TOWERS, Garnishee. 
 
 (Court of Appeals of Maryland, 1888. 69 Md. 77, 14 Atl. 497, 9 Am. St. Rep. 
 
 398.) 
 
 On the 15th of April, 1870, the appellant recovered judgment 
 against Robert J. W. Garey and George Millington, trading as Garey 
 & Millington, for $1,188.51 and interest and costs. In May, 1886, 
 Thomas F. Garey, the father of Robert J. W. Garey, died leaving a 
 will, in which he devised certain real estate to one John Robert Foun- 
 tain as trustee, in trust for the following purposes, to wit: "That he 
 shall pay, or cause to be paid, unto my dear son, Robert J. W. Garey, 
 as the same may accrue, the net rents, income and profits arising from 
 said farm and property, after deducting such sums of money as may 
 be necessary to satisfy and pay taxes and assessments levied thereon, 
 and needful repairs to buildings and fencing, * * * the said net 
 rents, income and profits to be paid to the said Robert J. W. Garey, 
 (into his own hands, and not into another, whether claiming by his au- 
 thority or otherwise,) so long as he, the said Robert J. W. Garey, shall 
 live" etc. ; then in trust convey to the same in fee simple to the children 
 
 24 Brandon v. Robinson, 18 Yes. Jr. 429 (1811); s. c, 1 Rose, 197; .Green 
 v. Spicer, 1 Russ. & Myl. 395 (1830) ; s. c, Taml. 390 ; Woodmeston v. Walker, 
 2 Russ. & Myl. 197 (1831) ; Jones v. Salter, 2 Russ. & Myl. 208 (1831) ; Brown 
 v. Pocoek, 2 Russ. & Myl. 210 (1831) ; Piercy v. Roberts, 1 Myl. & K. 4 (1832) ; 
 Snowdon v. Dales, 6 Sim. 524 (1834) ; Rippon v. Norton, 2 Beav. 63 (1839) ; 
 Page v. Way, 3 Beav. 20 (1S40) ; Lord v. Bunn. 2 Y. & C. C. C. 98 (1843) ; 
 Kearsley v. Woodcock, 3 Hare, 185 (1843) ; Younghusband v. Gisborne, 1 
 Coll. 400 (1844); Rocbford v. Hackman, 9 Hare, 475. 480 (1S52) ; Wallace v. 
 Anderson, 16 Beav. 533 (1S53) ; Rugely v. Robinson, 10 Ala. 702 (1846) ; Rob- 
 ertson v. Johnston. 36 Ala. 197 (I860); Smith v. Moore, 37 Ala. 327 (1861); 
 Jones v. Reese, 65 Ala. 134 (1880) ; Taylor v. Harwell, 65 Ala. 1 (1880) ; Kemp- 
 ton v. Hallowell, 24 Ga. 52, 71 Am. Dec. 112 (1858) ; Bailie v. McWhorter, 56 
 Ga. 183 (1876) ; Samuel v. Salter, 3 Mete. (Ky.) 259 (1860) ; Knefler v. Shreve. 
 
 78 Ky. 297 (1879) ; Woollev v. Preston, S2 Ky. 415 (1S84) ; Marshall's Trustee 
 v. Rash, 87 Ky. 116, 7 S. W. 879, 12 Am. St. Rep. 467 (18S8) ; Bland's Adm'r v. 
 Bland, 90 Ky. 400. 14 S. W. 423, 9 L. R. A. 599. 29 Am. St. Rep. 390 (1890) ; Bull 
 v. Ky. Nat. Bk., 90 Ky. 452. 14 S. W. 425, 12 L. R. A. 37 (1890) ; Hallet v. 
 Thompson, 5 Paige (N. Y.) 583 (1836) ; Bryan v. Knickerbacker, 1 Barb. Ch. 
 (N. Y.) 409 (1846) ; Havens v. Healy, 15 Barb. (N. Y.) 296 (1853) ; Bramhall v. 
 Ferris, 14 N. Y. 41, 67 Am. Dec. 113 (1856) ; Rome Exch. Bk. v. Eames. 4 Abb. 
 Dec. (N. Y.) S3, 99 (1864) ; Dick v. Pitchford, 21 N. C. 4S0 (1S37) ; Bank v. For- 
 ney, 37 N. C. 181, 184 (1S42) ; Mebane v. Mebane, 39 N. C. 131, 44 Am. Dec. 102 
 (1845) ; Pace v. Pace, 73 N. C. 119 (1875) ; Wallace v. Smith. 2 Handy (Ohiol 
 
 79 (1855) ; Hobbs v. Smith, 15 Ohio St. 419 (1864) ; Stanley v. Thornton, 7 Ohio 
 Cir. Ct. 455 (1893) ; Tillinghast v. Bradford, 5 R. I. 205 (1858) : Jastram v. Mc- 
 Auslan, 26 R. I. 320, 58 Atl. 952 (1904) : Heath v. Bishop, 4 Rich. Eq. (S. C.) 
 46, 55 Am. Dec. 654 (1851) ; Wylie v. White. 10 Rich. Eq. (S. C.) 294 (1S58) ; 
 Hutchinson v. Maxwell. 100 Va. 169. 40 S. E. 655, 57 L. R. A. 384. 93 Am. St. 
 Rep. 944 (1902) ; Honaker Sons v. Duff, 101 Ya. 675, 44 S. E. 900 (1903).
 
 250 TRANSFER OF RESPECTIVE [NTERESTS OF PARTIES. (Ch. 3 
 
 or descendants of said Robert, etc. The said Fountain, trustee, being 
 1, under proper proceedings had in the Circuit Court for Caroline 
 County, in equity, William F. Towers was, by the decree of said court, 
 appointed trustee in the place of Fountain, to take and hold said (arm 
 .md property in trust, and discharge said trust; and he duly qualified 
 as such trustee, as required by said decree. On the 8th of June, L887, 
 an attachment was issued by way of execution, and laid in the hands 
 of William F. Towers, trustee, to affeel funds which he held under the 
 will of Thomas F. Garey in trust for Robert J. W. Carey, one of the 
 judgment debtors. An agreed statement of facts was filed in the case, 
 and it was agreed that a pro forma judgment should be entered for 
 the defendant, with the right of appeal reserved to the plaintiff. The 
 plaintiff accordingly took this appeal. 
 
 Robinson, J., delivered the opinion of the court. 25 
 
 The testator devised certain real estate to his friend John R. Foun- 
 tain in tru-^t to collect the rents and profits, and to pay the same to his 
 son Robert, "into his own hands, and not into another, whether claim- 
 in-' by his authority, or otherwise," and upon his death to convey said 
 real estate to such children of his son Robert as may be living at the 
 time of his death. ' 
 
 Upon the construction of this clause of the testator's will two ques- 
 tions ari>e: First, did the testator mean to give the income of the 
 property to his son to the exclusion of his creditors? and secondly, if 
 so are the terms and provisions of the will effectual to carry out this 
 intention? There can be no difficulty whatever as to the first point. 
 I le not only gives the legal estate to the trustee, but directs in express 
 terms that he shall pay the income into the hands of his son and not 
 into the hands of any other person, whether claiming by his authority, 
 or in any other capacity. Here, then, is an express provision, that 
 the income shall he paid to his son, and an express prohibition against 
 paying it to any other person. If the income in the hands of the trus- 
 tee is liable to the claims of creditors, the trustee it is plain could not 
 carrv out the trust. So construing this will as w^e do, and it is not we 
 think susceptible of any other construction, the testator meant beyond 
 all question that the income should be paid into the hands of his son, 
 to the exclusion of all other persons, whether claiming as alienees or 
 as creditors. 
 
 The next point is one of more than ordinary importance, and has 
 not heretofore been decided by this Court. A great deal may be said 
 on both sides, and the question is not free of difficulty. In England 
 the decisions are all one way, and it is well settled there, that the dev- 
 isee of an equitable estate or interest for life to any person, other 
 than a married woman, carries with it, as a necessary incident to such 
 estate or interest, the right of alienation by the cestui que trust, and 
 is liable for the payment of his debts, and no provision by way of 
 
 2sT1m' dissenting opinion of Alvey, C. .7.. concurred in by Bryan, J., has 
 been omitted because of its length. It deserves a careful examination.
 
 Sec. 6) BY BANKRUPTCY. 251 
 
 inhibition or otherwise, which does not operate as a cesser or limita- 
 tion over of the estate, can protect it against the claims of creditors. 
 Brandon v. Robinson, 18 Ves. 429; Rochford v. Hackman, 9 Hare, 
 480; Graves v. Dolphin, 1 Sim. 66; Green v. Spicer, 1 Russ, & Myl. 
 395 ; Younghusband v. Gisborne, 1 Collyer, 400. 
 
 In this country, however, the decisions are conflicting, and the Su- 
 preme Court of the United States, and the Supreme Courts of other 
 states, have, after full consideration of the English cases, held that 
 the power of alienation is not a necessary incident to an equitable 
 estate for life, and that the owner of the property may, in the free 
 exercise of his bounty, so dispose of it as to secure its enjoyment to his 
 beneficiary, without making it alienable by him, or liable in any man- 
 ner for his debts, and that such an intention when clearly expressed 
 by the founder of the trust, must be respected by the courts. The Su- 
 preme Court, after reviewing the English decisions, in an able opin- 
 ion by Justice Miller, say: "But the doctrine, that the owner of prop- 
 erty, in the free exercise of his will in disposing of it, cannot so dis- 
 pose of it, but that the object of his bounty, who parts with nothing in 
 return, must hold it subject to the debts due his creditors, though that 
 may soon deprive him of all the benefit sought to be conferred by the 
 testator's affection or generosity, is one which we are not prepared to 
 announce as the doctrine of this Court. * * * Nor do we see any 
 reason, in the recognized nature and tenure of property and its trans- 
 fer by will, why a testator who gives, without any pecuniary return, 
 who gets nothing of property value from the donee, may not attach 
 to that gift the incident of continued use, of uninterrupted benefit of 
 the gift, during the life of the donee." Nichols, Assignee, v. Eaton 
 et al., 91 U. S. 725, 727, 23 L. Ed. 254. 
 
 And in the still later case of Broadway National Bank v. Adams, 
 133 Mass. 170, 43 Am. Rep. 501, argued in June, 1881, and reargued 
 in March, 1882, the Court unanimously held that property may be con- 
 veyed in trust, with the provision that the income shall not be alienated 
 by the beneficiary by anticipation, or be subject to be taken by his 
 creditors in advance of its payment to him, although there is no cesser 
 or limitation over of the estate in such an event. Morton, C. J., says: 
 "We are not able to see that it would violate any principles of sound 
 public policy to permit a testator to give to the object of his bounty 
 such a qualified interest in the income of a trust fund, and thus provide 
 against the improvidence or misfortune of the beneficiary. * * * 
 Under our system, creditors may reach all the property of the debtor 
 not exempt by law, but they cannot enlarge the gift of the founder of 
 a trust, and take more than he has given." 
 
 And then again in Rife v. Geyer, 59 Pa. 393, 98 Am. Dec. 351, 
 Judge Sharswood speaking for the Court says: "That a benefactor 
 has the power of thus restricting the enjoyment of his bounty through 
 the medium of a trust during the life of the beneficiary is now the un- 
 questionable law of this state." In Shankland's Appeal, 47 Pa. 113,
 
 252 TRANSFER OF RESPECTIVE [NTERESTS OF PARTIES. (Ch. 3 
 
 the point was expressly decided, and it was there held that a trust to 
 collect and receive rents and pay over the same to a son of the testa- 
 trix for and during the term of his natural life, without being subjeel 
 to his debts and liabilities was an active one, and that the legal estate 
 was vested in the trustee, and. no act of the cestui que trust could de- 
 prive him of it, or allow him to interfere with the collection of the 
 income, and no creditor could touch the income or any interest which 
 the cestui que trust had in it. 
 
 In Vermont, Connecticut and Kentucky, the highest courts have 
 held that the income of property may be devised in trust for the benefit 
 of the cestui que trust for life to the exclusion of the claims of his 
 creditors. Ex'rs of White v. White, 30 Vt. 338; Leavitt v. Beirne, 
 21 Conn. 1 ; Pope's Ex'rs v. Elliott, <S B. Mon. ( Ky.) 56. 
 
 In other states, however, and it may be said in the majority of the 
 states where the question has arisen, the English rule has been adopted 
 without qualification. Tillinghast v. Bradford, 5 R. I. 205; Dick v. 
 Pitchford, 21 N. C. 480; Heath v. Bishop, 4 Rich. Eq. (S. C.) 46, 55 
 Am. Dec. 654; Bailie v. McWhorter, 56 Ga. 183; Rugeley and Har- 
 rison v. Robinson, 10 Ala. 702. 
 
 In this state there is no decision to govern us, and with conflicting 
 decisions in other Courts entitled to the highest consideration, the 
 question is one after all to be determined by us on principle. The 
 English decisions rest on two grounds : First, that the right of aliena- 
 tion is a necessary incident to an equitable estate for life, and any re- 
 straint upon this right is against the policy of the law which favors the 
 ready alienation of property; and secondly, that public policy forbids 
 that one should have the right to enjoy the income of property, to the 
 exclusion of his creditors. Now the right to sell and dispose of prop- 
 erty, is a necessary incident of course to the absolute ownership of 
 such property. You cannot give to one a fee simple interest, and then 
 say he shall not sell or dispose of it, because the right to alien it is a 
 legal and necessary incident to the estate granted, and to impose such 
 a condition would be repugnant to the nature and tenure of the estate 
 itself. And besides the best interests of the public require that there 
 should be a ready transmission of property. But the reasons on which 
 the rule is founded do not apply to the transfer of property in trust. 
 
 Where by the terms of the trust the legal estate is vested in a trus- 
 tee, he takes the legal title with the necessary incidents attached to it, 
 and among such incidents is the right to alien it. The cestui que trust 
 takes the equitable estate with the right to the accrued income, and 
 when this has been paid to him, the absolute right to dispose of it. So 
 neither the principal nor the income can be said to be inalienable. And 
 besides, the policy of the law is not against all restraints on the abso- 
 lute right to dispose of it. You may give an estate for life, with a pro- 
 vision that the estate shall go over to a third person upon alienation, 
 voluntary or involuntary, by the life tenant. You cannot give prop- 
 erty to be held in perpetuity, but you may give one an estate for life,
 
 Sec. 6) BY BANKRUPTCY. 253 
 
 with a limitation over to lives in being, and twenty-one years there- 
 after. And so by the English rule you may give an equitable estate 
 for life, with a limitation over or a cesser 2a to a third person, should 
 the life tenant attempt to alien it. Now, in all these instances, there is 
 a restraint to a greater or less degree on the right of alienation. The 
 law does not therefore forbid all and any restraints on the right to 
 dispose of it, but only such restraints as may be deemed against the 
 best interests of the community. And the gift of an equitable right 
 to the income from property for the life of the beneficiary, to the ex- 
 clusion of his alienee, is not, in our opinion, repugnant to the estate 
 or interest granted, nor is it such a restraint on the right of alienation 
 as the law for reasons of public policy forbids. 
 
 And then as to the other ground, that it is against the policy of the 
 law to permit one to hold and enjoy an estate or interest in property 
 for life, whether legal or equitable, to the exclusion of his creditors. 
 Now common honesty requires, of course, that every one should pay 
 his debts, and the policy of the law for centuries has been to subject 
 the property of a debtor of every kind, which he holds in his own 
 right, to the payment of his debts. He has as owner of such property 
 the right to dispose of it as he pleases, and his interest is, therefore, 
 liable for the payment of his debts. But a cestui que trust does not 
 hold the estate or interest in his own right ; he has but an equitable 
 and qualified right to the property or to its income, to be held and en- 
 joyed by the beneficiary on certain terms and conditions prescribed by 
 the founder of the trust. The legal title is in the trustee, and the 
 cestui que trust derives his title to the income through the instrument 
 by which the trust is created. The donor or devisor, as the absolute 
 owner of the property, has the right to prescribe the terms on which 
 his bounty shall be enjoyed, unless such terms be repugnant to the 
 law. And it is no answer to say that the gift of an equitable right to 
 income to the exclusion of creditors is against the policy of the law. 
 This is begging the question. Why is it against the policy of the law ? 
 What sound principle does it violate ? The creditors of the beneficiary 
 have no right to complain, because the founder of the trust did not 
 give his bounty to them. And if so, what grounds have they to com- 
 plain because he has seen proper to give it in trust to be received by 
 the trustee and to be paid to another, and not to be liable while in the 
 hands of the trustee to the creditors of the cestui que trust. All deeds 
 and wills, and other instruments by which such trusts are created, are 
 
 26 Limitation over: Yarnold v. Morehouse, 1 R. & M. 364 (1830) ; Manning 
 v. Chambers, 1 De G. & Sin. 282 (1847) ; Itochford v. Hackman, 9 Hare, 475 
 (1852) ; Sharp v. Cosserat. 20 Beav. 470 (1855) ; Joel v. Mills, 3 K. & J. 458 
 (1S57) ; Nichols v. Eaton, 91 U. S. 716, 23 L. Ed. 254 (1875) : Bull v. Kv. Nat. 
 Bk.. 90 Ky. 452, 14 S. W. 425 (1890) ; Bottom v. Fultz, 124 Ivy. 302, 98 S. W. 
 1037 (1907) ; Bramhall v. Ferris, 14 N. Y. 41, 67 Am. Dec. 113 (1856). 
 
 Cesser: Dommett v. Bedford, 3 Yes. Jr. 149 (1796); Shee v. Hale, 13 Yes. 
 Jr. 404 (1807); Rochford v. Hackman, 9 Hare, 475, 4S0-483 (1852); Joel v. 
 Mills, 3 K. & J. 458 (1857) ; Hatton v. May, L. R. 3 Ch. Div. 148 (1876) ; 
 Nichols v. Eaton, 91 U. S. 716, 23 L. Ed. 254 (1875).
 
 25 t TRANSFER OF RESPECTIVE [NTERESTS <»F PARTIES. (Cll. .'> 
 
 required by law to be recorded in the public offices, and creditors have 
 notice of the terms and conditions on which the beneficiary is entitled 
 
 to the income of the property. They know that the founder of the 
 trust has declared that this income shall be paid to the object of his 
 bounty to tlie exclusion of creditors, and if under such circumstances 
 they see proper t<i give credit to one who has but an equitable and 
 qualified right to the enjoyment of property, they do so with their 
 eyes open. It cannot be -aid that credit was given upon such a quali- 
 fied right to the enjoyment of the income of property, or that creditors 
 have been deceived or misled; and if the beneficiary is dishonest 
 enough not to apply the income when received by him to the payment 
 of his debts, creditors have no right to complain because they cannot 
 subject it in the hands of the trustee to the payment of their claims, 
 against the express terms of the trust. The hardship to them is one 
 that will surely bring about its own remedy, for the dishonest bene- 
 ficiary it is plain would soon be without credit. And then, as to the 
 rights of creditors, these may be defeated, even according to the Eng- 
 lish decisions, by providing that in the event of the recovery of a judg- 
 ment against the cestui que trust, or upon his insolvency, his interest 
 in the property shall cease, and shall go to another. Now what advan- 
 tage to the creditor is the cesser or limitation over? What he wants is 
 the money due to him, and this is not paid by depriving the beneficiary 
 of the property. But it may be said that, sooner than lose his interest 
 in the property, self-interest, if no higher consideration, will prompt 
 him to pay his debts. There is force in this, but with the best inten- 
 tions any one may, by the chances and hazards incident to every pur- 
 suit in life, be unable to pay his debts, and in that event, by depriving 
 one of his property by limitation over to a third person, you may de- 
 prive him of the very means by which he might in the future repair 
 his fortune. So it does not seem to us there is any substantial advan- 
 tage to the creditor, in thus permitting the founder of the trust to do 
 that indirectly, which we think he can do directly. And then again, 
 by the English rule, the rights of creditors may be excluded by pro- 
 viding that the income may be paid or not to the beneficiary at the 
 option of the trustee. To impose a requirement, so harsh in itself, 
 upon the bounty of a donor or devisor who may desire to provide for 
 the certain support of the object of his bounty is not warranted, it 
 seems to us, by any principle of justice or sound public policy. And 
 a rule of law which requires this to be done, and one which may be 
 evaded by carefully drawn terms and provisions, is hardly worth pre- 
 serving. Upon principle, therefore, we are of opinion that the founder 
 of a trust may provide in direct terms that his property shall go to his 
 beneficiary to the exclusion of his alienees, and to the exclusion of his 
 creditors. This being so, the rents and profits in the hands of the 
 trustee, and which the testator in the will before us directs shall be 
 paid into the hands of his son, Robert, and "not into the hands of an- 
 other, whether claiming by his authority or otherwise," cannot, in our
 
 Sec. 6) BY BANKRUPTCY. 255 
 
 opinion, be reached by his creditors, by any process, either at law or in 
 equity, before such rents and profits are paid to him. 27 
 Judgment affirmed. 
 
 In re NEIL. 
 HEMMING v. NEIL. 
 (In Chancery, befoie Kekewich, J., 1890. 62 Law Times Reports \N. S.] 649.) 
 
 Adjourned Summons. 
 
 James Neil who died in 1888, devised and bequeathed all his real 
 and personal estate to his trustees to convert the same into money and 
 divide the total into seven equal parts, and to stand possessed of one- 
 seventh upon trust during the life of his son Philip to pay and apply 
 the whole or any part of the income or accumulations of income for 
 the support, maintenance, or education, or otherwise for the benefit 
 of his son Philip, his wife and children, or any one or more of them, 
 his said son, his wife and children, in such manner in all respect as 
 his trustees should in their uncontrolled discretion think fit. 
 
 August 1, 1889, Philip Neil assigned to R. C. A. Hemming all his 
 interest in said one-seventh to secure payment of £60., October 31, 
 
 27 Nichols v. Eaton, 91 U. S. 716, 725-729. 23 L. Ed. 251 (1875) ; Hyde v. 
 Woods, 91 U. S. 523, 526, 21 L, Ed. 261 (1876) ; Steib v. Whitehead. Ill III. 
 217 (1SS4) ; Roberts v. Stevens. SI Me. 325, 21 Atl. 873. 17 L. R. A. 266 (1892) ; 
 Braman v. Stiles, 2 Pick. (Mass.) 160, 163, 13 Am. Dec. 115 (1824) ; Broadway 
 Nat. Bank v. Adams, 133 Mass. 170, 13 Am. Rep. 501 (1882); Billings v. 
 Marsh, 153 Mass. 311, 26 N. E. 1000. 10 L. R. A. 761. 25 Am. St. Rep. 635 
 (1891) ; Leigh v. Harrison, 69 Miss. 923. 11 South. 601, IS L. R. A. 49 (1892) ; 
 Lampert v. Haydel, 96 Mo. 139. 9 S. W. 7S0, 2 L. R. A. 113. 9 Am. St. Rep. 
 35S (1SS8) ; Partridge v. Cavender, 96 Mo. 152, 9 S. W. 785 (1888) ; Fisher v. 
 Taylor, 2 Rawle (Pa.) 33 (1829) : Vaux v. Parke, 7 Watts & S. (Pa.) 19 (1811); 
 Shankland's Appeal, 47 Pa. 113 (1861); Rife v. Geyer, 59 Pa. 393, 9S Am. 
 Dec. 351 (1868) ; Overman's Appeal, 88 Pa. 276 (1879) ; Thackara v. Mintzer, 
 100 Pa. 151 (1882) ; Jourolmon v. Massengill. 86 Term. 81, 5 S. W. 719 (1887) ; 
 Barnes v. Dow, 59 Vt. 530, 10 Atl. 258 (1887). 
 
 A man cannot settle his own property in trust for his own benefit, so as 
 to exempt the income from alienation by him or from process by his creditors. 
 Warner v. Rice, 66 Md. 136, 8 Atl. 81 (1886): Pacific National Bank v. Wind- 
 ram, 133 Mass. 175 (1882) ; Jackson v. Von Zedlitz, 136 Mass. 312 (1SS1) ; Mc- 
 Ilvaine v. Smith, 42 Mo. 45, 97 Am. Dec. 295 (1867) : Schenck v. Barnes, 156 
 N. Y. 316, 50 N. E. 967. 11 L. R. A. 395 (1898); Mackason's Appeal. 12 Pa. 
 330, S2 Am. Dec. 517 (1862) ; Ghornmley v. Smith, 139 Pa. 581, 21 Atl. 135, 
 11 L. R. A. 565, 23 Am. St. Rep. 215 (1891). 
 
 In some jurisdictions, e. g., California, Illinois, Indiana. Kansas, Michigan, 
 Minnesota, New Jersey, New York, North Dakota, South Dakota. Oklahoma. 
 Tennessee, and Wisconsin, the rights of creditors of the cestui que trust are 
 fixed by statutes ; they being either denied all rights or limited to the surplus 
 income that may remain after providing a suitable support for the cestui que 
 trust. See Cummings v. Corev, 58 Mich. 191, 25 N. W. 481 (1885); Harden- 
 liurgh v. Blair, 30 N. J. Eq. 615 (1879); Force v. Brown. 32 N. J. Eq. 118 
 (1880); Lippincott v. Evens, 35 N. J. Eq. 553 (1SS2) ; Linn v. Davis, 5S N. J. 
 Law. 29. 32 Atl. 129 (1895) ; Williams v. Thorn, 70 N. Y. 270 (1S77) ; Tolles 
 v. Wood, 99 N. Y. 616, 1 N. E. 251 (18S5) ; Kilroy v. Wood, 42 Hun (N. Y.) 
 636 (1886).
 
 •_'.")•> TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 1889, and August 14, 1889, gave said Hemming a further charge on 
 the same to secure payment of a further sum of £60. the same day. 
 
 August L5, iss'.i, Hemming notified the trustees of these assign- 
 ments. Notwithstanding this notice the trustees continued to pay 
 Philip Neil weekly sums on account of the income of his share. 
 
 An originating summons was taken out by Hemming against the 
 trustees and Philip Neil asking that certain questions be determined. 
 
 The summons was adjourned into court and now came on to he 
 heard. 
 
 KekewicHj T. 2S * * * It appears that some moneys have been 
 paid to or for the benefit of Philip Neil since notice of the assignment 
 of his interest was given to the solicitors for the trustees of the will, 
 and the plaintiff seeks to make the trustees liable in respect of the pay- 
 ments so made. In determining that question the word which will 
 guide me is the word "benefit" in the direction to the trustees to pay 
 or apply the whole or any part of the income of his share. Philip is 
 entitled to assign nothing but his beneficial interest under the will of 
 the testator. Money paid to him or to any person on his behalf — ex- 
 cluding such a special case as that put by Cotton, L. J., in Re Coleman ; 
 and Henry v. Strong (60 L. T. Rep. N. S. 127; 39 Ch. Div. 443)— is 
 necessarily part of his beneficial interest. Air. MacSwinney says that 
 the money is not his until it is actually paid to him. I think that that 
 argument is more ingenious than sound. I think that it must be as- 
 sumed that money paid by the trustees to him or to any person in his 
 behalf was his in their irrevocable determination immediately before 
 the payment. At that period of time they had notice or were affected 
 with notice of the assignment. I think, therefore, the trustees are 
 liable to pay to the plaintiff all moneys which have been paid by them 
 to Philip Neil, or to any person on his behalf, since the receipt by the 
 trustees of the notice of the charge. * * * 
 
 In re BULLOCK. 
 
 GOOD v. LICKORISII. 
 
 (In Chancery, before Kekewieh J., 1891. G4 Law Times Reports [N. S.] 736.) 
 
 Adjourned Summons. 
 
 By the will and codicil of Edwin Bullock (who died on the 1 1th 
 Feb., 1870), all the real and personal estate of the testator were vested 
 in the plaintiffs Charles Patten Good and Henry Williams, and the 
 testator's widow, Mary Bullock, his executors and trustees, in trust 
 for the testator's children, and the issue born in his lifetime of Mary 
 Bullock, as she should by deed or will appoint, and, failing such ap- 
 pointment, and so far as the same should not extend, in trust for those 
 
 * 8 A part of the opinion is omitted.
 
 Sec. 6) BY BANKRUPTCY. 257 
 
 of his six children who should he living- at her death, and the issue of 
 such as should be then dead leaving issue. 
 
 Mary Bullock, by her will dated the 29th May, 1883, directed and 
 appointed as follows : 
 
 "My late husband's trustees or trustee shall stand possessed of 
 £15,000. further part of the said net proceeds, upon trust to invest the 
 same in some or one of the modes of investment by law authorized for 
 the investment of trust funds, and to pay the income of such invest- 
 ments to the said Theodore Walter William Bullock, during his life or 
 until he shall become a bankrupt or a liquidating debtor, or cease to be 
 entitled to receive such income, or any part thereof, for his own per- 
 sonal use or benefit, by any means or for any purpose. And in the 
 event of, and upon the said T. W. W. Bullock becoming a bankrupt or 
 a liquidating debtor, or ceasing to be entitled to receive the said in- 
 come, or any part thereof, for his own personal use or benefit, by any 
 means or for any purpose, to pay to him or apply for his benefit, dur- 
 ing the remainder of his life, either the whole, or so much, and so 
 much only of the said income, as my late husband's trustees or trustee 
 shall in their or his uncontrolled discretion think fit, and, subject to the 
 aforesaid interest hereinbefore appointed in favor of the said T. W. 
 W. Bullock, my late husband's trustees or trustee shall hold the said 
 £15,000., and the investments and income (including any accumulations 
 of income) thereof in trust for the child, if only one, or all the children 
 equally, if more than one, born in my lifetime, of the said T. W. W. 
 Bullock, and if there be no such child, in trust for the said William 
 Bullock, Mary Holyoake Bullock, Constance Bullock, and Dorothy 
 Marian Good as tenants in common in equal shares." 
 
 The testatrix died on the 29th Dec, 1886, and her will and several 
 codicils, which did not affect the above appointment, were proved by 
 her executors, the plaintiffs Charles Patten Good and Henry Williams, 
 on the loth Feb. 1887. * * * 
 
 The trustees invested the £15,000. in stock, * * * the interest 
 on which was paid to T. W. W. Bullock up to and including the 16th 
 July, 1890. 
 
 On the 23rd August, 1890, the trustees received notice of a memo- 
 randum of charge, dated the 30th Jan., 1889, from T. W. W. Bullock 
 to Lickorish and Bellord, solicitors, on all his interest under the will 
 of the testatrix to secure money of which about £500. was stated to 
 be owing. 
 
 On the 23rd of Oct., 1890, a receiving order was made against T. 
 W. W. Bullock, and on the 14th Nov., 1890, the trustees received no- 
 tice that the official receiver claimed the £12,011. stock as trustee in 
 the bankruptcy of T. W. W. Bullock. He subsequently claimed the 
 proportion of interest due at the date of the receiving order ; but the 
 claims of the trustees were afterwards withdrawn. 
 
 The trustees took out an originating summons, asking (inter alia) 
 Kkn.Tr.— 17
 
 258 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 whether the plaintiffs properly might during the life of T. W. W . 
 Bullock apply the whole, or any, and what part, of the income of the 
 trust fund in providing in such manner as they might from time to 
 time think fit for the past and future lodging, board, clothing, main- 
 tenance, and support of T. W. W. Bullock, and the payment of sundry 
 legal expenses incurred by him or on his behalf in and since July, 1890, 
 or how the said income ought to be dealt with by the plaintiffs. 
 
 The summons was adjourned into court, and now came on to be 
 heard. 
 
 K: Ki.wicn, J. At the conclusion of the arguments on that point, 
 I held that the particular assignee represented by Mr. Maidlow is not 
 entitled to any part of the income in which Theodore Walter William 
 Bullock lakes' an interest under the will. He only claimed that which 
 accrued before notice of his assignment was given to the trustees of 
 the will, and that on the ground that until such notice was given the 
 assignment was not perfect, and Mr. Bullock could not until then be 
 said to have ceased to be entitled to receive the income for his own 
 personal use or benefit. I held that, although for some and important 
 purposes, the assignment might fairly be said to be not perfect until 
 notice given, yet as between assignor and assignee it was perfect as 
 from its date, and operated as a cesser of the assignor's title to receive 
 the income. I advert to this now because, with reference to the point 
 remaining to be decided, it is important to observe that the particular 
 assignee has no interest. It is also important to observe that the gen- 
 eral assignee — that is, the trustee in bankruptcy — makes no claim. He 
 has abstained from doing so deliberately, and I have no doubt wisely. 
 He could not, as far as I can see, have put forward any tenable argu- 
 ment in support of a claim if made. The question is therefore raised as 
 between Mr. Bullock and those entitled under the gift over, or, rather, 
 such of them as claimed adversely to him, for they do not all act togeth- 
 er or take the same view. Mr. Warmington's argument for them was 
 that the language of the will only empowers the trustees to pay the 
 income to Mr. Bullock or to apply it for his benefit, and that neither 
 of these things can be done. As regards payment, reliance was placed 
 on the decision in Re Coleman, Henry v. Strong (60 L. T. Rep. X. S. 
 127; 39 Ch. Div. 443) and my own judgment in Re Neil, Hemming v. 
 Xeil (62 L. T. Rep. N. S. 649), to which, on reflection I adhere; and 
 it was said that to pay income to Mr. Bullock would be to make a pay- 
 ment in derogation of the over-riding title of the trustee in bank- 
 ruptcy, and therefore a wrongful payment, which would be no dis- 
 charge to the trustees of the will, and render them accountable to the 
 trustee in bankruptcy. The argument is, I think, well founded. 
 
 As regards applications for the benefit of Mr. Bullock, the argu- 
 ment took this form. It was said that where the court has upheld a 
 discretionary trust for applications arising on bankruptcy or the equiv- 
 alent of bankruptcy, the discretion has been exercisable with reference 
 to wife and children as well as the bankrupt, and the decisions of the
 
 Sec. 6) BY BANKRUPTCY. 259 
 
 court have proceeded on the impossibility of determining beforehand 
 what, if anything, the trustees would, in the exercise of their discre- 
 tion, apply for the benefit of the bankrupt as distinguished from the 
 other objects of their power. For this reference was made to two 
 cases as examples of a class — Godden v. Crowhurst ( 10 Sim. 642) and 
 Kearsley v. Woodcock (3 Hare, 185). The language of the judg- 
 ments, and especially that of Vice Chancellor Shadwell in Godden 
 v. Crowhurst, countenances the argument ; but the precise point which 
 I have now to consider was not before the court in either case, and 
 T cannot think that either judge intended! to decide it. I can see no 
 reason on principle for defeating the obvious intention of the testatrix. 
 That obvious intention was to enable the trustees in the event of 
 Mr." Bullock's bankruptcy to apply for his benefit the income, or an 
 adequate part of the income, which he thereupon ceased to be entitled 
 to receive. It is clear, and the trustee in bankruptcy has practically 
 admitted, that he can take no interest in income thus applied ; and 
 it is difficult to see how those entitled under the gift over can success- 
 fully claim as coming to them what, if it does not come to them, would 
 not go to the trustee in bankruptcy. 
 
 The argument in opposition to their claim is strongly supported by 
 Chambers v. Smith (3 App. Cas. 795). It is a Scotch case, but the 
 Scotch law was expressly stated to be on this point in no way different 
 from that of England. It was there held that trustees possessing a dis- 
 cretionary power, such as the trustees of this will possess, might exer- 
 cise it in favor of the beneficiaries occupying Mr. Bullock's position, 
 notwithstanding arrestment by judgment creditors. The law is ex- 
 pounded by the several learned Lords who gave their opinions to the 
 House, but it will suffice to refer to those of Lord Chancellor Hatherley 
 and Lord Blackburn. There is a passage in the Lord Chancellor's 
 judgment (on page 804) which seems to me directly applicable to the 
 case in hand. It may be thus applied : Mr. Bullock has no control over 
 the fund when the trustees resolve to exercise their discretionary power. 
 He cannot, and no one claiming through him can, make a claim against 
 the trustees for payment. It would be a sufficient answer to any such 
 claim to say, "We have postponed! such payment to you personally, and 
 intend ourselves to apply the money for your behoof." And on page 
 807 he says: "If I am correct in holding as I do that the trust powers 
 could not be destroyed by the objects of them becoming indebted, 
 which, indeed, seems the time at which the testator would have desired 
 them to be brought into action, then the trustees are not innovating, 
 but only exercising their rights as conferred upon them by their trus- 
 tee at their own discretion." On page 817 Lord Blackburn notices 
 the great and fundamental difference between a gift to one either di- 
 rect or through the medium of trustees, who are mere conduit pipes 
 to convey the gift to the beneficiary, and a gift subject to a power re- 
 served to trustees to be exercised paramount to the beneficiary and in 
 his despite, and adds : "I think the arrestment fixes the date at which
 
 2(;U TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Cll. 3 
 
 it is to be determined whether the arresters have a right to attach the 
 fund, and anything that is subsequently done by the debtor or by those 
 who have rights against the debtor, or by those who claim under him, 
 comes too late after that." In other words, the assignment in this case, 
 which is equivalent to the arrestment in the case before the House of 
 Lord-, called the discretionary power of the trustees into operation, 
 and it would be a contradiction to hold that the power is inoperative 
 just when it was intended to be exercised. What the trustees in the 
 exercise of their discretion do not from time to time think fit to apply 
 for the benefit of Air. Bullock goes by the words of the will to those 
 entitled under the gift over; but they take only this overplus, and 
 cannot claim what the trustees determine to apply. 
 
 I was asked by the trustees to define the limits within which they 
 may apply the income for Air. Bullock's benefit. I find it extremely 
 difficult to do this in the abstract, and I am unwilling to fetter the trus- 
 tees' discretion, which was intended to be and ought to be construed 
 as large. I could not refuse to determine any particular question sub- 
 mitted by them to the court, and, if any real difficulty occurs, they 
 would probably be justified in asking the court's protection. I can say 
 no more at present than that they certainly may, in my opinion, spend 
 the whole or any part of the income in maintenance, using that word 
 in its most general and widest sense ; and I doubt whether I was right 
 in saying in the course of the argument that they could not properly 
 pay Air. 1 hillock's debts. The discretion is vested in them, and though, 
 as already mentioned, they are entitled to the assistance of the court 
 if a case of real difficulty occurs, they must exercise it, and so long 
 as they exercise it honestly — that is, as men of ordinary business 
 habits and prudence, and with due regard to all the circumstances of 
 the case — the court will not interfere with them. 29 
 
 
 SECTION 7.— BY ACT OF CREDITORS. 
 
 I. Creditors of Trustee. 
 
 . . 
 
 STITH v. LOOKABILL. 
 (Supreme Court of North Carolina, 1874. 71 N. C. 25.) 
 
 Civil Action, to recover possession of certain real estate tried at the 
 Spring Term, 1874, of the Superior Court of Davidson County, before 
 His Honor, Judge Cloud. 
 
 The plaintiff showed title from the state to one J. AI. Lisle; then a 
 deed from Lisle to F. AI. Camman ; then an original attachment 
 
 29 
 
 See 
 
 9 See Gray, Restraints on the Alienation of Property (2d Ed.) lG7f-lG7j. 
 , also, Nichols v. Eaton, 91 U. S. 71G, 2.'5 L. Ed. 1254 (1875).
 
 Sec. 7) BY ACT OF CREDITORS. ^61 
 
 against Camman, which was duly levied on the premises, and after 
 proper proceedings had thereon, a final judgment in said attachment, 
 and a ven. ex. issued to sell the land. Plaintiff further showed a sale 
 and that A. B. Stith became the purchaser, who, dying pendente lite, 
 willed the same to the plaintiff; also, that the defendant was in pos- 
 session. 
 
 Here, the plaintiff resting his case, the defendant moved the Court 
 to non-suit the plaintiff, on the ground that Camman did not acquire 
 such an interest as was the subject of attachment, levy and sale under 
 execution, the defendant stating that if His Honor should overrule the 
 motion he had evidence to offer showing title in himself. 
 
 His Honor sustained the motion and non-suited the plaintiff. From 
 this judgment the plaintiff appealed. 
 
 The provisions of the deed to Camman are sufficiently set forth in 
 the opinion of the Chief Justice. 
 
 Pearson, C. J. 30 Upon the motion to non-suit, the only question 
 was, "Had Camman such an estate as was subject to sale under ex- 
 ecution by his creditors?" On this depended the right of the plaintiff, 
 who was the purchaser, to maintain an action against the defendant, 
 who for the purposes of the motion, stands as a wrong-doer, without 
 connection, either as assignee or agent, with the cestui que trusts for 
 whom Camman is assumed to have held the legal estate. 
 
 Mr. Gilmer in a well-considered argument admitted the general po- 
 sitions taken by Mr. Bailey, in respect to "uses and trusts," to wit : 
 
 1. This case did not come within the operation of Stat. 27 Henry 
 VIII. So the legal title was in Camman subject to the trust, set out 
 in the deed, "for the sole and exclusive benefit of the members of a 
 company called and known as 'The Conrad Hill Gold and Copper 
 Company,' " their successors and assigns forever. 
 
 2. Camman, in the courts of law, was considered to be the owner 
 of the land, and no notice was taken of the trust, to which he was 
 subject. 
 
 3. Camman had power to assign the legal estate, and it could be 
 sold under an execution against him, the purchaser taking subject to 
 the trust, and notice being presumed. 
 
 4. Under the old system the plaintiff would have been entitled to 
 judgment on a demurrer to the evidence. 
 
 Mr. Gilmer then "proved by the books" that although the plaintiff 
 was in a court of law (under the old system) treated as the absolute 
 owner of the estate, still being a trustee, on the face of the deed by 
 which he derives title, he and his assignee, whether by his own sake, 
 or that of the sheriff, is subject to the control of the courts of equity, 
 by which these trust estates were upheld and treated as the real owner- 
 ship. See the reasoning in Blackmer v. Phillips, 67 N. C. 340. 
 
 The trustee or his assignee will be enjoined from enforcing his mere 
 
 so A part of the opinion dealing with a question of practice is omitted.
 
 2G2 TRANSFER OF RESPECTIVE [NTERESTS OF PARTIES. (Ch. 3 
 
 legal right in order to take possession of the land. From these prem- 
 ises he drew the conclusion that under our new system, the Court act- 
 ing- both as a court of equity and a court of law, the assignee of the 
 trustee by sale on execution will not be allowed to take judgment for 
 the recovery of the possession of the land. 
 
 The argument is well constructed, but it fails in this: Under the old 
 system the court of equity only interfered by injunction to prevent the 
 trustee or his assignee from taking possession as against the cestui 
 que trusts, or their assignee or agent, but did not interfere in favor 
 of a wrongdoer, who fails to connect himself in any way with the 
 cestui que trusts. Such is the law under the new system. In our case, 
 for the purposes of the motion to non-suit, the cestui que trusts arc 
 not before the court, and the defendant stands as a wrong-doer, with- 
 holding' the possession from the plaintiff who is the owner of the legal 
 estate. 
 
 If Camman had brought the action, the defendant, so far, as for 
 the purposes of the motion, as the matter now stands, would not have, 
 under the old system, entitled himself to an injunction; neither can 
 he do so under the new system, by which the equity of the cas 
 well as the law is administered in the same forum, for the plain reason 
 that he stands as a wrong-doer, withholding the possession from one 
 having the legal estate, and does not in any way connect himself with 
 the supposed cestui que trusts. 
 
 There is error. Judgment reversed and venire de novo. * * * 
 
 Per Curiam. Venire de novo. 
 
 STITH v. LOOKABILL. 
 (Supreme Court of North Carolina, 1S77. 76 N. C. 465.) 
 
 Civil Action to recover possession of real estate, tried at Fall Term, 
 1875, of Cabarrus Superior Court, before Schenck, J. 
 
 The plaintiff claimed as devisee of one A. B. Stith, who bought the 
 land in controversy at execution sale. The defendant claimed as ten- 
 ant of one Sturges who claimed to be the owner in fee of said land, 
 or if not the owner in fee, then the beneficiary owner, and entitled to 
 the equitable fee therein. 
 
 Reade, J. Land is conveyed to A. in trust for B. 
 
 A. has the legal title and conveys to C. 
 
 B. has the equitable title and conveys to D. 
 
 Who is entitled to hold the land in this Court, C. or D. ? 
 
 Very clearly D. is entitled to hold the land in a court of equity as 
 this is. 
 
 That is substantially this case, and that principle settles this case 
 in favor of the defendant. 
 
 John M. Lisle conveyed the land to Camman in trust for certain 
 persons. The plaintiff's devisor had an execution against Camman
 
 Sec. 7) BY ACT OF CREDITORS. 2G3 
 
 levied on the land and bought is at sheriff's sale. That puts the plain- 
 tiff in the shoes of Camman with the naked legal title. 
 
 The cestui que trusts conveyed to Sloan, who conveyed to the de- 
 fendant's landlord. That puts the defendant in the shoes of the cestui 
 que trusts with the equitable title. 
 
 The plaintiff insists that, even if that principle be correct, yet it 
 does not apply here because the defendant does not represent the 
 cestui que trusts ; that the cestui que trusts were the Conrad Hill Gold 
 and Copper Company; and that that company attempted to join and 
 merge itself into the North Carolina Mining Company, by proceed- 
 ings which were irregular and ineffectual for that purpose, and that 
 the said North Carolina Mining Company conveyed to Sloan, etc. 
 
 It may be admitted as contended by the plaintiff, that the deeds and 
 proceedings relied on by the defendant, are irregular and ineffectual 
 to pass the legal title, for if they had been ever so regular and formal 
 they could not have passed the legal title. The legal title was in the 
 plaintiff and not in the cestui que trusts. But what the defendant 
 rightly insists upon is that the deeds and proceedings coupled with the 
 facts that they were for value and were fair and bona fide, operate as 
 assignments of the equitable interest of the cestui que trusts ; and that 
 having the possession of the land he is entitled to hold it. 
 
 There is no error. 31 
 
 Per Curiam. Judgment affirmed. 
 
 si The creditor of an executor or administrator cannot even at law take 
 the assets of the deceased to satisfy his debtor's individual debt. Farr v. 
 Newman, 4 T. R. 621 (1792) ; Gaskell v. Marshall, 1 M. & R. 132 (1831) ; 
 Williams v. Fullerton, 20 Vt. 346 (1S48). 
 
 Some decisions hold that the creditor of a trustee cannot even at law take 
 the trust property to satisfy the individual debt of the trustee. Lessee of 
 Smith v. McCann, 24 How. 39S, 16 L. Ed. 714 (1860) ; Hitchcock v. Galveston 
 Wharf Co. (C. C.) 50 Fed. 263 (18S0) ; Baker v. Copenbarger, 15 111. 103. 5S 
 Am. Dec. 600 (1S53) ; Robison v. Botkin, 181 111. 182, 54 N. E. 915 (1899); 
 Bostick v. Keizer, 4 J. J. Marsh. (Ky.) 597, 20 Am. Dec. 237 (1830) ; Logan v. 
 Moore, 7 Dana (Ky.) 74 (183S) : Booker v. Carlile, 14 Bush (Ky.) 154 (1S78) ; 
 Morrill v. Raymond. 28 Kan. 415, 42 Am. Rep. 167 (18S2) ; Houston v. Now- 
 land. 7 Gill & J. (Md.) 480 (1836) ; Bancroft v. Consen, 13 Allen (Mass.) 50 
 (1S66) : Hayward v. Cain, 110 Mass. 273 (1S72) ; Ashurst v. Given, 5 Watts 
 & S. (Pa.) 323 (1843) ; Wilhelm v. Folmer, 6 Pa. 296 (1S47) ; Reed's Appeal, 
 13 Pa. 476 (1850); Shryock v. Wagoner. 28 Pa. 430 (1S57) ; Brown v. Wil- 
 liamson's Executor, 36 Pa. 338 (1S60) ; Miller v. Baker, 166 Pa. 414. 31 Atl. 
 21, 45 Am. St. Rep. 680 (1894) ; Townsley v. Barber, 27 Vt. 417 (1855) ; Bar- 
 ber v. Chapin, 28 Vt. 413 (1856) ; Hackett v. Callender, 32 Vt. 97 (1859) ; Hart 
 v. Farmers' & Mechanics' Bk., 33 Vt. 252 (1860) ; Abell, Adm'r, v. Howe, 43 
 Vt. 403 (1871). 
 
 It would seem, however, that the creditor of a feoffee to use could satisfy 
 his judgment against the feoffee individually out of the property held in use. 
 Y. B. 14 Hen. VIII, fol. 4, pi. 5.
 
 
 264 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 SMITH v. SMITH and the BANK OF WADESBOROUGH. 
 (Supreme Court of Nortl} Carolina, 1S5S. 57 N. C. 303.) 
 
 Appeal from the Court of Equity of Richmond County, from an in- 
 terlocutory order made by Saunders, J. 
 
 Upon the hill and answers, the case appears to be this: Jonathan 
 Hailey, of Richmond county, the lather of the plaintiff, by his will, 
 dated January, 1855, bequeathed as follows: "I give to my daughter 
 1 lannah. the wife of Franklin C. Smith, my slaves, Lydia, Jim, Reuben 
 and Hannah, to the sole and exclusive use of the said Hannah Smith, 
 separate and apart from all control, or ownership of her said husband, 
 and free from all liability for his debts or contracts, for and during 
 her natural life, and at her death, to her daughter Alice, and all such 
 children a- she may have then living, share and share alike, it being 
 my express will, that the said Franklin C. Smith shall have no inter- 
 est, trust, or property, either at law or in equity, in or to said negroes." 
 After the death of the testator, the slaves went into the possession of 
 the plaintiff, or her husband, by the assent of the executor, as the bill 
 states. One of the slaves, Jim, about seventeen years of age, was 
 rogueish and unmanageable, and the plaintiff, and her husband, con- 
 curred in thinking it was best to dispose of him, and the bill states 
 that it was agreed between them, in October, 1855, that the husband 
 .should carry him off and exchange him for a female slave, that could 
 serve in the house, or sell him, and invest the proceeds in such a fe- 
 male, to be held in the place of Jim, and that accordingly Smith took 
 Jim to Richmond, Ya., and soon after brought back a negro girl by 
 the name of Harriet, about thirteen years of age, whom, he said, he 
 had received in exchange for Jim, and also the sum of $125 to boot, 
 and he delivered the said girl to the plaintiff, and she accepted her, 
 in place of Jim, agreeing that he should retain the money for his time, 
 trouble, and expense in the transaction ; that the plaintiff claimed Har- 
 riet, and held her as her separate property, under her father's will, 
 up to August, 1858, when the sheriff of Richmond seized her under a 
 fieri facias, on a judgment, at the instance of the Bank of Wadesbor- 
 ough, against Franklin C. Smith and others, and advertised her for 
 sale as the property of Smith, the husband ; and then this bill was filed 
 by .Mrs. Smith, by her next friend, who was the father's executor, 
 against the Bank of Wadesborough and her husband, praying that the 
 husband may be declared to hold the said Harriet in the place of Jim, 
 in trust for her separate use, during her life, and then for her daugh- 
 ter Alice, and such other child or children as she may have, and that 
 the said negroes may be properly settled upon a fit trustee, according 
 to the purposes and trusts of the will ; and that, in the meanwhile, 
 the defendants may be restrained by injunction from proceeding to 
 sell the slave Harriet. Upon the bill an injunction was granted as 
 prayed for. 

 
 Sec. 7) BY ACT OF CREDITORS. 2G5 
 
 The answer of Smith admits all the material allegations of the bill, 
 and submits that all the negroes, including Harriet, shall be conveyed 
 to such trustees as the Court may designate, and settled upon the 
 trusts declared in the will. 
 
 The answer of the other defendant, the Bank of Wadesborough, 
 admits the bequest of the negroes by the will, and that Mark Hailey, 
 the executor, assented to some of the legacies, but denies that he as- 
 sented to the legacy of Jim, and states that Smith, the husband, as the 
 defendant believes, took Jim against the assent of the executor, and 
 without his knowledge. It admits the character imputed in the bill 
 to the negro, Jim, but denies that the plaintiff requested her husband, 
 or agreed with him, that he should carry Jim off and exchange him 
 for a negro girl, or sell him, and with the proceeds purchase a girl in 
 his place ; and states that Jim was carried off against the will and 
 decided opposition of the plaintiff. It also denies that Jim was ex- 
 changed for Harriet, or that Harriet was purchased with the proceeds 
 of Jim, or was ever delivered to the plaintiff by her husband, or by 
 her accepted in place of Jim. It states that, about the time Smith 
 went off with Jim, he borrowed twelve or fourteen hundred dollars, 
 and on his return stated that, on the trip, he purchased Harriet and 
 another negro and sold the latter before he got back; that Smith took 
 a bill of sale for Harriet in his own name, as the absolute owner, and 
 claimed her as his own property and frequently offered to sell her, 
 saying he could make a good title, and no claim was set up to her by 
 the plaintiff until after the bank got the judgment against her hus- 
 band, when, after becoming insolvent, he executed to the plaintiff a 
 bill of sale for Harriet, with the intent to defraud his creditors, and 
 absconded. The answer admits the seizure of Harriet on the execu- 
 tion, and the intention to sell her under it, as the property of Smith. 
 
 Upon this answer, the counsel for the Bank of Wadesborough 
 moved to dissolve the injunction, which was refused, and the Bank 
 appealed. 
 
 RuFFin, J. 82 Although the order in the court of equity does not 
 declare the grounds on which it was made, yet, in the opinion of the 
 court, enough appears in the pleadings to sustain it. Equity does not 
 usually interfere to restrain a trespass, but leaves the party to legal 
 redress. But, both from the nature of the property, and the pecul- 
 iarity of the situation in which the parties stand, the plaintiff is entitled 
 io_xeli£f. The bequest is plainly and expressly to the separate use of 
 the wife, with a remainder to a child then born, and to such others as 
 may come in esse. But no trustee is nominated, and, therefore, the 
 legacy, as far, at least, as the estate of the wife is concerned, vested 
 jure mariti, in the husband. But, in this court, he stands as trustee 
 for her, upon the clear intent that he should not take for his own bene- 
 fit, but that she should enjoy, for her life, as if she were sole. Parker 
 
 32 A part of the opinion is omitted.
 
 
 266 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 v. Brooke. 9 Ves. 583; Steel v. Steel, 36 N. C. 452. He, then having 
 the legal title, though on trust, could not maintain an action against 
 the sheriff for taking the slave as his property, nor against the pur- 
 r from the sheriff. It is possible that obstacles may present them- 
 selves in the way of getting the full relief asked (that of a settlement 
 of all the negroes in trust for the plaintiff for life, and then for the 
 children), both Erom the nature of the limitation in remainder to the 
 children, and from the fact that the children are not parties. But we 
 are not to deal with that question now, nor to anticipate the effect on 
 the injunction of amending the hill, by bringing in the children. The 
 controversy, at present, concerns the interest of the plaintiff alone. 
 She has, unquestionably, an estate to her separate use in the negroes, 
 and that is purely an equitable interest that can he asserted only in 
 this court, and will be protected in this court, hecause she has either 
 no trustee, or none that can, in the actual condition of things, make 
 the title available at law, so as to secure her equitahle interest. 
 
 Thus far the jurisdiction has been considered as if the controversy 
 were touching the negroes specifically bequeathed, in which case, as 
 the separate use of the wife is beyond all doubt, the court holds that 
 she would be entitled to an injunction against the husband to restrain 
 his alienation in breach of the trust, and to a decree securing the prop- 
 erty to her by a proper settlement, with a fit trustee, and, therefore, 
 that she is equally entitled to a similar relief against the creditor of 
 the husband, endeavoring to effect a similar breach of trust, by a sale 
 under execution, wherein the purchaser could only get (if anything) 
 the naked legal title of the husband, and would hold it, in the view of 
 this court on the same trusts as attached to it in the hands of the hus- 
 band. Freeman v. Hill, 21 N. C. 389; Polk v. Gallant, 22 N. C. 395, 
 3d Am. Dec. 410. This, however, is not the case of a seizure of one 
 of the slaves bequeathed to the separate use of the plaintiff, but of a 
 slave which, the hill alleges, was got in exchange for one of them by 
 the husband, acting as the agent of the plaintiff, by an agreement be- 
 tween her and her husband, or purchased by him for her with the 
 price obtained for one of the original slaves, necessarily sold for his 
 faults, and accepted by her in his stead. It must be admitted that on 
 those positions, if denied by the defendants, the onus is on the plain- 
 tiff. She must show that she has the same equity attaching to the 
 slave in controversy which she had in the one her father gave her. 
 * * * 
 
 [The court, having concluded that the plaintiff had established this 
 equity, affirmed the order appealed from.] 33 
 
 ss See Newlands v. Paynter, 4 Myl. & 0. 408 (1839); Roberts v. Death, L. 
 R 8 B D. 319 (1881) ; ('ooper v. Griffin, L. It. 1 Q. B. D. 740 (1892) ; Snediker 
 v Boyloston, s:! Al.«>. 4<>s, 4 South. 738 (1887); Creditors -of Spieer v. Spicer, 
 21 Ga. 20() (1857); Hollingsworth v. Trueblood, 59 [nd. 542 (1877); Rogers 
 v Hendsley 2 Da. 597 (1830 L831) ; Iluntt v. Townshend, 31 Md. .'{80, 100 Am. 
 Dec. 63 (1869); Hartsocfe v. Russell, - r ,2 Md. 010 (1879); Houghton v. Daven- 
 porl 74 Me. 590 (1883); Lerow v. Wilmarth, 9 Allen (Mass.) 382 (1864); Han-
 
 Sec. 7) BY ACT OF CREDITORS. • 2G7 
 
 DYSON and Others v. SIMMONS. 
 (Court of Appeals of Maryland, 1S7S. 4S Md. 207.) 
 
 Appeal from the Circuit Court for Montgomery County, in Equity. 
 
 The appeal in this case was taken from a decree directing the sale 
 of the mortgaged premises in the proceedings mentioned, and from an 
 order ratifying certain auditor's accounts distributing the proceeds 
 of sale, and rejecting others. By the accounts ratified the judgments 
 rendered on contracts made after the date of the mortgage were 
 awarded payment in full, and to the mortgage claim was awarded the 
 balance, less certain expenses, which was not sufficient to pay it in 
 full. Creditors who held judgments obtained on claims existing prior 
 to the mortgage, Mrs. Cornelia Jones who claimed under a deed of 
 trust, and her trustee appealed. The case is further stated in the 
 opinion of the Court. 
 
 Ai,vrcv, J., delivered the opinion of the court. 34 
 
 The bill in this case was filed by the -appellee as assignee of Eliza- 
 beth A. Simmons, of a mortgage and single bill, for $2,500; the 
 single bill being executed by John L. T. Jones, and the mortgage by 
 the said! Jones and his wife; both instruments bearing date the 19th 
 of April, 1871. The mortgage was in all respects duly executed and 
 acknowledged by the mortgagors, and the consideration sworn to by 
 the mortgagee ; and it was filed for record within the time prescribed 
 by law, and actually recorded, in Montgomery county, where the land 
 mortgaged is situate; but the acknowledgment and affidavit having 
 been made before a justice of the peace in Frederick county, there 
 was an omission to obtain the clerk's certificate of the official char- 
 acter and qualification of the justice, as required by the Code, art. 
 24, § 3. The mortgagor, Jones, being legally indebted on contracts 
 made both before and since the date of the mortgage, upon which 
 a large number of judgments have been recovered subsequent to that 
 date, the present bill is filed to enforce the mortgage, thus ineffectu- 
 ally recorded, upon the footing of a contract, and as an equitable 
 charge upon the land embraced in it. This is resisted by the judg- 
 ment creditors, upon the ground that their judgments have created 
 liens upon the land, and that such liens cannot be displaced or inter- 
 fered with by a prior unrecorded or equitable mortgage, which should 
 
 cock v. Titus, 39 Miss. 224 (I860) ; South Presbyterian Church v. Ilintze, 72 
 Mo. 363 (18SO) ; Connor v. Follansbee, 59 N. H. 124 (1S79) ; Camnneld v. 
 Johnson, 5 N. J. Eq. 245 (1845) ; Bunn v. Mitchell, 27 N. J. Eq. 54 (187(5) ; 
 Ells v. Tousley, 1 Paige (N. T.) 280 (182S) ; Wylie v. White, 10 Rich. Eq. 
 (S. C.) 291 (1S58); Sandford v. Weeden, 2 Heisk. (Tenn.) 71 (1870); Baker 
 v. Hardin, 10 Heisk. (Tenn.) 300 (1S72) ; Parker v. Coop, 60 Tex. Ill (1883). 
 
 In the following decisions the creditor of the trustee was given preference 
 over the cestui que trust: Buck v. Webb, 7 Colo. 212, 3 Pac. 211 (18S3) : 
 Roberts, Adm'r, Broom, 1 Del. Ch. 38S (1831) ; Kennedy v. Lee, 72 Ga. 39 
 (18S3) ; Dill v. Hamilton, 118 Ga. 20S, 44 S. E. 989 (1903). 
 
 a* Only so much of the opinion as deals with the first question is given.
 
 2G8 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 only be enforced as against the mortgagor, and his ordinary or non- 
 lien creditors, existing at the date ni the mortgage. 
 
 Two questions arise: 1st) whether the lien of a judgment can be dis- 
 placed or subordinated to that of a prior equitable mortgage or charge? 
 and, 2ndly, if such mortgage or charge can be enforced as against 
 judgment liens, in what order are the creditors to be affected thereby? 
 
 1. The principle is now so well settled, that it would seem to be 
 beyond all question and controversy, that if a party makes a mort- 
 gage, or a li'erts to make one. but it proves to be defective, by reason 
 of some informality or omission, such as failure to record in due time, 
 defective acknowledgment, or the like, though even by the omission 
 of the mortgagee himself, as the instrument is at least evidence of 
 an agreement to convey, the conscience of the mortgagor is bound, 
 and it will be enforced by a court of equity. Taylor v. Wheeler, 2 
 Win. 565; Mestaer v. Gillispie, 11 Ves. 621, 624; Price & Bevan 
 v. McDonald, 1 Md. 414. 54 Am. Dec. 657. As against the mort- 
 gagor himself this proposition was never regarded as questionable 
 (Carson & Vickery v. Phelps, 40 Md. 73), but as against judgment 
 creditors of the mortgagor, obtaining their judgments subsequent to 
 the date of the mortgage, there was formerly some dispute. The 
 question, however, both in England and in this State, has been long 
 ■dnce settled ; and the cases, without an exception, so far as we are 
 informed, hold that a judgment, being but a general lien, must be 
 subordinated to the superior equity of a prior specific lien, created! 
 by a defective mortgage or conveyance. Judgments create liens only 
 because the land is made liable by statute to be seized and sold on 
 execution: Miller v. Allison, 8 Gill & "[• 38; Coombs v. Jordan, 3 
 Bland, 284, 298-310, 22 Am. Dec. 236 ] Eschbach v. Pitts, 6 Md. 
 77; Tayloe v. Thomson, 5 Pet. 358, 8 L. Ed. 154. But such lien se- 
 cures to the creditor neither jus in re nor jus ad rem: Ex parte 
 Knott, 11 Ves. 609, 617; Lacy v. Fugle, 2 Phill. 442; Conard v. 
 Atlantic Ins. Co., 1 Pet. 442-443, 7 L. Ed. 189. At the time of the 
 execution of this mortgage the mortgagor had full and complete 
 power of conveying or charging the land, provided it was bona fide 
 as against existing creditors, and the general principle is, that if a 
 party has power to charge certain lands, and agrees to charge same, in 
 equity he has actually charged them ; and a court of equity will en- 
 force the charge. Alexander v. Ghiselin, 5 Gill, 187; Rolleston v. 
 Morton, 1 Dr. & War. 195. And the fact that judgments have been 
 subsequently recovered against the party agreeing to convey or charge 
 the land, will in no manner defeat the right to have the agreement 
 executed. As has been very properly said, a judgment has relation 
 to the time when it is entered up. It will not affect any bona fide 
 conveyance made for value before that time, for it only attaches upon 
 that which is then, or afterwards becomes the property of the debtor. 
 The fact that the debtor may retain the property at law does not 
 change the principle upon which a court of equity proceeds. If the
 
 Sec. 7) BY ACT OF CREDITORS. 209 
 
 property is charged in equity before the entry of the judgment, the 
 judgment will not affect such charge. Whitworth v. Gaugain, 1 
 Phill. 728, 729. The judgment creditor therefore stands in the place 
 of his. debtor, and he can only take the property of his debtor, sub- 
 ject to the equitable charges to which it was justly liable in the hands 
 of the debtor, at the time of the rendition of the judgment, — except 
 in those cases where the principle may have been modified by express 
 statute. Taylor v. Wheeler, 2 Vern. 565; Finch v. Earl of Win- 
 chelsea, 1 P. Wms. 277, 282; Sir Simeon Stewart's Case, cited in 
 Burn v. Burn, 3 Ves. 573, and stated and approved in Alexander v. 
 Ghiselin, 5 Gill, 185. 
 
 In no case to be found in the books is the question more directly 
 and strongly presented than in that of Whitworth v. Gaugain, 3 
 Hare, 416. In that case, an equitable mortgagee of lands was held 
 to be entitled in equity to enforce his charge on the land in priority 
 to a creditor of the mortgagor, who, without notice of the equitable 
 mortgage, had, subsequently thereto, recovered judgment against 
 the mortgagor, and obtained actual possession of the land by writ of 
 elegit and attornment of the tenants. A stronger case than that 
 could hardly be stated ; and yet it was held, upon full review of the 
 cases, that, notwithstanding the judgment had been executed to the 
 extent of obtaining actual possession of the land under the elegit, 
 the equitable mortgagee had the superior equity, and, consequently, 
 was entitled to priority. That case was affirmed on appeal, upon 
 full review of the authorities by the Lord Chancellor (1 Phill. 728), 
 and it has been fully approved in subsequent cases. Abbott v. Strat- 
 ten, 3 Jones & Lat. 603 ; Eyre v. McDowell, 9 H. L. Cas. 619, 642 ; 
 Beavan v. Lord Oxford, 6 De G., M. & Gord. 507. These cases are 
 the stronger, as they involve the consideration of the Act of 1 & 2 
 Vict. ch. 110, as applicable to England, and the similar Act of 3 & 
 4 Vict. ch. 105, as applicable to Ireland, which enacted that a judg- 
 ment shall operate as a charge on all lands of which the judgment 
 debtor shall, at the time of entering up judgment or afterwards, be 
 seized or possessed, or over which such judgment debtor shall, at the 
 time of entering up judgment or afterwards, have any disposing 
 power which he might, without the consent of any other person, ex- 
 ercise for his own benefit. These statutes, it was decided, contained 
 nothing to vary the rule as to the equities to which the property may 
 be subject. For, as said by Lord Cranworth, in Eyre v. McDowell, 
 supra, the debtor could not have appropriated the land in question 
 to the liquidation of his debt, without first satisfying the claim of his 
 equitable mortgagee, and the Legislature did not intend to enable 
 the creditor by judgment to take what his debtor could not give. 
 
 This well established principle of the English cases has been fully 
 adopted in our own; and the cases to which we are about to refer, 
 are, we think, quite decisive of the question under consideration. 
 [Here the court refers to Hampson v. Edelen, 2 Har. & J. 64, 3 Am.
 
 '-'70 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. CCh. 3 
 
 Dec. 530 ; Repp v. Repp, 12 Gill & J. 341 ; Alexander v. Ghiselin, 5 
 Gill, 138.] 
 
 It is clear, therefore, that the fact of the existence of judgments, 
 recovered subsequent to the date of the mortgage, gives to the judg- 
 ment creditors no such fixed lien upon the land as to exclude or defeat 
 the security intended by the mortgage; and it was in accordance with 
 this view that the decree appealed from was passed. 35 * * * 
 
 Decree affirmed. 
 
 MOVER v. I II X MAN. 
 
 (Court of Appeals of New York, 1855. 13 N. Y. ISO.) 
 
 In October, 1835, H. W. Schroeppel being the owner of two hun- 
 dred and fifty acres of land, situate in Oswego county, contracted 
 with the plaintiff to sell and convey to him a part of it containing 
 sixty acres, at the agreed price of $465 ; fifty dollars of the purchase 
 price to be paid down, and the residue at or before the expiration of 
 ten years with annual interest. By the contract it was agreed that the 
 plaintiff should have immediate possession of the premises, and on 
 payment of the purchase money, the same should be conveyed to him 
 in fee by Schroeppel. The following spring the plaintiff entered into 
 possession of the land mentioned in the contract, which was wild, 
 and erected a house and commenced making other improvements 
 thereon. From that time till the commencement of this action, he 
 occupied and improved the premises. 
 
 In 1838, R. S. Corning recovered a judgment against Schroeppel 
 in the Supreme Court, which then became a lien on the real estate of 
 the latter, situate in Oswego county ; and in 1844, an execution upon 
 this judgment was issued to the sheriff of Oswego county, who, by 
 virtue thereof, in August of that year, sold the premises contracted 
 to the plaintiff, together with the residue of the two hundred and 
 
 85 p.ur^k v. Francis, 3 Swanston, 536, note (a) (1673) ; Brace v. Duchess of 
 Marlborough, 2 P. Wins. 493 (1728); Casberd v. Atty. Genl., 6 Price. 411 
 (1819); Whitworth v. Gaugain, :: Hare, -lit; (1844), affirmed 1 Phillips, 728 
 (1846); Abbotl v. Stratten, :: .1. & Lat. «'><»:; (1846); Brearcliffl v. Dorrington, 4 
 De G. & Sm. 122 (1S50) ; Dnnstcr v. Lord (ilengall, '■', lr. Ch. 47 (1S53) ; Scott 
 v. Lord Hastings, 4 K. & J. 633 (1858); Eyre v. McDowell, 9 II. L. C. 619 
 (1861); Pickering v. Ilfracombe Ky. Co.. L. R. 3 C. P. L'.V) (1868); Robinson 
 v. Williams, 22 X. Y. 380 (1860); Ins. Co. of Pa. v. Phoenix Ins. Co.. 71 1'a. 
 ::i (1872); Delaire v. Keenan, :; Dosaus. (S. C.) 74, 4 Am. Dec. 604 (1809). 
 
 'IIm- si ' principle gives the mortgagee of after-acquired property priority 
 
 over the creditor of the mortgagor. Holroyd v. Marshall. 10 H. I>. <'. l'.'l 
 (1861); Brown v. Bateman, L. 11. 2 C. P. 272 (1867); Ponnock v. Coe, 23 
 Bow. 117. L6 L. Ed. 436 (1859); Robinson v. Mauldin, 11 Ala. 977 (1847); 
 Floyd v. Morrow, 20 Ala. 353 (1855); Hamlin v. Terrard, 72 Me. 62 (1881); 
 Sillers v. Lester, 48 Miss. 513 (1873); Wright v. Bircher's Ex'r, 72 .Mm. 179, 
 37 Am. Rep. 433 (1880); Rutherford v. Stewart, 70 Mo. 216 (1883); France 
 v. Thomas, 86 Mo. 80 (1885); Smithurst v. Edmunds, 14 X. .7. Eq. 408 (1862); 
 Philadelphia, W. & B. R. Co. v. VVoelpper, 64 Pa. 366, :'. Am. Rep. 596 (1870); 
 Groton Mfg. Co. v. Gardiner, 11 R. T. 626 (1877); First Xat. Bank of Alexan- 
 dria v. Turnbull, 32 Grat. (Va.) <;or>, 34 Am. Kep. 791 (1SS0). Contra: Ross 
 v. Wilson, 7 Bush (Ky.) 129 (1869).
 
 Sec. 7) BY ACT OF CREDITORS. 271 
 
 fifty acres, and gave the usual sheriff's certificate of sale to Corning, 
 the plaintiff in the execution, who was the purchaser at the sale. 
 A duplicate of this certificate was duly filed by the sheriff in the 
 clerk's office of Oswego county. In August, 1845, Corning sold and 
 assigned to the defendant the sheriff's certificate, and in the ensuing 
 January the premises were conveyed to him by the sheriff, pursuant to 
 the sale and certificate. The sheriff's deed to the defendant was duly 
 recorded in Oswego county, in February, 1846. 
 
 Intermediate the recovery of the judgment and the sale by virtue 
 of the execution, the plaintiff made several payments to Schroeppel 
 upon the contract; and in October, 1845, after the sale and assign- 
 ment of the sheriff's certificate to the defendant, but before the execu- 
 tion of the sheriff's deed, he made a further payment to Schroeppel on 
 the contract, of $224. When the plaintiff made these payments, he 
 had no actual notice of the judgment or of the sale made by the sheriff. 
 
 Soon after the defendant received his deed, he notified the plain- 
 tiff and forbid his making further payments to Schroeppel, and of- 
 fered to convey to him the premises on his paying to the defendant 
 the amount unpaid upon the contract at the time of the sheriff's 
 sale. This the plaintiff declined to do, and the defendant, in 1851, 
 brought an action against him to recover possession of the premises. 
 The plaintiff thereupon tendered to the defendant the amount due 
 upon the contract after crediting the $224, paid Schroeppel after the 
 sheriff's sale, and before he conveyed to the defendant and demanded 
 a conveyance of the premises described in the contract ; and the de- 
 fendant declining to accept the amount and execute the deed, this 
 action was instituted to compel him to do so, and to stay the suit 
 commenced to recover possession of the premises. This action was 
 tried before Mr. Justice Pratt without a jury, in 1852. He found 
 the facts above stated, and decided that the payment made to Schroep- 
 pel in October, 1845, was not valid as against the defendant, and 
 that the latter was entitled to demand and receive the amount owing 
 on the contract at the time of the sheriff's sale, and he ordered judg- 
 ment that the defendant convey the premises to the plaintiff, on his 
 paying this amount. The plaintiff excepted, and the judgment having 
 been affirmed by the Supreme Court at general term in the Fifth dis- 
 trict, he appealed to this court. 
 
 Denio, J. 38 The counsel for the parties in this case agree that 
 the plaintiff, being in possession under his contract at the time of 
 docketing the judgment under which the defendant claims, is to be 
 protected in equity as to his rights which existed at that time ; and 
 the position is so well established by authority as to have become 
 an elementary doctrine in this branch of the law of real estate. I 
 consider it equally well settled that the docketing of a judgment 
 against the vendor affords no notice of its existence, either actual 
 
 3 6 5. part of the opinion of Denio, J., and the concurring opinion of Hand, 
 J., are omitted.
 
 •J72 TRANSFER OP RESPECTIVE INTERESTS OF TARTIES. (Cll. 3 
 
 or constructive, to the prior vendee of the judgment debtor. Parties 
 who deal with the debtor respecting his lands subsequently to the 
 docketing of the judgment, are affected with notice. Such persons 
 may make themselves perfectly safe in that particular, by searching 
 the ducket book of judgments in the proper office; and they will, of 
 course, abstain from purchasing if they find the land which they 
 are proposing to buy, encumbered by a judgment. So, it may be 
 said!, a party holding a contract upon which payments remain to be 
 paid, may, before making such payments, examine for judgments 
 against the vendor; but it would be an intolerable i nconvenience to 
 require this, where the payments, as is usually the case, are to be 
 made annually or oftener; and should such examination ever be strict, 
 the vendee would have to run the risk of an encumbrance inter- 
 vening, while he was going from the office where the same was 
 made to the residence of the vendor to make the payment. It 
 has been repeatedly decided that the docketing of a judgment or the 
 recording of a mortgage is no notice to a prior purchaser or mort- 
 gagee of the premises whose conveyance is on record, or of which 
 notice was had, the object of the recording acts, and of the law 
 requiring judgments to be docketed, being, it is said, to protect sub- 
 sequent purchasers and incumbrancers against previous deeds, mort- 
 gages, etc., which are not recorded and of which they had no no- 
 tice, and to deprive the holder of the prior unrecorded conveyance 
 or mortgage of the right which his priority would have given him at 
 the common law. Cheeseborough v. Millard, 1 John. Ch. 409, 7 Am. 
 Dec. 494; Stuyvesant v. Hall, 2 Barb. Ch. 151. The plaintiff in this 
 case being in possession under his contract, that circumstance was 
 notice to all persons who might subsequently become interested in 
 any way in the premises, not only of such possession, but of the terms 
 of the contract and of all his existing rights under it. 
 
 In the view of a court of equity, his condition was like that of a 
 party having a prior conveyance or lien which was duly recorded. 
 When, therefore, Corning had recovered his judgment against 
 Schroeppel, the situation of the respective parties was this : The 
 plaintiff was the equitable owner of the land, subject to future pay- 
 ments to be made by him, and the judgment creditor had notice of 
 his situation and of his rights ; but the plaintiff had no notice and 
 was not chargeable with notice of the lien of his creditor. The cred- 
 itor had at law the right to acquire the legal title to the land by 
 means of a sheriff's sale and a purchase by himself; but in equity his 
 rights were limited to the future payments to be made by the plain- 
 tiff. But as the vendee had no notice of the judgment creditor's lien, 
 and the creditor had full notice of the vendee's situation, it would 
 seem to be reasonable that in order to intercept those payments and 
 divert them from the vendor's hands into his own, the creditor ought 
 at least, to inform the vendee of the existence of his lien and of his 
 right to the unpaid purchase money.
 
 Sec. ?) BY ACT OF CREDITORS. 273 
 
 In accordance with this view, it was held, in a case in Maryland, 
 that where the vendee, subsequently to the recovery of a judgment 
 against the vendor, but without actual notice thereof, had paid over 
 a balance of the purchase money and taken a conveyance from the 
 judgment debtor, such vendee was, in equity, entitled to be pro- 
 tected against the claim of the judgment creditor. Hampson v. 
 Edelen, 2 Har. & J. (Md.) 64, 3 Am. Dec. 530. * * * 
 
 If then, the payment made by the plaintiff to Schroeppel is not 
 j affected by the docketing of Coming's judgment, I am not aware of 
 '.any principle upon which the sale upon the execution and the pur- 
 chase of the premises by Corning, under which the defendant holds, 
 can prejudice that payment. The sale converted the general lien 
 into a particular one upon these premises. It was still but a lien ; 
 for any judgment creditor of Schroeppel might, notwithstanding, re- 
 deem the premises. But the consideration, which in my judgment, 
 prevents its having the effect claimed for it, of cutting off the plain- 
 tiff's right to pay Schroeppel, is, that the former had no notice of 
 the transaction, while Corning and the defendant must be considered 
 as having full notice of the plaintiff's rights. Admitting that Schroep- 
 pel had no right to the money, and that Corning or the defendant had, 
 either the plaintiff or the defendant must lose the money; and the 
 rule in such cases is that the party shall suffer who, by his acts or 
 omission, permitted the money to go into the hands of a party not 
 entitled to it. The defendant could readily have informed the plain- 
 tiff of the judgment and of the sheriff's sale; and then if the plain- 
 tiff had chosen to pay Schroeppel, instead of refusing so to pay, or 
 to take measures by bill of interpleader or otherwise, if threatened 
 by a suit by Schroeppel, perhaps the payment would have been in his 
 own wrong. As the case stands, he paid the money to the party 
 holding his obligation for the payment without any notice that any 
 other person had become interested in that contract, or had any right 
 to the money which he had engaged to pay to Schroeppel. * * * 
 
 The judgment of the Supreme Court should be modified!, and a 
 judgment should be given in accordance with this opinion, to be set- 
 tled by one of the judges of this court. The defendant should pay 
 the costs in the Supreme Court. 37 
 
 37 iu many jurisdictions, so long as the vendor retains the legal title, his 
 judgment creditor acquires a charge thereon as security for the unpaid pur- 
 chase money, and a purchaser of the legal title at execution sale can hold the 
 same as such security. A payment by the vendee to the vendor in ignorance 
 of the judgment or sale will pro tanto lessen this right. Doe ex dem. Nickles 
 v. Haskins, 15 Ala. 619, 50 Am. Dec. 154 (1S49) ; Sellers v. Hayes. 17 Ala. 
 749 (1850) ; Hardee v. McMichael, Adm'x. 68 Ga. 678 (1S82) ; Bell v. Mc- 
 Duffie, 71 Ga. 264 (1883) ; Simpson v. Niles, 1 Ind. 196 (184S) ; Gaar v. Lock- 
 ridge, 9 Ind. 92 (1857) ; Holman v. Creagmiles, 14 Ind. 177 (1860) : Burke v. 
 Johnson, 37 Kan. 337, 15 Pac. 201, 1 Am. St. Rep. 252 (1SS7) ; Doe on dem. 
 Riley v. Million, 4 J. J Marsh. (Ky.) 395 (1830). See. however. Cooper v. Ar- 
 nett, 95 Ky. 603, 26 S. AY. 811 (1*94) ; Hampson v. Edelen, 2 Har. & J. (Md.) 
 64, 3 Am. Dec. 530 (1S07) ; Doak v. Runyan, 33 Mich. 75 (1875) ; Corey v. 
 
 Ken.Tr.— 18
 
 
 274 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 BROWN v. TIERCE. 
 
 (Supreme Court of the United States, 1808. 7 Wall. 205, 19 L. Ed. 134.) 
 
 Error to the Supreme Court of Nebraska Territory. 
 
 Brown filed his bill in September, 1860, in the court below ag-ainst 
 three persons, Pierce, Morton, and Weston, alleging that in the spring 
 of 1X57 he settled upon and improved a tract of land near Omaha; 
 that he erected a house on the tract and continued to occupy it until 
 August 10, 1857, when he entered the tract under the pre-emption 
 laws of the United States ; that Pierce claimed the land by virtue of 
 the laws of an organization known as the Omaha Claim Club; that 
 this organization, consisting of very numerous armed men, sought to, 
 ami did to a great extent, control the disposition of the public lands in 
 the vicinity of Omaha in 1857, in defiance of the laws of the United 
 States ; that it frequently resorted to personal violence in enforcing 
 its decrees ; that the fact was notorious in Omaha, and that he. 
 Brown, was fully advised in the premises; that as soon as he had 
 acquired title to the land, Pierce, together with several other members 
 of the club, came to his house and demanded of him a deed of the 
 land, threatening to take his life by hanging him, or putting him in 
 the Missouri river, if he did not comply with the demand; that the 
 club had posted handbills calling the members together to take action 
 against him, and that knowing all this, and in great fear of his life, 
 he did. on the 10th of August, 1857, convey the land by deed to 
 Pierce; that he, Brown, received no consideration whatever, for the 
 conveyance; that from the date of his settlement upon said land, until 
 the time of filing the bill, he had continued to keep possession either 
 
 Smalley, 106 Mich. 257. 64 N. W. 13, 58 Am. St. Rep. 474 (1895); Filley v. 
 Duncan. 1 Neb. 134. 93 Am. Dec 337 (1871) ; Courtnay v. Parker, 10 Neb. 
 311, 20 N. W. 120 (1884), s. c. 23 Neb. 582, 33 N. W. 202 (1887); Olander 
 v. Tighe, 43 Neb. 344 (1895); Wehn v. Fall. 55 Neb. 547. 70 N. W. 13. 70 
 Am. St. Rep. 397 (1898) ; Lane v. Ludlow. 6 Paige (N. Y.) 310, note a (1837); 
 Smith v. Gage, 11 Barb. (N. Y.i 60 (1863); Butler v. Brown's Heirs, 5 Ohio 
 St. 211 (1855); Lefferson v. Dallas, 20 Ohio St. 68 (1870); Coggshall v. Marine 
 Bk. ('.'., 63 Ohio St. 88, 57 N. B. lose, (1900); Fasholt v. Reed. 16 Serg. & R. 
 (Pa.) 266 (1827); McMullen v. Wenner, L6 Serg. & R. (Pa.) IS, 16 Am. Dec. 
 543 (1827); Stewart v. Coder, 11 Pa. 90 (1849); Patterson's Estate. 25 Pa. 
 71 (1855); Kinports v. Boynton, 120 Pa. 306, 14 Atl. 135, 6 Am. St. Rep. 700 
 (1888); Snyder v. Botkln, 37 W. Va. 355. 10 S. E. 5*.M (1892). 
 
 In some jurisdictions the judgment creditor of the unpaid vendor and the 
 purchaser at execution sale with notice of the vendee's rights acquire no 
 rights. Strauss v. White, 66 Ark. 167, 51 S. w. 64 (1899); Baldwin v. Thomp- 
 son. 15 Iowa. 504 (1864); W Iward V. Dean. 40 Iowa. 1!)'.) (1877); Money 
 
 v. Darsey, 15 Miss. 15 (1846); Taylor v. Lowenstein, 50 Miss. 278 (1874); 
 Cllisholm v. Andrews, 57 Miss. 636 (1880); Jones v. Howard. 142 Mo. 117. 43 
 
 s. \v. 635, 64 Am. St. Rep. 546 (1897); Moore v. Byers, 65 N. O. 240 (1871); 
 Tally v. Reed, 72 X. C 336 (1875); Fblger v. Bowles, 72 N. O. 003 (1875); 
 Adickes v. Lowry, 15 S. c. 128 (1879). 
 
 If the purchase money lias been fully paid, the vendee may enjoin a sale 
 under an execution against the vendor. Finch v. Earl of Winehelsea, 1 P. 
 Wins. 277 (1715); Prior v. Penpraze, 4 Price, 99 (1817); Valentine v. Seiss, 79 
 Md. 187, 28 AH. 892 (1894).
 
 Sec. 7) BY ACT OF CREDITORS. 275 
 
 actually or constructively ; that Morton claimed an interest in the 
 premises by virtue of a judgment lien, and that Weston also made 
 some claim. 
 
 The prayer was, that the deed might be declared void, and Pierce 
 be decreed to reconvey, and for general relief. 
 
 The bill was taken pro confesso as to all the defendants, except 
 Morton, who answered. 
 
 This answer, stating that he, Morton, was not a resident of the 
 territory, and had no knowledge or information about the facts alleged 
 in the bill, but on the contrary was an utter stranger to them, and 
 therefore could not answer as to any belief concerning them, set forth, 
 that on the 28th of August, 1857, Pierce was "the owner and in pos- 
 session of, and otherwise well seized and entitled to, as of a good and 
 indefeasible estate of inheritance in fee simple," the tract in con- 
 troversy; that being so, and representing himself to be so, and having 
 need of money in business, he applied to him, Morton, to borrow the 
 same, and that he, Morton, being induced by reason of the repre- 
 sentation, and also by the possession, and believing that he, Pierce, 
 was the owner, he was thereby induced to lend, and did lend to him 
 $6,000, on the personal security of him, Pierce ; that before the filing 
 of this bill by Brown, he, Morton, had obtained judgment against 
 Pierce for $3,400, part of the loan yet unpaid ; that this judgment was 
 a lien on the lands ; and that as he, Morton, was informed and be- 
 lieved, if he could not obtain his money from this land, he would be 
 wholly defrauded out of it. 
 
 The court below declared Brown's deed void, and decreed a re- 
 conveyance from Pierce to him and that neither Morton nor Weston 
 had any lien on the premises. Morton now brought the case here for 
 review. 
 
 Mr. Justice Clifford delivered the opinion of the Court. * * * 38 
 
 Next question which arises in the case is, whether the judgment 
 set up by the appellant creates a superior equity in his favor over that 
 alleged and proved by the appellee. * * * 
 
 Express decision of this Court is, that the lien of a judgment con- . 
 sjitutes no property in the land, that it is merely a general lien secur- 
 ing a preference over subsequently acquired interests in the property, 
 but the settled rule in chancery is, that a general lien is controlled in 
 such courts so as to protect the rights of those who were previously 
 entitled to an equitable interest in the lands or in the proceeds thereof. 
 
 Specific liens stand upon a different footing, but it is well settled 
 that a judgment creates only a general lien, and that the judgment 
 creditor acquires thereby no higher or better right to the property or 
 assets of the debtor, than the debtor himself had when the judgment 
 was rendered, unless he can show some fraud or collusion to impair 
 his rights. Drake on Attachments, § 223. 
 
 38 A part of the opinion is omitted.
 
 276 TRANSFER OP RESPECTIVE [NTERESTS OF PARTIES. (Cll. 3 
 
 C ' 'I'rcct statement of the rule is, that the lien of a judgment creates 
 a preference oyer subsequently acquired rights, but in equity does not 
 attach to the mere legal title to the land, as existing in the defendant 
 at its rendition, to the exclusion of a prior equitable title in a third 
 Berson. Howe, Petitioner, 1 Paige (N. Y.) 128, 19 Am. Dec. 395; 
 Ells v. Touslev, 1 Paige (X. V. ) 2N3 ; White v. Carpenter, 2 Paige 
 i X. Y.) 219; Buchan v. Sumner, 2 Barb. Ch. (N. Y.) 181, 47 Am. 
 Dec. 305; Lounsbury v. Purdy, 11 Barb. (N. Y.) 494; Keirsted v. 
 Avery, 4 Paige ( X. Y.) 15. 
 
 Guided by these considerations, the Court of Chancery will pro- 
 tect the equitable rights of third persons against the legal lien, and 
 will limit that lien to the actual interest which the judgment debtor 
 had in the estate at the time the judgment was rendered. * * * 
 
 Decree affirmed. 
 
 HARRIS v. GAINES. 
 (Supreme Court of Tennessee, 1878. 2 Lea, 12.) 
 
 Appeal from the Chancery Court at Waverly. G. H. Nixon, Chan- 
 cellor. 
 
 McFarland, J., delivered the opinion of the Court. 39 
 
 The bill in substance charges that on the 12th day of July, 1877, 
 the complainant entered into a contract with the defendant, Gaines, 
 and in pursuance of that contract conveyed to said Gaines and the 
 defendant, Morris, a small tract of land in Humphreys county, and 
 gave them his two obligations for $150, due respectively in two and 
 three years after date, one of which he has paid to their assignee, and 
 on the other he has paid $100, in consideration of all which said Gaines 
 made to complainant a deed for certain lands which he claimed he 
 and Morris owned in Missouri, but Morris did not join in the deed; 
 that in this transaction a gross fraud was committed upon him; that 
 Gaines represented that, the title to the land in Missouri was clear 
 and unincumbered, and in their possession, and suggested to com- 
 plainant, who resided in this State, to write to certain parties, named 
 by Gaines, for information, he, Gaines, having in the meantime fraud- 
 ulently suggested to these parties the answers to return, so as to de- 
 ceive and mislead the complainant. He charges that on investigation 
 he found that Gaines and Morris really owned no land in Missouri. 
 The land Gaines proposed to convey had never been paid for, a ven- 
 dor's lien existed thereon, and they were not in possession; so that 
 complainant would, in reality, have to purchase the land again be- 
 fore he could get any title or possession. 
 
 Alter the plaintiff had conveyed his land to Gaines and Morris, 
 the defendant, Lucas, who had a judgment against Gaines, caused 
 execution to be levied on the land, and was proceeding to have it 
 
 3» A part of the opinion is omitted.
 
 SeC. 7) BY ACT OF CREDITORS. 277 
 
 condemned, when Gaines filed his bill enjoining a condemnation, 
 which bill is still pending. 
 
 The prayer is for a rescission and that the cause be consolidated 
 and heard with the cause of Gaines and Lucas. 
 
 Lucas filed a demurrer assigning four causes, two of which, the 
 third and fourth, were sustained by the Chancellor, and the bill dis- 
 missed as to him. [After concluding that the demurrers should have 
 been overruled, the Court proceeded as follows:] 
 
 Another ground of demurrer assigned is, that it not being alleged 
 that Lucas had knowledge of the fraud, the levy of his execution 
 gave him a right prior to the claims of the complainant. This ground 
 of demurrer was not acted upon by the Chancellor and in strictness, 
 perhaps, we need express no opinion upon it. It being alleged that 
 Gaines has a bill pending to enjoin the execution of Lucas, it may 
 become unnecessary to decide the question. If Lucas' levy gave him 
 priority, that right may be enforced on final decree without now dis- 
 cussing the bill as to him. However, the weight of authority and 
 reason is, we think, that the mere levy of an execution without sale 
 fixes a lien attaching to the legal title, and this is subject to any equity 
 against the debtor, relating to period of time prior to the levy, and 
 such levy is not a superior lien to the right of the grantor to rescind 
 for duress or fraud. * * * 
 
 Decree reversed and demurrer overruled, Lucas paying costs of 
 this court. 
 
 WHITE and Others v. WILSON and Another. 
 (Supreme Court of Indiana, 1S43. 6 Blackf. 448, 39 Am. Dec. 437.) 
 
 Error to the Tippecanoe Circuit Court. 
 
 Blackford, J. Wilson and another filed a bill in chancery against 
 White and others. The object of the bill was to have a mistake in a 
 mortgage, which had been executed by one of the defendants to the 
 complainants, corrected by the insertion in the mortgage of a certain 
 tract of land which, by mistake, had been omitted, and also to secure 
 the land so omitted from being liable to certain judgments against the 
 mortgagor. The Circuit Court, on the bill, answers, depositions, etc., 
 rendered a decree correcting the mistake, and freeing the land omitted 
 in the mortgage from the lien of the judgments. 
 
 The facts necessary to be noticed in this case are as follows : Hunt, 
 one of the defendants, mortgaged certain lands to the complainants, 
 in order to secure them against loss as his endorsers of a promissory 
 note. A tract of land, intended by the parties to be included in the 
 mortgage, was omitted by mistake. Subsequently to the mortgage, and 
 before the bill was filed, certain creditors of Hunt obtained judgments 
 against him ; and the complainants had reason to apprehend that 
 executions on the judgments would be levied on the land, which, by
 
 278 TRANSFER OF RESPECTIVE [NTERESTS OF PARTIES. (Ch. 3 
 
 mistake, had been omitted in the mortgage. The complainants had 
 paid the note, which was for a larger amount than the mortgaged 
 lands and the tract omitted were worth; and Hunt was insolvent. 
 
 We think the decree is right. The court had authority to correct 
 the mistake. Mitford's Ch. PI. 184; Gillespie v. Ah. on, 2 John. Ch. 
 ( . X. Y.) 585, 7 Am. Dec. 559. And the land omitted in the mort- 
 gage, the mistake being corrected, was not subject to the judgments. 
 It is said by Ju3ge Story, that, in all cases of mistake in written in- 
 struments, courts of equity will interfere as between the original par- 
 ties, or those claiming under them in privity, such as personal rep- 
 resentative-, heirs, devisees, legatees, assignees, voluntary grantees, or 
 judgment creditors, or purchasers from them with notice of the facts. 
 1 Story's Eq. 178. See, also, Burgh v. Francis, 1 Eq. Cas. Abr. 320; 
 Taylor v. Wheeler, 2 Vernon, 564; Finch v. The Earl of Winchelsea, 
 1 P. Williams, 277; In the Matter of Howe, 1 Paige (N. Y.) 125, 19 
 Am. Dec. 395. 
 
 PER Curiam. The decree is affirmed with costs. 40 
 
 HARNEY et al. v. FIRST NAT. BANK OF JERSEY 
 CITY et al. 
 
 (Court of Chancery of New Jersey, 1894. 52 N. J. Eq. 697, 29 Atl. 221.) 
 
 Pitney, V. C. 41 * * * Three questions are to be solved : First. 
 Was the lot of land in question partnership assets? And, second, if 
 so, is the right of the judgment creditors superior to that of the com- 
 plainants? Third. Are the complainants in a position to assert their 
 equity ? 
 
 [The Vice Chancellor concluded that the lot was partnership prop- 
 erty.] 
 
 2. William A. Harney failed early in 1893, and on the 17th of 
 March, 1893, the defendant Bowen, as assignee of Clark & Demarest. 
 recovered a judgment against him for $399.29; and on the 7th of 
 
 4 That the equity of reformation is good against attaching or execution 
 Creditors without, regard to notice, sec. also. Stone v. Hale, 17 Ala. 557, 52 
 Am. Dec. 185 (1850); Whitehead v. Brown, 18 Ala. G82 (1S51) ; Early v. 
 Owens, 68 Ala. 171 (1880); Berry v. Sowell, 72 Ala. 14 (1882); Bailey v. Tine 
 nerlake, 74 Ala. 221 (1883); Orr v. Echols, L19 Ala. 340, 24 South. 357 (1898); 
 Blackburn v. Randolph. 33 Ark. 119 (1878) : Ft. Smith Milling Co. v. Mikles, 
 (II Art.. 123, .",2 S. W. to:: (lsor,); Wall v. Arrington, 13 Ga. 88 (1853); Burke 
 v. Anderson. 40 Ga. r,3.~, (1S00); Lowe, Adm'x. v. Allen, (is Ga. 122.1 (1881); 
 Phillips v. Roquemore, or, Ga. 710. 23 S. E. 855 (1895); Kerchner v. Frazier, 
 106 Ga. 137, 32 S. E. 351 (1898); Boyd v. Anderson. 102 Ind. 217, 1 N. E. 724 
 (1885); Welton v. Tizzard, 15 Iowa. 495 (1864); Rea v. Wilson, 112 Iowa, 
 517, 84 X. W. 539 (1900) ; Bush v. Bush, : , .: , > Kan. 556, 6 Pae. 704 (1SS5) ; Bod- 
 well v. Beaton, 10 Kan. 36. 18 Pae. 001 (1888); Young v. Coleman, 43 Mo. 170 
 (1869); Martin v. Nixon. 02 Mo. 20, 4 S. W. . r ,0?, (1887); Galway v. Malchow, 
 7 Neb. 285 (1878); Chadron Building & Loan Ass'n v. Hamilton, 45 Neh. 369, 
 63 N. W. 808 (1895) ; Strang v. Beach, 11 Ohio St. 28.3, 78 Am. Dec. 308 (1860). 
 
 •*i A. part of the opinion is omitted.
 
 SeC. 7) BY ACT OF CREDITORS. 279 
 
 June, 1893, the First National Bank of Jersey City recovered a judg- 
 ment for $4,061.55, and subsequently, on the 14th of August, 1893, 
 the bank recovered a further judgment against him for the sum of 
 $1,638.46. Upon this last judgment execution was issued and re- 
 turned unsatisfied. William A. Harney was then examined under sup- 
 plementary proceedings, and upon such examination his interest in 
 this property was discovered, and an _alias execution was issued and 
 duly levied upon the lot in question, and it was advertised for sale. 
 
 The defendants contend that, by virtue of their several judgments 
 and levies, they acquired a lien upon the one-third interest of W. A. 
 Harney, which is superior in right to the equity of the executors of 
 the deceased partner. They do not deny that the executors have an 
 equity, but they say it is a secret one, and must yield to the statutory 
 lien of a judgment. 
 
 The general rule is that an equity of this sort is superior to that 
 of a judgment creditor or any other party acquiring an interest from 
 the holder of the legal title, except it be a bona fide purchaser for 
 value. The principle is that the lien of a judgment reaches only such 
 right as the defendant in execution has in the property, subject to all 
 equities against it. The holder of the legal title of real estate which 
 constitutes part of the assets of a partnership holds it in trust for the 
 .fixm J ."so far, at least, as may be necessary to pay the partnership debts, 
 and adjust the equities between the partners." Pillsbury v. Kingon, 
 31 N. J. Eq. 619, at page 625, and cases cited; Lindl. Partn. p. 351 
 et seq. ; and see remarks of Mr. Justice Dixon in Arnold v. Hager- 
 man, 45 N. J. Eq. 186, at page 197, 17 Atl. 93. 14 Am. St. Rep. 712. 
 This trust in favor of the firm results from the mere fact that the land 
 was bought and paid for with partnership funds, for partnership pur- 
 poses, and is a part of the partnership property. The doctrine is quite 
 familiar, and perfectly well settled. [Authorities cited.] 
 
 The well-settled and only ground upon which a person dealing with 
 the holder of the title of real estate subject to a secret trust, of which 
 he has no notice, is permitted to obtain from him a title clear of the 
 trust is that he parts with something of value on the strength of the 
 apparent ownership of the land. This is the very essence of the 
 doctrine of bona fide purchaser. The rule is universal in equity that, 
 in order to constitute a person a bona fide purchaser for value, he 
 must have parted with something either in the way of money or val- 
 uable thing, or of a right of action, or have given up some lien which 
 he already had, or assumed some new obligation. He must have al- 
 tered his position irretrievably in "actual reliance" upon the apparent 
 title of the other party to a particular piece of propertv. 2 Pom. Eq. 
 Jur. §§ 745, 747; Basset v. Nosworthy, 2 White & T. Lead. Cas. Eq. 
 (4th Am. Ed.) 82, 83. 
 
 Now, a mere judgment creditor is not clothed with this armor. He 
 has parted with nothing on the strength of the apparent title of his 
 debtor in any particular parcel of propert y;. Such apparent owner-
 
 280 TRANSFER OF RESPECTIVE INTERESTS of PARTIES. (Ch. 3 
 
 ship has not misled him to his injury. He may be disappointed, but 
 mere disappointment does not amount, in legal contemplation, to in- 
 jury. 
 
 In the case in hand it appears affirmatively that neither of the cred- 
 itors knew that the debtor had the title to this land until after they 
 had obtained judgment. But if they had acquired such knowledge 
 previous to the credit, or to bringing suit on their debts, the situation 
 and rights of the parties would not be changed, for the mere giving 
 general credit on the strength of the apparent ownership of the prop- 
 erty does not constitute one a bona fide purchaser. Xor does the in- 
 curring the expense of a suit at law create an estoppel. Phillipsburg 
 Bank v. Fulmer, 31 N. J. Law, ?2. at page 55. [Authorities cited.] 
 
 Our recording statutes do. indeed, declare that unrecorded deeds of 
 conveyance absolute of land (Revision, p. 155, § 14), and unrecorded 
 deeds of mortgage or conveyances in the nature of mortgages of lands 
 (Revision, p. 706, § 22), shall be void as against subsequent judgment 
 creditors and bona fide purchasers and mortgagees for value. 
 
 But these provisions do not, by their terms, include resulting trusts, 
 or other purely equitable rights or liens, and they have never, so far 
 as I am informed, been construed by our courts to have such effect. 
 
 The subject-matter of the legislation of which they form a part is 
 the providing for the acknowledgment, proof of execution, and! re- 
 cording of deeds, etc ; and it would be a great stretch of the power 
 of construction to hold them to extend to rights which, from their 
 verv nature, are incapable of record. See, on this subject, Martin 
 v. Bowen, 51 N. J. Eq. 452, 26 Atl. 823. 
 
 The reasoning, however, which excludes mere judgment creditors 
 from the position of bona fide mortgagees, except when expressly 
 given that position by the statute, does not apply to purchasers for 
 value without notice (other than the plaintiff) upon executions upon 
 judgments. Such purchasers have all the qualifications of bona fide 
 purchasers for value, and are protected as such. 2 Pom. Eq. Jur. § 
 774 * * * 
 
 3. The next question is whether the complainants are in a position 
 to enforce their equity. 
 
 It is insisted that to give them standing in this court they must 
 either have established their claim by a judgment at law or the sub- 
 ject-matter of the suit must have been brought within the jurisdiction 
 of the court by a decree of dissolution and judicial seizure of the 
 assets prior to the judgment. 
 
 Wither of these positions is tenable. While it is well settled that 
 a mere creditor at large of the firm has no standing in this court to 
 prevent an improper application of the firm's assets (Young v. Frier, 
 9 X. J. Eq. 465), it is equally well settled, as I think, upon the plainest 
 principles, that a partner, as such, may maintain such a suit in this 
 court by virtue of his equitable right or lien in the property in ques- 
 tion. Deveney v. Mahoney, 23 N. J. Eq. 247, at pages 249 [bottom],
 
 Sec. 7) BY ACT OF CREDITORS. 281 
 
 250, and cases cited ; to which I add: 1 Madd. Ch. Pr. 135 ; 1 Story, 
 Eq. Jur. § 678, and cases cited; Beavan v. Lewis, 1 Sim. 376; Kerr, 
 Inj. 169; Lindl. Partn. 359; Greenwood v. Brodhead, 8 Barb. 
 (N. Y.) 593. * * * 
 
 I think the complainants are entitled to the relief prayed for, and 
 that the sale should be stayed until the partnership debts are paid, and 
 the accounts adjusted; and will advise a decree accordingly. 42 
 
 
 
 EVERETT v. DREW and Others. 
 (Supreme Judicial Court of Massachusetts, 1SS0. 129 Mass. 150.) 
 
 Morton, J. This is an action of contract, and the substantial al- 
 legations of the plaintiff's declaration are, that the defendants made 
 an arrangement with Elijah C. Drew that he was to buy a parcel of 
 land, to take the deed in his own name, and to execute a declaration 
 that he held it in trust for the defendants, to pay a part of the con- 
 sideration with money furnished by the defendants, and to give his 
 own note and mortgage back for the balance thereof. The declara- 
 tion also alleges that Drew purchased land of the plaintiff's wife and 
 other persons; that he paid therefor $10,000, with money furnished 
 by the defendants ; that the owners made a deed to him, and he, at 
 their request, gave his note and a mortgage, containing a power of 
 sale to the plaintiff; that the plaintiff foreclosed saidi mortgage by a 
 sale; that, after applying the proceeds of the sale, there remains a 
 balance due on said note ; and that the defendants owe the plaintiff 
 the said balance and the interest thereon. 
 
 The plaintiff contends that Drew throughout the transaction and in 
 giving the note acted as the agent of the defendants ; and that, as the 
 note is not a negotiable promissory note, he has the right to maintain 
 an action on it against them as unknown and undisclosed principals. 
 
 The general rule is well established that if an agent, acting for his 
 principal, makes a contract without disclosing his principal, the lat- 
 ter is bound by the contract. Thomson v. Davenport, 2 Smith, Lead. 
 Cas. (5th Am. Ed.) 358, and cases cited. He is bound because it is 
 his contract made through another person. But this rule does not 
 apply in the case at bar. Drew was not the agent of the defendants. 
 
 42 The last six cases are not cases of technical trusts. They are cases of 
 "equities," so called, enforceable in a court of equity and conferring rights 
 against property, superior to the rights of creditors as such. Instances of 
 other "equities" conferring rights superior to the rights of creditors will be 
 found in the following cases: Wanzer v. Truly, 17 How. 5S4, 15 L. Ed. 216 
 (1S54) ; Justice v. Justice, 115 Ind. 201, 16 N. E. 615 (1888) ; Loomis v. Hud- 
 son. IS Iowa, 416 (1865) ; Wiggin v. Day. 9 Gray (Mass.) 97 (1857) ; Walton 
 v. Hargroves, 42 Miss. 18, 97 Am. Dec. 429 (186S) ; Matter of Howe, 1 Paige 
 (N. Y.) 125, 19 Am. Dec. 395 (1828); Williams v. Ingersoll. S9 N. Y. 50S 
 (18S2); Manifold's Estate, In re, 5 Watts & S. (Pa.) 340 (1843); Farmers' & 
 Mechanics' Nat. Bk. v. King. 57 Pa. 202. 98 Am. Dec. 215 (1868) ; Burkholder 
 v. Ludlam, 30 Grat. (Va.) 255. 32 Am. Pvep. 66S (1878).
 
 282 TRANSFER OF RESPECTIVE ENTERESTS OF PARTIES. (Cll. 3 
 
 I [e was not authorized to, and did not in fact, make any contract for 
 and on behalf of them. Tie bought the land and took the title, he gave 
 the note and the mortgage, in his own name and for his own behalf 
 as trustee. The relations between him and the defendants were not 
 those. of agent and principal, but of trustee and cestuis que trust. Such 
 a rrl.ition is lawful, and, in the absence of fraud, does not render tKe 
 cjsiuis que trust liable, to suits at law upon contracts made by the 
 trustee in hi- own name. 
 
 It is true that the declaration alleges that Drew was the agent of 
 the defendants. But it also alleges the specific facts which show the 
 relations between the parties, and those facts show that he was not 
 gent. The allegations that he was an agent, must be regarded 
 as mere allegations of a conclusion of law which are not sustained 
 by the facts. The defendants' demurrer was therefore rightly sus- 
 tained. 43 
 
 Exceptions overruled. 
 
 O'BRIEN v. JACKSON et al 
 
 (Court of Appeals of New York, 1901. 167 N. Y. 31, GO N. E. 238.) 
 
 Action by Michael J. O'Brien against Henry H. Jackson and others, 
 executors of the will of Peter A. II. Jackson. From a judgment of 
 the appellate division, affirming a judgment in favor of plaintiff, and 
 from an order denying a new trial, defendants appeal. Reversed). 
 
 Cullen, J. 44 This action was brought against the defendants, as 
 executors of and trustees under the will of Peter A. H. Jackson, de- 
 ceased, to recover a balance due on a contract for repairs made to 
 some buildings of the testator, which were devised to the defendants 
 on certain trusts. The complaint alleged) that the defendants were 
 the executors of and trustees under said will, and were authorized 
 to make the agreement sued on. This allegation as to authority was 
 put in issue by the answer. On the trial of the case the defendants 
 moved to dismiss the complaint on the ground that it stated no cause 
 of action against them in their representative capacity. This motion 
 was denied. At the close of the evidence the motion was renewed 
 on the same grounds, and again denied, to which rulings the defend- 
 ants excepted. The case was then submitted to the jury on the issues 
 relating to the performance of the contract and the plaintiffs claim 
 for extra work. A verdict was rendered for the plaintiff, on which 
 judlgment was entered that the plaintiff recover of the defendants, 
 
 The distinction here drawn seems to be one without a difference. The 
 relation of airent and undisclosed principal, we submit, is thai of trustee and 
 cestui que trust, and a suit against die undisclosed principal on a contract 
 made with liis agent presents 1 1 1 - - anomaly of an action at. law against the 
 cestui que trust on a contract made with his trustee. See Ames' Cases on 
 Trusts (2d Ed.) p. 258, note 1. 
 
 '• A part of the opinion is omitted.
 
 SeC. 7) BY ACT OF CREDITORS. 2S3 
 
 as executors of and trustees under the last will and testament of Peter 
 A. H. Jackson, deceased, a specified sum, and that the plaintiff have 
 execution therefor. The judgment having been affirmed by the ap- 
 pellate division, an appeal has been taken to this court. 
 
 We are of opinion that the action in its present form cannot be 
 maintained, and the defendants' motion to dismiss the complaint as 
 not stating a cause of action against them in their representative ca- 
 pacity should have been granted. The general rule is well settled in 
 this state that executors or trustees cannot, by their executory con- 
 tracts, although made in the interest and for the benefit of the estate 
 thev represent, if made upon a new and independent consideration, 
 bind the estate, and thus create a liability not founded upon the con- 
 tract or obligation of the testator. Ferrin v. Myrick, 41 N. Y. 315; 
 Austin v. Munroe, 47 N. Y. 360; Matter of Van Slooten v. Dodge, 
 145 N. Y. 327, 39 N. E. 950; Parker v. Day, 155 N. Y. 383, 49 N. 
 E. 1046. The reason for the rule is clearly explained by Hunt, C. J., 
 in the earliest of the cases cited. While, as between the executor 
 and the person with whom he contracts, the latter may rely on the 
 contract, the beneficiaries are not concluded by the executor's act, 
 but the propriety of the charge and the liability of the estate therefor 
 must be determined in the accounting of the executor. In an action 
 at law against the executor, the legatees and persons interested in 
 the estate have no opportunity to be heard. To the general rule there 
 are exceptions, and an equitable action can be maintained against the 
 estate on behalf of a creditor in case of the fraud or insolvency of 
 the executor, or when he is authorized to make an expenditure for 
 the protection of the trust estate, and he has no trust fund for the 
 purpose. In the latter case, if unwilling to make himself personally 
 liable, he may charge the trust estate in favor of any person who 
 will make the expenditure. Charges against the trust estate in 
 such cases can be enforced only in an equitable action brought for 
 the purpose. To that action the beneficiaries and cestuis que 
 trustent are necessary parties. The trust estate cannot be de- 
 pleted or swept away except in an action which they may defend. 
 The defendants were personally liable on their contract with the plain- 
 tiff, but the action cannot be changed on this appeal into one against 
 the defendants individually. Austin v. Munroe, supra. Any amend- 
 ment of the pleadings or in the parties must be sought in the su- 
 preme court. 
 
 This action is in form at law, and has proceeded on that theory. 
 The judgment is for the recovery of a sum of money, and authorizes 
 the issue of an execution. But, while no action at law can be main- 
 tained against the defendants in their representative capacity, it may 
 be that, if the complaint stated a good cause of action in equity, the 
 defendants' motion to dismiss the complaint was properly denied, and 
 the judgment might be suffered to stand for whatever it is worth in 
 any subsequent proceedings the plaintiff should take to reach the trust
 
 284 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ctl. 3 
 
 estate. The defendants did not take the objection at the trial, either 
 by demurrer or answer, that their cestuis que trustent were not made 
 parties to the action, and therefore cannot raise that objection now. 
 But the difficulty is that the complaint did nol allege facts sufficient 
 to entitle the plaintiff to charge the trust estate in equity. It did not 
 allege that the defendants were insolvent, or not amply personally 
 responsible for the debt; nor did it state that the defendants were 
 without funds sufficient to pay for the work contracted for. 
 
 It is said by the learned appellate division that the will authorized 
 the executors to make the improvement for which the plaintiff seeks 
 to recover. By his will the testator devised his residuary estate, real 
 and personal, to his executors, in trust to hold the same in shares, 
 and to apply the income of one share to each of his children during 
 life, and upon the death of the child the testator devised the share to 
 the issue or heirs at law of such child. He directed his executors to 
 pay all taxes and assessments on his property, "keep the same in- 
 sured, and in good repair and condition; if damaged, rebuilt; while 
 held in trust by them, respectively, as aforesaid." The executors were 
 authorized to sell certain pieces of real property with the consent of 
 all his children, while as to the remainder of the real estate they were 
 given no power of sale. The trustees were therefore empowered by 
 the will to make the improvement out of which this action grows. 
 Probably, the repairs being necessary, they would have the same 
 power without express direction in the will. But the authority to in- 
 cur the expense did not of itself create the right to run in debt for it, 
 and pledge or mortgage the trust estate for the payment of the debt. 
 Ordinarily, the cost of repairs should be borne by the income of the 
 estate as it accrues. Extraordinary expenditures might, however, be- 
 come necessary, which the income should not exclusively bear, or 
 which might properly be apportioned between income to accrue in 
 various years in the future. 
 
 The supreme court is now empowered by statute to authorize a sale 
 or mortgage of the trust estate under proper circumstances and for 
 sufficient reasons. But what is a proper charge on the estate, and 
 how that charge should be apportioned and satisfied), are to be deter- 
 mined in proceedings between the trustee and his cestui que trust. 
 I nlcss he is without trust funds sufficient for the purpose, he must 
 act for himself in making expenditures, leaving the propriety of the 
 expenditures to be determined in such proceedings. Tie can create 
 a lien in favor of a third party only where the expenditures would 
 otherwise necessarilv involve an adyance of his own funds. Willis 
 v. Sharp, 113 N. Y. 586, 21 N. E. 705, 4 L. R. A. 493. * * * 
 
 Judgment reversed.
 
 SeC. 7) BY ACT OF CREDITORS. 285 
 
 CLOPTON, Adm'r, v. GHOLSON and Others. 
 (Supreme Court of Mississippi, 1876. 53 Miss. 4GG.) 
 
 Appeal from the Chancery Court of Monroe County. 
 
 Chalmers, J., delivered the opinion of the court. 45 
 
 In 1865-66 Haughton and McNairy, executors of T. Brandon, de- 
 ceased, delivered for collection to Davis & Haughton (afterwards 
 Davis, Haughton & Gholson), attorneys at law, a large mass of claims 
 against various persons, amounting in the aggregate to something 
 more than $35,000. Upon all of them suits were instituted, which, 
 in many instances, resulted in long and complicated litigation, involv- 
 ing injunctions in the Chancery andi appeals to the Supreme Court. 
 A large majority of the judgments obtained proved worthless, so that, 
 after the appropriation by the attorneys of all the money realized, 
 there still remained due them several thousand dollars for fees. The 
 fees charged were proved to be usual and legitimate, according to the 
 custom and standard at the Aberdeen bar. Both of the executors 
 having resigned and subsequently died, the appellant Clopton was, in 
 1869, appointed administrator cum testamento annexe One of the 
 suits only seems to have been revived and prosecuted in his name, 
 all the others having ripened into judgments before his appointment. 
 The claim of the attorneys for their fees remaining unpaid, this bill 
 was filed against the administrator Clopton in his representative ca- 
 pacity, to compel payment out of the assets in his hands. Many ques- 
 tions were raised by the pleadings below and by the assignment of 
 errors in this court ; but we shall notice only the principal one, which 
 underlies and controls all others. Can an attorney make the estate 
 of a decedent liable for services rendered to the executor or admin- 
 istrator in its management? 
 
 We had occasion in the recent case of Fearn v. Mayers, 53 Miss. 
 458, to declare that, while trustees have a lien on the trust estate for 
 all costs and expenses legitimately incurred by them in its adminis- 
 tration, this privilege does not extend to agents employed by them, 
 but such agents must look alone to the trustee for reimbursement. 
 It follows from this, that while the trustee who has paid or become 
 responsible to parties legitimately employed by him in the business 
 of the estate may retain the assets for his own reimbursement, yet if 
 he does not do so, the parties employed by him are ordinarily power- 
 less to assert any claim against the estate. 
 
 A careful re-examination of the subject has strengthened our con- 
 viction of the soundness of this decision, both on principle and au- 
 thority. If the trust estate was liable to be attacked and impleaded 
 by every person who had dealt with the trustee, and forced to liti- 
 gate with them, the nature, value and beneficial character to the es- 
 tate of the services alleged by them to have been rendered, it would 
 
 45 A part of the opinion is omitted. 
 
 Qst^-4-t.
 
 286 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 be involved in endless complications, and be perhaps swallowed up 
 or seriously injured by the accumulations of costs. The law, there- 
 fore, compels such persons to look to the trustee with whom they 
 dealt, and against whom alone they have a legal demand. If their 
 claim is recognized -or enforced against him, he presents it to the 
 proper tribunal, and with him the beneficiaries of the estate will liti- 
 gate the question of the propriety of its allowance against themselves. 
 The authorities on this point are almost, if not altogether, uniform 
 and harmonious. Hill on Trustees, 567; 2 Terry on Trusts (2d Ed.) 
 § 907; Lewin on Trusts, 454. 455; Worrall v. Harford, 8 Yes. Jr. 
 4; Tones v. Dawson, 19 Ala. 672; Wade v. Pope, 44 Ala. 690; Mulhall 
 v. Williams, 32 Ala. 489; Livingston v. Gaussen, 21 La. Ann. 286, 
 99 Am. Dec. 731 ; Kessler v. Hall, 64 N. C. 60; Austin v. Munroe, 47 
 N. Y. 360; Guerry v. Capers, Bailey, Eq. (S. C.) 159; Sims v. Stil- 
 well, 3 How. ( Miss.) 176; Woods v. Ridley, 27 Miss. 119. 
 
 It is evident that this principle applies with especial force to con- 
 tracts entered into by executors and administrators. These func- 
 tionaries have no authority to contract debts which shall primarily 
 bind the estates committed to them, except in cases specially authorized 
 by statute, and ordinarily such debts are obligatory only as personal 
 obligations. This has been repeatedly held true of fees due attor- 
 neys for professional services in the management of estates, as was 
 declared in the leading case of W r orrall v. Harford, ubi supra, and 
 in several of the other cases above cited. 
 
 It is true that, under some circumstances, attorneys or other cred- 
 itors of the administrator may, under the principles of substitution and 
 subrogation, reach the assets of the estate; but such relief must be 
 based on the fact that the administrator himself either already has 
 some claim against the estate, or would be entitled to one by a pay- 
 ment of the demand of the creditor, and that the latter is unable to 
 obtain satisfaction from the administrator. If, for instance, the cred- 
 itor can show that the consideration of his demand inured to the 
 benefit of the estate^ and is unpaid ; that the administrator is nonresi- 
 dent or insolvent ; has never received credit for it in his settlements ; 
 and that the estate is indebted to him,— in such case the creditor may, 
 bv a bill in chancery, have himself subrogated to the rights of the ad- 
 ministrator against the estate, and to that extent have satisfaction of 
 his demand out of its assets. Nor would it be necessary for him to 
 show that the estate was actually indebted to the insolvent adminis- 
 trator. It would be sufficient if he could show that the estate would 
 have been indebted if the administrator had paid the demand out of 
 lhs private funds. Inasmuch as in such a case the administrator 
 ought to have paid it, and if he had done so, would have been allowed 
 a credit against the estate, a court of equity will consider that done 
 which should have been done, and will give the creditor a decree 
 against the estate, provided the administrator is not indebted to the 
 estate, or would not thereby become so, and has not already received
 
 Sec. 7) BY ACT OF CREDITORS. 287 
 
 credit for the claim. Under such circumstances the creditor would) ob- 
 tain payment only for beneficial services rendered to the estate, while 
 it would be in no wise damaged. 
 
 The Supreme Court of South Carolina, in Guerry v. Capers, Bai- 
 ley, Eq. 159, after laying down, in the broadest terms, the doctrine 
 that the creditor must look alone to the administrator with whom he 
 contracted, thus announces the principle above stated: "Whenever the 
 trustee, if he hadl paid the debt out of his own funds, would be in 
 advance to the trust estate, and would be entitled to be reimbursed 
 out of it, his creditor may, if the trustee is insolvent, be allowed to 
 take his place, and be paid out of the estate to the same extent. This 
 constitutes, however, the only exception to the general rule which we 
 are prepared to recognize." This, we think, announces the true rule, 
 except that the court omits the contingency of the estate being already 
 indebted to the trustee, in which event, of course, the equity would 
 be still stronger. 
 
 This right of subrogation is not to be confounded with that inti- 
 mated in Woods v. Ridley, 27 Miss. 119, and more fully exemplified 
 in Short v. Porter, 44 Miss. 533, where parties had furnished money 
 to the administrator which had been applied in exoneration of the 
 debts of the estate. In such cases the equities arise by reason of the 
 application of the money to the discharge of the burdens resting upon 
 the estate, and are in no manner affected by the solvency or insolvency 
 of the administrator, or by the state of the accounts between himself 
 and the estate. In the class of cases under consideration the creditor 
 has no debt against the estate, nor has he discharged any. He has a 
 personal claim against the administrator, which he will be allowed to 
 assert against the estate under the limitations above indicated, because 
 the estate has received the benefit of the consideration, and has not 
 paid for it ; and while it is impossible to collect it from the party pri- 
 marily liable, its payment out of the assets can inflict no injustice upon 
 the beneficiaries of the estate. 
 
 Whether under any circumstances such a proceeding can be in- 
 stituted against the estate, before the administrator with whom the 
 contract was made has been pursued to insolvency, is a mooted ques- 
 tion. It was ruled in the affirmative in Coopwood v. Wallace, 12 Ala. 
 790 ; but this decision was overruled in Jones v. Dawson, 19 Ala. 672, 
 Chief Justice Dargan dissenting. The latter decision was undoubtedly 
 correct in the principal question discussed, to wit, the non-liability of 
 the trust estate to the claims of parties dealing with the trustee, in 
 discussing which the court remarked : "We say nothing of the right 
 of the party, after he has exhausted his legal remedy against the 
 trustee, to proceed in equity to subject an equitable demand which the 
 trustee may have against the estate." 
 
 Conceding that the party has this right, as we have decided above 
 that he has, we see no reason why he should not be allowed to assert 
 it primarily, without being put to the necessity of a suit at law in the
 
 288 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 first instance. In such a proceeding he must assume the burden of 
 showing the impossibility of obtaining payment from the administra- 
 tor, as well as of establishing all the other facts necessary to maintain 
 the suit. The administrator or his legal representatives should he 
 made a defendant, as well as the existing representative of the estate 
 proceeded against. 
 
 The bill in this case possesses none of the features deemed essential 
 to its maintenance ; and the demurrer filed to it should have been sus- 
 tained. * * * 
 
 Decree reversed. 
 
 FEARN v. MAYERS, Trustee, and Others. 
 (Supremo Court of Mississippi, 187G. 53 Miss. 45S.) 
 
 Appeal from the Chancery Court of Hinds County; Hon. H. R. 
 Ware, Chancellor. 
 
 In this suit a bill was filed to subject certain lands held in trust to 
 the payment of services rendered by an agent employed by the trus- 
 tees to take care of and manage the trust estate. A demurrer was 
 tiled to the bill, which was overruled, and the defendants were re- 
 quired to plead; and an order of reference to a commissioner was 
 made, to have an account stated between the trustees and their agent. 
 But the Chancellor, who overruled the demurrer, went out of office; 
 and the new Chancellor, upon final hearing, dismissed the bill for 
 want of jurisdiction of the matters and things therein set forth. The 
 complainant appealed to this court, and assigned for error the action 
 of the Chancery Court in dismissing the bill. 
 
 Chalmers, J. 4r> In 18 12, William P. Bibb, David P. Bibb, Robert 
 T. Bibb, and Archibald E. Mills conveyed in trust to Thomas Bibb 
 and A. M. Hopkins a large amount of real and personal property, sit- 
 uated in the States of Alabama, Mississippi, and Louisiana, for the 
 purpose of liquidating certain liabilities therein specified. When these 
 debts had been extinguished, the surplus property remaining was to 
 be reconveyed to the grantors, or sold for division of the proceeds 
 among them, as might then be deemed advisable. 
 
 Under a special authorization contained in the conveyance, the trus- 
 tees appointed George Fearn their agent to look after and manage so 
 much of the property as was situated in Mississippi, at a stipulated 
 salary. There was a full settlement between Fearn and the trustees 
 in 1859, by which a small balance was found due him ; and after that 
 period very little was done in furtherance of the trust, the debts in- 
 tended to be secured by it having been mostly liquidated. Fearn, 
 however, remained in charge of the Mississippi property, giving it 
 needful attention, until 1868, when he was adjudged a bankrupt. At 
 the sale of his effects by his assignee, the complainant Mary C. Fearn 
 
 •"'•A part <>f (lie opinion is omitted.
 
 Sec?) BY ACT OF CREDITORS. 
 
 289 
 
 became the purchaser of his claim against the trustees, for salary and 
 moneys expended in his agency. The original trustees having died), 
 and the appellee Mayers having been appointed in their stead, by the 
 Chancery Court of Alabama, in which State the parties in interest 
 principally resided, Mary C. Fearn filed this bill against said new 
 trustee, and against the children and representalives of the original 
 grantors in the trust deed, for the purpose of subjecting the corpus of 
 the trust estate, situate in this State, to the satisfaction of the amount 
 due to her as assignee of George Fearn. * * * 
 
 Can a lien for this amount be asserted against the body of the trust 
 estate ? 
 
 It seems well settled, that while trustees have a lien on the trust 
 fund for all costs and expenses legitimately incurred by them in its ad- 
 ministration, this privilege does not extend to agents employed by 
 them, but such agents must look alone to the trustees for reimburse- 
 ment. Hill on Trustees, 567; 2 Perry on Trusts (2d Ed.) § 907; 
 Jones v. Dawson, 19 Ala. 672. This principle is not disputed by the 
 complainant as a general proposition, but it is insisted that a different 
 rule must prevail here, because by the instrument creating the fund 
 the expenses of administering it were expressly made chargeable up- 
 on the estate, and the trustees were given authority to appoint such 
 agents, who might "do anything which the said grantees [trustees] 
 could do in execution of the trusts of said deed." 
 
 It is sufficient to remark that, without any stipulation to that effect, 
 the expenses of administering a trust are always chargeable upon the 
 trust fund, and that every appointment of a trustee or agent to trans- 
 act an extended and complicated business carries with it the power to 
 employ suitable sub-agents; so that the enumeration of these things 
 in the conveyance in this instance was unnecessary. But yet it was 
 in this very class of cases, where the imposition upon the estate of 
 the expenses properly incurred by the trustee, and his power to em- 
 ploy agents or attorneys, were unquestioned, that the rule denying 
 to such employes a lien on the estate was established. In none of 
 them was any question raised as to his power of employing such 
 agents, or as to the liability of the estate for the cost of administering 
 the trust. It is impossible to see, therefore, how the insertion of the 
 provision in question can change the rule of law, in the absence of 
 an express declaration in the instrument that the estate shall be liable 
 for all costs and charges incurred by or owing to the sub-agents of 
 the trustees. * * * 
 
 The complainant in the case at bar, having no lien upon the trus? es- 
 tate, is without standing in a court of chancery. The action of the 
 court below in dismissing the bill is affirmed. 47 
 
 4 7 See Worrall v. Harford, 8 Yes. Jr. 4 (1802) ; Strickland v. Synions. L. 
 It. 26 Ch. Div. 245 (1864). 
 Ken.Tr.— 19
 
 290 TRANSFER OF BESPECTIVB INTERESTS OF PARTIES. (Ch. 3 
 
 NORTON and Others v. PHELPS and Wife. 
 (Supreme Oourl of MTississippi, L877. 54 Miss, kit.) 
 
 Appeal from the Chancery Court of Washington County. 
 
 ( >n April 17. lsoo, M. O.' II. Morton & Co. filed this bill against A. 
 J. Phelps and his wife Mary B. Phelps, formerly Yick, to subject a 
 plantation in their possession to an account for supplies and money 
 advanced to Henry W. Vick and Jonathan Pearce, trustee, for the 
 plantation, Henry W. Vick, and Mary B. Vick, the cestui que trust. 
 The trustee Pearce was not made a party to the suit until 1870. In 
 1850, Sarah Vick conveyed the plantation to Pearce in trust, as in- 
 dicated in the opinion. Henry W. Vick having died in April, 1861, 
 lVarce took possession of the place in the following June, and be- 
 came guardian of Mary B. Vick, the cestui que trust. On Nov. 28, 
 1865, Pearce, as guardian and trustee, exhibited to the Probate Court 
 his account, showing that the estate was indebted to him $3,000, and 
 to Norton & Co.. $10,000, composed of $6,000 contracted by Henry 
 W. Vick, and $4,000 contracted by himself in the course of his guard- 
 ianship. This account, having been exhibited to Mary B. Vick after 
 she became of age and before she married, was approved by her ; and 
 Pearce being discharged as guardian, surrendered the plantation to 
 her. and became a non-resident of this State. On October 3, 1866, 
 Norton & Co. rendered Pearce an account of that date, showing a bal- 
 ance of $7,631.16, which he admitted to be "correct, due and owing." 
 This account was exhibited to Mary B. and A. J. Phelps, who admit- 
 ted it to be a proper charge against them, and a liability for which 
 the trust estate was bound The complainants appealed from a final 
 decree on the merits dismissing the bill. 
 
 Campbell, J., delivered the opinion of the court. 48 
 
 In the case of Clopton v. Gholson, 53 Miss. 466, we announced the 
 principles applicable to this case. These are, that persons dealing 
 with a trustee must look to him for payment of their demands, and 
 that, ordinarily, the creditor has no right to resort to the trust estate 
 to enforce his demand for advances made or services rendered for the 
 benefit of the trust estate. But while this is the rule, there are excep- 
 tions to it, and where expenditures have been made for the benefit of 
 the trust estate, and it has not paid for them, directly or indirectly, 
 and the estate is either indebted to the trustee, or would have been 
 if the trustee had paid, or would be if he should pay the demand, 
 and the trustee is insolvent or nonresident, so that the creditor can- 
 not recover his demand from him, or will be compelled to follow him 
 to a foreign jurisdiction, the trust estate may be reached directly by 
 a proceeding in chancery. The principle is that, while persons dealing 
 as creditors with the trustee must look to him personally, and not to 
 the trust estate, yet where the estate has received the benefit of ex- 
 
 48 A part of the opinion is omiltod.
 
 Sec. 7) BY ACT OF CREDITORS. 201 
 
 penditures procured 1 to be made for it by the trustee, and it has not 
 in any way borne the burden of these expenditures properly charge- 
 able to it, and to fasten the charge upon it will do it no wrong, but 
 simply cause it to pay what it is liable for to the trustee, or would be 
 liable for if he had paid it, or should pay it, and because of the in- 
 solvency or non-residence of the trustee, our tribunals cannot afford 
 the creditor a remedy for his demand, he may proceed directly against 
 the trust estate, and assert against it the demand the trustee could 
 maintain if he had paid or should pay the claim, and should himself 
 proceed against the trust estate. Generally the trustee alone must be 
 looked to. He stands between the creditor and the estate. He rep- 
 resents the estate, and deals for it. He is entitled to be reimbursed 
 out of the trust estate for all disbursements rightfully made by him on 
 account of it, and creditors must get payment from him; but when 
 they cannot do that, and it is right for the trust estate to pay the de- 
 mand, and it owes the trustee, or would owe him if he had paid or 
 should pay the demand, the rule, founded in policy, which denies the 
 creditor access to the trust estate, yields to the higher considerations 
 of justice and equity; and, in order that justice may be done, the cred- 
 itor may be substituted, as to the trust estate, to the exact position 
 which the trustee would occupy if he had paid or should pay the de- 
 mand, and seek to obtain reimbursement out of the estate. Apply- 
 ing these principles to the facts of this case, it will be found that they 
 bring it within the exception stated. 
 
 Clearly, if Pearce, the trustee, had paid, or should pay, under a re- 
 covery against him, the demand sought to be enforced against the 
 trust estate, he would be a creditor of the estate. He is a non-resi- 
 dent of the State of Mississippi, where the trust property is and 
 where the debt was contracted, and the creditor has the same rights, 
 because of this, as to the trust property, as if Pearce was insolvent. 
 The reason why insolvency of the trustee is an element in the com- 
 bination of circumstances admitting the creditor to proceed against 
 the trust estate is because of the inability of the creditors to coerce an 
 insolvent person to pay his liabilities; and the same considerations 
 apply, ordinarily, in case of the non-residence of the trustee, without 
 regard to his pecuniary condition ; for a creditor seeking the aid of 
 our courts should not be dismissed because he might pursue a person 
 to a foreign land, and there have a recovery against him. If he can- 
 not obtain justice through our courts except by departing in an ex- 
 ceptional case from a rule of policy, to secure justice the departure 
 should be made. "Trustees have an inherent right to be reimbursed 
 all expenses properly incurred in the execution of the trust, and no 
 express declaration in the trust instrument is requisite to create the 
 right." Hill on Trustees, 570 et seq. ; 2 Perry on Trusts, § 910. The 
 trust deed in this case vests the title of the property in Pearce, as 
 trustee, providing that he "is to permit the said Henry W. Vick, as 
 agent for said trustee, * * * to superintend, possess, manage and
 
 292 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 control said property," etc., "with power to sell and exchange," etc. 
 This conferred very large powers lor incurring expenditures to be 
 borne by the trust estate. Hill on Trustees, 571, 572. Vick was thus 
 constituted the agent of the trustee Eor the very purpose of possessing, 
 managing and controlling the trust property. Debts properly made by 
 Vick, agent and CO tin-tee, as he is elsewhere in the deed called, in 
 the management of the trust property, were the debts of Pearce, the 
 trustee, with this qualification, viz., that he is exempted by the deed 
 from responsibility personally for the acts or conduct of Vick. 49 * * * 
 Decree reversed and cause remanded. 
 
 
 Ex parte GARLAND. 
 
 (In Chancery, before Lord Chancellor Eldon, 1S04. 10 Vesey, Jr. 110.) 
 
 Henry Ballman by his will, dated the 17th of February, 1798, after 
 directing his debts, etc., to be paid, bequeathed all his leasehold and 
 personal estates to his wife Margaret Ballman, and three other per- 
 sons, their respective executors, etc., upon trust to permit Margaret 
 Ballman to receive the rents, interest, etc., for her life, or until she 
 should marry again, for her own use, and the support, maintenance, 
 and education, of his five children, until they should respectively at- 
 tain the age of 21, subject to certain payments to his children as after 
 mentioned ; and from and after the death andl second marriage of 
 his wife in trust for all and every or such one or more of his said chil- 
 dren or their issue, and in such shares, manner, and form, as she 
 should appoint by any deed or instrument in writing or by her will ; 
 and for want of such appointment and as to such parts, of which no* 
 such appointment should be made, in trust for all his children, their 
 respective executors, etc., equally to be assigned, paid and transferred, 
 at their respective ages of 21, with survivorship in case of the death 
 of any under that age ; and in case of the deaths of all under that age 
 without leaving issue then to pay, etc., his said personal estate to Mar- 
 garet Ballman, her executors, etc.- 
 
 49 Habersham v. Huguenln, R. M. Charlt (Ga.) 376 (1832); Wylly v. Col- 
 lins, 9 <:a. 223 (1851); Malone v. Buice, 60 Ga. L52 (1878); Cater v. Eveleigh, 
 I Desaus. (S. C) 19, G Am. Dee. 590 (1809); .lames v. Mayrant, 4 Desaus. 
 (S. C.) 591, 6 Am. Dee. 630 (1815); Montgomery v. Eveleigh, 1 McCord, Eq. 
 (S. C.) 267 (1826); Douglas v. Fraser, 2 McCord, Eq. (S. C.) 105 (1827); Guerry 
 v. Capers, Bailey, Eq. (S. C.) 159 (1830); Manigault v. Dims, Bailey, Eq. 
 (S. C.) lis-. 290 (1831); Ilenshaw v. Freer, Kaile.v, Kq. <S. <'.) 311. 317, 31S 
 (1831); Magwood v. Johnston. 1 Hill. Eq. (S. (.'.) 22S (is:;:;); Tennanl v. 
 Stoney, 1 Rich. Eq. (S. C.) 222, 44 Am. Dec. 213, 243 (1S45) ; Owens v. Mitchell, 
 38 Tex. 588 (1873). 
 
 Most of the cases here cited recognize the principle that the creditor of the 
 trustee cannot recover against the trusl estate so long as the trustee is a, de- 
 faulter to the trust. Wylly v. Collins, 9 Ga. 223 (1851), and Manderson's Ap- 
 peal. 113 I'a. <;:;i. c, All. M>3 (lSOC). are contra. 
 
 Sec article by Louis D. Brandeis, 15 Am. Law Rev., 449.
 
 Sec. 7) BY ACT OF CREDITORS. 293 
 
 The testator then directed his trustees to pay to his children re- 
 spectively, as they should attain 21, £400. apiece out of his personal es- 
 tate ; and he farther directed, that his trade of a miller and the farming 
 business, then carried on by him, should be carried on by Margaret 
 Ballman, until his trustees should think proper to establish his sons 
 or either of them therein ; and he directed his trustees upon so settling 
 his sons or either of them in the business to permit them to take off 
 the stock, crop, and other effects in the said business at a fair valua- 
 tion, and to take a bond or note from them for the amount, payable 
 by such instalments as his trustees would think reasonable, with in- 
 terest in the meantime at 4 per cent. He also directed, that as long 
 as the businesses should be carried on by his wife, the profits thereof 
 should be applied for her own use and for the maintenance and edu- 
 cation of his children ; and that an inventory and valuation of his 
 stock, crop and effects, in his said businesses, should be taken within 
 six weeks after his decease ; and that any sum or sums, not exceeding 
 £300., which by a codieil he increased to £600., should be paid by his 
 trustees to Margaret Ballman out of his personal estate for the pur- 
 pose of enabling her to carry on the said businesses ; and that she 
 should give notes of hand to the other trustees for the sums so ad- 
 vanced to her and the amount of the valuation. He appointed his 
 widow and the other trustees his executors. 
 
 After the death of the testator Margaret Ballman carried on the 
 trades till December, 1801 ; when she became bankrupt. The other 
 trustees had according to the directions of the will advanced her the 
 sum of £600.; and the stock and effects were valued at £1,351. 5s.; 
 for which she gave two notes to the other trustees. At the time of her 
 bankruptcy she was indebted to the trustees in respect of those two 
 notes, and also in £768. 12s. 4d. of the testator's assets received by 
 her. The surviving trustee proved under the commission the three 
 sums of £1,351. 5s., £600., and £768. 12s. 4d. 
 
 The petition was presented by the assignees under the commission ; 
 praying, that the proof may be expunged; and the dividends re- 
 funded ; and that it may be declared, that the whole of the personal 
 estate of the testator is liable to all the debts contracted by the bank- 
 rupt in carrying on the trades of a miller and farmer under the direc- 
 tions of the will. 
 
 When the petition was first heard, two points were made for the 
 assignees: 1st, that the surviving trustee, as a creditor on the notes, 
 ought to be postponed to all the other creditors of the bankrupt ; 2dly, 
 that the general assets of the testator were subject to the bankruptcy. 
 
 On the first point, the Lord Chancellor immediately expressed a 
 clear opinion in favor of the assignees. The second His Lordship 
 considered a point of great importance ; and directed a farther argu- 
 ment. 
 
 The Lord Chancellor. In the case before Lord Kenyon the im- 
 portant difficulties that have been urged upon this occasion, were not
 
 •_".»1 TRANSFER OF RESPECTIVE [NTEEESTS OF PARTIES. (Ch. 3 
 
 submitted to the Court. Certainly. Lord Kenyon developed the rea- 
 sons upon which he drew the conclusion in that case, in a very lim- 
 ited degree, if at all. The question really goes to this: Whether this 
 Court is to hold, that, where a testator directs a trade to he carried on, 
 and without limitation, all the other purposes of his will are to stand 
 still, or all the administration under it to be checked, that every person 
 taking is in effect to become a security in proportion to the property 
 he take-, and to the extent of all time, for the trade which the testator 
 has directed to be carried on. The inconvenience would be intoler- 
 able; amounting to this; that every legatee is to hold his legacy upon 
 terms, connected with transactions, by which he cannot benefit, which 
 he cannot control, and which may cut down all his hopes; as far as 
 they are founded upon his receipt of that bounty. On the other hand, 
 the case of the executor is very hard. He becomes liable, as person- 
 ally responsible, to the extent of all his own property; also, in his 
 person ; and as he may be proceeded against as a bankrupt ; though 
 be is but a trustee. But he places himself in that situation by his 
 own choice; judging for himself, whether it is fit and safe to enter 
 into that situation, and contract that sort of responsibility. The cred- 
 itors of the testator must be either those, whose debts were contracted 
 before his death, or persons, who have become creditors of the trade 
 after his death. If they are creditors of the former description, they 
 have the power and the means of calling forth after the testator's 
 death the whole of his property, in discharge of their demands; and, if 
 they do not put an end to that relation, but permit the representative 
 to act, they have perhaps no more reason to complain of a decision, 
 more limited than that of Lord Kenyon, than they would have, if by 
 their own conduct they permitted part of the assets to get to the 
 hands of persons, from whom they could not draw them ; and they 
 relied upon his liability. 
 
 As to creditors, subsequent to the death of the testator, in the first 
 place, they may determine, whether they will be creditors. Next, it 
 is admitted, they have the whole fund that is embarked in the trade; 
 and in addition they have the personal responsibility of the individual, 
 with whom they deal; the only security in ordinary transactions of 
 debtor and creditor. They have something very like a lien upon the 
 estate, embarked in the trade. They have not a lien upon anything 
 else ; nor have creditors in other cases a lien upon the effects of a per- 
 son, with whom they deal; though, through the equity, as to the ap- 
 plication of the joint and separate estates to the joint and separate 
 debts respectively, they work out that lien. If it is to be determined 
 upon the convenience, it is not so inconvenient to say, those, who 
 deal with the executor, must take notice, that the testator's responsi- 
 bility is limited by the authority given the executor, as to say, on the 
 other hand, that, the executor being authorized to carry on that trade, 
 making from day to day a great variety of engagements, or, as it has 
 been put, entering into one great and important engagement, but also
 
 SeC. 7) BY ACT OF CREDITORS. 295 
 
 authorized by the will to do many other acts, which he must equally 
 do in a due administration under the will, wherever for the benefit of 
 one child the trade is directed to be carried on, all the other objects 
 of the will must at any distance of time be considered, to the extent 
 of the property they take, security for the creditors on the trade. 
 
 Such a decision was never made previously to Hankey v. Ham- 
 mock. I am not aware, that such a decision has ever been made 
 since that case. We may recollect cases not consistent with the sup- 
 position, that the law is according to that decision. It is necessary 
 to look into other cases, from which it may appear, that it was not 
 present to the mind of the court, that there was such a rule. The 
 difficulty also, that must exist in a variety of instances, is to be con- 
 sidered ; the case, that has been put, where a tradesman directs the 
 trade to be carried on for the benefit of a son, giving him a legacy of 
 £50,000. It is difficult to say, that legacy must not be liable ; and yet 
 it is very difficult to say, it shall be liable consistently with saying 
 legacies to others shall not ; unless upon this, that the legacy is given 
 by the same will, for the benefit of the same person, who is to have 
 the benefit of the trade ; and yet I do not know, that is a principle of 
 decision, by which I can abide. But, in the ordinary case, the eldest 
 son, made residuary legatee and executor, and ordered to carry on the 
 trade for the benefit of another child, cannot possibly withdraw his 
 residuary legacy from the liability the trade carried on would impose 
 upon him personally; for he makes himself personally liable; and 
 therefore with reference to the property, taken from his father, 
 though not liable as legatee, he becomes liable, as a person carrying on 
 the trade ; his legacy assisting the means of his responsibility in carry- 
 ing on the trade. That person, therefore, both legatee and executor, 
 must answer for his acts as to the trade. Then why should not another 
 legatee? The answer is, that person is liable, not as legatee; but upon 
 the ground that the property is part of his general substance, and he 
 may spend it, notwithstanding his liability as executor. So may an- 
 other legatee ; but the power of spending his general substance shows, 
 there is no great convenience in this doctrine. 
 
 In this case, I fear, I shall be under the necessity of contradicting 
 the authority of a judge I most highly respect; feeling a strong opin- 
 ion, that only the property declared to be embarked in the trade, shall 
 be answerable to the creditors of the trade. If I am not bound by 
 decision, the convenience of mankind requires me to hold, that the 
 creditors of the trade, as such, have not a claim against the distributed 
 assets, in the hands of third persons under the direction of the same 
 will, which has authorized the trade to be carried on for the benefit 
 of other persons. 
 
 Aug. 13th. The Lord Chancellor. My opinion upon this case is, 
 that it is impossible to hold, that the trade is to be carried on, perhaps 
 for a century ; and at the end of that time the creditors, dealing with 
 that trade, are, merely because it is directed by the will to be carried
 
 296 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 on, to pursue the general assets, distributed perhaps to fifty families. 
 
 The order was, that the proof should stand in respect of the sum of 
 £7(>S. 12s. -Id.; without prejudice to filing a bill. 00 
 
 No bill was filed. 
 
 In re JOHNSON. 
 SHEARMAN v. ROBINSON. 
 
 (Iligh Court of Justice, Chancery Division, 1S79. Law Reports 15 Chancery 
 
 Division, 5 18.) 
 
 Adjourned Summons: 
 
 Peter Johnson, by his will, dated the 27th of May, 1873, appointed 
 the defendant Robinson and another his executors ; and, after making 
 certain specific and pecuniary bequests, and directing the payment 
 of his debts, and funeral and testamentary expenses, he directed his 
 executors, as soon as might be after his decease, to collect, get in 
 and receive all debts owing to him in respect of the business of a 
 tailor and robe-maker then carried on by him at Cambridge, and also 
 all other debts owing to him not connected with the business then 
 carried on by him in London in partnership with Thomas Sadler, and 
 (subject to the provisions thereinafter contained) to sell and convert 
 into money all his Cambridge stock in trade, and standi possessed of 
 the proceeds, and all other his personal estate and effects whatsoever 
 (except his share and interest in the London business) not therein- 
 before specifically bequeathed, upon trust to pay one equal fourth part 
 thereof to and amongst such of the children of his deceased sister 
 Catherine Neill ( including his nephew John Neill) as should be living 
 at the time of his decease; one other equal fourth part to the plaintiff; 
 and the remaining two fourth parts to the several persons therein 
 named. And the testator declared that in case his nephew John Neill 
 
 bo Ex parte Richardson, 3 Mad. 13S (1818); Thompson v. Andrews, 1 M. 
 & K. 110 (1832); Cutbush v. Cutbush, 1 Beav. 184 (1839); Ex parte Butter- 
 field, De G.'s Bkpty. Hep. 570 (1847); McNeillie v. Aden. 4 De M. & G. 
 744 (1853); Ex pari.' Westcott, L. H, 9 Ch. App. Cms. 62G (1874); Fairland v. 
 Percy, L. R. 3 P. & D. 217 (1875): Owen v. Delamere, L. H. 15 Eq. 134 (1871); 
 Burwell v. Cawood, 'J How. (U. S.) 560, 11 L. Ed. 378 (1844); Smith v. Ayer, 
 KM r. s. 320, 25 L. Ed. 955 (1879)-; Jones v. Walker, 103 U. S. 444, 20 
 L. Ed. 404 (1880); Cook v. Adm'r of Rogers (C. C.) 3 Fed. 69 (1880); Edgar 
 v. Cook, Adm'r, 4 Ala. 588 (1843); Altheimer v. Hunter, 56 Ark. 159, 19 S. 
 W. 196 (1892); Pitkin v. Pitkin, 7 Conn. 307, 18 Am. Dec. Ill (1828); Blod- 
 gett v. Am. Nat. Bk., 4!) Conn. 9 (1881); Wilson, Ex'x, v. Fridenberg, 21 
 I l.i. 386 (1885); Stanwood v. Owen. Adm'r, 14 Gray (Mass.) 195 (18591; 
 Hagan v. Barksdale, 44 .Miss. ISO (1870); Brasfield v. French, 59 Miss. 632 
 (1882); Laible v. Ferry, 32 N. J. Eq. 701 (1880); Willis v. Sharp, 113 X. V. 
 586, 21 N. i:. 705, 4 L. H. A. 493 (1889); Stewart v. Robinson, 115 N. Y. 
 328, 22 N. E. 100, 163, 5 L. H. A. 410 (1880); Adams v. Albert, 155 N. Y. 
 356, in N. E. 929, 63 Am. St Hep. 675 (1898); Lucht, Adm'r, v. Behrens, 28 
 Ohio St. 231, 22 Am. Rep. 378 (1876); Gratz v. Bayard, 11 Serg. & H. (Pa.) 
 41 (1824); Mathews v. Stephenson, 6 Pa. 496 (1847); Laughlin v. Adm'r of 
 Lorenz, 48 Pa. 275, 80 Am. Dee. 502 (1804) ; Davis v. Christian, 15 Gratt. 
 (Va.) 11 (1859).
 
 Sec. 7) BY ACT OF CREDITORS. 297 
 
 should be under the age of twenty-one years at the time of his de- 
 cease, it should be lawful for his said executors, upon the request of 
 the said John Neill, to postpone the sale of his Cambridge stock in 
 trade and allow his said business of tailor and robe-maker at Cam- 
 bridge to be carried on by the said John Xeill for his own benefit 
 under the supervision of his said executors until such time as the said 
 John Neill should attain twenty-one, and during such period should 
 use such part of the share of the said John Neill in his residuary per- 
 sonal estate as might be requisite for the due carrying on of the 
 said business. And he directed, in case that provision was carried 
 into effect, that an inventory and valuation of all his stock in trade at 
 Cambridge should be taken immediately after his decease, and that 
 on the said John Neill attaining his age of twenty-one years he should 
 have the option of taking the then existing stock at the amount of 
 such valuation, and that if he declined to do so, and the said stock 
 was sold, then the said John Neill should bring the amount of the pro- 
 ceeds of such sale into hotchpot on the calculation for the distribution 
 of the residuary personal estate. The testator then gave certain direc- 
 tions as to the winding-up of his partnership in the London business, 
 and directed that his share and interest therein should fall into his 
 residuary personal estate. 
 
 The testator died on the 25th of November, 1875, and) his will was 
 proved by the defendant Robinson alone, the other executor having 
 renounced. There were living at the testator's death two children of 
 his deceased sister Catherine, one of whom was the said John Neill, 
 then an infant. 
 
 After the testator's death the defendant did not get in the book debts 
 of the Cambridge business as directed by the will, but he continued 
 to carry on the business in his own name until the 30th of June, 1878, 
 when John Neill attained twenty-one ; he also continued the manage- 
 ment of the testator's share in the London business. For the purpose 
 of carrying on the Cambridge business, the defendant advanced from 
 time to' time several sums of money out of John Neill's share in the 
 testator's personal estate, which sums were repaid out of the busi- 
 ness in the ordinary course of carrying it on, but the defendant kept 
 no separate banking account for the business. 
 
 An action having been instituted by one of the residuary legatees, 
 and a judgment obtained for the administration of the testator's es- 
 tate, it was found, on taking the defendant's accounts, that there was 
 due from him a balance of £764. 16s. Id. in respect of profits from the 
 Cambridge business, and also a balance of £1,668. 3s. Id. in respect 
 of the general personal estate of the testator, including his share in 
 the London business. 
 
 Amongst the creditors who made claims against the estate under 
 the judgment were several persons who had supplied the defendant 
 with goods in the course of his carrying on the Cambridge business 
 subsequently to the testator's death, but these claims being disallowed
 
 298 TRANSFER OF RESPECTIVE [NTERESTS OF PARTIES. (Ch. 3 
 
 by the chief clerk, summonses were taken out by three of these cred- 
 it.!- for the purpose of establishing their claims. One of the sum- 
 es was by a firm of Standen & Co., woollen warehousemen, and 
 asked that a sum of £460. 5s. lOd. due to them for goods sold and 
 delivered to the defendant, the executor, in the course of his carrying 
 on the trade or business of a tailor from the time of the testator's 
 death down to the 30th of June, 1878, might be forthwith paid to them 
 by the said executor out of the share of the said John Xeill in the 
 testator's residuar) personal estate; or otherwise that it might be de- 
 clared that the applicants were entitled to a lien on the portion of the 
 estate of the said testator which on the 30th of June, 1878, was em- 
 barked in the carrying on as aforesaid of the said testator's business; 
 and thai an inquiry might be directed for the purpose of ascertaining 
 what were the assets of the said! testator which were so subject to the 
 lien of the applicants. 
 
 The two other summonses, which were by creditors for an aggre- 
 gate amount of upwards of £600., asked that they might be at liberty 
 to bring in their claims against the assets of the business carried on 
 by the defendant under the powers of the will, in respect of debts 
 incurred by him to the applicants in the course of such business, and 
 that such assets might be applied in payment of what should be found 
 due to the applicants in respect of their debts. Upon the further con- 
 sideration of the action all three summonses came on for hearing. 
 
 It appeared that the defendant, the executor, was insolvent. 
 
 JESSKL, M. R. I shall dismiss these summonses, but I will give the 
 creditors liberty to present a petition. I will not distribute the assets 
 until they have presented a petition ; that seems to me the regular 
 course, but at present I do not see that they are entitled to anything. 
 That seems to have been the course taken in several cases, and I 
 think it is the right course, for the creditors are not parties to this 
 suit at all. They ought to come in under a petition. With regard to 
 the point that has been argued, I understand the doctrine to be this, 
 that where a trustee is authorized by a testator, or by a settlor — for 
 it makes no difference — to carry on a business with certain funds 
 which he gives to the trustee for that purpose, the creditor who trusts 
 the executor has a right to say, "I had the personal liability of the 
 man I trusted, and I have also a right to be put in his place against the 
 assets ; that is, I have a right to the benefit of indemnity or lien which 
 he has against the assets devoted to the purposes of the trade." The 
 first right is his general right by contract, because he trusted the 
 trustee or executor; he has a personal right to sue him and to get 
 judgment and make him a bankrupt. The second right is a mere 
 corollary to those numerous cases in equity in which persons are al- 
 lowed to follow trust assets. The trust assets having been devoted to 
 carrying on the trade, it would not be right that the cestui que trust 
 should get the benefit of the trade without paying the liabilities ; there- 
 fore the court says to him, You shall not set up a trustee who may be
 
 SeC. 7) BY ACT OF CREDITORS. 299 
 
 a man of straw, and make him a bankrupt to avoid the responsibility 
 of the assets for carrying - on the trade; the court puts the credit 
 to speak, as I understand it, in the place of the trustee. But if the 
 trustee lias wronged the trust estate, that is, if he has taken money 
 out of the assets more than sufficient to pay the debts, and instead of 
 applying them to the payment of the debts has put them into his own 
 pocket, then it appears to me there is no such equity, because the 
 cestuis que trust are not taking the benefit. The trustee having 
 pocketed the money, the title of the creditor, so to speak, to be put in 
 the place of the trustee, is a title to get nothing, because nothing is due 
 to the trustee. It does not appear to me that in that case the creditor, 
 who has never contracted for anything, who has only got the benefit 
 of this equity, if I may say so, by means of the trustee, through the 
 lucky accident of there being a trust, ought to be put in a better posi- 
 tion than any other creditor. I do not see that any judge has said so. 
 
 If we start with Ex parte Garland [10 Ves. Jr. 110], what Lord El- 
 don says is this [page 120] : "It is admitted, they [the creditors] have 
 the whole fund that is embarked in the trade" — that is, as between 
 themselves and the executors the creditors can claim the application 
 of the fund — "and in addition they have the personal responsibility 
 of the individual with whom they deal ; the only security in ordinary 
 transactions of debtor and creditor." [His Lordship then read down 
 to the words "security for the creditors on the trade" (Id. 121 j, and 
 continued:] Then [page 122], after expressing his strong opinion 
 that only the property declared to be embarked in the trade should be 
 answerable to the creditors of the trade, he says: "If I am not bound 
 by decision, the convenience of mankind requires me to hold, that the 
 creditors of the trade, as such, have not a claim against the distributed 
 assets, in the hands of third persons under the direction of the same 
 will, which has authorized the trade to be carried on for the benefit of 
 other persons." That does not decide the point I have mentioned at 
 all. All that it decides is that the claim of the creditors is limited to 
 the assets devoted to trade. What their right against those assets is, 
 Lord Eldon does not decide. 
 
 Then we have a case which I think comes nearest to the present 
 case, Ex parte Edmonds [4 De G., F. & J. 488] . Lord Justice Turner 
 says this [page 498] : "The case of Ex parte Garland and the other 
 cases referred to in the argument have not, in my opinion, any appli- 
 cation to the present case. They proceed upon the principle that the 
 executor or trustee directed to carry on the business having the right 
 to resort for his indemnity to the assets directed to be employed in 
 carrying it on, the creditors of the trade are entitled to the benefit 
 of that right, and thus become creditors of the fund to which the ex- 
 ecutor or trustee has a right to resort." 
 
 Having read those two authorities, which, being decisions of a Lord 
 Chancellor and of the Court of Appeal in Chancery, would be binding 
 on me, I need only say that I do not think the point arises in any of the
 
 300 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 subsequent eases, or was the subject of consideration in them. Owen 
 v. Delamere [L. R. 15 Eq. 134], which contains a mere dictum of 
 Vice-Chancellor Bacon, but still of course entitled to great respect, 
 if it did differ — which I do not think it does — from what Lord Jus- 
 tice Turner laid down in Kx parte Edmonds as the true principle, 
 would not be binding upon me; but T do not think it is different, be- 
 cause Vice-Chancellor Bacon is directing his attention to the point de- 
 cided in Kx parte Garland, that is, that the creditors have no right to 
 go beyond assets devoted to trade. The nature of the right as against 
 those assets is not adverted to; that is plain ; for after saying that Ex 
 parte Garland "contains a clear, distinct, and luminous exposition of 
 the law on the subject" — which it does upon the point that it is not 
 the general estate of the testator which is liable, but only so much as 
 he has authorized to be employed in the business — the Vice-Chancellor 
 says [page 139] : "The court will give effect to the trust which has 
 been created by the testator, and will keep separate and applicable 
 only to purposes of the trust that estate which the testator designated 
 and directed to be employed for that purpose." It is merely repeating 
 Kx parte Garland without the slightest reference to the mode in which 
 the claim is to be enforced. 
 
 The same may be said of the case of Fairland v. Percy [L. R. 3 P. 
 & D. 217]. I dispose of that by saying that Sir James Hannen goes 
 no further, and that he does not consider the second point at all. 
 
 The question raised by the second point — that is, what is the right 
 to resort — is not treated of, as far as I can see, in any reported de- 
 cision except in the case of Ex parte Edmonds. I think it is inferen- 
 tially referred to in Mr. Justice Lindley's book, where I think he 
 means to say the same that Lord Justice Turner said, although I 
 must say, with great deference to Mr. Justice Lindley, it might have 
 been more clearly put. Nothing can be clearer than the way in which 
 Lord Justice Turner puts it; it is simply, as he says, the right to re- 
 sort for indemnity to the assets actually directed to be employed ; and 
 the creditor is entitled to the benefit of that right. 
 
 What Mr. Justice Lindley says is this [Lindley on Partnership 
 (3d Ed.) p. 1103] : [His Lordship then read the passage commencing 
 "If an executor of a deceased partner," and ending "lien on the assets 
 of the deceased employed therein," and continued:] 
 
 I am not sure that Mr. Justice Lindley had in view the remarks of 
 Lord Justice Turner in Ex parte Edmonds, for he does not cite the 
 case ; but he may have arrived at the same conclusion independently. 
 
 The only other text-book that I have been looking at on this point 
 is the last edition of Williams on Executors [8th Ed., p. 1798]. After 
 stating that a trade is not transmissible, but is put an end to by the 
 death of the trader, it says : "Executors, therefore, have no authority 
 in law to carry on the trade of their testator, and if they do so, unless 
 under the protection of the Court of Chancery, they run great risk, 
 even although the will contains a direction that they should continue
 
 Sec. 7) BY ACT OF CREDITORS. 301 
 
 the business of the deceased." Then it says [p. 1800] : "The testator 
 may, by his will, qualify the power of his executor to carry on trade, 
 and limit it to a specific part of the assets, which he may sever from 
 the general mass of his property for that purpose; and then in the 
 event of the bankruptcy of the executor, the rest of the assets will not 
 be affected by the commission, although the whole of the executor's 
 private property will be subject to its operation." Although the 
 author cites Ex parte Garland, he does not appear to me to deal di- 
 rectly with the question I have to deal with, which is, What is the 
 nature of the right of the creditors against the assets specifically ap- 
 propriated by the testator for the purpose of carrying on the trade? 
 I am therefore really thrown back on the authority of Lord Justice 
 Turner. If the right of the creditors is, as is stated by Lord Justice 
 Turner, the right to put themselves, so to speak, in the place of a 
 trustee, who is entitled to an indemnity; of course, if the trustee is not 
 entitled, except on terms to make good a loss to the trust estate, the 
 creditors cannot have a better right. They do get some additional 
 benefit so as to avoid a supposed injustice; but the injustice to be 
 avoided is the injustice of the cestui que trust walking off with the 
 assets which have been earned by the use of the property of the cred- 
 itor ; but .where the cestui que trust does not get that benefit, there is 
 no injustice as between him and the creditors, and there is no reason 
 for the court interfering at the instance of the creditors to give them 
 a larger right than that they bargained for, namely, their personal 
 right against the trustee. It appears to me, therefore, that if the 
 trustee has no such right in such a case, they have none here. 
 
 The particular case before me is peculiar. It appears by the evi- 
 dence, and it is the fact, that the executor carried on the Cambridge 
 business in his own name, and not in the name of the infant, which 
 was strictly in accordance with the terms of the will, for I do not sup- 
 pose he could carry it on in any other way. By the will the testator 
 allowed him to make use of one-eighth of the residue for the purpose 
 of carrying on the business on behalf of the legatee, who was an in- 
 fant of the name of Neill, during his minority ; that Neill on his at- 
 taining twenty-one, was to be allowed to take the stock in trade, if 
 he thought fit, not at its then value, but at its value at the testator's 
 death, and all the rest fell into residue. But the executor and trustee 
 did not follow the will, for, as I said before, he carried on business 
 in his own name as executor, and used the assets then in the business. 
 He did not do what the testator told him to do, namely, collect the 
 book debts and throw them into general residue with the business, 
 and then make use of one-eighth of the residue ; he kept no separate 
 banking account so as to shew the actual sums of money used in the 
 business, but he carried on the business as it had been carried on be- 
 fore. Whether that makes any difference or not it is immaterial now 
 to inquire, but that is what he actually did. He carried on the busi- 
 ness, and in carrying it on he received £764. 16s. Id. more profits than
 
 
 302 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 he has accounted for, and this amount he owes the estate. Besides 
 that he was carrying on the London business belonging to the estate. 
 From that and other sources he has received £1668. 3s. Id. more than 
 he has accounted for; so that lie is a very large defaulter. It is mani- 
 fest that he could not take one penny out of this estate by way of 
 indemnity until he made good his default. 
 
 Therefore unless the creditors can he in a position to shew — as to 
 which there is no evidence before me — that there were profits from 
 carrying on the business to an amount exceeding the deficit, so that 
 something was gained by the use of these assets, it does not appear to 
 me that they can be entitled to anything. 
 
 As the facts on this point do not appear I will give the creditors 
 liberty to present a petition within a limited time, if they think they 
 can support it. and I will not allow the assets to be distributed until 
 they have had time to present their petition. I do not think it is a 
 case to make the creditors pay costs. 
 
 The summonses are, therefore, dismissed without costs. 51 
 
 In re GORTON. 
 DOWSE v. GORTON. 
 
 (Supreme Court of Judicature, Court of Appeals, 18S9. Law Reports 40 
 Chancery Division, 536.) 
 
 This was an appeal from a decision of Sir H. F. Bristowe, Vice 
 Chancellor of the County Palatine of Lancaster. 
 
 By an agreement dated the 25th of September, 1874, Luke Turner 
 agreed with John Gorton and another person named Shemilt for the 
 sale to them of his business of an elastic cord manufacturer, in Man- 
 chester, and his interest in the mill, machinery audi plant, for £19,487., 
 to be paid in instalments; and it was agreed that the purchasers and 
 the survivor of them should carry on the business till all the instal- 
 ments were paid. L. Turner died in 1874, and the plaintiffs were his 
 executors. J. Gorton survived Shemilt and died in December, 1883. 
 At that time £8,487. was due for principal and interest to the executors 
 of Turner. J. Gorton left a will appointing his widow and J. W. 
 Gorton his executors andl trustees, and he declared that it should be 
 lawful for his trustees, in case they should in their uncontrolled dis- 
 cretion think fit, to continue for such period as they might think fit 
 any business in which he might be engaged at his death, and to en- 
 gage and employ in any such business such part of his estate and ef- 
 fects as they should think desirable. 
 
 bj Ex parte Edmonds, 4 De G., F. & J. 488. 408 (1862); Tn re Evans, L. R. 
 34 Ch. Div. 597 (1887); Mason v. Pomeroy, 151 Mass. KM. 24 N. E. 202, 7 
 ),. K. A. 771 (1890); In re Blundell, L. It. 40 Ch. Div. 370 (18S8) ; Cock v. 
 Carson, 45 Tex. 420 (187G).
 
 SeC. T) BY ACT OF CREDITORS. 303 
 
 The executors of Gorton carried on the business, using therein the 
 assets of the testator. At the time of his death his assets were suffi- 
 cient to discharge all his liabilities ; but in carrying on the business his 
 executors incurred trade debts to a considerable amount, including a 
 debt for goods sold and delivered to Messrs. Riley & Sykes. 
 
 At the present time the assets of the testator in the hands of the ex- 
 ecutors were insufficient to pay the debt due under the agreement with 
 Turner, and the liabilities incurred by the executors in the conduct of 
 the business. Turner's executors accordingly brought an action for 
 the administration of Gorton's estate, and also brought an originating 
 motion asking that the following questions might be determined by 
 the court : 
 
 1. Whether the executors of J. Gorton were entitled, as against 
 the persons to whom he was indebted at the time of his death, to be 
 indemnified out of his estate, or any part thereof, against debts and 
 liabilities incurred by the executors in carrying on his business. 
 
 2. Whether ajl his book debts, stock, and the assets of the business 
 carried on by the said J. Gorton at the time of his death, and now due 
 and owing in respect of the said business, or belonging to the same, 
 ought not to be applied in payment of the debts due by the said J. 
 Gorton at the time of his death, in priority to any claim of his ex- 
 ecutors for indemnity, or to any claim of the persons with whom such 
 executors dealt in carrying on the said business. 
 
 The motion also asked for administration of the estate in accordance 
 with the opinion of the Court. 
 
 The Vice-Chancellor, on the 23d of November, 1887, made an or- 
 der on the motion answering the second question in the affirmative, 
 and giving no answer to the first question ; and from this decision the 
 business creditors of Gorton's executors appealed. 
 
 Cotton. L. J. 52 This is an appeal against so much of the decision 
 of the Vice-Chancellor as declared that "the book debts, stock, and 
 other assets of the business carried on by John Gorton at the time of 
 his death, and now due and owing in respect of the said businesses, 
 or either of them, or belonging to the same, ought to be applied in 
 payment of the debts due by the said John Gorton at the time of his 
 death in priority to any claim of his executors or administrators, and 
 then gave other consequential accounts." 
 
 What happened was this. At the time of the testator's death there 
 were certain debts due and owing by him, but there are very few now 
 remaining, the principal being a sum due in respect of the purchase- 
 money payable by him to the executors of the vendor of the business 
 which he carried on. By his will he empowered his executors to car- 
 ry on his business, and they did carry it on ; and, in carrying on that 
 business, they became liable for certain sums for goods soldi and de- 
 livered, and other matters. The trade creditors contend that they are 
 not creditors of the testator, but creditors of his executors, and what 
 
 62 A part of the opinion of Lord Justice Lindley is omitted.
 
 304 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 they say is, in my opinion, correct. They are not entitled to any Hen 
 at all against the assets of the testator — those which were his at the 
 time of his death— and they have no claim against anything except in 
 this way, that they have a claim against the executors personally, and, 
 then, if those executors have any claim of indemnity against the es- 
 tate, they are entitled to have that indemnity applied for their benefit 
 — that is to say, they are to stand in the place of the executors in en- 
 forcing the indemnity. That, in my opinion is right. Where a busi- 
 ness is carried on after the death of the testator, of course the persons 
 who supply goods, are in no way creditors of the testator. They can- 
 not make any claim against the executors as executors ; but they can 
 make a claim against the executors as the persons who dealt with them 
 and on whose order they supplied the goods. Then if the executors 
 are entitled to be indemnified they will stand in the place of the ex- 
 ecutors in enforcing that indemnity. 
 
 What is contended for on the other side is this : They say that the 
 persons who dealt with the executors and supplied goods which came 
 into the possession of the executors are not entitled to any indemnity 
 till all the creditors of the testator are paid. It seems to me that that 
 is not right. What the creditors of the testator seek to do is this: 
 They seek to have the benefit of those services supplied by the trade 
 creditors of the executors for the benefit of the estate without making 
 any provision for them. But the creditors of the executors, who are 
 not creditors of the testator, cannot make any claim to be paid any- 
 thing out of what estate there may be in the hands of the executors 
 if the executors themselves are indebted to the estate, so that they 
 have got in their own pockets that out of which they ought to take 
 their indemnity ; and I think an account must be taken so as to ascer- 
 tain what claims the executors have by way of indemnity against the 
 estate. So far as concerns the original assets of the testator, they can- 
 not, of course, claim as against the creditors of the testator. All 
 they could claim would be an indemnity against their expenses in 
 realizing the assets of the testator. That there is no doubt about. 
 Thev will only be liable for the money they get properly from real- 
 izing those assets. Where there are liabilities undertaken under the 
 direction of the testator's will they are entitled to an indemnity in re- 
 spect of them out of the assets acquired by the executors after the 
 testator's death. The creditors of the testator say, these are assets 
 of our testator, and he could not by declaring a trust for you to per- 
 form, give you any right of indemnity against the property. That is 
 not correct. 
 
 I think there must be a declaration that the executors of the tes- 
 tator are entitled, in priority to the persons to whom he was indebted 
 at the time of his death, to be indemnified out of such part of the es- 
 tate as has been acquired by the executors since his death against 
 debts or liabilities incurred by the executors in carrying on this busi- 
 ness for the full amount of such debts or liabilities; or, if the ex-
 
 Sec. 7) BY ACT OF CREDITORS. 
 
 305 
 
 ecutors be in default to the testator's estate, then to the full amount of 
 such debts or liabilities after deducting the amount in respect of which 
 the executors are so in default. That is to say, you do not want a 
 separate account of the carrying on of the business, but the executors 
 must have their accounts taken ; and if, in taking the accounts, it 
 appears they are indebted to the estate, then they have got in their 
 pocket the money out of which the indemnity to which they are en- 
 titled ought to be paid ; but if they are not indebted to the estate then 
 they have a right to be indemnified. Then the property which was 
 the testator's at his death must go in favor of the creditors of the 
 testator, and, consequently, the directions given which entitle the ex- 
 ecutors to an indemnity will be withdrawn from their claim in the 
 administration of the estate. I think that will work it out. 
 
 Then this, which is merely of course, should be added, that the 
 persons with whom the executors dealt in carrying on the business, and 
 to whom they are now under any debts or liabilities in respect there- 
 of, may be declared to be substituted for, or entitled to the right of, 
 the executors with regard to the said indemnity as to such debts or 
 liabilities. In my opinion that is a correct declaration, and the in- 
 quiries or accounts for carrying that into effect, if they are not already 
 in the decree, must be added. That is the correct principle on which 
 this case is to be decided. If the executors have dealt with the es- 
 tate so as to make a large sum due from them they will not be en- 
 titled to any such indemnity, or rather they will be entitled to an in- 
 demnity, but, as I have already said, they have got the money in their 
 purse to satisfy that. 
 
 Lindley, L. J. The question raised by this appeal can only be an- 
 swered by considering, first of all, the rights of the creditors of the de- 
 ceased, and, secondly, the rights of those who have become creditors 
 of the executors since his death, and by adjusting those two rights 
 where they appear to conflict. 
 
 Now what is the right of the creditor of the deceased? He is a 
 creditor ; he has no equitable rights as distinguished from legal rights 
 against the assets of the deceased. His right is to sue the executor 
 at law and get a judgment at law de bonis testatoris, and under that 
 to seize under a fi. fa. the assets of the deceased in the hands of the ex- 
 ecutors at the time of his death. But he has nothing to do with fu- 
 ture acquired property. That is his right at law. But then, if the ex- 
 ecutor has so dealt with the assets as to have increased them, the 
 executor cannot put the accretion into his own pocket ; neither can he 
 hand it over to the legatees or next of kin so long as the debts of the 
 testator are unpaid. Therefore I think it is plain that the creditors 
 of the testator can get the subsequently acquired property, but not 
 on the same footing that they could get the property of the testator 
 which were assets of the testator at the time of his death. The cred- 
 itor of the testator can only get the after acquired property on terms 
 Ken.Tr.— 20
 
 306 TRANSFER OP RESPECTIVE [NTERESTS OF PARTIES. (Cll. 3 
 
 which are just. He cannot take the property from the executors and 
 make the executors pay for it out of their own pockets. He can only 
 have the property subject to the right of the executors to indemnity. 
 that is to say, he cannot throw the cost of getting the assets on the ex- 
 ecutors, and take the assets regardless of that cost. The right of the 
 executors to be indemnified out of the subsequently acquired property 
 lets in the rights of those to whom they are liable, that is to say, the 
 creditors who have become such in the course of the executors trading 
 or carrying on the business. Such are the rights of the creditors of 
 the deceased. 
 
 Now, let us look at the rights of those who have dealt with the ex- 
 ecutors after his death. The right of those is to sue the executors. 
 I believe there are some very exceptional cases in which subsequent 
 creditors can get the assets, and I think there is authority for saying 
 that funeral expenses can be got out of the assets ; but with those ex- 
 ceptions the right of subsequent creditors is to sue the executors. 
 They have nothing to do with the assets of the testator at all, and they 
 can only get at them by the circuitous process of the executors being 
 indemnified. Now, adjust those rights, and the thing is perfectly 
 plain. Out of the assets of that part of the estate which existed at 
 the death of the testator his creditors come first ; the executor has no 
 right of indemnity except as regards debts incurred by himself as ex- 
 ecutor. Those creditors have nothing to do with the will ; as Mr. 
 Buckley said, they have nothing to do with what the will says about 
 carrying on the business or anything else. They ask for payment out 
 of the assets of the testator and they get it. When you come to other 
 assets, then, as T say, a distinction must be drawn ; whereas they claim 
 the assets of the testator free from all rights of the executors to be 
 indemnified, they cannot claim the subsequently acquired assets ex- 
 cept subject to the rights of the executors to indemnity. That is 
 worked out by the variations in the order which Lord Justice Cotton 
 has suggested, and which we propose to make. * * * 
 
 Lopes, L. J. I am of the same opinion. 
 
 CLACK v. HOLLAND. 
 
 (In Chancery, before Sir John Romilly, Master of the Rolls, 1854. 19 
 
 Bea van, 202.) 
 
 By a settlement made in 1806, certain real and personal estate was 
 settled upon the Rev. Thomas Clack and Elizabeth Sadler, succes- 
 sively, for life, and afterwards for the benefit of the issue of the mar- 
 riage. 
 
 In 1823, the trustees, under a power, converted the trust property 
 into money and lent il800, part of it, to Mr. Clack. By way of se- 
 curity a policy of assurance for £1200, effected on the life of Mr.
 
 Sec. 7) BY ACT OF CREDITORS. 307 
 
 Clack in the names of Messrs. Aberdein, was assigned to them. Mr. 
 Clack covenanted to keep up the policy, and, if he neglected to do so r 
 the trustees were authorized to keep it up. Mrs. Clack died in 1845. 
 Holland, one of the trustees, being at times unable after Mrs. Clack's 
 death in 1845 to induce Mr. Clack to pay the premiums, with Mr. 
 Clack's sanction, borrowed certain sums, from time to time, from 
 Daniel Cullington, Samuel Riles, and Jane Eden, for that purpose, and 
 they also paid some of the premiums and Holland gave Cullington 
 and Riles a lien on the policy as security for the repayment. 
 
 Mr. Clack died in 1852, insolvent and without having repaid what 
 he had borrowed from the trustees. Cullington gave notice to the 
 office of his claim upon the policy, and the plaintiffs, the cestuis que 
 trust of the settlement, also gave notice that they claimed it and filed 
 their bill against the trustees of the settlement, Cullington, Riles and 
 their father's representatives, to have the proceeds of the policy ap- 
 plied to pay the loan to Mr. Clack. The defendants, Holland, Cnl- 
 lington and Riles, insisted that they had a lien upon it, Holland for 
 the premiums paid by him, and the other two for the sums advanced 
 upon the security of the policy. Miss Eden disclaimed. 
 
 The Master of the Rolls. 53 * * * The next question to be 
 considered is, what is the position of Richard Holland with reference 
 to this policy. In the first place he was the assignee of the policy in 
 trust to secure the repayment of the debt to the family. * * * 
 
 I find it was Thomas Clack's duty to pay the premiums, and that 
 it was the duty of Richard Holland to compel him to pay them if he 
 could. Down to 1845, no question arises, and the evidence satisfies 
 me, that from that time down to September, 1852, when Thomas Clack 
 died, Richard Holland had abundant means of paying the premiums 
 on this policy. * * * Knowing that he ought to keep it up, the evi- 
 dence shows me, that he did obtain funds which he ought to have ap- 
 plied for that purpose, and if he paid to Thomas Clack the money ap- 
 plicable to the payment of the premiums, he, by so doing, committed 
 a breach of trust. * * * Assuming it to have been invalid, and 
 that Richard Holland had not funds for the purpose, and could not 
 get any from Thomas Clack, then it was his duty to have sued Thomas 
 Clack on the deed for the amount necessary for keeping up the policy ; 
 and if the policies were liable to have "been lost in the meantime, by 
 a default in paying the premiums, I am of opinion, that if he, having 
 no trust funds for that purpose, had applied his own money for keep- 
 ing up the policy, he would then have had a lien on the policy, for the 
 amount advanced by him for the purpose of keeping it on foot. * * * 
 
 The other question is with respect to the £51., the three sums 
 paid for the premiums on the policy. I felt originally some difficulty 
 on this point of the case. It appeared to me, in the first instance, 
 that it was in the nature of salvage, and it was forcibly put by Mr. 
 
 63 A part of the opinion is omitted.
 
 308 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 Bird in the only way in which, if at all, it could be supported, as the 
 case of the trustee saying, "I have behaved wrongly and have forfeited 
 the money given to me for this purpose; will you advance the money 
 and save the policy from being lost?" But, upon further considera- 
 tion, I am of opinion that this is not the case. * * * In fact it 
 amounts to this: A trustee has received money for the purpose of 
 paying premiums on a policy which it is his duty so to apply; can he, 
 by misapplying that money to his own use, and borrowing money for 
 the purpose of keeping the policy on foot, give a valid security to 
 the person who advances money for that purpose? It is obvious that 
 if he can, he can gain an advantage by his own breach of trust; in 
 my opinion it is invalid, and the same question as that in Pinkett v. 
 Wright [2 1 tare, 120, 127; 12 CI. cS; Fin. 764]. There can be no ques- 
 tion (as I have already stated), that if the trustee has no funds prop- 
 erly applicable to keeping up the policy, he may do, and in my opin- 
 ion it is his duty to do what he can to protect the policy, and advance 
 or obtain money for the purpose of paying the premium, and a lien 
 on the policy will then be obtained, because the trustee has no money 
 applicable for the purpose, and he does really what is the best for the 
 cestui que trust in obtaining money for that purpose. Therefore the 
 cestui que trust, having the benefit of that advance, cannot make the 
 trustee pay personally that of which he has received the benefit. But 
 if the cestui que trust supply funds, or if the trustee, by duly perform- 
 ing his trust ought to be in possession of funds applicable to that pur- 
 pose, then he acquires no lien on the policy, and cannot confer one 
 on another. * * * 
 
 The result of this case, in my opinion, is, that the plaintiffs are en- 
 titled to the produce of the policy, and I must make a declaration to 
 that effect. 54 
 
 B4 Muir v. City of Glasgow Bank, 4 App. Cas. 337, 355, 360. 361, 362, 365, 
 368, :;«;'.». 370, -".77. 388 (1879); Todd v. Moorhouse, L. It. 19 Eq. 69 (1874): 
 Campbell v. Gordon (Ct. of Session) 2 Dunlop, 639 (1840); Johnson v. Le- 
 in.iii. 131 111. 609, 23 X. EL 4:;.",. 7 L. R. A. r,7>CK 19 Am. St. Rep. 63 (1890); 
 Glenn v. Allison. 58 Md. 527 (1882); Noyes v. Blakeman, 6 N. Y. 567 (1852); 
 New V. Nicoll, 7.". N. Y. 1127. 29 Am. Rep. Ill (1878); Terry v. Hoard of .Mis- 
 sions. 102 X. V. 99, 6 N. E. 116 (1886); Van Slyke v. Bush, 123 N. V. 47. 25 
 X. E. 196 (1890); Stanton v. King, 8 Hun (X. Y.) 4 (1876), affirmed 69 X. V. 
 609 (1877); Fowler v. .Mutual ins. Co., 28 Hun iX. Y.) VX> (1882); Randall 
 v. Dusenbury, 39 X. Y. Super. Ct. 171 (1875), affirmed c>. -> . X. Y. 645 (1875). 
 
 The foregoing cases recognize the right of a trustee under certain circum- 
 stances to stipulate that not he personally, but the trust estate only, shall 
 be liable. But according to the principal case he cannot thus bind the trust 
 estate so long as he is in default to the trust.
 
 Sec. 7) BY ACT OF CREDITORS. 3UU 
 
 II. Creditors of the Cestui que Trust. 
 
 BENNET and Another v. BOX and Others. 
 (In Chancery, before Lord Chancellor Clarendon, 1662. 1 Chancery Cases, 12.) 
 
 Anno 15 Jac. — Ralph Allen purchaseth lands in his own name, and 
 in the name of Edward Hammond, in trust for Ralph Allen and his 
 heirs, and Hammond to take nothing thereby; but the trust is not ex- 
 pressed in the conveyance. William Allen, senior, did borrow £600. 
 of John Bennet, and the said William Allen, Ralph Allen, and William 
 Allen, Jr., son and heir of the said Ralph Allen (William Allen, Sr., 
 being first bound in the bond), 1630, did become bound unto the said 
 John Bennet, since deceased, for the payment of the said £600., by 
 bond of £1,000., wherein they bound themselves and their heirs, under 
 whom the plaintiffs are well entitled to the debt in question. And one 
 witness deposeth, that Ralph Allen was a good husband, not one that 
 contracted any debts of his own, and believes he and William Allen, 
 Jr.. were only sureties for William Allen, senior. Ralph Allen dies, 
 and Hammond survives, and after dies ; then William Allen, son and 
 heir of Ralph Allen, dieth without issue, and the now defendants, as 
 heirs at law, bring their bill against the heirs of Hammond, who had 
 the estate in law, to have the lands conveyed in performance of the 
 trust; which is decreed to them accordingly, and the lands conveyed 
 unto them as heirs at law of Ralph Allen. 
 
 The now plaintiffs bring their action of debt at law against Henry 
 Box, since deceased, and the now defendants, as heirs of Ralph Allen. 
 The defendants thereunto pleaded riens per discent praeter a third 
 part of a messuage worth £6. 13s. 4d. per annum. 
 
 January, 1662. The now plaintiffs bring their bill in this court 
 against the defendants, and Henry Box, the defendant's late hus- 
 band, who had the lands decreed and conveyed unto them as heirs of 
 Ralph Allen, to have them decreed as heirs, to pay the just debts of 
 Allen, or to have the said lands made liable to pay the said debts as 
 assets in equity. 
 
 The defendants, Box and Stonehouse, pleaded, that the said action 
 still depended, which is a double vexation ; and demur, and demand 
 judgment, whether they, as heirs, shall be charged in equity, without 
 any trust or agreement further than the law chargeth them. 
 
 On hearing thereof, a case was stated on the bill plea and demur- 
 rer ; and afterwards Henry Box died. And before any bill of re- 
 vivor against the defendants, it was ordered May 12, 1653. that the 
 defendants do answer the plaintiff's bill ; but the benefit of the plea to 
 be considered at the hearing. 
 
 The defendants deny that they have entered into, or received any 
 of the profits of the said! lands, the same being ever since 7 Car. ex- 
 tended for the debts of Ralph Allen; and ever since held by Sir John
 
 310 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 Banks and his executors, and formerly before the extents were let 
 at £500. per annum, and after at £300. per annum, and now but at 
 £400. per annum, and whereout above £60. is deducted for the charges 
 of the Sea-Banks, and the rest will not pay the interest of the prin- 
 cipal debt, as the extendors allege. 
 
 An original was filed by the plaintiffs against Henry Box and the 
 other defendants, on the bond in question in the Common Pleas, bear- 
 ing teste 16 Feb. 1659. 
 
 The defendant, Walter Stonehouse, did for £400. bargain and sell 
 his third part of the reversion in fee of the lands in question to Henry 
 Box, deceased, by deed bearing date 3d Oct. 1660; and the said Henry 
 paid then to the said Walter the £400. purchase money for the same, 
 and the defendant-, as they swear by their answer, had not then, or 
 in some months after, any notice of the said original, and no notice 
 proved; and one witness deposeth, he believeth there was no notice; 
 for he being conversant in all Mr. Box's affairs, if there had been 
 any notice, he should have heard of it, as he verily believes. 
 
 The defendant George Burdet, after the other defendants were 
 ordered to answer, put in his answer, and thereby insisted on the 
 same matter the other defendants did by their plea and demurrer, and 
 was on June the 9th last past, served with process ad audiendum 
 indicium upon 21st June following, but appeared not at the hearing, 
 or any for him. 
 
 1. Question. Whether the said lands, as this case is, shall or ought 
 to be decreed as assets in equity? 
 
 2dly. Or whether the plaintiffs ought to have any decree in this 
 case against the defendants? 
 
 Chief Justice Hyde, Chief Baron Hales, and Justice Windham, 
 were of opinion, on hearing counsel on both sides, that the lands in 
 the said case and bill mentioned, (as the case is stated) are not, nor 
 ought to be decreed as assets in equity, and that the plaintiffs ought 
 not to have any decree against the defendants. 
 
 Afterwards in Hillary Vacation, 1664, the bill was dismissed upon 
 the judge's certificate, 14th Nov. 1664, or 1661, in a case wherein 
 Clark was plaintiff against Sir Thomas Fanshaw. 
 
 PRAT v. COLT. 
 
 (Tn Chancery, before Lord Keeper Bridgman, 1669. 1 Cases in 
 Chancery, 128.) 
 
 The plaintiff had a judgment against George Holt, and brought his 
 bill against his heir, to subject certain lands which he had a decree of 
 this court for, upon a trust for his father and his heirs to satisfy his 
 debts ; and the defendant demurred, and this demurrer allowed : and 
 the Lord Keeper conceived it all one with Bennet and Box's Case. 
 But quaere, since the statutes of Frauds and Perjuries.
 
 Sec. 7) BY ACT OF CREDITORS. 311 
 
 LORD GREY and Others v. COLVILE and Others. 
 
 (In Chancery, before Lord Finch, Chancellor, 167S. 2 Reports in 
 Chancery, 143.) 
 
 The plaintiff the Lady Grey's bill is to be relieved for a debt of 
 £1500., and interest on bond, wherein John Colvile did bind himself 
 and his heirs, to repay the same unto the plaintiff her executors and 
 assigns, that the same might be paid out of the lands which were pur- 
 chased by the said John Colvile, with his own proper money, in the 
 names of himself and the defendant's wife, to hold to them two for 
 their lives, and then to the heirs of Colvile, and the rest were pur- 
 chased in the names of the said defendants Morris and Saunders, in 
 trust for the said John Colvile and his heirs ; that soon after, and 
 before the £1500. was paid, the said John Colvile died, and the right 
 and equity of the premises, during the life of the said defendant's 
 wife, is in Josia Colvile, and the reversion in fee, after the death of 
 the said wife, will descend to the said defendant Josia Colvile, as 
 son and heir of the said John Colvile, and the profits are received 
 by him or for his use ; that the said John Colvile dying intestate, ad- 
 ministration is granted to Dorothy his relict, who pleads she hath 
 no personal estate, whereupon the Lady Grey commenced a suit at 
 law, by filing an original for her said debt against the defendant 
 Josia, as son and heir of the said John Colvile and hath got judgment 
 thereon to have satisfaction for the said debt, out of the reversion 
 of the lands of John, which descended! in fee to the said defendant 
 Josia Colvile, and ought to have satisfaction accordingly; but the 
 said defendant Josia pretendeth he hath nothing by descent in pres- 
 ent, but the reversion of the lands purchased in the names of John 
 Colvile and his wife, after the death of his wife; whereas he and 
 the other two defendants were only trustees for John Colvile and 
 his heirs ; and their trust being now come to the defendant Josia, 
 they are liable as assets, in equity, for satisfaction of the plaintiff's 
 debts, and the plaintiff ought to be let into the immediate possession, 
 and the said Josia also insists, that the premises are incumbered by 
 a former judgment of one lease for £800., and the plaintiff's creditors, 
 and others the creditors in their suit, seeking relief against the same 
 defendants, upon the same trust and equity, and to have their debts 
 paid out of the said lands, they insisting they are creditors by judg- 
 ment, grounded on original of the same day and date with the 
 said Lady Grey, and ought to be satisfied, in equal degree and time. 
 
 The plaintiff Creed and the other creditors, insist, that they for 
 so much as the estate in law of Wise is in the heir, that their judg- 
 ments ought to attach the lands according to priority of originals, 
 and though the said Leke hath obtained a decree, prior to the cred- 
 itors in these suits, yet the same is to be subject to the direction of 
 this court, and ought not to take place, but according to the date of 
 their originals.
 
 312 TRANSFER OF RESPECTIVE INTERESTS OP PARTIES. (Ch. 3 
 
 This court (it being admitted by all, that the original on which the 
 said Leke's judgment is grounded, is prior to all the other creditors' 
 originals, and that the plaintiff the Lady Grey's and Creed's originals 
 are next in priority, and hear the same date one with another, and 
 ought next to he satisfied with other judgments, who originally bear 
 the same date) declared, that the estate purchased in the names of the 
 defendant's wife as aforesaid, was a trust for life, attending the 
 reversion, and so liable to make the several plaintiff- satisfaction for 
 their debts, and should be enjoyed by the plaintiffs, against the said 
 Wise and Jos'ia Colvile the heir; and the court decreed that if the 
 estate of Wise, as aforesaid, was not sufficient, then the said rever- 
 sionary lands, purchased in the names of the said Morris and Saun- 
 ders, after the death of Sir John Tufton, who hath an estate for life in 
 the said lands, should go towards satisfaction of the said debts. 
 
 CREED v. COLVILLE. 
 
 (In Chancery, before Lord Keeper North, 1683. 1 Vernon, 172.) 
 
 The single point of this case was, whether the trust of an estate 
 in fee descended upon the heir is liable in equity to the satisfaction 
 of a debt by bond, wherein the heir is expressly bound? 
 
 The late Lord Chancellor had decreed it assets ; but upon a re- 
 hearing before the Lord Keeper, he seemed doubtful. 
 
 For the heir against the decree it was said, that this point had 
 formerly been settled upon great advice in the case of Box v. Ben- 
 nett, which was heard by the Lord Chancellor, with the assistance 
 of the Lord Chief Justice Hales, and Mr. Justice Wadham Windham. 
 And that this decree was unreasonable, in that an account of the 
 profits was decreed during the infancy; whereas, at law, if the heir 
 is bound in the bond of the ancestor, and after the death of his an- 
 cestor is sued during his infancy, the parol must demur, and the 
 plaintiff cannot have judgment against the infant, neither are the 
 profits liable during his minority. 
 
 But for the decree it was argued, that the precedent of Box and 
 Bennett was looked upon as a hard case, and had never carried any 
 great authority with it; it being a precedent of the judges' making, 
 who look upon the Court of Chancery as precarious in its jurisdic- 
 tion, and therefore, as much as may be, are for restraining it to the 
 rides of law ; but a trust, being a creature of this court, ought to be 
 governed solely by the rules of equity, and equity ought to be con- 
 formable throughout; and therefore why should not the trust of an 
 inheritance be assets, as well as the trust of a term? an equity of 
 redemption is every day made assets in equity; and what reason 
 can be given, why in equity a trust of an inheritance should not be 
 assets, where the inheritance itself, had it not been in trust, would 
 have been assets at law?
 
 Sec. 7) BY ACT OF CREDITORS. 313 
 
 As to the profits during minority, they said, that was not insisted 
 on by them, though they had no precedent in equity, that the parol 
 should demur; but infants were there suable. 
 
 Lord KEEPER. I know the case of Box and Bennett has had hard 
 words given it, and been much railed at ; but the decree in that 
 cause was made upon great advice, and he did not know, how he could 
 be better advised now; and said, there was a difference between the 
 case of an heir, and the case of an executor ; and therefore the trust 
 of a term and the trust of an inheritance are not the same thing, as 
 to this point ; for whatever money comes to the hands of the exec- 
 utor, either by sale of the term, or if money be decreed to him, in 
 this court, will be assets; but if an heir, before an action brought, 
 sells and aliens the assets, the money is not at law liable in his hands ; 
 unless the sale were with fraud or collusion ; as if an heir sell and 
 buy again, there the new purchased lands will be assets. And as to 
 an equity of redemption, he said, that if a man had a mortgage and 
 a bond ; before the mortgage should be redeemed by the heir the 
 bond ought to be satisfied ; but he did not know that an equity of 
 redemption should be assets in equity to all creditors : and mentioned 
 Mr. Baron Weston's case against Mrs. Danby which was thus : 
 
 Baron Weston had a debt due to him by bond, wherein the heir 
 was bound, but it happened that for three descents the heir was still 
 an infant, so the parol demurred at law, till the interest much ex- 
 ceeded the penalty of the bond ; and Mrs. Danby having been all 
 along guardian to these infants, and received the profits of the estate 
 without paying any debts, and converted them to her own use, the 
 Baron therefore brought an action against her, and called her admin- 
 istrator to these children ; but the Baron's policy did not prevail. 
 
 As to the case in question, his Lordship said, he would not throw 
 such a cause out of court without good consideration first had, and 
 that he should be much governed by the precedent of Box and Ben- 
 nett, unless they could shew that the latter precedents had been other- 
 wise ; and directed them to attend him with precedents towards the 
 latter end of the term. 
 
 FREEDMAN'S SAVINGS & TRUST CO. v. EARLE. 
 
 (Supreme Court of the United States. 1S84. 110 U. S. 710, 4 Sup. Ct. 226, 
 
 2S L. Ed. 301.) 
 
 Appeal from the Supreme Court of the District of Columbia. 
 
 The appellee recovered a judgment against Robert P. Dodge in the 
 supreme court of the District of Columbia on January 4, 1878, for 
 $7,700, with interest and costs, which was revived April 2, 1879, and 
 on which a fi. fa. was issued April 9. 1879, and returned nulla bona. 
 
 On June 1, 1877, Dodge, the judgment debtor, being then seized in 
 fee-simple of certain real estate in the city of Georgetown, in this
 
 314 TRANSFER OF RESPECTIVE INTERESTS OF FARTIES. (Ch. 3 
 
 district, conveyed the same by deed duly recorded to Charles H. Cra- 
 gin, jr., in trust, to secure to Nannie B. Blackford payment of the sum 
 of $2,000, with interest, according to certain promissory notes given 
 therefor, and which were indorsed to Charles 1 1. Cragin. 
 
 On April 10, 1870, the appellee filed his bill in equity, to which 
 Dodge, Charles H. Cragin, Jr., Charles H. Cragin, and Nannie B. 
 Blackford were made defendants, the object and prayer of which were 
 to take an account of the debt secured by the trust deed, and, subject 
 thereto, to have the premises sold and the proceeds of the sale ap- 
 plied to the satisfaction of the appellee's judgment. 
 
 The defendants having appeared and answered, a decree according 
 to the prayer of the bill was rendered June 11, 1879. 
 
 On December 27, 1879, leave therefor having been obtained, the 
 appellants filed a petition in the cause, setting forth the recovery of 
 a judgment in their favor against the defendant Dodge, in the sum 
 of $7,386.47, with interest and costs, on February 11, 1879, in the 
 supreme court of the District of Columbia, and that on December 2d 
 a fi. fa. had been issued thereon, and returned nulla bona December 
 19, 1879 ; and praying that they may be made parties complainant in 
 the cause ; that the "equitable interest of Dodge in the real estate 
 described be subjected to the satisfaction of their judgment; that the 
 .ame be sold, and the proceeds of sale be brought into court and dis- 
 tributed! according to law. To this petition Dodge answered, admit- 
 ting the recovery of the judgment as alleged. 
 
 On May 25, 1880, the trustee appointed for that purpose under the 
 decree of June 11, 1879, reported a sale of the premises for $5,525, 
 and the same, on June 25, 1880, was confirmed. The cause was then 
 referred to an auditor to state the account of the trustee to sell, whose 
 report showed an appropriation of the proceeds of the sale, after 
 payment of costs, in payment to that extent of the appellee's judg- 
 ment. On exceptions to this report, a final decree confirming the 
 same was made September 14, 1880, which decree, on appeal to the 
 general term, was affirmed December 10, 1880. From that decree 
 this appeal is prosecuted. 
 
 Mr. Justice MATTHEWS delivered the opinion of the Court. After 
 reciting the facts in the foregoing language he continued : 
 
 As ground of reversal, it is assigned by the appellant that the pro- 
 ceeds of the sale of the equitable interest of Dodge, the judgment 
 debtor, should have been distributed pro rata between the appellees 
 and the appellants, instead of having been awarded exclusively to 
 the appellee. It is contended on behalf of the appellants that the in- 
 terest of the judgment debtor in the land being an equity merely, is 
 not subject to execution at law; and as it can be reached by judg- 
 ment creditors only through the intervention and by the aid of a court 
 of equity, it becomes of the nature of equitable assets, and when sold 
 the proceeds will be applied, according to the maxim that equality is 
 equity, ratably among the creditors.
 
 Sec. 7) BY ACT OF CREDITORS. 315 
 
 In the case of Morsell v. First Nat. Bank, 91 U. S. 357, 23 L. Ed. 
 436, it was decided that under the laws of Maryland in force in this 
 district, judgments at law were not liens upon the interest of judg- 
 ment debtors who had previously conveyed lands to a trustee in trust 
 for the payment of a debt secured thereby. Mr. Justice Swayne said, 
 (page 361:) "The judgments in nowise affected the trust premises 
 until the bill was filed. That created a lien in favor of the judgment 
 creditors. There was none before." And it was accordingly held 
 that in the distribution of the proceeds of sale the judgments must 
 be postponed to debts secured by other deeds of trust made before 
 the filing of the bill, but subsequent to the rendition of the judgments. 
 But that decision leaves open the question arising here between judg- 
 ment creditors seeking satisfaction in equity out of the debtor's equi- 
 table estate. It becomes necessary, therefore, to determine the nature 
 of the right and the principle of distribution which arises from it. 
 
 At common law executions upon judgments could not be levied 
 upon estates merely equitable, because courts of law did not recognize 
 any such titles and could not deal with them. They could not be levied 
 upon the estate of the trustee when the judgment was against the 
 cestui que trust for the same reason; and when the judgment was 
 against the trustee, if his legal estate should be levied on, the exe- 
 cution creditor could acquire no beneficial interest, and if the levy 
 tended injuriously to affect the interest of the cestui que trust, the lat- 
 ter would be entitled to relief, by injunction or otherwise, in equity. 
 Lewin, Trusts, 171, 186; 2 Spence, Eq. Jur. 39. 
 
 But as courts of equity regarded the cestui que trust as the true 
 and beneficial owner of the estate, to whose uses, according to the 
 terms of the trust, the legal title was made subservient, so in its 
 eyes the estate of the cestui que trust came to be invested with the 
 same incidents and qualities which in a court of law belonged to a 
 legal estate, so far as consistent with the preservation and admin- 
 istration of the trust. This was by virtue of a principle of analogy, 
 adopted because courts of equity were unwilling to interfere with the 
 strict course of the law, except so far as was necessary to execute 
 the just intentions of parties, and to prevent the forms of the law from 
 being made the means and instruments of wrong, injustice, and op- 
 pression. 
 
 Thus equitable estates were held to be assignable and could be con- 
 veyed or devised; were subject to the rules of descent applicable to 
 legal estates; to the tenancy by curtesy, though not to dower, by 
 an anomalous exception afterwards corrected by statute 3 & 4 Wm. 
 IV, c. 105 ; and were ordinarily governed by the rules of law which 
 measure the duration of the enjoyment or regulate the devolution or 
 transmission of estates; so that, in general, whatever would be the 
 rule of law, if it were a legal estate, was applied by the court of 
 chancery by analogy to a trust estate. 1 Spence, Eq. Jur. 502.
 
 316 TRANSFER OF RESPECTIVE [NTERESTS OF PARTIES. (Ch. 3 
 
 A.s judgment creditors, after the statute of Westminster, 13 Edw., 
 c. 18, were entitled, by the writ of elegit, to be put in possession of 
 a moiety of the lands of the debtor, until satisfaction of the judgment ; 
 
 and as it would be contrary to equity to permit a debtor to withdraw 
 his lands from liability to his judgment creditors, this analogy was 
 at an early date extended, so as to give to judgment creditors similar 
 ts in respect to the equitable estate of their debtors; and as 
 the remedies in favor of judgment creditors by way of execution upon 
 the legal estate of their debtors have been enlarged, they have been 
 imitated by a corresponding analogy as to equitable estates by courts 
 of equity. This is in pursuance of the principle stated in a pregnant 
 sentence by Lord Northington, in Burgess v. Wheate, 1 Eden, 177- 
 2t.}. where he said: "For my own part, I know no instance where 
 this court ever permitted the creation of a trust to affect the right 
 of a third party." Id. 151. It is embodied in the maxim, gequitas 
 uitur legem. 
 
 It was accordingly held by Lord Nottingham, in the anonymous 
 case cited in Balch v. Wastall, 1 P. Wm. 445, "that one who had a 
 judgment, and had lodged a fieri facias in the sheriff's hands, to which 
 nulla bona was returned, might afterwards bring a bill against the 
 defendant, or any other, to discover any of the goods or personal 
 estate of the defendant, and by that means to effect the same;" and 
 although Lord Keeper Bridgman, in Pratt v. Colt, Freem. Cas. Ch., 
 h\ Eovenden, 139, refused to permit a trust estate, which had de- 
 scended to the heir, to be extended upon an elegit on a judgment 
 against his ancestor, the reporter adds: "But note that this hath not 
 been taken to be a good demurrer by the old and best practicers. as 
 little according with good reason, for the heir at law is as much 
 chargeable with the ancestor's judgment as the executor with the 
 testator's debts, and so equity ought to follow the law." Three years 
 subsequently to this decision the statute of frauds, 29 Car. II, c. 3, 
 was enacted, the 10th section of which made trust estates in fee- 
 simple assets for the payment of debts, and subject to an elegit upon 
 judgment against the cestui que trust. But this statute did not ex- 
 tend to chattels real, to trusts under which the debtor had not the 
 whole interest, to equities of redemption, or to any equitable interest 
 which had been parted with before execution sued out. Forth v. 
 Duke of Norfolk, 4 MaddL 503. The statute of 5 Geo. II. c. 7, which 
 made lands within the English colonies chargeable with debts, and 
 subject to the like process of execution as personal estate, was in 
 force in Maryland; but as it did not interfere with the established 
 distinction between law and equity, it did not permit an equitable in- 
 terest to be seized under a fieri facias. Lessee of Smith v. McCann, 
 24 How. 398, 16 L. Ed. 714. But as the effect of these statutes was 
 to enlarge the operation of executions upon legal estates, so the cor- 
 responding equitable remedy as to equitable estates was also enlarged, 
 and as to them equitable executions were enforced to the same extent
 
 Sec. 7) BY ACT OF CREDITORS. 317 
 
 to which executions at law were enforceable upon estates subject to 
 seizure under them. 
 
 This mere equity, consisting in the right to obtain the aid of the 
 court in subjecting the equitable interest of the debtor, not being a 
 lien at law or a specific charge in equity, nevertheless constitutes such 
 an interest, and creates such a privity, as entitles the judgment cred- 
 itors to redeem a prior mortgage, and succeeding thus to the rights of 
 the mortgagee in England, where the doctrine of tacking prevailed, 
 he was permitted to hold the whole estate as security for his judg- 
 ment also, even when by virtue of an elegit at law, he would be en- 
 titled only to a moiety of the debtor's land. And he could file his 
 bill to redeem without previously issuing an execution. Neate v. 
 Duke of Marlborough, 3 Mylne & C. 407. The reason for this, as- 
 signed by Lord Cottenham in the case just cited, is that, inasmuch 
 as the court finds the creditor in a condition to acquire a power over 
 the estate by suing out the writ, it does what it does in all similar cases 
 — it gives to the party the right to come in and redeem other incum- 
 brances upon the property. 
 
 But in other cases, when the object of the bill is to obtain satis- 
 faction of the judgment, by a sale of the equitable estate, it must 
 be alleged that execution has been issued. This is not supposed to 
 be necessary wholly on the ground of showing that the judgment 
 creditor has exhausted his remedy at law ; for, if so, it would be 
 necessary to show a return of the execution unsatisfied, which, how- 
 ever, is not essential. Lewin on Trusts, 513. But the execution must 
 be sued out ; for, if the estate sought to be subjected is a legal es- 
 tate, and subject to be taken in execution, the ground of the juris- 
 diction in equity is merely to aid the legal right by removing ob- 
 stacles in the way of its enforcement at law. Jones v. Green, 1 Wall. 
 330, 17 L. Ed. 553. And if the estate is equitable merely, and there- 
 fore not subject to be levied on by an execution at law, the judg- 
 ment creditor is bound, nevertheless, to put himself in the same posi- 
 tion as if the estate were legal, because the action of the court con- 
 verts the estate, so as to make it subject to an execution, as if it 
 were legal. The ground of the jurisdiction, therefore, is not that of 
 a lien or charge arising by virtue of the judgment itself, but of an 
 equity to enforce satisfaction of the judgment by means of an equi- 
 table execution. And this it effects by a sale of the debtor's interest 
 subject to prior incumbrances, or according to circumstances, of the 
 whole estate, for distribution of the proceeds of sale among all the 
 incumbrancers, according to the order in which they may be entitled 
 to participate. Sharpe v. Earl of Scarborough, 4 Yes. 538. 
 
 It is to be noted, therefore, that the proceeding is one instituted 
 by the judgment creditor for his own interest alone, unless he elects 
 to file the bill also for others in a like situation, with whom he chooses 
 to make common cause ; and as no specific lien arises by virtue of 
 the judgment and execution alone, the right to obtain satisfaction out
 
 'M8 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Cll. 3 
 
 of the specific property sought to be subjected to sale for that pur- 
 pose dates from the filing of the bill. "The creditor," says Chancel- 
 lor Walworth, in Edmeston v. Lydte, 1 Paige I \. Y.) 637-640, 19 Am. 
 Dec. 454, "whose legal diligence has pursued the property into this 
 court, is (-'milled to a preference as the reward of his vigilance;" and 
 it would "seem unjust that the creditor who has sustained all the risk 
 and expense of bringing his suit to a successful termination should 
 in the end be obliged to divide the avails thereof with those who have 
 slept upon their rights, or who have intentionally kept back that they 
 might profit by his exertions when there could no longer be any risk 
 in becoming parties to the suit.*' As his lien begins with the filing 
 of the bill, it is subject to all existing incumbrances, but is superior 
 to all of subsequent date. As was said by this court in Day v. Wash- 
 burn, 24 How. 352, 16 L. Ed. 712: "It is only when he has obtained 
 a judgment and execution in seeking to subject the property of his 
 debtor in the hands of third persons, or to reach property not ac- 
 cessible to an execution, that a legal preference is acquired which a 
 court of chancery will enforce." This is in strict accordance with 
 the analogy of the law, as it was recognized that the judgment cred- 
 itor who first extends the land by elegit is thereby entitled to be first 
 satisfied out of it. It is the execution first begun to be executed, un- 
 less otherwise regulated by statute, which is entitled to priority. 
 Rockhill v. llanna. 15 How. 189, 195, 14 L, Ed. 656; Payne v. Drewe, 
 4 East, 523. The filing of the bill, in cases of equitable execution, 
 is the beginning of executing it. 
 
 The passage cited from the opinion in Day v. Washburn, supra, 
 speaks of the preference thus acquired by the execution creditor as 
 a legal preference. It was distinctly held so to be by Chancellor Kent 
 in McDermutt v. Strong, 4 Johns. Ch. (N. Y.) 687. He there said: 
 "But this case stands on stronger ground than if it rested merely on 
 the general jurisdiction of this court, upon residuary trust interests 
 in chattels, for the plaintiffs come in the character of execution cred- 
 itors, and have thereby acquired, by means of their executions at 
 law, what this court regards as a legal preference, or lien on the 
 property so placed in trust;" and "admitting that the plaintiffs had 
 acquired, by their executions at law, a legal preference to the assist- 
 ance of this court, (and none but execution creditors at law are en- 
 titled to that assistance,) that preference ought not, in justice, to 
 be taken away. Though it be the favorite policy of this court to dis- 
 tribute assets equally among creditors, pari passu, yet, whenever a 
 judicial preference has been established by the superior legal dili- 
 gence of any creditor, that preference is always preserved in the 
 distribution of assets by this court." The decision in that case was 
 made, giving the priority to the execution creditors who filed the bill, 
 when, otherwise, by virtue of an assignment by the debtor who was 
 insolvent, the proceeds of the equitable interest sought to be sub- 
 jected would have been distributed ratably among all creditors.
 
 Sec. 7) BY ACT OF CREDITORS. 319 
 
 This case, often cited and never questioned, shows that the doctrine 
 of equitable assets, to which we are referred by the appellant as the 
 ground of his claim, has no application to the case. Ordinarily and 
 strictly, the term "equitable assets" applies only to property and funds 
 belonging to the estate of a decedent, which by law are not subject 
 to the payment of debts, in the course of administration by the per- 
 sonal representatives, but which the testator has voluntarily charged 
 with the payment of debts generally, or which, being non-existent 
 at law, have been created in equity, under circumstances which fasten 
 upon them such a trust. Adams on Equity, 254. But, as was said 
 by Chancellor Kent in Williams v. Brown, 4 Johns. Ch. (N. Y.) 682, 
 the doctrine "does not apply to the case of a debtor in full life, for 
 there is no equitable trust created and attached to the distribution 
 of the effects in the latter case." Property held by a trustee for the 
 testator is legal assets, for, although the benefit of the trust, if re- 
 sisted, cannot be enforced without equitable aid, yet the analogy of 
 the law will regulate the application of the fund. To constitute equi- 
 table assets, the trust imposed by the party, or by the court, must be 
 for the benefit of creditors generally. 
 
 It is true that in Moses v. Murgatroyd, 1 Johns. Ch. (N. Y.) 119, 
 7 Am. Dec. 478, Chancellor Kent held surplus money arising from the 
 sale of mortgaged premises to be equitable assets, but that was in a 
 case where the mortgagor was deceased and the fund was in a court 
 of equity for distribution, and when the judgment to which priority 
 was refused was confessed by the administrator. 
 
 In Purdy v. Doyle, 1 Paige (N. Y.) 558, the rule was stated by 
 Chancellor Walworth, in these words : "If it is such property as the 
 judgment creditors could obtain a specific or general lien on at law. 
 they are entitled to the fruits of their superior vigilance, so far as 
 they have succeeded in getting such lien. But if the property was 
 in such a situation that it could not be reached by a judgment at law, 
 and the fund is raised by a decree of this court, and the creditors are 
 obliged to come here to avail themselves of it, they will be paid on the 
 footing of equity only." 
 
 But a specific lien, whether legal or equitable, on property liable 
 as equitable assets, was always respected by courts of equity. Free- 
 moult v. Dedire, 1 P. Wms. 429; Finch v. Earl of Winchelsea, Id. 
 277; Ram on Assets, 318. And Lord Chancellor Parker, in Wilson 
 v. Fielding, 2 Yern. 763, 10 Mod. 426, drew the distinction between 
 property which is assets in a court of equity only and certain prop- 
 erty which a creditor cannot come at without the aid of a court of 
 equity. In that case the mortgage debt had been paid out of the 
 personal estate by the executor, thus exonerating the mortgaged prem- 
 ises which had descended to the heir. The unsatisfied creditors filed 
 a bill to require the heir at law to refund, which was "a matter purely 
 in equity and a raising of assets where there were none at law." 
 
 And see Atlas Bank v. Nahant Bank, 3 Mete. (Mass.) 5S1 ; Cod-
 
 320 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 wise v. Gelston, 10 [ohns. (N. Y.i 507, 522; Tennant v. Stoney, 1 
 Rich. Eq. 222. 44 Am. Dec. 213; 1 Story, Eq. Jur. § 553; 2 White & 
 T. Lead. Cas. Eq. pt. 1, p. 390". 
 
 We have already seen that the filing of a bill by an execution 
 creditor to subject the equity of the debtor in his life-time, created 
 a lien and gave him a legal preference. And in the English chancery. 
 although equities of redemption after the death of die mortgagor are 
 classed as equitable assets, the rule of distribution, pari passu, is 
 modified in it- application to them in respect to judgment creditors 
 by permitting them to retain their priority over other claims, be- 
 cause, if >nch priority were not allowed, the judgment creditor might 
 acquire it by redeeming the mortgage. Adams, Eq. 256. Legal as- 
 sets, according to the definition of Mr. Justice Story, (Eq. Jur. § 
 551,) "are such as come into the hands and power of an executor or 
 administrator, or such as he is intrusted with by law virtute officii to 
 dispose of in the course of his administration. In other words, what- 
 ever an executor or administrator takes qua executor or administrator, 
 or in respect to his office, is to be considered legal assets." And this 
 is the modern doctrine in England. In Lovegrove v. Cooper, 2 Smale 
 & G. 271, it was held, for that reason, that the proceeds of real es- 
 tate directed to be sold for the payment of debts, and paid by the pur- 
 chaser into court, were legal and not equitable assets. 
 
 It follows from this, 'that in this country generally, where the real 
 estate of a decedent is chargeable with the payment of debts, and, 
 in case of a deficiency of personal property for that purpose, may be 
 subjected to sale and distribution as assets by the personal representa- 
 tive in the ordinary course of administration, the distinction between 
 legal and equitable assets has ceased to be important. In every such 
 case the equity of redemption could only be applied after sale by 
 the executor or administrator in the ordinary course of administra- 
 tion, subject to whatever liens may have been imposed upon it in the 
 life-time of the mortgagor, and among them, as we have seen, is 
 that of an execution creditor who has filed his bill to subject it to the 
 payment of his judgment. So, in other cases where the rule of 
 equality in distribution, as to equitable assets, applies, as in cases of 
 assignments by the debtor himself for the payment of debts generally, 
 and in cases of bankruptcy and insolvency, except as otherwise ex- 
 pressly provided by statute, the estate passes, subject to existing liens, 
 including that of an execution creditor who had previously filed a 
 bill to subject the equitable interest of the debtor, and his priority is 
 respected and preserved. The lien is given by the court in the ex- 
 ercise of its jurisdiction to entertain the bill and to grant the relief 
 prayed for; and to distribute the proceeds of the sale for the benefit 
 of others, equally with the execution creditor first filing the bill, would 
 be to contradict the very principle of the jurisdiction itself, and de- 
 feat the very remedy it promised; for the fruits of litigation, accord- 
 ing to the rule of equality, would have to be divided, not only with
 
 Sec. 7) BY ACT OF CREDITORS. 3JI 
 
 other judgment and execution creditors, but, as well, with all cred- 
 itors, whether their claims had been reduced to judgment or not. 
 For these reasons the decree appealed from is affirmed. '. 
 
 STATUTE 29 CAR. IT (1676) c. 3, § 10. 
 
 Sec. 10. And be it further enacted by the authority aforesaid, that 
 from and after the said four and twentieth day of June it shall and 
 may be lawful for every sheriff or other officer to whom any writ 
 or precept is or shall be directed, at the suit of any person or persons, 
 of, for and upon any judgment, statute or recognizance hereafter to 
 be made or had, to do, make and deliver execution unto the party in 
 that behalf suing, of all such lands, tenements, rectories, tithes, rents 
 and hereditaments, as any other person or persons be in any manner 
 or wise seized or possessed, or hereafter shall be seized or possessed, 
 in trust for him against whom execution is so sued, like as the sheriff 
 or other officer might or ought to have done, if the said party against 
 whom execution hereafter shall be so sued, had been seized of such 
 lands, tenements, rectories, tithes, rents or other hereditaments of such 
 estate as they be seized of in trust for him at the time of the said 
 execution sued; (2) which lands, tenements, rectories, tithes, rents 
 and other hereditaments, by force and virtue of such execution, shall 
 accordingly be held and enjoyed freed and discharged from all in- 
 cumbrances of such person or persons as shall be so seized or pos- 
 sessed in trust for the person against whom such execution shall be 
 sued; (3) and if any cestui que trust hereafter shall die, leaving a 
 trust in fee simple to descend to his heir, there and in every such 
 case such trust shall be deemed and taken, and is hereby declared to 
 be, assets by descent, and the heir shall be liable to and chargeable 
 with the obligation of his ancestors for and by reason of such assets, 
 as fully and amply as he might or- ought to have been, if the estate 
 in law had descended to him in possession in like manner as the 
 trust descended ; any law, custom, or usage to the contrary in any 
 wise notwithstanding. 
 
 LEDBETTER v. ANDERSON and Others. 
 
 (Supreme Court of North Carolina, 1SG8. G2 N. C. 323.) 
 
 Bill filed to Fall Term, 1862, of the Court of Equity for 
 Rutherford, and at Fall Term, 1866. set for hearing upon the plead- 
 ings and proofs, and transmitted to this court. 
 
 The complainant alleged that he had purchased at execution sale 
 
 «5 See Newell v. Morgan, 2 Harr. (Del.) 225 (1S37). 
 Ken.Tb.— 21
 
 322 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Cll. 3 
 
 the interest of the defendant Anderson in a certain tract of land, and 
 had received a sheriff's deed therefor; that Anderson's interest was 
 by virtue of a bond for title from the defendant Frazer ; that he 
 had offered to pay Frazer the balance due to him upon such bond, 
 and now brings the same into court for the same purpose; that Frazer 
 and Anderson had conspired to defraud him, etc. 
 
 The prayer was that Frazer be compelled to take the money and 
 make a title, or that the land be sold for the plaintiff's indemnity, and 
 f( ir other relief. 
 
 The answers admitted that Anderson's title was under a bond from 
 Frazer, and that a large portion of the purchase money was still due. 
 After other statements which are immaterial here, they denied! the 
 charge of conspiracy, and submitted to the court whether the bill 
 disclosed any equity. 
 
 Readk, J.' From the bill, as well as from the answers, it appears 
 that the defendant Anderson had only a bond for title to the land 
 levied upon by the sheriff under whose sale the plaintiff purchased, 
 and that Anderson had paid only a part of the purchase money. 
 
 It is well settled that a purchaser of land holding only a bond for 
 title, without having paid the whole of the purchase money, has no 
 such interest in the land as is subject to execution. The plaintiff 
 therefore obtained no title by his purchase. 
 
 The case is not altered by his offering to pay the balance due, nor 
 by his bringing the money into Court. Having acquired no interest 
 in the land, his offering to pay for it is no more than if he were 
 to offer a certain price for any other tract of land and then file a 
 bill to obtain a title. 
 
 The bill must be dismissed, with costs. 58 
 
 Per Curiam. Decree accordingly. 
 
 5 fi Section 10 of the statute of frauds applies only where the cestui que 
 trust, the judgment debtor, has the entire equitable interest. Forth v. Puke 
 of Norfolk, 4 Mad. 503 (1820); Doe v. Greeuhill, 4 B. & Al. 684 (1821); 
 Harris v. Booker, 4 Bing. 96 (1S27); Pettit v. Johuson, 15 Ark. 55 (1854); 
 
 Utica Ins. Co., 18 Wend. (N. Y.) 236 (1837); Ontario Bank v. Root, 3 Paige 
 i\ V i 17s (1s:;l>); Kolhr- v. Wood. I Paige (N. Y.) 5TS. 610 (1S:J4) ; Brew- 
 ster v. Power, in Paige (N. Y.) 562 (1844); Brown v. Graves, 11 N. C. 342 
 (1826); Mordeeai v. Parker, 11 N. C. 425 (1832); Battle v. Petway, 27 N. C. 
 r,7<; II Am. !"•'•. 59 (1845); Thompson v. Ford, 29 N. C. 418 (1847); Tally v. 
 Beed 72 X. ('. 336 (1875); White v. Kavanagh, 8 Rich. Law (S. C.) 377 
 (1855); Bristow v. HcCall, 16 S. C. 545 (1881); Smitheal v. Gray, 1 Humph. 
 (Term.) 491, 34 Am. Dee. 604 (1840); Coutts v. Walker, 2 Leigh (Va.) 268 
 (1830). , _ 
 
 "Three years subsequently to this decision [1'rat v. Colt, Freeman s Cas. 
 in Ch. L39], the Statute of Frauds. 29 Charles II, e. 3, was enacted, the 10th 
 section of which made trust estates in fee simple assets for the payment of 
 debts, and subject to an elegit upon judgment against the cestui que trust. 
 But this stiituie did not extend to chattels real, to trusts under whieh the 
 debtor had not the whole interest, to equities of redemption, or to any equi-
 
 Sec. 7) BY ACT OF CREDITORS. 323 
 
 The Case of the Creditors of Sir CHARLES COX.f 
 
 (In Chancery, before Sir Joseph Jekyll, Master of the Rolls, 1734. 3 Peere 
 
 Williams, 341.) 
 
 Another part of this case was reserved for the further considera- 
 tion of the court, and was as follows : 
 
 Sir Charles Cox possessed of a term for years made a mortgage 
 thereof, and died possessed of the equity of redemption of the saidl 
 mortgage, and leaving greater debts due from him at his death than 
 his estate would extend to pay. Whereupon the question was, 
 whether this mere equity of redemption was only equitable assets, and 
 distributable equally pro rata, among all the creditors, without re- 
 gard to the degree or quality of their debts ; or whether it should be 
 applied in a course of administration ; in which last case the bond 
 creditors would swallow up all the assets, without leaving anything 
 for the simple contract creditors. 57 
 
 And His Honour, after time taken to consider of it, delivered his 
 opinion with solemnity ; that this equity of redemption was equitable 
 assets only, the mortgage being forfeited at law, and the whole es- 
 tate thereby vested in the mortgagee ; and it being now become pre- 
 carious and doubtful, whether it would prove worth redeeming; also, 
 for that the quantum of the money due on the mortgage was un- 
 certain, forasmuch as, when the executors of the mortgagor should 
 
 table interest which had been parted with before execution sued out." Mr. 
 Justice Matthews in Freedman's Savings & Trust Co. v. Earle. 110 U. S. 
 710, 714, 4 Sup. Ct. 226, 28 L. Ed. 301 (1S84). 
 
 In Scott v. Scholey and Another, 8 East, 4G7 (1S07), plaintiff sued defendant, 
 as sheriff of Middlesex, for a false return of nulla bona to a writ of fieri 
 facias. The question was whether an equitable interest in a term of years 
 could be sold under a fieri facias. The Court of King's Bench held that it 
 could not. 
 
 Lord Ellenborough, C. J., said: "But the very silence of that statute 
 [statute of frauds], which, while it expressly introduces a new provision in 
 respect to lands and tenements held in trust for the person against whom 
 an execution is sued, says nothing as to trusts of chattel interests, affords 
 a strong argument that those interests were meant to continue in the same 
 situation and plight, in respect of executions, in which both freehold and 
 leasehold trust interests equally stood prior to the passage of that statul '. 
 In the absence, therefore, of any authority in favor of the sale of such an 
 equitable interest under a common law execution against goods, we are of 
 opinion, upon the grounds already stated, that the sheriff's return of nulla 
 bona in this case, where the defendant in the execution had no other property 
 besides the trust property in question, was not a false return; and of course 
 the verdict which has been obtained by the plaintiff against the sheriff in 
 this case, must be set aside, and a new trial granted." 
 
 "Neither the statute of uses, nor the 10th section of the statute of frauds, 
 embrace personal property." Dunkin. Ch., in Bice v. Burnett, Speer, Eq. 
 (S. C.) 579, 42 Am. Dec. 33G, 5S8 (1S44). 
 
 t The title of the cause was Spencer v. Cox, Reg. Lib. B. 1734, fol. 113, 
 and was probably the same cause as Spencer v. Biffen, cited in 2 Atk. 291. as 
 it appears by the register's book, that Biffen was the maiden name of Sir 
 Charles' second wife. 
 
 57 a part of the opinion is omitted-
 
 32 I TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 be admitted to redeem, they must pay costs, which in equity are con- 
 siderable; so that it cannot now be known what the surplus money 
 on the redemption would amount to upon the account taken. Where- 
 fore this right of redemption being barely an equitable interest, it 
 was reasonable to construe it equitable assets, and consequently dis- 
 tributable amongst all the creditors pro rata, without having respect 
 to the decree or quality of their debts; all debts being in a con- 
 scientious regard equal, and equality the highest equity; accordingly 
 it was so decreed. But, 
 
 Secondly. The court declared, that where a bond is due to A, 
 but taken in the name of B in trust for A. and A dies; this must 
 he paid | Wilson v. Fielding, 2 Yern. 763] in a course of administra- 
 tion; for in such case there can hardly he any dispute touching the 
 quantum of the debt, seeing the principal, interest and also the costs, 
 must he paid to the obligee in the bond ; whereas in the other case, 
 the costs must he paid by the party coming to redeem. For the same 
 reason, if a term for years be taken in the name of B. in trust for A, 
 this, on the death of A, the cestui que trust, will be legal assets; 
 for here the right to the thing is plain; and if the trustee contests it, 
 he must, prima facie, do it on the peril of paying costs. 53 * * * 
 
 COOK v. GREGSON. 
 
 (In Chancery, before Vice Chancellor Kindersley, 1S5G. 3 Drewry, 547.) 
 
 In this cause, which was a suit instituted by a simple contract cred- 
 itor for the administration of the estate of E. McDonnell, the prin- 
 cipal question was, whether certain property of the testator, con- 
 sisting of the equity of redemption of an equitable interest in a sum 
 ( charged upon real estate) which the testator had mortgaged, was 
 equitable assets, and therefore distrihutable ratably among the cred- 
 itors of different degrees ; or whether it was legal assets, in which 
 
 nsThis decision was followed by Lord Ilardwicke in Hartwell v. Chitters, 
 Ambler, 308 (175G), and approved by Bayley, J., in Clay v. Willis, 1 B. & C, 
 364, :;t^ (1823). 
 
 In Sharpe v. Earl of Scarborough, 4 Ves. Jr. 538 (1799), the Solicitor 
 General, Sir John Mitford (afterwards Lord Redesdale), is reported to have 
 said in argument: "The Case of Sir Charles Cox's Creditors and Hartwell 
 v. Chitters, have been considered as overruled. According to them every 
 decree in the common administration of assets in this court is wrong. If 
 leasehold estates are subject to mortgages, there is no conception, that credi- 
 tors by specialty have not a right to come upon the produce of them, sub- 
 ject to the mortgages. The equity of redemption of a leasehold estate is 
 clearly assets at law; and I he executor is charged there with the difference 
 between the value of the estate and the sum he paid in the redemption of it 
 In the case of a mortgage of a freehold estate the equity of redemption is 
 assets at law; and it cannot be suggested that the specialty creditors are 
 not entitled to their remedy against those estates descended as legal assets; 
 though they cannot be got at but through the medium of a court of equity."
 
 SeC. 7) BY ACT OF CREDITORS. 325 
 
 case the specialty creditors would absorb it. The security had been 
 realized, the mortgage paid off, and there was a surplus, which was 
 in court. 
 
 The Vice Chancellor. Much difficulty has sometimes arisen in 
 determining the precise distinction between legal and equitable as- 
 sets. The general proposition is clear enough, that when assets may 
 be made available in a court of law, they are legal assets, and when 
 they can only be made available through a court of equity, they are 
 equitable assets. This proposition does not, however, refer to the 
 question whether the assets can be recovered by the executor in a 
 court of law or in a court of equity. The distinction refers to the 
 remedies of the creditor and not to the nature of the property. The 
 question is not whether the testator's interest was legal or equitable, 
 but whether a creditor of the testator, seeking to get paid out of such 
 assets, can obtain payment thereout from a court of law, or can only 
 obtain it through a court of equity. This, I apprehend, is the true 
 distinction. If a creditor brings an action at law against the executor, 
 and the executor pleads plene administravit, the truth of the plea must 
 be tried by ascertaining what assets the executor has received, and 
 whatever assets the court of law, in trying that question, would charge 
 the executor with, must be regarded as legal assets ; all others would 
 be equitable assets. 
 
 Supposing, however, this distinction to be well founded, there still 
 remains the question, what property come to the hands of the executor 
 would a court of law consider properly to be taken into account as 
 assets, in trying the truth of the plea plene administravit. I think the 
 general principle is that a court of law would treat as assets every 
 item of property come to the hands of the executor, which he had re- 
 covered, or had a right to recover, merely virtute officii, i. e., which 
 he would have had a right to recover if the testator had merely ap- 
 pointed him executor without saying anything about his property or 
 the application thereof. That I think is the test which, upon prin- 
 ciple, a court of law would apply. 
 
 Assuming that to be the true principle, suppose, first, that the tes- 
 tator was at his death entitled to a sum of money equitably charged on 
 land ; as the executor could recover this merely virtute officii, as ex- 
 ecutor, I apprehend that, when recovered by the executor, it would 
 be legal assets in his hands. 
 
 Next, let the same principle be applied to an equity of redemption. 
 When the time fixed for payment of the mortgage money has passed, 
 what is the right of the mortgagor? It is suggested that it is merely 
 a right to repurchase. That certainly is not the view taken of the law 
 in modern times ; the unvarying tendency of modern decisions is to 
 treat a mortgage merely as a security, and to treat the mortgagor as 
 being still the real owner. And I think that the view which Went- 
 worth takes in the passage referred to by the learned counsel for the
 
 .''26 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 plaintiff must be considered as much affected by the different light in 
 which the position of the mortgagor was regarded in former times. 
 An equity of redemption is not now considered as a matter of indul- 
 gence; it is now a matter of absolute right. And is it not merely by 
 virtue of bis office that the executor of a mortgagor who has mort- 
 gaged a chattel, comes to this court to redeem? I think it clearly is. 
 If there were nothing in the will but the appointment of executor, 
 would not the executor be entitled simply virtute officii to ask for re- 
 demption? Clearly he would. A mere administrator might demand 
 it. If so, I confess it appears to me that the general principle as I 
 have stated it, applies to an equity of redemption of a chattel interest, 
 whether real or personal; and that such an equity of redemption would 
 be legal assets. 
 
 Now whether those cases which have been cited with respect to 
 the equity of redemption of a mortgaged term of years are to be con- 
 sidered an exception, it is not absolutely necessary for me to deter- 
 mine. If I were called upon to do so, I should say that, in my opin- 
 ion, those cases are not sustainable, and ought not at this day to be 
 f( >11< iwed. 
 
 In this case, it is an equity of redemption of an equitable charge of 
 a sum of money on real estate, which the executor has clearly in my 
 opinion a right, in his mere character of executor, first to redeem, 
 and then to enforce payment of. It is said it is a sort of double- 
 distilled equity; first, there is a mere equity as a charge, and then 
 there is a mortgage of that, and the testator's interest consists of the 
 equity of redemption of that mortgaged equity. That does not. as it 
 appears to me, at all prevent the executor being entitled virtute of- 
 ficii to redeem and recover the sum charged ; and I am therefore of 
 opinion that the assets here recovered are legal. 
 
 The decree was accordingly. 
 
 CHRISTY v. COURTENAY. 
 
 (In Chancery, before Sir John Romilly, Master of the Rolls, 1858. 26 
 
 Beavan, 140.) 
 
 Part of the testator's estate consisted of chambers in the Temple, 
 held for lives. These were in 1836 mortgaged to Messrs. Milne for 
 £8,000. 
 
 By the decree, the chambers were ordered to be sold, free from the 
 mortgages, in case the mortgagees consented, and the surplus of the 
 produce, after paying the mortgagees, was ordered to be paid into 
 Court, and "that the question whether such proceeds of sale consti- 
 tute legal or equitable assets be reserved." 
 
 The cause now came on for further consideration.
 
 Sec. 7) BY ACT OF CREDITORS. 327 
 
 The Master of the Rolls 59 held * * * that the surplus 
 produce of the chambers formed part of the legal assets of the tes- 
 tator, and directed the plaintiff's costs to be paid out of the funds, 
 and the residue to be applied amongst the specialty creditors. 60 
 
 DUNDAS v. DUTENS. 
 
 (In Chancery, before Lord Chancellor Thurlow, 1790. Cited from Opinion of 
 
 Lord Chancellor Manners in Grosrnn v. Cooke, 2 Ball & Beatty, 
 
 280, 233 [1812].) 
 
 In the case of Dundas v. Dutens, 1 Ves. Jr. 196, 2 Cox, Eq. Cas. 
 235, the question was, whether stock that had been settled, could be 
 brought within the reach of creditors ; I have a note of that case, 
 which, on this point, is more full than the printed report of it, which 
 I will briefly state. Lord Thurlow says : "Is there any case where 
 stock standing in a trustee's name, can be made available to pay 
 debts, or that debts (and stock is a chose in action) shall be transfer- 
 red to creditors for that purpose? You cannot have an execution at 
 law against such effects. The opinion in Horn v. Horn [Ambler, 79], 
 is so anomalous and unfounded, that forty such opinions would not 
 satisfy me. It would be preposterous and absurd to set aside an 
 agreement, which, if set aside, leaves the stock in the name of a per- 
 son where you could not touch it." 61 
 
 59 A part of the opinion is omitted. 
 
 so See Shee v. French, 3 Drew. 716 (1S57) ; Mutlow v. Mntlow, 4 De G. 
 & J. 539 (1859). 
 
 It seems, in view of these later decisions, safe to say that all equitable in- 
 terests coming to a legal representative or heir as such are distributable in 
 the same manner as legal interests, on the principle that equity follows the 
 law. 
 
 Equitable assets, that is, assets distributable equally among all the cred- 
 itors of a deceased person, could be created only in the case of realty, when 
 the same was either devised in trust to be sold to pay the debts of the testa- 
 tor, or charged with payment of such debts. 
 
 For a long time it was held that, if the devise were to the executor or heir 
 of the testator, the assets would be legal, and not equitable. Dethicke v. Car- 
 avan, 1 Lev. 224 (1667); Girling v. Lee, 1 Vern. 63 (16S2) ; Hawker v. Buck- 
 land, 2 Vern. 106 (1689); Blatch v. Wilder, 1 Atk. 420 (1738); Plunket v. 
 Penson, 2 Atk. 290 (1742); Fremoult v. Dedire, 1 P. Wins. 429 (1718); Allam 
 v. Heber, 2 Stra. 1270 (174S) ; Cntterback v. Smith, Prec. Chy. 127 (1700); 
 Bickham v. Freeman, Prec. Chy. 136 (1700). 
 
 These cases have been overruled, and land devised to any one for the pay- 
 ment of debts must be applied equally anions]; all creditors. Silk v. Prime. 1 
 Bro. C. C, 138, note (1768); Newton v. Bennet, Bro. C. C. 135 (17S2); Bailey 
 v. Ekins, 7 Ves. Jr. 319 (1S02) ; Shiphard v. Lutwidge. S Ves. Jr. 26 (1802) ; 
 Helm v. Darby's Adm'r, 3 Dana (Ky.) 1S5 (1S35) ; Cloudas' Ex'x v. Adams. 
 4 Dana (Ky.) 603 (1S36) ; Speed's Ex'r v. Nelson's Ex'r, S B. Mon. (Ky.) 499 
 (1848) ; Benson and Others, Ex'rs, v. Le Roy and Others, 4 Johns. Ch. (N. 
 Y.) 651 (1820). 
 
 eiCaillaud v. Estwick. 2 Anst. 381, 3S4. 385 (1794); Nantes v. Corrock, 
 9 Ves. Jr. 182 (1803) ; Rider v. Kidder, 10 Ves. Jr. 360 (1S05) ; Plasket v.
 
 328 TRANSFER OF RESPECTIVE INTERESTS OF PARTIES. (Ch. 3 
 
 Lord Dillon, 1 Bogan, 324 (1825). Contra: McCarthy v. Goold, 1 B. & B. 
 ;:^7 1 1810). 
 
 Horn v. Horn, Ambler. 79 (1749) I Taylor v. .Tones. 2 Atk. 600 (1743); 
 Badden v. Spader, 20 Johns. (N. Y.i 554 (1822), s. c. 5 Johns. Ch. i.v Y.i 
 280 (1821); Storm v. Waddell, 2 Sands. Ch. (N. Y.) 494 (1845). See, however, 
 Donovan v. Finn. Hopk. Ch. 59 (1823). 
 
 In England a debtor's Interest in :i legal chose in action could he reach- 
 ed by his creditors neither at law nor in equity. Bank of England v. Lunn, 
 L5 Ves. Jr. 569 (1809); Guy v. Pearkes, 18 Ves. Jr. 196 (1811); Crogan v. 
 Cooke, 2 Ball & Beatty, 230 (1812); Cockrane v. Chambers, Ambler. 79, note 
 1 1) (1825); Sims v. Thomas, 12 A. & E. 536 (1840); Otley v. Lines, 7 Trice, 
 
 L'71 (1819). 
 
 The English rule was adopted in the following cases: Shaw v. Aveline, 5 
 ind. 380 (1854); Stewart v. English, 6 Iml. 176 (1855); Williams v. Reynolds, 
 7 Ind. 622 (1856); Buford v. Buford, 1 Bibb (Ky.) 305 (1808); Winebrinner 
 v. Weisiger, 3 J. B. Mon. (Ky.) 312 <lN2r>>; McFerran v. Jones, 2 Lit t. (Ky.) 
 219 (1822); Cosby v. Ross' Adm'r, 3 J. J. Marsh. (Ky.) 290, 20 Am. Dec. 140 
 (1830); Bardenburgh v. Blair, 30 N. J. Eq. (.47 (1879); Greene v. Keene, 14 
 R. I. 388, 51 Am. Rep. 400 (1884); Maxon v. Gray, 14 K. I. (ill (1885); Ewing 
 v. Cantrell, Meigs (Tenn.) 364 (1838); Erwin v. Oldham, 6 Y6rg. (Tenn.) 185, 
 27 Am. Dec. 458 (1834); White Sewing Mach. Co. v. Atkeson, 75 Tex. 330, 
 112 S. \V. S12 (lss'.M; Carter Bros. & Co. v. Bightower, 79 Tex. 135, 15 S. W. 
 223 (1890). 
 
 In the following cases a legal chose in action was reached by a bill for 
 an equitable execution: Watkins v. Dorsett, 1 Bland. (Md.) 530 (1828); Sar- 
 genl v. Salmond, 27 Me. 539 (1847); Drake v. Rice, 130 .Mass. 410 (1881); 
 Wrighl v. Petrie, Smedes & M. Ch. (Miss.) 282 (1843); Catchings v. Manlove, 
 39 Miss. 655 (1S61); Tappan v. Evans, 11 N. 11. 311 (1840); Abbott v. Ten- 
 ney, L8 N. B. 109 (1846); Chase v. Searles, 45 N. II. 511 (1864); Bayard v. 
 Hoffman, 4 Johns. Ch. (N. Y.) 450 (1820); Weed v. Pierce, 9 Cow. (N. Y.) 
 7121' (1827); Prosens v. Mclntyre, 5 Barb. (N. Y.) 424 (1849); McGill v. Bar- 
 man, 55 N. C. 179 (1855); Burton v. Farinholt, 86 N. C. 2G0 (1882). See, how- 
 ever, Doak v. Bank, 28 N. C. 309, 335-338 (1846).
 
 Ch. 4) EXTINGUISHMENT OF A TRUST. 329 
 
 CHAPTER IV. 
 
 EXTINGUISHMENT OF A TRUST. 
 
 SELBY v. ALSTON. 
 
 (Tn Chancery, before Sir Richard Pepper Arden, Master of the Rolls, 1797. 
 
 3 Yes. Jr. 339.) 
 
 James Selby having- contracted for the purchase of certain estates 
 in the counties of Middlesex and Hertford and the isle of Ely, and 
 having paid the purchase money, afierwards by his will gave and) de- 
 vised "all the rest of my real and personal estate whatsoever and 
 wheresoever to my said wife in trust, that she do thereout educate 
 and maintain my said son until he shall attain the age of twenty-one 
 years, and until he shall have sufficiently settled and secured to and 
 upon my said wife what is to be settled upon and given to her, as 
 aforesaid ; and afterwards in trust to convey and dispose of all the 
 then rest of my real and personal estate and the produce thereof to 
 my said son, his heirs, executors and assigns ; but in case my said 
 son shall die, without issue, before he shall attain his age of twenty- 
 one years, then in trust," etc. 
 
 The testator died before any conveyance was made of the estates 
 agreed to be purchased. After his death a conveyance by lease and 
 release was made to his widow ; who died before her son attained the 
 age of twenty-one. He afterwards attained the age; and died in 1772. 
 having been always in possession of these estates from the death of 
 his mother, and having devised them to charitable uses ; which devise 
 was void by the statute of mortmain [9 Geo. II, c. 36]. 
 
 The bill was filed by the heir at law ex parte paterna, claiming these 
 estates against the heir ex parte materna; who was in possession. The 
 defendant put in a general demurrer. 
 
 Solicitor General [Sir John Mitford] for the plaintiff. The ques- 
 tion is, as to the equity of the plaintiff. The ground of his coming 
 here is, that the legal title is with the defendant. The son being en- 
 titled in both capacities, as heir ex parte paterna, and ex parte materna, 
 that made it a question of election ; and it might not have been the 
 same to him to take in either character ; for his mother might have 
 died considerably indebted. If the equitable estate merges in the le- 
 gal, a cestui que trust happening to be heir of his trustee must be lia- 
 ble to all the judgments of the trustee. 
 
 The Master of the Rolls suggesting that this point had been before 
 Lord Thurlow, and Mr. Mansfield and Mr. Stratford, who supported 
 the demurrer, saying it had been determined by Lord Thurlow in fa- 
 vor of the heir ex parte materna upon this very will in Hone v. Med-
 
 330 EXTINGUISHMENT OF A TRUST. (Ch. 4 
 
 craft and Franklin v. Alston, 23d April, 1779, it was ordered to stand 
 over, that it might be inquired into; the Master of the Rolls saying, 
 if that was so, it would not be proper for him, sitting for the Lord 
 Chancellor, to give any opinion upon it. 
 
 March 22d. Master OF the Rolls. Upon looking into this case, I 
 have no objection to give my opinion; as, if it was decided by Lord 
 Thurlow, my opinion is the same as his. 
 
 The ground of this bill is, that the plaintiff, claiming as heir ex 
 parte paterna of the late Mr. Selby, has an equity to call for a con- 
 veyance. The case and the premises, or at least some of them, are 
 exactly the same as in Goodright v. Wells, Doug. 771. When this 
 was mentioned, it occurred to me, that the question had been already 
 decided by Lord Thurlow in some other cause. After a verdict at 
 law, and a judgment determining, that at law it descended to the heir 
 ex parte materna, with a very strong opinion of three of the judges, 
 that equitably the heir ex parte paterna could have no claim, though 
 one judge gave an opinion to the contrary, it does appear that the 
 point, whether argued or not, came on before Lord Thurlow. The 
 Register's book contains farther directions in two causes. Both bills 
 were restrained twelve months ; and it was ordered that Wells and 
 the Franklyns, claiming as heirs upon the part of his father's mother, 
 should bring an ejectment; that Sir Rowland Alston, claiming on the 
 part of the mother, should also bring an ejectment; that there should 
 be a trial at bar ; and that Sir Rowland Alston might also attend at 
 the trial of the ejectment brought by the Wells's. The ejectment 
 was under the direction of this court ; that is certain. Upon farther 
 directions his Lordship declared, that the devise in the will of the sev- 
 eral freehold and leasehold estates thereby given to the charity was 
 void ; and it was ordered, that the title deeds of the estates in St. 
 Clements's church yard and at Hertingfordbury should be delivered to 
 Sir Rowland Alston, who recovered in the ejectment; and that the 
 receiver should be discharged. 
 
 If any equity remained between these heirs, this decree could not 
 have been made. The equitable point was raised in the court of law ; 
 and the judges gave their opinions upon it; and Lord Thurlow de- 
 livered up possession to the person claiming as heir ex parte materna. 
 
 Then the next question is, whether upon the case made by the 
 plaintiff he is entitled to an equity. The question at law was clear; 
 there could be no question about that; but the judges intimated their 
 opinion upon the equitable point. The argument of Mr. Justice Wil- 
 son was more equitable than legal. We have an intimation of the 
 opinion of Lord Mansfield and a strong opinion of Judges Ashurst 
 and Buller against the equity. Mr. Justice Willes's opinion was in 
 favor of the equity. The question now is, whether upon the case 
 now coming before a court of equity the opinion of the three judges 
 is such as this court will follow. I do not say, the case is free from 
 all difficulty; and there may be good reason to contend, that the sit-
 
 Ch. 4) EXTINGUISHMENT OF A THUST. 
 
 331 
 
 uation of the trustee shall not affect in any degree the estate coming 
 from him to the cestui que trust; but I must not lay that down too 
 broadly; for that is not the fact. In Philips v. Brydges [3 Vesey, Jr. 
 126] I stated as a universal proposition that wherever the legal and 
 equitable estates uniting in the same person are co-extensive and 
 commensurate, the latter is absorbed in the former. I stated, and 
 think I was warranted in so doing, that no act of the trustee can in 
 any degree vary the right of the cestui que trust; but I did not state, 
 nor upon full consideration am I prepared to say, that it was ever 
 held, that the situation of the trustee, and the operation of law arising 
 from that situation, and the relation to the cestui que trust, does not 
 make considerable difference in the estates to be taken ; as for in- 
 stance: Supposing the trustee was an ancestor of the cestui que trust, 
 and dies ; and then the cestui que trust dies : Is there any doubt that 
 his widow would be dowable ; though if the cestui que trust died first, 
 she unquestionably would not. It has been argued, that the trustee 
 is a mere instrument, and his situation or act can have no effect at all 
 upon the estate. I have put a case, where the fact being that the 
 legal estate descends upon the cestui que trust and is united with the 
 trust estate, he becomes solely seized at law; and both his widow and 
 heir are entitled. Therefore the situation of the trustee (I do not 
 say, his act) may make a considerable difference. If the widow of 
 Mr. Selby had conveyed to the son, it is clear he would have taken 
 an estate descendible to his heirs ex parte paterna. Suppose she had 
 made a feoffment to the use of herself for life, remainder to her son ; 
 she wouldi have had no intention of giving the estate in any new line 
 (it is to be supposed, she would rather it should continue in the line 
 that would carry it to her own heirs) ; but that act, though not done 
 with that view, would have such an effect. So, where an heir takes 
 by devise instead of by descent, the consequences are different ; but 
 that was never insisted on as a ground of equity. If an heir ex parte 
 materna takes by devise, that would let in his heirs ex parte paterna, 
 and if they fail, his heirs ex parte materna also; if he takes by de- 
 scent, he would only take an estate descendible to his heirs ex parte 
 materna ; and! yet, if he can take by descent, the law makes him take 
 so. The case of an escheat does seem a hardship upon the line of 
 heirs that would have succeeded, if Mr. Selby had taken from his 
 father. That is the only argument that pressed upon my mind. 
 Where the person himself has an equal, coextensive, estate at law and 
 in equity, the legal shall prevail notwithstanding the case I put of the 
 escheat. I have not found that courts of equity have ever, upon that 
 circumstance, held that he is not to be considered as having a coex- 
 tensive estate in law and equity. 
 
 The case relied upon in Philips v. Brydges was Wade v. Paget, 1 
 Bro. C. C. 363. There Lord Thurlow lays down a universal proposi- 
 tion, to which I am inclined to accede; that where the estates unite, 
 the equitable must merge in the legal. That was the principle of the
 
 332 EXTINGUISHMENT OF A TRUST. (Ch. 4 
 
 opinion of the judges in Goodright v. Wells; and upon consideration 
 I am inclined not to lay any restriction upon or to narrow it in any 
 respect, but to hold, that by whatever means, whether by conveyance 
 or otherwise, a person obtains the absolute ownership at law of the 
 estate, though he acquired that by an equitable title, and both either 
 come together or are afterwards united in him, the legal will prevail, 
 the equitable is totally gone for the purpose of being acted upon by 
 any person in this court. Therefore, that being laid down universally, 
 this demurrer must be allowed against the plaintiff claiming as heir ex 
 parte paterna. 
 
 MATTHEWS, Administrator, v. THOMPSON and Others. 
 THOMPSON and Others v. SAME. 
 
 (Supreme Judicial Court of Massachusetts, 1904. 186 Mass. 14, 71 N. E. 93, 
 GG L. It. A. 421, 104 Aiu. St. Rep. 550.) 
 
 Two bills in equity filed respectively November 19, 1900, and Au- 
 gust 6, 1900, one by Nathan Matthews, Jr., administrator with the 
 will annexed of the insolvent estate of Edward Thompson, seeking to 
 set aside, as fraudulent and void as against the creditors of that es- 
 tate, a conveyance of certain land on Huntington Avenue, made by 
 Edward Thompson through a third person to the defendant V. Mabel 
 Thompson, or, in the alternative, to have the defendant V. Mabel 
 Thompson declared a trustee for the benefit of the plaintiff as ad- 
 ministrator; the other by Henry Thompson, Elizabeth B. Thompson 
 and Frances M. Thompson, the brother and sisters of Edward Thomp- 
 son, seeking to establish a trust in the land for their benefit. 
 
 The cases were heard together by Barker, J., who reports them for 
 determination by the full court, such decrees to be entered as justice 
 and equity might require. 
 
 Knowlton, C. J. 1 Edward Thompson, the testator of the plaintiff 
 in the first suit, became indebted from time to time in a considerable 
 sum to his unmarried sisters, Elizabeth B. Thompson and Frances M. 
 Thompson, who were old ladies unfamiliar with business. Of his own 
 motion, he made to them, as security, a mortgage of the real estate 
 in question, subject to other mortgages, which together amounted to 
 about $37,000, and afterwards he caused them to foreclose this mort- 
 gage. A conveyance of the property, subject to the prior mortgages, 
 was made to his son, who held it as agent of these sisters of the tes- 
 tator. Subsequently the testator caused his son to convey the prop- 
 erty to the testator's nephew, one Eldridge, who executed a declara- 
 tion of trust for the benefit of the old ladies, to secure them for their 
 previous mortgage debts, and also for the benefit of their brother, 
 Henry Thompson, to secure him for any advancements that he might 
 make to Edward Thompson, and any other claims that he might hold 
 
 i Part of the opiuion is omitted.
 
 Ch. 4) EXTINGUISHMENT OF A TRUST. 333 
 
 against Edward. The declaration of trust also provided that after the 
 payment of these debts the trustee should pay the balance, if any, to 
 Edward Thompson. This declaration was not acknowledged nor re- 
 corded. It was understood that Edward Thompson was to have the 
 entire management of the property, and these arrangements for se- 
 curity were made at his suggestion. At the end of about a year and 
 a half, at his request, a paper was signed by the beneficiaries and sent 
 to Eldridge, as follows: 
 -Mr. William T. Eldridge, "September 16th, 1896. 
 
 "Dear Sir: We hereby request and authorize you to convey to 
 Edward Thompson the real estate in Boston conveyed to you by Fred- 
 erick P. Thompson. Henry Thompson. 
 
 "Elizabeth B. Thompson. 
 "Frances Mary Thompson." 
 
 The testator enclosed this paper to Eldridge and asked him for a 
 conveyance of the real estate. Thereupon, on October 6, 1896, El- 
 dridge conveyed the land to Edward Thompson by a deed which was 
 duly recorded, and which contained no reference to a trust. The deed 
 was in the form of an ordinary quitclaim purporting to be for a con- 
 sideration of $1 paid by Edward Thompson, not describing him as 
 trustee, and it contained a warranty that the premises were free from 
 all incumbrances made or suffered by Eldridge, and a warranty against 
 the lawful claims and demands of all persons claiming by, through 
 or under him. This deed was delivered by Eldridge to Edward 
 Thompson and was duly recorded. After this conveyance Edward 
 Thompson held the land as if it were his own, mortgaged it several 
 times for his own debts, had repeated negotiations for the sale of it, 
 and treated it in all respects as if he were the absolute owner of it. 
 The first question in the cases is whether he held it charged! with a 
 trust in favor of his brother and sisters, so that it still remains sub- 
 ject to this trust in the hands of his widow, to whom it was afterwards 
 conveyed in his lifetime. 
 
 In reference to the transfer from Eldridge to the intestate, the pre- 
 siding justice found "as a fact that the intention of all parties inter- 
 ested, including that of the retiring trustee, Mr. Eldridge, was not 
 that Mr. Edward Thompson should hold as trustee." He found, "that 
 the intention of his brother and! sisters and of the retiring trustee 
 was that the title should go back to him, Edward Thompson, and that 
 the brother and sisters relied upon his saying what he would do in 
 regard to their debts, not because he was a trustee, but because he was 
 their brother and they were willing to trust him." 
 
 As all the parties were of full age, and as the trust was created by 
 an arrangement to which the trustee and the cestuis que trust were 
 the only parties, there is no doubt that they could terminate it at any 
 time. Smith v. Harrington, 4 Allen (Mass.) 566; South Scituate Sav- 
 ings Bank v. Ross, 11 Allen (Mass.) 442; Sears v. Choate, 146 Mass. 
 395, 15 N. E. 786, 4 Am. St. Rep. 320; Brown v. Cowell, 116 Mass.
 
 "..i-t EXTINGUISHMENT OF A TRD8T. (Ch. 4 
 
 461. Upon the findings of the judge, it is plain that they undertook 
 to terminate it andi supposed that they had terminated it. The plain- 
 tiffs in the second suit, the former cestuis que trust, rely upon the 
 Pub. St. c. 120, § 3 (Rev. Laws, c. 127, § 3), which provides that 
 "No estate or interest in land shall be assigned, -ranted, or surren- 
 dered unless by such writing [an instrument in writing signed by the 
 grantor or by his attorney] or by operation of law." The kind of in- 
 strument in writing required under this section depends upon the 
 nature of the interest to be assigned or surrendered. In the present 
 case, not only the legal estate, but by the record title an absolute es- 
 tate in fee, including equitable interests, as well as legal, was in El- 
 dridige. This title was affected only by an unacknowledged and un- 
 recorded paper. By his deed to Edward Thompson, Eldridge as- 
 signed and conveyed, according to the record, a perfect title subject 
 to prior mortgages. This deed was an instrument in writing. The 
 only additional instrument required by the statute was a writing which 
 would! relieve the grantor from the consequences of what would have 
 been a breach of trust if he had acted without authority from the 
 cestuis que trust. Nothing more was needed to pass a title which was 
 free from equities. As applied to conditions like the present, we are 
 of opinion that the assignment of the equitable rights of the plaintiffs 
 in the second suit, made by a deed of one who held of record a per- 
 fect title and who acted under their authority given in writing was a 
 compliance with the statute. If we consider it as a surrender of equi- 
 table rights, we are of opinion that the paper which they signed was 
 all the instrument required by the statute, it being given as an au- 
 thority to be acted) upon, and which was in fact acted upon, by the 
 trustee who held of record an absolute title. The principle is anal- 
 ogous to that which has been applied to the surrender and cancella- 
 tion of an unrecorded deed of defeasance, given in connection with an 
 absolute deed to constitute a mortgage. When this is done in good 
 faith, and is subsequently acted upon by the person to whom the sur- 
 render is made, the original holder is estopped from setting up the 
 surrendered instrument against the existing title. Trull v. Skinner, 
 17 Pick. ( Mass.) 213; Falis v. Conway Ins. Co., 7 Allen (Mass.) 46, 
 49. See, also, as to parol waiver by cestuis que trust, under the 
 statute of frauds, Kline's Appeal, 39 Pa. 493 ; Miller v. Pierce, 104 
 N. C. 389, 10 S. E. 554; Gorrell v. Alspaugh, 120 N. C. 362, 368, 27 
 S. E. 85. The action of the parties, taken in good faith, makes it 
 impossible in equity for the cestuis que trust to hold the trustee for 
 a violation of his duty in making the conveyance, or to charge the 
 conscience of the grantee having knowledge of the previous trust, with 
 a duty to hold subject to the trust. 2 * * * 
 
 2 Ormsby v. Dumesnil, 01 Ky. 601, 16 S. W. 459 (1891); by the exhaustion 
 of the cestuis que trust, Burgess v. Wheate, 1 Win. Bl. vs.'. (1759); by the es- 
 cheal of the legal title to laud held in trust, King v. Mildinay, 5 D. & Ad. 
 254 (1833). 
 
 See note to this case, IS II. L. R. 53, 54.
 
 Ch. 5) THE DUTIES OF A TRUSTEE. 33; 
 
 CHAPTER V. 
 THE DUTIES OF A TRUSTEE. 
 
 SECTION 1.— TO CONVEY THE TRUST RES AS THE 
 CESTUI OUE TRUST MAY DIRECT. 
 
 WATTS v. TURNER. 
 
 (In Chancery, before Sir John Leach, Master of the Rolls, 1S30. 1 Russel 
 
 & Mylne, G34.) 
 
 A trust estate descended to the defendant; and the plaintiff, who 
 was cestui que trust, being entitled to the legal estate, a draft of 
 the intended conveyance was sent to the solicitor of the defendant, and 
 approved of by him. The defendant afterwards refused to execute 
 the conveyance, unless the plaintiff paid him a sum of money. The 
 bill was filed to compel a conveyance. 
 
 The Master of the Rolls made the decree against the defendant. 
 with costs. 1 
 
 i Cary, 13; Jones v. Lewis, 1 Cox. 199 (1786); Willis v. Hiseox, 4 Myl. & 
 Cr. 197 (183S) ; Holford v. Phipps, 3 Beav. 434 (1841) ; Thorbv v. Yeats, 1 Y. 
 & C. C. C. 43S (1S42); Campbell v. Home, 1 Y. & C. C. C 664 (1S42); Pen- 
 fold v. Bouch, 4 Hare, 271 (1844); Firmin v. Pulhain, 2 De G. & Sin. 99 
 (1848); Devey v. Thornton, 9 Hare, 222 (1851): King v. King, 1 De G. & J. 
 663 (1857); Palairet v. Carew, 32 Beav. 564 (1863); In re Knox's Trusts, L. 
 R. 1 Ch. 53S (1S95) ; Pearce v. Bryant Coal Co., 25 111. App. 51 (1887) : Warren 
 v. Ireland, 29 Me. 62. 6S (1S48); Paine v. Forsaith. 86 Me. 357, 30 Atl. 11 
 (1S94); Tilton v. Davidson. 98 Me. 55, 56 Atl. 215 (1903); Jasper v. Maxwell. 
 If. X. C. 357 (1S30); Reid v. Gordon, 35 Md. 174 (1871) ; Hunnewell v. Lane. 
 11 Mete. (Mass.) 163 (1846); Smith v. Harrington, 4 Allen (Mass.) 566 (1862); 
 Bowditch v. Andrew, 8 Allen (Mass.) 339 (1S64): Stone, Petitioner, 138 Mass. 
 476 (1885); Slater v. Hurlbut, 146 Mass. 308, 15 X. E. 790 (1888); Whall v. 
 Converse, 146 Mass. 345, 15 N. E. 660 (1SSS) ; Sears v. Choate, 146 Mass. 395, 
 15 X. E. 7S6, 4 Am. St. Rep. 320 (1888); Felton v. Sawyer. 41 X. H. 202 
 (1860); Archer v. American Waterworks Co.. 50 X. J. Eq. 33, 24 Atl. 508 
 (1892); Turnage v. Greene. 55 X. C. 63. 62 Am. Dec. 20S (1854); Matthews v. 
 McPberson, 65 X. C. 189 (1871); Taylor v. Huber, 13 Ohio St. 2SS (1862); 
 Megargee v. Xaglee. 64 Pa. 216 (1870); Hepburn's Appeal, 65 Pa. 468 (1870); 
 Culbertson's Appeal, 76 Pa. 145 (1871): Sharpless' Estate, L51 Pa. 214, 25 Ail. 
 11 (1892); Fisher v. Wister, 154 Pa. 65, 2.1 Atl. 1009 (1893); Clark's Estate, 
 15 Phila. (Pa.) 573 (18S2) ; Hubbs' Estate, 16 Phila. (Pa.) 211 (1883); [ves v. 
 Harris, 7 R. I. 413 (1863); Taylor v. Taylor, 9 R. I. 119 (1S6S); Rogers 
 v. Rogers, 10 R. I. 556 (1S73): Nightingale v. Nightingale. 13 R. I. 113 (1880); 
 Whelan v. Reilly, 3 W. Ya. 597, 613 (1869). 
 
 Contra: Ring v. McCoun, 10 X. Y. 268 (1851); Lent v. Howard. S9 N. Y. 
 169 (1SS2); Asche v. Asche, 113 X. Y. 2:12, 21 N. E. 70 (1889); Cuthbert v. 
 Chauvet, 136 N. Y. 326, 32 N. E. 1088. 18 L. R. A. 745 (1893); Metealfe v. 
 Union Trust Co., 181 N. Y. 39, 73 X. E. 498 (1905); Lewis' Kstate, 3 Misc. 
 Rep. 164, L 1 :: N. Y. Supp. 287 (1893). 
 
 In Turner v. Buck, 22 Yin. Abr. 21, pi. 5 (1715), Lord Chancellor Cowper 
 refused to direct a trustee to convey the legal title to the cestui que trust, so
 
 336 THE DUTIES OP A TRUSTEE. (Ch. 5 
 
 GOODSON v. EIXISSON. 
 (In Chancery, before Lord Chancellor Eldon, 1827. 3 Russell, 583.) 
 
 EUDONj Lord Chancellor. 2 In 1767 a deed was executed, and I 
 will assume that a fine was properly levied in pursuance of it, by 
 which an estate was granted and conveyed to Richard Ellisson and 
 his heirs on certain trusts. The bill deduces the various changes of 
 the title to the equitable interest, which occurred between 1767 and 
 November, 1822, bringing it, in 1819, into eight different persons, 
 each of whom is represented as the owner of an undivided eighth part 
 of the pri >perty. 
 
 These eight persons sell the property in different lots to different 
 persons; and, the present plaintiff having bought one of the lots, a 
 deed is prepared, conveying certain parcels of land to him; that deed 
 the eight persons, who are represented as the owners of the beneficial 
 interest, have executed; and the co-heiresses of Richard Ellisson are 
 also required to execute it. They refuse, and the bill is filed. * * * 
 
 The Master of the Rolls has ordered the defendants to execute the 
 conveyance, and to pay the costs of the suit. 
 
 Now, even if the plaintiff had been the purchaser of the whole es- 
 tate, and the conveyance had related to the whole, it would have been 
 a matter for consideration, whether the trustees would not have a 
 right, where there has been so much devolution of title, to have the 
 title examined in this Court, instead of being required to acquiesce 
 in an opinion which was not clothed with the sanction of judicial au- 
 thority. But this plaintiff is the purchaser of only sixteen acres of the 
 property, and the rest of the estate has been sold to other persons 
 in different lots. Xow, I confess it is quite new to me, to be in- 
 formed that you can call on a trustee from time to time to divest him- 
 self of different parcels of the trust estate, so as to involve himself 
 as a party to conveyances to twenty different persons. Has not a 
 trustee a right to say, "If you mean to divest me of my trust, divest 
 me of it altogether, and then make your conveyances as you think 
 
 that the latter might maintain an ejectment against the purchaser for value 
 without notice of the plaintiff's rights. 
 
 n seems that the trustee will be compelled to convey a legal title only 
 commensurate with the equitable interest <>f the cestui que trust. Saunders 
 v. Nevil, 2 Vera. (Raithby's Ed.) 428 (1706); Talbot v. Whit Held. Bunbury, 
 204 (1725). 
 
 In Dawkins v. Penrhyn, 4 App. Cas. 51 (1878) at page 60, Lord Chancellor 
 Cairns said: "I can conceive, although it would be a strange and unusual 
 mode of conveyancing, a conveyance or devise to a man and the heirs of his 
 lody in trust for A. I'.. and his heirs; and then the estate tail would he held 
 in trust for A. I'... and A. B. could call upon the tenant in tail, I dare say, 
 to bar the estate tail, and to enlarge it into a fee for his benefit." 
 
 If the trustee lias a legal title in fee simple, and the cestui que trust an in- 
 terest in tail, it seems thai the cestui que trust can bar the equitable interest 
 in tail, and enlarge it into an equitable fee simple, and then compel the 
 trustee to convey to him a fee. See Pearson v. Lane. 17 Yes. Jr. 101 (1S09). 
 
 - Only u part of Ixml Eldon's opinion is given.
 
 Sec. 1) TO CONVEY RES AS CESTUI QUE TRUST MAY DIRECT. 337 
 
 proper." I have been accustomed to think, that a trustee has a right 
 to be delivered from his trusts, if the cestuis que trust call for a con- 
 veyance. 
 
 Another principle which has been lost sight of in this decree, is, 
 that a trustee can be called on to convey only by the words and de- 
 scriptions by which the conveyance was made to him. In this re- 
 spect, he is like a mortgagee. 
 
 I see nothing in the record which would have hindered me from 
 directing these ladies to convey, if I had such parties before me as 
 would have enabled me to direct a conveyance of the whole estate. 
 If the cestuis que trust had all been here, they might have prayed that 
 the sixteen acres in question might be conveyed to Goodson, and the 
 residue of the estate to a trustee on trust to convey to other purchas- 
 ers. As the suit is framed, I cannot take that course. 
 
 The following decree was made: "His Lordship doth order, that 
 the decree made in this cause, the 18th of August, 1824, be reversed; 
 and it is ordered, that it be referred to the Master to inquire and 
 state to the Court, whether the plaintiff is entitled to that beneficial in- 
 terest which he seeks to have clothed with a legal estate by convey- 
 ance ; and in making the said inquiry, it is ordered, that the Master 
 do ascertain and state to the Court whether all prior vested and con- 
 tingent equitable titles have failed by deaths or nonexistence of per- 
 sons who would have taken before the plaintiff, etc. And it is or- 
 dered, that the said Master do tax the costs of the defendants of this 
 suit to this time, including their costs of the appeal, as between party 
 and party, that the same, when taxed, be paid by the plaintiff to the 
 defendants ; but this taxation is to be without prejudice as to whether 
 the defendants shall not be finally entitled to any further costs, charges 
 and expenses ; and his Lordship doth reserve the consideration of all 
 further directions, and whether the defendants shall be allowed any 
 further costs, charges and expenses up to this time, and also the con- 
 sideration of all subsequent costs, charges, and expenses, until after 
 the Master shall have made his report." 3 
 
 SMITH and SNOW v. SNOW and Others. 
 
 (In Chancery, before Sir John Leach, Vice Chancellor, ISIS. 3 Maddock, 10.) 
 
 The plaintiff Smith was the assignee of the plaintiff Snow's seventh 
 part or share in certain funds standing in the name of trustees, two 
 of the defendants. The plaintiffs Smith and Snow filed their bill 
 against the trustees, and against six of the cestuis que trust, brothers 
 
 3 In Rhoads v. Rhoads, 43 111. 230 (1807). Gunn v. Brown, 03 Md. 00 (1884), 
 Seamans v. Gibbs, 132 Mass. 230 (1882), Zabriskie's Ex'rs v. Wetmore, 20 N. J. 
 
 Eq. 18 (1875), and Hutchison's Appeal, 82 Pa. 500 (1870), a bill bled by one 
 of several cestuis que trust for the transfer to him of his share of the trust 
 Ken.Tr.— 22
 
 338 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 and sisters of the plaintiff Snow, to have the seventh part or share of 
 the plaintiff Snow transferred to the plaintiff Smith. To this bill, 
 four of the defendants, brothers and sisters of the plaintiff Snow (two 
 of the defendants, his brothers, being out the jurisdiction) put in the 
 following demurrer: 
 
 "These defendants, etc. for cause of demurrer show that no relief 
 is prayed by the bill against the defendants, and that the said com- 
 plainants have not by their said bill made such a case as entitles them 
 in a court of equity to any discovery from or against these defend- 
 ants, touching the several matters in the bill of complaint mentioned, 
 or any of them, or as entitles them to any relief or assistance against 
 the defendants. Therefore," etc. 
 
 The Vice Chancellor. The question is, whether a party who is 
 entitled to a certain aliquot proportion of a certain ascertained sum. 
 can file a bill to have it transferred to him, without making the persons 
 entitled to other aliquot shares of the fund, parties. Persons not in- 
 terested in the suit cannot be made parties, and it is sufficient to say 
 that it is not alleged that these defendants have any interest in this 
 suit. My only difficulty is. whether trustees can he called upon to act 
 in execution of their trust, by parts, as in that case seven different 
 bills might he filed against them; but that T think is not so great an 
 inconvenience as the allowing of such a bill as this would be. 4 
 
 Demurrer allowed. 
 
 TAYLOR and Wife v. Executors of HUBER and Others. 
 (Supreme Court of Ohio, 1SG2. 13 Ohio St. 288.) 
 
 On the 11th of October, 1844, Jacob Huber made his will, in which 
 he bequeathed to his son. Martin Huber, an equal share of his estate. 
 The testator, Jacob, survived his son Martin, who died May 26, 1846, 
 and on April 16, 1847, made this codicil to his will : 
 
 "My son Martin, having departed this life since I made my said 
 will, leaving a widow and children, 1 do declare, will and direct that 
 the said children of Martin shall succeed to the distributive share 
 which would otherwise have accrued to said Martin, in case he had 
 
 property was dismissed; not. however, on the ground urged by Lord Eldon, 
 but out of regard to the Intention of the creator of the trust. 
 
 In Russell v. Grinnell, 105 Mass. 425 (1870), Cooper v. Cooper, 36 N. J. Eq. 
 L21 (1882), and Estate of Moss. 15 Phila. (Pa.) 516 (1882) an equitable tenant 
 for life was refused a conveyance of a legal life estate. 
 
 * In Re Radcliffe, L. R. 1 Ch. 227 (1892), Inches v. Hill, 100 Mass. 575 
 (1871) Williams v. Thacher, 186 Mass. 293, 71 N. E. 507 (1904), Welch v. 
 Episcopal Theological School, is'.' Mass. 108, 75 N. E. 139 (1905), and Estate 
 of Henderson, 15 Phila. (Pa.) 598 (1882), one of several cestuis que trust ob- 
 tained a conveyance of his share of the trust property. 
 
 See Wetmore v. Zabriskie, 29 N. J. Eq. 62 (1878), and Terry v. Smith, 42 IN. 
 J. Eq. 504, 8 Atl. SS6 (1887), as to the partibility of a trust.
 
 Sec. 1) TO CONVEY RES AS CESTUI QUE TRUST MAY DIRECT. 331) 
 
 survived me. Provided, however, that the interest of one third part 
 of said share shall be paid annually to the widow of said Martin, dur- 
 ing- her natural life, the principal of said one third part to he dis- 
 tributed to the children, or their heirs, of said Martin, after the death 
 of his said widow. And to the end, that the interest may be raised on 
 said one third part, for said widow, and the principal he secured, I 
 do direct that my executors, when the money shall come into their 
 hands, shall loan the same upon bond and mortgage on real estate, 
 and the interest to be paid annually. The money which is to accrue 
 to said children of Martin, shall be paid to them as they become of 
 age; and, until that time, shall be loaned on bond and mortgage as 
 aforesaid, except such part as may be necessary for their support." 
 
 The children of Martin Huber, mentioned in this codicil, were 
 David and Levi, then living ; and their mother, the widow of said Mar- 
 tin, is the present plaintiff, Sarah Taylor, since intermarried with her 
 co-plaintiff, Levi Taylor. 
 
 The testator, Jacob Huber, died in April, 1849. His will, with the 
 codicil thereto, was admitted to probate, and letters testamentary 
 were granted to the executors, the present defendants, in May, 1849. 
 
 After the death of the testator, David and Levi, the children of 
 Martin Huber, both died intestate, minors, free of debt, unmarried, 
 and without children, leaving no brothers or sisters of the whole or 
 half blood. David died first. 
 
 The plaintiffs, Sarah Taylor and Levi Taylor, her present husband, 
 filed their petition against the executors of said testator, in the court 
 of common pleas of Fairfield county, stating the foregoing facts : 
 whereby they claim that the said Sarah, the mother of the deceased 
 children of Martin Huber, as their heir at law, became entitled to suc- 
 ceed to their property and estate, and to demand and receive from 
 said executors, by virtue of said codicil to the will of said Jacob Hu- 
 ber, the principal of the one third of the distributive share directed 
 in said codicil to be distributed "to the children, or their heirs, of said 
 Martin, after the death of his said widow," the said Sarah, being one 
 third of $3,624.80, or $1,208.27, the executors having paid to her the 
 other two thirds. 
 
 The petition further states, that the executors have invested said 
 sum of $1,208.27, or put the same at interest for a long period of 
 years; and the plaintiffs demand judgment against the executors for 
 said sum, with interest from the date of the last payment of interest ; 
 but if the executors are not bound personally to pay said sum, that 
 then they may be decreed to assign to said Sarah all notes, bonds, 
 mortgages, etc., they may hold for the payment of said sum, to her 
 sole and separate use, etc. 
 
 The petition further states, that on January 19, 1860, James A. 
 Bope, was appointed administrator of the estate of said children, David 
 and Levi, and claims as such an interest in said $1,208.27, adverse to 
 the plaintiffs. He is made a defendant, and with a prayer that he
 
 :U0 THE DUTIES OF A TRUSTEE. (Cll. 5 
 
 be required to answer, and be restrained from collecting or interfering 
 with said sum. 
 
 Asa second cause of action, tbe petition alleges the non-payment of 
 interest on the $1,208.27 for several years, of which an account is 
 prayed and judgment for the amount. 
 
 To so much of the petition as seeks a recovery of the principal of 
 the one third of the legacy given by the codicil to the children of Mar- 
 tin Huber, deceased, the executors of the will demur, on the ground 
 that the facts stated do not constitute a cause of action. 
 
 To the second cause of action, said executors answer, admitting; a 
 balance of $46.35, on interest, on said $1,208.27, due April 4, 1859, 
 and offer to pay the plaintiffs that sum. 
 
 Bope, as the administrator of Martin Huber's deceased children, an- 
 swers, claiming title and right to the fund, and prays judgment for 
 the same against his co-defendants, the executors of Jacob Huber, or 
 for the securities evidencing its investment. 
 
 The executors demur to Dope's answer, on the ground that it 
 shows no cause of action against them. 
 
 The district court reserved the case to this Court for decision. 
 
 Brinkhrhoff, J. There is no controversy among counsel in this 
 case, but that on the death of the testator, the legacy bequeathed by 
 his will became vested in his grandsons, David and Levi, though sub- 
 ject to the charge upon it in favor of their mother during her life; 
 that on the death of David, his share of it passed by descent, subject 
 to administration, to Levi, and on his death, no provision having been 
 made in the will for these contingencies, that the whole passed by de- 
 scent, subject to administration, to their mother, the plaintiff, as their 
 next of kin. 
 
 And it is claimed, in behalf of the administrator of the infants, in 
 effect, that inasmuch as a regular course and succession of adminis- 
 trations, Settlements, and distributions, with their attendant costs, 
 charges and consequent depletions of the original legacy, would be 
 a regular course of proceeding at law, therefore the whole formula 
 of such a course must be followed; and that the interest of the mother 
 can reach her only through this course of administrative distributions. 
 \\ hile, on the part of the executors of the testator, it is claimed, that 
 under the provisions of the will, they have the right to retain the fund 
 until her death; that what she has inherited though then payable to 
 her heirs, shall never reach her at all. 
 
 We cannot accede to either of these claims. Although a course of 
 successive administrations and distributions would be regular at law, 
 there is here no occasion for it, the children having left no debts to 
 be paid or adjusted, and it would be dilatory and expensive. The ex- 
 ecutors from the first held this fund in trust for the grandsons of the 
 testator by the provisions of the will ; and now, through a contin- 
 gency not foreseen or provided for by the will, that trust having 
 wholly failed, they, by operation of law, hold it in trust for their
 
 SeC.l) TO CONVEY RES AS CESTUI QUE TRUST MAY DIEE( T. 341 
 
 heir, the mother. The title of the administrator of the infants, is sub- 
 ject to the like trust. These trusts equity has ample jurisdiction to 
 enforce and in proper cases, like this, will do so. Cram v. Green, G 
 Ohio, 429; Stiver v. Stiver, 8 Ohio, 217; 1 Story's Eq. § 593. 
 
 A decree may be entered in favor of the plaintiff, Sarah Taylor, 
 ordering the executors to deliver to her the securities in their hands, 
 representing the fund in controversy, subject to any just and proper 
 charges in their favor, which they may have incurred in its adminis- 
 tration, and remaining unpaid; and subject also to such costs and 
 expenses of administration on the estates of the infant grandsons, 
 if any, as the court of common pleas, to which the case will be re- 
 manded, shall find, under all the circumstances of the case, to be strict- 
 ly reasonable and just. 
 
 HEAD v. LORD TEYNHAM. 
 
 (In Chancery, before Lord Loughborough, Sir W. II. Ashhurst, J., and Sir 
 Beaumont Hotham, B., Commissioners, 1783. 1 Cox, 57.) 
 
 Bill to carry the trusts of a will into execution, whereby, amongst 
 other things, lands were limited to trustees for a term of 500 years 
 to raise £4,000. for younger children's portions. There being six- 
 younger children entitled under this limitation to have the £4.000., 
 two of them assigned their shares of the £4,000. to a trustee for the 
 benefit of two other of the children. And the only question was, 
 whether it was necessary that this trustee should be a party to this 
 suit. For plaintiff it was insisted that as the original trustees of the 
 term who had the legal estate, and all the children who had the 
 beneficial interest were before the court, there was no occasion to 
 make the other trustee a party, and the Court would direct a sale of 
 the term without his joining in the sale; and of that opinion was the 
 court — and decreed accordingly. 
 
 JOSSELYN v. JOSSELYN. 
 
 (In Chancery, before Sir Lancelot Shadwell, Vice Chancellor, 1S37. 9 
 
 Simons, 63.) 
 
 James Josselyn, the testator in the cause, disposed of his residuary 
 personal estate in the following words: "All the rest, residue and re- 
 mainder of my goods, chattels, ready money, securities for monies in 
 the public stocks or funds, debts and all other personal estate what- 
 soever, I give unto John Josselyn. the son of my late cousin John 
 Josselyn, deceased; and I order and direct my executors or the sur- 
 vivor of them, etc., to place the same out on government or good real 
 security, and the interest arising therefrom, as the same shall become 
 due, to place out on the like securities, so as to accumulate, and the
 
 342 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 principal to be paid to the said John Josselyn at his attainment of the 
 age of twenty four years." 
 
 The plaintiff attained 21 in August, 1837, and, thereupon, presented 
 a petition stating that he was advised that, on attaining that age, he 
 became entitled, under the will, to a vested interest in the testator's 
 residuary estate, and the accumulations thereof, and praying that the 
 funds of which the residue and accumulations consisted, might be 
 transferred to him. 
 
 The Vice Chancellor. The residue is actually given to the plain- 
 tiff; and the words which follow the gift are merely directory as to the 
 future management of what is before given. 1 shall, therefore, make 
 an order, according to the prayer of the petition. 
 
 GOSLING v. GOSLING. 
 
 (In Chancery, before Sir W. Page Wood, Vice Chancellor, 1859. Johnson, 265.) 
 
 Bennett Gosling devised real estate to trustees to hold to the use of 
 plaintiff for life, remainder to the use of his first and other sons re- 
 spectively in tail male, with divers remainders over. By a codicil he 
 provided : "It is my particular desire, that no one shall be put in 
 possession of my estate, or shall enjoy the rent, dividends, and profits 
 of any part thereof, or of any property left by my will or codicil, un- 
 til he shall attain the age of twenty-five years : and in the meantime, 
 the rent, dividends, and profits to accumulate." 
 
 The questions for the opinion of the court were: Whether the tes- 
 tator's desire expressed in the codicil with respect to the accumula- 
 tions of the rent, dividends, and profits of his estate and property, was 
 operative ; and whether such rent, dividends, and profits, or any of 
 them, ought to be accumulated in accordance therewith. 
 
 The Vice Chancellor. 5 The principle of this court has always 
 been to recognize the right of all persons who attain the age of twen- 
 ty-one to enter upon the absolute use and enjoyment of the property 
 given to them by a will, notwithstanding any direction by the testator 
 to the effect that they are not to enjoy until a later age ; unless, during 
 the interval, the property is given for the benefit of another. If the 
 property is once theirs, it is useless for the testator to attempt to im- 
 pose any fetter upon their enjoyment of it in full so soon as they at- 
 tain twenty-one. And upon that principle, unless there is in the will, 
 or in some codicil to it, a clear indication of an intention on the part 
 of the testator, not only that his devisees are not to have the enjoyment 
 of the property he has devised to them until they attain twenty-five, 
 but that some other person is to have that enjoyment — or unless the 
 property is so clearly taken away from the devisees up to the time 
 of their attaining twenty-five as to induce the court to hold, that, 
 
 o The statement is abridged and part of the opinion is omitted.
 
 SeC.l) TO CONVEY RES AS CESTUI QUE TRUST MAY DIRECT. 343 
 
 as to the previous rents and profits, there has been an intestacy — the 
 court does not hesitate to strike out of the will any direction that the 
 devisees shall not enjoy it in full until they attain the age of twenty- 
 five years. * * * 
 
 The true construction of the codicil is clearly this: There is I 
 no alteration in the limitations made by the will as regards the per- 
 sons who are to take, or as regards the time at which their interests 
 are to be vested. But having said by his will that they should enjoy 
 the property at twenty one, it occurs to him in the codicil, that a young 
 man of twenty one is not competent to manage his affairs and, there- 
 fore, he desires "that no one shall be put in possession of his estate, 
 or shall enjoy the rents," until he shall attain twenty-five; every 
 word in the codicil pointing to the enjoyment and user of a gift 
 which is taken under the will, and nothing pointing to a revocation of 
 that gift for any purpose, still less for the purpose of creating an in- 
 testacy. 
 
 It seems to me clear, both upon principle and upon the authorities 
 which were cited, that the clause in the codicil was simply an attempt 
 to put a fetter upon the enjoyment of the property given by the will 
 after the period when the law says the owner of property shall enjoy 
 j£ * * * 
 
 The answer to the second question will be, that the desire of the 
 testator, expressed in the codicil with respect to the accumulations of 
 the rent, dividends, and profits of his estate and property, is inop- 
 erative. 6 
 
 Decree accordingly. 
 
 s Saunders v. Vautier, 4 Beav. 115 (1841); Curtis v. Lukin, 5 Beav. 147 
 (1S42) 155, 156; Jackson v. Majoribanks, 12 Sim. 93 (1841); Jacob's Will, 29 
 Beav. 402 (1S61) ; Tathum v. Vernon. 29 Beav. 604 (1861); Coventry v. Cov- 
 entry, 2 Dr. & Sm. 470 (1865); Magrath v. Morehead, L. R. 12 Eq. 491 (1871); 
 Hilton v. Hilton, L. R. 14 Eq. 468 (1872) : In re Cammeron, L. R. 26 Cb. Div. 
 19 (1SS4); In re Tweedie, L. R. 27 Ch. Div. 315 (1SS4) ; Harbin v. Masterman, 
 L. R. 2 Cb. 1S4 (1894); In re Johnston, L. R. 3 Cb. 204 (1S94) ; Millers 
 Trustees v. Miller (Court of Session) 18 R. 301 (1890); Cuthbert and Another, 
 31 Sc. L. R. 575 (1894) ; Jasper v. Maxwell, 10 N. C o57 (1S::0); Iluber v. 
 Co.,,, -hue. 49 N. J. Eq. 125, 23 Atl. 195 (1891). 
 
 Where property is held in trust for the children of a woman, and in default 
 of children in trust for another, the latter may compel a conveyance by the 
 trustee, as soon as the woman in the opinion of the court has become in- 
 capable of bearing children. Miles v. Knight, 12 Jur. 6G6 (1S4S) ; Forty v. 
 Reay, Dart. V. & P. (5th Ed.) 345 (1853); Groves v. Groves, 12 W. K. 15 
 (1863); Dodd v. Wake, 5 De G. & Sm. 226 (1S52); Edwards v. Tuck. 23 
 Beav. 268 (1856); In re Widow's Trusts, L. R. 11 Eq. 408 (1871); In re Mid- 
 ler's Estate. L. R. 14 Eq. 245 (1872): Browne v. Taylor. W. X. 190 (1872); 
 Maden v. Tavlor, 45 L. J. Ch. r><;9 (is7t>) : Archer v. Dowsing, W. N. 43 (1879): 
 Taylor's Trusts, 29 W. R. 350 (1881); Croxton v. May, I.. R. 9 Ch. Div. ::^ 
 (1878); Davidson v. Kimpton, L. R. 18 Ch. Div. 213 (1881); Browne v. War- 
 nock, L. R. 7 Ir. Ch. 3 (1880); Washington v. Bank for Savings. 05 App. 
 Div. 338, 72 N. Y. Supp. 752 (1901); Gowen's Appeal, 106 Pa. 2SS (1884): 
 Estate of Mellon. 16 Phila. (Pa.) 323 (1884). 
 
 See, however, Towle v. Delano, ill Mass. 95, 10 N. E. 709 (1887); List v. 
 Rodney, S3 Pa. 4S3 (1S77) ; Westhafer v. Koons, 144 Pa. 20, 22 Atl. 8S5 
 (1891).
 
 ;U4 THE DUTIES OF A TRUSTEE. (Cll. 5 
 
 CLAFLIN v. CLAFLIN ct al. 
 
 (Supreme Judicial Court of Massachusetts, 1SS9. 149 Mass. 19, 20 N. E. 454, 3 
 L. R. A. 370, 14 Am. St. Hop. 393.) 
 
 Appeal from supreme judicial court, Suffolk county; William Allen, 
 Judge. 
 
 Bill by Adclbert E. Claflin against William Claflin and others, trus- 
 tees under the will of Wilbur F. Claflin, deceased, to require them to 
 pay the complainant a legacy given by said will. From a decree dis- 
 missing the bill complainant appeals. 
 
 Field, J. By the eleventh article of his will, as modified by a 
 codicil, Wilbur F. Claflin gave all the residue of his personal estate to 
 trustees, "to sell and dispose of the same, and to pay to my wife, 
 Mary A. Claflin, one-third part of the proceeds thereof, and to pay 
 to my son Clarence A. Claflin, one-third part of the proceeds thereof, 
 and to pay the remaining one-third part thereof to my son Adelbert 
 E. Claflin, in the manner following, viz : Ten thousand dollars when 
 he is of the age of twenty-one years, ten thousand dollars when he 
 is of the age of twenty-five years, and the balance when he is of the 
 age of thirty years." 
 
 Apparently, Adelbert E. Claflin was not quite 21 years old when his 
 father died, but he some time ago reached that age, and received 
 $10,000 from the trust. He has not yet reached the age of 25 years, 
 and he brings this bill to compel the trustees to pay to him the re- 
 mainder of the trust fund. His contention is, in effect, that the pro- 
 visions of the will postponing the payment of the money beyond the 
 time when he is 21 years old are void. There is no doubt that his 
 interest in the trust fund is vested and absolute, and that no other 
 person has any interest in it ; and the authority is undisputed that the 
 provisions postponing payment to him until some time after he reaches 
 the age of 21 years would be treated as void by those courts which 
 hold that restrictions against the alienation of absolute interests in 
 the income of trust property are void. There has indeed, been no 
 decision of this question in England by the House of Lords, and but 
 one by a Lord Chancellor, but there are several decisions to this effect 
 by Masters of the Rolls, and by Vice-Chancellors. The cases are 
 collected in Gray, Rest. Alien. §§ 106-112, and appendix II. See 
 Josselyn v. Josselyn, 9 Sim. 63; Saunders v. Vautier, 4 Beav. 115, 
 on appeal, Craig.' & P. 240; Rocke v.- Rocke, 9 Beav. 66; In re 
 Young's Settlement, 18 Beav. 199 ; In re Jacob's Will, 29 Beav. 402 ; 
 Gosling v. Gosling, H. V. R. Johns. 265 ; Turnage v. Greene, 55 N. C. 
 63, 62 Am. Dec. 208; Battle v. Petway, 27 N. C. 576, 44 Am. Dec. 59. 
 
 These decisions do not proceed on the ground that it was the in- 
 tention of the testator that the property should be conveyed to the 
 beneficiary on his reaching the age of 21 years, because in each case 
 it was clear that such was not his intention, but on the ground that
 
 SeC.l) TO CONVEY EES AS CESTUI QUE TRUST MAY DIRECT. 
 
 9 II 
 
 the direction to withhold the possession of the property from the bene- 
 ficiary after he reached his majority was inconsistent with the ab- 
 solute rights of property given him by the will. 
 
 This court has ordered trust property conveyed by the trustee to 
 the beneficiary when there was a dry trust, or when the purposes of 
 the trust had been accomplished, or when no good reason was shown 
 why the trust should continue, and all the persons interested in it 
 were sui juris, and desired that it be terminated; but we have found 
 no expression of any opinion in our reports that provisions requiring 
 a trustee to hold and manage the trust property until the beneficiary 
 reached an age beyond that of 21 years are necessarily void if the in- 
 terest of the beneficiary is vested and absolute. See Smith v. Harring- 
 ton, 4 Allen (Mass.) 566; Bowditch v. Andrew, 8 Allen (Mass.) 339; 
 Russell v. Grinnell, 105 Mass. 425; Inches v. Hill, 106 Mass. ?7S: 
 Sears v. Choate, 146 Mass. 395, 15 N. E. 786, 4 Am. St. Rep. 320. 
 This is not a dry trust, and the purposes of the trust have not been 
 accomplished, if the intention of the testator is to be carried out. 
 
 In Sears v. Choate it is said: "Where property is given to certain 
 persons for their benefit, and in such a manner that no other person 
 has or can have any interest in it, they are in effect the absolute owners 
 of it; and it is reasonable and just that they should have the control 
 and disposal of it, unless some good cause appears to the contrary/' 
 In that case the plaintiff was the absolute owner of the whole property, 
 subject to an annuity of $10,000, payable to himself. The whole of 
 the principal of the trust fund, and all of the income not expressly 
 made payable to the plaintiff, had become vested in him when he 
 reached the age of 21 years by way of resulting trust as property un- 
 disposed of by the will. Apparently the testator had not contemplated 
 such a result, and had made no provision for it, and the court saw no 
 reason why the trust should not be terminated, and the property con- 
 veyed to the plaintiff. 
 
 In Inches v. Hill, supra, the same person had become owner of the 
 equitable life-estate and of the equitable remainder, and, "no reason 
 appearing to the contrary," the court decreed a conveyance by the 
 trustees to the owner. See Whall v. Converse, 146 Mass. 345, 15 X. E. 
 660. 
 
 In the case at bar nothing has happened which the testator did not 
 anticipate, and for which he has not made provision. It is plainly his 
 will that neither the income nor any part of the principal should now 
 be paid to the plaintiff. It is true that the plaintiff's interest is alien- 
 able by him, and can be taken by his creditors to pay his debts, but it 
 does not follow because the testator has not imposed all possible re- 
 strictions that the restrictions which he has imposed should not be 
 carried into effect. 
 
 The decision in Broadway Nat. Bank v. Adams, 133 Mass. 170. 43 
 Am. Rep. 504, rests upon the doctrine that a testator has a tight to 
 dispose of his own property with Mich restrictions and limitations, not
 
 346 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 repugnant to law, as he sees fit, and that his intentions ought to he 
 carried out, unless they contravene some positive rule of law, or are 
 against public policy. The rule contended for by the plaintiff in that 
 case was founded upon the same considerations as that contended for 
 by the plaintiff in this, and the grounds on which this court declined 
 to follow the English rule in that case are applicable to this; and for 
 the reasons there given we are unable to see that the directions of the 
 testator to the trustees to pay the money to the plaintiff when he 
 reached the ages of 25 and 30 years are against public policy, or are 
 so far inconsistent with the rights of property given to the plaintiff, 
 that they should not be carried into effect. It cannot be said that these 
 restrictions upon the plaintiff's possession and control of the property 
 are altogether useless, for there is not the same danger that he will 
 spend the property while it is in the hands of the trustees as there 
 would be if it were in his own. 
 
 In Sanford v. Lackland, 2 Dill. 6, Fed. Cas. No. 12,312, a benefi- 
 ciary who would have been entitled to a conveyance of trust property 
 at the age of 26 became a bankrupt at the age of 24, and it was held 
 that the trustees should convey his interest immediately to his assignee, 
 as "the strict execution of the trusts of the will had been thus rendered 
 impossible." But whether a creditor or a grantee of the plaintiff in 
 this case would be entitled to the immediate possession of the property, 
 or would only take the plaintiff's title sub modo, need not be decided. 
 The existing situation is one which the testator manifestly had in 
 mind, and made provision for. The strict execution of the trust has 
 not become impossible ; the restriction upon the plaintiff's possession 
 and control is, we think, one that the testator had a right to make; 
 other provisions for the plaintiff are contained in the will, apparently 
 sufficient for his support ; and we see no good reason why the inten- 
 tion of the testator should) not be carried out. Russell v. Grinnell, ubi 
 supra; Toner v. Collins, 67 Iowa, 369, 25 N. W. 287, 56 Am. Rep. 
 346; Rhoads v. Rhoads, 43 111. 239; Lent v. Howard, 89 N. Y. 169; 
 Barkley v. Dosser, 15 Lea (Tenn.) 529; Carmichael v. Thompson 
 (Pa.) 6 Atl. 717; Lampert v. Haydel, 20 Mo. App. 616. 
 
 Decree affirmed. 
 
 FORD v. BATLEY. 
 
 (In Chancery, before Sir John Romilly, Master of the Rolls, 1S53. 
 17 Beavan, 303.) 
 
 The testator directed his executors, immediately after his decease, 
 to purchase, in their names, from the Commissioners for the Reduc- 
 tion of the National Debt, by the Act 10 Geo. IV, c. 24, empowered 
 to grant annuities, or of or from any public company, duly empowered 
 by act of Parliament, charter, or otherwise, to grant annuities, an 
 annuity of £30. for the plaintiff.
 
 Seel) TO CONVEY RES AS CESTUI QUE TRUST MAY DIRECT. 347 
 
 The executors handed over the residue to the residuary legatee, 
 without making the investment, there being some doubt as to the 
 
 identity of the annuitant. 
 
 The plaintiff, however, ultimately established his right to the an- 
 nuity. 
 
 Mr. Craig and Mr. Southgate, for the plaintiff. First, the annui- 
 tant has a right to select the security upon which the annuity shall 
 be purchased; and, secondly, he has a right to elect to take the pur- 
 chase-money instead of having the annuity purchased. He elects to 
 have a government annuity, and insists on having the money necessary 
 to purchase it. 
 
 Mr. Goodeve, contra. The testator has given his executors a dis- 
 cretion as to the mode of purchasing the annuity. This should be 
 exercised in a manner the least prejudicial to the estate, and the an- 
 nuity should therefore be purchased from a public company, whose 
 terms are less onerous than those of government. Secondly, the tes- 
 tator has directed the annuity to be purchased in the names of the 
 executors. His directions they are bound to follow, and to allow the 
 plaintiff to take the money would be opposed to the clear intention 
 of the testator, who intended to give an annuity and not a legacy. 
 He referred to Blewitt v. Roberts [Craig & Ph. 274]. 
 
 Tine Master of the Rolls. The annuitant is entitled to have the 
 best security for his annuity, which is a government security. I am, 
 therefore, of opinion, that he is entitled to a government annuity. 
 
 I also think he is entitled to have such a sum of money as would 
 be required to purchase an annuity from the Commissioners for the 
 Reduction of the National Debt, for it is obvious, that if an annuity 
 were purchased, he might sell it immediately afterwards. 7 
 
 t Re Browne's Will, 27 Beavan, 324 (1859); Stokes v. Cheek, 28 Beav. G20 
 (18G0); Gott v. Nairae, L. R. :i Ch. Div. 278 (1876); Biggs v. Peacock, L. R. 
 22 Ch. Div. 284 (1882); In re Mabhett, L. R. (1891) 1 Ch. 707: Fluke v. Ex- 
 ecutors of Fluke, 16 N. J. Eq. 478 (1864); .Morse v. Hackensack Savings 
 Bank, 47 N. J. Eq. 279, 20 All. 961, 12 L. R. A. 62 (1890) ; Huber v. Donoghue, 
 49 N. J. Eq. 125, 23 Atl. 495 (1891) ; Prentice v. Janssen, 7:t N. Y. 47s (1880); 
 Armstrong v. McKelvey, 104 N. Y. 179, 10 N. E. 266 (1887); Greenland v. 
 Waddell, ilG N. Y. 2:J4, 22 N. E. 367, 15 Am. St. Rep. 400 (1889); Mellen v. 
 Mellen, 139 N. Y. 210. 34 N. E. 925 (1893); McDonald v. O'Hara, 141 N. Y. 
 .M'.t;. 39 N. E. 042 (1895). 
 
 See, also, Pearson v. Lane, 17 Ves. Jr. 101 (1S00) ; Hetzel v. Barber, »::> N. 
 Y. 1 (1N77). 
 
 In Stokes v. Cheek, 28 Beav. 620 (1860), the testatrix, after bequeathing 
 several annuities and authorizing her trustees to sell her freeholds, etc., and 
 directing them out of the produce t<> purchase government annuities, provided 
 "that no one of the annuitants hereinbefore named, shall be. nor shall the ex- 
 ecutors or administrators of any of them be, .allowed to accept tin' value of 
 the annuity to which he or she, respectively, shall he entitled, in lieu thereof." 
 
 The estate having been sold, the question arose whether the annuitants 
 were entitled to receive the amount necessary to purchase the annuities, in- 
 stead of having the annuities purchased for them. The Blaster of the Rolls, 
 Sir John Romilly, answered the question in the affirmative. To the same ef- 
 fect, see nation v. May, E. R. .". c'h. Div. its itsTc,); Roper v. Roper, L. R. 
 3 ch. Div. 71 1 (1876); In re Mabbett, L. R. (1891) 1 Ch. 707.
 
 348 TIIE DUTIES OF A TRUSTEE. (Cll. 5 
 
 HATTON v. MAY. 
 
 iln Chancery, before Vice Chancellor Malins, 1S7G. Law Reports, 3 Chancery 
 
 Division, 14S.) 
 
 Thomas Macaulcy. by his will, dated the 26th of July, 1872, gave 
 all the residue and remainder of his property, estate, and effects, to 
 George Hatton and Sidney Smith, their executors, administrators, 
 and assigns, upon trust to convert the same into money, and to pur- 
 chase thereout from Government an annuity of £100. sterling for 
 Mary Ann May during her life, and which he gave to her accordingly ; 
 and after directing three other annuities to be purchased in the like 
 manner for each of his three daughters, he declared that the said 
 Mary Ann May and his three daughters should not, nor should either 
 of them, nor should their personal representatives respectively, in 
 case of the death of either of them before such purchase, be entitled 
 to elect to receive the price or value of the said annuity in lieu of 
 it; and he declared that all and every the annuities given by his will 
 to Mary Ann May and his said daughters were so given for their 
 sole and separate benefit and disposal as the same should be from time 
 to time payable independently and exclusively of, and so as not to 
 be subject to the control, debts, or engagements of any husband, and 
 to be paid to the respective proper hands of the said Mary Ann May 
 and his said daughters respectively, and their respective receipts given 
 when and as the same respectively became due and payable, to be 
 alone and only proper discharges for the same ; and he expressly 
 declared that if any of the said annuitants should at any time sell, 
 alien, assign, transfer, incumber, or in any wise dispose of or an- 
 ticipate the said respective annuities, or any part thereof, then and 
 in such cases respectively, and immediately thereupon, the same an- 
 nuity to such annuitant should cease, determine, and be void, and 
 should sink into and become part of the residue of his personal estate 
 and effects. And upon further trust that his said trustees should pay 
 all the residue of his trust moneys, after making such purchases and 
 deductions as aforesaid, and all other (if any) his personal estate, 
 property, and effects, unto the conductor of an orphan asylum therein 
 named, to be applied for the use of such asylum. 
 
 By a codicil to his will, dated the 26th of July, 1872, the testator 
 appointed Mary Ann May and Sarah Morgan to be trustees and ex- 
 ecutors of his will jointly with G. Hatton and S. Smith. lie died 
 shortly afterwards, and left a considerable amount of property be- 
 yond what was specifically bequeathed by his will. All the annui- 
 tants were alive. The bill was filed by G. Hatton, S. Smith, and 
 Sarah Morgan, against Mary Ann May for the administration of his 
 estate, and for a declaration as to the rights of Mary Ann May in 
 respect of her annuity. 
 
 The defendant, Mary Ann May, had required her co-executors, the 
 plaintiffs, to pay her such a sum as would be required to purchase a
 
 Sec. 1) TO CONVEX RES AS CESTUI QUE TRUST MAY DIRECT. 34!> 
 
 Government annuity of £100. for her life, but the plaintiffs were ad- 
 vised that it was doubtful whether she was entitled to this payment. 
 
 M at.ins, V. C. The cardinal rule in construing wills is to look at 
 the whole of a will, in order to ascertain the intention of the testator. 
 If the direction to the trustees to purchase an annuity for Mary Ann 
 May had stood alone, it would, according to the authorities, have en- 
 titled her to be paid the price for which a Government annuity could 
 be purchased; but to ascertain whether that is the effect of the be- 
 quest, you must look at the whole of the will, and if you see that 
 such is not the intention of the testator, but that there is an event 
 specified upon the happening of which the annuity is to be cut short, 
 then you must pay the amount to the annuitant so long only as her 
 title to it endures. By the first clause the annuitant gets so much 
 money as will buy the annuity, but the testator subsequently shows 
 his anxiety that this annual sum shall be a personal benefit for her. 
 He says that Mary Ann May, and each of his three daughters, "shall 
 not, nor shall either of them, be entitled to elect to receive the price 
 or value of the annuity in lieu of it;" but notwithstanding that, it 
 has been argued that the annuitant is entitled to have a sum of money 
 in lieu of the annuity. Then he goes on to direct that all the annuities 
 given by his will "are so given for their sole and separate benefit and 
 disposal, as the same shall be from time to time payable, independ- 
 ently and exclusively of and so as not to be subject to the control, 
 debts, or engagements of any husband she may marry." If he had 
 stopped there it would have been like the case of Woodmeston v. 
 Walker [2 Russ. & My. 197] . It would have been a gift to the separate 
 use of each annuitant, and Mary Ann May might simply have elected 
 to take the money ; but then, in order to carry his intention into 
 effect more fully, he declares "that if any of the said annuitants shall 
 at any time sell, alien, assign, transfer, incumber, or in any wise 
 dispose of or anticipate the said respective annuities, or any part 
 thereof, then and in such cases respectively, and immediately there- 
 upon, the same annuity to such annuitant shall cease, determine, and 
 be void, and shall sink into and become part of the residue of my 
 personal estate and effects." Now, therefore, he has commenced by 
 giving an absolute annuity, but he has declared she shall not take it 
 if she aliens, assigns, transfers, incumbers, or in any wise disposes 
 of it, and if she does then it is to be void and to sink into the residue. 
 
 This is clearly settled, that if you give an annuity till the happen- 
 ing of any specified event, that is the measure of its limitation. It 
 may be cut short by a conditional limitation which abridges the 
 estate. That is distinctly laid down in Fearne [page 10, note "h"]. 
 where the difference is stated between a contingent remainder and 
 a conditional limitation so that the gift is to her for life, and if she 
 does certain acts, then the interest is to be cut short. That is a con- 
 ditional limitation, that in case she alienates the annuity it is to be 
 void and to go over. What sort of law is it, then, which says that
 
 :;5U Tin: duties of a trustee. (Ch. 5 
 
 a testator has no power to prevent an annuitant from having a power 
 of alienation? The case of Slice v. Hale [13 Ves. 404], which is 
 not by any means the first case laying down the rule, was a bequest 
 of an annuity with a condition that it should fall into the residue 
 upon alienation or insolvency, and the condition was held to be broken 
 in taking the benefit of the Insolvent Act, and the annuity was for- 
 feited. 
 
 That rule having been solemnly settled, I have alwnys relied upon 
 it as one of the fixed principles of the law, and I have never known it 
 questioned. 
 
 Now, this case is not a new one. The point was argued in Day v. 
 Day [1 Drew. 569]. I need not say that I entertain the highest re- 
 spect for the decisions of my learned predecessor, but that case was 
 produced in argument in the case of Power v. Hayne [Law Rep. 8 Eq. 
 262], and having carefully looked into the case and fully considered 
 the judgment, and delayed giving my decision, I deliberately came to 
 the conclusion that I could not follow it, because I thought that if 
 the trustees had paid over the value of the annuity to Charles Day, 
 and he had afterwards become bankrupt, they could have no answer 
 whatever to the persons entitled under the gift over. The views I 
 then expressed are to my mind conclusive. That case decides that 
 you can give an annuity with a provision for its going over in case 
 of alienation. 
 
 The will says there is an annuity to be purchased, which is to be 
 paid to Mary Ann May for her separate use, and if she commits any 
 act of alienation it is to fall into the residue. What is the difficulty 
 of carrying that direction into effect? My attention was drawn to 
 the case of Woodmeston v. Walker, by Mr. Cutler, in which the very 
 same question arose. It is a case I well remember, for I heard all 
 the arguments in it, and they made considerable impression upon me 
 at the time. The case was this: a testator directed that one-third 
 of his residuary estate, should be invested in the purchase of an an- 
 nuity for the life of his sister, who was unmarried, and this annuity 
 he gave to her separate use and independently of any husband she 
 might marry, and without power to sell or assign the same by an- 
 ticipation. The Master of the Rolls, Sir J. Leach, refused to order 
 payment to the legatee of the price which would be paid for the an- 
 nuity, on the ground that the restraint against alienation would be 
 valid in case of future coverture. That decision was reversed by 
 Lord Brougham, who said [2 Russ. & My. 204] : "If a testator be 
 desirous to give an annuity without the power of anticipation, he can 
 only do so by declaring that the act of alienation shall determine the 
 interest of the legatee and create a new interest in another. There 
 is no gift over in the present case, which is that of a mere naked 
 prohibition, not guarded by any clause of forfeiture." He also pre- 
 viously says: "Where the subject is a personal chattel, it is impossible 
 so to tie up the use and enjoyment of it as to create in the donee a
 
 Seel) TO CONVEY RES AS CESTUI QUI: TRUST MAY DIRECT. 351 
 
 life estate which he may not alien. Although the object may he ob- 
 tained indirectly, in a manner consistent with the known ruli oi law, 
 by annexing to the gift a forfeiture or defeasance on the happening 
 of a particular event, or on a particular act being done, 
 and upon the happening of the event or the doing of the act a new 
 and distinct estate accrues to a different individual." That is exactly 
 what this testator has done. The annuitant is not to have the right 
 to take money instead of the annuity, and it is to he inalienable. 
 Nothing can he better expressed or more consonant with every rule 
 of law. The cases cited by Mr. Pearson, such as Barnes v. Rowley 
 [3 Ves. 305], and Bayley v. Bishop [9 Ves. 6], where property was 
 given absolutely, have nothing to do with this question. Such was 
 the case of Bradley v. Peixoto [3 Ves. 324]. There the words were : 
 "I give to my son the dividends arising from £1620. bank stock for 
 his support during his life, but at his decease the bank stock to de- 
 volve to his heirs, executors, administrators and assigns;" and he 
 went on to say that if his son attempted to dispose of the principal 
 such attempt should exclude him from any benefit in his will, and he 
 should forfeit the whole of his share, principal and interest, which 
 should be divided among his other children. The son filed a bill that 
 he might be declared entitled to the bank stock absolutely. The 
 Master of the Rolls said it was laid down as a rule long established, 
 that where there is a gift, with a condition inconsistent with and re- 
 pugnant to such gift, the condition was wholly void. He considered 
 that the condition in that case was inconsistent with the interest given 
 to the legatee in the stock, and was therefore void. No wonder that 
 was held to be void; if this were a gift to Mary Ann May absolutely 
 I should say the same. 
 
 I think the whole case was decided by me in Power v. Ilayne [Law 
 Rep. S Eq. 262], in a manner I am still satisfied with. I decided that 
 case after much consideration. The arguments were heard on the 
 7th of May, and I took till the 28th before I delivered my judgment, 
 and during that time, as my habit is, I looked into all the cases cited. 
 \lv decision, therefore, was the result of careful investigation of the 
 authorities, and I desire to be understood as adhering to that decision, 
 and repeating the rule of law I there laid down, that in the case of 
 a gift to a tenant for life, either to A. until a certain event should 
 happen or for a whole life, with a proviso that it shall cease on the 
 happening of a particular event, the restriction is clearly effectual. 
 
 If there could have been any doubt in this case it is removed by 
 Allen v. Jackson [1 Ch. Div. 399]. That is. to my mind, completely 
 in accordance with the rules I have laid down. There a testatrix 
 gave the income of certain property to her niece and her niece's 
 husband during their joint lives, and to the survivor during his or 
 her life, with a proviso that if the husband survived his wife and mar- 
 ried again the property should go over. The husband survived his 
 wife and married again. It was there held that this was a limitation
 
 ii52 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 to the husband while remaining a widower, that the proviso was 
 valid, and upon the husband marrying again the gift over took effect. 
 
 I should take the present case to be a conditional limitation cutting 
 short the first gift. Mary Ann May is not to take the annuity in 
 money and is not to alienate. Mr. Pearson's construction would 
 entitle her to take the whole, so that she might spend the money the 
 day after receiving it, leaving nothing for her support during the 
 remainder of her life. 
 
 My opinion is that she is entitled to the annuity only for her life, 
 or until alienation. 
 
 The decree will be that an annuity is to be purchased for Mary 
 Ann May in the name of the trustees, and to be paid to her for life 
 or until she shall alien, assign, transfer, incumber, or in any wise 
 dispose of or anticipate the annuity, or any part thereof. 8 
 
 HAYES v. OATLEY. 
 
 (In Chancery, before Sir John Roniilly, Master of the Rolls, 1872. Law 
 
 Reports, 14 Eq. 1.) 
 
 By virtue of two indentures, dated the 11th of December, 1838, 
 a mortgage debt of £12,000. became vested in William Jones and 
 William Henry Oatley upon trust as to £2,000., part thereof, for 
 Walter Stubbs absolutely, and as to £10,000., the residue thereof, upon 
 trust to pay the interest thereof to Elizabeth Stubbs, the wife of Walter 
 Stubbs, during his life, and after her death, to Walter Stubbs during 
 his life, and, subject as aforesaid, upon trust for such persons as 
 Elizabeth Stubbs should by deed or will appoint, and in default of 
 appointment for Walter Stubbs, his executors, administrators, and as- 
 signs. 
 
 Elizabeth Stubbs by her will, dated the 23d of June, 1838, expressed 
 her wish that her husband should enjoy her income during his life, 
 after paying two annuities of £150. and £50. as therein mentioned; 
 and at his decease she gave pecuniary legacies, amounting in the 
 whole to more than £5,000., out of the fund of £10,000. She made 
 a codicil to her will, dated the 7th of October, 1844, in the following 
 terms : "To prevent any doubt on the construction of my will, I 
 hereby declare that the legacies given by my said will are to be pay- 
 able and are to be paid only out of the sum of £5,000. (so far as the 
 said sum of £5,000. may extend), one moiety or half part of the sum 
 of £10,000., over which I have an appointing power under my settle- 
 ment (subject to the interest for life of my said husband) ; and as 
 to the remaining full moiety of the said sum of £10,000., I hereby 
 appoint, give, and bequeath the same remaining moiety, being £5,000., 
 
 s Power v. Ilayne, L. R. 8 Eq. 202 (1869) ; In re Draper, 57 L. J. Ch. (N. S.) 
 942 (1888). Contra, Day v. Day, 1 Drew. 569 (1853).
 
 Seel) TO CONVEY BBS AS CESTUI QUE TRUST MAY DIRECT. 353 
 
 to my said dear husband, Walter Stubbs; all my estate what 
 
 and wheresoever and all the residue of my personal e tate, I give, 
 
 devise, and bequeath to my said husband, Walter Stubbs, his heirs, 
 
 executors and administrators; I appoint the said Walter Stul 
 
 be executor of my will and codicil; and T confirm my said will in 
 
 all respects save as it may he repugnant to this codicil ; and I n 
 
 the will so far as it is repugnant or inconsistent with I ■ ■licil." 
 
 Elizabeth Stubbs died on the 12th of October, 1844, and Walter 
 Stubbs proved her will. After her death the mortgage debl of 
 £12,000. wa- paid off by the persons entitled to the equity of redemp- 
 tion in the property subject thereto. A receipt for the debt was given 
 by William Jones and William Henry Oatley, but the money was 
 actually received by Walter Stubbs, who retained thereout the sums 
 of £2.000. and £5,000. to which he was entitled, and invested £3,000., 
 part of the remaining £5,000., to answer the legacies given by the 
 will of his wife. The residue of the last mentioned £5,000., amount- 
 ing to £2,000., was not invested by Walter Stubbs, and by reason of 
 his insolvency was subsequently lost. 
 
 Walter Stubbs died in 1865, 'and William Jones in 1869. 
 
 In 1871 this suit was instituted by William Hayes and Mary, his 
 wife (the latter of whom was a legatee under the will of Elizabeth 
 Stubbs), against William Henry Oatley and the legal personal rep- 
 resentative of William Jones, to compel them to make good the sum 
 of £2,000. which had been lost. 
 
 Lord Rom ill y, M. R. I entertain no doubt that the trusts of the 
 settlement were completely discharged when the trustees paid over 
 the £10,000. to the executor of Mrs. Stubbs. If it were not so, the 
 trustees would have to carry into effect all the limitations of her will. 
 I think that it is a mistake to say that her will did not come into 
 operation till the death of her husband. 
 
 The bill must be dismissed with costs. 9 
 
 BUSK v. ALDAM. 
 
 (In Chancery, before Sir Richard Matins, Vice Chancellor, 1S74. Law Reports. 
 
 19 Eq. 16.) 
 
 Demurrer. Thomas Benson Pease by will dated in 1839, after be- 
 queathing to defendants £10,000. upon trust to invest and pay the 
 income to his daughter, Susannah Pease, afterwards Susannah Busk, 
 
 » Re Philbrick's Settlement, 34 L. J. Ch. 368 (1865) ; Re Boskin's Trusts, 
 L. R. 5 rh. Div. 229 (1877), on appeal L. R. 6 Ch. Div. 281 (1877). 
 
 In 6 Ch. l>iv. 281, at page 283, James, L. J., said: "1 may add that. If the 
 merits had to he gone into, I should hold ii to be established beyond all ques- 
 tion thai where a feme covert, or any other person having a general power of 
 appointment over a fund of personalty, makes an appointment of the fund 
 by will and appoints an executor, the executor, when he has proved the will, 
 is entitled to receive the appointed fund." 
 Ken.Tr— 23
 
 354 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 for life, with power to her to appoint the fund to her children "in 
 such manner" as she should direct, died May 24, 1840. Mrs. Busk 
 died in 1873. By will dated in 1868 she appointed that the fund of 
 £10,000. should be held upon certain trusts in favor of her children 
 and directed it to be paid to trustees named in her will and that they 
 should either permit the same to remain in its actual state of invest- 
 ment, or should sell and invest in the manner therein mentioned, 
 which gave a greater range of investments than allowed by the will of 
 Thomas Benson Pease. 
 
 The trustees of Mrs. Busk's will filed a bill against the trustees of 
 Thomas Benson Pease's will and prayed that defendants be ordered 
 to pay the £10,000. to them. Defendants demurred. 
 
 Sir Richard Malins, V. C, after stating the facts, continued: 
 So far as the appointment by Mrs. Busk to trustees is concerned, 
 it has been held by a long series of decisions that it is a valid execu- 
 tion of the power of appointment, and that the appointment is just 
 as good as if it had been made direct to the objects of the power. 
 But this bill is filed for the purpose of having the fund transferred 
 from the trustees in whose control it is now placed to those to whom 
 it is appointed. For what object this is desired I cannot understand. 
 It is said that it would be very convenient to have the fund placed 
 in the hands of the new trustees. But I cannot look at that. I must 
 consider what was intended to be done by the original testator; and 
 I can see that such a transfer as is asked would violate his intention. 
 I asked Mr. Cookson whether he contended that a mere appointment 
 of new trustees by the donee of the power would have been valid, 
 and he pressed upon me that, on the authority of the cases cited, the 
 court was bound to hand over the fund to the new trustees. 
 
 Now there is, first of all, the case of Thornton v. Bright [2 My. 
 & Cr. 230], which simply decides that an appointment to persons not 
 an object of a power as trustee for a person who is an object is a 
 valid exercise of the power; and there are also Kenworthy v. Bate 
 [6 Ves. 793], Trollope v. Linton [1 S. & S. 477], Cowx v. Foster 
 1 1 J. & H. 30], and Fowler v. Cohn [21 Beav. 360]. But those were 
 all cases where there was real estate to be converted and no person 
 appointed to effect the conversion, and it was decided that in that 
 case an appointment to trustees to sell and convert and distribute the 
 proceeds amongst the objects of the power was a valid execution of 
 the power. But I am unable to see how that can be an authority for 
 taking away a fund from trustees who are fit and proper, and 
 handing it over to others who may net be so tit, in a case where the 
 duty of the trustees is simply to hold the fund. 
 
 I am asked to treat these cases as establishing a general law, that 
 where, in all cases, a fund is settled upon trust for a mother for life, 
 and then upon trust for her children as she should appoint, and she 
 appoints to trustees for her children, the first trustees are bound to 
 hand over the fund to the trustees appointed by the daughter. Here
 
 Seel) TO CONVEY RES AS CESTUI QUE TRUST MAY DIRECT. 355 
 
 nothing more is required than that some one should hold the fund, 
 and it is suggested that I am bound to hand it over to the second 
 trustees. 
 
 Mr. Cookson says that I decided the point in Ferrier v. Jay [L. 
 R. 10 Eq. 550]. But what I there decided was, that where there 
 was a general and a special power, and an appointment was made 
 of both funds together to trustees in trust to pay debts and to apply 
 the residue to the objects of the special power, the appointment must 
 be read reddendo singula singulis, and the fund coming under the 
 general power applied in the first instance to the purposes to which 
 the fund subject to the special power was not applicable. I agreed 
 with the decision in Cowx v. Foster, that the circumstance of direct- 
 ing debts to be paid only meant that they were to be paid out of the 
 particular portion of the mixed fund which could be so applied. 
 
 I did also in that case undoubtedly say that the second trustees 
 were the most fit persons to have charge of the fund ; but I did 
 not say that where it was a mere question which of two sets of trus- 
 tees should hold a particular fund, the court would necessarily hand 
 it over to the second set in point of date. 
 
 The demurrer will be allowed. 10 
 
 ONSLOW v. WALLIS. 
 
 (In Chancery, before Lord Chancellor Oottenham, 1849. 1 Hall & Twell, 513.) 
 
 By indentures of lease and release, dated in July, 1837, A. L. Sarel 
 conveyed some freehold hereditaments to Wallis, in fee simple, upon 
 trust to convey them to such persons and in all respects as Louisa 
 Sarel, the wife of A. L. Sarel, should by deed appoint ; and in default 
 of appointment, upon trust to apply the rents to her separate use 
 during her coverture ; and after the decease of her husband, in case 
 he died in her lifetime (an event which happened), then upon trust 
 to convey the hereditaments to the use of Louisa Sarel, her heirs and 
 assigns; but if she should die in the lifetime of her husband, then the 
 trustee was to stand seized of the hereditaments in trust for the ex- 
 ecutors and administrators of Mrs. Sarel, as part of her personal 
 estate. 
 
 Wallis died in April, 1842, whereupon the hereditaments in ques- 
 tion descended to his eldest son, the defendant in this suit. 
 
 Mrs. Sarel survived her husband, and died in September, 1847. 
 The answer alleged, that she died without an heir. She made a will 
 in June, 1847, by which she devised certain hereditaments to one of 
 the plaintiffs in this suit, in fee, and then continued as follows: "I 
 
 io Von Broekdorff v. Malcolm, L. R. SO Ch. Div. 172 (1885) : In re Tyssen, 
 L. R. (1804) 1 Oh. 56 (1S93). See Scotney v. Lomer, L. R. 31 Ch. Div. 380, 3S6 
 (1SSG).
 
 356 TIIK DUTIES OF A TRUSTEE. (Ch. 5 
 
 give certain legacies, which I have mentioned and specified in a cer- 
 tain memorandum in writing, marked with the letter A, and signed 
 by me, which I direct my trustees and executors, hereinafter named, 
 to pay out of my personal estate. I give, devise and bequeath .ill 
 other the messuages, lands, tenements, hereditaments and real estate, 
 and all the personal estate and effects of or to which I shall at my 
 death be seized, possessed, or entitled at law or in equity, unto [the 
 plaintiffs] their heirs, executors, administrators and assigns respec- 
 tively, on trust that they and the survivor of them, and the heirs, ex- 
 ecutors, administrators or assigns of such survivor, do and shall, with 
 all convenient speed, make sale and absolutely dispose of and convert 
 into money, and call in and receive all the same real and personal 
 estate respectively, and do and shall stand possessed of and interested 
 in the moneys to arise from the sale thereof, in trust, in the first place, 
 to pay thereout all costs, charges, and expenses of and attending the 
 execution of the trusts of this my will, and my debts, funeral and 
 testamentary expenses and legacies; and then in payment of the 
 legacies given by me in a certain memorandum, signed by me, and 
 marked with the letter 'A.' " 
 
 The memorandum marked with the letter "A" had not been dis- 
 covered. 
 
 It was alleged by the bill, and admitted by the answer, that there 
 were debts of the testatrix, which her personal estate was not suffi- 
 cient to pay. The trustees under the will applied to the defendant to 
 convey the hereditaments to them as such trustees, but he insisted 
 that he was entitled to hold them for his own benefit, subject to the 
 payment of such portion of the charges created by the will, as were 
 properly chargeable thereon, and which he offered to pay. 
 
 The bill prayed that the defendant might be decreed to convey and 
 assure to them [the trustees under Mrs. Sard's will], as such dev- 
 isees aforesaid, the hereditaments comprised in the deeds of July, 
 1837. 
 
 The cause was heard by the Vice Chancellor of England, on the 
 16th of January, 1849, when he ordered a conveyance to be executed 
 by the defendant, according to the prayer of the bill. 
 The defendant now appealed from that decision. 
 The Lord Chancellor. No case similar to this has been cited, 
 where the owner of property which was on trust, has given it to 
 somebody else ; and whether it was so given beneficially, or not, is a 
 question which the defendant has no right to inquire into. It is not 
 like the case of Burgess v. Wheate [1 Eden, 177, 1 W. lib 123]. The 
 only reason why the trustee, under such circumstances as existed in 
 that case, is allowed to hold property, is because there is nobody to 
 take it from him; it does not belong to any person whom the law 
 recognizes as having a right to ask for the execution of the trust. 
 Now here the original owner undoubtedly had a right, as against the 
 trustee, to direct what he should do with the property; he was a
 
 Seel) TO CONVEY RES AS CESTUI QUE TRUST MAY DIRECT. 357 
 
 mere naked trustee. The testatrix in this case had a right to do what 
 she pleased with the beneficial interest, and she did by her will din 
 the legal estate to he conveyed, or at least gave the property, to the 
 trustees of her will. The question is, whether the defendant, who 
 appears to be the trustee of the legal estate, has any right to inquire 
 for what purpose these parties are to hold the trust property. It is a 
 gift, in trust, it is true; hut it is the appointment of persons who are 
 to stand in the place of the original owner, as against the trustee. 
 Then why is the beneficial interest, which is by the operation of the 
 rule of law, in Ihirgess v. Wheate, to enure to the benefit of truste< 
 to enure to the benefit of this trustee? There is no want of person, 
 authorized, as against him, to require a transfer of the beneficial 
 interest. Suppose the testatrix had simply directed that the estate 
 should be transferred, and had appointed new trustees, and directed 
 the existing trustee to convey to those who are trustees under the 
 will, could the trustee of the legal estate dispute the title of the trus- 
 tees under the will, because they might or might not have the means 
 of carrying into effect the trusts of the will ? 
 
 The real question is, whether it is regulated by the doctrine in 
 Burgess v. Wheate. I think that it is not regulated by the doctrine 
 in Burgess v. Wheate at all, because that case proceeds on the fact 
 of there being no persons having a right to control the legal estate, 
 and here there are persons authorized to control the legal estate. 
 
 I do not take exactly the view which the Vice Chancellor seems to 
 have done, because he seems to have considered that the matter would 
 depend on the presumed intention of the testatrix. For that purpose, 
 you are to assume she intended that the paper A should not be pro- 
 duced, and therefore there would be a failure of her declared inten- 
 tion. Therefore, if there is any trustee who is to have the benefit of 
 the doctrine in Burgess v. Wheate, the trustees under the will are to 
 have it. It cannot be considered that the testatrix had any such view 
 at all. It must be presumed, she intended that the purposes declared 
 by her will should be carried into effect. Those purposes have failed, 
 in consequence of that paper A not being produced; it may be pro- 
 duced hereafter, or it may not. I do not proceed on that ground, but 
 I proceed on this: That there are persons appointed by the owner of 
 the property, to whom the property is to be conveyed. They are the 
 only parties having a right to it; whether or not they have power 
 afterwards to dispose of all the beneficial interest, is a matter to which 
 the defendant Wallis, as mere owner of the legal estate, has nothing 
 whatever to do. 
 
 This seems to me to be a case which does not fall within the doc- 
 trine of Burgess v. Wheate, so far as the defendant Wallis is con- 
 cerned ; and therefore the direction of the Vice Chancellor for a con- 
 veyance, under the terms of the will, is, I think, a proper decree, and 
 it must be affirmed, with costs. 11 
 
 II S. C 1 Mac. & G. 500.
 
 358 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 In re LASHMAR. 
 MOODY v. PENFOLD. 
 
 (In the Supreme Court of Judicature, Chancery Division, 1W)0. Law Reports 
 
 [1891] 1 Ch. 258.) 
 
 Appeal from Mr. Justice Kekewich. 
 
 Peter Lashmar, by his will dated in 1858, devised a freehold house 
 to three trustees in trust for Thomas Lashmar and Jane, his wife, 
 for their lives and then for his nephew, John Lashmar, for life, and 
 on his death unto Charles Lashmar, nephew of John Lashmar, ab- 
 solutely in fee simple. Peter Lashmar died in November, 1859. John 
 Lashmar died in March, 1875. Thomas Lashmar died in April, 1881, 
 and Jane in November, 1889. Charles Lashmar died in August, 1868, 
 leaving a will by which he gave to John Lashmar and John Moody 
 all his property upon trust to pay to his wife Ann Lashmar, the 
 income during her life, and after her death, upon trust for his son 
 George Jlartnup. He appointed John Lashmar and John Moody his 
 executors. 
 
 George Hartnup was illegitimate and died intestate and without 
 issue in July, 1880. Ann Lashmar died in October, 1886. 
 
 Shortly after the death of Jane Lashmar in 1889, Moody, the sur- 
 viving trustee of Charles Lashmar, applied to defendant William 
 Pen fold, the surviving trustee of Peter Lashmar, for a conveyance, 
 and that being refused the plaintiff took out an originating summons 
 to determine his right to such a conveyance. 
 
 This summons, after being adjourned into court, was heard March 
 27, 1890, by Mr. Justice Kekewich, who made a decree in favor of 
 plaintiff. The defendant appealed. 
 
 Lindley, L. J. 12 In this case a controversy has arisen as to which 
 of two trustees is to keep certain property which was not intended for 
 either of them. Mr. Penfold is in the happy position of having got 
 it, and the question is whether anybody is entitled to take it away 
 from him, and, in particular, whether Mr. Moody is entitled to take 
 it away from him. The learned Judge has decided this question in 
 Mr. Moody's favor, and when the appeal was opened and for a con- 
 siderable time afterwards I was disposed to think that that decision 
 was right. But Mr. Hadley has convinced me, and further reflection 
 has confirmed the conviction, that the decision is wrong, and that the 
 person who is in possession must keep what he has got. 
 
 The question arises in this way. Under the will of Peter Lashmar, 
 which was dated in 1858, Charles Lashmar was entitled to an equi- 
 table reversion in fee in certain property, the legal estate of which 
 was vested in William Penfold, who was the surviving trustee of 
 Peter Lashmar's will. Charles Lashmar made a will, which I will 
 
 -^The concurring opinions of Bo wen and Fry, L. JJ., are omitted, and a 
 portion of the opinion of Lindley, L. J.
 
 Sec. 2) DUTY TO PUT CESTUI QUE THUST IN POSSESSION. 359 
 
 shortly read. [His Lordship then stated this will, and continued:) 
 Now the question is, upon that will, what interest (if any) the sur- 
 viving trustee, William Moody, takes in this property; and I cannot 
 find, after spelling over the will with all the care I can, that he i . or 
 rather was, anything more than a hare trustee for George Hartnup. 
 It is quite obvious that, as soon as Mrs. Jam- Lashmar, the surviving 
 tenant for life, died and George Hartnup attained twenty-one, that 
 .Moody had no duty whatever to perform. He had a power of sale 
 during the life of the tenant for life, and also during the minority 
 of George Hartnup; but after the tenant for life was dead and Hart- 
 nup had attained twenty-one, he was simply a bare trustee, bavin- 
 no duty whatever to perform. * * * 
 
 Mr. Hadley has convinced me that upon the true construction of 
 this will. Moody, the trustee under it, having no duty whatever to 
 discharge, and having nothing on earth to do with the property, can- 
 not take the house in question from Penfold, who has got it. It 
 appears to me that the true way to regard this will is to look through 
 Moody as nobody. So it comes to this. The property is in Penfold 
 on trust for nobody at all. Therefore, he keeps it; and accordingly 
 the appeal must be allowed. 
 
 Lindley, L. J. * * * I think, perhaps, I ought to say with 
 respect to Onslow v. Wallis [1 Mac. & G. 506], on which I think 
 Mr. Justice Kekewich decided this case, that there the trustee had 
 duties to perform, and if this gentleman had any duties to perform 
 our decision would have been the other way. It is because he has 
 none that we decide as we have done. 
 
 SECTION 2.— TRUSTEE'S DUTY TO PUT CESTUI QUE 
 TRUST IN POSSESSION OF THE TRUST ESTATE. 
 
 TIDD v. LISTER and Others. 
 
 (In Chancery, before Sir John Loach, Vice Chancellor, isi'O. 5 Mnddock, 420.) 
 
 The Vice Chancellor. 13 The testator in this case, after giving 
 to his wife and daughter the personal occupation of the house in 
 which he resided, and the use of his furniture, has devised and be- 
 queathed his whole real and personal property to certain trustees upon 
 trust, in the first place to pay his funeral expenses and debts; then 
 to keep the buildings upon his estate, consisting of freehold, copyhold 
 and leasehold, insured against loss or damage by fire; next to pay the 
 
 i» Only the opinion of the court is jziven.
 
 360 THE DUTIES OF A TRUSTED. (Ch. 5 
 
 premiums of certain policies of assurance on the lives of his two sons, 
 which are to form a provision for their widows and children ; then 
 to pay annuities of sixty guineas each to his two sons; and lastly, 
 he has given the surplus income between his wife and daughter during 
 their joint lives, and the whole surplus income to the survivor for 
 life; and in case his two sons should survive his wife and daughter, 
 then he gives to them his whole real and personal estate. Soon after 
 •the death of the testator, a bill was filed in this court for the execution 
 of the trusts of his will; and in the progress of that suit, the debts 
 and funeral expenses were paid out of the personal estate, and the 
 residue of the personal estate was secured in the name of the Ac- 
 countant General, and is of an amount sufficient to satisfy the two 
 annuities of sixty guineas each, given to the sons, who do accordingly 
 receive the same from the Accountant General. The premiums of 
 the policies of assurance continue to he paid out of the rents and 
 profits of the estates. The mother died in the year 1819, and the 
 daughter, who is become entitled to the whole surplus income of the 
 real and personal estate, has married. The mother, the two sons, and 
 two other persons, were the trustees named in the will ; one of these 
 persons is dead; the other has but little interfered in the trusts of 
 the will ; one of the sons is abroad, and the management of the 
 property has principally devolved upon the son, William Lister. The 
 present bill is filed by the daughter and her husband, praying, a con- 
 veyance, surrender and assignment of the legal estate from the trus- 
 tees ; and that the plaintiffs may be let into possession, or that a 
 receiver be appointed. The prayer for the conveyance, surrender 
 and assignment was abandoned at the bar, but it was insisted that it 
 is a matter of course in a court of equity, to divest a trustee of the 
 management of the trust property, and to deliver the possession to the 
 cestui que trust for life. And that the only difficulty here was, that 
 the trustees are in the first place directed to pay certain premiums 
 upon policies of assurance, which remained to be provided for out of 
 the rents and profits of the estates; and that to remove this difficulty 
 the daughter's husband was willing to invest in the cause a sum suffi- 
 cient to answer the amount of those annual payments ; and the case 
 of Blake v. Uunbury [1 Yes. Jr. 194] was cited as an authority for 
 this doctrine. 
 
 My first impressions were strongly against the existence of any 
 such rule. It is perfectly plain from the continuing nature of this 
 trust that the testator intended that the actual possession of the trust 
 property should remain with the trustees; and it did appear to me a 
 singular proposition, that if a testator who gives in the first instance 
 a beneficial interest for life only, thinks fit to place the direction of 
 the property in other hands, which is an obvious means of securing 
 the provident management of that property for the advantage of 
 those who are to take in succession, that it should be a principle in 
 a court of equity to disappoint that intention, and to deliver over the
 
 Sec. 2) DUTY TO PUT CESTUI QUE TRUST IN POSSESSION. 
 
 501 
 
 estate to the cestui que trust for life, unprotected against that bias 
 which he must naturally have to prefer his own immediate interest 
 to the fair rights of those who are to take in remainder. Inde- 
 pendently of the purpose of management of the property, a testator 
 may be considered in the case of a female cestui que trust for life, as 
 having a further view to her personal protection in the case of her 
 marriage. 
 
 The husband can only compel the trustee to account to him for 
 the wife's income by the aid of a court of equity; and this court, in 
 certain cases of misconduct by the husband, will not compel the trus- 
 tee to account to the husband, but will secure the income for the bene- 
 fit of the wife. It is manifest that this protection would, to some 
 extent, be prejudiced, if the husband were put into the possession of 
 the trust estate. 
 
 The case of Blake v. Bunbury is no authority for the proposition 
 for which it was cited. It was not the case of a cestui que trust for 
 life, but the case of a legal tenant for life, subject to a term for 
 raising a charge. There was there no purpose but to raise the charge, 
 and the legal tenant for life, securing the charge, had upon every 
 principle a right to the possession. There may be cases in which it 
 may be plain from the expressions in the will, that the testator did 
 not intend that the property should remain under the personal man- 
 agement of the trustee. There may be cases in which it may be plain 
 from the nature of the property, that the testator could not mean to 
 exclude the cestui que trust for life, from the personal possession of 
 the property, as in the case of a family residence. 14 There may be 
 very special cases in which this Court would deliver the possession of 
 the property to the cestui que trust for life, although the testator's 
 intention appeared to be that it should remain with the trustee, as 
 where the personal occupation of the trust property was beneficial 
 to the cestui que trust, there the court taking means to secure the due 
 protection of the property for the benefit of those in remainder, 
 would, in substance, be performing the trust according to the inten- 
 tion of the testator. The present case is not one of special circum- 
 stances. It is not the personal occupation, but the management of 
 the property, that is sought by this bill. 
 
 The cestui que trust for life is a feme covert. Two of the trustees 
 are the persons, who, if they survive the wife, will be entitled to this 
 property. The testator has thought fit to place his property in their 
 
 n Baylies v. Baylies, 1 Coll. 537 (1844); Powys v. Blagrave, Kay, 495 (1854), 
 affirmed 4 De G., M. & G. 448 (1854); Eloper v. Roper, 29 Ala. 247 (1856); 
 Williamson v. Wilkins, 14 Ga. 416, 122 (1854); Wade v. Powell, 20 Ga. 645 
 (1856); Mountjoy v. Lashbrook, 8 Dana (Ky.) 33 (1839) ; Campbell v. Pres- 
 tons. 22 Grat (Va.) 396 (1872). 
 
 See, also, Kaye v. Powel, 1 Ves. Jr. 408 (1791); Jenkins v. Milford, l J. 
 & \V. 629 (1820); Clarke v. Earl of Ormonde, Jacob, L08 (1821); Denton v. 
 Denton. 7 Beav. 388 (1844); Horner v. Wheelwright, '2 Jur. (N. S.) 367 (1856); 
 Hoskins v. Campbell, W. N. 59 (1869); Etchells v. Williamson, W. N. 61 
 (1869); Young v. Miles' Ex'rs, 10 B. Mon. (Ky.) 287 (1850).
 
 302 THE DUTIES OF A TRUSTEE. (Cll. 5 
 
 hands, and out of the management of the cestui que trust for life, 
 and I have no authority to revoke his will. 
 
 There is, however, in this bill, a prayer for a receiver, and allega- 
 tions of misconduct to support that prayer. These allegations are 
 denied by the answer, and not proved. But I find in the answer, that 
 the accounting trustee, William Lister, expresses himself to be willing 
 that a receiver should be appointed. If the plaintiffs desire a re- 
 ceiver, they are entitled to it, upon this consent of the trustee. 16 
 
 TAYLOR v. TAYLOR. 
 
 (In Chancerv. before Sir George Jessei, Master of the Rolls, 1875. Law Re- 
 ports, 20 Eq. 297.) 
 
 [ames M. Taylor died in April, 1870. By his will he made certain 
 devises and bequests to two trustees for the benefit of his wife during 
 her life. She had entered into contracts for granting leases of por- 
 tions of the real estate comprised in the trust. [An application was 
 now made in the suit of Taylor v. Taylor that the contracts might 
 be approved by the Court, and leases granted in pursuance thereof.] 
 
 Mr. Ince, for the trustees : 
 
 Secondly, the application is wrong in point of substance. Mrs. 
 Taylor has no power to grant leases under the will, nor is she a per- 
 son "entitled to the possession or to the receipt of the rents and 
 profits" within the meaning of the Leases and Sales of Settled Estates 
 Act, § 32. 
 
 Mr. Bagshawe, Q. C, in reply: 
 
 The words "entitled to the possession or to the receipt of the rents 
 and profits" are a conventional expression used throughout the Act 
 to indicate the beneficial owner of the property. Grey v. Jenkins [26 
 Beav. 351]. Mrs. Taylor is the beneficial owner, and upon making 
 application to the Court, would, according to the ordinary practice, 
 be let into possession of the property. 
 
 [He also referred to Tidd v. Lister.] 
 
 Sir G. Jessel, M. R. 16 The question which I have to consider is, 
 the proper construction to be put on the 32d section of the Leases and 
 Sales of Settled Estates Act [19 & 20 Vict. c. 120 (1856)] under the 
 circumstances I am about to mention. * * * 
 
 Now, the material part of the 32d section of the Act is this: "It 
 shall be lawful for any person entitled to the possession or to the 
 receipt of the rents and profits of any settled estates for an estate for 
 life," to lease for any term not exceeding twenty-one years, "provided 
 that every such demise be made by deed, and the best rent that can 
 
 is Pugb v. Vaughan, 12 Beav. 517 (1850); I>avis v. Hunter. 23 Ga. 172 
 (1857) ; Dick v. Pitchford, 21 N. C. 480 (1837) ; Wickhaui v. Berry, 55 Pa. 70 
 (1867). 
 
 is (jnly a part of the opinion is given.
 
 Sec. 2) DUTY TO PUT CESTUI QUE TRUST IN POSSESSION. 
 
 363 
 
 reasonably be obtained be thereby reserved, without any fine, or other 
 benefit in the nature of a fine, which rent shall be incident to the 
 immediate reversion," the demise not to be made without impeach- 
 ment of waste, and to contain covenants for the payment and receipt 
 of the rent, and such other usual and proper covenants as the lessor 
 shall think fit, and a condition for re-entry. That is, therefore giving 
 to the person making the demise a very great power of management, 
 because in the case of the trustees being appointed managers by the 
 will, it is enabling the person said to be the beneficial tenant for life 
 not only to lease without their consent, but to impose such terms on 
 the lessee as the tenant for life, or so-called tenant for life, shall think 
 tit. Tt is a very strong interference, therefore, with the management 
 of the estate, and the question is, whether the Legislature intended 
 that to apply when the tenant for life was not the manager of the 
 estate. I do not think the Legislature did so intend. In the case I 
 have before me the management is in the trustees. They are clearly 
 by the express terms of the will, the persons to receive the rents. 
 They are the persons to pay the charges of insurance, repairs, collec- 
 tions, and other necessary outlay, besides the annuities, and so on. 
 Clearlv, therefore, as far as the words and meaning of the will are 
 concerned, they are to have the management, and are to dispose of 
 and apply the net annual income and rents that may be left to the 
 lady, and for her separate use if she should be married. As far as 
 the will is concerned, and as far as the express intention of the tes- 
 tator can be gathered from his words, the trustees are managers of 
 the estate. 
 
 Then it is said, and truly said, that there are certain cases in which, 
 although similar words have occurred in wills, the Court of Chancery 
 has thought fit to put the tenant for life in possession. I agree, but 
 I say it is subject to the judicial discretion of the Court. It is not the 
 right of the tenant for life to be in possession. The tenant for life 
 is not entitled to the possession, but the court has a power, notwith- 
 standing similar expressions in a will, to say that, looking to the 
 whole will, the intent can be fully accomplished by putting the tenant 
 for life in possession, taking security from the tenant for life either 
 in the shape of an undertaking (if that shall be thought sufficient) 
 or, in some instances, other substantial security, that what remains to 
 be done under the will for the benefit of persons other than the tenant 
 for life, shall be duly performed. The tenant for life in such a case 
 is not a person entitled to possession, but a person who may obtain 
 possession by judicial process, and to whom the trustees ought not 
 to hand over the possession unless either by the leave of the court, 
 or, if they choose to act without the leave of the court, then by taking 
 such security as would indemnify them hereafter from any breach 
 by the tenant for life of those duties which the trustees ought them- 
 selves to perform. Therefore, in such a case as I have before me, 
 I am of opinion that this lady is not entitled to the possession.
 
 ,164 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 Then the next point is as to the receipt of the rents and profits. 
 That is the same thing. The trustees are the persons who. by the 
 will, are directed to receive the rents and profits. I agree that I 
 might upon terms take the receipt from them. I might possibly do 
 so even in this case, but then the tenant for life is not entitled to the 
 receipt. She may obtain it through the intervention of the court, but 
 she is not a person entitled, in my opinion, to the receipt. The very 
 notion that this Act of Parliament was to allow a person entitled to 
 the residue of the rents and profits to take away the management and 
 letting of the estate from the trustees while they remained in actual 
 management and in receipt of the rents, is, according to my judg- 
 ment, wholly repugnant to the ordinary proceedings of the Legisla- 
 ture in not interfering with the testamentary dispositions of men 
 more than is absolutely necessary. I think that the Act has no ap- 
 plication, and that there is no power of this sort, and the application 
 must be refused. 17 
 
 E. A. COX and Wife, BARBARA, v. ARETUS WILLIAMS 
 
 and Others. 
 
 (Supreme Court of North Carolina, 1S59. 58 N. C. 150.) 
 
 Cause removed from the Court of Equity of Jones County. 
 
 Lewis Williams, by his will devised and bequeathed, among other 
 things, as follows, viz: "Having no confidence whatever in E. A. 
 Cox, the husband of my daughter, Barbara, I give and bequeath and 
 devise unto my son, Aretus Williams, his heirs, executors, admin- 
 istrators and assigns, forever, the following property, that is: The 
 tract of land whereon I now reside, subject to the life estate of my wife 
 therein, and a negro woman, named Sarah, in special trust and con- 
 fidence, nevertheless, that he and they will hold the same for the sole 
 and separate use and benefit of my daughter, Barbara Cox, and during 
 her natural life, in such manner that the same shall in no event be 
 subject to the control or liable for the debts, or contracts, of her 
 husband, E. A. Cox, and I wish Aretus, or his executors, etc., to allow 
 his sister, Barbara, either on the said place to live, or rent it out," 
 with ulterior limitations of the trust to the children of the said Bar- 
 bara. In a subsequent clause, he gives to his wife a number of slaves 
 for her life, with remainder to Aretus Williams, in trust, for the sole 
 and separate use of Barbara Cox, as in the preceding clause. Mrs. 
 Irena Williams, by deed, properly authenticated, surrendered to Are- 
 tus Williams her life estate in the land and slaves, given her by the 
 will of her husband, to hold the same as trustee for Mrs. Cox, ac- 
 cording to the trusts declared in the foregoing will. 
 
 Cox, the husband, and his wife, filed this bill against the trustee, 
 
 it Affirmed L. R. 3 Ch. Div. 14. r > (1876).
 
 Sec. 2) duty to tut cestui que trust in possession. 365 
 
 setting out tli.it it would greatly promote the comfort of the family 
 of Mrs. Cox. and preserve and increase the value of the land and 
 slaves intended for her benefit, for her and her husband, to have I 
 
 possession of the property for the purpose of carrying on farming 
 operations, and pray that a decree may pass the court to that i 
 
 The defendant demurred to the bill, generally, for the want of 
 equity. 
 
 The cause was set down for argument on the demurrer, and sent 
 to this court by consent. 
 
 PEARSON, C J. The ohject of the hill is to have the land and 
 negroes put into the possession of the feme plaintiff, so as to let her 
 have the use of the property for the purpose of carrying on a farm, 
 without the control and superintendence of the trustee, and the equity 
 is put on the ground, that she would thus he furnished with a com- 
 fortable home, and her support and maintenance be better provided 
 for than by allowing the property to continue under his management. 
 The defendant has filed a demurrer, and, in support of it, urges: 
 that if the property is put into the possession of the feme plaintiff, 
 it would, as matter of course, be subject to the control and manage- 
 ment of her husband, the other plaintiff, and thereby defeat the pur- 
 pose of the trust, and be in direct violation of the expressed directions 
 of the testator. 
 
 It is clear, from a perusal of the will, that the testator did not 
 intend that the property, the use of which is given to his daughter, 
 should, in any event, be subject to the control of Cox; for this rea- 
 son, he gives the property to his son, so that it may be under his 
 management; and, to remove all room for doubt, he sets out, in so 
 many words, that he does so, because "he has no confidence whatever 
 in E. A. Cox, the husband of his daughter." 
 
 In respect to the land, he relaxes, in some degree, and gives to his 
 son a discretion "either to let his sister live on the place, or rent it 
 out," but this restricted discretion tends to show, the more plainly, 
 that in regard to the negroes, there was to be no discretion, and his 
 son was to keep them under his exclusive management. So, it is 
 manifest, that the object of the bill is in direct contravention of the 
 trusts declared by the testator. See how it would operate. Suppose, 
 instead of merely permitting his sister "to live on the place," which 
 is within his discretion, the trustee should be required, by a decree of 
 this Court, to let his sister have possession of the plantation and the 
 negroes also; it would become necessary, in order to carry on the 
 farm, that horses, cattle, farming utensils, etc., should be provided, 
 and as she is under the control of her husband, it would follow that 
 the entire management and control of the concern would fall into his 
 hands. 
 
 A testator has a right to give his property with such restrictions, 
 and upon such terms, as he sees proper, and the courts are bound to 
 carry his intention into effect, unless there be something in the trusts
 
 i566 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 unlawful and against public policy. So that, so far from showing 
 an equity, the plaintiffs, on their own showing, have none. 
 
 We deem it unnecessary to refer to any authority, and put our deci- 
 sion upon the peculiar circumstances growing out of the special pro- 
 visions of this will. 
 
 1'kr Curiam. Bill dismissed. 
 
 In re WYTHES. 
 
 WEST v. WYTHES. 
 
 (In Chancery, before Kekewich, J., 1893. Law Reports [1893] 2 Ch. 309.) 
 
 Adjourned summons. 
 
 George Wythes, of Bickley Park, Kent, and Copt Hall, Essex, by 
 his will, dated the 5th of September, 1882, appointed executors and 
 trustees, and devised to them all his real estate, upon trust, as to his 
 Bickley Park estate, during the life of George E. Wythes, the eldest 
 of his two grandsons, out of the rents and profits to provide for the 
 education of the said George E. Wythes until he should attain twenty- 
 one, and to accumulate any rents and profits not so applied, and upon 
 his attaining that age to pay the rents and profits of the Bickley Park 
 estate to him during his life, or until he should become a bankrupt, 
 or should assign, charge, or incumber, or attempt or affect to as- 
 sign, charge or incumber, the same rents and profits, or some 
 part thereof, or should do or suffer something whereby the same 
 or some part thereof would, through his act or default, or by 
 the action or process of law or otherwise, if belonging absolutely to 
 him, become vested in -or payable to some other person or persons; 
 and after the determination of the trust in favor of such grandson 
 in his lifetime the trustees were to apply the rents and profits in their 
 discretion for the maintenance and support of such grandson and his 
 wife (if any), and child or children and other issue, and accumulate 
 the unapplied residue ; and after the death of such grandson the 
 trustees were to stand possessed of the Bickley Park estate in trust 
 for his child or children as he should by deed or will appoint, and if 
 there were no such children, upon the trust declared concerning the 
 testator's Copt Hall estate in favor of his grandson Ernest J. Wythes 
 and his issue. The testator then devised his Copt Hall estate upon 
 trusts in favor of his grandson Ernest J. Wythes, corresponding with 
 the trusts of the Bickley Park estate in favor of his grandson George 
 E. Wythes. The testator empowered the trustees and trustee of his 
 will, "at their and his own uncontrolled discretion," during the con- 
 tinuance of the trusts of his will relating thereto, "to maintain, man- 
 age, and improve all or any part or parts of his real estates, and lay 
 out all or any of the surplus rents and profits directed to be accumu-
 
 Sec. 2) DUTY TO PUT CESTUI QUE TRUST IN POSSESSION. 
 
 36' 
 
 lated as aforesaid in the maintenance, management, and improvement. 
 by buildings, drainage, roads, or otherwise howsoever, of the heredita- 
 ments which had produced such rents and profits, or any other her- 
 editaments held upon the same trusts, and also to demise all or any 
 part of the real estates at such rents and subject to such covenants 
 and generally in all respects upon such terms and conditions as they 
 or he should in their or his uncontrolled discretion think fit." The 
 testator also provided that the trustees or trustee of his will should 
 have a power of sale and exchange over all or any of the heredita- 
 ments thereinbefore devised on trusts exercisable during the life of 
 any tenant for life in possession of the premises proposed to be sold 
 or exchanged with his consent in writing, and as to such premises 
 during the minority of any child or children of such tenant for life 
 at the discretion of the trustees or trustee. And after conferring 
 large powers of management on the trustees in connection with his 
 business and otherwise, the testator authorized them to transact all 
 matters and concerns respecting his business and estate, and to do 
 or cause to be done all acts relative thereto in such and in the same 
 manner to all intents and purposes as if such trustees or trustee were 
 absolutely interested therein, and as he (the testator) could have done 
 if living, it being his intention to give such trustees and trustee the 
 amplest possible discretionary power with reference to the disposi- 
 tion and management of his business and concerns in any contingency, 
 howsoever unforeseen, which might arise, and without such trustees 
 or trustee being answerable to any persons interested under his will 
 for the exercise of such discretion as was thereby given to them or 
 him. or the mode in which they or he might carry into effect any such 
 powers. 
 
 The testator died in 1883. His grandson, George E. Wythes, died 
 a bachelor in 1887. 
 
 The Bickley Park estate was subject to a mortgage of £80,000. 
 Ernest J. Wythes had attained the age of twenty-one years. It 
 did not appear that he had become bankrupt, or had in any way as- 
 signed, charged, or incumbered, or affected to assign, charge or 
 incumber the rents and profits of the Bickley Park or Copt Hall 
 estates. 
 
 The Bickley Park estate was a building estate. The Copt Hall 
 estate was agricultural and was let on lease. 
 
 This was a summons by Ernest James Wythes asking that he might 
 be let into possession and into the receipt of the rents and profits of 
 the Bickley Park and Copt Hall estates, on his undertaking to pay 
 and keep down, out of the rents and profits of the Bickley Park estate, 
 the interest upon the mortgage for £80,000; and that the trustees 
 might deliver to him the deeds and documents of title relating to the 
 two estates respectively, including the counterparts of current leases 
 and agreements for leases (but not including the probate of the tes-
 
 3G8 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 tator's will and a deed of disclaimer by one of the persons named 
 as trustees), the applicant undertaking not to part with such deeds 
 and documents without the consent of the trustees, and to produce 
 them to the trustees upon all reasonable occasions. 
 
 Kkkkwicii, J. It would not have been satisfactory to make such 
 an order as i^ asked in Chambers. The matter deserved the full 
 attention which it has received in open court. Inasmuch as there was 
 no hostile "argument, there is no occasion for me to go through the 
 authorities, or to recapitulate the rules deducible from them, or to 
 explain in detail how far recent legislation has qualified them or ren- 
 dered them inapplicable. On the other hand, it must be borne in 
 mind that the applicant's case was placed before the court by the 
 Solicitor General as fully and with as much precision as if he was 
 encountering opponents, as counsel for the trustees were prepared to 
 insist upon any point, requiring consideration, not thus brought out. 
 And not only during the argument, but since, I have thought it my 
 duty to reilect on the case made by the applicant, and to consider 
 all the authorities cited with special reference to the provisions of 
 the Settled Land Acts, on which the applicant's case was rested. 
 My conclusion is that the Solicitor General's argument is sound, and 
 that the old authorities, of which Tidd v. Lister [5 Mad. 429] may 
 be taken to be the type, and which were summarized by the late 
 Master of the Rolls in Taylor v. Taylor [L. R. 20 Eq. 297], may 
 be treated as largely, if not altogether, abrogated by the Acts just 
 mentioned. I must not be understood as saying that even now an 
 equitable tenant for life, where the trustees in wdiom the legal estate 
 is vested have duties of management and the like to perform, is 
 entitled, as a matter of course, to be let into possession ; but I intend 
 to hold that the powers granted to and the duties imposed on a 
 tenant for life, as defined by the Settled Land Acts (which definition 
 clearly includes an equitable tenant for life such as the applicant), 
 have raised a presumption in favor of the title to possession which 
 did not before exist, and have made it incumbent on the court to 
 provide that, if the estate and the trustees can be adequately protected 
 by reasonable safeguards, an equitable tenant for life shall be let 
 into possession and be enabled personally to exercise these powers and 
 discharge these duties unless there be found some reason to the 
 contrary far more urgent than is disclosed by the terms of this will. 
 The point is in a great measure new. It was before Mr. Justice 
 Pear-on in In re Bentley [54 L. J. Ch. 782], and I have no doubt, 
 from a perusal of his judgment, that he would have decided this 
 case as I am now deciding it. The title to possession once established, 
 the custody of the title deeds appears to follow, unless, of course, 
 there is in any particular case reason for distinction. As regards 
 the deeds, the case of In re Burnaby's Settled Estates, before Mr. 
 Justice Stirling [42 Ch. Div. 621], is distinctly in point. There was
 
 Sec. 3) DUTY TO GIVE INFORMATION AS TO TRUST ESTATE. 369 
 
 no opposition there ; but the arguments for the applicant were based 
 on the provisions of the Settled Land Acts, and the learned Judge 
 must be taken to have assented to them as I do. 18 
 
 SECTION 3.— THE TRUSTEE'S DUTY TO GIVE INFOR- 
 MATION AS TO THE TRUST ESTATE. 
 
 LOW v. BOUVERIE. 
 
 (In the Court of Appeal, 1891. Law Reports [1891] 3 Oh. R2.) 
 
 The plaintiff being about to deal with an equitable tenant for life 
 under a settlement by lending him money upon the security of his 
 life interest, caused inquiries to be made of the defendant, one of 
 the trustees of the settlement, whether the life interest was incum- 
 bered. Defendant replied that the life interest was subject to cer- 
 tain incumbrances, mentioning them, but did not say there were no 
 others. The plaintiff then made a loan to the life tenant on the 
 security of a mortgage of his equitable life interest. Subsequently the 
 plaintiff found that the life interest was subject to several incum- 
 brances prior to his own, besides those mentioned by defendant, the 
 existence of which, it was admitted, the defendant had forgotten 
 when replying to the plaintiff's inquiries, though he had had notice 
 of them. The plaintiff's security being insufficient, he sued the de- 
 fendant to have him declared liable for the amount due on the se- 
 curity, alleging that the loan was made upon the faith of the defend- 
 ant's representation. 
 
 Mr. Justice North decided in favor of the plaintiff and the de- 
 fendant appealed. 
 
 LiNDLEY, L. J. 19 This appeal raises several extremely important 
 questions. First, it is necessary to consider what are the duties of 
 trustees towards persons about to deal with their cestuis que trust, 
 and who, before dealing with them, make inquiries of their trustees 
 as to any assignments or incumbrances known to them. 
 
 In Browne v. Savage [4 Drew. 635, 639], Vice Chancellor Kin- 
 dersley said that trustees "must, for their own security, give correct 
 information, when inquiry is made of them, whether they have had 
 notice of any prior assignments affecting their trnst property." Mr. 
 
 is in re Bentley, 54 L. J. Ch. 782 (1885); in re Bagot's Settlement, L. R. 
 (1S94) 1 Ch. 177 (1S93) ; In re Newen, L. Et. (1894) 2 Ch. 297. 
 
 19 The statement of facts is condensed, and the opinions of Rowen and 
 Kay, L. JJ., and a part of the opinion of Lindley, L. J., are omitted. 
 
 Ken.Tr.— 24
 
 370 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 Lewin, in his well known work (Lewin on Trusts [8th ed.] p. 704), 
 refers to that case as an authority for the proposition that trustees 
 arc bound to answer such inquiries. But when this opinion is ex- 
 amined it can scarcely be supported, and if such a doctrine were 
 logically carried out it would impose very serious duties upon trus- 
 . The duty of a trustee is properly to preserve the trust fund, 
 
 pay the income and the corpus to those who are entitled to them 
 respectively, and to give all his cestuis que trust, on demand, infor- 
 mation with respect to the mode in which the trust fund has been dealt 
 with, and where it is. 20 But 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 squan- 
 dering 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 information which 
 the cestui que trust himself is not entitled to demand. The trustee, 
 therefore, is, in my opinion, under no obligation to answer such an 
 inquiry, lie can refer the person making it to the cestui que trust 
 himself. 
 
 I will next take the case of a trustee who answers the inquiry. 
 What in this case is the extent of his obligation ? Is he bound to find 
 out the facts — bound to make inquiries of his co-trustees or of the solic- 
 itor of the trust ? Or is his obligation limited to giving such information 
 as he himself can give without inquiry or research? I am not aware 
 of any principle or authority which imposes upon him any obligation 
 to do more than give an honest answer to the inquiry — that is to say, 
 to do more than answer to the best of his actual knowledge and belief. 
 He may, no doubt, undertake a greater responsibility. He may bind 
 himself by a warranty, or he may so express himself as to be estopped 
 from afterwards denying the truth of what he said ; but unless he 
 does one or the other, I do not know on what principle consistent with 
 Derry v. Peek [14 App. Cas. 337] he can, if he answer honestly, ex- 
 pose himself to liability. * * * 
 
 20 in Loud v. Winchester, 52 Mich. 174. at page 183, 17 N. W. 784, at page 
 787 (1883), Campbell, J., says: "The beneficiaries under a trust have the 
 righl to he kept informed at all times concerning the management of the trust, 
 and it is the duty of the trustees to so inform them." 
 
 See. also. Walker v. Syinonds, 3 Sw. 1, 58 (1818); Newton v. Askew, 11 
 Beav. 145 (1848) ; in re Dartnall, L. It. (1895) 1 Oh. 474.
 
 Sec. 3) DUTY TO GIVE INFORMATION AS TO TRUST EaTATE. 371 
 
 In re TTLLOTT. 
 LEE v. WILSON. 
 
 (In Chancery, before Chitty. Justice, 1891. Law Reports [1892] 1 Ch 86 I 
 
 Motion. 
 
 James Tillott, by his will dated the 11th of July, 1868, after ap- 
 pointing trustees and executors, bequeathed his leasehold messuages, 
 12 and 13 Amsherst Road, Hackney, to his trustees upon trust to 
 pay the net proceeds arising therefrom to his daughter Alary Ann 
 Lee, for her life, and after her decease upon trust for such of her 
 children living at her death, and such issue then living of her children 
 then dead as either before or after her decease should, being males, 
 attain twenty-one, or, being females, should attain that age or marry, 
 and if more than one, as tenants in common according to the stocks ; 
 and he devised and bequeathed the residue of his estate to his trustees 
 upon trust, as to one equal third part, to pay the net annual income to 
 each of his three daughters, the said Mary Ann Lee being one, during 
 their lives, and on the death of each daughter, as to the share in which 
 she had a life interest, upon similar trusts for their children as those 
 above mentioned with regard to the leaseholds bequeathed upon trust 
 for Marj Ann Lee. 
 
 The plaintiff, being one of the children of Mary Ann Lee, who was 
 still alive, commenced this action by originating summons, and asked 
 by this summons that the defendant, as trustee of the testator's will, 
 might be directed to sign and deliver to the plaintiff an authority- 
 enabling the plaintiff, his solicitor and agents, to ascertain the amount 
 of consols standing in the name of the defendant, and what stop orders 
 and distringases (if any) had been placed thereon, and to produce 
 all deeds, papers, and documents in his possession relating to the 
 property held by the defendant as trustee of the will, and to furnish 
 the plaintiff with a general account of the residuary estate. 
 
 By an order made in Chambers dated the 3d of August, 1891, 
 it was ordered that the defendant should forthwith write a letter to 
 the Bank of England authorizing the bank to inform the plaintiff as 
 to the amount of consols standing in the name of the defendant, or 
 to verify the same by affidavit, and to produce for the inspection of 
 the plaintiff all deeds and documents relating to property in which the 
 plaintiff was interested under the will of the testator. The defend- 
 ant accordingly wrote the letter to the bank as directed by the order. 
 
 This was a motion by the plaintiff that the above order might be 
 discharged or varied, and that the defendant might be directed to sign 
 and deliver to the plaintiff, an authority to the bank, enabling the 
 plaintiff to ascertain what stops, notices or distringases had been 
 placed on the consols standing in the name of the defendant. 
 
 CHITTY, J. In pursuance of an order made in Chambers the de- 
 fendant has written a letter to the bank, on the authority of which the
 
 372 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 bank has given to the plaintiff information which shows that a sum 
 of stock is actually standing in the name of the trustee. The plain- 
 tiff, however, requires something more; he asks for an authority 
 which will enable him to obtain information from the bank as to 
 whether there are any stop orders on the fund; his object in asking 
 for this information is to deal with his own share in the trust estate, 
 his share being one-twelfth, to which he is entitled contingently on 
 the death of his mother. It is no part of the duty of a trustee to 
 assist a cestui que trust in mortgaging or, as Mr. Justice Lindley 
 added, "in squandering or anticipating his fortune," Low v. Bouverie 
 [L. R. (1891) 3 Ch. 89, 99], but a testator is bound to give a 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 a 
 mortgage," but he must produce the mortgage deeds, so that the cestui 
 que trust may thereby ascertain that the trustee's statement is cor- 
 rect, and that the trust estate is so invested. The general rule, then, 
 is what I have stated, that the trustee must give information to his 
 cestui que trust as to the investment of the trust estate. Where a 
 portion of the trust estate is invested in consols, it is not sufficient 
 for the trustee merely 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, as has been done in this case, 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 incumbered ; some other person having a 
 paramount title may have obtained a charging order on the stock or 
 placed a distringas upon it. 
 
 The question here is whether the cestui que trust is not entitled, 
 in addition to the information that he has obtained, to the further 
 authority to the bank for information which will, besides verifying 
 the trustee's statement, that the trust money is invested in the stock, 
 also enable him to ascertain that the stock is free from incumbrance 
 or free from any paramount claim. In the case before me there is 
 no suggestion that the trustee is wrong, there is no charge of any sort 
 made against him, though Mr. Wheeler tried to suggest a possible 
 case and did suggest that there might be some kind of paramount 
 claim affecting the stock in question, yet there is no suggestion to be 
 found on the evidence in the case, but still, I think, now that the 
 matter has been brought before me and discussed, that the cestui que 
 trust is entitled to the further information that he now asks for, 
 which will enable him to go back with an authority from the trustee, 
 on which the bank will show that the fund is either clear of all dis- 
 tringases and the like or that it is not. I quite agree with what fell 
 from counsel for the defendant that this may give the plaintiff more 
 information than lie is entitled to ask, because as there are twelve 
 shares in this fund, it may be that there are several distringases on
 
 Sec. 3) DUTY TO GIVE INFORMATION AS TO TRUST E8TATE. 373 
 
 the fund obtained by persons who have charges on the contingent 
 interest of the other persons, and it is clear that the trustee i 
 bound to give the cestui que trusl of one share any information as to 
 the dealings of the other cestui que trust in whose share he hi 
 interest, showing whether those shares are or are not incumbranced. 
 I think, then, for these reasons, that there ought to be a further order 
 in the terms the plaintiff asks for, but the plaintiff must pay the costs 
 of the motion. 21 
 
 In re POSTLETHWAITE. 
 
 In re RICKMAN. 
 
 POSTLETHWAITE v. RICKMAN. 
 
 (In Chancery before North, Justice, 18S7. Law Reports, 35 Ch. Div. 722.) 
 
 Joseph Legg Postlethwaite, William Charles Rickman, and John 
 Joseph Tourle, were the trustees of the will of William Postlethwaite, 
 deceased. Joseph Legg Postlethwaite was beneficially interested in 
 the proceeds of sale of the testator's residuary real and personal es- 
 tate. Joseph Legg Postlethwaite was now dead. The plaintiffs were 
 his three children, and were entitled to his interest under the will 
 of William Postlethwaite. William Charles Rickman was also dead; 
 
 21 It is the trustee's duty to keep clear and correct accounts of the trust 
 property and to be ever ready to produce them for inspection by the cestui 
 que trust or the cestui que trust's agent White v. Lady Lincoln. 8 Vea. 363 
 (1803); Freeman v. Fairlie, 3 Mer. 24, 43 (1817); Anonymous. 4 Mad. 273 
 (1819); Pearse v. Green, 1 J. & W. 135 (1S19) ; Clarke v. Earl of Ormonde, 
 Jacob, 108, 120 (1821) ; Turner v. Comey, 5 Beav. 515 (1841); Ottley v. Gilby, 
 S Beav. 602 (1845) ; Gray v. Haig, 20 Beav. 219 (1854) ; Springett v. Dash- 
 wood, 2 (Jiff. 521 (1SG0) ; Kemp v. Burn, 4 Gift 348 (18G3) ; W roe v. Seed, 4 
 Gift 42r, (1863); Green v. Brooks, SI Cal. 328. 22 Pac. 849 (1889); Waterman 
 v. Alden. 144 111. 90, 32 N. E. 972 (1S93) ; Blauvelt v. Ackerman, 23 N. .7. Eq. 
 495 (1873) ; Elmer v. Loper, 25 N. J. Eq. 47.",. 482 (1S75) ; In re Gaston Trust. 
 35 N. J. Eq. GO (1882), affirmed in Veghte v. Steele. 35 N. J. Eq. 34S (1882) : 
 Martin v. Wilbourne, 66 X. C 321 (1872) ; Walker v. Sharpe, 71 N. C. 257 
 (1S74); Libliett v. Maultsby, 71 N. C. 345 (1S74). 
 
 It is the trustee's duty to produce all deeds and documents relating to the 
 trust estate for inspection by the cestui que trust or the cestui que trust's 
 agent. Clarke v. Earl of Ormonde, Jacob, 108, 120 (1821); Gough v. ottley. 5 
 DeG. & Sm. 653 (1852); Bugden v. Tylee. 21 Beav. 545 (1856); Smith v. 
 Barnes, L. R. 1 Eq. 65 (1865); Simpson v. Bathurst, 5 Ch. App. Cas. 193 
 (1869); In re Cowin, L. R. 33 Ch. Div. 179 (18S6). 
 
 II is the trustee's duty to produce for inspection by the cestui que trust 
 or by the cestui que trust's agent cases submitted to counsel and opinions 
 thereon furnished by counsel to snide him in the due administration of his 
 trust. Devaynes v. Robinson, 20 Beav. 12 (1855); Wynne v. Humberston, 
 27 Beav. 421 (1859); Talbot v. Marshfield, 2 Drew. & Sm. 549 (1865); Re 
 Mason, L. R. 22 Ch. Div. 609 (1883). 
 
 The trustee, however, is not hound to produce for such inspection cases 
 submitted and opinions of counsel thereon taken to defend himself against 
 legal proceedings by the cestui que trust. Brown v. Oakshott, 12 Beav. 252 
 (1849); Devaynes v. Robinson, 20 Beav. 42 (1855); Wynne v. Humberston, 
 27 Beav. 421 (1859); Talbot v. Marshfield, 2 Drew. & Sm. 549 (1S65).
 
 :',74 THE DITTIES OF A TRUSTEE. (Ch. 5 
 
 the defendants were his executors and John Joseph Tourle, the sur- 
 viving trustee of the will of William Postlethwaite. 
 
 The statement of claim alleged that a portion of the testator's 
 estate had been sold to one James Walker, who was acting as trustee 
 for William Charles Rickman, and was put forward by the latter for 
 the purpose of concealing from Joseph Legg Postlethwaite and others 
 interested in the estate that William Charles Rickman was the real 
 purchaser; that the defendant Tourle had acted as the solicitor for 
 himself and his co-trustee in winding up the estate, and that William 
 Charles Rickman had made large profits in reselling the trust prop- 
 erty bought for him. The plaintiffs sought to make the estate of 
 William Charles Rickman and the defendant Tourle liable for such 
 profits. 
 
 The defendants, the executors of William Charles Rickman, alleged 
 in their statement of defence that the sale to Walker was made bona 
 fide, and that their testator had subsequently bought from Walker. 
 They had made an affidavit of documents, including a number of 
 letters written by the defendant Tourle to their testator, and the bills 
 of costs of the defendant Tourle. They claimed privilege from pro- 
 ducing these on the ground that they were professional communica- 
 tions of a confidential character between their testator and the de- 
 fendant Tourle, who in such communications acted professionally 
 for their testator, and as his private solicitor, and not as solicitor for 
 the trust, and were charged to and paid for by him out of his own 
 money. 
 
 This was a summons on the part of the plaintiffs to compel the 
 production of those documents. 
 
 North, J. 22 The defendants object to produce certain letters and 
 copies of letters and correspondence between Tourle and Rickman in 
 the years 1853 and 1854, and two bills of costs, on the ground that 
 they were privileged. It is said that in that correspondence Tourle 
 was acting as the private solicitor of Rickman and not as the solicitor 
 of the trustees, and that those communications were paid for by Rick- 
 man personally out of his own moneys, and were made with the object 
 of enabling him to procure legal advice and assistance as a private 
 individual, and not as a trustee of the testator's will. And it is said 
 that the bills of costs were prepared by Tourle in his private capacity, 
 acting professionally for Rickman as a private individual and at his 
 expense, and that they contained professional communications of a 
 confidential character between Rickman and Tourle. 
 
 It seems to me that these documents ought to be produced, and 
 on three grounds. In the first place, looking at the case made by the 
 statement of claim (whether it will be proved or not I do not know 
 and I assume that it is true only for the purpose of deciding the 
 present question), I think that when a scheme is devised by two out 
 
 22 Only a part of the opinion is given.
 
 Sec. 3) DUTY TO GIVE INFORMATION AS TO TRUST ESTATE. 375 
 
 of three trustees that one of the two shall purchase part of the trust 
 estate in the name of a third party, and that this shall he concealed 
 from the third trustee, so that the cestui que trust may know nothing 
 about it, no professional privilege can avail to protect from pro- 
 duction any correspondence relating to such a transaction as 
 that. * * * 
 
 But, in the second place, Rickman and Tourle were acting together 
 in relation to the trust estate. Tourle was himself one of the trus- 
 tees, and he was the solicitor of all the trustees, and he also, in some 
 totally independent matters acted as Rickman's solicitor. In my 
 opinion it is not open to trustees to act together in such a way — the 
 one acting as the professional adviser of the other — as to close the 
 mouth of either of them in regard to matters relating to the trust. 
 Tf they do so act, they must take the consequence of that which they 
 had done not being treated as privileged. The difficulty of holding 
 that privilege existed in such a case would be very great. Suppose 
 that one of the cestuis que trust had made an assignment of his 
 interest in the trust property of which notice had been given only to 
 one of the trustees — Rickman. Suppose that no notice had been given 
 by the assignee to Tourle, but that he had been informed of the as- 
 signment by Rickman when he was acting as Rickman's solicitor; 
 could he decline to answer whether he had received notice on the 
 ground that he was acting as Rickman's solicitor? In my opinion he 
 could not, but the notice which he had received would have been re- 
 ceived by him in his character of trustee, and he would be bound to 
 disclose it. If two trustees acted together, not fraudulently, hut un- 
 fairly to their cestui que trust, I think it would be a novel doctrine 
 to say that they had a right to keep within their own bosoms that 
 which they had done because one of them was acting as solicitor for 
 the other. 
 
 The third ground is one which is peculiar to the present case. The 
 executors, by their defence, deny that Walker was acting as trustee 
 for Rickman for the purpose of concealing the fact that he was pur- 
 chaser from the cestuis que trust. Adopting this as a true statement, 
 it amounts to this, that what was done by Rickman and Tourle, before 
 the sale to Walker, was done by them as co-vendors of the property 
 to him, and not because Rickman had any independent interest by 
 reason of the purchase from Walker. If this be so, what ground is 
 there for saying that any relation of solicitor and client existed be- 
 tween Rickman and Tourle which can confer any professional privi- 
 lege upon the communications between them? I think the statements 
 in the executors' defence put them out of court. I therefore must 
 order the production of these documents. With the consent of the 
 counsel on both sides I have looked at the documents, and from what 
 I have seen of them I think it is clear that they ought to be produced, 
 lint the defendants will have liberty to seal up such parts as are not 
 relevant to the matters in question in this action.
 
 ;J76 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 
 SECTION 4.— THE TRUSTEE'S DUTIES OF MANAGEMENT 
 OF THE TRUST ESTATE. 
 
 I. The Trustee's Duty to Takk the Steps Necessary to Secure 
 the Trust Estate. 
 
 M \UV JACOB and ROBERT ROTHWELL LUCAS and Others, 
 Infants, by the Said MARY JACOB, Their Next Friend, Plain- 
 tiffs, v. ROBERT TRISTRAM LUCAS and Others, Defendants. 
 
 (In Chancery before Lord Langdale, Master of the Rolls, 1839. 1 Beavan, 
 
 43G.) 
 
 Stuckley Lucas, by his will, directed his children to assign to the 
 trustees of his will certain stocks, funds and securities, to which they 
 would become entitled under the testator's marriage settlement; and 
 in default, that they should forfeit the benefits given them by his 
 will. The testator gave part of his property, including the property 
 in the settlement, to his trustees, Thomas Todd, John Henry Jacob, 
 Richard Bere and John Beague, in trust as to part, for his son 
 Robert Tristram Lucas, for life, with remainder to his children, and 
 as to other part, for the benefit of persons defendants to the suit ; 
 and he appointed the four trustees his executors. The will contained 
 a direction, that when any trustee should die or refuse to act, the 
 surviving or acting trustees should appoint new trustees, "so that 
 there might not be less than two acting trustees at any one time." 
 
 The testator died in 1811, and Thomas Todd and John Henry Jacob 
 alone proved his will. Part of the testator's property consisted of 
 £825. bank stock and £17. 10s. long annuities, standing in his name 
 at the time of his death. The acting executors and trustees did not 
 transfer these sums into their own names, but suffered them to remain 
 in the name of the testator. 
 
 The settlement funds were assigned by the testator's children to 
 the trustees of the will, but were permitted by them to remain stand- 
 ing in the names of the trustees of the settlement. 
 
 Thomas Todd died in 1819; and John Henry Jacob, who survived 
 him, appointed no new trustee in his place. He died in 1828, having 
 appointed the plaintiff, Mary Jacob, his sole executrix, who after- 
 wards proved his will. After the death of John Henry Jacob, Robert 
 Tristram Lucas, upon the renunciation of Bere and Beague, the two 
 other executors who had not acted, obtained letters of administra- 
 tion de bonis non of the estate and effects of Stuckley Lucas ; and, 
 as administrator, he sold out the two sums of £825. bank stock and 
 £17. 10s. long annuities, and he applied the same to his own use. 
 This he was enabled to do, in consequence of the acting executors,
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 377 
 
 Thomas Todd and John Henry Jacob, having allowed these sums 
 to remain in the name of the testator, Stuckley Lucas. 
 
 Robert Tristram Lucas assigned his interest under the will to 
 secure £150. to John Wood; and, in 1822, he likewise charged it 
 with an annuity of £32. to George Haynes, and, in 1834, he further 
 charged it with an annuity of £106. 12s. to Mr. Rudall. 
 
 A suit of O'Neil v. Lucas had been instituted, to compel the specific 
 legatees of Stuckley Lucas to contribute towards payment of his 
 debts, there being a deficiency of assets to provide for the debts and 
 legacies. In that suit, funds, in which Robert Tristram Lucas was 
 interested under the will, had been paid into court. The effect of 
 that suit was relied on in argument, but did not form the ground of 
 the decision. 
 
 The bill was filed by Mary Jacob, the executrix of John Henry 
 Jacob, who was the surviving acting executor and trustee under the 
 will of Stuckley Lucas, and by the infant children of Robert Tristram 
 Lucas (who were entitled in remainder to part of the property), by 
 Mary Jacob, their next friend, against Robert Tristram Lucas, his 
 incumbrancers, and against the personal representatives of Thomas 
 Todd the other executor and trustee, and against the other parties 
 interested, praying "that Robert Tristram Lucas might be decreed 
 responsible for the said several sums of £825. Bank of England stock 
 and £17. 10s. long annuities, which he had sold out and applied to 
 his own use;" and that he might be decreed to replace those sums; 
 and "in default thereof, that the several stocks, funds and securities, 
 to which he might be held to be beneficially entitled under the said 
 will, and in the said suit of O'Neil against Lucas, might be appro- 
 priated and applied in the liquidation and satisfaction of such several 
 sums of stock and annuities." 
 
 The bill charged : "That Robert Tristram Lucas pretended that 
 he was not liable to reinvest the said stock, or to supply any deficiencv 
 that might arise in respect thereof, but that the estates of Thomas 
 Todd and John Henry Jacob, or one of them, were liable in respect 
 of any loss incurred thereby; for that such several sums of stock 
 ought, upon the death of the said testator, Stuckley Lucas, to have 
 been invested in their names, and that they wilfully neglected to do 
 so, and that in consequence thereof, they were guilty of a breach of 
 trust, and ought to make good any loss occasioned thereby ; whereas 
 the plaintiff, Mary Jacob, expressly charged, that the said trustees and 
 executors were never directed by the will to invest any such stock 
 in their own names by said testator, and that independently of that 
 circumstance, the same remaining outstanding was a protection to 
 the interest of the cestui que trust, by remaining distinct and unmixed 
 with other funds, over which they had control, and to which other 
 parties were entitled." 
 
 The Master of the Rolls. The bill prays: [His Lordship stated 
 the prayer.] It appears that Robert Tristram Lucas, as legal personal
 
 378 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 representative of the testator Stuckley Lucas, procured these funds, 
 in which he was entitled to a life interest, with remainder to the plain- 
 tiffs, his infant children, to be transferred into his own name, and 
 that he has applied them to his own use. Nothing can he more clear 
 than the equity of the plaintiffs to relief in respect to this gross 
 breach of trust; and it" this were all, it would be equally clear that 
 the infant plaintiffs and those who have suffered from this breach 
 of trust, are entitled to he recouped to the extent of the interest of 
 Robert Tristram Lucas; he has not only committed these breaches 
 of trust, but he has assigned hi- beneficial interest to other persons; 
 and when the plaintiffs ask that his interest may be appropriated and 
 applied in satisfaction of the breaches of trust, they come in instant 
 competition with the other persons who have claims on the fund, 
 either in the character of assignees or in the character of persons 
 who. having suffered from these breaches of trust, are, as such, en- 
 titled to equal relief with the plaintiffs. It is necessary, therefore, to 
 look beyond the simple circumstances to which I have adverted. 
 
 The testator died in 1811; by his will -he appointed four persons 
 to be his trustees and executors; two only proved; and it appears that 
 his assets consisted of stocks, funds and securities standing in his 
 
 me; he made gifts to his children on condition that they assigned 
 to the trustees of his will certain settlement funds to which they were 
 entitled; the children, it is said, assigned their interests and accepted 
 the benefit under the Will. Todd, one of the executors, died in De- 
 ccmber, 1819; and the other acting executor was Jacob, who died 
 on the loth of January, 1828. At that time a portion of the funds 
 remained in the name of the testator ; while that portion of the set- 
 tlement fund, which he had purchased by gifts to his children, re- 
 mained in the names of the trustees of the settlement. The acting 
 executors and trustees did not declare the trusts specifically or convert 
 themselves from executors to trustees, of the funds which were stand- 
 ing in the name of the testator, and did not procure the transfer of 
 the settlement funds. Jacob, the survivor, having died in January, 
 1S28, the two other persons who had been appointed executors anil 
 trustees renounced ; and letters of administration, with the will an- 
 nexed, were granted to Robert Tristram Lucas, who thereby took on 
 himself the execution of the trusts of the will. At the time he pro- 
 cured the letters of administration to be granted to him, the funds 
 were in this situation; partly in the name of the testator and partly 
 in the name of the trustees of the settlement ; and in this state of 
 things the case of O'Neil v. Lucas was instituted. [His Lordship 
 stated the nature of the suit of O'Neil v. Lucas.] There seems great 
 difficulty in tins suit not being connected with O'Neil v. Lucas, so 
 a- to enable the plaintiffs to avail themselves of the proceedings in 
 that case. A hill, being necessary, is filed, not on behalf of the infants 
 alone, but in conjunction with Mary Jacob, who is the legal personal 
 representative of John Henry Jacob the surviving executor and
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 379 
 
 trustee, who, it appears, has been sought to be charged with a breach 
 of trust. Mary Jacob, it is to be observed, is not at all personally 
 responsible (except out of the assets of John Henry Jacob) for 
 this breach of trust, which was of this nature; a certain number of 
 trustees ought to have been kept up, which has not been done, and 
 the funds were left in the name of the testator, and were never trans- 
 ferred into the names of the trustees; by these means Robert Tris- 
 tram Lucas got possession of these funds, and was thereby enabled 
 to commit this breach of trust. Another breach of trust complained 
 of was this, that after Todd and Jacob had (the time of the assign- 
 ment is not stated) obtained an assignment and transfer of the settle- 
 ment funds, by which they became a portion of the testator's estate, 
 they were permitted to remain in the names of the trustees of the 
 settlement ; the income was paid to the persons entitled, without any 
 notice having been given to the trustees that the trust fund had become 
 the property of the testator; and subject to the trusts of his will; 
 Robert T. Lucas was permitted to receive the interest of the trust 
 funds thus remaining in the hands of the trustees, and he pro- 
 ceeded to deal with it for the purpose of making incumbrances and 
 granting annuities payable out of his interest. In this state of things, 
 it is not to be wondered that those persons who are interested in the 
 estate of the testator, and have suffered by the breaches of trust of 
 Robert Tristram Lucas, should say that there is a remedy against the 
 trustees in respect of those breaches of trust ; and it is clear that if 
 John Henry Jacob was answerable for them, his estate in the hands 
 of Mary Jacob is also answerable. Now what is sought in this suit 
 is, that the infant children of Mr. Lucas desire to be repaid out of 
 his life estate; but in seeking payment out of that life estate, they 
 come in competition with a great variety of other persons — with 
 persons standing precisely in the same situation— having precisely 
 the same rights and equities as they have, and with other per- 
 sons, who under the circumstances I have mentioned, have become 
 assignees of the interest of Robert Tristram Lucas. Suppose (which 
 may possibly happen) that the life estate of Robert Tristram Lucas 
 should turn out to be insufficient to pay all the several losses which 
 the parties have sustained by the breaches of trust, who would then 
 be the person next resorted to but those who have improperly per- 
 mitted those breaches of trust to be committed? And these are the . 
 representatives of Todd and Jacob. I do not mean to decide any 
 points of equity arising between the parties ; but here I find the infant 
 plaintiffs connected in the suit with a person with whom they may 
 probably come into competition in the future stages of this cause. 
 The answer which was made during the argument of this case was, 
 that the joinder of Mrs. Jacob did not prejudice the infants at all, 
 because any other person might file a bill and make Mary Jacob a 
 defendant, and that she would not in any way be released by this suit. 
 But is that a state in which things ought to be left? I confess I feel
 
 3S0 THE DUTIES OE A TRUSTEE, (Ch. 5 
 
 it impossible to get over the difficulty; thinking, at the same time, 
 there is a right on the part of the plaintiffs to equitable relief, if it 
 were correctly brought forward, I should be disposed, if I could set 
 everybody right as to costs, and if I could leave the question open as 
 to the responsibility of Mary Jacob, to put the suit right, rather than 
 dismiss the bill. I have no objection to let the cause stand over for 
 a few days, to see if the parties can arrange it. 
 
 It being intimated to the court, that there was no prospect of the 
 parties consenting to any arrangement, 
 
 Tin; Master of Tiik Rolls said: Then I must dismiss the bill 
 with costs, without prejudice to the plaintiffs filing another bill, or 
 adopting such proceedings as they may be advised, and without prej- 
 udice to any question as to the rights of the parties. 23 
 
 HEXT v. PORCHER. 
 
 (Court of Appeals of South Carolina, 1S4G. 1 Strob. Eq. 170.) 
 
 Before Johnston, Ch., at Gillisonville, February, 1846. 
 
 The facts of the case are stated in the following circuit decree. 
 
 Johnston, Ch. This is a bill claiming redress for the alleged neg- 
 ligence of a trustee, by which the trust property has been lost to the 
 cestuis que trust. 
 
 On the 15th of December, 1806, Sarah C. Porcher, the mother, and 
 Lawrence Hext, the father of the plaintiffs, on the eve of their inter- 
 marriage, which shortly afterwards took place, entered into a deed of 
 indenture with James Porcher, the intestate of the defendant, whereby 
 the said Sarah C. conveyed all her individual interest in the estate of 
 her deceased father, Peter Porcher, and of her deceased uncle, Wil- 
 liam Young, to the said James Porcher, in trust, after the marriage, 
 for the joint use of herself and her intended husband, during their 
 joint lives, and to the survivor of them, with remainders in fee, to 
 the issue of the said Sarah C. by that or any subsequent marriage. 
 
 The trustee, James Porcher, caused the deed to be registered in the 
 Registry of Mesne Conveyance for P>eaufort District, thirteen or 
 fourteen days after its execution, but it was never registered in the 
 Secretary of State's office, and the original is now in the defendant's 
 possession, as administratrix of the said trustee. 
 
 After the intermarriage of Lawrence Hext and wife, her shares 
 in said estate were partitioned off to her, and there came into the 
 possession of the husband a number of slaves, who, with their 
 increase, now number some seventeen or eighteen. 
 
 All these slaves were sold to bona fide purchasers (without notice 
 either by Lawrence Hext himself or by the sheriff) for his debts, 
 
 23 See Fenwick v. Green well, 10 Beav. 412 (1847).
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 381 
 
 with the exception of two, as to which no relief is sought against the 
 defendant. Lawrence Hext and his wife are now both dead, and the 
 plaintiffs, who are the issue of the marriage, claim an account of the 
 value of the slaves lost to them by the negligence of their trustee to 
 register the deed in the proper office, so as to charge the purchasers 
 of the trust property with notice, and enable the plaintiffs to recover 
 it from them. It appears, from an examination of the Registry of 
 Mesne Conveyance for Beaufort District, from 1787 to 1812, inclu- 
 sive, that forty-six marriage settlements were recorded in that office, 
 of which twenty-three were settlements of real and personal property, 
 eighteen of personal property, and the remaining five of property the 
 character of which is undefined. 
 
 This is the case stated by the counsel, for the consideration of the 
 court; and the question is, whether, under these circumstances, the 
 trustee was liable for the losses sustained by his omission to record 
 the deed in the Secretary of State's office. 
 
 My impressions of this case have materially changed, since the 
 hearing; and I cannot now say, as I would have said then, that the 
 conduct of the trustee was or is to charge him. I do not doubt that 
 it was his duty, after accepting the trust, to perform any act necessary 
 for the preservation of the property, and for securing the interests 
 of his cestuis que trusts, and to record the deed, as one means of at- 
 taining these ends. 
 
 Nor is it any longer a question, that the proper office for the 
 registration of marriage settlements, under the Act of 1785, was that 
 of the Secretary of State; although that seems to have been doubted, 
 up to the decision of Boatright v. Wingate, 2 Tread. Const. 522, which 
 was long after this deed was recorded, and it will appear, by the 
 opinion of the Judges in that case, that one of them, who at the regis- 
 tration of this deed, was the leading counsel in Beaufort, and had 
 the principal direction and control of the business there, was strenu- 
 ously of opinion that such a registration as was made, in this case, 
 was effectual and valid. My own opinion, while at the bar, was, and 
 is still, that under the Act of 1785, settlements of personalty were to 
 be recorded in the Secretary's office, and that as to settlements of 
 realty, they were subject to a double registration ; one in the Secre- 
 tary's office, as settlements under the Act in question, and the other 
 in the Registry of Mesne Conveyance, as deeds for conveying lands, 
 under the Act upon that subject. The trustee, therefore, did not 
 comply with the law, by the registration which he caused to be made 
 in this case, and his cestuis que trusts, the preservation of whose 
 interest was the very end of his appointment, have suffered loss by 
 his omission. 
 
 But the liability of trustees is not measured by the abstract rule of 
 their duty. The universal test of their liability, or exemption from 
 liability, is this; is there, or is there not, in this case, evidence of 
 faithful endeavors to fulfill it? The office of trustee is one essential
 
 ::m» the duties of a trustee. (Ch. 5 
 
 to every important interest in society, and so far from those interests 
 Icing promoted, they would be deeply prejudiced, if any rule more 
 rigorous than this — any rule calculated to deter prudent and honest 
 men, of ordinary capacity, from accepting the appointment— were 
 laid down, or insisted on. The partial effect of that rule would be 
 to confine the office to the crafty and dishonest, who might accept 
 with the hope of eluding liability, and securing profit by fraud and 
 dexterity. The test of liability, as I have laid it down, is to be gath- 
 ered from all the cases upon the subject, and 1 shall not trouble my- 
 self with an analysis of them. There may be strong expressions to 
 the contrary effect, but the broad leading principle of all the cases is 
 as I have stated it. It has sometimes been said, as I have laid it 
 down in Cooper v. Day, 1 Rich. Eq. 26, that if the act done by a 
 trustee, be such as a prudent man would not have done in his own 
 affairs, or if that which the trustee has omitted, be wdiat a prudent 
 man would not have omitted in matters of personal interest, the trus- 
 tee shall be liable. But this rule is manifestly subsidiary. It is used 
 as a test of unfaithfulness, which, after all, is the fundamental ground 
 of liability. If a trustee does, or omits, what a prudent man would 
 not do or omit, in his own concerns, and there is no more in the case 
 than that, it may be set down as presumptive evidence of indifference 
 to his duty. And in the case I have mentioned there were circum- 
 stances (if their aid had been required) to give a tinge to the conduct 
 of the trustee, and to strengthen the presumption arising from his 
 unexplained omission to record the deed. But here the omission does 
 not stand alone. There are circumstances which refute the presump- 
 tion which might arise from it, and to show that the trustee was 
 honest and diligent, but mistaken. The fault is not an omission to 
 record, but a mistake in the office where it was done. The registra- 
 tion, though erroneous, is proof of a faithful intention to perform 
 the duty required by law, which intention is none the less meritorious 
 on account of the mistake. The mistake appears also to have arisen 
 naturally from the general custom of the time, in which prudent men, 
 trustees and others deeply interested, indulged; and it appears to 
 have been grounded upon very high authorities. 
 
 I do not conceive, that to take advantage of a mistake, committed 
 with an evidently honest endeavor by the trustee to perform his duty, 
 and to make him liable for the consequences, would either square with 
 the dictates of justice, or promote the true policy of the court or the 
 interests of its sanctions, and it is ordered that the bill be dismissed. 
 The complainants moved to reverse the decision of his Honor, 
 Chancellor Johnston, in the case above stated, on the following 
 grounds : 
 
 1. Because it was made clearly to appear, by the bill, answer, ex- 
 hibits and evidence, that the property to which complainants were 
 entitled, had been lost in consequence of the negligence or omission 
 of the trustee, James Porcher, to cause the trust deed to be registered
 
 Sec. 4) duties of management of trust estate. 383 
 
 in the proper office, and therefore the estate of the said James Por- 
 cher should have been held liable for the loss so sustained. 
 
 2. Because it is conceded, by the very terms of the decree, that 
 the trustee, James Porcher, was bound to cause the trust deed to be 
 recorded; and it is respectfully submitted, that the fact that the trust 
 deed was recorded in the wrong office, is not any proof of diligence, 
 prudence or skill, nor is it any excuse. 
 
 3. Because the decree is contrary to law, equity and evidence. 
 JOHNSTON, Ch., delivered the opinion of the court. 
 
 This court concurs in the decree of the Chancellor, and it is ordered 
 that the decree be affirmed, and the appeal dismissed. 
 Dunkin, Ch., and Caldwell, Ch., concurred. 
 Harper, Ch., absent at the hearing. 
 Appeal dismissed. 2 * 
 
 CANEY v. BOND. 
 (In Chancery, before Lord Langdale, Master of the Rolls, 1843. 6 Beav. 4S6.) 
 
 The object of the suit was to make an executor liable for a sum of 
 money which had been lost by the insolvency of the debtor, on whose 
 personal security the debt had been allowed by the executor to re- 
 main. 
 
 In 1825, the testator advanced to a Mr. Phillips a sum of £500.. 
 to be invested by the latter on some mortgage security. For securing 
 it in the meantime, Mr. Phillips gave to the testator his promissory 
 note, payable with interest. 
 
 In lanuary, 1826, the testator died, and his will was proved by 
 lones and Bond, his executors. Shortly afterwards, Jones and one 
 of the persons interested in the testator's estate pressed Bond to call 
 in this debt, and to invest it in the funds ; but Bond replied, "that he 
 should not think of removing the money from Mr. Phillips's hands, 
 as it was as safe there as if it were in the Bank of England." Other 
 similar applications were afterwards made to Bond, but with no 
 better success. In 1827 Bond received £100. from Mr. Phillips, in 
 part payment, and the remainder was lost by the death and insolvency 
 of Mr. Phillips in March, 1828. There was evidence to show that 
 Mr. Phillips, if pressed earlier, would have paid the amount. 
 
 Under these circumstances, it was insisted, by the bill, that Bond 
 was personally liable for the £400. and interest. 
 
 The Master of the Rolls. At the death of the testator, part of 
 his estate was outstanding on personal security. It was the duty of 
 the executors, quite independently of any application made to them 
 by the persons interested in the estate, to take steps to get in this 
 
 2* In Cooper v. Day, 1 Rich. Eq. 2G (1844), a trustee was held liable for loss 
 resulting to his cestui que trust from his neglect to record a trust deed of 
 laud.
 
 384 THE DUTIES OF A TRUSTEE. (Cll. 5 
 
 money. In the exercise of a fair discretion, they were not to com- 
 mence legal proceedings unnecessarily, Inn t hey ought to have exerted 
 themselves to get in the debt, and, if necessary, to have commenced 
 compulsory proceedings to obtain it. 
 
 The persons beneficially interested, not considering the money safe 
 where it was, requested the defendant T>ond to get it in. Instead of 
 complying with this request, he refused to do so, saying that the 
 money was as safe as in the Bank of England; two years afterwards 
 the money was lost by the insolvency of the debtor. 
 
 If, in any case, an executor is to be charged for wilful default, it 
 is in a case of this sort, where the money not only is found on a 
 security not sanctioned by the court, and which ought therefore to 
 be got in, but where also the executor has been requested to call it 
 in, and has refused on the ground that it is perfectly safe. 
 
 The defendant, by his conduct, has taken upon himself the risk 
 of the security, and he must therefore be charged with it, and with 
 the costs down to the hearing. 23 
 
 2 3Lo\vson v. Copeland, 2 Bro. C. C 156 (1787); Powell v. Evans, 5 Yes. 
 Jr. 839 (1801); Tebbs v. Carpenter, 1 Mad. 290 (1816); Mucklow v. Fuller, 
 Jacob, L98 (1821); Plate] v. Craddock, Cooper's Chy. Rep. 481 (1838); Bul- 
 lock v Wheatley, 1 Coll. 130 (1*44) ; Maitland v. Bateman, 16 Sim. 233, note 
 (1844); Styles V. Guy, 16 Sim. 230 (1848), affirmed 1 .Mac. ,v G. 122 iis4!»; 
 Byrne v. Norcott, 13 Reav. 336 (1851); Wiles v. Cresham, 2 Drew. 258 (1854); 
 Brittlebank v. Goodwin, L. R. 5 Eq. 7>\r, (1868); in re Brogden, L. R. 38 Ch. 
 Div. ."If, (1888); In re Tucker, L. R. (1894) 1 Ch. 724; Duffee v. Buchanan, 
 
 5 Ala. 27 (1845); Hughes v. Mitchell, 19 Ala. 268 (1851); Royall's Adm'r v. 
 McKenzie, 25 Ala. 363 (1854) ; Munden v. Bailey. 70 Ala. 63 (1881) : Shephard's 
 Heirs v. Shephard's Adm'r, 19 Fla. .".<>(), .'J20 (1*82) ; Sanderson's Adm'rs v. 
 Sanderson, 20 Fla. 292, ::::.-» (1883); Whitney v. Peddicord, <'>•': in. 249 (1872); 
 Waterman v. Alden. 144 111. 90, 32 N. E. 072 (1893); Simpson v. Gowdy, 19 
 Ind. 202 (1M)2i; State v. Gregory, 88 Ind. 110 (1882); Cross v. Petree, 10 
 B. Men. (Kv.) 413 (1850); Hunt v. Gontrum, SO Mil. 64, 30 Atl. t',20 (1894); 
 Banks v. Machen, 40 Miss. 250 (1866); Moffatt v. Loughridge, 51 Miss. 211 
 iis75); McWilliams v. Norfleet, 63 Miss. 183 (1885); Booker v. Armstrong, 
 93 Mo. 49, 4 S. W. 727 (1887); Holcomb v. Coryell. 11 X. J. Eq. 470 (1858); 
 Oooley v. Vansyckle, 14 N. J. Eq. 490 (I860); Poulson v. Johnson, 2:1 X. J. 
 Eq. 529 (1878); Speakman v. Tatem. 48 N. J. Eq. 136, 21 Atl. 466 (1891), 
 affirmed 50 N. J. Eq. 484, 27 Atl. 636 (1892); Shultz, Adm'r, v. Pulver, :; 
 Paige (N. Y.) 182 (1832), affirmed 11 Wend. (N. Y.i 361 (1833); Hollister v. 
 Burritt, 14 Hun (N.T.) 291 (187S) ; Harrington v. Keteltas, 02 N. Y. 40 (1883); 
 Matter of Cornell, 110 N. Y. 351, 365, 18 N. E. 142 (1888); O'Connor v. Gif- 
 t'onl. Dem. Sur. (N. Y.) 71 (1888); Wilson v. Lineberger, 88 N. 0. 416, 422 
 (1883); Long's Estate, Watts (Pa.) 16 (1837); Johnston's Estate, Watts 
 
 6 s. (Pa.) 107 (1845); Beckley's Appeal, :: Pa., 425 (1846); Wills' Appeal, 
 22 Pa. 325 (1853); Charlton's Appeal, 34 Pa. 473. 75 Am. Dec. 673 (1859); 
 Shaffer's Appeal, 46 Pa. L31 (1863); Stong's Estate, 160 Pa. 13, 28 Atl. 480 
 (1894); Can's Estate, 24 Pa. Super. Ct. 300. 375 (1004); O'Dell v. Young, 
 McMul. Eq. (S. C.) 1", (1829); dates v. Whetstone, s s. C. 244. 28 Am.Jiep. 
 284 (1876); Lowry v. McGee, :: Head (Tenn.) 269 (1859); Holmes v. Bridg- 
 m.an. :;7 vt. 28 (1864); McClosky v. Gleason, 50 Vt. 204. 18 Am. Rep- 770 
 (1883); Rowe v. Bentley, 20 Crat. 75<', iIstm; Anderson v. I'iercy, 20 W. Ya. 
 282, ::::d (1882). 
 
 In In re Brogden, L. R. 38 Ch. Div. 540 ilSVSt, Fry. L. J., said at page 572: 
 "When the cestui que trust has shown that the trustee has made default 
 in the performance Of his duty, and when the money which was the suhject 
 of the trust is not forthcoming, the cestui que trust has made out. in my 
 judgment, a prima facie case of Liability upou the trustee, and if the trustee
 
 Sec. 4) DUTIES OK MANAGEMENT OF TRUST ESTATE. 385 
 
 SPEAKMAN v. TATK.U. 
 (Tii Chancery, before Vice Chancellor Pitney, L891. 48 x. J. Eq. 136.) 
 
 Final hearing on bill, answer and proofs. 
 
 Bill by cestui que trust against his trustee alleging that he - 
 lected to collect and take possession of the trust fund, and praying 
 that he might be charged with what he ought to have collected. 
 
 The trust was created by deed by husband (complainant) and wife 
 to the trustee. It recited that .Mrs. Speakman was entitled, as resid- 
 uary legatee to a fourth part of the residue of the estate of her father 
 John Draper, devised to her by his will and trans ferred the same to 
 John C. Tatem in trust to recover, collect, and receive and hold the 
 <me- foil rth part of the residue of the estate of John Draper, and after 
 the death of either the said T. S. Speakman or Emma E. Speakman 
 to pay to the survivor during his or her natural life one-third of the 
 net income, and, on the death of such survivor, to pay over the corpus 
 
 desire to repel that by saying that if he had done his duty no good would 
 have flowed from it, the burden of sustaining that argument is plainly mi 
 the trustee." See. in accord, Stvies v. Guy, l<» Sim. 230 (1848); Grove v. 
 Grace, 26 Beav. 103 (1858); Re ITurst. 63 L. T. It. »;<;;,. t;<;s (lsooi; in re 
 Sanderson. 74 Cal. 199, 15 Pae. 75:; (1887); Shephard's Heirs v. Shephard's 
 Adm'r. l'.i Fla. 300, 319 (1882); Gordon v. Gibbs, •". Smedes & M. (Miss.) 47::. 
 491 HMD ; Moffatt v. Loughridge, 51 Miss. I'll. 2124 (1875); Williams, Adm'r, 
 v. Heirs of Pettierew, 62 .Mo. 460, 471 (1876); Julian v. Abbott, 7:'» Mo. 580 
 (1881); Booker v. Armstrong, 9:: Mo. 40. 59 (1887); Powell v. Hurt. 108 Mo. 
 507, 17 S. W. 985 (1891); Harrington v. Keteltas, 02 N. Y. 40. 45 (1883); 
 Johnston's Estate, 9 Watts & S. (Pa.) 107 (1845) ; Anderson v. Piercy, 20 W. 
 Va. 2S2, 324 (1882). 
 
 The trustee may escape liability by showing that probably more was to be 
 got by indulgence to the debtor than by legal proceedings. Walker v. Simonds, 
 :; Sw. 1. 71. 72 (IMS); Ratcliffe v. Winch, 17 Beav. 217 (1853); fn re Earl, 
 39 W. R. 107 (1890); Waring, Ex'x, v. Darnall, 10 Gill & J. (Md.) 126 (1838) ; 
 Torrence v. Davidson, 92 N. C. 437. ."»:: Am. Rep. 419 (1885); Xefr's Appeal, 
 57 Pa. 91 (1868); Dabney's Appeal. 120 Pa. 344, 14 Atl. 158 (1SSS) ; Tanner 
 v. Bennett's Adm'r, 33 Grat. (Va.) 251 (1880). 
 
 Compromise. — The trustee may justify a compromise of a claim by showing 
 that more was got thereby than could probably have been collected. Blue 
 v. Marshall, 3 P. Wms. 381 (1735); Pennington v. Healey, 1 Crompt & M. 
 402 (is:::;) ; Moulton v. Holmes, 57 Cal. 337 (1881 1 : Berry v. Parkes, 3 Smedes 
 & M. (Miss.) 625 (1S44); Long v. Shackleford, 25 Miss. 559 (1853); Wvman's 
 Appeal, L3 X. II. IS (1S42) ; People v. Pleas, 2 Johns, ('as. (X. Y.i 376 (1801) : 
 In re Seott, 1 Redf. Sur. (N. Y.) 234 (1847); Choteau v. Suydam, Adm'r. 
 21 X. Y. 170 (lstiui; Hacot v. Ileyward, 5 S. C. 441 (1874); Pool v. Dial, 10 
 S. C. 440 (1878); Alexander v. Kelso, 3 P.axt. (Tenn.) .".II (1874); Boyd's 
 Sureties v. Oglesby, 23 Grat. (Va.) 074 (1873); Pusey v. Clemson, 9 Serg. & 
 R. (Pa.) 204 (1823). 
 
 A trustee is justified in not suing to collect a claim where there is no rea- 
 sonable ground to believe that anything can be collected. Bowen v. Mont- 
 gomery, 48 Ala. 353 (1872); Succession of Pool, 11 La. Ann. 688 (1859); 
 Smith v. Oollamer, 2 Dem. Sur. (N. Y.) 1 17 (1884); Mitchell v. Trotter, 7 
 Grat (Va.) 13(5 (1850); Anderson v. Piercy. 20 W. Va. 282 (1882). Unless ho 
 is indemnified as to costs. Griswold v. Chandler, ."> X. II. 492, 494 (1831); 
 Sanborn v. Goodhue. 28 X. II. 48, 59 Am. Dec. 398 (1853); Hepburn v. Bep- 
 burn, 2 Bradf. Sur. iX. Y.) 74 (1851); t'tley v. Rawlins, 22 X. O. 438 (1839). 
 Ken.Tr.— 25
 
 386 THE DUTIES OF A TRUSTEE. (Cll. 5 
 
 to the three children of said T. S. Speakman and Emma E. Speak- 
 man. 
 
 Attached to the deed was this acceptance: "John C. Tatcm, the 
 grantee above named, hereby assents to and accepts of the above con- 
 veyance and the trusts therein contained. John C. Tatem." 
 
 June 9, 1870, Mrs. Speakman deserted her husband and on No- 
 vember 6, 1874, he obtained a decree of divorce for such desertion. 
 Mrs. Speakman died in 1887. During her life the trustee, Tatem, 
 permitted the executors of John Draper to pay over to Mrs. Speak- 
 man the income and corpus of the one-fourth of the residue of her 
 father's estate. 
 
 Pitney, A'. C." (; * * * Another defence set up is, that the 
 complainant never requested the trustee to execute the trust. If there 
 had been no acceptance in writing, and, to the knowledge of complain- 
 ant, nothing had been done by the trustee under the trust, there would 
 be, as it seems to me, great force in that position. But the trustee 
 accepted in writing, and undertook to execute the trust. The deed 
 was produced by him at the hearing. He actually did in part execute 
 it. * * * Says Mr. Lewin, p. 243 : "As soon as a trustee has 
 accepted the office he must bear in mind that he is not to sleep upon 
 it, but is required to take an active part in the execution of the trust. 
 The law knows not such a person as a passive trustee. * * * 
 When a trustee has entered upon the trust he is bound at once to ac- 
 quaint himself with the nature and particular circumstances of the 
 property, and to take such steps as may be necessary for the due pro- 
 tection of it." 
 
 To the same effect is the language of Mr. Perry in his treatise on 
 Trusts § 266. And having once accepted and undertaken the trust, 
 he cannot of his own motion abandon it and evade its duties, and 
 can only be relieved by the aid of a competent court. Perry, Trusts 
 § 401 ; and see 2 Pom. Eq. Jur. § 1067, and note. These principles 
 seem to me to be beyond dispute or question, and to be elementary 
 and fundamental and a necessary part of the system of trusts. I 
 am unable to perceive any difference in principle in respect to the 
 question now in hand between the case of a trustee appointed by will 
 and one by deed, where both have accepted the trust by unequivocal 
 acts. In fact, it seems to me that executors, administrators, guardians 
 of infants and lunatics, assignees in insolvency and bankruptcy, and 
 trustees under marriage or other voluntary settlements, all stand upon 
 the same plane in this respect, viz., that if they accept the office they. 
 must perfo rm its duties actively, not passively, and must not wait 
 u_pon the motion of the persons interested as cestuis que trust to 
 incite and prompt their actions. The trustee must act in and look after 
 the interest of all the cestuis que trust witb perfect impartiality. The 
 standard is this : He must use the same diligence in seeking for and 
 
 2c Only a part of the opinion is given.
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 387 
 
 reducing the trust property to possession, and the same care in pre- 
 serving; it, that an ordinarily cfiligent and careful man would exercise 
 and take in respect to his own property. It would he highly dangerous 
 to adopt any other rule or to ahate its rigor in the least. It is not 
 necessary to illustrate by instances. In the case in hand some of those 
 entitled in remainder were or might have been infants at the time 
 the trustee permitted the funds here in question to pass into the hands 
 of one of the donors. The trust was irrevocable, except by the con- 
 sent of both donors. Suppose, now, Airs. Speakman had squandered 
 these funds or diverted them by will to other objects, would the rights 
 of the remaindermen have been gone? 
 
 The disposition of courts of equity to hold trustees to an active 
 attention to the duties of their office, is illustrated by the case of Tay- 
 lor v. Millington, 4 Jur. (N. S.) 204, which in many of its aspects 
 resembles the case before the court. See, also, Youde v. Cloud, L. 
 R. 18 Eq. Cas. 634; Ex parte Ogle, L. R. 8 Ch. App. 711 (at page 
 716); Butler v. Carter, L. R. 5 Eq. Cas. 276; Ex parte Graves, 2 
 Jur. (N. S.) 651. * * * 
 
 In my opinion the complainant is entitled to relief to the extent of 
 the money which the defendant did receive and might have received 
 and which I ascertain to be the sum of $12,895. 27 * * * 
 
 Ex parte OGLE. Ex parte SMITH. 
 In re PILLING. 
 
 (In the Court of Appeal in Chancery, 187.'i. Law Reports 8 Chancery Appeal 
 
 Cases, 711.) 
 
 In this case there were two appeals from a decision of the judge 
 of the County Court at Manchester. 
 
 The question in dispute arose under a deed of assignment dated the 
 21st of October, 1864, by which David Pilling, a leather factor at 
 Manchester, assigned all his property to Edward Smith, as a trustee 
 for his creditors. The deed was assented to by the requisite majority 
 of creditors, and was registered under the 192d section of the Bank- 
 ruptcy Act, 1861 (24 & 25 Vict. c. 134). 
 
 Mr. Ogle and other creditors charged the trustee with negligence 
 and mismanagement of the estate, and claimed to surcharge him in the 
 accounts which he had rendered in several particulars, and the 
 charges were referred to the Registrar to report on the facts. The 
 effect of his report, dated the 7th of May, 1872, so far as material 
 to the present appeal, was as follows : 
 
 Item 1. As to wine sold to the debtor or allowed to remain in his 
 hands. 28 
 
 2 7 Affirmed 50 N. J. Eq. 4S4, 27 Atl. 636 (1S92). 
 
 2 8 Only so much of the report as affects item 1 is given.
 
 
 388 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 The trustee discovered on the 19th of November, 1864, that there 
 were 519 bottles of wine and 84 of brandy in the debtor's possession 
 unaccounted for. The trustee instructed his solicitor, Air. Simpson, 
 to take legal steps for the recovery of the property. * * * 
 
 Mr. Simpson's managing clerk stated that the reason why more 
 active measures were not adopted was that Mr. Simpson believed 
 that the indebtor intended eventually to pay for the wine, and that he 
 wished to treat him in a friendly spirit and not hostilely. * * * 
 
 The charges arising out of the report were brought before the 
 Judge of the County Court, and his Honor made an order to the fol- 
 lowing effect on the items which formed the subject of appeal : 
 
 Item 1 : That the trustee should be surcharged with £130. as the 
 value of the wine and spirit, with interest at £5. per cent., from the 
 3d of May, 1865. * * * 
 
 Mr. De Gex, O. C, and Mr. Bagley, then opened the cross-appeal: 
 
 As to item 1 : The trustee was not to blame in permitting the wine 
 to remain in the debtor's possession. He did all that he could by 
 placing the matter in the solicitor's hands. It is very doubtful wheth- 
 er the court, under the Act of 1861, had power to order a debtor to 
 give up property which he kept possession of. At all events there 
 is no authority for charging the trustee with interest on the value 
 of the wine. A trustee is never charged with interest unless he has 
 himself possessed and used the property. Tebbs v. Carpenter [1 
 Madd. 290]. In Grove v. Price [26 Beav. 103] no interest appears 
 to have been charged, although the money was clearly lost by the 
 trustee's negligence. 
 
 Sir W. M. James, L. J. It appears to me that this was not merely 
 a debt, but a deliberate breach of trust. No proceedings were taken 
 against the debtor because he was a friend of the solicitor. The 
 County Court Judge was, in my opinion, right in charging the trustee, 
 not only with the value of the wine but with interest, 29 on the ground 
 that it was a breach of trust. 
 
 Sir G. Mkllisii, L. J., concurred. 30 
 
 29 Eppinger v. Canepa, Ex'r, 20 Fla. 202, 288 (1883) ; Scott v. Crews. 72 
 Mo. 201, 207, 208 (1880); Torbet's Heirs v. MrKeynol.ls, 4 Humph. (Tenn.) 
 215 (1843); Lowry v. McGee, :: Head (Tenn.) 269 (1859). Contra: Lowson 
 v. Copeland, 2 Bro. C. C. 156 (17S7); Tebbs v. Carpenter, 1 Madd. 290, 299 
 (1810) ; Pulliam v. Pulliam (G. C.) 10 Fed. 53, 00-67 (1881). 
 
 so Harrison v. Mock, 10 Ala. 185 (1840); Id.. 10 Ala. 010 (1849); Royall's 
 Adm'r v. McKenzie, 25 Ala. ::<;:'.. : , .72, 373 (1854); Torbet's Ueirs v. McRey- 
 nolds, 4 Humph (Tenn.) 215 (1843).
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 389 
 
 II. The Trustee's Duty to Convert into Money So Much of the 
 Trust Estate as is Not in a Proper State of Investment. 
 
 HOWE v. EARL OF DARTMOUTH. 
 
 (In Chancery, before Lord El don, Chancellor, 1802. 7 Vesey, Jr. 137.) 
 
 William, Earl of Strafford, by his will, dated the 25th of October, 
 1774, gave to his wife Anne, Countess of Strafford, all his personal 
 estate whatsoever (except the furniture of Wentworth Castle) for her 
 life, subject to the following outpayments and legacies. He also left 
 to her all his houses, gardens, parks, woods, and all his landed es- 
 tates for her life ; and afterwards all his personal and landed estates 
 to his eldest sister Lady Anne Connelly, for her life ; and then to the 
 eldest son of George Byng, Esquire; and afterwards to his second, 
 third, or any later sons he may have by the testator's niece Mrs. 
 Byng; and then to the eldest son and other sons successively of the 
 Earl of Buckingham by his niece Caroline ; but all of them to be 
 subject to the following outpayments and legacies. He left his wife 
 the sum of £15,000. to dispose of forever as she pleases, and the 
 value of £500. in furniture in Wentworth Castle, of whatever sort 
 she chooses; else the whole furniture to be hers, if she meets with 
 any difficulty in this disposition. He gave several legacies and an- 
 nuities; and declared, he would have all his debts paid; and gave 
 all his servants a year's wages. 
 
 The testator died on the 10th of March, 1791. Anne, Countess of 
 Strafford, died in his life, on the 9th of February, 1785. Lady Anne 
 Connelly filed a bill for an account of the personal estate, etc. By 
 a decree, made at the Rolls on the 17th of May, 1793, the usual ac- 
 counts were directed; and it was declared, that the plaintiff would 
 be entitled to the interest of the clear residue of the testator's personal 
 estate during her life; and an inquiry was directed, who were the 
 next of kin of the testator at the time of his death. 
 
 The Master's report, dated the 7th of March, 1796, stated the ac- 
 count of the personal estate ; part of which consisted of the following 
 stocks and annuities, standing in the testator's name at his death: 
 £4,320. bank stock; £9,572. per annum long annuities; £750. per 
 annum short annuities. 
 
 Under orders made in the cause the sums of £15,000. and £4,000. 
 had been paid in by the executors; and laid out in 3 per cent, con- 
 solidated bank annuities. 
 
 By a decretal order, made on the 7th of May, 1796, the balance of 
 the personal estate in the hands of the executors, and of the interest, 
 etc., was ordered to be paid into the bank; and that the executors 
 should transfer the £4,320. bank stock, the £9.572. per annum long 
 annuities, and the £750. per annum short annuities, to the Accountant 
 General, in trust in the cause ; and that the said funds, when so trans-
 
 ;"590 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 ferred, should be sold with his privity ; and that the moneys to arise 
 by such sale should be laid out in the purchase of 3 per cent, annuities, 
 in trust in the cause, subject to farther order; and that the Master 
 should appropriate a sufficient part of the said bank annuities, when 
 purchased, to answer the growing payments of the several annuities; 
 an<l that as any of the annuitants should die, the funds appropriated 
 respectively, should fall into the general residue; with liberty to 
 apply ; and it was ordered, that the interest of the residue of the said 
 bank annuities after such appropriation, and also the interest and 
 dividends of the said £4,320. bank stock, should be paid to the plain- 
 tic Lady Anne Connelly for her life; and on her death any person 
 or persons entitled thereto were to lie at liberty to apply; and after 
 providing for the costs out of the balance of the personal estate, and 
 for the arrears of the annuities out of the sum of £2,067. 6s. Id. the 
 balance of the interest and dividends received by the executors, and 
 ordered to be paid into the bank, it was ordered, that the remainder 
 should be paid to Lady Anne Connelly; and also, that £1,846. 9s. 7d. 
 v-as'h in the bank, which had arisen from interest of the funds, in 
 which part of the testator's personal estate had been invested, should 
 be also paid to her; and that the dividends of £24,619. 4s. lOd. 
 3 per cent, bank annuities, in which the sums received by the execu- 
 tors from the personal estate had been invested, should from time to 
 time be paid to her during her life; and on her death any persons 
 claiming to be entitled were to be at liberty to apply ; and it was 
 ordered, that the executors should get in the outstanding personal 
 estate; and that so much thereof as should consist of interest, should 
 be paid to Lady Anne Connelly ; and so much as consisted of prin- 
 cipal, should be paid into the bank, subject to farther order. 
 
 The Master's farther report, dated the 10th of December, 1796, 
 stated, that the bank stock and the long and short annuities had been 
 sold, and the produce laid out in 3 per cent, annuities. 
 
 Upon the death of the plaintiff Lady Anne Connelly, the suit was 
 revived by her executors ; and the cause coming on before Lord Alvan- 
 ley, then Master of the Rolls, for farther direction on the subsequent 
 report, it was insisted on the part of Mr. Byng, that Lady Anne Con- 
 nelly had received for interest and dividends, accrued on the bank 
 stock, and the long and short annuities, and the produce laid out in 
 bank 3 per cent, annuities, large sums more than she was entitled to. 
 if those funds had been sold, as they ought to have been, immediately 
 after the testator's decease, and the produce invested in a permanent 
 fund, viz., the 3 per cent, consolidated bank annuities. The Master of 
 the Rolls directed inquiries with respect to that question between the 
 executors of Lady Anne Connelly and Mr. Byng and the other parties 
 interested in the residue of the personal estate ; with liberty to present 
 a petition to rehear the order of 1796, as to the payments thereby di- 
 rected to be made to Lady Anne Connelly. 
 
 Mr. Mansfield, Mr. Lloyd, Mr. W. Agar, Mr. Wingfield, Mr. Sear-
 
 Sec. 4) DUTIES OP MANAGEMENT OF TRUST ESTATE. 391 
 
 gent Palmer, Mr. Bill and Mr. Richards, for different parties, in sup- 
 port of the petition of re-hearing. — The tenant for life of such funds 
 as bank annuities, carrying a higher interest, and long and short an- 
 nuities, wearing out rapidly, is not entitled to the enjoyment of them 
 in specie; but there is a standing rule of the court for the benefit of 
 all parties interested, that those funds shall be laid out in the more 
 equal fund, the 3 per cents. No party ought to suffer by the circum- 
 stance, that what ought to have been done, and what the court would 
 have directed to be done, immediately on the testator's death, was not 
 done. 
 
 Mr. Romilly and Mr. Trevor, for the executors of Lady Anne Con- 
 nelly, in support of the decree. — The first question is, whether Lady 
 Anne Connelly was entitled to the annual produce of the personal es- 
 tate at the death of the testator; if not, the next consideration is, 
 whether, the executors having paid it to her, and particularly the div- 
 idends of the bank stock, those payments ought to be called back. 
 The personal estate is given to her for life specifically. 
 Lord Chancellor [Eldon]. 31 No question arises upon this will, 
 except, whether this is a specific bequest of such personal estate as 
 was the testator's at the time of his death. * * * I am clearly of 
 opinion^ therefore, that this is not a case, in which the personal estate 
 is in this sense specifically given, with a direction, that it shall remain 
 specifically as it was at the testator's death; and the purposes, for 
 which it is given, are those, for which it is admitted there is a gen- 
 eral rule, that these perishable funds are to be converted in such a way 
 as to produce capital, bearing interest. 
 
 I was astonished, when that was doubted, from general recollection. 
 I have considered the practice to be, that the first moment the observa- 
 tion of the court was drawn to the fact, the court would not permit 
 property to be laid out or to remain upon such funds under a direction 
 to lay it out in government securities ; but would immediately order it 
 to be converted into that, which the court deems for the execution of 
 trusts a government security. I pass over what has been said as to 
 real securities, for there is a great difference between real securities, 
 or bank stock, for instance, and government securities. Bank stock 
 is as safe, I trust and believe, as any government security, but it is 
 not government security; and therefore this court does not lay out, 
 or leave, the property in bank stock ; and what the court will decree 
 it expects from trustees and executors. I will not state, what the 
 court would do. where executors had not made these conversions. 
 That depends upon many circumstances. But I abide by Lord Ken- 
 yon's rule in the case of Mr. Champion, an executor, before which 
 time it was doubted, whether an executor could lay out the property 
 in the 3 per cents. Lord Kenyon, who was a repository of valuable 
 knowledge, produced a dictum of Lord Northington, that the court 
 
 si Only a part of the opinion is given.
 
 392 THE DUTIES OF A TRUSTEE. (Cll. 5 
 
 would protect an executor in doing what it would order him to do. 
 The court in this case would order him to do that. It is not so in the 
 case of a mortgage. The court would not permit a real security to 
 be called in without an inquiry, whether it would be for the benefit 
 of every person; and it is accident, that some part of the assets will 
 produce more interesl than a genuine trust security. In some in- 
 stances there is little doubt, it may he not only for the benefit of the 
 tenant for life, but for the substantial interest of the remaindermen that 
 the property should not be shifted from a good real security. 
 
 The question then is, whether the court will change the fund, not 
 as between the remaindermen and the executor, hut in a question be- 
 tween the tenant for life and the remainderman; and the question with 
 the executor cannot well arise, so as to be acted upon, till a failure by 
 the tenant for life, or those, who represent him; for the justice of the 
 case, if the tenant for life had received so much, would be, that he 
 should bring it hack in case of the executor, who paid him. If the 
 rule is, that the fund shall not remain, it is impossible to say, the date 
 of the decree shall decide. I do not like to put it upon the possibility 
 of collusion : but that is not to be totally neglected ; for it may hap- 
 pen, that the executor himself may be the tenant for life; and then 
 he has an interest in delay. Of necessity there must be great delay, 
 before there can be a final decree in a cause of great property ; and 
 it may be very much protracted, where there is an interest. However, 
 I do not put it upon that. But, if the principle is, that the court, 
 when its observation is thrown upon it, will order the conversion, it 
 ought to be considered to all practical purposes as converted, when it 
 could be first converted. That is the genuine inference from the 
 other principle. If the court has ever attended to the difficulties, often 
 thrown before it, with regard to perishable property of other kinds, 
 as leasehold estate, etc., it never has as to stock. You can learn the 
 price, at which it might be converted on any day; and the moment 
 the court was ordered by the Legislature to lay out its funds in stock, 
 it necessarily held, that for this purpose stock must always he consid- 
 ered of the same value. It is for the benefit of the creditor, that it 
 should be thrown into a lasting fund ; and it is equal to all the par- 
 ties interested. As to bank stock, the court has ordered 4 per cents. 
 and 5 per cents, to be sold and to be converted into 3 per cents, upon 
 this ground; that, however likely or not, that they may be redeemed, 
 the court looks at them as a fund, that is not permanent, though it may 
 remain forever; and considers, that from that quality there is an ad- 
 vantage to the present holder ; who gets more interest, because they 
 are liable to be redeemed. I do not know, whether the reasoning is 
 as just in practice as it is in theory. Property cannot be laid out by 
 this court in bank stock, in the execution of a trust to lay it out in 
 government security ; for it is not a government security. Convert- 
 ing that therefore the executors would have done what this court 
 would have ordered; and that falls under the same consideration; and
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 393 
 
 the advantage, if any, ought not to accrue to the tenant for life. The 
 account, therefore, must go as to that as well as the long and short 
 annuities, from the time, at which it would have been converted, if 
 the observation of the court had been drawn to the fact, that the ex- 
 ecutors were possessed of these funds. 
 
 This petition of re-hearing is therefore well founded. 32 
 
 HUGHES v. EMPSON. 
 
 (In Chancery, before Sir John Romilly, Master of the Rolls, 1S56. 22 Beav. 
 
 181.) 
 
 The testator gave his residue to his two executors, upon trust, after 
 converting the same into money, to lay out and invest the same in or 
 upon government or real securities, or upon railway bonds or deben- 
 tures in England, and hold the same on trust for the plaintiff. 
 
 The testator died the 20th of September, 1853. Part of his estate 
 consisted of seventy-five original Crystal Palace shares, which the ex- 
 ecutors retained. 
 
 By the decree, an inquiry was directed, under what circumstances 
 the defendant had retained the shares, and whether any and what loss 
 had been occasioned thereby. 
 
 32 Powell v. Cleaver. 7 Ves. Jr. 142, note 3 (1788) ; Cranch v. Cranch, 7 
 Ves. Jr. 141, note 2 (1797) ; Fearns v. Young, 9 Ves. Jr. 549 (1S03) ; Dimes v. 
 Scott, 4 Russ. 195 (1S2S) ; Mills v. Mills, 7 Sim. 501 (1835); Lichfield v. 
 Baker, 2 Beav. 481 (1840) ; 13 Beav. 447 (1840) ; Benn v. Dixon, 10 Sim. 636 
 (1S40) ; Taylor v. Clark, 1 Hare, 161 (1841) ; Caldecott v. Caldecott, 1 Y. & 
 Coll. N. R. 312 (1842) ; Sutherland v. Cooke, 1 Coll. 498 (1844) ; Wrey v. 
 Smith, 14 Sim. 202 (1S44) ; Mackie v. Mackie, 5 Hare, 70 (1S45) ; Sparling 
 v. Parker, 9 Beav. 524 (1846) ; Johnson v. Johnson, 2 Coll. 441 (1846) ; Pickup 
 v. Atkinson, 4 Hare, 624 (1S46) ; Hubbard v. Young, 10 Beav. 203 (1847) ; 
 Kirkman v. Booth, 11 Beav. 273 (1848) ; Morgan v. Morgan, 14 Beav. 72 
 (1851) ; Thornton v. Ellis. 15 Beav. 193 (1852) ; Blann v. Bell, 5 De G. & 
 Sin. 658 (1S52) ; 2 De G. M. & G. 775 (1852) ; Meyer v. Simonsen, 5 De G. 
 & Sm. 723 (1852) ; Murton v. Markby. 18 Beav. 196 (1854) ; Hood v. Claphan, 
 19 Beav. 90 (1854) ; Johnstone v. Moore, 27 L. J. Ch. 453 (1S5S) ; Craig v. 
 Wheeler, 29 D. J. Ch. 374 (1S60) ; In re Llewellyn's Trust, 29 Beav. 171 (1861) ; 
 Hume v. Richardson, 4 De G., F. & J. 29 (1S62) : Green v. Britten, 1 De G., 
 J. & S. 649 (1S63) ; Allhusen v. Whittell. L. R. 4 Eq. 295 (1867) ; Pidgeon v. 
 Spencer, 16 L. T. R. S3 (1867) ; Brown v. Gellatly, L. R. 2 Ch. Ap. Cas. 751 
 (1867) ; In re Shaw's Trusts, L. R. 12 Eq. 124 (1871) ; Tickner v. Old, L. R. 
 18 Eq. 422 (1S74) ; Porter v. Baddely, L. R. 5 Ch. Div. 541' (1877); MacDon- 
 ald v. Irvine, L. R. 8 Ch. Div. 101 (1S78) ; In re Smith's Estate, 48 L. J. Ch. 
 205 (1879) ; In re Hill. 50 L. J. Ch. 551 (1881) ; Brannock v. Stocker, Adm'r, 
 76 Ind. 558 (1SS1) ; Kinmonth v. Brigham, 5 Allen (Mass.) 270 (1862) ; Min.it 
 v. Thompson, 106 Mass. 583 (1871) ; Westcott v. Nickerson, 120 Mass. 410 
 (1S76) ; Hemenwav v. Hemenwav, 134 Mass. 446 (18S3) ; Mudge v. Parker, 
 139 Mass. 153, 29 N. E. 543 (1885) ; Edwards v. Edwards, 183 Mass. 581, 67 
 N. E. 658 (1903) ; Ashhurst v. Potter, 29 N. J. Eq. 625 (1S78) ; Covenhoven 
 v. Shuler. 2 Paige (N. Y.) 122, 21 Am. Dec. 73 (1S30) ; Williamson v . William- 
 son, 6 Paige (N. Y.) 298 (1837) ; Cairns v. Chaubert, 9 Paige (N. Y.) 160 (1S41) ; 
 Emmons v. Cairns, 2 Sandf. Ch. (N. Y.) 369 (1845); Spear v. Tinkham, 2 
 Barb. Ch. (N. Y.) 211 (1847) ; Smith v. Barham, 17 N. C. 420, 25 Am. Dec. 
 721 (1833) ; Jones v. Simmons, 42 N. C. 17S (1S51) ; Saunders v. Haughton, 
 43 N. C. 217, 57 Am. Dec. 581 (1852). 
 

 
 394 THE DUTIES OF A TRUSTEE. (Cll. 5 
 
 The chief clerk, by his certificate, found the average price of the 
 shares between the 21st of October, 1853 ( when the will of the testator 
 was proved by the defendant), and the 22d of December, 1853 (being 
 two months alter), and deducting therefrom the price of the shares on 
 the 14th of November, 1855 (the date of his certificate), he found that 
 there had been a loss of £325., with which he charged the executor. 
 The executor objected to the finding, and his objections now came 
 on for argument. 
 
 Mr. R. Palmer and Mr. Sclwyn, for the executor, contended, that 
 the executor ought not to have been charged with the price of the 
 shares at the end of two months, hut at the end of twelve month-, 
 when their value had considerably diminished, and that no rule existed 
 which required the conversion at the end of two months. 
 
 Mr. Lloyd and Mr. W. W. Cooper, for the plaintiff, argued, that 
 some period must he fixed for calculating the loss, which had occurred 
 by the executor allowing the assets to remain on an unauthorized se- 
 curity, and that two months was a reasonable time within which the 
 executor ought to have converted the Crystal Palace shares. 
 
 Puxton v. Buxton [1 Myl. & Cr. 80] ; Bate v. Hooper, [5 De G., 
 M. & G. 338] ; Morgan v. Morgan [14 Beav. 72] ; Knott v. Contee 
 [16 Beav. 77], were cited. 
 
 The Master of the Rolls, though he now seemed to think that the 
 certificate was correct, mentioned the case on a subsequent day. 
 
 The Master of the Rolls. I was desirous to reconsider what I 
 had done in this case on a motion to vary the certificate, and though 
 I concurred in the general effect of it, yet I think I was too hasty on 
 the subject at the time, and I propose to vary it. The question is 
 this: The executors found a portion of the testator's property 
 invested in Crystal Palace shares. It was clearly their duty to sell 
 and invest the produce, and not having done so, they are liable for 
 the loss which has occurred by their omission, and that is wdiat I 
 intended to determine on the former occasion. But then the question 
 is, at what time is the loss to be ascertained? Because the price 
 varied considerably between the death and the sale. I said that two 
 months was a reasonable time for that purpose, but it was contended 
 that a year was the time which has always been given, and that such 
 was the period allowed in Pate v. Hooper; but that case does not 
 govern me on this occasion; there must necessarily be a diseretion, 
 and I concur with the argument of Mr. Lloyd, that there is no fixed 
 period, and that it is impossible to say that it is one year. You can- 
 not fix one period for selling every species of property. Thus suppose 
 the testator possessed a large quantity of horses, it would he culpable 
 to keep them, at a great expense, incurring necessarily a great outlay 
 for their maintenance, instead of selling them at once. But with 
 respect to other property, there must be a reasonable time allowed for 
 selling: it.
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 395 
 
 With respect to these shares this was their situation : The insti- 
 tution had not opened, and they paid no dividend, but they bore a 
 premium in the market, and in the view I take of the case, I should 
 have considered it prudent to sell at the earliest period ; but in all 
 these cases, a large discretion is allowed to the executors. In Buxton 
 v. Buxton [1 Myl. & Cr. 80], Lord Cottenham held, that where an 
 executor had not sold Mexican bonds until a year and a half after 
 the death, and had bona fide kept them, he ought not to be charged 
 with the loss. In this state of things, I consider that the executor 
 may properly exercise a reasonable discretion, and I cannot fix any 
 particular period. I think, in my own view, that two months would 
 have been reasonable time, but he might fairly have considered twelve 
 months. I shall, therefore, only charge him with the loss which 
 would have occurred if he had sold them at the end of twelve months. 
 I have considered whether I could lay down any general rule, but 
 find it impossible. The question depends on the particular nature of 
 the property and the evidence affecting it. I shall, therefore, alter 
 the certificate and charge the executor with the value of the shares at 
 the end of twelve months. 33 
 
 LICHFIELD v. BAKER. 
 
 (In Chancery, before Lord Langdale, Master of the Rolls, 1840. 2 Beav. 4S1.) 
 
 The Master of the Rolls. 34 * * * The only point on which 
 I need call on the plaintiff's counsel to reply, is on the extent of relief 
 now to be granted. As to the other question, I take this to be the 
 rule of the court, that when a testator has given an estate, or the 
 residue of an estate, to persons in succession, as to one for life, with 
 remainder to another person ; the court, presuming that the testator 
 intended the remainderman should have something, will so deal with 
 the property, if it be property that is wearing out and may terminate 
 during the life estate, as to secure the accomplishment of that intent, 
 and give the remainderman something ; for that purpose it will convert 
 the perishable into a permanent property, and give the income which 
 arises from it to the persons entitled for life in succession, and pre- 
 
 33 In Grayburn v. Clarkson, L. R. 3 Ch. App. Cas. 605 (1S6S), at page GOG, 
 Sir W. Page Wood, L. J., said: "The result of the authorities seems to be, 
 that there is no fixed rule that conversion must take place by the end of the 
 year, but that that is the prima facie rule, and that executors who do not 
 convert by that time must show some reason why they did not do so." 
 
 For unreasonable delay in conversion trustees were held liable for loss 
 in the following cases: Bate v. Hooper, 5 De G., M. & G. 338 (1855); Gray- 
 burn v. Clarkson, L. R. 3 Ch. App. Cas. 605 (186S) ; Sculthorpe v. Tipper, 
 L. R. 13 Eq. 232 (1871) ; Earl of Gainsborough v. Watcombe Terra Cotta 
 Clay Co., 54 L. J. Ch. 991 (1885) ; Hiddingh Heirs v. Denyssen, 12 Ap. Cas. 
 624 (1SS7). Delay to convert for more than a year was held excusable in 
 Buxton v. Buxton, 1 Myl. & Cr. 80 (1835), and Marsden v. Kent, L. R. 5 Ch. 
 Div. 598 (1877). 
 
 a* The statement of facts is omitted and only a part of the case is given.
 
 ."'/JO THE DUTIES OF A TRUSTEE. (Cll. 5 
 
 serve the capital for the person entitled in remainder. That is the 
 rule; and the court only acts upon the general intention of the testa- 
 tor, that something should be given to the person who is the donee 
 in remainder j but if, upon the construction of the will, it appears the 
 testator had another intention, that is to say, an intention to give to 
 one or more persons who are to take for lives or during a succession 
 of lives, the enjoyment of the property in the state he left it at the 
 time of his death, then the court will carry that intention into effect; 
 and every one of the cases which have been cited, and every case which 
 can arise, will turn upon this question of construction, whether you 
 can find upon the face of the will, an intention that the legatee for 
 life shall enjoy the property in the way in which it stood at the tes- 
 tator's death, even to the extent of defeating the testator's intention 
 to bequeath something to the remainderman. I believe that in all the 
 cases which have been cited in opposition to the conversion, there have 
 been words clearly indicating, from the testator's description of the 
 property or some other circumstance, that the testator intended the 
 donee to enjoy it for life, in the same way in which it stood at his 
 death. 
 
 Having attended to this will and read it carefully over, and having 
 attended to the ingenious argument by which it has been attempted to 
 lie shown that the intention was that the donee for life was to enjoy 
 it as it stood, I think that there is not enough in the will to except this 
 case from the general rule. 35 * * * 
 
 ABBY M. KINMONTH v. WILLIAM BRIGHAM and Another. 
 (Supreme Judicial Court of Massachusetts, 1862. 5 Alien, 270.) 
 
 Hoar, J. This is a bill in equity by which the widow of David M. 
 Kinmonth seeks to enforce against the executors and trustees of her 
 deceased husband a trust created by his will. 
 
 The material facts presented by the bill and answers are these. The 
 testator, who died February 22, I860, by his will, after certain specific 
 
 85 in the following cases the intention of the creator of the trust was held 
 to exclude conversion, under the rule in Howe v. Earl of Dartmouth: Vin- 
 cent v. New* lie, 1 Younge, 599 (1832); Alcock v. Sloper, 2 Myl. & K. 699 
 
 il^-:;::); Collins v. Collins, 2 Myl. & K. 703 (1833); Bethune v. Kennedy, 1 
 .Myl. & Cr. Ill (1835); Pickering v. Pickering, 2 Beav. ::i (1839), affirmed 4 
 Mvl. A: <'r. L'S'J ils:;:>i; (ioodenough v. Treinainondo, 2 Beav. 512 (1840); 
 Vi'iuirhiin v. Buck, 1 Phillips, 75 (1*41) ; llinves v. Ilinves, .'5 Hare, 609 (1844); 
 Cafe v. Bent, 5 Hare, 24 (1845); Mackie v. Mackie, •> Hare, 70 (1845); Neville 
 v. Fortescue, L6 Sim. 333 (1848); Blann v. Bell, 16 Jur. 1081 (1852); Harris 
 v. Poyner, 1 Drew. 171 (1852); Crowe v. Crisford, 17 Beav. 507 (1853); Hind 
 v. Selby, 22 Beav. 373 (1856); Wearing v. Wearing, 23 Beav. 99 (1856); 
 Skirving v. Williams, 24 Beav. 275 (1857); Holgate v. Jennings, 24 Beav. 
 • ;-:; <i,sr>7>; Simpson v. Lester, 4 Jur. N. S. 1269 (1859); Boys v. Boys, 28 
 Beav. 437 HStiO) ; Gray v. Sixers. L, R. 15 Ch. Div. 74 (1880); In re Pit- 
 cairn. L. K. (1896) 2 Ch. 199 (1895); In re Nicholson, L. R. (1909) 2 Ch. Ill 
 (declining to follow Porter v. Baddely, L. R. 5 Ch. Div. 542).
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 397 
 
 legacies therein set forth, bequeathed the whole residue of his estate 
 to trustees, in trust to invest the same carefully, and to keep the same 
 safely invested, and as often as once in each year, to divide the net 
 income thereof into three parts, one of which they should pay over 
 to his wife, during her natural life. The same persons were named 
 as executors and trustees. 
 
 A part of his estate was his interest in a limited partnership, which 
 was formed September 4, 1858, to continue for four years; and to 
 which he had contributed $50,QQQ, jls special partner. By the articles 
 of partnership he was to be entitled to one-half of the profits, and 
 might withdraw the same semi-annually ; he was to bear one-half the 
 losses, to the extent of his capital invested, and make good the same 
 semi-annually ; and at the end of the term the general partners were to 
 take the stock, fixtures and good-will, and to pay over to him the capital 
 which he had contributed, and the net profits then due. It was also 
 provided that if either of the general partners should violate any of 
 the partnership covenants, the testator and his representatives should 
 have the right to dissolve it, and take possession of the stock, stand, 
 property, and business, and carry on the business on his or their own 
 account ; and that in case of the death of either of the general partners 
 within two years, the partnership should continue till the time of the 
 next semi-annual accounting, and the testator and his representatives 
 should then have the same right to take the property and business. 
 By the will, the executors were authorized not to avail themselves of 
 this last provision, unless they should see fit. 
 
 The business had been established and carried on by the testator, 
 previous to the formation of the special partnership. The special 
 partnership has proved extremely profitable, the testator having re- 
 ceived a large sum as profits before his death ; and the executors have 
 received, as profits and capital, $158,558.44 since their appointment. 
 
 The plaintiff seeks to compel the executors to distribute the sum of 
 $108,558.44, as the net income of the estate. 
 
 The case has been most ably and thoroughly discussed by the counsel 
 for the respective parties, upon principle and authority; and it will 
 be sufficient to state briefly the result at which we have arrived. 
 
 The English rule is perfectly well settled, that where the residue of 
 personal property is left without specific description, and is given in 
 succession to a tenant for life and remainderman, it shall be invested 
 in a permanent fund, so that the successive takers shall enjoy it in 
 the same condition, and with the same productive capacity. The 
 reason of the rule is the obvious and just consideration, that the inten- 
 tion of the testator is expressly declared to give the enjoyment of the 
 same fund to the successive takers; and that this can only be done 
 by fixing the value of the fund at the time when the right of the first 
 taker to its use commences. The leading case is Howe v. Dartmouth, 
 7 Ves. 137. This was followed by Fearns v. Young, 9 Ves. 549, where 
 the doctrine was applied to the case of money invested in a partner-
 
 308 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 ship at the death of the testator. Many of the subsequent cases are 
 collected and reviewed in 2 White & Tudor's Lead. Cas. in Equity 
 (Am. Ed. ) 27X et seq., in the notes to Howe v. Dartmouth, and these, 
 with others, have been carefully presented in the argument of this 
 cause. 
 
 hi the application of this rule, the English Courts of Chancery, by 
 a long course of decisions, have determined that an investment in the 
 three per cents, is to he generally regarded as the only investment 
 which will be sanctioned or directed by the court as safe and per- 
 manent; though, in a few cases, a reference has been made to a 
 Master to find whether an existing security at a higher rate of inter- 
 est is not absolutely safe, and more beneficial to all the parties. Calde- 
 cott v. Caldecott, 1 Y. & Coll. 312, 737. 
 
 But wherever property is specifically bequeathed, or where the inten- 
 tion can be gathered from the whole will that it should be enjoyed 
 in specie, the rule does not apply. 
 
 And the rule itself, so far as it requires an investment in public 
 securities, has never been adopted in this Commonwealth. As was 
 siid by Chief Justice Shaw, in Lovell v. Minot, 20 Pick. 119, 32 Am. 
 Dec. 206. "there are no public securities in this country, which would 
 answer these requisitions of an English Court of Equity." The only 
 rule which has been recognized by this court as obligatory upon a 
 trustee in making investments is, that he shall act with good faith, 
 and in the exercise of a sound discretion. 
 
 In Lovell v. Minot, an investment by a guardian in the promissory 
 note of a person in good credit, secured by a pledge of stock in a 
 manufacturing company which was then selling in the market at above 
 its par value, at the rate of about three-quarters of its par value, was 
 held to be made with sound discretion. 
 
 In Harvard College v. Amory, 9 Pick. 446, an investment was made 
 by trustees under a will, of a fund, the profits and income of which 
 were to be paid to the testator's widow for her life, and after her de- 
 cease the fund to be distributed. It was held that the trustees were 
 authorized to invest in the capital stock of an incorporated manu- 
 facturing company, and of an incorporated insurance company; and 
 that the actual profits and dividends received from such investment 
 were rightly paid to the widow. The will itself expressly empowered 
 the trustees to invest the fund "in safe and productive stock, either 
 in the public funds, bank shares or other stock, according to their 
 best judgment and discretion;" and enjoined attention "in the choice 
 of funds, and in the punctual collection of the dividends, interest and 
 profits thereof." A large part of the testator's property consisted of 
 manufacturing and insurance stock. 
 
 ( Put although in this Commonwealth there are no investments re- 
 
 j garded as so absolutely secure as to make a choice of them obligatory 
 
 upon trustees, and in all cases a considerable latitude is allowed, yet 
 
 it has never been held that trustees for successive takers were at
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 309 
 
 liberty to disregard the security of the capital in order to increase the 
 income. Nor where property is of a wasting nature, is an invest- 
 ment in it consistent with their duty, in the absence of specific direc- 
 tions in the creation of the trust. They are equally bound to preserve 
 the capital of the fund for the benefit of the remainderman, and to 
 secure the usual rate of income upon safe investments for the tenant 
 for life ; and to use a sound discretion in reference to each of those 
 objects. If there is no specific direction, and they are charged merely 
 with the general duty to invest, they cannot postpone the yielding 
 of income for the increase of the capital, nor select a wasting or 
 hazardous investment for the sake of greater present profit. And the 
 rule is the same in regard to property which comes to the trustees 
 from the testator, not specifically bequeathed, as it is in regard to mak- 
 ing new investments. If the investment is not such as this court would 
 sustain them in making, it should not be allowed to continue, but 
 should be converted. Its value as a fund should be ascertained as- of 
 the time when the enjoyment of the income of it is to commence; 
 and the fund treated as if it had been at that time converted into 
 sjich an investment as the court would sanction. In determining 
 this value, it is not always practicable to settle it with exactness, 
 until the conversion is actually made; especially in cases where 
 the capital is more or less at risk. The most just rule seems to 
 be, where reasonable care and prudence have been used by the trustees 
 in making the conversion, to treat the whole sums received from time 
 to time, until converted, as parts of the estate ; and to find what sum 
 at the time to which the conversion has reference would be equivalent 
 to the amount actually received, at the time it was received; and to 
 treat that sum as capital, and the remainder as income. Thus if the 
 residue consisted of notes or obligations payable at a future day, with- 
 out interest ; and the tenant for life were entitled to the income from 
 the death of the testator ; when the money was received, so much of it 
 only would be treated as capital, as, if invested at the death of the 
 testator, would have produced the whole amount at the time the notes 
 or obligations were payable; and the rest would be income. If the 
 property were embarked in a commercial adventure, or were in the 
 shape of a bottomry bond, or other hazardous condition, the trustees 
 would be required to use suitable skill and caution in collecting what- 
 ever could be obtained from it, and the value of whatever was or ought 
 to have been realized from it would be fixed as of the time of the 
 testator's death, and treated as capital. And on the other hand, where 
 the property is of a wasting nature, as terminable annuities, leases or 
 the like, the value of the whole investment at the testator's death 
 should be ascertained, and what should be regarded as income be com- 
 puted upon that basis. 
 
 In applying the principles which we have stated to the case at bar, 
 it is conceded that the income to which the plaintiff is entitled should 
 commence and be computed from the death of her husband. We are
 
 
 400 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 of opinion there is nothing in the will which indicates an intention 
 that she should enjoy the income of any particular property which the 
 tgstator possessed, in specie, hnt the whole residue was to be alike 
 eel to investment hy the trasteesl the reference to the special 
 partnership is only in connection with instructions to the executors as 
 to their duty in a certain contingency. In the next place; we cannot 
 regard the investment by a special partner in a trading partnership 
 as Mich an investment as the court would sanction. It is obviously 
 difficult, in this case, to determine what was the value of the invest- 
 ment at the testator's decease, hy any other mode than a computation 
 based upon the whole product ultimately realized from it. It included 
 not merely the fifty thousand dollars contributed hy the testator to the 
 enterprise, hnt the interest in an established and lucrative business, wdth 
 the right to the services, for a fixed period, of all the general partners. 
 The whole was at risk until the partnership concerns were all settled. 
 It somewhat resembles property invested in a ship, or upon a whaling 
 voyage, or long commercial adventure; from which returns are re- 
 ceived from time to time, hut with liability to losses which may require 
 the whole to be refunded ; and where the successful progress of the - 
 enterprise so far may have enhanced the value of the property far 
 beyond its original cost. We think such returns could not_ be justly - 
 treated, between tenant for life and remainderman, as the income of. 
 an investment. 
 
 We think, therefore, that upon a just construction of the will, 
 equity will regard that the profits received by the executors from the 
 special partnership should not be regarded or treated exclusively as 
 income, but that they should be treated, when received from time to 
 time, as property belonging to the estate, a part of which is to be 
 invested as capital, and a part distributed as income; which parts are 
 to be ascertained by finding what sum, if received at the death of the 
 testator, would amount with interest at six per cent., and making 
 animal rests, to the sum actually received, at the time it was received ; 
 and that the sum so found should be invested as principal, and the re- 
 mainder distributed as income. 
 
 The costs of the litigation are to be paid from the whole fund. De- 
 cree accordingly. 
 
 DIMES v. SCOTT. 
 
 (In Chancery, before Lord Chancellor Lyndhorst, 1S27. 4 Russell, 195.) 
 
 Captain l'iercy, by his will, dated the 24th of September, 1801, be- 
 queathed all his ready money, securities for money, and all other his 
 personal estate and effects not thereinbefore specifically disposed of, 
 unto John Atkins and John Corderoy, upon trust to convert the same 
 into money, and thereout to pay his debts and funeral and testamentary 
 expenses, and to stand possessed of, and interested in, the residue of
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 401 
 
 the money to arise and be produced by his estate and effects, in trust, 
 to place out or invest the same in or upon government or real securities, 
 as to his trustees should seem meet, and to stand possessed of and 
 interested in the money so to be invested or placed out at interest, 
 upon trust, after paying certain annuities, to pay the interest, dividends, 
 and annual produce to his wife Mary, during her life; and, after her 
 decease, to stand possessed of the principal, in the events which hap- 
 pened, in trust for Elizabeth Wintersgill, her executors, administrators 
 and assigns ; and he appointed Atkins, Corderoy, and his wife Mary, 
 executors of his will. 
 
 The testator died on the 30th of January, 1802 ; and, shortly after- 
 wards, his widow and Corderoy proved the will. 
 
 Part of Captain Piercy's property, at the time of his death, con- 
 sisted of a sum of £2,000., which, when in Calcutta in 1799, he had 
 invested in a fund of the East India Company, called the Decennial 
 Loan. That loan was irredeemable for ten years from the 1st of Jan- 
 uary, 1800; it bore interest at the rate of £10. per cent., payable an- 
 nually either in cash at Calcutta or by bills drawn upon the directors 
 in London,, and payable fifteen months after date. The principal was 
 to be repaid at the end of ten years ; a power, however, being re- 
 served to the company of postponing the payment for one or two 
 years longer, upon paying, during such additional period, interest at 
 either £10. per cent, or £5. per cent., according as the payment was 
 to be made in India or in London. The shares in the loan were trans- 
 ferable. 
 
 Captain Piercy, before he left India, directed the interest on his por- 
 tion of the loan to be paid to him in London. 
 
 The £2,000., invested in this loan, remained upon that security till 
 1813, when the principal was paid off and laid out in the purchase of 
 £3. per cent, stock. Corderoy, as executor and trustee, had, during 
 all this time, received the interest, and paid it over to the widow, who 
 had intermarried with a Mr. Scott. 
 
 In June, 1820, Elizabeth Wintersgill. and her husband, filed their 
 bill against the executors of Corderoy, and the widow of the testator 
 for an account of his assets. The bill charged, that "the testator's 
 interest in the decennial loan ought, as being a beneficial property, to 
 have been sold, or otherwise the interest ought to have been invested 
 as principal money for the benefit of the testator's estate; and that 
 Mary Scott and Richard Scott, or the personal representatives of 
 Corderoy, ought to be charged with the interest received by Corderoy 
 and Mary Scott in respect of the said loan." 
 
 At the hearing, the common accounts were directed. The Master 
 in his report allowed to the executors of Corderoy the payments of 
 the interest on the decennial loan, which Corderoy had made to Mrs. 
 Scott, the tenant for life of the residue. 
 
 The plaintiffs excepted to this part of the report, on the ground 
 Ken.Te.— 26
 
 402 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 that "Mary Scott, being only tenant for life of the residue, was not 
 entitled to be paid the interest upon the subscription of £2,000. to the 
 decennial loan, to the prejudice of the plaintiff, who was the person 
 entitled to the residue immediately after the death of Mary Scott; 
 but that the interest .upon the said subscription ought, as it became 
 due and was received by Corderoy, to have been considered and treated 
 by him as part of the general residue of the testator's personal estate, 
 and, as such, during the life of Mary Scott, and the interest thereof, 
 when so laid otit and invested, paid to her during her life." 
 
 Mr. Barber, in support of the exceptions. 
 
 The decisions pronounced, and doctrines laid down by Lord Eldon, 
 in Gibson v. Bott [7 Yes. 89], Howe v. Karl of Dartmouth [7 Yes. 
 137], and Fearns v. Young [9 Yes. 549], establish the rule, that, 
 where a general residue of personal property is given to one person 
 for life, with remainder over to others, that residue is to be considered 
 as converted into 3 per cent, stock so soon as it could have been so 
 converted, and the tenant for life is to take, not the annual profit 
 which it has yielded in its unconverted state, but the dividends which 
 would have arisen from it, if the conversion had taken place. 
 
 Mr. Pemberton, contra. 
 
 The present case has no resemblance to any of the authorities which 
 have been cited ; leaseholds and long annuities are a perishing fund ; 
 they aie yearly diminishing in value; every annual payment con- 
 sists partly of what is truly a payment of interest, and partly also of 
 what is a repayment of capital. Here the principal was not sustaining 
 any diminution. 
 
 Lord Gifford, Master of the Rolls, held that these payments to 
 the tenant for life were an improper application of the trust moneys. 
 
 The order made was as follows: "His Lordship held the plaintiff's 
 said exception to be good and sufficient, and doth therefore order the 
 same to stand and be allowed ; and his Lordship doth order that the 
 said Master do review his said report, as to the said decennial loan. 
 And his Lordship doth declare, that the testator John Wintersgill 
 Piercy's subscription of ±2,000. to the decennial loan, raised at Cal- 
 cutta, ought to have been sold upon the decease of the testator; and 
 it is ordered that it be referred to the said Master to inquire what sum 
 the said £2.000., subscribed by the testator to the decennial loan, would 
 have sold for one year after the testator's death, and what sum of 
 bank £3. per cent, annuities the money, which the said Master shall 
 find the said £2,000. subscribed to the said decennial loan would have 
 sold for would have purchased, if the same had been sold by John 
 Corderoy, the executor of said testator, one year after the said tes- 
 tator's death ; and it is ordered that the said Master do inquire, how 
 much would have arisen from dividends of such bank £3. per cent. 
 annuities, in case the same had been purchased as aforesaid, to the 
 time the said testator's subscription to the said decennial loan was paid 
 off; and his Lordship doth declare, that the defendants, Thomas
 
 Sec. 4) 
 
 DUTIES OF MANAGEMENT OF TRUST ESTATE. 
 
 403 
 
 James, John Stanbank, and William Green, the executors of John 
 Corderoy, the executor of the testator, are entitled to be allowed such 
 sum as the Master shall find would have arisen from dividends of the 
 said bank £3. per cent, annuities, as payments on account.'' 
 
 On appeal by the representatives of Corderoy the said order was 
 affirmed. 
 
 The Lord Chancellor. 86 This testator left his property to trus- 
 tees, who were directed to convert it into money, and to invest the 
 proceeds in government or real securities ; and he gave the interest 
 of the money so to be invested to his widow for life, with remainder 
 to the lady who is one of the present plaintiffs. Part of his property 
 consisted of a sum which he had subscribed to what is called a de- 
 cennial loan. The trustees did not convert his share of the loan into 
 money; but, suffering it to remain as they found it. paid the interest, 
 which was £10. per cent., to the tenant for life. Was that a proper 
 performance of their duty? 
 
 The directions of the will were most distinct; and, according to 
 the case of Howe v. Lord Dartmouth [7 Ves. 137], and the principles 
 of this court, it was the duty of the trustees to have sold the property 
 within the usual period after the testator's death. If they neglected 
 to sell it, still, so far as regarded the tenant for life, the property was 
 to be considered as if it had been duly converted. Had the conversion 
 taken place, and the proceeds been invested in that which is considered 
 in this court as the fit and proper security, namely, £3. per cent, stock, 
 the tenant for life would not have been entitled to more than the inter- 
 est which would have resulted from such stock. The e xecutor is 
 t herefore char geable with the difference between the interest which 
 the fund, if so conv erted, would have yielded, and the £10. per cent. 
 which was actually produced by the fund, and was paid over by him// 
 to the truant for life. * ;!: * 
 
 I think, therefore, that the judgment of the Master of the Rolls 
 must be affirmed. 
 
 Mr. Sugden submitted that the tenant for life was entitled to the 
 actual interest produced by the investment in the decennial loan till 
 the time when it was the duty of the executors to have converted it, 
 namely, till the end of the first year from the testator's death, and 
 therefore that the executors ought to be allowed in their accounts, 
 the extra interest received in respect of that year. 
 
 Mr. Home admitted that, according to the principle of Angerstein 
 v. Martin [1 Turn. & Russ. 232], and Hewitt v. Morris [1 Turn. & 
 Russ. 241], the tenant for life was entitled to the income of the res- 
 idue, not merely from the end of the first year after the testator's 
 death, but from the time of his death. The income, however, during 
 the first year was to be measured in the same w r ay as during any sub- 
 sequent year, and could therefore amount only, so far as the share in 
 
 so The opinion of the Master of the Rolls is omitted, and only a part of 
 the Lord Chancellor's opinion is given. 
 
 
 
 

 
 404 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 the decennial loan was concerned, to the dividends on the £3. per cent. 
 stock, which, at the end of a year from the testator's death, might have 
 been purchased with the proceeds of that share. 
 
 The Lord Chancellor. During the first year after the testator's 
 death the tenant for life is entitled, not to the interest on the decen- 
 nial loan, but to the dividends on so much £3. per cent, stock as 
 would have been produced by the conversion of the property at the 
 end of that year." 
 
 
 BROWN v. GELLATLY. 
 
 (In the Court of Appeal, 1N<!7. Law Reports 2 Chancery Appeal Cases. 751.) 
 
 Duncan Dunbar died March 6th, 1862, testate. By his will, exe- 
 cuted July 13th, 1859, he left all his property, personal or freehold, in 
 trust to William Smith Brown and Edward Gellatly ; giving them full 
 power, except as thereinafter provided, to realize the same when and 
 in such manner as they might see fit, without being personally respon- 
 sible for such realization, and "to sail my ships for the benefit of my 
 estate until they can be satisfactorily sold, without being responsible 
 for any loss on any voyage." 
 
 He made some specific gifts and gave a number of pecuniary leg- 
 acies upon trust. His residuary estate he gave in trust to tenants for 
 life, with remainders over. He appointed William Smith Brown and 
 Edward Gellatly executors, and gave them "full power to invest at 
 their discretion, or allow to remain as at present invested, all my funds 
 in government and colonial government securities, guaranteed railway 
 stock and debentures, East India bonds and stock, marine insurance 
 shares, and shares in the London Chartered Bank." 
 
 At his death, the testator was carrying on business on a large scale 
 as a ship owner and merchant. The ships which he owned at his death 
 were nearly all of them out on voyages. The rest sailed after his 
 death. The result was a large profit. 
 
 He possessed a large amount of such stocks, shares, and securities, 
 as were mentioned in the last clause of his will. These, to a consid- 
 erable extent, remained unconverted. He also possessed a large 
 amount of stocks, shares and securities, not coming under any of those 
 descriptions, and not being proper investments for trust moneys. 
 These also, to a great extent, remained unconverted. 
 
 In a suit to administer the trusts of the will, questions had arisen 
 lut ween the tenants for life of shares of the residue and the persons 
 entitled in remainder. A summons, having been taken out to take the 
 
 3 7 See, also, Taylor v. Clark, 1 Hare, 1G1 (1S41) ; Morgan v. Morgan, 14 
 Beav. 72 (1851); Holgate v. Jennings, 24 Beav. 623 (1857); In re Llewellyn's 
 Trust, 29 Beav. 171 (1861); Hume v. Richardson, 4 De G., F. & J. 29 (1862); 
 Allhusen v. Whittell, L. R. 4 Eq. 295 (1867); Brown v. Gellatly, L. R. 2 Ch. 
 App. Cas. 751 (1SG7).
 
 s~ 
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 405 
 
 opinion of the Master of the Rolls, he made an order declaring his 
 opinion and from that order the truants for life appealed. 
 
 Lord Cairns, L. J. There are three questions in the case; the first, 
 as to the ships; the second, as to what 1 will term the authorized se- 
 curities ; and the third, as to the securities which are not authorized 
 by the will. 
 
 With regard to the ships, I think that the case of Green v. Britten f 1 
 De G., J. & S. 649] does not apply. In Green v. Britten there was an 
 absolute prohibition against converting the ships for seven years, ex- 
 cept in an event which did not happen, and the court, resting upon the 
 prohibition, held that it was a sufficient warrant for giving to the ten- 
 ant for life the income which those ships earned during the seven 
 years. It is not necessary here to consider whether that was a cor- 
 rect construction or not; it is enough to say that the principle on 
 which the court proceeded does not apply to the present case, in which 
 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, namely, 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 exer- 
 cised for the benefit of the estate, meaning, as I apprehend, for the 
 benefit of the estate generally, without disarranging the equities be- 
 tween the successive takers. 
 
 I think, therefore, that with regard to the ships, the testator put 
 them simply in the position of property which was to be converted 
 cautiously, and in proper time, and as to which there was to be no 
 breach of trust in the executors delaying to convert it, but which, when 
 converted, was to be invested, and when invested, to be enjoyed as 
 the residue of his estate. 
 
 In that state of things, it seems to me that the case falls exactly 
 within the third division pointed out by Sir James Parker in the case 
 of Meyer v. Simonsen [5 De G. & Sm. 723], 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. 38 
 
 Then, secondly, as to the authorized securities. By those, I mean 
 the securities which are specified in the last clause of the will, gov- 
 
 3s See, also, In re Thomas, D. R. (1S91) 3 Ch. 482, 4S6; In re Woods, L. 
 R. (1904) 2 Ch. 4 ; In re Chaytor, L. R. (1905) 1 Ch. 233 (1904). The interest 
 now allowed in England under such circumstances is not 4 per cent., but 3 
 per cent See the last two cases.
 
 
 
 400 T1IK DUTIES OF A Tkl STEE. (Ch. 
 
 eminent and colonial government securities, guaranteed railway stock 
 and debentures, marine insurance shares, and shares in the London 
 Chartered Bank. The first thirteen items in the list of securities con- 
 tained in the statement submitted to the Master of the Rolls, are ad- 
 mitted to come under one or the other of those descriptions. In my 
 opinion, according to the construction of the will, the executors have 
 full power to retain upon those securities, for as long as they think 
 it advantageous, the money invested by the testator in those securities, 
 or to invest upon securities of any oi those descriptions the mon ey 
 obtained by the con\er-ion of any part of the testator's estate, and 
 while any such securities form part of the testator's estate the tenant 
 for life is, in my opinion, entitled to the specific income of the securi- 
 ties, 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 court has merely to follow his directions, and 
 treat the income accordingly, as being the income of authorized se- 
 curities. 
 
 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 
 They appear to have been securities possessed by the testator himself, 
 but that, T think, makes no difference; as they do not come within the. 
 class of authorized securities it was the duty of the trustees to convert 
 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, but I think 
 that the 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 [4 Russ. 195], followed by Vice-Chancellor Wigram 
 in the case of Taylor v. Clark [1 Hare, 161], namely, to treat the ten- 
 ant 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 pro- 
 duced by the conversion and investment of the property at the end of 
 one year. This will involve a variation of the order under appeal as 
 to those securities, since it proceeds upon a somewhat different footing, 
 and aggregates the amount produced by conversion at the end of the 
 year with the dividends produced during the year, which is not pre- 
 cisely in accordance with Dimes v. Scott and Taylor v. Clark. 
 
 In re STRAUBENZEE. 
 BOUSTEAD v. COOPER. 
 
 (In Chancery, before Lord Justice Cozens-Hardy, 1901. Law Reports (1001 1 
 2 Chancery Division, 770.) 
 
 By a settlement dated November 13, 1841, and made between Gen- 
 eral John Luther Richardson of the first part, Miss Charlotte Louisa 
 Richardson of the second part, General Sir Charles Thomas Van
 
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 407 
 
 Straubenzee (then Captain Van Straubenzee) of the third part, and 
 certain trustees of the fourth part (on the marriage of Miss Richard- 
 son and Captain Van Straubenzee), a sum of £2,000. Eas t India stock, 
 the property of General Richardson, was settled upon trust for the 
 wife for life, and then for the husband for life, with usual trusts for 
 the issue of the marriage; and in the event, which happened, of there 
 not being any child of the marriage, then the trustees were to transfer 
 one moiety to the husband, his executors, administrators and assigns 
 absolutely, and to transfer the other moiety to General Richardson, his 
 executors, administrators and assigns. The settlement contained a 
 covenant by the husband and wife that in case at any time or times 
 thereafter during the coverture any real or personal estate or effects 
 of any kind or quality of estate and effects should come to or vest in 
 the wife, or the husband in his right, at law or in equity, by devise, 
 descent, gift or otherwise, the same should be conveyed, settled and 
 assured from time to time, without any delay by the husband, his ex- 
 ecutors, and administrators, and the wife, and all persons claiming 
 under her, with the trustees, their heirs, executors, administrators, and 
 assigns respectively, according to the nature or quality of the said 
 property respectively, upon such and the same trusts, and to and for 
 such and the same ends, intents, and purposes, and with, under, and 
 subject to such and the same powers, provisions and limitations, dec- 
 larations and agreements, as were thereinbefore mentioned, expressed, 
 and declared of and concerning the said sum of £2,000. East India 
 stock, or as near thereto as the nature of the property or other inter- 
 vening circumstances should permit. The settlement did not contain 
 any power to vary securities. 
 
 General Richardson by his will, dated April 13, 1847, and proved ~Z<J_, 
 in 1849, gave all his residuary personal estate to trustees, upon trust ' 
 as soon as conveniently might be to sell and convert into money all 
 such parts of his estates and effects as should not consist of money, 
 and to stand possessed of the moneys which should arise from the said j 
 sale of the said residuary estate and effects, as to one equal third part 
 in trust for his daughter Mrs. Ellis, for her separate use ; as to an- 
 other equal third part for Lady Van Straubenzee absolutely ; and as 
 to the remaining third part in trust for his daughter, Catherine Frances 
 Richardson absolutely. 
 
 Lady Van Straubenzee died in 1900, a widow and without issue. 
 
 An originating summons was taken out by John Boustead, William 
 Naughtin, and Lindsay Farrington, the then trustees of the settlement 
 of 1841, to which summons the following persons were defendants, 
 namely : J. H. Cooper and D. Hale, the legal personal representatives 
 of the surviving trustee of the settlement ; J. F. Rochf ord, the legal 
 representative of Lady Van Straubenzee, Frances G. M. Naughtin, 
 (wife of W. Naughtin) and T. Van Straubenzee and J. P. Jervoice, 
 who with the plaintiff Farrington were the legal personal representa-
 
 108 
 
 THE DUTIES OF A TRUSTEE. (Ch. 
 
 tives of General Van Straubenzee; and A. J. King, the legal personal 
 representative of General Richardson. 
 
 As regards one of the questions raised by the summons, Cozens- 
 llar.lv, |., held that the one-third share which Lady Straubenzee took 
 
 in her father's residuary estate was bound by the covenant to settle 
 after-acquired property. This residue included one moiety of the set- 
 tled property, which, on her death, a widow and without issue, fell to 
 General Richardson's executors. 
 
 A further question was then argued, whether the rule in Howe v. 
 Earl of Dartmouth [7 Ves. 137] applied. 
 
 CozENS-Hardy, J., after stating the facts as above set out, contin- 
 ued as follow^ : Now, so far as I am aware, the rule in Howe v. Earl 
 of Dartmouth [7 Yes. 137] has never been applied except to a dis- 
 position by will of residuary personal estate given as one fund to be 
 enjoyed by several persons in succession. The court assumes an in- 
 tention that the legatees should enjoy the same thing in succession, 
 and, as the only mode of giving effect to such intention, it directs the 
 conversion into permanent authorized investments of all such parts 
 of the residuary estate as are of a wasting or reversionary or unau- 
 thorized character. See Pickering v. Pickering [4 My. & Cr. 289], 
 and Macdonald v. Irvine [8 Ch. Div. 101, 112]. Put the rule does not 
 apply to any bequest which is specific, as distinguished from residuary. 
 ( >n principle, I can see no ground for applying the rule to the present 
 case. The covenant to settle after-acquired property is a contract 
 which has to be performed in strict accordance with its terms. It op- 
 erates upon that which must be regarded as a specific property — 
 namely, the lady's share in her father's estate. This share^ is to be 
 vested in the trustees upon the same trusts as are declared with refer- 
 ence to the India stock. Those trusts do not include a trust for sale 
 of the India stock, nor is there even a power to sell it, apart from leg- 
 islation since 1841. I cannot imply a trust to convert that which is 
 brought into the settlement, whether it he real or personal estate. It 
 is remarkable that there is no direct authority on the point. Mr. 
 Vaizey, in his book on Settlements, p. 421, says: "There are two 
 cases in which, probably, the rule is applicable to trusts in settlements 
 created by deed. One is that in which the unrealized estate of a de- 
 ceased person, or of the share in such an estate to which the settlor 
 is entitled, is settled. The other is the case of a covenant to settle 
 after-acquired property." In support of this view no judicial decision 
 is cited, and there are two cases which tend in the opposite direction. 
 In .Mil lord v. Peile [17 Beav. 602], which is more fully reported in 
 2 \Y. R. 1X1, the point seems to have arisen. Py a settlement made 
 in 1848, on the marriage of Mrs. Milford, a sum of £10,000. con- 
 sols was held by trustees, upon trust either to retain the same in its 
 then present state of investment, or to sell the same and invest the 
 proceeds in other securities, with power to vary securities, and upon 
 trust to pay the income to the wife and hushand during their respective
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 409 
 
 lives. The settlement contained a joint and several covenant by Mr. 
 and Mrs. Milford that, in case any real and personal estate to the 
 amount of £100. sterling at any time should during the coverture, by 
 gift, devise, bequest or intestacy, from or of her father, Mr. Thames 
 Locke Lewis, come to or devolve on her, then the same real and per- 
 sonal estate should, by such acts, deeds, and assurances as should be 
 necessary for the purpose, be duly vested in the trustees or trustee for 
 the time being of the marriage settlement, their and his heirs, exec- 
 utors, administrators, and assigns, and be held upon and for such 
 trusts, intents and purposes, and with, under and subject to such pow- 
 ers, provisos, and declarations (as far as the nature of the property 
 would admit) as were thereby declared of and concerning the prem- 
 ises thereby assigned and settled by and on the part of the said Frances 
 Harriott Lewis, and the dividends and annual produce thereof, or 
 such and as many of the same as should be subsisting and capable of 
 taking effect. Mr. Lewis, the father, died in November, 1852, hav- 
 ing by his will bequeathed a certain leasehold house and premises, and 
 all the furniture and effects therein, to trustees, in trust for Mrs. Mil- 
 ford for her separate use. The bill was filed by Mrs. Milford against 
 her husband and the trustees to take the opinion of the court whether 
 the leasehold house and furniture were bound by the covenant, and, 
 if so, whether they ought to be enjoyed in specie, or be converted into 
 money, and the proceeds invested. The Master of the Rolls (Sir John 
 Romilly). held that the property was bound by the covenant, and was 
 of opinion that there was no trust for conversion in the settlement, 
 and that the property should be assigned to the trustees and enjoyed 
 in specie. Howe v. Earl of Dartmouth [7 Yes. 137], does not seem 
 to have been cited, and no clear reasons are given for the conclusion 
 arrived at. The decision, however, was inconsistent with the view that 
 the rule in Howe v. Earl of Dartmouth applied, unless Sir John Rom- 
 illy relied upon the express option given to the trustees either to re- 
 tain or to sell. 
 
 In the following year, 1855, the question arose for consideration be- 
 fore Kindersley, V. C, in Hope v. Hope, which is reported only in 
 1 Jur. (N. S.) 770. By a marriage settlement certain funds were 
 vested in trustees upon trust to pay the interest of one moiety to the 
 wife for her separate use, and upon trust to pay the other moiety to 
 the husband for life, and upon trust after the death of one to pay the 
 interest of the whole to the other, and trusts were declared as to the 
 trust funds after the death of the survivor for the benefit of the chil- 
 dren of the marriage ; and in the settlement was contained a cove- 
 nant to settle after-acquired property upon and for the trusts therein- 
 before declared as to the funds vested in the trustees above mentioned ; 
 provided always, and it was thereby agreed and declared, that it should 
 be lawful to and for the trustees, at the request in writing of the hus- 
 band and wife during their joint lives, and of the survivor of them 
 during his or her life, and after the decease of such survivor at the
 
 410 THE DUTIES OF A TIM STEB. (Ch. 5 
 
 discretion of the trustees, absolutely to sell and dispose of all or any 
 of the real estate or personal estate (not consisting of money, stocks, 
 funds, or securities) which under the covenants thereinbefore contained 
 
 dd become subject to the trusts thereof in manner therein men- 
 tioned; and that the trustees should stand and be possessed of the 
 in meys which should arise from such sale or sales upon the like trusts 
 and subject to the like provisions and agreements as were thereinbe- 
 fore declared and contained of and concerning the funds vested in 
 trustees as above mentioned. The lady's father by his will gave and 
 bequeathed to her his leasehold house in which he then resided, to- 
 gether with certain chattels, lie died in 1851, and the leasehold 
 house, which was held for a term of which twenty-two years was un- 
 expired, was assigned to the trustees of the settlement. A question 
 having arisen as to whether the leasehold house and the specific chat- 
 tels bequeathed by the will ought to he retained, or ought to be con- 
 verted into money and the proceeds invested upon the trusts of the 
 settlement or whether they ought to be enjoyed in specie, a special 
 case was submitted to the court. Howe v. Earl of Dartmouth and Mil- 
 Ford v. Peile were cited. Kindersley, V. C, said he was not aware 
 of any case in which the principle of Howe v. Earl of Dartmouth had 
 hcen applied to a settlement, which was a contract between the par- 
 lies, whilst in a will there was no contract. Rut whatever might he the 
 general principle, in this particular case, so far from there being any 
 trust, implied or otherwise, for conversion, conversion was only to take 
 place at the request of the husband and wife during their lives, and aft- 
 er their death at the discretion of the trustee, the intention being that 
 the propertv, whatever it was. coming to the wife, should be settled. 
 There would, therefore, be a declaration that the property was not to 
 he converted during the lives of the husband and wife without their 
 request. Hope v. Hope is important as indicating that in the opinion 
 of the Vice-Chancellor, the rule does not apply to a marriage settle- 
 ment, but I cannot treat it as a positive decision to that effect. Under 
 these circumstances I feel at liberty to follow my own view. And I 
 therefore hold that the rule in Howe v. Earl of Dartmouth has no ap-_ 
 plication to the present case. 
 
 In re OLIVER. 
 WILSON v. OLIVER. 
 
 (In Chancery, before Warrington, Justice, 190S. Law Reports (100S) 2 
 
 Chancery, 74.) 
 
 Originating summons. 
 
 Thomas I'dossom Oliver, by his will dated September 12, 1905, after 
 bequeathing to his wife Mary, an immediate legacy of £2,000., and all 
 of his household furniture and effects, gave and devised all his real 
 and personal estate unto his trustees upon trust for sale and conver-
 
 Sec. 1) DUTIES OF MANAGEMENT OF TRUST ESTATE. 411 
 
 .sion, and after payment of his debts, funeral and testamentary ex- 
 penses and the said legacy, upon trust to invest the net residue and 
 pay the income thereof to his wife during her life, and after her death 
 to pay and divide the corpus from which the said income was derived 
 and the investments equally between and amongst all his brothers and 
 sisters in equal shares as tenants in common. The will contained no 
 power to postpone the conversion of the estate. 
 
 The testator died on September 13, 1905, possessed of considerable 
 real and personal estate. 
 
 Part of the real estate and the whole of the personal estate had been 
 converted and the proceeds applied in payment of the debts, funeral 
 and testamentary expenses, and in or towards the discharge of incum- 
 brances on the unsold real estate, which now constituted the entire 
 estate and had been retained unconverted in the interests of the several 
 beneficiaries. 
 
 The present summons was taken out by the trustees of the will for 
 the determination of the question (inter alia) whether the plaintiffs as 
 trustees ought to make any, and if any what, payment to the defendant 
 Mary Oliver, by way of income in respect of the real estate of the 
 testator remaining unconverted and on what principle the amount of 
 such payment ought to be calculated. 
 
 Warrington, J., read the following judgment : 
 
 The question in this case is whether the defendant Mary Oliver, 
 the tenant for life under the testator's will, is entitled to the rents of 
 certain unsold real estate or whether such real estate ought to be val- 
 ued and interest on such value paid to her. [His Lordship stated the 
 facts, observing that the unsold real estate. had been properly retained 
 unconverted in the interests of the several beneficiaries. He contin- 
 ued:] On these facts the question I have stated arises. 
 
 In the case of a simple devise of real estate in trust for sale where ■* Ife 
 the proceeds are to be held for several in succession, I think it is set- 
 tled that until sale the tenant for life is entitled to the rents and profits., 
 Casamajor v. Strode [19 Ves. 390, note] ; [Hope v. D'Hedouville, L. 
 R. (1893) 2 Ch. 361]. On the other hand, in the case of a similar be- 
 quest of personal estate, the tenant for life would not be entitled to 
 the income of the estate in specie, so far as it is not derived from au- 
 thorized investments, but would be entitled to a sum representing in- 
 terest at a fixed rate on the value. 
 
 It has indeed been argued that there is no such distinction between 
 real and personal estate, but that the rule as to personalty is universal 
 in its application, and in support of this argument reliance is placed 
 on a passage in the judgment of Lord Macnaghten in Wentworth v. 
 Wentworth [L. R. (1900) A. C. 171]. That passage is as follows: 
 "In this country, in the case of income-producing property directed 
 by will to be converted, but retained for a time unconverted for the 
 benefit of the estate, it has been the practice of the court to put a value- 
 on the property, and to allow the tenant for life out of the income
 
 tl2 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 actually produced a sum equal to 4 per cent, on such value. That was 
 tl e rule laid down by Parker, V. C, in Meyer v. Simonsen [5 De G. 
 & Sin. 723], and followed by Lord Cairns in Brown v. Gellatly 1 1,. 
 R. 2 Ch. 751 |." But the subject-matter of that case was mining prop- 
 erty, and the question which the Privy Council had to determine was 
 not whether the tenant for life was entitled to the mining rents in 
 specie — for to them she was, of course, not entitled — but in what man- 
 ner her interest was to he ascertained. The court below had given 
 her only the income of the mining rents when invested. This the 
 Privy Council thought unfair to her and gave her interest on the value 
 of the estate. What might have been her rights as to the ordinary 
 rents and profits in real estate was not considered, nor was either Cas- 
 amajor v. Strode or Hope v. D'Hedouville cited; and I do not think- 
 under the circumstances that I can regard the passage I have quoted 
 from Wentworth v. Wentworth as overruling the express decisions 
 ah >ve mentioned. 
 
 But in this case the real and personal estate are devised and be- 
 queathed together, and the proceeds of both are to he held as one fund, 
 and it is contended that in such a case the rules regulating personal 
 e-tates ought to prevail. Against this contention there are two ex- 
 press decisions of a judge of co-ordinate authority, which are bind- 
 ing on me, unless it can be shown that there are other decisions which 
 are directly in conflict with them, or that they are contrary to some 
 established principle of law. The two decisions I refer to are those 
 in In re Searle [L. R. (1900) 2 Ch. 829] and In re Earl of Darnley 
 [L. R. (1907) 1 Ch. 159]. In the first of these cases Kekewich, J., 
 after argument reviewed the cases on the subject, and held that there 
 is in law the distinction I have mentioned between realty and person- 
 alty, and that this distinction exists notwithstanding that they are both 
 comprised in a single trust for conversion. This, therefore, is a case 
 directly in point. In the second case the same learned judge followed 
 his previous decision, and it is of importance only because in it \\ ent- 
 worth v. Wentworth was cited. There is no express decision to the 
 contrary, but it is said that there is an established principle that where 
 realty and personalty are combined in one fund rules relating to per- 
 sonalty will be applied to both constituents of such fund, and that 
 the decisions that I have mentioned are inconsistent with that prin- 
 ciple and therefore ought not to be followed. But the answer, I think, 
 is that no such general principle has been established. Reliance is 
 placed on Genery v. Fitzgerald [Jac. 468] and Bellairs v. Bellairs [L. 
 R. 18 Eq. 510]. The first of these related to intermediate rents of 
 real estate devised so as to vest at a future time, and the second to 
 conditions subsequent in restraint of marriage. In both the effect of 
 applying different rules to the two classes of property would have been 
 to give the beneficial interest in the two classes to different persons 
 though they were comprised in the same gift, and this, I think, is the 
 true ground of decisions of that class.
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 413 
 
 The strongest expression of opinion in favor of the supposed gen- 
 eral principle, is that of Sir George Jessel in Bellairs v. Bellairs. He 
 says: "But there is another ground upon which again I am bound 
 by authority. This is a mixed fund ; and the proceeds of realty and 
 personalty directed to be converted are thrown together as an entire- 
 fund. Now the rules as to mixed funds are very different from the 
 rules governing simple funds, arising from one or the other kind of 
 property. The general rule in modern times has been to govern this 
 mixed fund by the rules of personalty, and in some cases it has been 
 carried so far that even where the only mixture, so to say, was giving 
 the funds to the same objects, that has been carried out. The case of 
 Genery v. Fitzgerald is a notable example. That was not the case of 
 a true mixed fund, but a simple gift of realty and personalty to the 
 same object. When we come to true mixed funds we find the law has 
 been largely modified in favor of the rules regulating personal estate, 
 as is shown by the decisions in the well-known cases of Roberts v. 
 Walker [1 Russ. & Myl. 752], Boughton v. Boughton [1H.L. C. 406] 
 and Tench v. Cheese [6 De G., M. & G. 453]. Therefore, if it de- 
 pended simply on this consideration, I should be bound to hold that, 
 having a mixed fund, you are not to sever it into two, and say it is 
 valid as to so much as arises from realty, and invalid as to so much as 
 arises from personalty, but to hold that the two funds are to be kept 
 together, and that the rules as to personal estate apply." I think the 
 key to this is to be found in the words, "the two funds are to be kept 
 together," and that the passage was not intended to have the general 
 application contended for. No such general principle as is contended 
 for has, in my opinion, been established. There is no question here 
 of keeping the two funds together, and no difficulty in applying one 
 rule to the rents of realty and another to the income of personalty, 
 any more than there would be in giving the tenant for life income in 
 specie of authorized investments and some conventional sum in lieu of 
 income of unauthorized investments. 
 
 On the whole I must follow In re Searle and In re Earl of Darnley 
 and I declare that Mary Oliver is entitled to the rents of the unsold 
 real estate. 39 
 
 SARAH E. N. EDWARDS and Another, Trustees, v. HENRY 
 EDWARDS and Others. 
 
 (Supreme Judicial Court of Massachusetts, 1903. 183 Mass. 581, 67 N. E. 658.) 
 
 Bill in equity, filed March 2*3, 1903, by the trustees under the will 
 of James Edwards, for instructions as to the application of the pro- 
 as In re Searle, L. R. (1000) 2 Ch. 829; In re Earl of Darnley, L. R. (1907) 
 1 Ch. 159 (1906). See, also, Hope v. D'Hedouville, D. R. (1S«J3) 2 Ch. 361 ; 
 Casauiajor v. Strode, 19 Ves. 390, note 11.
 
 Ill THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 ceeds of sale of a certain valuable tract of vacant land on Huntington 
 Avenue in Boston. 
 
 The case came on to be heard before Braley, J., who reserved it 
 upon the bill and answer and an agreed statement of facts for the con- 
 sideration of the full court, such order to be made therein as justice 
 and equity might require. 
 
 Kxowi.tox. C. J. This is a bill for instructions by trustees ap- 
 pointed under the will of James Edwards. By the will he gave all his 
 property to the^e trustees, stating the trust as follows: "To invest 
 and reinvest the same at their discretion, in such securities as the 
 laws of this Commonwealth allow Savings Banks to invest their 
 fund- in. and the whole net income therefrom shall be paid to my 
 wife as long as she shall live, for her own use and disposal, with the ex- 
 cept ion that I direct that from said income there shall be paid monthly 
 to my son, William Edwards and his wife, Alice J. Edwards, in equal 
 shares, the sum of one hundred dollars, as long as my said wife shall 
 live." At the death of his wife the trustees are to pay the income 
 to his children and to the wife of one of them, and at the termination 
 of the trust, to pay over the remainder to his grandchildren or to his 
 heirs at law. The value of the personal property that came into the 
 hands of the trustees was nearly $70,000, and the value of the real 
 estate was more than $200,000. Much of the personal property, that 
 he left, was stock carried by brokers on margins and the most valu- 
 able part of the real estate was unproductive land on Huntington 
 Avenue which was appraised in the executor's inventory, filed No- 
 vember 11, 1896. at $150,000, and in the trustees' inventory, filed 
 December 31, 1898, at $155,000. and was sold by the trustees on 
 September 1, 1899, for $196,500. The question relates to the ap- 
 portionment of income and principal between the life tenant and the 
 remaindermen, from the proceeds of the sale of the land on Hunting- 
 ton Avenue. It is argued that the value of this land at the time of 
 the testator's death was the sum at which it was appraised in the ex- 
 ecutor's inventory, and that the trustees used every reasonable effort 
 to sell it, and in view of the improvements in that vicinity, exercised 
 a sound judgment in holding it until the time of the sale. It did not 
 produce sufficient income to pay the taxes and expenses upon it. 
 Under language like that of this will, which gives the trustees all the 
 property, real and personal, and does not indicate an intention that 
 the time for establishing the fund shall be postponed, and which gives 
 to a life tenant the annual income, it is well settled law in this Com- 
 monwealth that the income is to be computed from the time of the 
 testator's death. Sargent v. Sargent, 103 Mass. 297. 299; Westcott 
 v. Xickerson, 120 .Mass. 410. In the present case the testator ob- 
 viously intended that the entire property should be converted into 
 one fund, and that the unproductive and speculative investments which 
 he had at the time of his death should be changed without unreason- 
 able delay. Much of the property held on margins was not of such
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 415 
 
 a kind "as the laws of this Commonwealth allow Savings Banks to 
 invest their funds in," and the land on Huntington Avenue was not 
 in a condition to he held as a permanent investment. It was, there- 
 fore, the duty of the trustees to convert this property into an income- 
 producing fund, and this they did according to their best judgment 
 and discretion. The testator is presumed to have expected that some 
 time would be required to accomplish this. At the same time, he is 
 presumed to have intended that the rights of the life tenant to income 
 should be ascertained on the creation of the fund, as if the fund had 
 come into existence immediately after his death. This is in accord- 
 ance with the rule repeatedly stated by this court. Kinmonth v. Brig- 
 ham, 5 Allen, 270, 278; Sargent v. Sargent, 103 Mass. 297; West- 
 cott v. Nickerson, 120 Mass. 410; Mudge v. Parker, 139 Mass. 153, 
 29 N. E. 543. The rule is applicable as well when the delay in con- 
 verting the property is necessary as when it is caused by the voluntary 
 act or default of the trustees. Loring v. Massachusetts Horticultural 
 Society, 171 Mass. 401, 404, 50 N. E. 936. In Westcott v. Nicker- 
 son, ubi supra, Chief Justice Gray says of the property in such cases, 
 "The necessary inference, and the established rule are that it must 
 be invested as a permanent fund, and the value thereof fixed at the 
 time when the right of the first taker begins, that is to say. at the death 
 of the testator." In Sargent v. Sargent, ubi supra, the same justice 
 says : "The general rule is established, that the tenant for life is en- 
 titled to the income of a residue given in trust from the time of the 
 testator's death." 
 
 The question raised by this bill for instructions relates only to the 
 proceeds of the sale of the land on Huntington Avenue. The life 
 tenant, the widow of the testator, is one of the trustees who bring 
 the suit, and in the bill she states her claim as follows : "The widow 
 of the testator, who with the annuitants, is entitled to the income 
 of the trust fund from the time of the testator's death to the filing of 
 this bill, claims that she is entitled to receive a proportionate part of 
 the proceeds of the sale of said Huntington Avenue land, as the 
 income of that part of the trust estate, and contends that all the taxes, 
 assessments and brokers' commissions, which the trustees and execu- 
 tors have paid, and are bound to pay, should be charged to the funds 
 received from said sale, and that the fund should then be so divided 
 as to constitute a fund at the time of the testator's death, which, with 
 interest at a reasonable rate, to wit, four per cent., will produce the 
 amount for which the said estate was sold, less the expenses accruing 
 on the same, and all betterments against said premises which the trus- 
 tees are bound to pay, and that then she is entitled to said interest or 
 income, and that the fund determined as aforesaid shall form a part 
 of the corpus of the estate." The question arises whether, in ap- 
 portioning the principal and income, we are to assume that the fund, 
 if established at the time of the testator's death, would have earned 
 interest at the rate of six per cent, per annum, or only at some lower
 
 41G Till: DUTIES OF A TRUSTEE. (CTl. 5 
 
 rate. It was said at the argument, and we suppose it to be a fact of 
 common knowledge, that a fund invested in such securities as savings 
 hanks may invest in under our laws, cannot be made to produce an 
 income of nearly so much as six per cent, per annum, and the life 
 tenant in stating her claim, suggests the allowance of ''interest at a 
 reasonable rate, to wit. four per cent." In this statement she rec- 
 ognizes the principle that in this case we are not to deal with interest 
 as an allowance made by law to represent damages for the failure to 
 pa) money when it is due. We are to deal with the income which 
 could have been obtained by the trustees if the fund had been ready 
 for investment and had been invested immediately after the death 
 of the testator. The failure to invest it then was not the fault of any- 
 body, and we are not called upon to allow interest as interest, but 
 only to ascertain the probable income. Whenever interest is to be 
 allowed for the failure to pay money, the law knows no other rate 
 than six per cent, per annum. Welch v. Adams. 152 Mass. 74, 25 
 X. !•'.. 34, 9 L. R. A. 244; Loring v. Massachusetts Horticultural 
 Society, 171 Mass. 401, 50 N. E. 936; Bartlett, Petitioner, 163 Mass. 
 509, 521, 40 X. E. 899. 
 
 But we are to ascertain as between tenant for life and remainder- 
 men, what part of a gross sum now in hand shall be treated as capital 
 and what part as income, and when we are called upon to find out 
 what sum at an earlier date, if invested by trustees, would have been 
 sufficient to produce, with its income, the gross sum now in hand, we 
 must look to the actual income that can be obtained from investments, 
 and not to the rate of interest established by law. 
 
 In Westcott v. Nickerson, ubi supra, it is said that the amount ob- 
 tained "is to be distributed between the tenant for life and the re- 
 mainderman, by computing what sum, if received at the death of the 
 testator, adding interest at six per cent, with annual rests, would 
 produce the amount afterwards actually received * * * and by 
 investing the original sum, so computed, as principal, and distributing 
 the residue as income." In Kinmonth v. Brigham, ubi supra, a direc- 
 tion is given in similar language. But in neither of these cases was 
 any consideration given to the possible difference between the income 
 actually obtainable and the rate of interest prescribed by law. The 
 firsl of these cases was decided in 1876 and the other in November, 
 1862, and at the time to which the decisions relate there was little if 
 any, difference between the actual earnings of capital and the rate of 
 interest established by law. Neither the parties nor the court had 
 any occasion to consider the question now raised. 
 
 We are of opinion that the case should be referred to a master to 
 ascertain what sum would have been sufficient if invested by the 
 trustees immediately after the death of the testator, to produce, with 
 the income which they reasonably could have obtained from it, the 
 sum in the hands of the trustees as the net proceeds of the land on 

 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 417 
 
 Huntington Avenue, after deducting their disbursements on account 
 
 of the property. That sum is to be held as principal and the re- 
 mainder is to be paid over as income. 
 
 III. The Trustee's Duty to Invest the Trust Funds. 
 
 HARDEN v. PARSONS. 
 (In Chancery, before Lord Keeper Northington, 1758. 1 Eden, 1 15.) 
 
 John Stokes by his will, bearing date the 6th of August, 1725, gave 
 the sum of £1,000. to be invested in land, and settled to the use of 
 John Stokes and his heirs lawfully begotten, with remainder to Sam- 
 uel Stokes in the same manner. He appointed John Lyde, Andrew 
 Parsons, John Thomas, Benjamin Milles, and William Thornhill, his 
 executors. By a codicil, bearing date the 25th of August, 1726, he 
 afterwards reduced the sum to £400., and died in 1727. All the ex- 
 ecutors acted except Milles. 
 
 The sum of £1,000. which was due to the testator upon mortgage 
 at his death, having been called in and paid on the 1st of October, 
 1731, was lent to Lyde, who was a considerable merchant at Bristol, 
 who gave a bond to the other executors, which was deposited with 
 their clerk. 
 
 By indenture, bearing date the 29th of March, 1738, reciting the 
 devise under the will and the words of the limitations, the names of 
 the executors, and the codicil verbatim, and that the sum of £400. 
 had not been laid out in lands according to the directions of the said 
 testator, but that the same remained in the hands of the trustees, some 
 or one of them, the said John Stokes assigned his interest in the same 
 to the plaintiff Harden. 
 
 Lyde regularly paid the interest upon the bond till 1735, when he 
 paid off the sum of £565., which reduced the principal to £400. ; and 
 from that time to his death in 1744, he regularly paid the interest of 
 the £400. to Stokes. L yde dying insolvent, the present bill was 
 b rought to charge _ tlie_. ex ecu tors, with the legacy. 
 
 The Lord Keeper. 40 This is a bill brought to have a legacy 
 invested in land, pursuant to the will of John Stokes, which legacy 
 became due in the year 1727, being thirty-one years ago ; and it is 
 to have it paid by the executors, the money having been lost by an 
 insolvent security;- and the claim of the plaintiff is said to be founded 
 upon two legal principles. 1st., That two executors joining in a re- 
 ceipt are each chargeable pro toto. 2dly, That an executor lending 
 out money on a personal security, is guilty of a breach of trust, and 
 liable to the payment of the money. * * * 
 
 40 Only a part of the opinion is given. 
 Ken.Tr.— 27 
 
 / 
 
 '•"7-
 
 418 TIIE DUTIES OF A TRUSTEE. (Ch. 5 
 
 The next consideration must proceed upon a supposition that the 
 money was received and lent out on an improper security, and that 
 they are guilty of a breach of trust. It is said that they cannot place 
 it out on personal security. It is agreed that there is no text writer 
 that lays down that rule, nor any cases which establish it. If so, 
 we must resort to the inquiry into the nature of the office and duty 
 of a trustee as considered in a court of equity. No man can require, 
 or with reason expect a trustee to manage his property with the same 
 care and discretion that he would his own. Therefore the true touch- 
 stone by which such cases are to be tried is, whether the trustee has 
 been guilty of a breach of trust or not. If he has been guilty of a 
 gross negligence, it is as bad in its consequences as fraud, and is a 
 breach of trust. The lending trust money on a note, is not a breach 
 of trust, without other circumstances crassse negligentise. That is 
 plain from the case of Ryder v. Bickerston [3 Sw. 80], where a sum 
 of money was left to be placed out on security, with the best interest 
 that could be got. The executor had lent it on a note without inter- 
 est. Did the court say that it was a clear breach of trust to lend it 
 on a personal security? No. The court heard counsel, and gave a 
 solemn opinion to show the gross negligence in that particular case ; 
 and there was not an intimation that a fair loan of rational credit is, 
 in itself, a breach of trust. But it is said, and Mr. Attorney applies 
 to Mr. Wilbraham, knowing his habitual timidity about money mat- 
 ters, and asks him, whether he would do it? Perhaps not; but other 
 prudent men do. 
 
 The confirmation here is most deliberate, uniform, and steady, both 
 in John Stokes, deceased, and in Samuel, the present plaintiff. John 
 Stokes knew of the will and the trusts of it, and recites them in his 
 assignment ; all the family had legacies, particularly the remainder- 
 man ; they consent that the legacy shall continue, by not bringing 
 their bill, or finding a purchase, and applying to the executors to lay 
 out the money in land. 41 Bill dismissed. 
 
 4i See Hale's Case, 3 Sw. 63 n. (b.) (1637). 
 
 In Walker v. Symonds, 3 Sw. 1 (1818), at pases 62, 63, Lord Chancellor 
 Eldon says of the i > r i u < - i j >a I case: "The judgment in Harden v. Parsons [1 
 Eden, 1451 is,, in more resptx-ts than one, a curious document in the history 
 of trusts as administered by this court. Lord Northington says: 'The lend- 
 ing trust money on a note is not a breach of trust, without other circumstances 
 crassse negligentiae. That is plain from the ease of Ryder v. Bickerston, 
 where a sum of money was left to lie placed out on security, with the best 
 interest that could be got. The executor had lent it on a note without in- 
 terest. Did the court say that it was a clear breach of trust to lend it on 
 a personal security? No.' The fact is, that the court said. Yes; declaring 
 that the trustee having placed out the money neither at interest nor on se- 
 curity, had committed a direct breach of trust in both resjiects. Lord North- 
 ington proceeds to state a most material circumstance in the case; a 'delib- 
 erate, uniform, and steady confirmation.' The editor of this valuable work 
 lias taken the trouble to subjoin a great variety of cases, all of which con- 
 tradict (he doci rine that investing trust money on personal security is not a 
 breach of trust."
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 419 
 
 HOLMES v. DRING. 
 
 (In Chancery, before Sir Lloyd Kenyon, Master of the Rolls, 1788. 2 Cox, 
 
 Equity Cases, 1.) 
 
 The plaintiff (an infant) was entitled to a sum of £300. under a 
 will, which the two defendants, the executors, residing in the country, 
 lent on private security of a bond in which a surety joined, and which 
 was made to both the executors. The obligors were in very ample 
 circumstances at the time the money was lent, but afterwards be- 
 coming insolvent, the plaintiff now charged the executors with the 
 money. 
 
 Madocks & Mitford for the executors argued, that persons in the 
 country could not so readily invest money in the public funds as those 
 who resided on the spot, and that if they lent so small a sum as this 
 upon such security as might reasonably be considered at the time as 
 ample and unquestionable, and such as a prudent man would lend his 
 own money upon, it would be a hard measure to charge them with 
 any loss that might happen by the unexpected failure of such security. 
 And Madocks mentioned a case in Gilb. Rep. 10, to show that the 
 court considered an executor as justifiable in lending trust money 
 on private security, if he took the security of more than one solvent 
 person. 
 
 The Master of the Roles. As to the case in Gilbert, it cannot be 
 authority for what is contended for ; the bond of several persons 
 cannot be distinguished from the bond of one person, as applied to 
 this case. It was never heard of that a trustee could lend an infant's 
 money on private security. This is a rule that should be run-' in the 
 ears of every person who acts in the character of a trustee, for such 
 an act may very probably be done with the best and honestest inten- 
 tion, yet no rule in a court of equity is so well established as this. 
 
 1 must, therefore, direct an account against the executors of this 
 
 ... 
 money, and order them to pay it in moieties, with interest at 4 per 
 
 cent., and I am bound to make them pay the costs of the cause. 42 
 
 42 Terry v. Terry. Prec. in Chy. 273 (1708); Gilbert, Eq. 10; Ryder v. 
 Biekerton, 3 Sw. 80, note (174.",) ; Anonymous, Loft't, 492 (1774) ; Adye v. 
 Feuilleteau, 3 Sw. 84, note (1783) ; 1 Cox, Eq. 24 ; Keble v. Thompson, 3 
 Bro. C. C. 112 (1790) ; Wilkes v. Steward, G. Cooper, 6 (1S01) ; Pocock v. 
 Redlngton, 5 Ves. Jr. 794 (1801); Vigrass v. Binfield, 3 Mad. 62 (1818); 
 Walker v. Symonds, 3 Sw. 1, 02, 63 (1818) ; Clough v. Bond, 3 Myl. & Cr. 490. 
 496 (1S3S); Darke v. Martyn, 1 Beav. 525 (1839); In re Tucker, L. R. (1894) 
 
 2 Ch. 724 (1893) ; Perley v. Snow, Ritchie, Eq. (Nova Scotia) 373 (1S79) ; 
 Worts v. Worts, 18 Out. 332 (1889) ; Barney v. Saunders, 16 How. 535, 545. 
 14 L. Ed. 1047 (1853) ; Lewis v. Cook, IS Ala. 334, 337 (1S50) ; Moore v. Hamilton. 
 4 Fla. 112 (1851) ; Brown v. Wright, 39 Ga. 96 (1869) ; State v. Johnson, 7 
 Blackf. (Ind.) 529 (1845) ; Benson v. Liggett, 78 Ind. 452 (1881) ; Clay v. 
 Clay, 3 Mete. (Ky.) 548 (1861) ; Mattocks v. Moid ton, 84 Me. 545, 552. 24 
 Atl. 1004 (1S92); Hunt v. Gontrum, SO Md. 64, 30 Atl. 620 (1894); Harding 
 v. Lamed, 4 Allen (Mass.) 426 (1862) ; Clark v. Gartield, 8 Allen (Mass.) 427 
 (1864); Judge v. Mathes, 60 N. H. 433 (1881) ; Gray v. Fox, 1 N. J. Eq. 259, 
 22 Am. Dec. 508 (1S31) ; Vreeland v. Vreeland, 16 N. J. Eq. 512, 530 (1863) ;
 
 4,20 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 Appeal of FRANKENFIELD. 
 
 (Supreme Court of Pennsylvania. 1882. 11 Wkly. Notes Cas. 373, 127 Ta. 
 
 369, note.) 
 
 Appeal of Samuel A. Frankenfield from a decree of the Common 
 Pleas of Lehigh County, dismissing his exceptions to and confirming 
 the report of an auditor appointed by the court to audit appellant's 
 final account as committee of Samuel Frankenfield, a lunatic. * * * 
 
 GrEEN, J. 43 In this case the appellant, who was the committee of 
 a lunatic, having trust funds in his hands, made a deposit of $2,000 
 thereof in the Franklin Savings Bank of Allentown, Pa., and took a 
 certificate therefor in the following form : 
 
 Certificate of Deposit. 
 Franklin Savings Bank, Allentown, Pa. [Stamp.] 
 
 November 11th, 1876. 
 S. A. Frankenfield, Committee of Samuel Frankenfield, has de- 
 posited in this bank two thousand dollars, payable to his order, three 
 months after date, with interest at the rate of six per cent per annum, 
 on return of this certificate. 
 
 Thirty days' notice to be given of the intention to withdraw this 
 deposit. 
 $2,000. 
 
 J. E. Zimmerman, Cashier. D. H. Muller, President. 
 
 Per J. E. Z. 
 
 The deposit was made in the name of the committee as such, it 
 was done by the advice of counsel, and at the time of the transaction 
 the bank was in good repute. So far, therefore, as these considera- 
 tions affect the question of the appellant's liability for the loss of the 
 money by reason of the insolvency of the bank, it must be conceded 
 at once that no liability would arise. There was no bad faith on the 
 part of the appellant, and although the bank was really insolvent when 
 the deposit was made, that fact was not known in the community. 
 The question at issue is thus reduced to the narrowest limits. If this 
 had been an ordinary deposit, subject to the check of the depositor from 
 the day it was made, ic is very probable the appellant would not have 
 
 Sherman v. Lanier. .",!» N. .1. Eq. 249, 252 (1884); Dufford v. Smith, 46 X. J. 
 Eq. 216, 18 Atl. 1052 (1880); Brewster v. Demarest, 48 N. .1. Eq. 559, 23 Ad. 
 271 (1891); smith v. Smith, 4 John. Ch. (N. Y.i 281 (1820); Lefever v. Has- 
 brouck, 2 Dem. Sur. (N. 'Y.t 567 (1882); Matter of Foster. 15 Hun (N. Y.) 
 387 (1878); Matter of Cant. 5 Dem. Sur. (X. V.) 269 (1886); In re Blau- 
 velt's Estate, 2 ('on. Sur. 458, 20 X. Y. Supp. 119 (1890); Nyce's Estate, 5 
 
 Watts & S. (Pa.) 255. 256, 40 Am. Doe. 41ts (1843); Wills' Appeal, 22 Pa. .".25 
 (1853); Wynne v. Warren, 2 Ileisk. (Tenn.) 118 (1870); Simmons v. Oliver, 
 71 wis. <;:;::, 4:; x. w. 561 (1889). 
 
 Contra: Ilk'u'ins v. McClure, 7 Bnsh iKv.i .".7'.> (1870); Clark v. Anderson, 
 13 Bush (Ky.) 111,119(1877); Glover v. Glover, McMull. Eq. (S. C.) 153(1841); 
 Nance v. Nance, 1 S. c. 209 (1869); Barney v. Parsons, 54 Vt. <'>2. -> >. 41 Am. 
 Rep. 858 (1882). 
 
 *3 Statement of facts abridged and only part of the opinion given.
 
 Sec. 4) DUTIES OF MANAGEMENT OF TBI ST ESTATE. 421 
 
 been liable. But it was not such a deposit. In practical effect, it was 
 a loan to the bank for a fixed period and payable with interest. Dur- 
 ing that period it was entirely beyond the control of the depositor. 
 He could make no legal demand for the money until at least three 
 months had expired, and not even then unless he had given thirty 
 days' notice of his intention to withdraw the fund. In no essential 
 feature does this transaction differ from an ordinary loan. It is true, 
 the borrower is a bank and not an individual. But that circumstance 
 is of no moment in determining the character of the transaction. It 
 is a loan still, just as it would have been had the depository been a 
 citizen or a firm of the greatest wealth, or a manufacturing or a busi- 
 ness corporation of large capital and resources. In these latter cases 
 the security would apparently have been greater, for the capital of 
 this bank was actually very small. The distinguishing feature of the 
 case is, that even if the money be regarded as deposited in the tech- 
 nical sense, it was also loaned, and hence was subject to the qualities 
 and incidents of a loan superadded to those which belonged to it as a 
 deposit. Nor does the brevity of the time affect the question. There 
 could be no difference in principle between a deposit payable in three 
 months and one payable in twelve or twenty-four months, when the 
 question relates only to its character as a loan. This being so, the law 
 regulating the investments by committees of lunatics becomes ap- 
 plicable to the case and controls it. The Act of June 12, 1836, § 25, 
 expressly directs that such investments must be made under the 
 direction of the Court of Common Pleas, and only exempts the com- 
 mittee from liability for loss when he pursues this course, and in good 
 faith (Purd. Dig. 983, pi. 25). In Hemphill's Appeal, 6 Harr. 303. 
 it was formally and definitely settled that a trustee can only protect 
 himself from risk when he invests the trust fund in real or govern- 
 mental securities or makes the investment in pursuance of an order 
 by the court. On p. 306, Black, C. J., says: "It has never been 
 doubted anywhere that a loss which accrues to a trust fund, invested 
 on personal security, must be borne by the trustee." These considera- 
 tions determine that the auditor and the court below were right in 
 holding the appellant liable for the loss of the sum of one thousand 
 dollars, deposited with the Franklin Savings Bank. * * * 
 [Decree reversed on other grounds.] 44 
 
 Estate of W. W. LAW, a Minor. 
 
 (Supreme Court of Pennsylvania, 1891. 144 Pa. 499, 22 Atl. 831, 14 L. R. A. 
 
 103.) 
 
 On October 13, 1890, the account of Henry W. Scott, guardian of 
 William W. Law, a minor, was called for audit before Ashman, ]., 
 
 ** See Rehden v. Wesley. 29 Beav. 213 (1861) ; Baer's Appeal, 127 Pa. 360. 
 18 Atl. 1. 4 L. II. A. 609 (1889) : Law's Estate, 144 Pa. 499, 22 Atl. 831, 14 
 L. R. A. 103 (1891) ; Baskin v. Baskin, 4 Lans. (N. Y.) 90 (1S71).
 
 422 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 when a credit was claimed by the accountant for the sum of $3,339.12. 
 The allowance of the credit was objected to by the Commonwealth 
 Title Insurance & Trust Company, substituted guardian of said minor. 
 
 Before the auditing judge, it was made to appear that on January 
 29, 1890, the accountant received $3, 339.12 of the money of his ward, 
 part of the proceeds of a policy of life insurance, and immediately 
 placed it in the Dank of America, where it remained until the bank 
 failed on April 30, 1890; that the money was deposited in the ac- 
 countant's name as guardian; that the accountant had been advised 
 by an officer of the Philadelphia Finance Company, the surety on his 
 bond, that the bank mentioned was entirely solvent and safe ; that 
 for several years the accountant had kept his personal account as a 
 depositor in the same institution; that there was nothing upon the 
 deposit book, or the books of the bank, indicating that the placing of 
 the ward's money in the hank was other than an ordinary deposit, 
 but the accountant testified that he had a verbal agreement with the 
 bank whereby the bank agreed to allow him three per cent, interest, 
 if he would allow the money to remain until he should find an invest- 
 ment for it, and he was to give two weeks' notice before withdraw- 
 ing it. 
 
 The auditing judge allowed the credit claimed, and decreed a balance 
 of $1,620.50 to be due by the accountant. 
 
 Exceptions to the adjudication, filed by the Commonwealth Com- 
 pany, substituted guardian, were sustained. 
 
 A formal decree having been filed, adjudging that the accountant 
 pay to the Commonwealth Company, the substituted guardian, the sum 
 of $5,126.58, the Philadelphia Finance Company, surety upon the bond 
 of the accountant, took this appeal, specifying that the court erred in 
 not confirming the adjudication and dismissing the exceptions thereto. 
 
 Mr. Justice Clark. 45 This is an appeal by the Philadelphia Finance 
 Company, surety upon the guardianship bond of Henry W. Scott, 
 guardian of William W. Law, from the adjudication of the Orphans' 
 Court of Philadelphia County, upon the account of said guardian. 
 ( )n January 29, 1890, Scott received $3,339.12 of the money of his 
 ward, and immediately deposited the same in the Bank of America. 
 The accountant had kept his personal account, as a depositor, in the 
 same institution for several years, and had been advised by an 
 officer of the Finance Company, which latter company was surety 
 on his bond as guardian, that the Bank of America was entirely 
 solvent and safe. The deposit was in a separate account, in the name 
 of the guardian as such. No certificate was issued ; the whole trans- 
 action was evidenced only by an entry of credit upon the books of 
 the bank in the usual form. The accountant was in search of an 
 investment, and the deposit was to remain only until he could find 
 one. The bank agreed to allow him three per cent, interest, but he 
 
 *5 A part of the opinion is omitted.
 
 SeC. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 423 
 
 was to give two weeks' notice before withdrawing it. The bank 
 failed on the thirteenth of April following. At the time of the deposit 
 the bank was in good repute, and there is no allegation of bad faith, 
 or want of due care or diligence. The only question for our consider- 
 ation is whether or not, under such circumstances, the trustee is 
 responsible for the amount of the deposit. 
 
 As a general rule, the measure of care and diligence required of ' ' 
 a trustee is such as would be pursued by a man of ordinary prudence 
 and skill, in the management of his own estate. Fahnestock's Appeal, 
 104 Pa. 46. It is equally well settled, however, that a trustee who 
 invests the funds belonging to a trust on personal security does so 
 at his own risk. This is so well settled that a citation of authorities 
 is unnecessary. * * * 
 
 Banks of deposit are a recognized necessity in the commercial 
 world. A trustee who would continuously keep for any considerable 
 length of time a large sum of money about his person or in his house, 
 rather than deposit it for safe-keeping in a solvent and reputable bank 
 or__trust company, where all the precautions may be exercised for its 
 safety, might justly be regarded as derelict in duty. No one would 
 be accredited with the exercise of common prudence who would keep 
 his own money in this way ; and a trustee, as we have said, is held 
 generally for such care and diligence as an ordinarily prudent man 
 would exercise in the conduct and management of his own busi- 
 ness. * * * 
 
 Was this transaction with the Bank of America a deposit of the 
 money, or was it a loan or investment of it? A deposit is where a 
 sum of money is left with a banker for safe-keeping subject to order, 
 and payable, not in the specific money deposited, but in an equal sum. 
 It may or it may not bear interest, according to the agreement. 
 Whilst the relation between the depositor and his banker is that of 
 debtor or creditor simply, the transaction cannot in any proper sense 
 be regarded as a loan, unless the money is left not for safe-keeping 
 but for a fixed period at interest, in which case the transaction as- 
 sumes all the characteristics of a loan. The Orphans' Court decided 
 this case upon the rulings of this court in Frankenfield's App., 11 
 Wkly. Notes Cas. 373, and Baer's App., 127 Pa. 360, 18 Atl. 1, 4 
 L. R. A. 609; but we think these cases are readily distinguishable 
 from the case at bar. In Frankenfield's Appeal, supra, there was a 
 loan by the trustee of two thousand dollars of trust funds to the 
 Franklin Savings Bank for three months, with interest at six per 
 cent. ; thirty days' notice to be given of the trustee's intention to 
 withdraw the deposit. The bank was in good repute, and there was 
 no evidence of bad faith or want of care on the part of the trustee. 
 Our Brother Green, in the opinion filed, said : "If it had been an 
 ordinary deposit, subject to the check of the depositor from the day 
 it was made, the appellant would probably not have been liable ; but
 
 1_'4 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 it was nol a deposit, it was a loan upon merely personal security for 
 a fixed period, at interest : and during that period the money, because 
 of the loan, was entirely beyond the trustee's control. The twenty- 
 fifth section of the Act of June 12. 1836, expressly provides that such 
 investments must hi' made under the direction of the Court of Com- 
 mon Pleas, and only exempts the trustee from liability when he pur- 
 sues this course in good faith." In Baer's Appeal, supra, the banker's 
 certificate of deposit was substantially in the same form as in Franken- 
 field's Appeal, supra, excepting that there was no stipulation for 
 notice of the withdrawal of the deposit. The transaction possessed 
 all the qualities of a loan of money for a year at four per cent, inter- 
 est. It is of no consequence that the borrower is a hank, for a bank 
 may borrow money. Parties engaged in the hanking business, wheth- 
 er as individuals or as members of a partnership or of a corporation, 
 may take a loan of money for a fixed period of time at interest, with 
 like effect as persons engaged in other pursuits. The transactions 
 may be termed a time deposit, but it is none the less a loan, and 
 subjects the lender to that decree of responsibility. 
 
 In the present case, the money was placed in the bank, not as an 
 investment for any fixed period, but merely for safe-keeping, ana at 
 a small rate of interest until a suitable investment could be found. 
 This was the express understanding of both parties at the time. The 
 transaction was entered upon the books of the bank as a deposit 
 merely. It was treated as a temporary, provisional, or precautionary 
 ' arrangement. No person would speak of this as an investment; an 
 investment carries with it a greater or less degree of permanency, 
 which does not characterize this transaction. It is true that two 
 weeks' notice was to be given of the withdrawal of the deposit, but 
 this was a reasonable provision and not inconsistent with a bank 
 deposit. Almost all savings institutions stipulate for notice of with- 
 drawal with their depositors, and such a stipulation is for the benefit 
 not only of the bank, but also of its depositors; the reasonableness 
 of the time is a question in each case to be determined by the court. 
 It is said the trustee thereby loses control of the money; but that is 
 not the true test. The depositor always, in a certain sense, loses con- 
 trol of the money when he places it in bank ; for the bank may re- 
 fuse payment of his checks, and, as he then has no claim upon this 
 specific money, he stands upon the footing of a creditor merely. It_ 
 is true, a trustee, as a general rule, is not allowed to part with 
 the control of trust money. Salway v. Salway, 2 Russ. & M. 
 215. lhit he may do so by way of precaution against loss, by a 
 deposit in a solvent and reputable bank. A deposit, as we have said, 
 is a temporary disposition of money for safe-keeping; and it is upon 
 this ground alone that the trustee is justified in depositing trust funds 
 in hank, and it is upon the same ground that a deposit is distinguish- 
 able from an investment.
 
 Sec. 4) DUTIES OF MANAGEMENT OP TRUST ESTATE. 
 
 42.", 
 
 We are of opinion, for the reasons stated, that the trustee was not 
 properly chargeable with this loss. 
 Decree reversed, with costs. 46 
 
 CANN v. CANN. 
 (In Chancery, before Kay, Justice, 1S84. 33 Weekly Reporter, 40.) 
 
 Adjourned summons. 
 
 This was an application by the defendants to vary the chief clerk's 
 certificate, whereby a sum of £138. lis. 4d. had been disallowed. 
 
 The defendants were the surviving- trustees and executors of the will 
 and codicil of Samuel Cann, which were dated in 1854 respectively. 
 The said will contained a trust for investment, directing the trustees 
 tojnyest in parliamentary stock or funds, or on government or real se- 
 curities in England and Wales, with the usual power to vary invest- 
 ments. The trust estate produced an annual income of about £700. In 
 A'Iay7"!869, the trustees deposited the sum of £500. belonging to the 
 trust estate, which had been previously invested on a mortgage, at 
 Messrs. Harvey & Hudson's Bank at Norwich, in order that they jnjght 
 look for another mortgage. The money remained on deposit until the 
 16th of July, 1870, when the bank failed. The said sum of £138. lis. 
 4d. represented the loss thereby occasioned, and the question was 
 whether the trustees were liable to make it good. 
 
 Kay, J. It is extremely difficult in these cases to know where to 
 draw the line. Here there is an estate producing £700. a year. A 
 mortgage of £500. is paid off, and the trustees pay that money into a 
 bank for the purpose of getting another mortgage. The question is, 
 whether it was within their powers as trustees to leave that sum in the 
 bank for fourteen months. It seems to me that that was too long. If 
 after six months they could not get a mortgage they ought to have in- 
 vested in consols. Without attempting to draw a hard and fast line — 
 •for I consider that each of these cases must be judged on its merits 
 — I say that leaving that money in the bank for fourteen months was 
 
 46 Adams v. Claxton, 6 Yes. Jr. 226 (1801); France v. Woods. Tamlyn, 172 
 (1829); Lord Dorchester v. Earl of Effingham, Tamlyn. 27P (1829); Johnson 
 v. Newton, 11 Hare, 160 (1S53) : Wilks v. Groom, 3 Drew. 584 (1856) : Swin- 
 fen v. Swinfeu, 20 Beav. 211 (I860) ; Fenwick v. Clarke, 4 De G., F. & J. 
 240 (1862) ; In re Marcon's Estate, 40 L. J. Ch. (N. S.) 537 (1871) ; In re Earl. 
 39 W. R. 107 (1890); Norwood v. Harness, 98 Ind. 134, 49 Am. Rep. 739 
 (1884); Jacobus v. Jacobus, 37 N. J. Eq. 17 (1883); People v. Faulkner, 107 
 N. Y. 477. 14 N. E. 415 (1887) ; Moore v. Enre, 101 N. C. 11, 7 S. E. 471. 9 
 Am. St. Rep. 17 (1888); Ramsey v. McGregor, 1 Cine. Super. Ct. R. 327 (1871); 
 Odd Fellows' Ben. Ass'n v. Ferson, 3 Ohio Cir. Ct. R. 84 (1888). 
 
 The fact that the deposit draws interest is immaterial. See. in addition 
 to the principal case, France v. Woods. Tamlyn. 172 (1829); Wilks v. Groom. 
 3 Drew, 584 (1856); Fenwick v. Clarke. 4 De G.. F. & J. 240 (1S62) ; In re 
 Marcon's Estate, 40 L, J. Ch. (N. S.) 537 (1871) ; People v. Faulkner, 107 N. Y. 
 477, 14 N. E. 415 (1S87).
 
 426 THE DUTIES OF A TRUSTEE. (Cll. 5 
 
 leaving it there too long. The moment they began to leave the money 
 there too long they became responsible for all the consequences of their 
 default; ami they arc, therefore, liable for the £138. which has been 
 lost. 1 must dismiss the summons with costs. 47 
 
 In re ARGUELLO. 
 (Supreme r-ourt of California, 1893. 07 Cat. ion. 31 Vac. 937.) 
 
 Appeal from an order of the Superior Court of San Diego County, 
 requiring an administrator to pay the creditors of the estate certain 
 sums of money. 
 
 Belcher. C. 1s This is an appeal by the administrator of the estate 
 of the decedent from an order of the Superior Court of San Diego 
 County requiring him to pay to the creditors of the estate whose claims 
 had been duly presented and allowed certain sums of money. 
 
 The sum of money in controversy was $4,846.80, which was received 
 by the administrator for and on account of the estate, between July 5, 
 1891, and October 15, 1891, and deposited by him in the California 
 Savings Bank, in the City of San Diego in his own name. 
 
 The court below found the facts to be as follows: 
 
 "That at the time said funds were deposited by said administrator in 
 said California Savings Bank, said bank was reputed to be and was 
 considered a safe and solvent bank and place of deposit, and was of 
 good credit and standing, and was believed by said administrator to 
 be solvent and safe ; that said deposit was made in the individual 
 name" of the administrator "'without any designation or indication of 
 his representative capacity, but said administrator had no other funds 
 or account with said bank, and deposited such with that particular 
 bank for the express purpose of keeping the same separate from, and 
 so that it would not be unnecessarily mingled with, his own property 
 or individual funds." 
 
 "That in depositing said funds in said California Savings Bank as 
 aforesaid, said administrator acted in good faith." 
 
 *» In the following eases, also, trustees were charged with losses caused 
 by the failure of banks, because they had left trust moneys on deposit 
 too long. Movie v. Moyle, 2 Russ. & Myl. 710 (1831); Barney v. Saunders, 
 16 How. r,::.-,, 14 L. Ed. 1047 (1853); Woodley v. Holley, 111 N. C. 3S0, 10 
 S. E. 41!) (1892). 
 
 In Whitecar's Estate, 147 Pa. 36S, 23 Atl. 575 (1802), a trustee, having left 
 trust moneys on deposit for fifteen years, was surcharged with 1 per cent. 
 as loss to i lie cestui que trust from failure to invest. 
 
 If a trustee leaves too large a balance on deposit, he will he liable for the 
 excess beyond a proper balance. Asthury v. Beasley, 17 W. R. 638 (1869). 
 
 When it is a trustee's duty to pay over trust moneys, and, instead of SO 
 doing, lie leaves them on deposit in hank, he does so at his peril. J.unham 
 v. Blundell, --'7 L. .7. Ch. IT'.i (1858); Wilkinson v. Bewick. 4 Jur. (N. 8.) 1010 
 (1858); Gough v. Etty, 20 L. T. R. 358 (I860); Ricks v. Broyles, Rec'r, 78 Ga. 
 fill). :: S. E. 772. Am. St. Rep. 280 (18S7). 
 
 48 Only a part of the opinion is given.
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 427 
 
 "That on the 12th day of November, 1891, said California Savings 
 Bank became suddenly, unexpectedly, and wholly insolvent, suspended 
 business, and has not been able to pay the amount so deposited by said 
 administrator with it, or any part of it." 
 
 "That said administrator has been guilty of no negligence or want 
 of care in the administration of said estate, except that he deposited 
 such funds in the California Savings Bank in his own name, instead 
 of in his representative capacity, or in the name of the estate." 
 
 And as conclusions of law the court found that the administrator 
 was responsible for the money so deposited by him, and that he must 
 pay it over to the creditors of the estate. 
 
 The appellant contends that an administrator is only required to 
 act in good faith, and to exercise such skill, prudence, and diligence in 
 managing the affairs of the estate as men ordinarily bestow upon their 
 own affairs, and that when he has, in good faith and with reasonable 
 care, deposited funds of the estate in bank, which have been subse- 
 quently lost by the failure of the bank, he will not be held liable for 
 the loss, unless he has wilfully and unnecessarily mingled the trust 
 property with his own, so as to constitute himself in appearance its ab- 
 solute owner; and hence, that, under the facts found in this case, the 
 order of the court was erroneous, and should be reversed. 
 
 The question presented has many times been before the courts of 
 England and of this country, and the decisions upon it have been 
 practically unanimous, and to the same effect as the decision of the 
 court below in this case. 
 
 The law upon the subject is stated in Perry on Trusts, § 443: "A 
 trustee may deposit money temporarily in some responsible bank or 
 banking house ; and if he acted in good faith and with discretion, and 
 deposited the money to a trust account, he will not be liable for its 
 loss * * * but he will be liable for the money in case of a failure 
 of the bank, or for its depreciation, if he deposits it to his own credit, 
 and not to the separate account of the trust estate." And again, in 
 section 463 : "So if the trustee pays the money into a bank in his 
 own name, and not in the name of the trust, he will be responsible for 
 the money in case of the failure of the bank." [Authorities cited.] 
 
 But whatever may be the rule elsewhere, appellant insists that the 
 rule in this case is declared in section 2236 of the Civil Code, and that 
 that does not make him liable. The section referred to reads as fol- 
 lows : 
 
 "Sec. 2236. A trustee who wilfully and unnecessarily mingles the 
 trust property with his own, so as to constitute himself in appearance 
 its absolute owner, is liable for its safety in all events." 
 
 We do not think this section was intended to change the rule gener- 
 ally prevailing, or to limit liability under it; on the contrary, the sec- 
 tion seems to be in entire accord with the general rule, and in effect 
 to declare it in unmistakable terms.
 
 128 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 In our opinion the order appealed from should be affirmed. 
 VANCLIEFj C, and IIaynks. C, concur. 
 
 For the reasons given in the foregoing opinion, the order appealed 
 from is affirmed. 48 Paterson, J. ; Garoutte, J. ; Harrison, J. 
 
 DENIKE et al. v. HARRIS et al. 
 (Court of Appeals of New York. 1881. 84 N. Y. 89.) 
 
 Appeal from judgment of the General Term of the Supreme Court, 
 in the second judicial department, entered upon an order made Decem- 
 ber 14, 1880, affirming a judgment in favor of plaintiffs, entered upon 
 a decision of the court on trial at Special Term. 
 
 I'. \ki.. J. 50 For some time before his death the testator was a special 
 partner of the defendant in the business of selling agricultural imple- 
 ments ; and as such special partner he had contributed to the capital 
 of the partnership the sum of $15,000. * * * On the 17th day of 
 July thereafter he made and published his will, in which he nominated 
 his partner, Reeves, and the defendant Harris as his executors; and 
 he died on the 6th of September, 1879. The will was subsequently ad- 
 mitted to probate, and the executors qualified and entered upon their 
 duties as such. * * * 
 
 The tenth clause of the will, which gave rise to the present contro- 
 versy, is as follows : "It is my will, and I do hereby order and direct 
 
 f-' Hitmar v. Bogle, 5:} Ala. 109 (1875); Harward v. Robinson, 14 111. App. 
 560 (1884); Naltner v. Dolan, 108 Ind. 500, 8 X. E. 289, 58 Am. Rep. 61 
 (1886); Succession of Mllmo, 47 La. Ann. 120, 1('» South. 772 (1895); Jenkins 
 v. Walter, 8 Gill & J. (Md.i 218, 29 Am. Dec. 5.'!9 (1836); Estate of Horner, 
 66 .Mo. App. 531 (1896); Baskin v. Baskin, 4 Lans. (X. Y.) 90 (1871); Sum- 
 mers v. Reynolds, 95 X. O. 404 (1886); Williams v. Williams, 55 Wis. 300, 12 
 X. W. 465, 13 X. W. 274, 42 Am. Rep. 70S (1882); Booth v. Wilkinson, 78 
 Wis. 052. 47 X. W. L128, 23 Am. St. Rep. 44^ (1891); O'Connor v. Decker, 
 95 Wis. 202. 70 N. W. 286 (1897). 
 
 Contra: Atterberry v. McDuffee, 31 Mo. App. 00.°, (1888), explained in 
 Estate of Horner, 66 Mo. App. 531 (1896); Parsley's Adm'r v. Martin. 77 
 Va. 376. 46 Am. Rep. 7:;:: (1883); Gregory v. Parker, 87 Va. 451, 12 S. E. 
 801 (1S91). 
 
 If the trustee deposits trust money in his individual account and mingles 
 it with his own money he is, a fortiori, answerable for the safely of the 
 hank. Wren v. Kirtoii. It Ves. Jr. 377 (1805); Fletcher v. Walker. 3 Mad. 
 73 (1818); Massey v. Banner, 4 Mad. 413 (1819), affirmed 1 J. & W. 241 (1820); 
 Robinson v. Ward, 2 < '. & P. 59 (1825); Macdonnel] v. Harding, 7 Sim. 178 
 (1834); Pennell v. Deffell, 4 De G., M. & (;. 372, 392 (1853); Henderson v. 
 Henderson, 58 Ala. 582 (1877); Allen v. Leach, 7 Del. Ch. 83. 20 Ail. 1050 
 (1894); Webster v. Pierce, 35 111. 158 (1864); Cartmell v. Allard, 7 Bush 
 (Ky.) 482 (1870); Norris v. Hero, 22 La. Ann. 605 (1870); Coleman v. Lips- 
 comb, 18 Mo. App. 143 (1885); Matter of Stafford. II Barb. (N. Y.) 353 (1851); 
 Shaw v. Bauman, 34 Ohio St. 25 (1877); Commonwealth v. McAlister, 28 
 Pa. 180 (1857); Id., .*'.0 Pa. 536 (1858); Mason v. Whitthorne, 2 Cold. (Tenn.) 
 242 (1865); Vaiden v. Stubblefield, 28 Grat. (Va.) 153 (1S77). 
 
 Contra: Crane v. Moses, 1.*', S. C. 561 (1S79). 
 
 50 Only a part of the opinion is given.
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 421) 
 
 my executors, hereinafter named, to allow my friend, Robert C. 
 Reeves, to retain, as a loan to him out of my personal estate, the sum 
 of $15,000, being the amount now invested by me in the busines 
 ried on and conducted by him, and in which I am a special partner, to 
 be used and employed by him in carrying on and conducting the said 
 business, and to be continued from year to year at the option of the 
 said Robert C. Reeves, but not to exceed the term of three years, upon 
 his paying the interest thereon annually at the rate of five per cent. 
 per annum. Such income, when received by my executors, to be from 
 time to time paid over to my residuary legatees, and at the expiration 
 of said term, or the sooner determination thereof at his option afore- 
 said, I direct my said executors to receive from the said Robert C. 
 Reeves the said sum of money and interest, and to discharge him fully 
 from all further liability on account or by reason of such indebtedness, 
 and upon such payment being made to my said executors, the said 
 sum of $15,000 is to become a part of my residuary estate, and to be 
 distributed according to the provisions of this my will with respect 
 thereto." * * * 
 
 The plaintiffs, two of the three residuary legatees named in the will, 
 for themselves and the other residuary legatee, commenced this action 
 to restrain the executors from making the loan to Reeves mentioned in 
 the tenth clause of the will, without requiring of him security therefor. 
 They alleged in their complaint, among other things, that the executors 
 proposed and intended to make the loan without taking security ; that 
 the business in which Reeves was engaged was one peculiarly of great 
 risk, and that he had but little or no property. The defendants in 
 their answer, among other things, denied that the business of Reeves 
 was one peculiarly of great risk, as alleged in the complaint, and they 
 denied that he had little or no property, and alleged that he was and 
 had at all times been solvent and able to pay all his debts. 
 
 The court, at Special Term, found, upon the allegations in the com- 
 plaint and answer above specified, without any proof, that the business 
 in which Reeves was engaged was one of risk — not that it was pecul- 
 iarly risky, or more risky than other kinds of commercial or mercantile 
 business. He also found that Reeves intended to use the money, if 
 loaned to him, in his business, and that it would thus be at risk, peril 
 and jeopardy, and liable to be lost; that the executors intended to loan 
 him the money, and refused to take any security therefor, although 
 they had been requested to do so by the plaintiffs. And the court or- 
 dered judgment for plaintiffs, among other things, that the executors 
 should not loan the $15,000 to Reeves, or permit him to retain that 
 sum, as provided in the tenth clause of the will, without requiring 
 and obtaining from him sufficient and proper security for the safe pay- 
 ment and return of the sum thus loaned or retained at the end of the 
 three years. The judgment thus ordered was, upon appeal by the de- 
 fendants, affirmed at the General Term, and then they appealed to 
 this court.
 
 430 THE DUTIES OP A TRUSTEE. (Ch. 5 
 
 The claim of the plaintiffs, which has thus far been sustained by 
 the Supreme Court, is, that in making this loan, the defendants arc in 
 the position of all trustees authorized to loan trust funds, and that they 
 are bound by the general rules of law to take proper security. That 
 rule is supposed to require trustees exercising a general authority to 
 make investments to take government or real estate securities. King 
 v. Talbot, 40 X. Y. 76. But the creator of a trust requiring the in- 
 vestment of money may designate how the investment may be made, 
 and what security may be taken, and he may dispense with all security. 
 The question lure is, did the testator intend that Reeves should give 
 security for the sum to be retained by or loaned to him? We think it 
 clear that he did not. The language used precludes the idea 
 
 of security. As executor he was required to give no security. The 
 property was then in his hands, and as surviving partner he was re- 
 quired to give no security. He was to be allowed "to retain" the sum 
 named. If the testator had intended that security should be exacted 
 for the loan, that matter would have been in his mind and probably 
 expressed. Here then the testator designated the person to whom the 
 loan should be made and the rate of interest, and under such circum- 
 stances and in such language, that we think it was intended that the 
 loan should be without security. 
 
 It matters not that the sum thus loaned is put in some jeopardy — 
 subjected to such risks as ordinarily attend the carrying on of any 
 business or the loaning of money upon mere personal security. The 
 testator contemplated such risks, and was willing his executors should 
 take them. * * * 
 
 The sum to be loaned w r as for use by Reeves "in carrying on and 
 conducting" his business. He could not claim the loan for any other 
 purpose. If he was actually insolvent, or if for any other reason he 
 was not in a condition to go on with his business, he could not claim the 
 loan. 
 
 We are, therefore, of opinion that no case was made justifying the 
 decision rendered herein, and the judgment should be reversed and a 
 new trial granted, costs to abide event. 51 
 Judgment reversed. 
 
 r i For other instances of authority by the creator of a trust to loan on 
 persona] security, see Forbes v. Ross, 2 Bro. C. C. 430 (1788); s. e. 2 Cox, 
 Eq. L13; Langston v. Ollivant, G. Cooper, .'!.''> (1807); Brown v. Sansome, 
 McCl. vV y. 427 (1825); Stickney v. Sewell, 1 Myl. & Cr. S (1835); Paddon 
 v. Richardson, 7 De G.. M. \- <;. ."",<;:: (isr>5); Pickard v. Anderson, L. R. 13 Eq. 
 608 (1872); Knox v. Mackinnon, 13 A pp. Gas. 753 (1888); Rae v. Meek, 14 
 App. Cas. 558 (1889); In re Karl, 39 W. R. 107 (1890): In re Tucker, L. R. 
 (1894) 1 Ch. 724 (1893); Lowry v. McGee, 3 Head (Tenn.) 2G9 (1859).
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 431 
 
 NORBURY v. NORBURY. 
 
 (In Chancery, before Sir John Leach, Vice Chancellor, 1819. 
 4 Maddock, 191.) 
 
 On the coming on of this cause, for further direction, Mr. Bell de- 
 sired that a reference might be made to the Master, to ascertain 
 whether it would not be for the benefit of the infants, that a sum of 
 money in the executor's hands should be laid out on mortgage, in- 
 stead of being applied in the purchase of three per cents consols, as 
 the interest on the mortgage would exceed the dividends of the money 
 if laid out in the three per cents. 
 
 The Vice Chancellor said, he did not recollect that such permission 
 had ever been given unless under very special circumstances, as where 
 there was a mortgage or charge on the infant's estate, it being the con- 
 stant course of the court to order the money to be laid out in the three 
 per cents ; but he permitted Mr. Bell to mention the matter again, 
 if he should find any authority. 
 
 On this day [May 27, 1819] Mr. Bell mentioned the case of Poore 
 v. Hawker, 5th August, 1816, in which the late Master of the Rolls 
 directed a reference, to see whether it was for the benefit of the infant, 
 to lay out a sum of £20,000. three per cents and £17,000. three per cents 
 reduced, or any part thereof, on real security. 
 
 The Vice Chancellor. I am surprised that any such order should 
 have been made. There must have been something very special in 
 that case. If I were to order this reference, it would be equally right 
 in every case to inquire what mode of investment would be most bene- 
 ficial to the infant. The court adopts, as a general rule, that the in- 
 vestment in the three per cent, consols is most beneficial to the suitors 
 of the court; and never varies from this rule without special circum- 
 stances. 52 
 Reference refused. 
 
 52 Mortgages of Real Estate.— Lord Harcourr, in Brown v. Litton, 1 
 P. Wms. 140 (1711), Lord Hardwicke, in Ryder v. Bickerton. 3 Sw. SO, note. 
 81 (1743), and Lord Alvanley, in Pocock v. Reddington, 5 Yes. Jr. 794, 800 
 (1801), thought trust moneys might be invested upon the security of mort- 
 gages of real estate. Lord Tliurlow, however, in Ex parte Cathorpe, 1 Cox, 
 Eq. 182 (1785). refused to allow an investment of trust moneys on a mortgage 
 of land, and his view was generally followed in England* Widdowson v. 
 I Mick, 2 Mer. 494 (1817) ; Re Fust, Cooper t. Cottenham, 157, note "c" (1S17) ; 
 Ex parte Ellice, Jacob, 234 (1821) ; Ridgeway Minors, 1 Hogan. 309 (1S25) ; 
 Ex parte Johnson, 1 Molloy. 12S (1828) ; Ex parte Franklvn, 1 De G. & Sm. 
 52S (1848) ; Barry v. Marriott, 2 De G. & 8m. 491 (1848) ; Rabv v. Ridehalgh, 
 7 De G., M. & G. 104 (1855). 
 
 In 1S59, what is known as Lord St. Leonard's Act (22 & 23 Vict. c. 35) 
 was passed, section 32 of which provided: "When a trustee, executor, or ad- 
 ministrator shall not, by some instruments creating his trust, be expressly 
 forbidden to invest any trust fund on real securities, in any part of the 
 United Kingdom, or on the stock of the Bank of England or Ireland, or on 
 East India stock, it shall be lawful for such trustee, executor, or adminis- 
 trator to invest such trust funds on such securities or stock ; and he shall
 
 ■432 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 In re SALMi )N. 
 
 PRIEST v. UPPLEBY. 
 
 (Tn the Court of Appeal, L889. Law Reports, 12 Chancery Division, 351.) 
 
 Eliza Salmon died in 1841, leaving a will of which Uppleby and Fox 
 were the trustees and executors. She bequeathed to them her personal 
 estate upon trust to invest in parliamentary stocks or funds, or on real 
 securities in England or Wales, with power to vary investments. The 
 trusts were for Annette Bower for life, and then to snch of her chil- 
 dren a-, ^honld attain twenty-one or marry. 
 
 Annette Bower had six children, all of whom attained twenty-one. 
 Fox died in 1845. 
 
 In 1881 Uppleby, the surviving trustee, sold out the Government 
 stock held upon the trusts of the will, and on the 18th of July, 1881, 
 invented out of the proceeds £1,300. on a mortgage in fee of thirteen 
 small freehold houses in Kin^ton-upon-llnll, with a power of sale. 
 
 Before taking this mortgage, Uppleby had the property valued by a 
 
 not be liable on that account as for a breach of trust, provided that such 
 investment shall in other respects he reasonable and proper." 
 
 it lias been decided in England that loans l>y trustees on contributory 
 mortgages are improper. Webb v. Jonas, L. It. 39 <'h. Div. 660 (1888); In 
 re Massingberd's Settlement, 63 I/. T. R. 296 (1890); In re Dive, L. R. 
 (1909) 1 Ch. 328 (1908). The creator of the trust may. of course, authorize a 
 contributory mortgage. In re (hull rev. L. R. 23 Ch. I>iv. 183 (1883). 
 
 It will be Observed thai Lord St. Leonard's Act authorized loans of trust 
 funds "on real securities." It said nothing of "tirst mortgages." In this 
 country investments of trust funds on mortgages of real estate have been 
 generally permitted without a statute. 
 
 Second Mortgages of Real Estate. — In Ames on Trusts c_\l Ed.) 485, it is 
 said: "In several jurisdictions it is a breach of trust to invest in second 
 mortgage s. Gerl St. Conn; isss. § 495; .Mattocks v. Moulton, 84 Me. 545, 
 21 Atl. 1004: Gilmore v. Tuttle, 32 X. .1. Eq. oil ; Id., 36 X. J. Eq. oil: Por- 
 ter v. Woodruff, 36 X. J. Eq. 171: Savage v. Gould, 60 How. I'rae. (X. Y.) 
 234; Re Petrie, 5 Dem. Sur. (N. Y.) 352; Singleton v. Lowndes, 9 S. <'. 165. 
 There are dicta to the same effect in Thomson v. Christie. 1 Macq. 236, 238; 
 Drosier v. Brereton, L5 Beav. 221 : Lockhart v. Reilly, I De G. & J. 464, 176; 
 Sheffield Society v. Aizlewood, 11 Ch. Div. 412, 459." 
 
 The Connecticut statute quoted mow Gen. St. Conn. 1002, § 254) authorized 
 the investment of trust funds (inter aliat in mortgages on unincumbered real 
 estate in Connecticut, double the value of the amount Loaned. Quwre, if this 
 necessarily prohibited by implication second mortgages. What was said in 
 Mattocks v. .Moulton. si Me. 545, 24 Atl. 1004 (1892), Savage v. Gould, <:<> 
 How. i'rae. ix. v.i 234 (1880), and Re Petrie, 5 Dem. Sur. (X. Y.) 352 (1886), 
 was by way of dictum, and no one of the dicta supports the position that an 
 investment of trust moneys on a second mortgage of real estate is per se a 
 •reach of trust in Gilmore v. Tuttle, 32 X. .1. Eq. <;ii (1880), on appeal 
 36 X. .1. Eq. 017 (1883), Porter v. Woodruff, 36 x. J. Eq. 17 1 (1882), and sin- 
 gleton v. Lowndes, 9 S. C. 465 (1877), trustees who had Invested trust moneys 
 on second mortgages were charged with a loss, not because the loans were 
 per se Preaches of trust, hut because the security for the leans when made 
 was inadequate. 
 
 The flieta in Thomson v. Christie. 1 Macq. 236 (1852), and Lockhart v. 
 
 Reilly, 1 De G. & .1. lot (1857), had reference to investments on second 
 
 mortgages made before 22 & 2.". Vict. C. •".".. and, therefore, when all iuvest- 
 
 "on real securities," not authorized by a court of equity or by the
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 433 
 
 local valuer of reputation, who valued them at £1,750. They were not 
 all finished at the time of the mortgage, and were let at weekly rents. 
 
 On the 15th of November, 1884, Uppleby retired from the trusts, 
 and under a power in the will appointed Charles U. Bower and Thomas 
 Bower, two of the sons of Annette Bower, trustees and duly transfer- 
 red the £1,300. mortgage to them. 
 
 On the 14th of May, 1887, the new trustees sold the mortgaged 
 property by auction under the power of sale in the mortgage deed for 
 £8^0,. leaving £820. net after deducting the costs of sale. 
 
 That the sale took place without any notice to Uppleby was not 
 disputed. 
 
 In February, 1888, the plaintiff (an assignee of the interest of one 
 of the six children of Annette Bower) commenced this action, claiming 
 a declaration that the investment of the £1,300. was a. breach of trust, 
 that Uppleby might be ordered to replace the stock which he had sold 
 out to make the investment, or otherwise to make good the loss to the 
 estate and that upon his replacing the stocks the investments of the 
 £820. might be transferred to him. 
 
 creator of the trust, were a breach of trust. In Drosier v. Brereton, 15 Beav. 
 221 (1S51), the creator of the trust authorized investments "on real securi- 
 ties." An investment on second mortgage resulted in a loss, with which the 
 trustee was charged. Lord Romilly said (page 22G): "I have no doubt it 
 was a breach of trust to lend this money on a second mortgage of house 
 property." The investment was condemned, not because per se a breach of 
 trust, but because the security, when taken, was inadequate. 
 
 In Sheffield Society v. Aizlewood, 44 Ch. Div. 412 (1880), Stirling, J., says, 
 at page 459: "Again, part of the security consisted of a second mortgage, on 
 which the rules of the court prohibited ordinary trustees from making ad- 
 vances." In Want v. Campian, Ch. Div. 9 Times L. R. 254 (1893), Mr. J. 
 Wright said: "The numerous authorities cited showed that there was no 
 fixed rule that a trustee must never invest on the security of a second mort- 
 gage; but having regard to the case of Swaffield v. Nelson. Weekly Notes 
 1N7<), p. 255, and the decision of Mr. Justice Stirling in Sheffield & South 
 Yorkshire Building Society v. Aizlewood, 44 Ch. Div. 459, the burden of 
 proof that it was a proper investment must fall upon the trustee." This po- 
 sition is supported by dicta in Waring v. Waring, 3 Ir. Ch. 331, 337 (1852), 
 Shuev v. Latta, 90 Ind. 136, 139 (1883), Whitney v. Martine, 8S N. Y. 535, 
 539, 540 (1882). and King v. Mackellar, 109 N. Y. 215, 221. 16 N. E. 201 (1S8S). 
 
 In Re Blauvelt's Estate (Sur.) 20 N. Y. Supp. 119 (1S90), and Jack's Ap- 
 peal, 94 Pa. 367 (18S0), investments in second mortgages were held proper, 
 and the courts refused to charge trustees with losses thereon. See, fur- 
 ther, Bogart v. Van Velsor, 4 Edw. Ch. (N. Y.) 718 (184S), and Decider's 
 Appeal, 21 Wkly. Notes Cas. (Pa.) 505 (1S88). 
 
 If an investment on second mortgage were necessarily a breach of trust, 
 the cestui que trust woidd have an absolute right to reject the investment 
 and require the trustee to account for the money invested with interest. 
 But in Torter v. Woodruff, 36 N. J. Eq. 174 (1882), Van Fleet, V. C. at page 
 186, says: 'T know of no authority which goes to the length of declaring 
 that a trustee shall be liable, whether loss is sustained or not, simply because 
 he has invested the funds in his hands in a second mortgage." 
 
 Eqcitaku: Mortgages.— Investments by trustees on equitable mortgages 
 are not allowed. Webb v. Ledsam. 1 Kay & J. 385 (1855); Swaffield v. Nel- 
 son. W. N. 255 (1876). 
 
 Leasehold Mortgages. — Investments by trustees on the security of lease- 
 holds are not allowed. Wyatt v. Sharratt, 3 Beav. 49S (1S40) ; Fyler v. Fy- 
 Kes.Tr— 2S 

 
 434 Till: DUTIES OF A TRUSTEE. (Ch. 5 
 
 Uppleby by his defence denied the insufficiency of the security, and 
 stated that the plaintiff had been fully in formed of the investments be- 
 fore he purchased Augustus Bower's share. He alleged that the sale 
 was made by the new trustees with the privity and at the instigation 
 of the plaintiff and without any previous notice of it to him (Uppleby), 
 and that he never had the option given him of taking over the security 
 on his paying the amount secured by it. 
 
 The action was tried by Mr. Justine Kekewich, who dismissed the bill 
 with costs a- against Mr. I'pplcby and the new trustee and the plain- 
 tiff appealed. 
 
 Cotton, L. J. r ' 3 This is an appeal by the plaintiff from a decision of 
 .Mr. Justice Kekewich dismissing an action brought against Uppleby 
 a retired trustee of the will of Eliza Salmon, to make him responsible 
 for an improper investment. 
 
 There are two questions to be considered. The first is, whether th< 
 investment in question was wrongful. It was within the terms of the 
 trust, for it was an investment on mortgage of a freehold estate. In 
 one sense, therefore, it was in accordance with the trusts, and if the 
 
 ler, 3 Beav. 550 (1S41) ; Fuller v. Knight, 6 Beav. 205 (1843) ; In re Chennell, 
 L. R. 8 Ch. Div. 492 (1878) ; In re Boyd's Settled Estates, L. It. 14 Ch. Div. 
 620 (1880). Unless the leaseholds are for a long term and at a nominal rent. 
 McCleod v. Annesley, 1G Beav. 600 (1S53) ; In re Chennell, L. R. 8 Ch. Div. 
 492 (1878). 
 
 Formerly leasehold mortgages were not "real securities." In re Boyd's 
 Settled Estates, L. R. 14 Ch. Div. 62G (1880) ; Leigh v. Leigh, 55 L. T. R. 634 
 (1887). 
 
 The Trustee Act 1SS8 (51 & 52 Vict. c. 59) § 9, provided: "A power to invest 
 trust money in real securities shall authorize and shall be deemed to have 
 always authorized an investment upon mortgage of property held for an un- 
 expired term of not less than two hundred years and not subject to any 
 reservation of rent greater than one shilling a year, or to any right of re- 
 demption, or to any condition lor re-entry for non-payment of rent." See, 
 also. Trustee Act 1S93 (56 & 57 Vict. c. 53) pt. 1, | 5 (1) (a). 
 
 Trustees, unless authorized by the terms of the trust, have no right to 
 purchase land with the trust money. Ouseley v. Anstruther. 10 Beav. 453, 
 156 <•( seq. (1S47); Williams v. Williams, 35 N. J. Eq. 100 (1882); Eckford 
 v. DeKay, 8 raise (N. Y.) 89 (1840): Raker v. Disbrow, :: Redf. (N. Y.) 348 
 (1878). affirmed is Hun (N. Y.) 29 (1879), affirmed 79 N. Y. 631 (1880); Mc- 
 Lean v. Ladd, 66 Hun, 341, 21 N. V. Supp. 19G (1892); Royer's Appeal, 11 
 Pa. ::<; (1849); Morton v. Adams, 1 Strob. Eq. (S. C.) 72, 7G (1S4G) ; Mathews 
 v. Hoy ward. 12 S. C. 239 (1*70). 
 
 In general, investments in property beyond the jurisdiction of the trustees 
 are disapproved. McCullough's Ex'rs v. McCullough, 44 N. J. Eq. 313, 14 
 Atl. 123 (1888); Ormiston v. Olcott, 84 N. Y. :;:; , .> (1881); Denton v. Sanford, 
 in:: \. V. 607, 9 X. E. 490 (1886); Matter of Reed, 15 App. Div. 19G, 61 N. 
 Y. Supp. 50 (1899); Rush's Estate. 12 Pa. ::7.». 378 (1849). In Amory v. 
 Green, J.'; Allen. 413 (1866), the Supreme Court of Massachusetts authorized 
 tho purchase of land by trustees outside of their jurisdiction; and in Thayer 
 v. Dewey, is.". Mass. GS, 69 N. E. 1074 (1904), the same court refused to dis- 
 allow such investments. In Ex parte Copeland, Rice, Eq. (S. 0.) 69 (1839), 
 the court refused to permit a guardian appointed in Florida to receive the 
 ward's property, so as to remove the same to Florida. 
 
 bs Part of the statement of facts, a part of the opinion of Cotton, L. J., 
 and the concurring opinions of Fry and Bowen, L. JJ., are omitted.
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 435 
 
 trustee took good care as to its sufficiency there would be no breach of 
 trust, and nobody could complain, though it ultimately proved insuf- 
 ficient. The case differs from that of an investment not within the 
 terms of the instrument, which is necessarily a breach of trust, so that 
 if any loss occurs the trustees must be liable for it. The question here 
 is, whether Uppleby took proper care in seeing to the sufficiency of the 
 security. 
 
 Now as regards the rule which has been so much discussed, as to 
 the amount which may be lent on a given security, the law is thus 
 summed up in Learoyd v. Whiteley, 12 App. Cas. 727, 733: "As a 
 general rule the law requires of a trustee no higher degree of diligence 
 in the execution of his office, than a man of ordinary prudence would 
 exercise in the management of his own private affairs. Yet he is not 
 allowed the same discretion in investing the moneys of the trust as if 
 he were a person sui juris dealing with his own estate. Business men 
 of ordinary prudence may, and frequently do, select investments which 
 are more or less of a speculative character ; but it is the duty of a 
 trustee to confine himself to the class of investments which are per- 
 mitted by the trust, and likewise to avoid all investments of that class 
 which are attended with hazard. So, so long as he acts in the honest 
 observance of these limitations, the general rule already stated will ap- 
 ply. The courts of equity in England have indicated and given effect to 
 certain general principles for the guidance of trustees in lending money 
 upon the security of real estate. Thus it has been laid down that in 
 the case of ordinary agricultural land the margin ought not to be less 
 than one-third of its value; whereas in cases where the subject of the 
 security derives its value from buildings erected upon the land, or its 
 use for trade purposes, the margin ought not to be less than one-half. 
 I do not think that these have been laid down as hard and fast limits up 
 to which trustees will be invariably safe, and beyond which they can 
 never be in safety to lend, but as indicating the lowest margins which 
 in ordinary circumstances a careful investor of trust funds ought to 
 accept." 54 These rules are there recognized, though they have been 
 impeached by Mr. Warmington and Mr. Wood. In the present case 
 the value of the property was mainly derived from buildings. I do not 
 think that the valuation of the property has been successfully im- 
 peached. We must take the property as having been worth £ 1,750. 
 The trustees lent £1,300. upon it. Now, we must have regard not only 
 to the value, but to the nature of the property. It consisted of small 
 houses let at weekly rents, and we know the class of tenants likely to 
 be attracted by cottage property in Hull. It was certainly not 
 prudent to lend to this extent upon property the value of which de- 
 pended on labourers' houses being wanted in that part of Hull. The 
 
 54 See in re Godfrey, L. R. 23 Ch. Div. 483, 496 (1SS3) ; In re Olive, L. 
 R. 34 Ch. Div. 70, 73 (1SS6).
 
 136 THi: DUTIES OP A TRUSTEE. (Ch. 5 
 
 investment, therefore, was a breach of trust as having been made im- 
 provi dently. 55 
 
 The second point is new, and no authority is to he found upon it. 
 It was contended that the plaintiff had taken part in the sale of the 
 mortgaged property by the new trustees, and that therefore he could 
 not call on the late trustee for the loss, because, as it was contended, 
 
 the late trustee was entitled to notice of the intention to sell, so that he 
 might have an opportunity of taking to the mortgage and paying to 
 the tniSt fund the amount lent on it. If that he the law the late trus- 
 tee is not liable. But there is a fallacy in this argument; it is founded 
 on treating the mortgage as not being part of the trust estate. That 
 view is wrong. The money was invested according to the terms of 
 the trust, though without due care, and the mortgage was from the 
 first a part of the trust estate. When Uppleby retired he transferred 
 the mortgage to the new trustees, to be held on the trusts of the will, 
 and, unless their acceptance of it exonerated him from his liability for 
 taking an insufficient security, I do not see how he was exonerated 
 from the consequences of his neglect of duty. The case is entirely 
 distinct from that of an investment outside of the terms of the trust, 
 which the cestui que trust must accept or reject. Here the trustee is 
 only liable for the loss, and that liability is to be enforced when the 
 investment is realized. I think that the realization was according to 
 the power which Uppleby gave to the new trustees by handing over 
 the investment to them, and he is liable for the deficiency. It is like 
 a sale of mortgaged property by the mortgagee under a power with- 
 out the concurrence of the mortgagor. If the sale is improperly made 
 it may be impeached, but if it is made fairly the mortgagor is bound 
 by it and is answerable for what remains due on the mortgage after 
 deducting the proceeds of sale. I think that this mortgage was part 
 of the trust property, tha t no duty therefore arose in the cestuis que 
 trust to say whether they would accept or reject it, and that the late 
 trustee is liable for the deficiency. * * * 
 
 I cannot agree with Mr. Justice Kekewich, and there must be a de- 
 cree against Air. Uppleby for the plaintiff's share of the deficiency. 
 
 55 For other instances in which trustees were held liable for losses upon 
 Investments upon real estate mortgages made upon insufficient margin, see 
 Stickney v. Sewell, 1 Myl. & Cr. 8 (1835); Norris v. Wright, 14 Beav. 291 
 (1851); Macleod v. Annesley, L6 Beav. 600 (1853); Stretton v. Ashmall, a 
 Drew. :> (1854); ingle v. Partridge, 34 Beav. 411 (1865); Budge v. Gummow, 
 L. It. 7 cli. App. ('as. 719 (1872); Hoey v. Green, W. N. 236 (1884); Fry v. 
 Tapson, L. Et. 28 Ch. Div. 268 (1884); Smethurst v. Hastings, L. R. 30 Ch. 
 Iti\. I'.io (1885); Walcotl v. Lyons, 54 L. T. It. 786 (1886) ; In re olive, L. 
 It. :;t Ch. Div. 70 (1886); In re Whiteley, 12 App. Cas. 727 (1887); He Part- 
 ington, .",7 L. T. R. 654 (1887); Knox v. MacKinnon. 1:5 App. ('as. 7-">3 (1SSS) ; 
 Etae v. Meek, 14 App. ('as. .">* (lsM» ; In re Somerset, L. R. (1894) 1 Ch. 
 233 (1893); Ouardianship of Cardwell, 5J3 Cal. L3JZ (18S0) : Bogart v. Van 
 Velsor, I Edw. Ch. (N. Y.) 718 (1848); Blauvelt's Estate (Sur.) 20 N. Y. Supp. 
 nit (1890); Girard Trusl Co.'s Appeal, L3 Wkly. Notes Cas. (ra.) oG7 (1882); 
 Lechler's Appeal. 23 Wkly. Notes Cas. (Pa.) 505 (1888). 
 
 Sec further, Trustee Ad 1888 (51 & 52 Vict. c. 59) §§ 4 and 5; Trustee 
 Acl i893 (56 & 57 Vict. c. 53) pt. 1, §S 8 and 9.
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 437 
 
 KING v. TALBOT. 
 (Court of Appeals of New York, 1S69. 40 N. T. 7G.) 
 
 Woodruff, J. 56 It is conceded, that in England, the rule is, and 
 has long heen settled, that a trustee, holding funds to invest for the 
 benefit of his cestui que trust, is bound to make such investment in the 
 public debt, for the safety whereof the faith of their government is 
 pledged ; or in loans, for which real estate is pledged as security. And 
 that, although the terms of the trust commit the investment, in general 
 terms, to the discretion of the trustee, that discretion is controlled by 
 the above rule, and is to be exercised within the very narrow limits, 
 which it prescribes. 
 
 As a purely arbitrary rule resting upon any special policy of that 
 country, or on any peculiarity in its condition, it has no application to 
 this country. It is not of the common law. It had no applicability 
 to the condition of this country, while a colony of Great Britain, and 
 cannot be said to have been incorporated in our law. 
 
 So far, and so far only, as it can be said to rest upon fundamental 
 principles of equity, commending themselves to the conscience, and 
 suited to the condition of our affairs, so far it is true, that it has ap- 
 propriate application and force, as a guide to the administration of a 
 trust, here, as well as in England. 
 
 I do not, therefore, deem it material to inquire, through the multi- 
 tude of English cases, and the abundant texts of the law writers, into 
 the origin of the rule in England, or the date of its early promulgation. 
 Nor, in this particular case, do I deem it necessary to determine wheth- 
 er it should, by precise analogy, be deemed to prohibit here investments 
 in any other public debt, than that of the State of New York. 
 
 Neither, in my judgment, are we at liberty, in the decision of this 
 case, to propound any new rule of conduct, by which to judge of the 
 liability of trustees, now subjected to examination. Under trusts here- 
 tofore created, the managers thereof performed their duty with the 
 aid of rules for the exercise of their discretion, which were the utter- 
 ance of equity and good conscience, intelligible to their understanding, 
 and available for their information ; otherwise, trusts heretofore 
 existing, have been traps and pitfalls to catch the faithful, prudent, and 
 diligent trustee, without the power to avoid them. 
 
 But it is not true, that there is no underlying principle or rule of 
 conduct in the administration of a trust, which calls for obedience. 
 Whether it has been declared by the courts or not, whether it has 
 been enacted in statutes or not, whether it is in familiar recognition in 
 the affairs of life, there appertains to the relation of trustee and cestui 
 que trust, a duty to be faithful, to be diligent, to be prudent in an 
 
 ss The statement of facts and a part of the opinion of Woodruff, J., are 
 omitted.
 
 438 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 administration entrusted to the former, in confidence in his fidelity, 
 diligence and prudence. 
 
 To this general statement of the duty of trustees, there is no want 
 of promulgation or sanction, nor want of sources of information for 
 their guidance. In the whole history of trusts, in decisions of courts 
 for a century in England, in all the utterances of the conrts of this 
 and the other states of this country, and not less in the conscious good 
 sense of all intelligent minds, it > recognition is uniform. 
 
 The real inquiry, therefore, is. in my judgment, in the case hefore 
 ns, and in all like cases: lias the administration of the trnst, created 
 by the will of Charles W. King, for the benefit of the plaintiff, been 
 governed by fidelity, diligence and prudence? If it has, the defend- 
 ants are not liable for losses, which, nevertheless, have happened. 
 
 This, however, aids but little in the examination of defendants' con- 
 duct, unless the terms of definition are made more precise. \\ hat are 
 fidelity, diligence and discretion? and what is the measure thereof, 
 which trustees are bound to possess and exercise? 
 
 It is hardly necessary to say, that fidelity imports sincere and single 
 intention to administer the trust for the best interest of the parties 
 beneficially interested, and according to the duty, which the trust 
 imposes. And this is but a paraphrase of "good faith.*' 
 
 The meaning and measure of the required prudence and diligence 
 has been repeatedly discussed, and with a difference of opinion. In 
 extreme rigor, it has sometimes been said, that they must he such and 
 as great, as that possessed and exercised by the Court of Chancery 
 itself. And again, it has been said, that they are to be such, as the 
 trustee exercises in the conduct of his own affairs, of like nature, and 
 between these is the declaration, that they are to be the highest 
 prudence and vigilance, or they will not exonerate. 
 
 My own judgment, after an examination of the subject, and bearing 
 in mind the nature of the office, its importance, and the considerations, 
 which alone induce men of suitable experience, capacity, and respon- 
 sibility to accept its usually thankless burden, is that the just and true 
 rule is, that the trustee is bound to employ such diligence and such 
 prudence in the care and management, as in general, prudent men of 
 discretion and intelligence in such matters, employ in their own like 
 affairs. 
 
 This necessarily excludes all speculation, all investments for an un- 
 certain and doubtful rise in the market, and, of course, everything that 
 does not take into view the nature and object of the trust, and the con- 
 sequences of a mistake in the selection of the investment to be made. 
 
 It, therefore, does not follow that, because prudent men may, and 
 often do, conduct their own affairs with the hope of growing rich, and 
 therein take the hazard of adventures which they deem hopeful, trus- 
 tees may do the same; the preservation of the fund, and the procure- 
 ment of a just income therefrom, are primary objects of the creation 
 of the trust itself, and are to be primarily regarded.
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 439 
 
 If it be said, that trustees are selected by the testator, or donor of 
 the trust, from his knowledge of their capacity, and without any 
 expectation that they will do more than, in good faith, exercise the 
 discretion and judgment they possess, the answer is : First, the rule 
 properly assumes the capacity of trustees to exercise the prudence and 
 diligence of prudent men, in general ; and, second, it imposes the duty 
 to observe and know, or learn, what such prudence dictates in the 
 matter in hand. 
 
 And once more, the terms of the trust, and its particular object and 
 purpose, are in no case, to be lost sight of in its administration. 
 
 Lewin, in his Treatise on the Law of Trusts, etc. (page 332), states, 
 as the result of the several cases, and as the true rule, that "a trustee 
 is bound to exert precisely the same care and solicitude in behalf of 
 the cestui que trust, as he would do for himself ; but greater measure 
 than this, a court of equity will not exact." In general, this is true, 
 but if it imports that, if he do what men of ordinary prudence would 
 not do, in their own affairs, of a like nature, he will be excused, on 
 showing that he dealt with his own property in like want of discretion, 
 it cannot be sustained, as a safe or just rule towards cestuis que trust; 
 nor is it required by reasonable indulgence to the trustee ; it would be 
 laying the duty to be prudent out of the view entirely, and I cannot 
 think the writer intended it should be so understood. 
 
 The Massachusetts cases (Harvard College v. Amory, 9 Pick. 446; 
 Lovell v. Minot, 20 Pick. 116, 32 Am. Dec. 206), cited by the counsel 
 for the defendant, are in better conformity to the rule, as I have 
 stated it. 
 
 To apply these general views to the case before us, and with the de- 
 ductions, which necessarily flow from their recognition : The testator 
 gave to each of his children fifteen thousand dollars, the interest on 
 the same, so far as required, to be applied to their maintenance and"' 
 education, and the principal, with any accumulations thereon, to be 
 paid to them severally on their majority; appointed the defendant, 
 Talbot, and his partner, Mr. Olyphant, executors, "entrusting to their 
 discretion the settlement of my affairs and the investment of my estate 
 for the benefit of my heirs." 
 
 If I am correct in my views of the duty of trustees, this last clause 
 neither added to, nor in any wise affected the duty or responsibility of 
 these executors ; without it, they were clothed with discretion ; with 
 it, their discretion was to be exercised with all the care and prudence 
 belonging to their trust relation to the beneficiaries. Such is the dis- 
 tinct doctrine of the cases very largely cited by the counsel for the 
 parties, and is, I think, the necessary conclusion from the just rule 
 of duty I have stated. 
 
 What, then, was the office of the trustees, as indicated by the terms 
 and nature of the trust? If its literal reading be followed, it directed 
 that, "fifteen thousand dollars" in money be placed at "interest." The 
 nature of the trust, according to the manifest intent of the testator,
 
 110 THE DUTIES <>F A TRUSTEE. (Cll. 5 
 
 required that, in order to the maintenance and support of infant chil- 
 dren, whose need, in that regard, would he constant and unremitting, 
 that interest should flow in with regularity and without exposure to 
 the uncertainties or fluctuation of adventures of any kind. And then 
 the fund should continue-, with any excess of such interest accumulated 
 for their benefit, so as to be delivered at the expiration of their mi- 
 nority. 
 
 Palpably, then, the first and obvious duty was to place that fifteen 
 thousand dollars in a state of security; second, to see to it that it was 
 productive of interest; and, third, so to keep the fund, that it should 
 always be subject to future recall for the benefit of the cestui que 
 trust. 
 
 I do not attach controlling importance to the word "interest" used 
 by the testator, but I do regard it as some guide to the trustees, as an 
 expression of the testator, that he did not contemplate any adventure 
 with the fund, with a view to profits as such. 
 
 But, apart from the inference from the use of that word, I think 
 it should he said, that whenever money is held upon a trust of this 
 description, it is not according to its nature, nor within any just idea 
 of prudence, to place the principal of the fund in a condition, in which 
 it is necessarily exposed to the hazard of loss or gain, according to 
 the success or failure of the enterprise in which it is embarked, and in 
 which, by the very terms of the investment, the principal is not to be 
 returned at all. 
 
 It is not denied, that the employment of the fund, as capital in trade, 
 would be a clear departure from the duty of trustees. If it cannot be 
 so employed under the management of a co-partnership, I see no rea- 
 son for saying that the incorporation of the partners tends, in any de- 
 gree, to justify it. 
 
 The moment the fund is invested in hank, or insurance, or railroad 
 U ek, it has left the control of the trustees ; its safety and the hazard, 
 or risk of loss, is no longer dependent upon their skill, care, or dis- 
 cretion, in its custody or management, and the terms of the investment 
 do not contemplate that it ever will he returned to the trustees. 
 
 If it he said, that, at any time, the trustees may sell the stock, (which 
 is hut another name for their interest in the property and business of 
 the corporation) and so repossess themselves of the original capital, 
 1 reply, that is necessarily contingent and uncertain ; and so the fund 
 has been voluntarily placed in a condition of uncertainty, dependent 
 upon two contingencies: First, the practicability of making the busi- 
 ness profitable, and, second, the judgment, skill, and fidelity of those 
 who have the management of it for that purpose. 
 
 If it he said, that men of the highest prudence do, in fact, invest 
 their funds in such stocks, becoming subscribers and contributors 
 thereto, in the very formation thereof, and before the business is de- 
 veloped, and in the exercise of their judgment, on the probability of 
 its safety and productiveness, the answer is, so do just such men,
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 441 
 
 looking to the hope of profitable returns, invest money in trade, and 
 adventures of various kinds. In their private affairs, they do, and they 
 lawfully may, put their principal funds at hazard ; in the affairs of a 
 trust they may not. The very nature of their relation to it forbids it. 
 
 If it be said, that this reasoning assumes, that it is certainly prac- 
 ticable so to keep the fund, that it shall be productive, and yet safe 
 against any contingency of loss ; whereas, in fact, if loaned upon bond 
 and mortgage, or upon securities of any description, losses from in- 
 solvency and depreciation may, and do often happen, notwithstanding 
 due and proper care and caution is observed in their selection. Not 
 at all. It assumes and insists, that the trustees shall not place the ■ 
 fund where its safety and due return to their hands will depend upon 
 the success of the business in which it is adventured, or the skill and 
 honesty of other parties entrusted with its conduct ; and it is in the 
 selection of the securities for its safety and actual return, that there 
 is scope for discretion and prudence, which, if exercised in good faith, 
 constitute due performance of the duty of the trustees. 
 
 My conclusion is, therefore, that the defendants were not at liberty 
 to invest the fund bequeathed to the plaintiff, in stock of the Delaware 
 and Hudson Canal Company ; of the New York and Harlem Rail- 
 road Company; of the New York and New Haven Railroad Com- 
 pany ; of the Bank of Commerce ; or of the Saratoga and Washington / 
 Railroad Company; and that the plaintiff was not bound to accept/ 
 these stocks, as, and for his legacy, or the investment thereof. 
 
 In regard to the bonds of the Hudson River Railroad Company, and 
 of the Delaware and Hudson Canal Company, it appears by schedule 
 B, given in evidence, that the former were mortgage bonds ; but what 
 was the extent or sufficiency of the security afforded by such mort- 
 gage, or what property was embraced in it, does not appear, nor does 
 it appear, whether there was any security whatever for the payment 
 of the Canal Company's bond. 
 
 It is not necessary for the decision of this case and I am not pre- 
 pared to say, that an investment in the bonds of a railroad, or other 
 corporation, the payment whereof is secured by a mortgage upon 
 real estate, is not suitable and proper, under any circumstances. 
 
 If the real estate is ample to ensure the payment of the bonds, I do 
 not, at present, perceive, that it is necessarily to be regarded as inferior 
 to the bond of an individual, secured by mortgage; it would, of course 
 be open to all the inquiries which prudence would suggest, if the bond 
 and mortgage were that of an individual. The nature, the location, 
 and the sufficiency of the security, and the terms of the mortgage, 
 and its availability for the protection and ultimate realization of the 
 fund, must, of course, enter into the consideration. 
 
 But it is not necessary to pursue that subject. The plaintiff, in his 
 complaint, rejects the entire investment. The court below held, that 
 it was equitable that the plaintiff should be held to receive the whole 
 or none of the stocks and bonds, and to that ruling, neither the plain-
 
 442 THE DUTIES OF A TRUSTEE. (Cll. 5 
 
 lift* nor the defendants have excepted; and, therefore, the question, 
 whether the judgment below was correct in that respect, is not be- 
 fore us. 
 
 It is proper, however, to say, that I do not clearly apprehend the 
 propriety of that ruling, unless it be on the ground, that the plaintiff, 
 in his complaint, did so elect. 
 
 The rule is perfectly well settled, that a cestui que trust is at liberty 
 to elect to approve an unauthorized investment, and enjoy its profits, 
 or to rejed it at his option; and 1 perceive no reason for saying, that 
 where the trustee has divided the fund in parts and made separate 
 investments, the cestui que trust is not at liberty, on equitable as well 
 as legal grounds, to approve and adopt such as he thinks it for his 
 interest to approve. The money invested is his money; and in respect 
 to each and every dollar, it seems to me, he has an unqualified righl 
 to follow it, and claim the fruits of its investment, and that the trustee 
 cannot deny it. The fact, that the trustee has made other investments 
 of other parts of the fund, which the cestui que trust is not bound to 
 approve, and disaffirms, cannot, I think, affect the power. For ex- 
 ample, suppose, in the present case, the cestui que trust on delivery 
 to him of all the stocks and bonds in which his legacy had appeared 
 invested, had declared: Although these investments are improperly 
 made, not in accordance with the intent of the testator, nor in the due 
 performance of your duty, I waive all objection on that account, ex- 
 cept as to the stock of the Saratoga and Washington Railroad Com- 
 pany. That, I reject and return to you. Is it doubtful that his posi- 
 tion must be sustained? 
 
 The result is, that the main features of the judgment herein must 
 be affirmed. * * ; ' : 
 
 All the judges concur in the result to which Judge Woodruff ar- 
 rived. 
 
 Murray, J., thought it a settled principle of law, in this State, that 
 a trustee, holding trust funds, for investment for the benefit of minor 
 children, must invest in Government or real estate securities, and that 
 any other investment would be a breach of duty, and the trustee would 
 be personally liable for any loss. 57 Grover, Daniels, and James, JJ., 
 concurred. Hunt, C. J., and Mason and Lott, JJ., contra. 
 
 sTTrafford v. Boehm, 3 Atk. 440 (1746); Howe v. Earl of Dartmouth, 7 
 Ves. Jr. i:;7 (1802); .Mills v. Mills, 7 Sim. 501 (1835); Davies v. Hodgson, 
 25 Beav. 177 (1858)"; Hynes v. Redington, 1 J. & La T. 589 (1844); 7 Ir. Eq. 
 405; Randolph v. East Birmingham Land Co., 301 Ala. 355, 16 South. 126, 
 53 Am. SI. Rep. 64 (1893); White v. Sherman, 168 111. 589, 4S N. E. 128, 61 
 Am. St. Rep. L32 (1897); Tucker v. State, 72 Ind. 242 (1SS0) ; Gilhert v. 
 Welsch, 7."» Iml. 557 (1881); Smith v. Smith, 7 J. .7. Marsh. (Ky.) 238 (1832) - 
 see now Ky. St. mo:;. * 47<)<>, and Robertson v. Robertson's Trustee, 130 Ky. 
 :.".>::. 113 S. W. L38, L32 Am. St. Rep. 368 (1908)— Ashhurst v. Potter, 29 N. 
 .1. Eq. 625, 6::i. kyi (1878) ; Tucker v. Tucker, 33 N. J. Eq. 235 (1880); Re 
 Mundy, :: X. J. Law J. 185 (1880) ; Executors of Voorhees, 3 N. J. Law J. 211 
 (1880); Ackerman v . Emott, 4 Barb, (N. Y.) 626 (184S) ; Adair v. Brimmer, 
 74 N. Y. 539 (1878) ; Mills v. Hoffman, 26 Hun (N. Y.) 5!>4 (1882) ; Hemphill's 
 Appeal, is pa. :;m:; (1852); Worrell's Appeal, 23 Pa. 44 (1854); Pray's Ap-
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 443 
 
 FREDERICK DAVIS, Appellant. 
 
 
 (Supreme Judicial Court of Massachusetts, 1903. 183 Mass. 499, G7 N. E. 
 
 604.) 
 
 Appeal, from a decree of the Probate Court of the County of Suf- 
 folk, disallowing in part the fourteenth and fifteenth accounts of the 
 surviving trustee under the will of Moses Day, late of Boston. 
 
 Hammond, J., reserved the case for the determination of the full 
 court. 
 
 The details of the investments in the bonds and stock of the Atchi- 
 son, Topeka & Santa Fe Railroad Company, described by the court, 
 were as follows : 
 
 Jan. 15, 1883. $2000 6 per cent, bonds $ 2,000.00 
 
 Dec. 11, 1885. 5 shares of stock $ 428.12 
 
 Reduced by sale of rights.... 24.10 
 
 $ 404.02 
 
 Dec. 24, 1S86. 45 shares of stock $4.246.8S 
 
 Reduced by sale of rights.... 97.65 
 
 — 4,149.23 
 
 Feb. 17, 1887. 6 shares of stock $ 593.50 
 
 Reduced by sale of rights.... 13.02 
 
 — 5S0.48 
 
 Dec. 28, 1SS7. 2 shares of stock $ 1S5.SS 
 
 Reduced by sale of rights.... .94 
 
 1S4.94 
 
 Total stock 5,318.07 
 
 June IS, 1SS7. $5000 collateral trust bonds 4.995.00 
 
 $12,313.67 
 
 Morton, J. 58 The first question in this case is whether in the 
 investment of the trust funds in the stock and bonds of the Atchison, 
 Topeka and Santa Fe Railroad Company, to the extent to which they - 
 invested in them, the trustees manifested the sound judgment and rea- 
 sonable discretion and prudence which is required of trustees in such 
 
 peals. 34 Pa. 100 (1S59) ; Ihmsen's Appeal, 43 Pa. 431 (1862) ; Simmons v. 
 Oliver, 74 Wis. 633. 43 N. W. 561 (1889). 
 
 By Lord St. Leonard's Act (22 & 23 Vict. c. 35, 1S59) § 32, investments of 
 trust funds in Bank of England stock, Bank of Ireland stock, or East India 
 stock were authorized. By 23 & 24 Vict. c. 38 (1860) § 10, the judges therein 
 named were empowered to make general orders as to the investment of cash 
 under the control of the court; and section 11 authorized trustees to invest 
 trust funds in the same securities. The Trust Investment Act 1889 (52 & 53 
 Vict. c. 32) greatly extended the field of investment for -trust funds in Ensr- 
 land. The field was still further extended by the Trustee Act 1893 (56 & 57 
 Vict. c. 53) pt. 1. 
 
 The Constitution of Alabama of 1875 (article 4, § 35) provides that "no 
 act of the General Assembly shall authorize the investment of any trust 
 fund by executors, administrators, guardians and other trustees in the bonds 
 or stock of any private corporation." The same provision is found in the 
 Constitution of Colorado (article 5, § 36) and that of Pennsylvania (article 
 3, § 22). 
 
 The statutes of the various states should be carefully consulted as to the 
 investment of trust funds. 
 
 ss a part of the opinion is omitted.
 
 1 14 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 matters. The question is to be determined as of the lime when the 
 investment- were made. There is also a question whether the general 
 rule is affected by the language creating the trust. It is agreed that 
 the purchases were made in perfect good faith and that before making 
 them the trustee took the advice of persons on whose opinion he 
 thought he was entitled to rely as to the value of the securities. It 
 is also agreed thai at the time of the purchases he had invested his 
 own money to a considerable amount in stocks and bonds of the com- 
 pany. 
 
 The trust estate consisted of a fund of $30,000 bequeathed by the 
 testator to the trustees in trust, to invest the same and pay over the 
 income to the testator's daughter during her life and upon her death 
 to distribute and pay over the principal amongst her children. From 
 1883 to 1887 inclusive the trustees invested in the stock and bonds 
 of the Atchison, Topeka and Santa Fe Railroad Company upwards of 
 >d2,000 of the trust funds as follows: On January 15, 1883, they 
 purchased $2,000 of the six per cent sinking fund bonds issued by that 
 company and secured by mortgage bonds of various railroad com- 
 panies whose lines composed a part of the Atchison system. On 
 December 11, 1885, they purchased five shares of the stock, on De- 
 cember 24, 1886, forty-five shares of stock, on February 17, 1887, six 
 shares of the stock, on June 18, 1887, $5,000 collateral trust bonds 
 issued by it and secured by mortgage bonds of various railroads, and 
 on December 28, 1887, two shares of the stock. Prior to the last 
 purchase of bonds and the last two purchases of stock between a 
 quarter and a fifth of the trust property had been invested in the stock 
 and bonds of the company. The Probate Court disallowed the last 
 purchase of bonds and the last two purchases of stock and allowed 
 the other investments. In Dickinson, Appellant, 152 Mass. 184, 
 where the facts in regard to the situation of the corporation whose 
 stock was purchased were very similar to the facts in this case, the 
 decision was in effect that so much of the investment as was in excess 
 of a quarter to a fifth of the whole trust fund could not be sustained 
 as made in the exercise of a sound discretion. The court declined to 
 say that the trustee had so far failed to exercise a sound discretion 
 that the investment should be held to be wholly unauthorized, but 
 disallowed them in part. We do not see how this case can be fairly 
 distinguished from that, the fact that the investment was partly in 
 stock and partly in bonds of the company not being sufficient, it seems 
 to us, to distinguish it. And while we recognize in this case as the 
 court did in that "the hardship of compelling a trustee to make good 
 out of his own property a loss occasioned by an investment of trust 
 property which he has made in good faith, and upon the advice of 
 persons whom he thinks to be qualified to give advice," we cannot 
 in this case any more than the court could in that hold upon the evi- 
 dence the trustee was justified in investing in the stock and bonds 
 in question so large a proportion of the trust property.
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 445 
 
 The remaining question is whether the language of the will cre- 
 ating the trust takes the case out of the general rule and relieves the 
 trustee from liability on account of imprudent investments, if made 
 in good faith. * * * 
 
 The will contains no direction as to the security in which the trus- 
 tees are to invest. That matter is left to their judgment and discre- 
 tion, and we think that in such a case the general rule applies, and 
 that they are bound to exercise a sound judgment and a reasonable 
 and prudent discretion. Dickinson Appellant, ubi supra ; Mattocks v. 
 Moulton, 84 Me. 545, 24 Atl. 1004; King v. Talbot, 40 N. Y. 76; 
 Kimball v. Reding, 31 N. H. 352, 64 Am. Dec. 333. 
 
 We agree with the judge of the Probate Court in thinking that the 
 words "with full power to make purchases, investments and ex- 
 changes * * * in such manner as to them shall seem expedient; 
 it being my intention to give my said trustees and those who may be 
 made such, the same dominion and control over said property as I 
 now have" are enabling words inserted to give to the trustees the 
 power to deal fully and expeditiously with the estate, and that they 
 do not release the trustees from the obligation to exercise a sound 
 judgment and a reasonable and prudent discretion in regard to such 
 investment as they may make under the authority given to them. 
 
 Decree of Probate Court affirmed. 
 
 Matter of HALL. 
 
 (Court of Appeals of New York, 1900. 164 N. Y. 196, 58 N. E. 11.) 
 
 Appeal from an order of the Appellate Division of the Supreme 
 Court in the Second judicial department, made March 6, 1900, af- 
 firming a decree of the Surrogate's Court of the county of New York 
 
 sa For other decisions justifying investments by trustees in stocks of cor- 
 porations, see Lamar v. Micou, 112 U. S. 452, 5 Sup. Ct. 221, 28 L. Ed. 751 
 (1884) ; Id., 114 U. S. 21S, 5 Sup. Ct. 857, 29 L. Ed. 94 (1885) ; Gray v. Lynch, 
 8 Gill (Md.) 403, 420-422 (1849); McCoy v. Horwitz, 62 Md. 183 (1884); Dick- 
 inson, Appellant, 152 Mass. 184, 25 N. E. 99, 9 L. R. A. 279 (1890) ; Washing- 
 ton v. Emery, 57 N. C. 32 (1858) ; Peckham v. Newton, 15 R. I. 321, 4 Atl. 
 758 (1SS6) ; Boggs v. Adger, 4 Rich. Eq. (S. C.) 408 (1852). 
 
 "All that can be required of a trustee to invest is that he shall conduct 
 himself faithfully and exercise a sound discretion. He is to observe how 
 men of prudence, discretion and intelligence manage their own affairs, not 
 in regard to speculation, but in regard to the permanent disposition of their 
 funds, considering the probable income, as well as the probable safety of the 
 capital to be invested." Harvard College v. Aanory, 9 Pick. (Mass.) 446, 461 
 (1830), per Putnam, J. 
 
 Trustees in Massachusetts accordingly have a wide field of investment. See 
 Lovell v. Minot, 20 Pick. 116, 32 Am. Dec'. 206 "(183S) ; Brown v. French, 125 
 Mass. 410 (1S7S) ; Bowker v. Pierce. 130 Mass. 262 (18S1) ; Hunt, Appellant, 
 141 Mass. 515, 6 N. E. 554 (1S86) ; Thayer v. Dewey, 185 Mass. 6S, 60 N. E. 
 1074 (1904).
 
 446 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 adjudging certain investments made by the trustees herein to have 
 been illegal and unauthorized. 
 
 Cullen, J. The question in the case is as to the liability of the 
 appellants as trustees for an investment of twenty-five thousand dol- 
 lars in the debenture stock of "The Umbrella Company." The au- 
 thority given the appellants by the will is: "I hereby give my said 
 executors and trustees hereinbefore named full power to reinvest the 
 proceeds of such sale or other act as aforesaid in any security real 
 or personal which they may deem for the benefit of my estate and cal- 
 culated to carry out the intention of this my last will." The testator 
 himself had been in the umbrella business and by the sixth clause of 
 his will he directed that his interest in the business be closed on the 
 first day of July or the first of January immediately following his de- 
 cease. The referee acquitted the appellants of any bad faith, but 
 held them liable on the ground that the character of the investment 
 was illegal. This report was confirmed by the surrogate and the sur- 
 rogate's decree unanimously affirmed by the Appellate Division, which, 
 while it held that under the will the trustees were not limited to what 
 might be called ordinary trust investments, was of opinion that the 
 investment was speculative and hazardous, and, therefore, improper. 
 With this view we agree. As there was a unanimous affirmance be- 
 low, unless we are prepared to decide that good faith exonerates the 
 the trustees from liability, no matter how speculative, hazardous or 
 unwise the investment may have been, we must affirm the judg- 
 ment and cannot look into the evidence to see how speculative or un- 
 reasonable the investment was. 
 
 The investment in the case at bar was in the preferred stock of a 
 corporation organized to conduct the manufacture and sale of umbrel- 
 las, and formed by the consolidation of several firms at the time engag- 
 ed in that business. The corporation had no real estate or plant. The 
 preferred or debenture stock was issued for merchandise, fixtures 
 and book accounts of the firms, while the common stock was issued 
 for the supposed good will of those firms. While the money was not 
 paid on an original subscription of stock, but the stock was bought 
 from a holder, still it was during the very first days of the existence 
 of the company and before experience had shown that it could achieve 
 any success or stability. After doing business for a short time the 
 corporation failed and two-thirds of the investment of twenty-five 
 thousand dollars was lost. One of the firms from the consolidation 
 of which the corporation sprang was that of the appellant Hall, in 
 which firm the testator at the time of his decease was a partner. As 
 pointed out in the opinion delivered by Justice Bartlett in the Appel- 
 late Division the testator certainly never intended that the money he 
 had directed to be withdrawn from the business should be invested in 
 the same business. 
 
 We concede that under the terms of the will the trustees were given 
 a discretion as to the character of the investments they might make,
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 447 
 
 and that they were not limited to the investments required by a court 
 of equity in the absence of any directions from a testator. The trusts 
 of this will are to provide the testator's children with incomes during 
 their lives, and on their deaths the principal is to go to their issue. 
 The very object of the creation of the trust, was, therefore, the 
 security of the principal, otherwise the testator might better have giv- 
 en the property outright to his children who were the primary ob- 
 jects of his bounty. The range of so-called "legal securities" for the 
 investment of trust funds is so narrow in this state that a testator may 
 well be disposed to grant to his executors or trustees greater liberty 
 in placing the funds of the estate. But such a discretion in the absence 
 of words in the will giving greater authority should not be held to 
 authorize investment of the fund in new, speculative or hazardous 
 ventures. If the trustees had invested in the stock of a railroad, 
 manufacturing, banking, or even business corporation, which, by its 
 successful conduct for a long period of time, had achieved a standing 
 in commercial circles and acquired the confidence of investors, their 
 conduct would have been justified, although the investment proved 
 unfortunate. But the distinction between such an investment and 
 the one before us is very marked. Surely there is a mean between 
 a government bond and the stock of an Alaska gold mine, and the fact 
 that the trustee is not limited to the one does not authorize him to 
 invest in the other. 
 
 In our judgment the authority given to the appellants by this will 
 is quite similar to that vested in trustees in the New England states, 
 where the strict English rule as to the investment of trust securities 
 which prevails in this state does not obtain. In Mattocks v. Moulton, 
 84 Me. 545, 24 Atl. 1004, it was held that in the investment of trust 
 funds the trustee must exercise sound discretion as well as good faith 
 and honest judgment. The court said: "It will be generally conced- 
 ed that a mere business chance or prospect, however promising, is not 
 a proper place for trust funds. While, of course, all investments how- 
 ever carefully made, are more or less liable to depreciate and become 
 worthless, experience has shown that certain classes of investments 
 are peculiarly liable to such depreciation and loss. These, of course, 
 would be avoided by every prudent man who is investing his own 
 money with a view to permanency and security rather than chance of 
 profit. A trustee should, therefore, avoid them, even though he sin- 
 cerely believes a particular investment of that class to be safe as well 
 as profitable." In Dickinson, Appellant, 152 Mass. 184, 25 N. E. 
 99, 9 L. R. A. 279, a trustee was held liable for an investment in 
 Union Pacific railroad stock. It was there said : "Our cases, how- 
 ever, show that trustees in this commonwealth are permitted to in- 
 vest portions of trust funds in dividend-paying stocks and interest- 
 bearing bonds of private business corporations, when the corporations 
 have acquired, by reason of the amount of their property, and the pru- 
 dent management of their affairs, such a reputation that cautious and
 
 418 THi: DUTIES OP A TRUSTEE. (Ch. 5 
 
 intelligent persons, commonly invest their own money in sncJi stocks 
 and bonds as permanent investments." 
 
 Several of the equitable life tenants consented to the investment 
 made by the trustees and are estopped from questioning its propriety. 
 The courts below have so held and have authorized the trustees to re- 
 tain the shares of such life tenants in the income produced by the 
 sum which the appellants have been directed to pay into the fund 
 on account of the loss on the securities. The decree, however, does 
 not go far enough in this respect, for in certain contingencies these 
 life tenants may be entitled to share in the principal of the fund. The 
 decree should be modified so as to provide that in case any bene- 
 ficiary who has assented to the investment in the umbrella stock 
 should become entitled to any part of the principal of the fund paid 
 by the trustees, then the trustees may retain such part, and as so mod- 
 ified affirmed, without costs ^>i this appeal to any party. 
 
 Judgment accordingly. 
 
 WARD v. KITCHEN. 
 (Court of Chancery of New Jersey, 187S. CO N. J. Eq. 31.) 
 
 Bill for construction of will and for directions. 
 
 The Chancellor [Theodore Runyon]. The complainant asks 
 the direction of this Court in the discharge of his duty as trustee un- 
 der the will of Moses Ward, deceased, and asks, also, for a construc- 
 tion of part of that instrument, and of part of the codicil thereto. 
 By the will the testator, after sundry gifts and provisions, gave one- 
 half of all the residue of his estate, real and personal, to his son, the 
 complainant, and of the remaining half he gave to his daughter Maria 
 the "sum or value of $6,000 to be at her own disposal," and provided 
 as follows as to the residue of that half: 
 
 "Whatever remains of the said last-mentioned half, I direct my ex- 
 ecutor to invest in productive funds, upon good securities, and to col- 
 lect and pay over to my said daughter the interest and income there- 
 of, half-yearly, during her natural life." 
 
 He provided, also, for the division of the residue between his son 
 and daughter by their mutual agreement, declaring it to be his will 
 that they might, by their own agreement and without sale, by releas- 
 ing to each other, make division of any and all of the residue of his 
 estate between themselves, so far as they could mutually agree upon 
 the terms of division and the valuation of the property. 
 
 By the will he gave to his executor the sum of $10,000 in trust, to 
 be applied towards defraying the expense of erecting a wing to the 
 asylum building of the Newark Orphan Asylnm Association, provided 
 the association should procure the necessary additional funds to build 
 and finish the wing, and actually build and finish it within ten years 
 from the time of his death. He further declared it to be his will, that
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 449 
 
 until such additional funds were procured, the -$10,000 should be in- 
 vested in productive funds, upon good and sufficient securities, and 
 the interest and income thereof reinvested in like manner and added 
 to the original sum, and that the whole should, if necessary, he ap- 
 plied to the before-mentioned purpose as soon as the additional fund 
 to be provided by the association should be obtained and the work 
 finished, provided it should be within the ten years. He further de- 
 clared it to be his will that if funds from other sources should he pro- 
 cured for the purpose of such amount that, they being first applied 
 thereto, any part of his bequest should remain unexpended, then that 
 the residue of his bequest which should so remain unexpended should 
 be invested or put out at interest on good and sufficient securities, and 
 the yearly interest thereof be applied to the general uses and support 
 of the institution. By the codicil, he revoked that bequest, and, in 
 lieu thereof gave to his executor, in trust, for the same purposes and 
 on the same conditions, and subject to the same limitations, one hun- 
 dred shares of the capital stock of the Newark Gas Light Company, 
 fifty shares of the capital stock of the Newark Banking Company, 
 and fifty shares of the capital stock of the State Bank at Newark; 
 the dividends or profits arising from those stocks to be collected, ap- 
 plied and disposed of in the same manner as, in his will, the interest 
 of the $10,000 was directed to be applied and disposed of. 
 
 The division of the residuary estate, which consisted, in part, of 
 real estate and stock of the Newark Lime Cement Manufacturing Com- 
 pany, the Newark Gas Light Company, the Mechanics National Bank 
 of Newark, and the Newark City National Bank, was made by the 
 complainant and his sister, her husband consenting thereto ; and there 
 were therein set off to the complainant, to be held by him, under the 
 trust declared in the will, in respect to his sister's share of the residu- 
 ary estate, certain shares of those stocks. All of those stocks are 
 valuable, are above par in the market (the Lime and Cement Manu- 
 facturing Company's stock very exceptionally so), and all of them 
 are regarded, by many very prudent business men, as excellent invest- 
 ments for their own money. These shares of stock were, in the division, 
 taken at their market value, and they are still held by the complain- 
 ant, as trustee for his sister at her request, because she, as well as he, 
 regards them as entirely safe, as well as profitable, investments. 
 
 The condition on which the gift of stock to the complainant, for 
 the benefit of the Newark Orphan Asylum Association, was made, has 
 been complied with, the wing has been built, and there still remains, in 
 the hands of the complainant, of that bequest, stock of the value of 
 more than $16,000. 
 
 The complainant asks whether the provision of the will as to the 
 
 division of the residue by him and his sister, is valid, and whether 
 
 the division so made will be binding, not only as against those who 
 
 made it, during the lifetime of his sister, but afterwards, as against 
 
 K i-n.Tr.— 29
 
 450 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 all persons claiming as heirs at law of the testator or otherwise. Also, 
 whether he may, without his sister's con-cut, dispose of the shares of 
 stock which, in that division, were assigned to him to he held in 
 trust as part of her share of the residue, and invest the proceeds in 
 other securities, and whether it is his duty to make such conversion 
 and investment, and whether he will be liable to be held responsible, 
 pecuniarily, for any depreciation in the value of those stocks should 
 he fail to do so. Also, whether he may lawfully continue to hold, in 
 the stock in which it was invested when the testator died and in 
 which it came to the complainant's hands, the unexpended residue of 
 the Orphan Asylum legacy, or whether it is his duty to convert that 
 stock into cash and reinvest the amount in approved securities. 
 
 The power given by the testator, to the complainant and his sister, 
 to divide between them, by mutual agreement, his residuary estate, is 
 valid, and a division bona fide, made under it, is binding on all who 
 are affected by or interested in it. 
 
 The trust, in respect to all of the daughter's share of the residuary 
 estate, except the $6,000 which were to be at her own disposal, is to 
 invest it in productive funds, upon good securities, and to collect and 
 pay over to her the interest and income thereof, half-yearly, during 
 her natural life. Under this direction, the trustee would not be at 
 liberty to invest the money in the stocks of banks and manufacturing 
 companies, however exceptionally good, without incurring the respon- 
 sibility of answering for any loss which might occur to the funds, ei- 
 ther in interest or principal, by reason of such investment. If no 
 directions are given in the will as to the conversion and investment 
 of the trust property, the trustee, to be safe, must take care to invest 
 the property in the securities pointed out by the law. Perry on 
 Trusts, § 465 ; King v. Talbot, 40 N. Y. 76. Nor will the fact that 
 the testator himself made and approved of the investment, in the 
 absence of express or implied directions in the will, relieve the trustee 
 from responsibility in continuing, permanently, an investment made by 
 the testator which the trustee himself would not be justified in mak- 
 ing. Id. But the will itself furnishes evidence that the testator, in 
 this case, intended that the investment should not be in stocks. As 
 appears, by the provisions of the codicil changing the bequest to the 
 ( )rphan Asylum, lie thoroughly understood the difference between a 
 direction to invest in "productive funds upon good and sufficient se- 
 curities'' and apply the interest, and the gift of stocks with direction 
 to apply the dividends. In the legacy to Mrs. Brown, and in the gift 
 to the Orphan Asylum, in the will, the same language is used in the 
 direction for investment which is employed in the residuary clause 
 in regard to that part of the residuum which is to be held in trust for 
 his daughter. The direction in the residuary clause is "to invest in 
 productive funds upon good securities, and to collect and pay over 
 to his daughter the interest and income thereof, half-yearly during her 
 natural life." In the provision in the codicil for the Ornhan Asylum,
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 451 
 
 the gift is of specific stocks, the dividends or profits arising from 
 them to be collected, applied and disposed of as in the will the in- 
 terest of the $10,000 was directed to be applied and disposed of. 
 The direction to pay the interest or income to his daughter, half-year- 
 ly, is indicative of the character of investment which the testator had 
 in contemplation. The direction to invest on good securities will be 
 construed to mean investment on such securities, and on such securi- 
 ties only, as are regarded by the court as proper for the investment 
 of trust funds. If the complainant shall fail so to invest the funds 
 now held by him, in stocks, in trust for his sister, he will be liable to 
 be required to make compensation, at least, for any loss of principal 
 which may occur through depreciation of the stocks. 
 
 The gift to the Orphan Asylum stands on a different footing. It 
 is a bequest to the complainant of specific shares of the capital stock 
 of a gas light company and two banks, in trust for the same purposes 
 to which, in his will, the testator had directed the $10,000 to be ap- 
 plied, "the dividends or profits from the said stocks to be collected, 
 applied and disposed of in the same manner" as in his will the interest 
 of the $10,000 was directed to be applied and disposed of. The com- 
 plainant is not at liberty to convert this stock into money (Neville v. 
 Fortescue, 16 Sim. 333; Boys v. Boys, 28 Beav. 436), unless the de- 
 preciation, or threatened depreciation, of it should render it prudent 
 for him to do so in order to protect the trust fund, in which case he 
 must act wisely in the emergency. 60 
 
 MORRIS v. WALLACE. 
 
 (Supreme Court of Pennsylvania, 1846. 3 Pa. 319, 45 Am. Dee. 642.) 
 
 Appeal from the Court of Common Pleas of Tioga County. 
 
 Wallace as "legal representative" of Henrietta, wife of S. Clement, 
 and others, together with the said Henrietta and her husband, the 
 other cestui que trusts, filed a petition in the Common Pleas, praying a 
 citation to appellant, trustee of the widow of W. Patton, to settle his 
 account, exhibiting the true condition of the estate and the manner 
 in which it was disposed of. The account having been filed, was re- 
 ferred to auditors. The question in the cause was, the allowance of a 
 
 60 in Matter of Stewart, 30 App. Div. 368, 371, 51 N. Y. Supp. 1050 (1898), 
 Hatch, J., says: "It may be observed, at the outset, that he who creates a 
 trust requiring the investment of money may direct how the investment shall 
 be made and what securities shall be taken, or he can dispense with any se- 
 curity. Denike v. Harris, 84 N. Y. 89." 
 
 See. also, Forbes v. Ross, 2 Bro. C. C. 430, 2 Cox, Eq. 113 (17S8) ; Robinson 
 v. Robinson, 1 DeG., M. & G. 247, 261-263 (1851); Paddon v. Richardson, 7 
 De G., M. & G. 563 (1S55) ; Consterdine v. Consterdine, 31 Beav. 330 (1862) ; 
 Pickard v. Anderson, L. R. 13 Eq. 608 (1872) ; Arnould v. Grinstead, W. N. 
 216 (1872) ; In re Earl, 39 W. R. 107 (1890) : Matter of Stewart, 30 App. Div. 
 368, 51 N. Y. Supp. 1050 (1S9S), affirmed 163 N. Y. 593, 57 N. E. 1125 (1900) ; 
 Barker's Estate, 159 Pa. 518, 2S Atl. 365, 368 (1894).
 
 ■i~>'2 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 credit claimed for an investment in bank stock of the funds belonging 
 to the trust. 
 
 It appeared from the report that Morris was the trustee of certain 
 land, in trust for Henrietta for life, for the support of herself and her 
 minor children, (appellees,) remainder to the children; with power 
 to the trustee to sell at any time, and "invest the proceeds in some 
 productive fund, upon the special trust as aforesaid." 
 
 hi 1831, the trustee made a conveyance of the land, and took a bond 
 and mortgage, payable in four annual instalments, for a part of the 
 purchase money. In 1840, the amount remaining due was $659.50. 
 This was assigned, and a draft for the same amount was received for 
 the price. This draft was enclosed by the trustee to the cashier of the 
 Towanda Bank, in a letter, on the 7th December, directing it to be 
 placed to his credit, saying, "I am disposed to invest the amount, say 
 $650., in your stock, if it can be had at par." On the 13th, thirteen 
 shares were transferred to Morris, for which he was charged $654.66. 
 In these transactions no reference to his character of trustee appears. 
 The stock was selling at par, and the dividends from November, 1835, 
 to November, 1840, were usually 5 per cent, semi-annually. The 
 cashier testified to various conversations with Morris, in which the 
 value and security was discussed; and that he had given Morris his 
 opinion it was a safe investment; and the prospect was fair of its 
 continuing to pay as it had done. Morris had also stated, he was the 
 agent for a lady wdio was anxious to dispose of her property and in- 
 vest in this stock. On cross examination, he stated, the bank had sus- 
 pended specie payments at the time of the transfer; that it resumed 
 at the same time with others in the State, and again suspended. That 
 in 1843, at a public sale, the shares brought $2.00. 
 
 The auditor disallowed the credit for the amount invested, charged 
 interest on the amount received on the assignment of the mortgage, 
 and also struck out an item of charge for a dividend received in May 
 and Xovember, 1841, and allowed a commission of 5 per cent, on the 
 amount received by the trustee. * * * 
 
 The court confirmed the report of the auditor and the rejection of 
 the credit was alleged as error. 61 
 
 Rogers, J. In addition to the views of Judge Conyngham, which 
 we adopt, we think the cause is against the appellant on another 
 ground. The trustee, Mr. Morris, has thought proper to take the 
 transfer of the stock, purchased with the funds of the cestui que trust, 
 in his own name. The nature of the transaction, as he now represents 
 it, nowhere appears on the books of the bank, nor is there any written 
 memorandum; hut the case rests on the intention of the trustee, de- 
 duced only from his acts and d< clarations at the time of the invest- 
 ment. Granting that Mr. Morris acted bona fide, which I am not dis- 
 posed to deny, yet this is a practice which we unequivocally condemn, 
 and have always done so; and if persisted in, it must he at the peril 
 
 6i The statement of facts is abridged.
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 453 
 
 of the trustee. The rule which makes them personally liable, is 
 intended to prevent fraud, avoiding the temptation to put the profits 
 of the investment in their own pockets, and throw the loss, if any, 
 on others ; a temptation, to which those who act in a fiduciary char- 
 acter are exposed, and producing an injustice which may be perpe- 
 trated, if allowed, almost without the possibility of detection. It is 
 said, that guardians frequently purchase stock in their own names, 
 with the money of their wards, intending it, at the time, for the ex- 
 clusive benefit of the latter. If so, the sooner there is an end put to 
 the practice, the better, as it may lead to fraud, and can answer no 
 good purpose whatever. It does not deserve the countenance of a 
 court of justice, for another reason. When the funds of the cestui 
 que trust are invested in the name of the trustee, there is always a 
 difficulty, sometimes insurmountable, in tracing the money to the bene- 
 fit of the cestui que trust ; the consequence of which is, that the funds 
 of the cestui que trust are taken to pay the debt of an insolvent trus- 
 tee. As this is contrary to every principle of equity, it should be 
 avoided, if possible ; we therefore wish it to be distinctly understood, 
 that we regard such an investment as a legal fraud, liable to all the 
 consequences as such, without regard to the intention, or integrity 
 of the trustee, or the honesty and good faith of the particular trans- 
 action. It is of the first importance to the cestui que trust, and we 
 think for the benefit of the trustee himself, that their funds should 
 not be intermixed, but should be kept separate and distinct. For un- 
 less this rule is observed, it puts the trustee in the power of the cestui 
 que trust, who may, at his option, either insist on the transfer of the 
 stock or other investment, or, if he chooses, charge the trustee with the 
 price and legal interest. The same principle, be it observed, applies to 
 all persons, whether guardians, executors, or others who act in a 
 fiduciary character. Nor does the obiter opinion of Mr. Justice Ken- 
 nedy, in Lukens' Appeal, 7 Watts & S. 48, interfere with the broad 
 principle there laid down, but the case affirms it ; for he merely says, 
 "that taking a transfer in the name of a guardian will not itself be 
 sufficient to set aside a settlement made by the ward with the guardian, 
 without other circumstances being show r n, from which it may be in- 
 ferred that the ward had not been fairly dealt with." He, however, 
 nowhere intimates (but the contrary is decided) that it is not such a 
 fraud in law, as the minor can take advantage of at his will and 
 pleasure. And the same thing, in effect, and for the same reason, 
 is ruled in Myers v. Entriken, 6 Watts & S. 44, 40 Am. Dec. 538, 
 where it is decided, that a factor who sells the goods of his principal, 
 consigned to him for that purpose, and takes the notes of the vendee, 
 which he has discounted for his own accommodation, thereby becomes 
 responsible for the amount of sales, in the event of the insolvency of 
 the purchaser. It is ruled, on the ground that the temptation to abuse, 
 afforded by a usage to use the money of the principal, is too strong to 
 be tolerated. So in Wren v. Thirston, 11 Yesey, 382, it is said, that an
 
 454 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 agent who places his principal's money to his own account with his 
 general hanker, takes the risk of the banker's failure; and the rea- 
 son given, is, that he cannot so deal with it as to he ahle to treat it as 
 the money of his principal, or his own, according to the event. Nor 
 can it be permitted that the trustee, Mr. Morris, may treat the stock as 
 his own, or as the cestui que trust's, as it may fall or rise in value. The 
 decree is affirmed. 62 
 
 IV. Consequences or Failure or thf. Trustee Properly to Invest 
 
 the Trust Estate. 
 
 ROBINSON v. RORINSON. 
 
 (In the Court of Appeal in Chancery. 1851. 1 De Gex, Macnaghten & Gordon. 
 
 247.) 
 
 Matthew Robinson, by his will dated the 10th of January, 1835, 
 gave all the residue of his personal estate to his executors, upon trust 
 that they should, with all convenient speed, collect and convert the 
 same into money, and should place out and invest the net amount 
 thereof, or continue the same in or upon any of the parliamentary 
 stocks or funds, or of real securities, at interest, and should pay the 
 interest and dividends of the said stocks, funds, and securities to his 
 son Augustin Robinson, for his life; and after his decease then upon 
 trust to pay and transfer the said stocks, funds, and securities to, 
 between, and among the children of the said Augustin Robinson. 
 
 The testator died on the 20th of July, 1837, and in the following 
 month of August the will was proved by the executors. 
 
 The present bill was filed by the three infant children of Augustin 
 Robinson against the executors, and against their father, for the pur- 
 pose of having their grandfather's estate administered. 
 
 The testator at his death had £5,468. bank stock, £5,182. London 
 Dock stock, and £6,000. Turnpike bonds. The executors paid the in- 
 terest and dividends to Augustin Robinson until July, 1845. They 
 sold in July, 1845, the bank stock for £11,511. and the London Dock 
 stock for £6,063. and in August the bonds for £5,000., and invested all 
 the proceeds in 3 per cents. Lord Langdale on March 13th, 1849, made 
 a decree charging the executors with the amount of 3 per cents which 
 might have been purchased with the proceeds of the securities had they 
 been sold at the end of one year from the testator's death and de- 
 claring that Augustin Robinson was entitled to so much as the div- 
 idends on such 3 per cents, had they been purchased, would have 
 amounted to. 
 
 «2 Walker v. Svmoixls. 3 Sw. 1, 66 (1818); Glenn v. Glenn, 41 Ala. 571 
 (1868); Matter of Kane, 120 Cal. 533, f>2 Pac. 852, V,:> Am. St. Hep. 1!>7 (1898) : 
 White \. Sherman, L68 III. ."sit, is x. E. L28, m Am. si. Rep. 132 (1897); Gil-
 
 Sec. 1) DUTIES OF MANAGEMENT OF TRUST ESTATE. 455 
 
 From this decree Augustin Robinson and the executors appeal. 
 
 Lord Cranwortii, L. J. ° 3 * * * In the present case it will he 
 observed the executors had the option of investing the trust money at 
 their discretion on real or government securities, and in such a case 
 Sir J. Leach held, in the case of Marsh v. Hunter [6 Madd. 295], that 
 trustees, by whose default the money is lost, are chargeable, not with 
 the amount of stock which might have been purchased, but only with 
 the principal money lost, and of course, though the report is not so 
 expressed, with interest thereon. 
 
 That decision occurred in 1822. Four years later, namely, in 1826, 
 occurred the case of Hockley v. Bantock [1 Russ. 141], before Lord 
 Gifford. There the executors had a similar discretion of investing ei- 
 ther on real or government securities ; and, on a bill seeking to charge 
 them with balances improperly retained in their hands, Lord Gifford 
 directed an inquiry as to the price of £3. per cents, at the several tinier 
 when the balances ought to have been invested. Such an inquiry would 
 have been improper if the executors could not have been charged 
 with the value of the stock; and the case, therefore, is an authority 
 that, in the opinion of Lord Gifford, they might be so charged. Not- 
 withstanding this last case, however, Sir J. Leach adhered to his own 
 view of the law, and acted on it in a non-reported case of Gale v. 
 Pitt at the Rolls on the 10th of May, 1830. 
 
 Lord Gifford's authority has been followed by Lord Langdale in 
 several reported cases, to which we were referred in the argument, 
 namely, Watts v. Girdlestone [6 Beav. 188], Ames v. Parkinson [7 
 Beav. 379], and Ouseley v. Anstruther [10 Beav. 456]. 
 
 On the other hand, Sir James Wigram, in Shepherd v. Mouls [4 
 Hare, 500], and my learned brother, in Rees v. Williams [1 De G. & 
 S. 314], have refused to follow the authority of Hockley v. Bantock, 
 and have acted on the earlier case of Marsh v. Hunter. In this ir- 
 reconcilable conflict of authority, it is absolutely necessary for us to 
 look to the principles on which the doctrine rests. 
 
 There can be no doubt but that, where trustees improperly retain 
 balances in their hands, or, by want of due care, cause or permit 
 trust money to be lost, they are chargeable with the sums so retained 
 or lost, and with interest on them at £4. per cent. Qi 
 
 bert v. Welsch, 75 Ind. 557 (1881) ; State v. Greensdale, 106 Ind. 364, 6 N. E. 
 926. 55 Am. Rep. 753 (1SS5) ; State v. Roeper, S2 Mo. 57 (18S4) ; Knowlton v. 
 Bradley, 17 N. H. 458, 43 Am. Dec. 600 (1845); Stanley's Appeal. S Pa. 431, 
 49 Am. Dee. 530 (1S4S) ; Rover's Appeal, 11 Pa. 36 (1S49) ; Noble's Estate, 
 178 Pa. 460, 35 Atl. S59 (1S96) ; Can's Estate, 24 Pa. Super. Ct. 369 (1904). 
 
 6 3 The statement of facts is abridged, and only a part of tbe opinion is 
 given . 
 
 e* Negligence. — Rocke v. Hart, 11 Ves. 58 (1805) ; Tebbs v. Carpenter, 1 
 Madd. 290 (1816); Johnson v. Prendergast, 28 Beav. 4S0 (I860); In re Evans' 
 Estate, W. N. 205 (1876) ; Gilbert v. Price, W. N. 117 (1878) ; Gilroy v. Ste- 
 phens, 51 L. J. Ch. 834 (18S2) ; Glapp v. Woodall, 3S Sol. J. 4S7 (1894). 
 
 Active Misconduct.— In England a distinction is generally drawn between 
 negligence and active misconduct on the part of a trustee. In the case of 
 negligence he is charged with 4 per cent, interest, and in the case of active
 
 456 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 Tt may also be true that, where trustees have in their hands, money 
 which they are bound to secure permanently for the benefit of their 
 cestuis que trustent, then in the absence of express authority or direc- 
 tion to the contrary, they are generally bound to invest the money in 
 the £3. per cents. This obligation is nol the result of any positive law, 
 but has been imposed on trustees by the court as a convenient rule, 
 affording security to the cestuis que trustent and presenting no possible 
 difficulty to the trustees. 
 
 Suppose then that trustees have improperly retained in their hands 
 balance- which they ought to have invested in £3. per cents., either by 
 reason of this general rule of the court, or because such a duty was 
 expressly imposed upon them by the terms of the trust, or have by 
 
 misconduct with 5 per cent. Interest. Piety v. Stace, t Ves. Jr. 020 (1799): 
 Pocock \. Reddington, 5 Ves. Jr. 7;>l (1801); Heathcote v. Hulme, 1 J. & V\ . 
 L22 (1819); CrackeH v. Bethune, l J. & W. 586 (1820); Bick v. Motly, 2 
 .Mvl. & K. 313 (1835); Munch v. Cockerell, 5 Myl. & Cr. L78, 220, 222 (1839); 
 Penny v. Avison, 3 Jur. X. S. 62 (1856); Mayor, etc., v. Murray, 7 De G., M. & 
 G. 197, 515, 519 (1856); Burdick v. Garrick, 5 Ch. App. Cas. 233, 241, 243 
 
 (1869); Ex parte Ogle, 8 Ch. App. ('as. 711 (1873); Hi er v. Hooper, W. N. 
 
 171 (1874); Price v. Price, 42 L. T. R. 626 (1880); Re Jones, 49 L. T. R. 91 
 (1S83); Vyse v. Foster, 8 Ch. App. Cas. 309, 337 (1872). 
 
 In the following cases, however, of active misconduct, only 1 per cent, in- 
 teresl was given: Perkins v. Baynton, 1 Bro. C. C. 375 (1784); in re Ilil- 
 liard, 1 Ves. Jr. 89 (1790); Browne v. Southouse, :: Bro. C. C. L07 (1790); 
 Younge v. Combe, 4 Ves. Jr. lot (1798); Attorney General v. Alford, 1 DeG., 
 M. & <;. 843 (1855); Fletcher v. Green, 33 Beav. 426 (1864); In re Emmet's 
 Estate, 17 Ch. Div. 142 (1881). 
 
 Originally a trustee using trust funds for his own benefil was charged no 
 interest. Grosvenor v. Cartwright, 2 Ch. Cases. 21 (1679); Linch v. Cappy, 2 
 Chy.Cas. 35 (1680); Bromfield v. Wytherley, Prec. in Chy. 505 (1718); Ratcliffe 
 v. Graves, 1 Vern. 196 (1683); Ratcliff v. Graves, 2 Chy. Cas. 152; Corsellis v. 
 Lake. 1 Vern. 1!>7. note 1 (1756). See. also. Adams v. dale. 2 Atk. 100 (1740); 
 Child v. Gibson, 2 Atk. 603 (1743). 
 
 In the United states the distinction between negligence and active miscon- 
 duct is in general disregarded, and simple int. -rest at the legal rate charged. 
 Iu re Thorp, 4 N. Y. Leg. Obs. 377, Fed. Cas. No. 14,002 (1840); Bourne v. 
 Maybin, 3 Woods, 724. Fed. Cas. No. 1.700 (1877); Bryant v. Craig, 12 Ala. 354 
 (1847); Xuiiii v. Nunn, <;c Ala. 35 (1880); Eppinger v. Canepa, Exr., 20 Fla. 
 262 (1883); Hough v. Harvey, 71 111. 72 (1873); Lehmann v. Rothbarth, 111 
 111. isr, (1884); White v. Sherman, 168 III. 589, 48 N. E. 128, m Am. St. Rep. 
 132 (1897); Rochester v. Levering, KM ind. 562, I X. E. 203 (1885); Hughes 
 v. Smith. 2 Dana (Ky.) 251 (1834); Ringsold v. Ringgold, 1 liar. & G. (Md.) 
 11, is Am. Dec. 250 (1826); Comegys v. state. 10 Gill & -1. (Md.) 17.", (1838); 
 Glenn's Ex'rs v. Cockey, 16 Md. 446 (1860); Smith v. Darby, 39 Md. 268 
 (1873); Gotl v. State, etc., 44 M<1. 319 (1875); McKim v. Hibbard, 142 Mass. 
 122, 8 N. E. 152 (1886); Forbes v. Ware, L72 .Mass. 306, 52 N. E. 1 17 (1899); 
 .Mover v. Fletcher, 56 Mich. 508, 2:: X. W. 198 (1885); Perrin v. Lepper, 72 
 .Mich. 154 in X. W. 859 (1888); Judd v. Kike. 30 Minn. 380, L5 X. \Y. (',72 
 (1883); Crosby v. Merriam, 31 Minn. 342, 17 X. W. 950 (1883); St. Paul 
 Trust Co. v. Kittson, 62 .Minn. 408, 65 X. W. 71 (1895); Davis v. Swedish 
 American National Bank, 78 Minn. 408, 80 X. W. 953, 81 X. W. 210, 79 Am. 
 St. pep. 100 (1899); St. Paul Trust Co. v. Stong, 85 Minn. 1. 88 N. W. 256 
 (1901); Ames v. Scudder, n Mo. App. L68 (1881), affirmed 83 Mo. L89 (1884); 
 Knowlton v. Bradley, 17 X. II. 458, 13 Am. Dec. 609 (1845); Stark v. Gamble, 
 i:; N. II. 165 (1862); French v. Currier. 17 X. II. ss <ix<;r,i: Pickering v. De 
 Rochemont, 60 X. II. L79 (1880); Aldridge v. McClelland, 36 X. .1. Eq. 288 
 (1882); affirmed 38 X. J. Eq. 1^7'.i ils-Mi; iHinscoinh v. Dunscomb, 1 Johns. 
 Ch. iX. Y.) 508, 7 Am. Dec. 504 (1815); Manning v. Manning, 1 Johns. Ch.
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 4 .~ i 
 
 neglect allowed such balances to be lost, what, in such a case, is the 
 right of the cestuis que trustent? 
 
 In all such cases, or at all events, in all such cases where there has 
 been an express trust to invest in £3. per cents., the cestuis que trustent 
 have the option of charging the trustee either with the principal sum 
 retained and interest, or with the amount of £3. per cents, which 
 would have arisen from the investment if properly made. '" The 
 doctrine of the court where it applies this rule is that the trustee shall 
 not profit by his own wrong. If he had done what he was bound to 
 do, a certain amount of £3. per cents, would have been forthcoming 
 for the cestuis que trustent. And therefore if called on to have such 
 £3. per cents, forthcoming, he is bound to do so; just as, in ordinary 
 cases, every wrongdoer is bound to put the party injured, so far as the 
 
 (N. Y.) 527 (1815) ; Brown v. Rickets. 4 Johns. Cb. (N. Y.) 303, 8 Am. Dee. 
 567 (1820) ; De Peyster v. Clarkson, 2 Wend. (N. Y.) 77 (1828) ; Garniss v. 
 Gardiner, 1 Edw. Ch. (N. Y.) 128 (1831): Utica Ins. Co. v. Lynch. 11 Paige 
 (N. Y.) 520 (1845) ; Duffy v. Duncan, 32 Barb. (N. Y.) 587 (I860) : affirmed :;.", 
 N. Y. 1S7 (1866) ; Rundle v. Allison, 34 N. Y. 180 (1866) ; King v. Talbot, 40 
 N. Y. 76 (1860) ; Lent v. Howard, 89 N. Y. 169 (18S2) ; Cook v. Lowry, 95 
 N. Y. 103 (1884); Thorn v. Garner. 42 Hun (N. Y.) 507 (1886); Morgan v. 
 Morgan. 4 Dem. Sur. (X. Y.) 353 (1886) ; In re Newcomb (D. C.) 32 Fed. S26 
 (18S7), New York law ; Butler v. Jarvis, 51 Hun. 248, 4 X. Y. Supp. 137 
 (1889) ; Matter of Mvers. 131 X. Y. 409. 30 X. E. 135 (1892) ; In re Barnes. 
 4 Misc. Rep. 136, 23 X. Y. Supp. 600 (1893); Matter of Reed. 45 App. Div. 
 196, 61 X. Y. Supp. 50 (1N99) ; Armstrong v. Miller. 6 Ohio, 119 (1S33) ; Es- 
 tate of McCall. 1 Ashm. (Pa.) 357 (1831) ; Fox v. Wilcocks, 1 Bin. (Pa.) 194, 
 2 Am. Dec. 433 (1806) ; Say's Ex'rs v. Barnes. 4 Serg. & R. (Pa.) 112. 8 Am. 
 Dec. 679 (1818): Estate of Dyott. 2. Watts & S. (Pa.) 557 (1841); Lane's Ap- 
 peal, 24 Pa. 487 (1S55) ; Breneman v. Frank, 28 Pa. 475 (1857); Landis v. 
 Scott. 32 Pa. 495 (1859) : Pennypaeker's Appeal. 41 Pa. 494 (1862) ; Hansen's 
 Appeal, 43 Pa. 431 (1862); lless's Estate, 68 Pa. 454 (1871); Conrad's Ap- 
 peal, 11 Wklv. Xotes Cas. (Pa.) 521 (1882); Wbitecar's Estate, 147 Pa. 36S. 
 23 Atl. 575 (1892); Black v. Blakely, 2 McCord, Eq. (S. C.) 1 (1827); Wright 
 v. Wright, 1' McCord, Eq. (S. C.) 185 (1827); Turney v. Williams. 7 Yerg. 
 (Tenn.) 172 (1834); Cannon v. Apperson, 14 Lea (Tenn.) 553 (1SS5) : Mur- 
 chison v. Payne, 37 Tex. 305 (1872 1873); Reed v. Timmins. 52 Tex. 84 
 (1879) ; McCloskey v. Gleason, 56 Vt. 264. 48 Am. Rep. 770 (1883) ; Miller 
 v. Beverleys. 4 Hen. & M. (Ya.) 415 (1809); Cavendish v. Fleming. 3 Munf. 
 (Va.) 198 (1812); Ker's Ad'm v. Snead. 11 Monthly L. R. 217 (1847); Cogbill 
 v. Bovd, 79 Va. 1 (1884); Guardianship of Thurston. 57 Wis. 104, 15 X. W. 
 126 (1883); Olsen v. Thompson, 77 Wis. 666. 47 X. W. 20 (1890); Taylor v. 
 Hill. 87 Wis. 609, 58 X. W. 1055 (1S91). 
 
 In Wilmerding v. McKesson, 103 X. Y. 329. S X. E. 665 (1886), and also in 
 Bruen v. Gillet. 115 X. Y. 10. 21 X. F. 676, 4 L. R. A. 529, 12 Am. St. Rep. 
 704 (1889), equitable interest, so called, 5 per cent, was charged, instead of 
 6 per cent., the legal rate. 
 
 In the following cases, where the trustee had misapplied trust funds under 
 a mistake as to his rights, but without profit to himself, no interest was 
 charged: Saltmarsb v. Barrett, 31 Beav. 349 (1862); Clauser's Estate. 84 
 Pa. 51, 54 (1877): Pulliam v. Pulliam (C. C.) 10 Fed. 5.",. 60-69 (1881). This 
 doctrine, however, is not generally adopted. See Mousley v. Carr, 4 Beav. 
 49 (1841); Attorney General v. Kohler, 9 II. L. C. ';~>4 (1861); Inglis v. Beaty. 
 2 Out. App. 453 (1878); In re Hulkes, L. R. 33 Ch. Div. :">2 (1886); Moody. 
 Adm'r. v. Hemphill. 71 Ala. 160 (1881); Crowder v. Shackelford. 35 Miss. 
 321 (1S5S) ; Jones v. Ward, 10 Yerg. (Tenn.) 160 (1836). 
 
 es Bate v. Hooper, 5 De G., M. & G. 338, 345 (1855); Pride v. Fooks, 2 
 Beav. 430 (1S40) ; Re Lasak's Estate (Sur.) 20 X. Y. Supp. 74 (1890).
 
 158 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 nature of the case allows, in the same situation in which he would have 
 stood if the wrong had not been done. All this is very intelligible. 
 
 Again, suppose the trustee has not only improperly retained balances, 
 but has lost or used them in trade. There the cestui que trust has 
 the right, if it is for his interest to do so, to charge the trustee not 
 with the sum retained and interest, hut with all the profits made in the 
 trade. ° 6 
 
 The ground on which this right rests is this. The employment in 
 trade is unwarrantable; hut if it turns out to have been profitable, the 
 cestui que trust has a right to follow the money, as it is said, into 
 the trade. In such a case, the trade profits have in fact been produced 
 by the employment of the money of the cestui que trust; and it 
 would be manifestly unjust to permit the trustee to rely on his own 
 misconduct in having exposed the funds to the risks of trade, as a rea- 
 son for retaining the extra profit beyond interest for his own benefit. 
 Even where no such extra profits have been made, the cestui que 
 trust is in general at liberty to charge his trustee, who has allowed 
 the trust money to be employed in trade, with interest at £5. per 
 cent., that being the ordinary rate of interest paid on capital in trade. 
 
 C6 Anonymous. 2 Ves. Sr. 629 (1755); Palmer v. Mitchell, 2 Myl. & K. 672, 
 note (1809); Burden v. Burden, 1 J. & W. 134 (cited) (1813); Ex parte Wat- 
 son, 2 V. & P.. 414 (1814) ; Heathcote v. Hulme. 1 J. & W. 122 (1819) ; Docker 
 v. Somes, 2 Myl. & K. (555 (1834); Willett v. Blandford, 1 Hare, 253 (1841); 
 Wedderburn \. Wedderburn, 22 Beav. S4 (1855); Townend v. Townend, 1 
 Giff. 201 (1859); Floekton v. Bunning, 8 Cb. App. Cas. 323, note (1S68) ; Bar- 
 ney v. Saunders. 16 How. 535, 543, 14 L. Ed. 1047 (1853); Whitney v. Ped- 
 dicord, 63 111. 240 (1872); Ringgold v. Ringgold, 1 II. & G. 11, SO (1826); 
 Heatb v. Waters, 40 Mich. 457 (1879); McKnight's Ex'rs v. Walsh, 23 N. J. 
 Eq. 136 (1S72) ; affirmed 24 N. J. Eq. 498 (1873); Sehieffelin v. Stewart, 1 
 John. Ch. IN. Y.) 620, 7 Am. Dee. 507 (1815); Robinett's Appeal, 36 Pa. 174 
 (1860); Norris's Appeal, 71 Pa. 106 (1872); Baker's Appeal, 120 Pa. 33, 13 
 Atl. 487 (1888); Hazard v. Durant, 14 R. I. 25 (1882). 
 
 Compound Interest. — Formerly compound interest was not allowed against 
 a trustee simply because be invested trust funds in trade. Treves v. Town- 
 shend, 1 Bro. C. C. 384, 1 Cox, Eq. 50 (1784); Rtocke v. Hart, 11 Ves. Jr. 58 
 (1805); Heathcote v. Hulme, 1 J. & W. 122, 134 (1819); Brown v. Sansome, 
 McClel. & Y 427 (1825); Sutton v. Sharp, 1 Iluss. 146 (1826); Moons v. De 
 Bernales, 1 Puss. 301 (1826); Attorney General v. Solly, 2 Sim. 518 (1829); 
 Docker v. Somes. 2 Myl. & K. 655 (1834); Mousley v. Carr, 4 Beav. 49, 53 
 (1841) ; Westover V. Chapman, 1 Coll. 177 (1844). But now the cestui que 
 trust has the option of charging the trustee with the fund invested and the 
 profits made, or with compound interest instead of profits; it. being presumed 
 that the profits are equal to compound interest. The burden of showing to 
 the contrary is on the trustee. Walker v. Woodward, 1 Russ. 107 (1826); 
 Heighington v. Grant, 1 Phillips, 600 (1S44) ; Jones v. Foxall. 15 Beav. 388 
 ils.YJi; Williams v. Powell, 15 Beav. 461 (1852); Penny v. Avison, 3 Jur. N. 
 S. 62 (1856); Saltmarsh v. Barrett. 31 Beav. 349, 350 (1862); Burdick v. 
 Garrick, 5 Ch. App. Cas. 233, 241 (1870); Inglis v. Beaty, 2 Ont. App. 453 
 (1878); Barney v. Saunders, 16 How. 535, 542, 14 L. Ed. 1047 (1853); Hook 
 v. Payne, 14 Wall. 252, 20 L. Ed. 887 (1871); Estate of Stott, 52 Cal. 403 
 (1877); Estate of Clark, 53 Cal. 355 (1879); Merrifield v. Longmire, 66 Cal. 
 ISO. 4 Pae. 1176 (1884); In re Eschrich, 85 Cal. 98, 24 Pac. 634 (1890); In 
 re Thompson. 101 Cal. 349, 35 Pae. 091, 36 Pae. !>s. 50S (1S!)4) ; Estate of 
 Cousins, 111 Cal. 441, 44 Pac. 182 (1896); In re Clary, 112 Cal. 292, 44 Pae. 
 569 (1896); Guardianship of Dow, 133 Cal. 446, 65 Pac. 890 (1901); Gassell
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 459 
 
 This right depends on principles the same, or nearly the same, as those 
 which enable the cestui que trust to adopt the investment, and take the 
 profits actually made. 
 
 But the grounds on which, in all these cases, the right of election in 
 the cestui que trust rests, wholly fail in a case where a trustee, having 
 an option to invest either in £3. per cents., or on real security, neglects 
 his duty and carelessly leaves the trust funds in some other state of 
 investment. In such a case, the cestui que trust cannot say to tin- 
 trustee, If you had done your duty I should now have had a certain 
 sum of £3. per gents., or the trust fund would now consist of a cer- 
 tain amount of £3. per cents. It is obvious that the trustee might 
 have duly discharged his duty, and yet no such result need have 
 ensued. 
 
 \Yhere a man is bound by covenants to do one of two things, and 
 does neither, there in an action by the covenantee, the measure of 
 damages is in general the loss arising by reason of the covenantor 
 having failed to do that which is least, not that which it most, bene- 
 ficial to the covenantee; and the same principle may be applied by 
 
 v. Gassell, 147 Cal. 510, S2 Pac. 42 (1905) ; Fall v. Simmons, G Ga. 2G5 (1849) ; 
 Johnson's Adm'rs v. Hedrick, 33 Ind. 129, 5 Am. Rep. 191 (1870) ; Chirk v. 
 Anderson, 10 Bush (Kv.) 99 (1873) ; Page's Ex'r v. Holman. 82 Ky. 57:: (1885) ; 
 Ringgold v. Ringgold, 1 Har. & G. (Md.) 11, SO, IS Am. Dec. 250 (1820) ; Dif- 
 Eenderffer v. Winder. 3 (Jill & J. (Md.) 311 (1831); Pen-in v. Lepper, 72 Mich. 
 454, 555, 550, 40 N. W. S59 (1S8S) ; In re Davis, Ex'r, 02 Mo. 450 (1876) ; Wil- 
 liams, Adm'r. v. Heirs of Petticrew, 62 Mo. 460, 472 (1876) ; Estate of Camp, 
 6 Mo. App. 563 (1879) ; Scott v. Crews. 72 Mo. 261 (1880) ; Bobb v. Bobb, 89 
 Mo. 411, 421, 4 S. W. 511 (1886) : Assignment of Murdoch & Dickson, 12!) Mo. 
 4S8, 31 S. W. 942 (1895); Crowder v. Shackelford. 35 Miss. 321, 359 361 
 (1S5S) ; Troup v. Rice, 55 Miss. 278 (18771 ; McKnight's Ex'rs v. Walsh, 23 
 N. J. Eq. 130, 146-148 (1872)'; affirmed 24 N. J. Eq. 498 (1873); Schieffeliu 
 v. Stewart, 1 John. Ch. (N. Y.) 620, 7 Am. Dec. 507 (1815) ; Garniss v. Gardi- 
 ner, 1 Edw. Ch. (N. Y.) 128 (1831) ; Utica Ins. Co. v. Lynch, 11 Paige (N. Y.) 
 520 (1845); Hannahs' Ex'r v. Hannahs, 68 N. Y. 610 (1877); Berwick v. Hal- 
 sey, 4 Redf. Sur. (N. Y.) 18 (1S78) ; Cook v. Lowry, 95 N. Y. 103 (1884) ; Mat- 
 ter of Reed, 45 App. Div. 196, 203, 61 N. Y. Supp. 50 (1S99) ; Farwell v. 
 Steen. 46 Vt. 678 (1874); McCloskey v. Gleason, 56 Vt. 264, 282, 283, 48 Am. 
 Rep. 770 (1883); Re Hodge's Estate, 66 Vt. 70, 28 Atl. 663, 44 Am. St. Rep. 
 820 (1893). 
 
 In some jurisdictions compound interest is allowed for mere misconduct. 
 Price, Guardian, v. Peterson, 38 Ark. 494 (1882) ; Hough v. Harvey, 71 111. 
 72 (1873) ; Jennison v. Hapgood, 10 Pick. (Mass.) 77, 104 (1830) ; Miller v. 
 Con-don, 14 Gray (Mass.) 114 (1859); Eliott v. Sparrell, 114 Mass. 404 (1874); 
 Salisbury v. Colt, 27 N. J. Eq. 492 (1875) ; Roberts' Appeal, 92 Pa. 407 (1880) ; 
 Frost v. Winston, 32 Mo. 489 (1862). 
 
 Trust for Accumulation. — Compound interest is charged against the trus- 
 tee failing to accumulate income, where such accumulation is directed. 
 Raphael v. Boehin. 11 Ves. Jr. 92 (1805); 13 Ves. Jr. 407 (1807); 13 Yes. Jr. 
 590 (1807) ; Knott v. Cottee, 16 Beav. 77 (1852) ; Townend v. Townend. 1 
 Giff. 201 (1859); In re Emmet's Estate, L. R. 17 Ch. Div. 142 (1881); Rowan 
 v. Kirkpatrick, 14 111. 1 (1852) ; Bond v. Lockwood. 33 111. 212 (1864) ; In re 
 Steele et al., Guardians. 65 111. 322 (1S72) ; Hushes v. People. Ill 111. 457 
 (1SS5) ; Clemens v. Caldwell, 7 B. Mon. (Ky.) 171 (1846) ; Voorhees v. Stoot- 
 hoff, 11 N. J. Law, 145 (1829) ; Perrine v. Petty, 34 N. J. Eq. 193 (1881) ; Eng- 
 lish v. Harvey. 2 Rawle (Pa.) 305 (1830): Bowles v. Executors of Drayton, 
 1 Desaus. (S. C.) 489, 1 Am. Dec. 6S9 (1796); Edmonds v. Crenshaw, Harp. 
 Eq. (S. C.) 224 (1824).
 
 400 Till: DUTIES OF A TRUSTEE. (Ch. 5 
 
 analogy to the case of a trustee failing to invest in either of two 
 modes equally lawful by the terms of the trust. 
 
 It was contended at the bar that, in such a case, the trustee has by 
 his neglect lost his right of election between the two modes of in- 
 vestment; that he was always hound by the trust to exercise his dis- 
 cretion in the mode most beneficial for the objects of the trust; and 
 that having omitted to do so at the time when the option was open to 
 him, he can no longer do it when he is called to account for his neglect, 
 and when he can no longer exercise an unbiased and impartial option. 
 The fallacy of this argument consists in assuming that, in the case 
 supposed, the trustee is called on to exercise any option at all. He 
 is not called on to exercise an option retrospectively; hut is made re- 
 sponsible for not having exercised it at the proper time, for not hav- 
 ing made one of two several kinds of investment. And a reason for 
 his being in such case chargeable only with the money which should 
 have been invested, and not with the £3. per cents, which might have 
 been purchased, is, that there never was any right in the cestui que 
 trust to compel the purchase of £3. per cents. The trustee is answer- 
 able for not having done what he was bound to do, and the measure of 
 his responsibility should he what the cestui que trust must have been 
 entitled to. in whatever mode that duty was performed. 
 
 The ground on which Lord Langdale proceeded in the several cases 
 before him appears to have been that when the trustee has failed to 
 perform his duty in either of the ways which were open to him, the 
 cestuis que trustent may then exercise an option which certainly did 
 not belong to them by the terms of the trust; i. e. that if the trustee 
 has failed to exercise his option, then the right of election passes to 
 the cestuis que trustent, although not given to them by the instrument 
 creating the trust. But on what foundation does this supposed right of 
 the cestuis que trustent to exercise such an option rest? No such 
 right can he derived from the principle that the cestuis que trustent are 
 entitled to compel the trustee to do what he was bound to do, for he 
 was not bound to purchase £3. per cents. Nor from the principle that 
 they may follow the trust funds into their actual state of investment, 
 or charge a higher rate of interest in consequence of such invest- 
 ment, for the foundation of the complaint is, that the funds have not 
 been invested at all. The only plausible foundation for the doctrine 
 which occurs to us is this: The trustee was hound to exercise his 
 option not capriciously, but in the mode likely to be most beneficial to 
 the cestuis que trustent. And their interests appear in the result to be 
 best served by requiring an investment in £3. per cents. But this rea- 
 soning seems founded on a fallacy. The selection of the £3. per cents. 
 is thus made to depend not on any option in their favor which the 
 trustee was originally hound to exercise; but on the accident of their 
 subsequent rise in value, a principle of decision from which, with all 
 deference, we differ. If such a principle were to be applied, then, as 
 it was well put at the bar, if in the present case there had been a discre-
 
 Sec. 4) DUTIES OF MANAGEMENT OF TRUST ESTATE. 4G1 
 
 tion to invest in railway shares, the cestuis que trustent might perhaps 
 now fix on the shares of some particular railway which has risen very 
 highly in value, and say the investment might have been, and so ought 
 to have been, on that particular security. 
 
 On the whole, therefore, we cannot discover any such right of option 
 as is contended for in the cestuis que trustent, not on the ground of 
 their being entitled by the terms of the trust to compel the trustee to 
 make an investment in £3. per cents., for no such obligation was im- 
 posed on him — not on the ground of their being entitled to adopt or 
 insist on any actual investment, for no investment was made — not 
 on the ground of any obligation on the part of the trustees to select the 
 £3. per cents, as the most beneficial mode of investment, for the ad- 
 vantage of the £3. per cents, arises from their accidental and subse- 
 quent increase in value, and not from any necessary superiority at the 
 time when the investment ought to have been made. 
 
 The consequence is, that the decree should, we think, be varied by 
 striking out so much of it as declares that the produce arising from 
 the sale of the bank stock, London Dock stock and sewers bonds ought 
 to have been invested in £3. per cents., and that the defendant Augus- 
 tin Robinson was entitled to so much only of the income arising from 
 those funds from the end of one year after the testator's decease, as 
 should not exceed the amount of the dividends which would have ac- 
 crued due on the £3. per cents, if purchased; and it must be declared 
 that he is entitled from the end of the first year after the testator's 
 decease up to the time of the sales and investments in £3. per cents, 
 in July and August, 1845, to interest at £4. per cent, on the amount 
 which the Master has found that those funds would have produced at 
 the end of the year, not exceeding the amount of interest and divi- 
 dends actually produced. * * * 67 
 
 BAKER v. DISBROW. 
 
 (Supreme Court of New York, General Term, Second Department, 1S79. 
 
 IS Hun, 29.) 
 
 Appeal from a decree by the Surrogate of the County of West- 
 chester, entered upon the final settlement of the accounts of the re- 
 spondents, as executors of Philena Disbrow, deceased. 
 
 Philena Disbrow died testate in New Rochelle, in March, 1865, 
 seized of a house and lot there and possessed of personal estate 
 amounting to $503.87. After directing payment of her debts and 
 funeral expenses, she devised and bequeathed the use of her real and 
 personal estate to the children of Cassandra Baker, wife of Edward T. 
 Baker, during the life of Cassandra Baker and at her death, to her 
 children equally. The executors were empowered to sell the real es- 
 
 G7 Knott v. Cottee, 1G Beav. 77 (1852) ; Andrew v. Schmitt, 64 Wis. 664, 26 
 X. W. 190 (1885).
 
 462 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 tate and "invest the proceeds of such sale on good bond and mortgage, 
 or in or upon other good and sufficient security." 
 
 \ftcr payment of funeral charges and debts, $106.10 of personal es- 
 tate remained. In April, 1866, the house and lot in New Rochelle were 
 sold and $4,256.08, after payment of expenses, remained in the hands 
 of the executors. On April 1, 1869, the executors bought a farm in 
 East Chester paying for it all of the trust funds, namely, $4,307.58, 
 and $1,500 contributed by the brothers of Mrs. Baker. In a few 
 weeks this farm was exchanged for a house and lot in New York 
 City, the executors receiving on the exchange about $2,000. In June. 
 1870, this property was sold and the executors had S9.449.86, of which 
 $f!,000 was on bond and mortgage. Of this .$3,000 was invested in a 
 mortgage on property in Fordham. Subsequently $1,000 more was ad- 
 vanced and a deed of the property taken and $500 spent for furniture 
 and improvements. In 1871 a part of the Fordham land was ex- 
 changed for a farm in New Jersey on which were two mortgages, 
 one of $4,000 and one of $6,000. The executors paid $2,600 and as- 
 sumed both mortgages. In October, 1873, the balance of the Fordham 
 property was sold for $2,500. The executors paid on the New Jersey 
 farm $2,600 in interest on the mortgages and in 1874 $2,000 on ac- 
 count of the second mortgage and $550 in satisfaction of a judgment 
 against Mr. and Mrs. Raker. Subsequently the second mortgage was 
 foreclosed and the property sold for less than the two mortgages to 
 the plaintiff. Up to the time of the exchange for the New Jersey farm 
 the trust fund had reached to $13,450. The result of all these specu- 
 lations was to diminish the fund to $1,394.04. 
 
 GILBERT, J. G8 A breach of trust having been shown, the only 
 question before us is in what way the trustees and executors are to 
 be charged. It appears that up to October. 1871, the unauthorized 
 dealings with the trust funds had produced large profits, but that in 
 consequence of similar dealings, after that date, all of those profits 
 and some of the principal of the fund had been lost. The trust was 
 "to invest on good bond and mortgage, or in or upon other good and 
 sufficient security." No particular mode of investment, except upon 
 bond and mortgage, was prescribed. The trustees invested in the pur- 
 chase of real estate. In such a case the rule seems to be that the 
 cestui que trust has his election to take the fund and legal interest 
 thereon, or the fund and all the profits that have been made upon the 
 fund. If the cestui que trust elects to take the profits he must take 
 them during the whole period, subject to all the losses of the business; 
 he cannot take profit for one period and interest for another. Hill on 
 Trusts (2d Am. Ed.) 534; Perry on Trusts, §§ 470-472, and cases 
 cited; Heathcote v. Hulme, 1 J. & W., 122. The trustee cannot be 
 charged with a greater amount of profits than he has actually received. 
 Jones v. Foxall, 15 Beav. 388-395; Utica Ins. Co. v. Lynch, 11 
 
 csThe statement of facts is abbreviated from 3 Kedf. Sur. (N. Y.) 348 
 
 (ISTSi.
 
 Sec. 5) DUTY AS TO THE CUSTODY OF THE TRUST ESTATE. 463 
 
 Paige 523, et seq. The principle is that, in the management of a 
 trust, the trustee may lose but cannot gain. If by any improper use 
 of the fund profits have been realized, they must be accounted for, 
 and if no profits have been made, he is to be charged with the fund and 
 interest thereon. The profits which may have accrued at any particu- 
 lar time are a mere accretion to the fund, and the trustee can be 
 charged with them only upon the ground that he has appropriated 
 them to his own use. If upon an accounting, in respect to the fund 
 during the entire period of the trust, it appears that no profits have 
 been made, the trustee is chargeable with interest only. The improper 
 investment is considered as against the trustee himself, as equivalent 
 to no investment. But in favor of the cestui que trust it gives an 
 option to claim either the investment made, or the replacement of the 
 original fund, with interest, according as the one or the other may 
 be most for his benefit. Lane v. Dighton, Amb. 409 ; Marsh v. Hunter, 
 6 Mad. 295; Robinson v. Robinson, 1 De G., M. & G. 256; Docker v. 
 Somes, 2 M. & K. 655 ; supra, cases cited. 
 
 The Surrogate appears to have been governed by the rule stated, and 
 his decree should be affirmed, with costs to be paid out of the estate. 
 
 Barnard, P. J., and Dykman, J., concurred. 
 
 Decree of Surrogate affirmed, with costs. 69 
 
 SECTION 5.— THE TRUSTEE'S DUTY AS TO THE CUSTODY 
 OF THE TRUST ESTATE. 
 
 MORLEY v. MORLEY. 
 (In Chancery, before Finch, Lord Chancellor, 167S. 2 Chancery Cases, 2.) 
 
 The defendant was trustee for the plaintiff, an infant, and received 
 for him £40. in gold ; a servant of the defendant living in the house 
 with him robbed his master of £200. and the £40. out of his house. 
 The robbery, viz. that the defendant was robbed of money, was proved ; 
 the sum of £40. was proved by only the defendant's oath. 
 
 Lord Chancellor. He was to keep it but as his own, and allowed 
 it on account ; so in case of a factor ; so in case of a person robbed, 
 for he cannot possibly have other proof. 
 
 7 
 
 69 See Heathcote v. Hulme, 1 J. & W. 122 (1819). 
 
 to johson v. Palmer, L. R. (1S93) 1 Ch. 71 (1892) ; United States v. Thomas. 
 15 Wall. 337, 313, 21 L. Ed. 89 (1872) ; Newsom v. Thornton. GG Ala. 311 
 (1SS0); Lehman v. Robertson, 84 Ala. 489. 4 South. 72S (1887); State v. 
 Meagher, 44 Mo. 35G, 100 Am. Dec. 29S (1869); Fudge v. Durn. 51 Mo. 264 
 (1S73); Stevens v. Gage, 55 N. H. 175, 20 Am. Rep. 191 (187.")); Furman v. 
 Coe, 1 Caines Cas. (N. Y.) 96 (1804); Carpenter v. Carpenter, 12 R. 1. 544, 34 
 Am. Rep. 716 (1880) ; Mikell v. Mikell, 5 Rich. Eq. (S. C.) 220 (1853) ; Mc- 
 Kuight v. McKnight, 10 Rich. Eq. (S. C.) 157 (1S5S).
 
 4G4 THE DUTIES OF A TIM STEE. (Ch. 
 
 CORNWELL v. DECK. 
 
 (Supreme Court of New York. General Term, Fourth Department, 1876. 
 
 8 Hun, L22.) 
 
 Appeal from a decree of the Surrogate of the County of Steuben, 
 on a final accounting, refusing to allow the administratrix credit for 
 moneys of the estate stolen, on account of negligence. The defend- 
 ants were creditors of the estate, which was insolvent. 
 
 The appellant is the widow of one A. Cornwell and was appointed 
 the administratrix of his estate, April 16, 1872. Deceased was a mer- 
 chant at Wbodhull. The estate consisted of a stock of goods in the 
 store there, besides accounts and notes. The administratrix, who was 
 an old lady, employed her son to sell the goods at retail and collect 
 the account-. She. with her family, occupied rooms adjoining the 
 -tore, and kept the money collected, in a trunk in a bed-room occu- 
 pied by her crippled son. On the 20th of March, 1873, the sum of 
 about $1,660 belonging to the estate, was stolen from said trunk and 
 never recovered. 
 
 The nearest bank was twelve miles from where she lived, at which 
 her husband had had a bank book, and where he used to deposit mon- 
 ey, and draw checks. The place of deposit of the money was known 
 to several persons, and the money, or a portion of it, had been kept 
 there for nearly a year. 
 
 E. Darwin Smith, J. Whether the appellant is liable for the loss 
 of the $1,660, money belonging to the estate and stolen from a trunk 
 in her possession, is the question presented upon this appeal. 
 
 In Chambersburg Savings Fund Ass'n's Appeal, 76 Pa. 203, the rule 
 is stated by Mercur, J., in respect to the liability of trustees, as fol- 
 lows: "It is well settled that a trustee shall not be surcharged by 
 a court of equity for a loss which has occurred in case he has exer- 
 cised common skill, common prudence and common caution, but for 
 supine negligence or wilful default, he shall be held responsible." 
 
 What is supine negligence must depend upon the nature of the prop- 
 erty to a great extent. While it might not be negligent to leave fur- 
 niture and ordinary personal property in any room in an occupied 
 dwelling house, it would certainly be very improper to leave money 
 or jewels in such a place, unless tluv were secured in an iron safe. 
 
 In 1 Caines' Cases in Error (Furman v. Coe, page 96, decided in 
 1804), it was held, that the executor was not liable where a body of 
 men broke into his house, and by force carried away funds of the 
 estate. The fund was acquired during the Revolutionary War when 
 the country was distracted and armed bodies of men were roaming 
 about. It does not appear that there was any bank or safe place of 
 deposit near. The money was kept in a strong chest in an upper 
 chamber, and no question was raised that the executor was negli- 
 gent. The court held that under the circumstances he was not liable.
 
 Sec. 5) DUTY AS TO THE CUSTODY OF THE TRUST ESTATE. 465 
 
 The trustee at the present time, when hanks and places of safe de- 
 posit so largely abound, would, probably, under the same circum- 
 stances, be held liable for negligence, because a man of common pru- 
 dence and acting with common caution would not retain the custody 
 of money and valuables liable to be stolen in such a place, when he 
 could easily deposit them in a place of safety. Jt is repeatedly held 
 that if a trustee, in the exercise of his best judgment, deposits mon- 
 ey in a bank of good repute, that he is not liable in the event of 
 the failure of the bank. In Wharton on Negligence, § 519, and 
 cases there cited, it is held that a guardian having funds of his 
 ward should not keep it in his house, but deposit it in bank. An ex- 
 ecutor or administrator is entitled to compensation for his services in 
 taking care of the estate, and "held to a stricter accountability than 
 a trustee without compensation." 
 
 In Litchfield v. White, 7 N. Y. 438, 57 Am. Dec. 534, it is held that 
 an assignee, under a voluntary assignment for the benefit of credi- 
 tors, being entitled to a compensation, is chargeable with the care of a 
 provident owner and liable for a loss occasioned by ordinary negli- 
 gence. See, also, 9 Alb. Law J. 423, and cases cited. The adminis- 
 tratrix in this case is an old lady unaccustomed to business, which 
 facts go to palliate what would in an ordinary business man be gross 
 negligence, yet I cannot see why having assumed this trust for which 
 she is compensated, and having gone on and sold the property and 
 collected the debts clue the estate, she should not be held to the exer- 
 cise of at least common prudence. It appears that this money was 
 kept in a place known to several persons. The place, to be sure, was 
 a bed-room occupied by her sick son, but it was, nevertheless, a very 
 insecure depository for such a sum of money, and presented a con- 
 stant temptation to take it even to the members of her own family. 
 Her husband had kept a bank account, of which she was aware. Al- 
 though the bank was some twelve miles off, he had deemed it proper 
 to deposit in it there, and she could and should have done the same. 
 Had this money been only a portion of the estate lately collected, and 
 had the rest been deposited in bank, she might be held authorized 
 to keep the same where she did, until a proper opportunity to deposit 
 in bank occurred, but the whole, or nearly all this fund had been al- 
 lowed to remain in this insecure place for nearly a year, until it was 
 finally stolen. 
 
 If executors and administrators are permitted to violate the most 
 ordinary laws of prudence in such a manner, it will open the door 
 for innumerable frauds, and place creditors and other persons inter- 
 ested in trust funds at the mercy of careless and reckless trustees. 
 
 I think the decree or order should be affirmed. 
 
 Present— Mulun, P. J., and Smith and Talcott, JJ. 
 
 Decree of Surrogate affirmed with costs. 71 
 
 7i See Lehman v. Robertson, S4 Ala. 4S9, 492, 4 South. 72S (1SS7). 
 Ken.Tr.—30
 
 4G6 THi: DUTIES OF A TRUSTEE. (Ch. 5 
 
 Mcknight v. Mcknight. 
 
 (Court of Appeals of South Carolina, 1858. 10 Rich. Eq. lf>7.) 
 
 On the 18th Dec, 1853, Isaac McKnight, being indebted to the 
 value of his estate, entered into a postnuptial settlement. He execut- 
 ed a deed hearing that date, to his mother, Jane J. McKnight, and his 
 brother, Joseph E. McKnight, by which he conveyed to them all his 
 negroes for the sole and separate use of his wife, and for the sup- 
 port and maintenance of his children, with various conditions and 
 limitations. The deed was not fraudulent and void, for it recognized 
 the rights of creditors. It declared that after the payment of his 
 debts, the property was to be held for the uses of the trust. During 
 the interval, after the execution of the deed, and the time of his leav- 
 ing the state, Isaac McKnight continued in the possession of the ne- 
 groes. In Oct., 1855, he absconded, and left the state, taking with 
 him all the negroes conveyed in the said deed of trust, except such of 
 them as the Sheriff had previously sold. 
 
 This is a bill by the cestui que trusts, namely Mrs. Cecelia Mc- 
 Knight, the wife of Isaac McKnight and his three infant children, 
 against Isaac McKnight, who has been made a party defendant by 
 publication, and against Jane J. McKnight and Joseph E. McKnight, 
 the trustees, for an account of the trust property, because of their al- 
 leged breach of trust and fraudulent complicity with Isaac McKnight, 
 in the removal of the property beyond the limits of the state. 
 
 The bill was dismissed and complainants appealed. 
 
 The opinion of the court was delivered by 
 
 Dargax, Ch. 7 - The only breach of trust charged in the bill, is 
 that the defendants accepted the trust, and took possession of the 
 negroes and combining and confederating with A. Isaac McKnight, 
 did aid, advise, assist and procure the removal of thirteen of the ne- 
 groes, conveyed to them by the deed of trust. * * * 
 
 To these charges, the defendants answered, and the cause proceed- 
 ed to trial on the issue thus made. No sufficient evidence was adduc- 
 ed to sustain the allegations of the bill. A decree was rendered in 
 behalf of the defendants, dismissing the bill. An appeal is now 
 brought before this court, and for the purpose of setting aside the 
 decree, on an issue not presented in the pleadings, which the defend- 
 ants were not called upon to answer, which the Circuit Court did not, 
 and was not asked to consider, and about which, not one word was 
 said on the Circuit trial. * * * 
 
 This suit was first conceived with a view of making the trustees lia- 
 ble for conniving at, aiding, abetting and procuring the fraudulent 
 abduction of the trust negroes by McKnight. Failing to make out by 
 the evidence a case, that can excite even a suspicion of the infidelity 
 
 72 Statement of facts abridged, and part of opinion omitted.
 
 Sec. 5) DUTY AS TO THE CUSTODY OF THE TRUST ESTATE. 467 
 
 of the trustees in that regard, and changing their ground, they now 
 contend, that without any connivance on their part in the escape of 
 McKnight, and his abduction of the negroes the bare fact of their 
 permitting the trust property to remain in the possession of Mc- 
 Knight, together with the loss of the negroes, is such a breach of the 
 trust as to render them responsible to the plaintiffs for the value of 
 the slaves. This Court is of opinion, that the simple fact relied on, 
 is not sufficient to subject them to liability. The deed of trust did 
 not inhibit such a course of management on the part of the trustees. 
 Mrs. McKnight, the plaintiff, kept house. She had three little chil- 
 dren. Surely the trustees could not have done better, than to allow 
 her the use of her own domestic servants, instead of hiring them out 
 to strangers, and with the proceeds of their hire, procuring other 
 servants for Mrs. McKnight and her children. And if Mrs. Mc- 
 Knight, for her convenience and her comfort, could have, and was en- 
 titled to have the use of the domestic servants, so of the field hands, 
 who were employed on a plantation whence the family's supplies were 
 derived. What is the difference, so far as a faithful execution of the 
 trust is concerned? Whether the trustees hired out these field ne- 
 groes and from their wages procured Mrs. McKnight her necessary 
 provisions, or suffered them to be employed directly in making these 
 provisions, they (the trustees), having no complicity whatever with 
 McKnight in carrying the negroes off. * * * 
 
 McKnight was living in harmonious domestic relations with his 
 wife and family. There was no suspicion that he was about to ab- 
 scond and carry off the trust negroes. * * * 
 
 To the court it does not appear that there was any devastavit or 
 breach of trust on the part of the trustees. 
 
 It is ordered and decreed that the decree be affirmed and the ap- 
 peal be dismissed. 
 
 Dunkin and Wardlaw, CC, concurred. 
 
 Appeal dismissed. 
 
 CARPENTER v. CARPENTER. 
 
 (Supreme Court of Rhode Island, 1SS0. 12 R. I. 544. 34 Am. Rep. 716.) 
 
 Bill in equity for an account and to obtain payment of a trust fund. 
 The facts involved are stated in the opinion of the court. 
 
 Durfee, C. J. This is a suit in equity brought by Harris I. Car- 
 penter, as legatee or cestui que trust under the will of his grand- 
 father, the late Earl Carpenter, against Charles E. Carpenter, surviv- 
 ing executor of the will, for an account. The clause of the will un- 
 der which the complainant makes his claim, directs the executors, 
 within two years after the death of the testator, to invest the sum of
 
 HIS THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 •$5,000 "in such stocks or other productive property as they may deem 
 advisable, in their names a- executors," and in the same manner to 
 invesl the income and profits, not required for the maintenance and 
 education of the complainant, and the fund so created to pay over 
 to the complainant on his attaining the age of twenty-five years. The 
 will named the defendant and one David C. Anthony, executors. 
 The testator died February 10. 1863. His will was admitted to pro- 
 hate, and the defendant and Anthony accepted the appointment as ex- 
 ecutors and qualified. The complainant attained the age of twenty- 
 five years November 6, 1878. The hill alleges that the defendant 
 refuses to account or to pay over the fund unless the complainant 
 will accept in full satisfaction of his claim the sum of about $3,000 
 deposited in a savings hank, which he declines to do. The bill also 
 alleges that the defendant pretend^ that he invested $5,000 as direct- 
 ed by the will in bonds wheh were stolen, and that he now has what 
 he recovered, on deposit in said savings bank, and that he is only ac- 
 countable for said deposit; whereas the bill alleges that the invest- 
 ment was not made in the names of the executors and did not con- 
 stitute a trust fund under the will. The bill prays that the defendant 
 may account for all moneys held in trust for the complainant, pursu- 
 ant to the will, and for an account thereof, and that the defendant 
 may be decreed to pay the complainant said sum of $5,000 and such 
 income as ought to have been received had the same been duly in- 
 vested, and all sums which may be found to be justly due to him. 
 
 'fhe facts in regard to said sum of $5,000 are these. Within two 
 years after the testator's death, to wit, January 23, 1865, the defend- 
 ant and David C. Anthony opened an account on their book with 
 the complainant, in which they charged themselves as trustees under 
 the will, to his credit with $5,000, which on the same day appears by 
 the account to have been invested by them in three one thousand dol- 
 lar I nited States coupon bonds, bearing interest at the rate of 7.3 
 per cent., being numbered 41.181, 41,587, 41,588 and two one thousand 
 dollar coupon bonds of the State of Rhode Island, bearing six per 
 cent, interest and being numbered 692 and 734. Having purchased 
 these bonds for the trust, the executors sealed them up in an envelope 
 superscribed: "Investment of five thousand dollars for Harris Irving 
 Carpenter, January Twenty-third, 1865," and locked them, so sealed, 
 in a tin box, which they deposited in the vault of the Traders' Bank in 
 the City of Providence. Between Saturday, February 11, and Monday, 
 February 13, 1865, the vault of this bank was entered by burglars and 
 robbed of a large amount of property, among which were the bonds 
 aforesaid. Efforts were made to recover the bonds, but without suc- 
 cess. Eleven months after the robbery, no clue having been obtained, 
 the executors closed the account on their book. Subsequently the ex- 
 ecutors, by giving heavy indemnity bonds, procured an issue of other 
 United States bonds in place of the United States bonds which had
 
 Sec. 5) DUTY AS TO THE CUSTODY OF THE TRUST ESTATE. 4G0 
 
 been stolen; but unfortunately the agent whom they employed in pro- 
 curing them, and whom they believed to be trustworthy, he being an 
 employee in the United States Treasury Department, was dishonest 
 and converted them to his own use, and they were able to recover of 
 him only a portion of the proceeds, being the moneys which, with 
 the interest accruing, constitute the deposit in the savings bank. 
 
 The complainant contends that the trust was never duly constitut- 
 ed, and that he is therefore entitled to $5,000, with interest, or such 
 profit as it would have earned if duly invested. He contends that 
 the trust was not constituted because the executors did not invest 
 the moneys "in their names," as directed by the will. 
 
 [The Court decided that the executors had invested the $5,000 "in 
 their names" when they bought the bonds and designated them for the 
 trust in an account which they opened in their names as trustees for 
 the complainant and that, therefore, the trust had been duly consti- 
 tuted.] 
 
 The complainant contends that if the trust was constituted, the de- 
 fendant is nevertheless liable for his subsequent mismanagement of 
 it. He contends that the trustees did not use due care in making the 
 deposit; that they ought to have adopted some means of identifying 
 the bonds and rendering them useless to the thief, and that they were 
 acting beyond the scope of their power when they authorized an agent 
 to receive the new bonds in a form that permitted and invited a sec- 
 ond theft. He contends that for these reasons the loss ought to be 
 made good by the defendant. We think, however, that the trustees 
 used as much care as prudent men ordinarily use in their own con- 
 cerns, and that is all that was required of them. It is easy for the 
 complainant to be wiser than the trustees after the event; but it is 
 doubtful if, before it, he would have been either wiser or more care- 
 ful. "In regard to the preservation and care of trust property," says 
 Story in his Commentaries on Equity Jurisprudence, "it has been said, 
 that a trustee is to keep it as he keeps his own. And therefore if he 
 is robbed of money belonging to his cestui que trust, without his own 
 default or negligence, he wall not be chargeable. * * * The rule 
 in all cases of this sort is, that when a trustee acts by other hands, 
 either from necessity or conformably to the common usage of man- 
 kind, he is not to be made answerable for losses." 2 Story, Eq. Juris. 
 § 1269.; Perry on Trusts, §§ 404, 441 ; Lewin on Trusts, 224, 260 
 (6th Ed. London); Litchfield v. White, 7 N. Y. 438, 57 Am. Dec. 
 534. 
 
 The complainant also contends that investment in a savings bank 
 was not authorized by the will. We are, however, of the opinion that 
 a deposit in a dividend paying savings bank may be regarded as "pro- 
 ductive property." 
 
 A decree may be entered referring the cause to a master to take the 
 account, the trust to be treated as duly established. Other matters in
 
 470 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 regard to the management of the trust which have been alluded to 
 will come up more properly in taking the account or on the master's 
 report. 
 
 Decree accordingly. 73 
 
 FIELD v. FIELD. 
 
 (In Chancery before Kekewich, Justice. 1893. Law Reports [1S94] 
 1 Chancery, 4LT>.) 
 
 The plaintiff, Joshua Field, tenant for life under his mother's will, 
 of a trust fund invested in the names of the defendants, the trustees, 
 on a mortgage on a building estate moved for an injunction to restrain 
 the defendants as trustees of the will, from permitting the deeds to 
 remain in the hands or custody of their solicitors, or, unless the deeds 
 were deposited by the defendants at a bank in their joint names, from 
 permitting the same to remain in the possession or custody of any 
 person or persons other than the defendants or one of them. 74 
 
 KEKEWICH, J. This motion raises a question of practical im- 
 portance, and one of extreme interest to solicitors, and still more to 
 those numerous clients of theirs who are trustees. My first inclination 
 was to say that a question of such a vast importance must be care- 
 fully considered, and that it would not be right to express an opinion 
 upon it until after consideration, and in language carefully weighed; 
 but further discussion has convinced me that I ought to dispose of this 
 motion, not as dealing with an abstract question, but rather with refer- 
 ence to the circumstances of this particular case, instead of laying 
 down any general rule. I have before me an affidavit of four gentle- 
 men with regard to the convenience of the deposit of trust deeds with 
 solicitors and the practice of the profession. These four gentlemen 
 stand high in the profession, and it would be difficult to find four 
 others better qualified to depose as to the practice and convenience of 
 business ; but they and the notice of motion alike seem to me to evade 
 what, to my mind, is the real point. A comparison has been made 
 between the deposit of deeds in a solicitor's office and the deposit of 
 them in a bank. The question is not whether the trust deeds may be 
 conveniently deposited in a solicitor's office, or in a bank, or anywhere 
 else, but whether the deeds ought to be under the personal control of 
 the trustees. If solicitors are prepared to make in their own office, or 
 elsewhere, arrangements for depositing trust deeds, so that they may 
 be under the control of trustees, I cannot myself see that this is open 
 to any objection, and the suggestion as to keeping the deeds at a bank 
 has not much to do with the case, and only introduces confusion. 
 
 " Jones v. Lewis, 2 Ves. Sr. 240 (1750) ; Raw v. Cutten, 9 Bing. 96 (1S32) ; 
 
 Job v. Job, L. ft G Ch. Div. 502 (1877); MeCabe v. Fowler, 84 N. Y. 314 
 (1881). 
 
 74 The statement of facts is abridged. »
 
 Sec. 5) DUTY AS TO THE CUSTODY OF THE TRUST ESTATE. 471 
 
 The general principle, in my opinion, is that trustees must have their 
 muniments of title, as well as their securities, under their own control. 
 I have held in one case some time ago, Webb v. Jonas [39 Ch. D. 660], 
 that this was enough to prevent trustees investing on a contributory 
 first mortgage, because trustees investing on any particular mortgage 
 security are bound to have the trust money and the security in their 
 own names, and if the money and the security are in the names of 
 others they are not fulfilling that obligation. The same thing applies 
 to documents and deeds in their possession. They are intrusted 
 with the custody of them, and they are bound within reasonable limits 
 to see that the deeds are kept in a safe place, and that no one else can 
 take them away. But to that obligation there must be reasonable limits, 
 In order to realize the trust estate, the deeds must be in the custody 
 of the solicitor to the trustees. He has to make abstracts of them, 
 to make an examination of the deeds abstracted, and, if the property 
 is sold in lots, the purchasers must have the opportunity of examin- 
 ing the deeds with the abstracts, if they wish, and even a second and a 
 third examination may be necessary before completion. It would be 
 a monstrous thing to say that the trustees have to keep the deeds all 
 that time in a box with perhaps three or four keys, so that if any pur- 
 chaser wishes to consult the deeds all the trustees would have to attend 
 in person. That strikes one immediately as showing that reasonable 
 limits to the trustees' obligation should be applied. 
 
 In the present case I have the trustees of a will, having their trust 
 fund invested on mortgage. It happens that the tenant for life under 
 the settlement is the mortgagor, but that is immaterial for the present 
 purpose. The mortgaged property is a building estate in course of 
 development; we all know what that is. From time to time building 
 agreements have to be prepared and leases granted, and the deeds have 
 to be consulted in order to see, for instance, that the parcels are all 
 right, or that the powers have been properly observed, or that the 
 boundaries of a plot in a second intended lease do not overlap the 
 boundaries in the first, and so forth. It is practically impossible to deal 
 with such questions unless the solicitor to the trustees has the deeds. 
 On the other hand, there is possible danger in that course. Rules are 
 made not only for the guidance of solicitors who are honest, as in the 
 overwhelming majority of instances they are, but also with reference 
 to dishonest solicitors, of whom, unfortunately, there are some. It 
 is extremely difficult to lay down any general rule, and to say where 
 any general rule may be departed from. In my opinion it comes to 
 this — that the solicitor may do what is reasonable and may advise the 
 trustees as to what is reasonable. If there is a trust shut up for 
 years, as often happens, and there is nothing in it to be done, I do not 
 see why the deeds should not be locked up in a box in a bank or a 
 safe deposit, and the trustees keep the keys, and that is the proper 
 course to pursue. If, on the other hand, they are wanted from time 
 to time, I do not think the trustees are acting unreasonably in giving
 
 472 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 their solicitor the power to do what it right and necessary for the 
 itch of business. If the particular business comes to an end and 
 there is no further occasion to refer to the deeds, then they can he put 
 into a safe place. 1 am now referring to title-deeds only. With re- 
 gard to bonds and certificates payable to hearer, 1 have not the slight- 
 est doubt that they ought not he under the control of a solicitor, or any 
 other agent. 7: ' The trustees are responsible for them, and they must 
 keep them, not necessarily in their own custody, hut in some place 
 where they cannot he got at without the consent of the whole body. 
 
 I am not prepared to make any order on the motion ; hut the matter 
 has been fairly argued, and therefore I make no order, except that 
 the costs of the motion are to he costs in the action. 
 
 SECTION 6.— WHO MAY EXECUTE A TRUST. 
 
 ADAMS v. TAUNTON. 
 (In Chancery, before sir John Leach, Vice Chancellor, 1820. 5 Maddock, 435.) 
 
 Henry Byne by his will, 1st Septemher, 1815, devised all his estates 
 to the plaintiff, George Adams, and to Ralph Carr, their heirs, ex- 
 ecutors, administrators and assigns, in trust to sell the same by public 
 auction or private contract, either together or in parcels, and to apply 
 the produce amongst his children, equally, and appointed the said 
 George Adams and Ralph Carr executors of his will, and declared 
 that the receipts of Adams and Carr should he a sufficient discharge to 
 the purchasers. The testator died on the 20th June, 1816. Carr by 
 deed-poll renounced. 
 
 The plaintiff Adams alone proved the will, and on the 21st October, 
 1819, he put up parts of the testator's real estates to sale by public 
 auction, and the defendant became the purchaser of four lots for the 
 sum of £2,670. 
 
 The defendant refused to complete his purchase, because Ralph Carr 
 refused to join with the plaintiff in the conveyance to the defendant, 
 and to join iu the receipt for the purchase money, and in consequence 
 the present suit was instituted for a specific performance of the pur- 
 chase agreement. 76 
 
 .Mr. Bell and Mr. Girdleston, for the plaintiff, insisted, that in con- 
 sequence of the deed-poll of the 1st July, 1816, the plaintiff alone was 
 enabled to convey and give a sufficient receipt for the purchase money, 
 and they cited Bonifant v. Greenfield, Cro. Eliz. 80, Leon. 60, and 
 Hawkins v. Kemp, 3 East, 410. 
 
 75 See Matthews v. Brise, <i Beav. 239 (1843). 
 to The statement is abridged.
 
 Sec. 6) WHO MAY EXECUTE A TR1 ST. 47o 
 
 Mr. Wyatt, for the defendant: 
 
 The defendant is desirous of completing his contract, hut as it has 
 heen a doubt in the profession, whether the co-trustee ought not to 
 join in the conveyance and receipt, the defendant is justifiable in his 
 objection, and is not compellable to take a title subject to doubt. 
 
 The Vice Chancellor expressed himself in favor of the plaintiff, but 
 said he would look into the authorities. 
 
 On this day [6th Dec. 1820] the Vice Chancellor said, it being now 
 settled that a devise to A, B and C upon trust, is a good devise to such 
 of the three as accept the trust, it follows by necessary construction, 
 that by the receipt of the trustees is to be intended the receipt of those 
 who accept the trust. 
 
 A specific performance was decreed, but without costs. 7? 
 
 DOILY v. SHERRATT. 
 
 (In Chancery, before Hon. John Verney, Master of the Rolls, 1735. 2 Equity 
 
 Cases Abridged, 742.) 
 
 A by will appoints two trustees, to whom and their heirs, executors 
 and assigns, he devises his real and personal estate on several trusts; 
 and in case one die, then the other to execute the same. During their 
 joint lives if one refuse to act, the other cannot act without him; but 
 the trust devolves upon the Court. 
 
 In re WADSWORTH. 
 
 (Court of Chancery of New York, 1847. 2 Barb. Ch., 381.) 
 
 This case came before the Chancellor upon the petition of James 
 S. Wadsworth and Elizabeth Wadsworth to remove \Y. W. Wads- 
 worth as one of the executors and trustees under the will of his father, 
 and to appoint another trustee in his place, so far as related to the 
 
 "Bonifaut v. Greenfield, Cro. Eliz. SO (1587); Smith v. Wheeler. 1 Ventris, 
 128 (1672): s. c. 2 Keble, 772; Hawkins v. Kemp, 3 East, 410 (1803); Small 
 v. Manvood. 9 B. & C. 300 (1829); Eaton v. Smith. 2 Bear. 236 (1839) : Cooke 
 v. Crawford, 13 Sim. 91 (1842); Browell v. Reed. 1 Hare. 434 (1842); Cape 
 v. Bent. 9 Jur. 653 (1845); Watson v. Pearson, 2 Ex. 581 (1848); Peppercorn 
 v. Wayman, 5 I>e G. & Sm. 230 (1S52i ; White v. McDermott, 7 Ir. It. < '. L. 1 
 (1872) ; Nicol] v. Miller, 37 111. 3S7, 411 (1865); Putnam Free School v. Fisher, 
 30 Me. 523 (1849); Ratcliffe v. Sangston, 18 Md. 383 (1862); Lou- v. Long, 
 62 M.l. :'.::. 57 (1884); Ellis v. Boston, etc. Co.. 107 .Mass. 1. 13 (1871); Scull 
 v. Reeves, :: V .1. Eq. 84, '-".i Am. Doc. 694 (1834); Jackson v. Ferris, L5 .Johns 
 (X. V.i 346 (1818); Matter of Stevenson, :; Paige (N. Y.i 420 (1832); King 
 v. Donnellv. 5 Paige (X. Y.i 4<; (1835); .Matter of Van Schoonhoven, :< Paige 
 (X. r.) 559 (1836): Niles v. Stevens. 4 Denio (X. Y.i .-.it'.) (1847); Leggett v. 
 Hunter. 19 X. Y. 44.1 (1859); Clemens v. Clemens, 60 Barb. (X. Y.i 366 (1867); 
 Lessee of Zebaeh v. Smith. 3 Lin. (Pa.) 69, 5 Am. Dee. 352 (1810); Bailey, Jr.. 
 Petitioner, 15 R. I. 60, 1 Atl. 131 (1SS5) ; De Saussnre v. Lyons, 9 S. C. 492 
 (1878).
 
 474 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 trust created for the benefit of the petitioner, E. Wadsworth. The 
 testator devised one-fourth of his residuary real estate to his two sons, 
 J. S. Wadsworth and W. W. Wadsworth and to his son-in-law M. 
 Brimmer, and to their successors, as trustees of his daughter Eliza 
 beth; in trust to receive the rents, profits and income thereof for her 
 separate use. with remainder to her issue, if she should have any at 
 death; and if she should die without issue, then to the other heirs 
 at law of the testator in fee. And the trustees were authorized to 
 lease the real estate embraced in the trust, for terms not exceeding 
 twenty-one years, or to sell the lands and re-invest the proceeds in 
 other lands, or in public stocks, or honds and mortgages upon the 
 same trusts; the cestui que trust assenting to such sales by joining 
 in the conveyances of the lands. He also bequeathed one fourth of his 
 residuarv personal estate to the same trustees; in trust to receive and 
 pay over the income thereof to his daughter Elizabeth for life, with 
 power to her to dispose of the principal thereof by will at her death, 
 and with power to the trustees to convert it into real estate, during her 
 lifetime; to be held by them upon the same trusts. 
 
 He also appointed his two sons and his son-in-law the executors of 
 his will. 
 
 The testator died in 1844, and all the executors proved the will. 
 
 M. l'.rimmer refused to accept said trust, and it therefore devolved 
 upon the two sons. In 1846, W. W. Wadsworth became of unsound 
 mind, and was found to be a lunatic upon a commission issued to in- 
 quire into the fact. 
 
 The Chancellor [Rkuben H. Walworth]. 78 The common law 
 has made no provision for the execution of a joint trust by one of 
 the trustees, where the co-trustee, by reason of lunacy or other in- 
 ability, becomes incompetent to execute the trust. This, therefore, 
 appears to be a proper case for the interposition of the Court to re- 
 move the lunatic trustee, under the provisions of the revised statutes ; 
 so that the trusts both as to the residuary estate given to the daughter, 
 and as to that given to the grandson of the testator, may be executed, 
 either by the remaining trustee, or by him and such other person as 
 may be substituted in place of the lunatic. 
 
 SWALE v. SWALE. 
 
 (In Chancery before Sir John Romilly. Master of the Rolls. 1856. 22 Beavan, 
 
 584.) 
 
 The Master of the Rolls. 79 I think the plaintiff is entitled to 
 a receiver. What has taken place is thus dtescribed in the answer: 
 Joseph Swale and Henry Anderson ask Mr. Holden to concur with 
 
 ts The statement is abridged and only a part of the opinion is given. 
 7 The statement of facts is omitted.
 
 Sec. G) WHO MAY EXECUTE A TRUST. 47ij 
 
 them in making certain investments of the trust property. Mr. Ilolden, 
 disagreeing with them, refused to concur. Thereupon, they continued 
 to act in the trusts, without conferring with or consulting him. It 
 appears also, that they have actually advanced! money on certain 
 securities, omitting the name of Mr. Holden, and that in one case, 
 they have taken a security in the name of one only. This Court can- 
 not approve of one trustee investing trust money in his own name 
 exclusively of the others. 
 
 It is suggested, that one executor may act without the concurrence 
 of the others ; but it is impossible that this can be treated as an ex- 
 ecutorship account. The testator died four years and a half ago, and 
 this transaction seems to have taken place, not in their character of 
 executors, but in their character of trustees. I think that the plain- 
 tiff, who is interested in the property, is not to be excluded in this 
 manner. 
 
 The answer of the two trustees is this: they say, that if Mr. Holden 
 will concur with them they will be exceedingly happy to go on and act 
 together, but that if he differ from them, then that they must act for 
 themselves. Considering the manner in which this Court deals with 
 trustees, whenever a breach of trust is committed, and the way in 
 which Holden might be involved in one, it seems not unreasonable that 
 he should insist on his view of the case being adopted, or, at least, 
 that the view of the other two trustees should not control his. The 
 testator intended to have the assistance and discretion of three trus- 
 tees, but here, as it sometimes happens, they do not act amicably to- 
 gether, their united assistance and discretion cannot be obtained, and 
 the majority act alone in the administration of the trust. In that state 
 of things, the plaintiff is entitled to have the receiver appointed. 
 
 A necessity is shown for some interposition to protect this property, 
 not merely for the sake of the two tenants for life, but for the inter- 
 est of the persons who may hereafter become entitled, who are not 
 sui juris, and are a class at present unascertained. 80 
 
 so in the execution of a private trust all the trustees must join. Sloo v. 
 Law, 3 Blatchf. 459. 471, 472, Fed. Cas. No. 12.957 (1856) ; Loud v. Winchester, 
 52 Mich. 174, 185, 17 N. W. 7S4 (1883) ; Green v. Miller, 6 John. (N. Y.) 39, 
 5 Am. Dec. 184 (1810); Sinclair v. Jackson, 8 Cow. (N. Y.) 543, 584 (1826). 
 Unless authority to act is given to less than all by the creator of the trust. 
 as in Attorney General v. Cuming, 2 Y. & C. Ch. R. 139 (1S43). or is to be 
 inferred from the nature of the trust as in Sloo v. Law, 3 Blatchf. 459, Fed. 
 Cas. No. 12,957 (1856). 
 
 Public trusts may be executed by a majority of the trustees. Wilkinson v. 
 Maliu, 2 Tyrwhitt, 545 (1832) ; Perry v. Shipway, 1 Gift. 1 (1859), affirmed 4 
 De G. & J. 353 (1859) ; Cooper v. Gordon, L. R. 8 Eq. 249 (1869) ; Scott v. 
 Detroit Young Men's Society's Lessee, 1 Doug. (Mich.) 119 (1S43) ; Hill v. 
 Josselyn, 21 Miss. 597 (1S50).
 
 4.76 Till: DUTIES OF A TRUSTEE. (Ch. 5 
 
 GUTMAN v. BUCKLER. 
 
 (Court of Appeals of Maryland. 1888. 69 Md. 7, U Atl. 635.) 
 
 Appeal from the Circuit Court of Baltimore City. 
 This appeal was taken from a decree of the Court below requiring 
 of the defendant a specific performance of his contract to purchase of 
 the plaintiff a certain piece of property in Baltimore City. 
 
 Robinson, J., delivered the opinion of the Court. 
 
 The only point in this case, is whether the power to sell and in- 
 vest the proceeds of sale given to two trustees, can upon the death of 
 one of them, he exercised by the survivor? And this question depends 
 upon the construction of the deed made by Mrs. White in contempla- 
 tion of her marriage, and in the execution of which, Doctor Buckler 
 her intended husband united. By this deed, she conveyed to Henry 
 White and Doctor Buckler, their heirs, executors, administrators and 
 assigns, as joint tenants, all her property real and personal, to have 
 and to hold the same to the use of the said Henry White and Doctor 
 buckler as joint tenants, their heirs, executors, administrators and as- 
 signs in trust. 
 
 1st. To permit the grantor to possess, enjoy and dispose of the 
 same as she shall see fit and proper up to the time of her marriage. 
 
 2nd. After her marriage to receive and collect the rents, profits and 
 income of said property, and pay the same to the grantor for her sole 
 and separate use. 
 
 3rd. In trust for such persons as the grantor may appoint by last will 
 and testament, and in default of such appointment, in trust to pay to 
 Doctor Buckler the sum of five thousand dollars per annum during his 
 life, and then in trust, etc. 
 
 The deed further provides "that whenever it may become necessary 
 to invest any part of the principal of the trust estate, the same may be 
 invested at the discretion of the trustees, who are further authorized, 
 as they shall see fit, to change any existing investment, and for that 
 purpose may sell and convey any part of the trust estate, without any 
 obligation on the part of the purchaser to see to the application of 
 the purchase money." 
 
 Since the marriage of the parties, Henry White, one of the trustees 
 lias died, and Doctor Buckler, surviving trustee, has agreed to sell to 
 the appellant a leasehold interest belonging to the trust estate, and the 
 question is whether he can convey a valid title to the purchaser? Now 
 a bare power or authority given to two persons cannot, in the absence 
 of "words of survivorship," or language of like import, be exercised 
 by the survivor. 1 laving thus named the persons by whom the power 
 is to be exercised, the law presumes, in the absence of language show- 
 ing a contrary intention, that the donor meant a joint execution of the 
 power, and if one of them dies it cannot be exercised by the survivor. 
 The power in such case does not survive. Coke, Littleton, 113a; Pey-
 
 Sec. G) WHO MAY EXECUTE A TRUST. 477 
 
 ton v. Bury, 2 P. Wins. 626; Attorney General v. Gleg, 1 Atk. 356; 
 Dyer 177a; Sugd. on Powers, 143. 
 
 But the power given to the trustees in the deed before us, is not a 
 bare power. On the contrary, the entire legal estate is vested in them, 
 and to be held by them as joint tenants upon certain trusts declared in 
 the deed. And to this estate is annexed a power to be exercised by 
 them as trustees over and in regard to the property. Such a power, 
 according to all the authorities, is a power coupled with an interest 
 and as such may be exercised by the surviving trustee. Co. Lit. 113a, 
 181b; Hawkins v. Kemp, 3 East, 410; Eaton v. Smith, 2 Beavan, 23; 
 Flanders v. Clark, 1 Ves. Sr. 9; Clarke v. Parker, 19 Ves. 19. 
 
 In Watson v. Pearson, 2 Exch., 594, the testator devised all his 
 property to his wife and two other persons, in trust to collect and re- 
 ceive the rents and income and to pay the same to his wife during 
 her life, with power to sell and mortgage or otherwise manage his 
 estate. One of the trustees died and another disclaimed the trust, and 
 the power, the Court said, survived to the wife as sole trustee; and 
 one of the powers it will be observed was to sell the estate if the trus- 
 tees should deem it expedient. 
 
 And again in Lane v. Debenham, 11 Hare, 188, where the testator 
 devised his estate to two trustees in fee, upon trust, as soon as con- 
 venient, to raise the sum of £2,000., for the benefit of the testator's 
 daughter, by sale or otherwise, at the discretion of the trustees, and 
 one of the trustees died, the Vice Chancellor held, the power survived, 
 and that the surviving trustee could sell and convey a good title. 
 
 So in Gray et al. v. Lynch and McDonald, 8 Gill, 403, where the 
 testator devised all his property to three persons in trust to sell the 
 same and to invest the proceeds in some profitable stock, to be held by 
 them in trust foi the sole and separate use of the testator's two daugh- 
 ters, the Court, after a full review of all the authorities, decided that 
 the power thus given to the trustees to sell was a power coupled with 
 an interest, and as such could be exercised by the surviving trustees. 
 And although the property was not in terms devised to the trustees 
 as joint tenants, yet the Court said, looking to the nature, objects and 
 provisions of the will, it was clearly the intention of the testator that 
 the power given to the trustees should, upon the death of one of them, 
 be exercised by the survivor. 
 
 In this case the estate is conveyed to the trustees as joint tenants, 
 and the power is given to them as trustees to be exercised by them in 
 regard to the trust estate, and such a power is according to all the 
 cases a power coupled with an interest, and survives to the surviving 
 trustees. 81 
 
 Decree affirmed. 
 
 si Attorney General v. Glegg, Ambler, 584 (173S) : Watson v. Pearson, 2 
 Ex. 58] (1848); Lane v. Debenham, 11 Hare. 1S8 (1853); Peter v. Beverly, 10 
 Pet. 5:52, 9 L. Ed. 522 (1836); Loring v. .Marsh. 6 Wall. 337, 18 L. Ed. S02 
 (1867) ; Parsons v. Boyd, 20 Ala. 112 (1852) ; Saunders v. Schinaelzle, 49
 
 478 THE DUTIES OF A TKl STEB. (Ch. 5 
 
 MORTIMER v. [RELAND. 
 
 (In Chancery, before Lord Tottenham, Chancellor, 1847. 11 Jurist, 721.) 
 
 This was an appeal from the decision of Wigram V. C, and the 
 point in question was. whether under the following circumstances, the 
 defendant R. Ireland was, or was not, a trustee of the will of Thomas 
 Bythesea Mortimer. The testator by his will, dated the 16th July, 
 1835, after giving certain pecuniary legacies, added: "I give to Mr. 
 Thomas Griffiths, solicitor, of Cheltenham, the sum of £300., and to 
 Mr. Pruen, jun., his partner, £100., and I constitute and appoint these 
 two gentlemen my executors and trustees." T. Griffiths and E. Pruen, 
 the executors thus named, both survived the testator. The former 
 died on 17th July, 1836, without having proved the will, or in any way 
 acted in the trusts ; E. Pruen alone proved the will, and acted. On 
 the 31st March, 1846, E. Pruen died, having by his will, dated the 11th 
 December, 1841, appointed H. Pruen and R. Ireland his executors, 
 and having by a codicil, dated the 13th December, 1841, given and 
 bequeathed to R. Ireland all messuages, lands, tenements and heredita- 
 ments, and all moneys and securities for money vested in him as 
 trustee or surviving trustee for any person or persons whomsoever, 
 to hold to him. his heirs, executors, administrators, and assigns, upon 
 and subject to tin- several trusts and equities affecting the same her- 
 editaments respectively, on which the same were vested in him. Both 
 executors proved the will. On the 1st September, 1846, a bill was filed 
 by the parties interested under the will of T. B. Mortimer, praying that 
 it might be declared by the Court, whether R. Ireland, under and by 
 virtue of the codicil of E. Pruen, had or had not been duly appointed 
 a trustee of the trust moneys and premises of T. B. Mortimer; and 
 that it might be referred to the Master to appoint a new trustee or 
 trustees of the said trust moneys and premises, to act with or in the 
 place or stead of R. Ireland; and that R. Ireland and H. Pruen might 
 be ordered to pay, transfer, and deliver the trust moneys and premises, 
 and the interest received thereon and the securities for the same, to 
 such new trustee or new trustees ; and that, if necessary, R. Ireland 
 and II. Pruen, and all other necessary parties, might be directed to 
 join in such instrument or instruments as might be necessary for as- 
 signing and releasing the trust moneys and premises, and the securities 
 for the same, to such new trustee or trustees, upon the trusts of the 
 will of the testator, Thomas Bythesea Mortimer. On the 27th May, 
 1847, the cause came on before the Vice Chancellor, when His Honor, 
 without prejudice to any questions in the cause, referred it to the 
 Master to approve of two new trustees, with liberty to R. Ireland to 
 propose himself, reserving further directions and costs, and giving 
 
 Cal. 59 (1874); Gray v. Lynch, 8 Gill (Md.) 403 (1849); Franklin v. Osgood, 
 2 Johns. Ch. (N. Y.) 1. 7 Am. Dec. 513 (1816), aflirmed 14 John. (N. Y.) 527 
 (1817;; Belmont v. OT.rieu, 12 N. Y. 394 (1855).
 
 Sec. G) WHO MAY EXECUTE A TRUST. 471) 
 
 liberty to the parties to apply. 6 Hare, 196. From this decision the 
 defendant R. Ireland now appealed to the Lord Chancellor. 
 
 Lord Chancellor. The argument amounts to this, that the ex- 
 ecutor of a trustee is of right a trustee. Whether the property is real 
 or personal estate is no matter, for suppose a man appoints a trustee 
 of real and personal estate simpliciter, adding nothing more, this can- 
 not make his representative a trustee. The case before the Master 
 of the Rolls (Titley v. Wolstenholme, 7 Beav. 425) was quite different, 
 for there the Court proceeded on the intention manifested, that the 
 trust should be performed by the assigns of the survivor. The property 
 may vest in the representative, but that is quite another question from 
 his being trustee. The testator may select the heir to succeed to the 
 trust, but he only can do so. Here there are two persons appointed 
 trustees ; both die ; thus there is no trustee, and it is for the Court to 
 appoint new ones. The testator having given no indication of inten- 
 tion, the Court must refer it to the Master. The decree of the Vice 
 Chancellor is right in its form. The appeal must be dismissed with 
 costs. 82 
 
 COOKE v. CRAWFORD. 
 
 (In Chancery, before Sir Lancelot Shadwell, Vice Chancellor, 1S42. 13 
 
 Simons, 91.) 
 
 Bill by the devisee of William Hall, the younger, for specific per- 
 formance of a contract for purchase. 83 
 
 The Vice Chancellor. I am of opinion that the demurrer in this 
 case, must be allowed ; for it is plain that the persons whom the sur- 
 viving trustee has thought proper to appoint to execute the trusts of 
 the testator's will, are persons to whom no authority was given, for 
 that purpose, by the testator, and there is no case in which a person 
 not mentioned by the party creating the trust, has been held entitled 
 to execute it. 
 
 I have always understood, ever since the point was decided in 
 Hawkins v. Kemp, 3 East, 410 (or rather was, as the judges said in 
 that case, properly abandoned by the defendant's counsel, as not cap- 
 able of being contended! for), that, where two or more persons are 
 appointed trustees, and all of them, except one, renounce, the trust 
 may be executed by that one. That decision, if it may be so called, 
 has been approved of by Lord Eldon and other judges. 
 
 Now, in the present case, the testator devised his estate in the 
 County of Lincoln, to his son, William Hall, and his friends, James 
 Burkitt and William Woolley, upon trust that they and the survivors 
 
 8 2 See In re Ingleby, L. R. 13 Ir. 32G (1883) ; In re Crunden and Meux's 
 Contract, L. R. 1 Ch. G70 (1909). 
 
 83 The statement of facts is omitted.
 
 180 THE DUTIES OF A TRUSTEE. (Cll. 5 
 
 or survivor of them or the heirs of said survivor, should, as soon as 
 conveniently might be after his . but at their discretion, sell 
 
 his estates either by public auction or by private contract, and either 
 altogether or in parcels, for such price or prices as they should con- 
 sider the value thereof; and. for the purpose of effecting any and 
 every such sale, he has empowered his trustees and their heirs to 
 enter into and execute all necessary contracts, conveyances and other 
 assurances to or in favor of the purchaser or purchasers of his estates. 
 Then he proceeds to declare that the written receipt or receipts of 
 the trustees, or of the survivors or survivor of them, or the heirs, 
 executor^, or administrators of such survivor, shall be good dis- 
 charges to the purchasers. 
 
 It is observable that the testator has not used the word "assigns" 
 either in the clause in which he has created the trust for sale, or in 
 either of the two clauses that follow it, in which he points out the 
 machinery by which the sale is to he effected. lie does not introduce 
 that word until he begins to speak of something that is to he done 
 after the sale has taken place, that is, until he declares the trusts 
 upon which the proceeds of the sale are to he held. Therefore, it is 
 plain that, when William Hall, who, by the disclaimer of Burkitt and 
 Woolley, became the sole trustee, thought fit to devise the legal 
 estate that was vested in him, he did an act which he was not author- 
 ized to do. 
 
 And here I must enter my protest against the proposition which 
 was stated in the course of the argument, that it is a beneficial thing 
 for a trustee to devise an estate which is vested in him in that 
 character. My opinion is that it is not beneficial to the testator's 
 estate that he should he allowed to dispose of it to whomsoever he 
 may think proper; nor is it lawful for him to make any disposition 
 of it. He ought to permit it to descend ; for, in so doing, he acts in 
 accordance with the devise made to him. If he devises the estate, I 
 am inclined to think that the court, if it were urged so to do, would 
 order the costs of getting the legal title out of the devisee, to he home 
 by the assets of the trustee. I see no substantial distinction between 
 a conveyance by act inter vivos, and a devise ; for the latter is nothing 
 hut a post mortem conveyance; and, if the one is unlawful, the other 
 must he unlawful. 
 
 It ,-ippears to me that, as my decision in Bradford v. Belfield, 2 Sim. 
 264, has been acquiesced in, the question raised by the demurrer in 
 this case, is concluded by that decision: hut, if it is not, then the 
 authority of Townsend v. Wilson, 1 B. & Ad. 608, and 3 Madd. 261, 
 is binding on the point. And my opinion is that the plaintiffs, who 
 may be properly called the assigns of William Hall, the sole acting 
 trustee of the testator's will, are not the persons to execute the trusts 
 of that will; consequently I shall allow the demurrerA 1 
 
 s* Contra: nsborne to Rowlett, L. It. 13 Ch. Div. 774 (1SS0).
 
 Sec. 6) WHO MAY EXECUTE A TRUST. 481 
 
 TITLEY v. WOLSTENHOLME. 
 
 (In Chancery before Lord Langdale, .Master of the Rolls, 1844. 7 Beavan, 425.) 
 
 The Master of the Rolls. 85 Robert Tebbutt was surviving trus- 
 tee and executor under the will of Richard Titley. By his will dated 
 the 30th of July, 1838, Robert Tebbutt gave, devised, and bequeathed 
 unto the use of Edward Titley, David Waddington, and Charles Wol- 
 stenholme, their heirs, executors, administrators and assigns, all the 
 trust estates, moneys, and premises vested in him as surviving devisee 
 in trust and executor, named and appointed in and by the last will 
 of Richard Titley, to hold the same, to the use of the said Edward 
 Titley, David Waddington, and Charles Wolstenholme, their heirs, 
 executors, administrators, and assigns, according to the nature and 
 quality of the same premises respectively, upon the same trusts, and 
 to and for the same ends, intents, and purposes, and under and sub- 
 ject to the same powers ; provisos, and declarations as are limited, 
 expressed, declared, and contained of and concerning the said estates, 
 moneys, and premises, in and by the said will of the said Richard Tit- 
 ley, or as near thereto as circumstances would admit. 
 
 The question in this cause is, whether the devisees in trust, under 
 the will of Robert Tebbutt have, by virtue of the devise, lawfully be- 
 come trustees of the estates devised by the will of Richard Titley. It 
 is admitted that the legal estates and interests which were vested in 
 Robert Tebbutt, as surviving trustee and executor, have, by virtue of 
 his will, become vested in his devisees and legatees ; that they, as 
 such devisees and legatees, are under an obligation so to dispose of 
 such legal estates and interests, that the cestuis que trust under the 
 will of Richard Titley may have the benefit of them; but it is alleged, 
 that they have not, themselves, any legal authority to execute the 
 trusts, and consequently, that new trustees ought to be appointed for 
 the purpose by this court. 
 
 Richard Titley, the testator, by his will, dated the 16th of January, 
 1828, gave, devised, and bequeathed to his wife, his son Richard, and 
 Robert Tebbutt, their heirs, executors, administrators, and assigns, 
 all his real estate and all his personal estate; to hold the same real 
 and personal estate, to the use of his wife, his son Richard, and 
 Robert Tebbutt, their heirs, executors, administrators, and assigns, 
 according to the nature thereof, to, for, and upon the several uses, 
 trusts, ends, intents, and purposes in his will after mentioned and de- 
 clared. * * * 
 
 The testator has not, by his will, given any power to appoint new 
 trustees, and it is thereupon argued, justly, that the trustees, or the 
 survivors or survivor of them, could not, by any assignment or act 
 
 8 5 The statement of facts is abridged and part of the opinion is omitted. 
 Ken.Tr.— 31
 
 482 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 inter vivos, relieve themselves from the responsibilities and duties of 
 the trust; hut it is further contended, that the same disability attends 
 any assignment by way of devise or bequest, and that although the 
 estate and property may he vested in the devisees or legatees of the 
 surviving trustee, the duties and the responsibilities attending the ex- 
 ecution of the trusts remain in the legal representatives, real and per- 
 sonal, of the surviving trustee. * * * 
 
 When a trust estate is limited to several trustees, and the survivors 
 and survivor of them, and the heirs of the survivor of them, and! no 
 power of appointing new trustees is given, we observe a personal 
 confidence given, or at least probably given, to every one of the several 
 trustees. As any one may be the survivor, the whole power will event- 
 ually come to that one, and he is entrusted with it, and being so, he is 
 not, without a special power, to assign it to any other ; he cannot, 
 of his own authority, during his own life, relieve himself from the 
 duties and responsibilities which he has undertaken. * * * 
 
 We have, in this will, expressions which clearly show that the testa- 
 tor intended the trust to be performed by the "assigns" of the sur- 
 viving trustee; and in construing the will, we must, if practicable, 
 ascribe a rational and legal effect to every word which it contains. 
 We cannot, consistently with the rules of this court, consider the word 
 "assigns" as meaning the person who may be madie such by the spon- 
 taneous act of the surviving trustee to take effect during his life ; but 
 there seems nothing to prevent our considering it as meaning the per- 
 sons wdio may be made such by devise and bequest ; and if we do not 
 consider the word "assigns" as meaning such persons, it would, in 
 this will, have no meaning or effect whatever. 
 
 For these reasons, and under the circumstances of this case, I am 
 of opinion, that the devise and bequest made by Robert Tebbutt of 
 the trust estates held by him under the will of Richard Titley, was a 
 good and valid devise and bequest ; and that the estates thereby given 
 to Edward Titley, David Waddington, and Charles Wolstenholme 
 are vested in them, on such of the trusts thereof declared by the will 
 of Richard Titley, as now remain to he performed. 80 
 
 In re MORTOX and ITALLETT. 
 
 (In the Court of Appeal, 1880, Law Reports, l.~i Chancery Division, 14?>.) 
 
 John Cole, by will, dated the 28th of May, 1852, devised to H. N. 
 Wixley and George Morton, and their heirs all his freehold and copy- 
 hold estates upon trust for Margaret May during her life, and then 
 to sell the same and stand possessed of the proceeds upon trust to pay 
 and divide the same, among the children of certain persons named. 
 
 so See Hall v. May, 3 K. & J. 585 (1857).
 
 Sec. 6) WHO MAY EXECUTE A TKl ST. 483 
 
 The testator died in September, 1852, and his will was proved by the 
 two executors. The surviving trustee died intestate in 1859. The 
 tenant for life having died, the customary heir of the surviving trus- 
 tee was admitted to the copyholds, and entered into a contract for the 
 sale of a part of them. The question whether he could make a good 
 title came before the Master of the Rolls (Sir George Jessel) on an 
 adjourned summons, under the Vendor and Purchaser Act, 1874, on 
 the 10th of February, 1880. He decided that the customary heir could 
 make good title, and dismissed the summons without costs. The 
 purchaser appealed. 
 
 James L. J. 87 I am of opinion that the appeal must be dismissed. 
 I agree with the Master of the Rolls that if an estate is given to A and 
 B and their heirs on trust to sell, the heir of the survivor of A and 
 B is a trustee under the will, takes the estate on trust for sale, and 
 can sell it. * * * 
 
 Baggallay, L. J. I am of the same opinion, and have only to add 
 that if it had been necessary to give any opinion on the point arising 
 in Osborne to Rowlett, 13 Ch. D. 774, I should have taken time to 
 consider whether that decision ought to be followed. As at present 
 advised, I am not prepared to dissent from Cooke v. Crawford [13 
 Sim. 91]. 
 
 Bramwell, L. J., concurred. 
 
 James, L. J. I also wish to add that I am not prepared! to say that 
 Cooke v. Crawford is to be considered as overruled. 88 
 
 BAYLEY v. MANSELL. 
 
 (In Chancery, before Sir John Leach, Vice Chancellor, 1819. 4 Maddoek, 226.) 
 
 On a bill filed for the substitution of new trustees, a decree was 
 made accordingly, and for a conveyance to them. Mr. Shadwell sug- 
 gested, that it would be convenient, by a clause in the conveyance, to 
 enable the new trustees to appoint others in their stead, if it should 
 become necessary ; but the Vice Chancellor refused to direct the in- 
 sertion of such a clause, there being no provision to that effect in the 
 trust deed. 
 
 st A part of the opinion of James, L. J., is omitted. 
 
 8 8 See, also, In re Cunningham, L. R. (1891) 2 Ch. 567. 
 
 The trust in such a ease cannot be executed by an assignee of the trustee 
 by a conveyance inter vivos. Y. B. 15 H. vii ; Bradford v. Belfield, 2 Sim. -VA 
 (182S); Titley v. Wolstenholme, 7 Beav. 425, 434, 435, 436 (1844); Hall v. 
 May, 3 K. & J. 585 (1857); Whittelsey v. Hughes. 39 Mo. 13 (I86C1 ; Suarez 
 v. Pumpelly, 2 Sandf. Ch. (N. Y.) 336 (1845); Seely v. Hills, 49 "Wis. 47:'. 5 
 N. W. 940 (1S80). Nor by a testamentary assignee of the surviving trustee. 
 Cooke v. Crawford, 13 Sim. 91 (1842) ; Wilson v. Bennett, 5 De G. & Sm. 475 
 (1852) ; Hall v. May, 3 K. & J. 585, 587 (1857) ; Stevens v. Austen, 3 E, & 
 E. 685 (1861); Druid Park Heights Co. v. Oettinger, 53 Md. 46, 59 (1SS0).
 
 484 THE Dl TIES OF A TRUSTEE. (Ch. 
 
 WHITE v. WHITE. 
 
 (In Chancery, before Lord Langdale, Master of the Rolls, 1S42. 5 Beavan, 
 
 22 1 . I 
 
 This was a bill for the appointment of two new trustees, in the 
 place of trustees appointed by the testator's will, but who had died 
 in his lifetime. The will contained a power for the surviving or con- 
 tinuing trustees or trustee, or the executors or administrators of the 
 last surviving or continuing trustee, to appoint new trustees in the 
 place of trustees dying, desiring to be discharged, etc. 
 
 Mr. K. \\ . K. Forster asked that the Master might insert a power 
 authorizing the trustees now to be appointed, to appoint future new 
 trustees; he referred to Joyce v. Joyce, 2 Moll. 276, as an authority. 
 
 Tin: Master of the Rolls said, he would look at the case cited, 
 but he saw no objection to what was proposed to be done. 
 
 His Lordship ordered that the Master, in settling the conveyance, 
 should be at liberty, if he should think fit, to insert the power to ap- 
 point new trustees. 
 
 ANONYMOUS. 
 
 (Cited from Bradwell v. Catchpole, 3 Swanston, 78, note [a], page 70.) 
 
 Sir J. Jekvll cited a late case at the Rolls, where one who was a 
 trustee for a woman and her children did with the woman's consent, 
 assign his trust to another who was guilty of a breach of trust, and 
 the first trustee decreed to make satisfaction, because trustees can- 
 not divest themselves of their trust at their pleasure. 89 
 
 IIULME v. HULME. 
 
 (In Chancery, before Sir John Leach, Master of the Rolls, 1833. 2 Mylne & 
 
 Keen, 682.) 
 
 On the 26th of July, 1810, articles of settlement, in contemplation 
 of an intended marriage between James Hulme and Ellen Docksey, 
 were executed for conveying and assigning in trust to Thomas Stafford 
 and John Braithwaite certain real estates, as soon as Ellen Docksey 
 should attain the age of twenty-one, together with a sum of £500. 
 in money, to the use of the intended wife for life, remainder to the 
 intended husband for life, remainder to the children of the marriage, 
 with an ultimate limitation to the intended wife in fee. The mar- 
 riage was shortly after solemnized. The wife attained her age of 
 twenty-one in November, 1813, when the articles were carried into 
 execution by indentures of settlement, dated the 2nd and 3rd of 
 
 s a See Hardwick v. Mynd, 1 Anstruther, 109 (1793).
 
 Sec. 6) WHO MAY EXECUTE A TRUST. 485 
 
 November in that year. On the same 3rd day of November an ap- 
 pointment, which was prepared by the same solicitor who prepared 
 the settlement, was executed by the husband and wife, by which Pow- 
 ell, one of the defendants, who was a private sailor, was named as a 
 single trustee in the place of Stafford and Braithwaite, who were al- 
 leged to be desirous of being discharged from the trust ; and the 
 £500. having been invested in the purchase of three per cent, con- 
 solidated annuities, the stock was transferred by Stafford and Braith- 
 waite to the new appointed single trustee, and by him immediately 
 sold out and handed over to the husband, who shortly afterwards be- 
 came bankrupt. 
 
 The bill was filed by the children of the marriage against the new 
 trustee, and against Stafford, praying a retransfer of the stock which 
 had been so transferred to the husband. Braithwaite, the other trus- 
 tee, died insolvent, and his representatives were not made parties to 
 the suit. It appeared, upon reference to the terms of the settlement, 
 that it was the clear intention of the parties that there should in all 
 times be two trustees of the property comprised in the settlement; 
 and it was admitted by the counsel for the defendant Stafford that 
 this was the effect of the settlement. 
 
 The Master of the Rolls. The decree must be according to the 
 prayer of the bill, against the new trustee and the defendant Stafford. 
 The concurrence in the appointment of a single trustee, with the trans- 
 fer of the stock by Stafford and Braithwaite to such single trustee, 
 was a plain breach of trust on their part, and made them respon- 
 sible for the stock so transferred. This being the case, it is unneces- 
 sary to direct those inquiries for the examination of the solicitor who 
 prepared the settlement and new appointment of trustees, which would 
 otherwise have been necessary in order to discover who were the parties 
 and privies to the fraud thus committed. 
 
 BRICKENKAMP v. REES. 
 
 (Supreme Court of Missouri, 1879. 69 Mo. 42G.) 
 
 Hough, J. The plaintiff's intestate executed and delivered to the 
 defendant, Rees, as trustee, a deed of trust of certain land in Frank- 
 lin County, to secure the payment of certain notes to the defendant 
 Jones, the cestui que trust in said deed. After default in the pay- 
 ment of the notes, and upon the request of the defendant Jones, the 
 holder thereof, and after due notice given by the trustee of the time, 
 terms and place of sale, and of the property to be sold, said land was 
 sold, and the defendant Jones became the purchaser. Jones having 
 refused to pay the purchase money, the present suit was instituted 
 for specific performance. The separate answers of the defendants 
 admitted the sale and purchase by Jones; and, with other defenses
 
 486 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 in avoidance thereof, averred that the defendant, Rees, was not present 
 at the auction. The Circuit Court found the issues for the defendant. 
 and dismissed the plaintiff's petition. This judgment was affirmed 
 by the court of appeals and the plaintiff has brought the case here 
 by a writ of error. 
 
 The sale took place at the courthouse door in Union, the auctioneer 
 or crier standing in the door, and the persons attending the sale, 
 eight or ten in number, being inside the hall. The testimony as to the 
 presence of the trustee during the sale was conflicting. Four wit- 
 nesses testified that he* was present, and three, including the trustee, 
 testified that he was not. It is conceded that he was present at the 
 courthouse door before the sale began, and that after the sale was 
 over he went with the crier and the purchaser, Jones, into the col- 
 lector's office a few feet distant from the 'door where the sale was 
 made. The trustee testified that during the sale he was not at the 
 courthouse, but in a saloon on the opposite side of the street, and 
 that he was not present at the sale because he did not think it was 
 necessarv for him to be there. Some of the witnesses who testified 
 that he was present were bidders, and were more observant, doubt- 
 less, of other matters than of the presence or absence of the trustee. 
 The positive testimony of the trustee, who, so far as the record 
 shows, is entirely disinterested, must, under the circumstances, be 
 regarded as conclusive of his absence, especially as he is corroborated 
 in this particular by the crier, who, in soliciting bids, would very nat- 
 urally observe the entire assemblage, in as much as it was a small one. 
 The counsel for the plaintiff contends, however, that such absence 
 from the place of sale as that testified to by the trustee, will not avoid 
 the sale ; that he was present at its conclusion to do all that he could 
 have done, had he been present at the actual crying of the sale. In this, 
 we think, the learned counsel for the plaintiff is in error. It was the 
 duty of the trustee to be present during the crying of the sale, to 
 observe the progress thereof, protect the interests of the parties 
 concerned, to reject fraudulent bids made to frustrate the sale, and, 
 if necessarv, to adjourn the sale. Graham v. King, 50 Mo. 22, 11 Am. 
 Rep. 401; Bales v. Perry, 51 Mo. 452; Vail v. Jacobs, 62 Mo. 130; 
 Perry on Trusts, §§ 779, 780; Gray v. Veirs, 33 Md. 18. If, however, 
 the auctioneer may lawfully make a sale in the absence of the trustee, 
 and should, during his absence, accept a bid, declare the person making 
 the same to be the purchaser, and by a proper memorandum in writing 
 complete the sale, it would be out of the power of the trustee to set 
 such sale aside. White v. Watkins, 23 Mo. 427. And in this way 
 the trustee might substitute the auctioneer for himself in the exercise 
 of that very discretion which the law declares is a personal trust and 
 cannot be delegated by him. The trustee, himself, should be present 
 to sanction the acceptance of the bid by the auctioneer before any 
 binding memorandum of sale is made. Whether the sale was, in fact, 
 judiciously conducted and advantageous in its terms to the debtor,
 
 Sec. 6) WHO MAY EXECUTE A TRUST. 487 
 
 are questions not involved in the present inquiry. Bales v. Perry, 51 
 Mo. 452. 
 
 The judgment of the court of appeals will be affirmed. 00 
 
 PARKER, Trustee, v. JOHNSON and Others. 
 (Court of Chancery of New Jersey, 1883. 37 N. J. Eq. 367.) 
 
 On exceptions to Master's report. 
 
 The Chancellor [Theodore Runyon]. 91 The ninth exception is 
 that the Master has allowed the trustee $238.86 commissions on the 
 rents collected, and has allowed him in addition five per cent on the 
 sums disbursed; thus subjecting the rents to fifteen per cent com- 
 missions for collections and disbursements. 
 
 A trustee may employ necessary assistants in executing his trust. 
 and pay them. ' He may employ agents, collectors, accountants and 
 other persons properly employed in similar affairs. Perry on Trusts, 
 § 912; Wilkinson v. Wilkinson, 2 Sim. & Stu. 237. No complaint 
 is made in this case that the allowances to the agent and trustee are 
 too great for the services and they do not appear to be so. * 
 
 * * 
 
 Ex parte BELCHIER. 
 
 Ex parte PARSONS. 
 
 (In Chancery, before Lord Hardwicke, Chancellor, 1754. 1 Ambler, 218.) 
 
 On cross-petitions, and exceptions to the assignment of commission- 
 ers of bankrupt, the case appeared to be : 
 
 Mrs. Parsons was chosen assignee of the effects of her son, John 
 Parsons, a bankrupt ; and there being a large quantity of tobacco to 
 be sold, she employed one Wiggan, a broker, to sell the same by auction. 
 
 so See Taylor v. Hopkins, 40 111. 442 (18(36) ; Grover v. Hale, 107 111. 638 
 (1883)- Graham v. King, 50 Mo. 22, 11 Am. Rep. 401 (1861); Howard v. 
 Thornton, 50 Mo. 291 (1862); Bales v. Perry, 51 Mo. 44!) (1863); Vail v. 
 Jacobs, 62 Mo. 130 (1S74) ; Spurlock v. Sproule, 72 Mo. 503 (1880) ; Powell v. 
 Tuttle, 3 N. Y. 396 (1850) ; Fuller v. O'Neal, 69 Tex. 349, 6 S. W. 181, 5 Am. 
 St Rep 59 (1887) ; s. c, 82 Tex. 417, 18 S. W. 479, 481 (1891) ; Smith v. 
 Lowther, 35 W. Va. 300, 13 S. E. 999 (1891). 
 
 Contra: Connollv v. Belt, 5 Cranch, C. C, 405; Fed. Cas. No. 3,117 (183S) ; 
 Smith v. Black, 115 U. S. 308, 6 Sup. Ct. 50, 29 L. Ed. 398 (1885); Johns v. 
 Sergeant, 45 Miss. 332 (1871) ; Tyler v. Herring, 67 Miss. 169. 6 South. 840. 19 
 Am. St. Rep. 263 (1889) ; Dunton v. Sharpe, 70 Miss. 850, 12 South. S00 (1893). 
 
 Trustees may, however, delegate the performance of purely ministerial 
 acts. Gillespie v. Smith, 29 111. 473, 81 Am. Dec. 328 (1863) ; Telford v. Bar- 
 ney, 1 G. Greene (Iowa) 575, 591 (1848) ; Keiin v. Lindley (N. J.) 30 Atl. 1063, 
 1074 (1895); Hawley v. James, 5 Paige (N. Y.) 318, 487 (1S35) ; Blight v. 
 Schenck, 10 Pa. 2S5, 51 Am. Dec. 478 (1849) ; Bohlen's Estate, 75 Pa. 304, 317 
 (1874). 
 
 9i Only a part of the opinion is given.
 
 4S8 THE DUTIES OF a TRUSTEE. (Ch. 5 
 
 The money was paid to the broker, and after remaining- in his hands 
 for about ten days, he died insolvent; and the commissioners were 
 of the opinion the assignee ought to bear the loss. 
 
 It was proved by several persons' depositions, that it is the common 
 method of business, to sell mercantile goods by auction, and to em- 
 ploy a broker, and for him to receive the money. 
 
 Lord Hardwicke, Chancellor, after argument at bar: If Mrs. Par- 
 sons is chargeable in this case, no man in his senses would act as as- 
 signee tmdler commissions of bankrupt. This court has laid down a 
 rule with regard to the transactions of assignees, and more so of trus- 
 tees, so as not to strike a terror into mankind acting for the benefit of 
 others, and not for their own. 
 
 Courts of law and equity too, are more strict as to executors and 
 administrators; but where trustees act by other hands, either from 
 necessity, or conformable to the common usage of mankind, they arc- 
 not answerable for losses. 
 
 There are two sorts of necessities: 1st. Legal necessity; 2nd. Moral 
 necessity. 
 
 As to 1st: A distinction prevails where two executors join in giving 
 a discharge for money and one of them only receives it, they are both 
 answerable for it, because there is no necessity for both to join in 
 the discharge, the receipt of either being sufficient ; but if trustees 
 join in giving a discharge, and one only receives, the other is not an- 
 swerable, because his joining in the discharge was necessary. 
 
 2d. Moral necessity, from the usage of mankind. If trustee acts 
 as prudently for the trust as for herself, and according to the usage 
 of business. 
 
 If trustee appoints rents to be paid to a banker at that time in credit, 
 and the banker afterwards breaks, the trustee is not answerable. 
 
 So in the employment of stewards and agents : The receiver of Lord 
 Plymouth's estate took bills in the country, of persons who at the time 
 were reputed of credit and substance, in order to return the rents to 
 London: the bills were protested, and the money lost, and yet the 
 steward was excused, 3 Atk. 4K0. None of these cases are on account 
 of necessity, but because the persons acted in the usual method of busi- 
 ness. 
 
 ( Ibjection: The goods were in a warehouse, but it does not appear 
 the broker had a key to the warehouse; if he had, he would then be 
 in possession of the goods; and if he had in such case embezzled any 
 of them, Mis. Parsons would not be liable for such loss. If she would 
 not in such ca.se of embezzlement, no more reason that she should in 
 this case. 
 
 Objection: Mrs. Parsons herself might have received the money. 
 
 It is not usual to receive the money one's self; a question frequently 
 happens, by reason of bankruptcy, as to goods, which are shipped but 
 not imported, to whom they belong. In those cases, this court gener- 
 ally orders the goods to be sold, and the money paid into the bank,
 
 Sec. 6) wno may execute a trust. 489 
 
 for the benefit of the parties who shall be entitled in the event. But 
 yet the broker is the hand to receive the money first. 
 
 Objection: She might have appointed another person to receive it. 
 
 The answer to that is : Nil agit exemplum, quod litem lite resolvit. 
 
 Objection: She might have taken security; but to do that upon 
 every occasion would tend greatly to the hindrance of business. 
 
 Therefore of opinion Mrs. Parsons ought not to be charged with 
 the value of the goods. 
 
 BOSTOCK v. FLOYER. 
 
 (In Chancery, before Sir John Romilly, Master of the Rolls, 1865. 35 Beavan, 
 
 003.) 
 
 In 1833 a sum of money was placed by Lord H. in the hands of Mr. 
 Wilmot, in trust for the plaintiff, Mrs. Bostock. 
 
 In 1853 Mr. Wilmot employed a Mr. Conyers, a solicitor in York- 
 shire in large practice and high repute, to procure an investment of 
 £400. 
 
 Conyers obtained possession of the £400. and represented that he had 
 laid it out on the mortgage of a copyhold property belonging to one 
 John Patrick Stephenson, and he forwarded to Mr. Wilmot a parcel 
 of deeds which was found amongst Mr. Wilmot's documents after his 
 decease. This parcel contained (inter alia) a copy of what purported 
 to be a surrender, dated 20th April, 1853, by John Patrick Stephenson, 
 to the use of Richard Coke Wilmot, his heirs and assigns, of two 
 closes, subject to a condition for making void! the surrender on pay- 
 ment by John Patrick Stephenson of said sum and interest on the 7th 
 day of the next ensuing July. 
 
 Interest was duly paid by Conyers to Wilmot and by him to the 
 plaintiff from 1853 down to Wilmot's death in 1856, and the interest 
 continued to be paid by Wilmot's executors or Conyers, from 1856 
 down to July, 1863. 
 
 In December, 1863, Conyers died, and in 1864 it was discovered 
 that the alleged mortgage was a mere fiction, that the copy surrender 
 to Wilmot had been signed by Conyers, the steward of the manor, 
 but that no such surrender ever existed. It further appeared, that 
 the property had been sold by J. P. Stephenson, to Conyers in 1856, 
 and that he had mortgaged it to third parties. 
 
 Mrs. Bostock instituted this suit in 1864, to make Floyer, the ex- 
 ecutor of Wilmot, liable for the £400. and interest. 92 
 
 The Master of the Roels. I am of opinion that the liability of this 
 trustee is fixed by the ordinary doctrine of this court. 
 
 Here is a gentleman who accepts the office ot trustee and receives 
 £400, he gives it to his solicitor to invest, the solicitor puts the money 
 into his own pocket and never invests it at all. It is the ordinary case 
 
 »2 The statement of facts is abridged.
 
 t90 Tin: DUTIES OF A TRUSTEE. (Ch. 5 
 
 of a trustee who is liable for the default of his solicitor. Mr. TIaynes 
 thinks that there is some difference, because a surrender of copy- 
 holds is forged by a solicitor, who was a steward of the manor, and 
 who writes a regular surrender of copyholds belonging to an existing 
 person and sends it to the trustee as evidence that he had invested the 
 money; but he was acting as solicitor for the trustee and was his 
 agent. There is no receipt for the purchase money, and, on searching 
 the rods, it i. foutid that the whole thing is a fiction. Roupell's case 
 is distinguishable from the present, for there the forgery was not that 
 of the mortgagee's solicitor. I fere a man employs an agent who cheats 
 him; the loss must fall on the trustee and not on the cestui que trust 
 wh( i never employed him. 
 
 I think the loss must fall on Wilmot, who selected this gentleman, 
 and did not take the precaution he might have taken to see whether 
 the mortgage had been made or not. u3 
 
 HOPGOOD v. PARKIN. 
 
 (In Chancery, before Sir John Romilly. Master of the Rolls, 1870. Law Re- 
 Reports, 11 Equity, 74.) 
 
 This was a suit by the children of Joseph Ilopgood and Honor, his 
 late wife, for the purpose of compelling James Parkin, the surviving 
 trustee of the settlement executed on the marriage of their parents, and 
 the representatives of Robert Govett, a deceased trustee, to make good 
 the loss sustained by the investment of the trust funds on a security 
 which had proved insufficient. 
 
 By a settlement dated the 3rd of March, 1842, and made on the mar- 
 riage of Joseph Ilopgood and Honor Davey, a sum of £10,000. 3 per 
 cent consols in possession, and a sum of i7,218. 2s. 3d., 3 per cent 
 Reduced Annuities in reversion expectant on the death of Maria 
 Davey, was settled on the usual trusts for the husband and wife and 
 issue of the marriage. The Rev. James Parkin and the Rev. Robert 
 Govett (since deceased) were the trustees of the settlement, and the 
 £10,000. consols were transferred into their names. 
 
 In 1855 the Rev. Robert Govett, William Govett Romaine and the 
 Rev. John Clement Govett, who were trustees of another settlement 
 (for the sake of distinction called the Govett family settlement), ad- 
 vanced £12,000. of the trust money belonging to that family to one 
 Henry Ernest on the security of a mortgage of his estate at LJanon, in 
 the county of Carmarthen. 
 
 The solicitor for the Govett trustees was Mr. Charles Albert Govett. 
 Mr. Ernest's solicitor was Mr. John Charles Williams, a partner in 
 the firm of Messrs. Goodwin, Williams, Edwards & Partridge. 
 
 os See In re Dewar, .",« \V. R. 497 (1885) ; In re Weall, L. R. 42 Ch. Div. 674 
 
 (INN!)).
 
 Sec. 6) WHO MAY EXECUTE A TRUST. 491 
 
 For the purpose of this mortgage the Llanon estate was valued by 
 Mr. Petherick, a surveyor recommended by Mr. John Charles Wil- 
 liams. The value placed on the estate by him was £19,047. 
 
 In June, 1857, Mr. Ernest gave notice of his intention to pay off 
 this mortgage. On the 15th of July, 1857, the mortgage was paid off, 
 and the estate reconveyed to Ernest. For this purpose a temporary 
 loan was in the first instance obtained from the Equity and Law Life 
 Insurance Office ; and then, in order to pay off this loan, John Charles 
 Williams, the solicitor of Mr. Ernest, negotiated with Charles Albert 
 Govett, who acted not merely as solicitor for the Govett trustees, but 
 also as solicitor for the trustees of the Hopgood family, to get an ad- 
 vance out of the money settled on the marriage of Mr. and Mrs. Hop- 
 good on the security of the estate. Maria Davey had then just died, 
 and £7,218. 2s. 3d. Reduced 3 Per Cents had fallen into possession, 
 and become subject to the trusts of the settlement. The advance was 
 agreed to by Charles Albert Govett, and sufficient of both funds of 
 £10,000. consols and £7,218. 2s. 3d. Reduced were sold out on the 31st 
 of July, 1857, to produce £13,000., which was advanced on the security 
 of a new mortgage by Ernest of the Llanon estate, dated the 3rd of 
 August, 1857. The property comprised in this mortgage, however, 
 was not exactly the same as that comprised in the former ; about two- 
 thirds of the estate included in the mortgage of 1855 was retained 
 and other property equal in quantity and value to the one-third omitted 
 was added to the new mortgage security. Mr. Govett, the solicitor, 
 received for his services a lump sum of £250. ; he made no new valu- 
 ation, no new inquiries. Having in his possession the abstract of title 
 delivered on the occasion of the mortgage of 1855, he did not require 
 any fresh abstract ; he never inquired whether there existed any prior 
 incumbrances; and he apparently trusted entirely to John Charles 
 Williams, who shortly afterwards became a bankrupt. The conse- 
 quence was that it turned out, first, that the property on which the ad- 
 vance was made was worth about £16,000., instead of £19,000.; and, 
 secondly, that there were two other mortgages on the estate, one dated 
 the 18th of March, 1857, for £4,000. and interest at 6 per cent per 
 annum, on the property included in the former mortgage, and another 
 for £3.500, at 5 per cent per annum, dated the 1st of July, 1857, on 
 another part of the property. 
 
 A suit of Hopgood v. Ernest was instituted to settle the priorities 
 of these mortgages, which were severely contested. In this suit, after 
 much litigation, only one of the two last mentioned mortgages was 
 ultimately held to be prior to that of the plaintiffs. The property was 
 sold, and it turned out, after taking the accounts of what was produced 
 by the sale and what was due to the first mortgagee for principal, in- 
 terest, and costs, that a loss of £6,555. 6s. 3d., or thereabouts, had been 
 sustained by reason of this advance by the trustees, and that nothing 
 could be recovered from Mr. Henry Ernest personally. 
 Honor Hopgood died in 1864.
 
 492 THE DUTIES OF A TRUSTEE. (Cll. 5 
 
 Lord Romiu.y. M. R. This case involves to some extent a question 
 of very considerable importance which, broadly stated and without 
 qualification, is shortly this: If trustees are defrauded, and by reason 
 of the fraud practiced upon them lose part of the trust estate, does the 
 loss fall upon them or upon their cestuis que trust? In Eaves v. Hick- 
 son, 20 T.eav. 136, T held thai if a person obtained trust property from 
 trustees by means of a forgery, the loss fell on them and not on the 
 cestuis que trust. I [ere the trustees advanced trust money on a prop- 
 erty sufficient to cover the mortgage if it were the first mortgage— the 
 fact of the existence of a prior mortgage was carefully concealed from 
 them; does the loss fall on them or on their cestuis que trust? 
 Though, in my opinion, this is the point which lies at the bottom of the 
 question to be decided here, yet there are in the present case many 
 qualifying circumstances on both sides which must be considered, and 
 which renders it necessary shortly to refer to the facts which are 
 proved in this cause: [His Lordship stated them, as above.] 
 
 The question is, on whom does this loss fall? First, it is material to 
 consider the course pursued by the solicitor of the trustees. It is true 
 that his conduct is not theirs; but he is appointed by them, he is their 
 agent for the management of the affairs of the trust, and if he mis- 
 conducts himself through ignorance or negligence, or wilfully, he is 
 answerable to the trustees, and they cannot, in my opinion, throw any 
 of the loss thereby incurred on their cestuis que trust. Now what is 
 the conduct of the solicitor in this case? It does not involve one iota 
 of moral turpitude. He acted, I have no doubt, as he believed, for the 
 best for all parties; but in so acting he did not display the caution 
 and vigilance which is to be expected from and is usually displayed by 
 a solicitor for his client. The dates of the mortgages plainly show this. 
 The mortgage of the Llanon estate to the Govett trustees was on the 
 13th of October, 1855. The mortgage to the Hopgood trustees was 
 on the 3rd of August, 1857. In the meantime, on one part of the 
 property included in the former mortgage, a mortgage for £4,000., with 
 6 per cent interest per annum, had been effected by Ernest, the mort- 
 gagor, by an indenture dated the 18th of March, 1857; and on another 
 part of the property a mortgage had been effected by Ernest, the mort- 
 gagor, for £3,500., with interest at 5 per cent per annum. It is true 
 that this latter mortgage, though prior in date, was postponed! to the 
 Hopgood trustees' mortgage but it was so after much expensive liti- 
 gation, the cost of which, when added to the debt, increases the de- 
 ficiency of the estate. 
 
 Though both these mortgages had been effected in the interval be- 
 tween the mortgage with Govett's trustees and that to Hopgood's trus- 
 tees, yet Mr. C. A. Govett, the solicitor, never inquired whether any 
 fresh incumbrances had been created, nor did he require a fresh ab- 
 stract to be delivered. Whether John Charles Williams would, if ap- 
 plied to, have disclosed the fact of there being two fresh incumbrances, 
 or whether, if required to furnish an abstract continued down to
 
 Sec. 6) WHO MAY EXECUTE A TRUST. 40.") 
 
 August, 1857, be would! have concealed these facts, it is not, in my 
 opinion, material now to consider. If he had done so, and wilfully and 
 knowingly deceived Mr. C. A. Govett by assertion of what was false, 
 or by the suppression of what was true, it might have altered the 
 character of the case and the liability of the trustees. But the trustees 
 are bound to employ competent persons, and if they do not the loss 
 must fall on them. The reason which Mr. Govett gives for not ask- 
 ing for a fresh abstract is singularly inappropriate ; it is that he had 
 already got it. This is true, but it came down to October, 1855. What 
 he wanted was an abstract down to August, 1857 ; or, if he dispensed 
 with that, he should have required a statutory declaration that no fresh 
 charge had been created on the property. All this he neglects, yet he 
 takes a liquidated sum for costs, as if he had gone regularly through 
 the investigation of title afresh, in the ordinary manner. The valua- 
 tion, also,- is very unsatisfactory. Mr. Govett, for this first mortgage, 
 employed Mr. Petherick, on the recommendation of the mortgagor's 
 solicitor, and he appears to me to have valued the property consider- 
 ably above its real value ; but this is not so material as the omission 
 to require that an abstract should) be furnished bringing the title down 
 to the time of the transaction in question, or, if not, the proper evi- 
 dence should be furnished that no further incumbrance had been 
 created prior to the 3rd of August, 1857, when the trustees were about 
 to advance the money. If the trustees of the Hopgood family had paid 
 off the mortgage to Govett's trustees, and taken an assignment of it 
 as a subsisting mortgage, it would have been different; but they do 
 nothing of the sort, they only require evidence to show that the first 
 mortgage to Govett's trustees had been paid off; and without any- 
 thing to show that fresh incumbrances had not been created, and thus 
 without evidence and without inquiry, they advance the money at once, 
 obtaining only a second mortgage on a property insufficient even for 
 a first incumbrance to that amount. I use the expression "they do 
 this," because it is exactly the same if it be done by the trustees them- 
 selves personally or by an incompetent or negligent agent. They must, 
 therefore, bear the loss and not the cestuis que trust, whom they 
 were appointed to protect. 
 
 The consequence is that I must make a decree compelling the sur- 
 viving trustee, Mr. Parkin, and the executors of the deceased trustee, 
 Robert Govett, to make good the loss sustained by the trust fund in 
 the circumstances I have above detailed of its having been advanced 
 on an insufficient security ; for which purpose the proper and neces- 
 sary accounts must be taken, with liberty to the Chief Clerk to adopt 
 the accounts taken in the suit of Hopgood v. Ernest; and if the 
 executors of Robert Govett, the deceased trustee, do not admit assets 
 sufficient for this purpose, there must be the usual account of his es- 
 tate, and the trustees must pay the costs of this suit. Of course, I 
 shall give C. A. Govett no costs ; but I cannot make him pay anything 
 in this suit.
 
 494 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 SPEIGHT v. GAUNT. 
 dn the court of Appeal, L882. Law Reports, 22 Chancery Division. 727.) 
 
 By his will dated the 16th of February, 1875, John Speight be- 
 queathed all his real and personal estate to Isaac Gaunt and Alfred 
 Wilkinson, whom he appointed trustees and, executors of his will, 
 upon certain trusts. Me died March 31, 1877. 
 
 Some of the security had been sold by one Cooke, a stockbroker 
 doing business at Bradford, and the proceeds paid into the Bradford 
 Hank to the credit of the trust account. Subsequently Cooke was em- 
 ployed by Gaunt to buy £5.000. stock of each of the corporations of 
 Halifax, Huddersfield and Leeds. 
 
 On the 24th of February, 1881, Cooke brought to Gaunt a "bought 
 note," filled up on a printed form as follows : 
 
 "John Cooke & Son, Stockbrokers, 
 Exchange Bank Street, Bradford, Feb. 24, 1881. 
 "To the executors of the late John Speight: 
 
 "We have this day bought for you as per your order, subject to the 
 rules of the London Stock Exchange : 
 
 Commissions 
 £ 5.000. Leeds Corporation Debenture Stock 105 >/ 2 nett 
 
 5,275. 
 
 5,000. Huddersfield do. 100 nett 
 
 5,000. 
 
 5,000. Halifax do. 100 nett 
 
 5,000. 
 
 £15.275. 
 "Account [Signed] John Cooke & Son." 
 
 Cooke said he wanted the money for these stocks to pay next day. 
 Gaunt signed three checks for £5,000. each to the order of Messrs. 
 John Cooke & Son. Cooke misapplied these checks to his own use, 
 filed a liquidation petition and then absconded. 
 
 Certain of the cestuis que trust brought their action against Gaunt 
 for a breach of trust and asked that he make good to the estate the 
 loss with 4 per cent interest. 
 
 Vice Chancellor Bacon decreed that Gaunt make good the £15,275. 
 (within 6 months) with interest at 4 per cent and costs. 
 
 From this decree Gaunt appealed. 
 
 Lindlkv, L. J. : " This case appears to me to be one of very great 
 importance, not only to Mr. Gaunt and the cestuis que trust, but also 
 to trustees in general who have to invest money or do invest money 
 through brokers. 
 
 94 The concurring opinions of Jessel. M. K.. and Kowen, L. J., are omitted. 
 The House of Lords affirmed, 9 App. Gas. 1 (1S83).
 
 Sec. 6) WHO MAY EXECUTE A TRUST. 49," 
 
 The first observation to be made is that this is a ease in which the 
 trustee is not even accused of having acted in any way with a view to 
 his own benefit, or otherwise than with perfect bona fides and honesty, 
 a remark which of course is important, because one approaches such 
 a case in a different state of mind from that with which one would 
 approach a case if one were dealing with a dishonest trustee. 
 
 The next remark is that the trust for investment was so worded 
 that nobody pretends that the investment of the trust property in de- 
 bentures or debenture stock of these corporations was not within the 
 investment clause. It is not suggested that it would be a breach of 
 trust on the part of the trustee in this case to invest the trust money 
 in that kind of securities in which he directed the broker to invest it. 
 
 Now what the trustee did in this case was this. Some of the trust 
 moneys to the extent of £13,000. had been paid over, and in that trans- 
 action Mr. Cooke, I understand, had been employed. He was the 
 family broker. He was not the broker whom Mr. Gaunt generally 
 employed in his own business, but he was a person recommended by 
 the family. I do not attach much importance to that, but it is a cir- 
 cumstance which should, I think, be mentioned. Mr. Cooke at the time 
 was a broker in good repute. He was a person to whom an ordinary 
 prudent man desiring to employ a broker in Bradford would have 
 recourse. Then Mr. Gaunt, being desirous of investing £15,000. in 
 debentures or securities of these corporations, intrusts Mr. Cooke to 
 make the investment. 
 
 The first point that occurs to my mind is this, Was it proper for the 
 trustee to employ Mr. Cooke in the transaction at all? Because if it 
 was not, I take it that .the trustee must be responsible for the conse- 
 quences. A trustee has no business to cast upon brokers or solicitors 
 or anybody else the duty of performing those trusts and exercising 
 that judgment and discretion which he is bound to perform and exer- 
 cise himself. On the other hand, a trustee is not bound to do every- 
 thing himself. A trustee is entitled to employ a broker and solicitors 
 to do that which in the ordinary course of business other people would 
 employ brokers and solicitors to do. 
 
 The real importance of this case is, that it lies between these two 
 propositions — that a trustee cannot delegate his trust, and that, on 
 the other hand, he is entitled to employ persons to do that which an 
 ordinary man of business would employ an agent to do. Now, look- 
 ing at the matter fairly and properly as a business man would look 
 at it, can it be said to be an improper thing on the part of a trustee 
 wdio is desirous of investing £15,000. in this class of securities to go 
 to a broker ? That he might have acted otherwise is plain enough ; but 
 was it a reasonable and proper thing not to apply to the secretaries or 
 treasurers of these corporations, but to employ a broker for that pur- 
 pose? So far as the evidence goes, it appears to me that on the balance 
 of the evidence it is impossible to say that this was an improper step 
 for a trustee to take. Although business men can do these things for
 
 496 Tin: duties of a trustee. (Ch. 5 
 
 themselves, unless we can go the length of saying that the employment 
 of Mr. Cooke was an improper delegation of the trust or an improper 
 employment, it will follow that it was nol an unreasonable thing or a 
 
 breach of trust to employ a broker to do this kind of work; and the 
 conclusion that 1 have arrived at on that point is that we cannot say 
 the trustee, acting honestly, was not entitled to employ a broker to do 
 
 this kind of business. 
 
 Then the next thin-- is, what did Mr. Gaunt employ Mr. Cooke to 
 do? He employed him to invest this money in these securities. He 
 did not tell him or suggest to him how it had better be done, he did 
 not know, and I do not think he was bound to ascertain, whether these 
 securities were in the market in the ordinary commercial sense, or 
 where Mr. Cooke was to get them from; he left that to Mr. Cooke's 
 discretion, and I think he was not guilty of negligence in so doing. 
 Mr. Cooke told him he would get them for him. There had been 
 apparently some discussion as to the class of bonds, Mr. Gaunt pre- 
 ferring to have Halifax bonds, and although Mr. Cooke said there 
 would be some difficulty about Halifax bonds, the result is that he 
 comes to Mr. Gaunt and says that he has got them, that is that he 
 has got £5,000. Halifax corporation debenture stock. I do not at- 
 tach much importance to the distinction pointed out between debentures 
 and debenture stock. The substance of the thing is what was wanted 
 was securities of these corporations, whether debentures or debenture 
 stock. Nothing turns upon that so far as I can see. Mr. Gaunt would 
 have been satisfied with either, and either wouldi be within the trust. 
 
 I now come to the bought note, which is a very important docu- 
 ment, and I confess I cannot look at it from the same point of view 
 as Vice Chancellor Bacon did. The bought note is a printed form, 
 filled up, of course, with a pen. Judging from the words of the docu- 
 ment, and from the appearance of it, and bringing to bear upon it the 
 knowledge which every one has of the ordinary transactions of busi- 
 ness, I confess this document would have completely misled me. I 
 could not possibly, looking at it with the utmost care and vigilance, 
 such as an ordinary man would exercise, extract from this document 
 the -lightest information or notice that this was a purchase other than 
 in the ordinary course of business on the Stock Exchange. If it 
 would mislead a person like myself, why should it not mislead others? 
 1 am quite aware that experts have been called who say that, to their 
 experienced eyes, there are signs on this document which indicate, to 
 them at any rate, irregularities ; but the question is not whether experts 
 like brokers or those who are accustomed to deal in these things see 
 irregularities; the question is, whether these signs of irregularity are 
 such as would attract the attention of an ordinary prudent man of 
 business. 
 
 There is no irregularity of that sort at all in it that T can discern. 
 It is a question of fact, and not a question of law, whether upon the 
 face of this document there are or are not such signs of impropriety
 
 Sec. 6) WHO MAY EXECUTE A TRUST. 497 
 
 as to excite the suspicion of anybody. Nobody suggests any, except 
 that the experts say that there are signs which would put them on 
 inquiry. 
 
 Now the signs which are visible to them are apparently these : First 
 of all, the absence of the name of the selling broker, of which I do not 
 think much ; and, secondly, the fact that there is nothing charged for 
 stamps or commission, and no date for the settlement of the account. 
 The absence of a charge for commission is explained by the fact that in 
 the commission column, the word "commission" being in print, under it 
 is written "nett," that is to say that the purchase was to be for a nett 
 price. Then it is said that the word "account" being printed, it ought 
 to have been followed by a date, and that a broker would look with 
 suspicion on a document with the word "account" in it not followed 
 by the date. I do not pretend to say that there are not signs of suspi- 
 cion to the eyes of a broker, but we are not looking at it with the eyes 
 of a broker. We are looking at this document with the eyes of ordinary 
 men of business, and there is so evidence to show that there is anything 
 which would lead an ordinary man of business to suppose that there 
 was anything wrong. I am not able to come to the conclusion that Mr. 
 Gaunt was put on inquiry, or ought to have been put on inquiry, as 
 a reasonable and cautious man. If anything was calculated to lull 
 suspicion in his mind, this document was, in my opinion, calculated to 
 do so. That he was deceived is plain enough upon the evidence, but 
 I cannot see that blame is to be imputed to him for not suspecting that 
 there was something wrong. Upon this point, and it is a question of 
 fact not of law, I differ from the Vice Chancellor, who seems to have 
 been more impressed than I am with the evidence of the experts, and 
 to have looked at this paper with the eyes of an expert, and too little 
 with the eyes of an ordinary man of business. 
 
 Now. assuming that the trustee was justified in employing Mr. 
 Cooke, and assuming that he was not negligent in not having his sus- 
 picions aroused when this document was brought to him, the next 
 question is, was he acting improperly in paying the purchase money 
 to the broker? That is to say, ought he, as a prudent man of business, 
 to have paid it to somebody else, namely, to the principals from whom 
 the broker ought to have got, but did not get, these securities, whether 
 upon the Stock Exchange or otherwise? If the trustee had notice, and 
 really did know that these things had not been bought on the Stock Ex- 
 change, it is quite possible that he ought so to have paid it. I say nothing 
 about that. It might be that in that case the trustee would be bound 
 to see further into the application of the money ; but, misled as he 
 was, and! entitled as he was to treat these things as bought by the broker 
 in the ordinary way of his business as a broker on the Stock Exchange, 
 it appears to me that it is perfectly impossible to hold that he was 
 bound to see to the application of the money, in the sense that he was 
 bound to pay the persons with whom the broker negotiated the pur- 
 Kbn.Tb.— 32
 
 •I'.IS THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 chase. We know the way in which business is done through brokers 
 in buying ordinary stock. 1 1' a broker buys £10,000. of stock there 
 are sometimes half a dozen people from whom he gets the stock. It 
 i- not in the ordinary course of business for a buyer, whether a trustee 
 or not, to pay to persons from whom the broker has bought ; he pays 
 the broker. He is entitled to do that by the ordinary course of busi- 
 ness. 1 do not myself understand that there is any evidence that, in 
 point of fact, a trustee or any other person employing a broker to buy 
 could do it in any other way. As a matter of business I believe he 
 could not. At all events, the evidence is conclusive that the ordinary 
 practice in employing a broker on such occasions is to send a check 
 to the broker. There was. therefore, no negligence in Mr. Gaunt 
 doing -o; there was no impropriety or breach of trust in his conduct 
 up to this point. 
 
 Then if we look a little farther, we shall see how the thing was done. 
 Mr. Gaunt did not find out, nor could he by reasonable diligence have 
 found out anything which would lead him to stop his own checks. If 
 anything could be brought home to him to show that he was negli- 
 gent in not stopping his checks the case would have been quite dif- 
 ferent; but there was nothing to justify him in doing so, there was 
 nothing sufficient to excite his suspicion. 
 
 Then it is said that there was negligence in not getting the securi- 
 ties. If the ordinary course of business had been that the securities 
 should be exchanged for the checks, of course it would be different; 
 but that is not the ordinary course of business. You pay the broker 
 and he gets you the securities. He sees to all that. That is the ordi- 
 nary course of business. It is very true that the broker did not fail 
 for three weeks or a month afterwards, but so far as the evidence goes 
 it seems to me clear to demonstration that no discovery Mr. Gaunt 
 could have made after the checks were cashed could have saved the 
 property. If he was not negligent in not looking after the matter 
 during the month. I do not see that the lapse of time or the so-called 
 negligence caused the loss. The loss was anterior to that negligence, 
 if negligence there were. I have made these observations in conse- 
 quence of the passage that has been read from the judgment of the late 
 Lord Hatherly in Mendes v. Guedalla, 2 J. & H. 259. I have looked at 
 the case since it was cited, and it appears to me, having regard to the 
 facts which were before the court, that the passage which was read 
 does not go to the length contended for, so far as I can understand it. 
 In that case there was negligence in not looking after the securities, 
 the negligence was long continued, and but for that negligence and 
 if inquiry had been made the securities might have been got back. 
 The charge there was that the trustees trusted the agent for several 
 years, and that they put the securities in a box and never asked any- 
 thing about them. There is no doubt that in that case there was not 
 only negligence, but the evidence was such as to show that but for the 
 negligence the loss would not have been incurred. As to Mr. Gaunt
 
 Sec. 6) WHO MAY EXECUTE A TRUST. 499 
 
 not asking for and not getting these securities, the time was short, and 
 the misappropriation of the fund had taken place, and I am satisfied 
 myself that the loss would have been sustained all the same if he had 
 asked for them. In other words the cause of the loss was not the want 
 of inquiry by Mr. Gaunt, but the fraud which was practiced upon him. 
 
 Now I do not propose to go through the authorities, but I will 
 advert to two cases, because they have been brought to the attention 
 of the court and they require notice. One is Bostock v. Floyer, in 
 which Lord Romilly held that a man was responsible for the sum of 
 £400. which he had given to his solicitor to invest. The solicitor had 
 pretended to invest it on a mortgage of some copyholds, but he had 
 not done so, and the money was lost, and the trustee was held re- 
 sponsible. As I understand it the ratio decidendi of the case was this, 
 that it was not the ordinary course of business for a trustee to place 
 money in the hands of a solicitor to invest. It was not a specific in- 
 vestment, it was handed to the solicitor, and in that point of view the 
 case is intelligible enough upon the ground that it was not right for 
 the trustee to hand over the money to the solicitor for the purpose of 
 investment. The other case was Hopgood v. Parkin, cited by Mr. 
 Millar. That case certainly goes much further than I should have 
 thought right ; but in the result the case was appealed. An infant 
 was concerned, and the Court of Appeals sanctioned a compromise on 
 behalf of the infant. 
 
 I wish most emphatically to say that if trustees are justified by the 
 ordinary course of business in employing agents, and they do employ 
 agents in good repute and whose fitness they have no reason to doubt, 
 and employ those agents to do that which is in the ordinary course of 
 their business, I protest against the notion that the trustees guarantee 
 the solvency or honesty of the agents employed. Such a doctrine would 
 make it impossible for any man to have anything to do with a trust. 95 
 I differ from the Vice Chancellor upon the question of fact : the prin- 
 ciples of law, which he stated in the first part of his judgment are en- 
 tirely sound, but I differ from the conclusion at which he arrived on 
 the bought note, and so differing from him I can not agree with the 
 judgment which he pronounced. 
 
 Re PARTINGTON. 
 PARTINGTON v. ALLEN. 
 
 (In Chancery, before Stirling, Justice, 1887. 57 Law Times Reports. 654.) 
 
 In this case an originating summons was taken out by Mrs. Part- 
 ington, one of the trustees of the will of the testator, W. H. Parting- 
 ton, asking for a declaration that the trustees were not chargeable with 
 
 95 See In re Bird, L. R. 16 Eq. 203 (1S73) ; Rochfort v. Seaton, [1896] 1 
 Ir. R. 18 ; Christy v. McBride, 2 111. 75 (1S32) ; Holeman v. Blue, 10 111. 
 App. 130 (1881).
 
 500 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 any breach of trust in respect of their having invested moneys subject 
 to the trusts of the will upon certain securities therein mentioned; or 
 that if any such breach of trust was chargeable it might be declared that 
 the defendant Allen was primarily liable in respect thereof, and he 
 might be ordered to make good any loss occasioned thereby. The de- 
 fendants were Mr. Allen, the other trustee, and Mr. James Parting- 
 ton, a sun of the testator, and one of the beneficiaries under the will. 
 The testator died in 1876, having by his will, dated the 29th of May, 
 1875, appointed his wife ( the plaintiff), J. Janion (since deceased), and 
 the defendant Allen, with whom he had been in partnership as a solic- 
 itor, his trustees and executors. After certain bequests and directions, 
 he directed that his trustees should appropriate out of his personal es- 
 tate and invest £30,000., and pay the income to his wife during widow- 
 hood, and after her death, or second marriage, that sum was to fall 
 into the residue, which he directed to be held upon certain trusts in 
 favor of his children by a former marriage. The investments au- 
 thorized for the trust funds were (inter alia) freehold, copyhold, 
 or leasehold securities in England or Wales (such leaseholds, if for 
 years, having sixty years to run). And the testator directed that 
 his trustees, J. Janion, or the defendant Allen, if he should be em- 
 ployed as the solicitor to his trustees, should be allowed all profes- 
 sional charges. 
 
 The trustees made various investments from time to time, and, 
 amongst others, the three mortgages out of which these proceedings 
 arose, viz., a mortgage for £2,500. on a freehold property at Staly- 
 bridge, and two mortgages for £2,400. and £1,500. respectively on 
 land and houses at Goole. All of these mortgages carried interest at 
 5 per cent. The Stalybridge property consisted (according to the 
 particulars given by the proposed mortgagor) of a public house, rent 
 £200. ; three cottages, rent 3s. each, £23. 8d. ; and six-stall stable and 
 coachhouse, at a rent of about £30., and some land, the whole sub- 
 ject to a chief rent of £6. 18s., and producing altogether a rent of 
 £246. 10s. With reference to this security, Allen, on the 8th Jan., 
 1878, wrote to a firm of surveyors, at Manchester, as follows: 
 
 "We shall feel obliged if you will value the freehold property at 
 Stamford street, Stalybridge, whereof the particulars are contained 
 in the plan sent herewith, and are also described on the other side. 
 The valuation is required for mortgage purposes, and your valuation 
 should state not only the value of the property, but also the maximum 
 amount which might in your opinion be safely lent by way of first 
 mortgage thereon by trustees. We understand that the George Hotel 
 was opened only on the 13th Oct. last as a fully licensed house, and that 
 the present tenant thereof is the son-in-law of Mr. John Marsland, 
 the owner of the property, who has informed us that he resides also 
 in the hotel. * * * You will be good enough also to check the 
 correctness of the rentals, and insert the particulars of the tenancies 
 in your valuation."
 
 Sec. 6) WHO MAY EXECUTE A TRUST. 501 
 
 The surveyors wrote in reply, saying that they had surveyed the 
 property, which they described, stating it to be subject to an annual 
 chief rent of £6. 10s., and that in their opinion the value of the whole 
 was £4.174., and it was a good and sufficient security for an advance 
 on mortgage of £3,130. Mr. Allen subsequently saw the surveyors and 
 pointed out that they had not stated whether they had checked the 
 rentals, when they replied that they had done so, and that the rents 
 then payable were correctly stated in the particulars set out in his 
 letter. Upon this £2,500. was advanced upon this security. 
 
 As regards the mortgage for £2,400. on property at Goole, Allen, 
 in the name of his firm, on the 30th of March, 1878, wrote to Fox 
 and Sons, surveyors of Leeds, the following instructions : 
 
 "On the other side we send you short particulars of a property at 
 Goole, upon which we have been requested to lend some money on 
 mortgage, and which our clients will be prepared to do subject to 
 vour furnishing us with a satisfactory valuation of the property. We 
 do not know who are the owners of the property, but the business has 
 
 been introduced to us by Mr. Gardiner, of the Office, Leeds, 
 
 and to whom we have sent this letter for delivery to you in order that 
 he may negotiate with you respecting the amount of your fee for 
 making the required valuation, but for payment of which we, as be- 
 tween you and ourselves, are of course responsible. Please take care 
 to state in your valuation, not only what you consider to be the valu- 
 ation of the property, but also the amount which may safely be ad- 
 vanced on mortgage thereon, and of course a better identification 
 should be inserted in the valuation than appears in the particulars." 
 
 The letter then went on to say that Messrs. Fox would of course ex- 
 ercise their independent judgment as to the valuation of the property, 
 but giving them a reference to a person at Goole if they wanted in- 
 formation as to it, or the tenants, or the possibility of its always being 
 well tenanted, whatever might be the state of trade or otherwise in 
 Goole for the time being. 
 
 The particulars (as furnished by the proposed mortgagor) were: 
 "Freehold property, situate in Goole, and comprising twenty-one 
 houses, let at 4s. per week each — £218. 8s. One house and shop let 
 at an annual rent of £20.— £238. 8s.; less rates, etc., £21.; total valua- 
 tion £217. 8s." 
 
 Messrs. Fox, on the 10th April, 1878, made a report that the prop- 
 erty consisted of modern and substantial dwellings, occupying an 
 acre of 1,770 square yards, and produced a net rental of £217., and 
 that they were of opinion that the property was worth £3,884., and 
 was a very ample security for a loan on mortgage of £2,000. ; that the 
 property was generally fully occupied, and the leakages trifling. 
 
 On the 11th April, 1878, Allen wrote to Mrs. Partington, inclosing 
 particulars of this security, which, he said, had been recently submitted 
 to him, and "so necessary was it in order to retain the first option of 
 accepting or declining the same, that I at once instructed Messrs. Fox
 
 ."jl)2 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 and Sons * * * to inspect and value the property without delay, 
 and I inclose also copy of their valuation." lie also said that they 
 were at liberty to decline the security if either of them thought fit, 
 but he should regret the loss of the same, having regard to the great 
 difficulty of new obtaining good mortgage securities at 5 per cent. 
 
 On the 16th .May Allen again wrote to Mrs. Partington, saying that 
 Mr. Middlewood, the owner of the property, had informed him that 
 he could dispense with obtaining a further loan for £800., if the 
 trustees would lend £2.400., instead of £2.000. only, on the property 
 referred to in the valuation of the 10th April; that he had at once 
 written to Messrs. Fox, asking whether they could advise the loan be- 
 ing increased, and heard from them that the property was a very 
 ample security for such increased sum. and said, "I presume you will 
 agree with me in deciding to let the same be advanced." Messrs. Fox 
 had on the 15th May 1878 altered their valuation of the 10th April by 
 adding in red ink, after £2,000., the words "or £2,400. if required." 
 Mrs. Partington agreed to the proposal and the £2,400. was advanced. 
 
 In the case of the £1,300. mortgage, the particulars were not ma- 
 terially different from those in the case of the other two, and need 
 not be stated in the report. 
 
 On the 24th Jan., 1879, Mr. Marsland was adjudicated bankrupt, 
 and in March, 1879, Mr. Middlewood liquidated his affairs by ar- 
 rangement. Default having been made in payment of the interest un- 
 der the mortgages, the trustees entered into possession of the several 
 properties, and shortly afterwards put them up for sale, but no sale 
 was effected, the highest bids being less than the amounts advanced. 
 In August, 1885, the Stalybridge property was sold for £1,000., and the 
 two properties at Goole were subsequently sold together, under an 
 order of the court, for £1,600. 
 
 Under these circumstances the plaintiff took out her summons. On 
 the 13th May, 1886, an order was made directing inquiries, and on 
 the 30th April, 1887, the Chief Clerk made his certificate. He found 
 that the mortgage on the Stalybridge property was a proper invest- 
 ment, but that the other two mortgages on the properties at Goole 
 were improper investments, and the trustees were responsible for the 
 same. 
 
 Summonses were taken out by the different parties to vary this cer- 
 tificate. The plaintiff and the defendant Allen asked that the second 
 and third mortgages might be stated to be proper investments, and the 
 defendant Partridge that the first mortgage might be declared to be an 
 improper investment. They were adjourned into court, and now 
 came on for hearing. This was also the further consideration of the 
 art i<.n. It was arranged that the question of the liability of the trus- 
 tees to the cestuis que trust should be dealt with first, and the ques- 
 tion between the two trustees afterwards. 
 
 Stirling, J. These summonses raise the question, which is always 
 an unpleasant one, whether certain investments on mortgage which
 
 Sec. 6) wno may execute a trust. 503 
 
 have been made by the trustees of the will of the testator in the action 
 are improper investments, and, if .so, whether the trustees, or either 
 of them, are, or is, responsible for the loss which has been occasioned 
 to the trust estate. Now, the law on the subject has been recently con- 
 sidered to a very considerable extent, both by the Courts of first in- 
 stance, and by the Court of Appeal, and by the House of Lords, par- 
 ticularly in two cases of Re Speight ; Speight v. Gaunt, and Re White- 
 ley; Whiteley v. Learovd. In the case of Speight v. Gaunt, when he- 
 fore the Court of Appeal, 48 L. T. Rep. N. S. 279 ; 22 Ch. Div. 727, the 
 Master of the Rolls (Sir George Jessel) says this: "In the first place, 
 I think we ought to consider what is the liability of a trustee who 
 undertakes an office which requires him to make an investment on be- 
 half of the cestui que trust. It seems to me that on general principles a 
 trustee ought to conduct the business of the trust in the same manner 
 that an ordinary prudent man of business would conduct his own, and 
 that beyond that there is no liability or obligation on the trustee." In 
 the case of Whiteley v. Learoyd, which came before the Court of Ap- 
 peal, that was commented upon, and accepted, subject to this qualifi- 
 cation, laid down by all the judges, I think, in the Court of Appeal, 
 but more particularly by Lindley, L. J. He says : "I accept this prin- 
 ciple" — which is the one that I have just read — "but, in applying it, 
 care must be taken not to lose sight of the fact that the business of 
 the trustee, and the business which the ordinary prudent man is sup- 
 posed to be conducting for himself, is the business of investing money 
 for the benefit of persons who are to enjoy it at some future time, 
 and not for the sole benefit of the person entitled to the present in- 
 come. The duty of a trustee is not to take such care only as a pru- 
 dent man would take if he had only himself to consider; the duty 
 rather is to take such care as an ordinary prudent man would take if 
 he were minded to make an investment for the benefit of other people 
 for whom he felt morally bound to provide." That is one principle 
 which is always to be had regard to in considering the propriety of an 
 investment. Another principle, which is also laid down in both cases, 
 is this : that a trustee is not bound to do everything in executing the 
 trust himself; he may avail himself of the services of people whose as- 
 sistance or advice he requires. For example, he may avail himself 
 of the assistance of a broker, if the investment is one which requires 
 the services of a broker ; of a valuer, if the investment be one, such as 
 the purchase or mortgage of land, which requires the services of a 
 valuer; and he can avail himself of the services of a solicitor as re- 
 gards matters as to which he requires legal advice and assistance. But 
 that, again, is subject to this qualification ; that he must not. in availing 
 himself of the services of such persons, delegate to them the duties 
 which, by accepting the trust, he has agreed himself to perform. In 
 Speight v. Gaunt, Lindley, L. J., says: "A trustee has no business to 
 cast upon brokers, or solicitors, or anybody else, the duty of perform- 
 ing those trusts, and exercising that judgment and discretion, which he
 
 ."04 THE DUTIES OF A TRUSTEE. (Cll. 5 
 
 is bound to perform and exercise himself. On the other hand, a trus- 
 tee is not bound to do everything himself. A trustee is entitled to em- 
 ploy brokers and solicitors to do that which, in the ordinary course of 
 business, other people would employ brokers and solicitors to do. The 
 real importance of this case is, that it lies between two propositions — 
 that a trustee cannot delegate his trust, and that, on the other hand. 
 he i> entitled to employ persons to do that which ordinary men of 
 business would employ an agent to do. Now, looking at the matter 
 fairly, and properly, as a business man would look at it, can it he said 
 to be an improper thing on the part of a trustee who is desirous of 
 investing £15.000. in this class of securities to go to a broker? That he 
 might have acted otherwise is plain enough, but was it a reasonable 
 and proper thing not to apply to the secretaries or treasurers of these 
 corporation-, but to employ a broker for that purpose? So far as 
 the evidence goes, it appears to me that on the balance of the evidence 
 it is impossible to say that this was an improper step for a trustee to 
 take. Although business men can do these things for themselves, un- 
 less we can go the length of saying that the employment of Mr. Cooke 
 was an improper delegation of the trust, or an improper employment, 
 it will follow that it was not an unreasonable thing or a breach of trust 
 to employ a broker to do this kind of work ; and the conclusion that 
 I have arrived at on that point is that we cannot say the trustee, act- 
 ing honestly, was not entitled to employ a broker to do this kind of 
 business. Then the next thing is, what did Mr. Gaunt employ Air. 
 Cooke to do? lie employed him to invest this money in these securi- 
 ties. He did not tell him or suggest to him how it had better be 
 done; he did not know, and I do not think he was bound to ascer- 
 tain, whether these securities were in the market in the ordinary com- 
 mercial sense, or where Mr. Cooke was to get them from. He left 
 that to Mr. Cooke's discretion, and I think he was not guilty of neg- 
 ligence in so doing." Those qualifications were again observed upon 
 and enforced by all the judges of the Court of Appeal in Whiteley v. 
 Learoyd, and Lindley, L. J., whose judgment I will read, because he 
 puts it shortly and clearly, refers to that in these terms. In dealing 
 with the investment which had been made in that case, he says: "One 
 observation applies to both of them, viz., that the trustees acted bona 
 fide, and obtained and acted on the advice of a solicitor and valuer 
 who were apparently competent men in their respective professions. 
 It was contended on behalf of the trustees that this circumstance 
 alone was enough to exonerate the trustees from liability. But this 
 contention goes too far. If it were to prevail, the court would, in 
 effect, decide that trustees could delegate their trust to any competent 
 persons, and so terminate their own responsibility. This, however, 
 trustees cannot do. They may and must seek advice on matters they 
 do not themselves understand; but, in acting on advice given to them, 
 they must act with that prudence which I have already endeavored to 
 describe." So that therefore the result of these two cases is this:
 
 Sec. 6) WHO MAY EXECUTE A TRUST. 505 
 
 that trustees may avail themselves of the assistance and advice of oth- 
 er persons in the ordinary course of business; but that, having ob- 
 tained that advice and assistance, they are not to adopt it blindly, but 
 exercise on it the judgment which an ordinary prudent person, acting 
 in the way described by Lindley, L. J., would act in reference to his 
 own matters. So much for the general principle by which trustees 
 are to be guided. But, with reference to investments on mortgage, 
 there is something still further to be considered. This court and its 
 officers from long experience have arrived at what I cannot call a 
 rule of law, but a general result of experience, as to the extent to 
 which trustees may safely go in making advances upon real security. 
 The rule has again been considered in recent cases, and particularly by 
 Kay, J., in the case of Fry v. Tapson, and in the case of Re Olive; 
 Olive v. Westerman. He states the rule in the last case from Mr. 
 Lewin's book on Trusts, in these terms : "Trustees cannot be ad- 
 vised to advance more than two-thirds of the actual value of the es- 
 tate, if it be freehold land; and if the property consists of freehold 
 houses, they should not lend so much as two-thirds, but, say one-half 
 of the actual value. The rule, however, of two-thirds, or one-half, 
 is only a general one ; and where trustees have lent on the security 
 of property of less value, but have acted honestly, they have been 
 protected by the court, and have been allowed their costs. As to 
 buildings used in trade, and the value of which must depend on ex- 
 ternal and uncertain circumstances, trustees will not in general be jus- 
 tified in lending so much as one-half." Then the learned Judge con- 
 tinues : "No one ever said that the rule as to lending not more than 
 one-half the value of house property was a hard and fast rule. Of 
 course, when applying that rule, all the circumstances must be looked 
 at. But surely trustees when they are lending trust moneys upon 
 house property, knowing, as I must take them to know, the rule which 
 has been certainly followed since 1836, should tell their valuers that 
 they are lending trust moneys, and that they do not desire to lend 
 more than one-half the actual value of the property. They should ask 
 for a valuation which would enable them to judge whether they are 
 justified in loaning the amount they propose to loan." Now that 
 rule is certainly one which in the chambers attached to this court is 
 constantly acted on. If, for example, an application is made in an ad- 
 ministration action by trustees for the sanction of the court to lend 
 money on mortgage, and the valuation was produced, the first thing 
 the Chief Clerk would consider would be whether the amount pro- 
 posed to be advanced was within the limit stated in that rule, and if 
 it exceeded that limit, the person proposing to make the advance 
 would immediately be required to make an explanation, and to justify 
 his proposal. It appears from the judgment which I have just read of 
 Kay, J., that trustees may now be supposed to know this rule, and 
 have regard to it ; and certainly if, in point of fact, a trustee is found 
 to know it, and he is found to deviate from it, I apprehend there is
 
 506 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 no question but that he is called on to justify what he does, and to 
 explain bow he came to deviate from the rule thus laid down. Now, 
 in the present case, the trustees who have made these investments are 
 trustee^ both of whom are named iii the will. They are the tenant 
 for life, the widow of the testator, who was himself a solicitor, and 
 his partner in the business of a solicitor, Mr. Allen. [His Lordship 
 referred to the terms of the will, and continued:] The trust estate 
 has been, to a very large extent, invested on mortgage. It appears 
 that not fewer than twenty mortgages for various sums have been 
 taken by the trustees as investments, all of them, I think, with the 
 exception of one, carrying interest at 5 per cent.; and it appears from 
 the admissions which have been put in evidence with reference to the 
 bills of costs, that hills of costs to a considerable amount have been 
 paid in respect of the work done by Mr. Allen's firm for the estate, 
 and in connection, as I understand, with these mortgages and other- 
 wise. Mr. Allen took the more active part, to say the least, in making 
 these investments, which are now called in question, and I propose 
 first to deal with the case as between the cestuis que trust and with 
 him, and then afterwards to consider the liability of Mrs. Partington, 
 his co-trustee. Xow a trustee, when his conduct with reference to an 
 investment on mortgage is challenged, has two courses open to him. 
 lie may, in the first place, say that he, in making the investments, 
 acted as an ordinary man of prudence would do ; that he employed a 
 proper solicitor and a proper valuer; that he gave them all proper 
 and necessary instructions ; that he received from the solicitor and 
 from the valuer opinions and valuations which, on the face of them, 
 justified him in acting as he did ; and he may say that that being 
 so, if it turns out there is a mistake in the opinion or the valua- 
 tion, on the faith of which he acted, that is the misfortune of the 
 cestui que trust, but is not to be attributed to him as a fault. In 
 the cases which I have to consider that defence is relied on. Then 
 the trustee has also got what I may call a second line of defence. 
 Supposing it turns out that the valuations or opinion cannot be re- 
 lied on, it is still open to him to show that, notwithstanding that, 
 the investment is such as an ordinary man of prudence would 
 have made at the time, and that it is a proper security. In that case 
 the burden of showing it, I apprehend, clearly lies on the trustee who 
 asserts this to he the case. [His Lordship then stated the facts as to 
 the advance upon the Stalybridge property, and continued:] Now, 
 upon these instructions, some observations occur. In the first place, 
 Mr. Allen so far complies with the rule laid down by Kay, J., that he 
 informs the valuer that the proposed lenders are trustees. But he 
 does not follow the rule completely, because that is only half of what 
 Kay, J., said. Kay, J., said trustees "should tell their valuers that 
 they are lending trust moneys, and that they do not desire to lend 
 more than one-half the actual value of the property." Therefore, he 
 did not completely comply with the requirements as laid down by Kay,
 
 Sec. 6) WHO MAY EXECUTE A TRUST. 507 
 
 J., and it was the more imperative on him to do that in this case, be- 
 cause the property is not mere house property, as was the case in 
 Olive v. Westerman. It partly consisted of an hotel, and the rent 
 might depend to a considerable extent on the license, and on the specu- 
 lative nature of the business that was carried on there. Therefore I 
 think he ought to have directed the attention of the surveyors to that 
 subject, and have ascertained actually what value could be attributed 
 to the property independently of its occupation as an hotel. But I 
 think there is more than that. The property is stated in the letter, 
 and was known to Mr. Allen to be in the occupation of the son-in-law 
 of Mr. Marsland, and he also knew that Mr. Marsland, the owner, 
 himself resided in the hotel, and that it was only opened as an hotel 
 on the 13th Oct. preceding. He also either knew, or ought to have 
 known, as the fact was, that there was no written agreement what- 
 ever for the tenancy. Now, when it is stated the property is let at 
 so much, and the relation of landlord and tenant really subsists, the 
 rent reserved is some evidence, at least fair evidence, of what the 
 annual value of the property is, but where it has only been occupied 
 for a short time by a son-in-law of the owner, and the owner himself 
 is living in the house, the nature of the relationship is such that no 
 guide as to the annual letting value can be derived from the rent, 
 which is stated to be reserved. I think, therefore, that it was the 
 duty of Mr. Allen pointedly to call the attention of the valuers, if he 
 meant to rely on this valuation, to this circumstance, and to ascertain 
 what the real annual value of the property was, and that it is not 
 enough for him to say that the proposed mortgagees are trustees, and 
 assume that the valuer on that will give him a correct valuation which 
 will enable him to act without exercising any judgment in the matter. 
 But it does not stop there, because, so far from directing him to in- 
 quire into the annual letting value of the property, he gave instructions 
 simply to check the correctness of the rentals, and therefore the in- 
 dication, so far as it is given by these instructions to the valuers is 
 simply this: check the accuracy of the statements in the particulars, 
 that is to say, find out whether the hotel is really let for £200. a year. 
 Under these circumstances I do not think that is enough. Then as 
 to the valuation. It seems to me, on the face of it, that, having re- 
 gard to the fact that Mr. Allen was a trustee-solicitor, and knew, as 
 the evidence shows, perfectly well the rule of the Court, it was not 
 a valuation which ought to have been acted on by him without fur- 
 ther inquiry. He says that the valuer whom he employs is telling him 
 that a trustee may safely lend to the extent of three-fourths of the 
 value which he puts on the property, the rule of court, of which he was 
 perfectly aware, being that prima facie on the best real estate security 
 you are only to go to the extent of two-thirds, this being not property 
 of that class, but, in the first place, house property, and, in the second 
 place, property deriving part of its value from the circumstance of its 
 being occupied for business. I do not wish to pass over some minor
 
 508 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 matters, which are these, that in the valuation the chief rent was 
 inaccurately stated to a small extent, and that it does not contain the 
 particulars of the tenancies, as it was required to do; but I think on 
 that footing further inquiry ought to have been made by Mr. Allen if 
 he was really desirous to act as a prudent man. and as a trustee ought 
 to have done. So far as appears, the only further inquiry which is 
 made is the conversation with the surveyors as to their omission to 
 state whether they had checked the rentals. Under these circum- 
 stances, I think, that this valuation was one which cannot he relied 
 on by him. Then the onus is on him of showing that he acted as a 
 prudent man in lending this money, and that the value of the property 
 in 1S7S was such as to justify an advance of £2,500. When one goes 
 into the evidence it does not seem to me that he in the least fulfils 
 the burden which is thrown upon him. [His Lordship then referred 
 to the evidence and continued:] Therefore, it seems to me that, on 
 the whole, Mr. Allen fails as regards this security, and I must hold 
 it was an improper investment in the first instance. [His Lordship 
 then stated the facts as to the mortgage for £2.400. on the property at 
 Goole and said as to the instructions of the 30th March, 1878:] I must 
 make this remark, not that 1 intend to decide the case on it; hut I re- 
 peat what I said in the course of the argument, that to introduce the vai- 
 ner to the mortgagor, or to the mortgagor's agent, as presumably Mr. 
 Gardiner was, for the purpose of negotiating the amount of the fee, 
 seems to me to be an inadvisable course on behalf of trustees or persons 
 in the position of Mr. Allen. In the case which came before me last 
 year, and which was referred to in the argument (Smith v. Stoneham), 
 it was discovered that advantage had been taken of that circumstance 
 to induce the valuer by the promise of a further fee from the mortgagor 
 to make a favorable valuation. I do not say that anything of the kind 
 occurred here. I have no ground for saying so. I merely make the 
 remark in passing, that the course pursued here was an unfortunate 
 one, and does sometimes give rise to unfortunate circumstances. But, 
 as I said before, I do not decide the case in any way on that ground. 
 Then as to the particulars, this remark occurs: It is clearly the duty 
 of a trustee, or anybody acting on his behalf, who proposes to lend 
 money on a security, to ascertain that the particulars which are given 
 to him with reference to that security are correct. It cannot be right 
 f< .r a trustee to assume without investigation that the statements made 
 to him by the proposed borrower are correct. The representation 
 which is made with reference to this property is, that it is a freehold 
 property let at weekly rents. From that at once it is to be inferred, 
 and without any inquiry, and, of course, if it could not be inferred it 
 is the duty of the trustee to ascertain, that the landlord pays all the 
 rates and taxes. The rates and taxes and other outgoings are rep- 
 resented to be of the amount of £21. a year. It was the duty of the 
 trustee to ascertain first of all that these were the weekly rents, and 
 that all the property was let; and secondly, what the amount of the
 
 Sec. 6) WHO MAY EXECUTE A TRUST. 509 
 
 rates and other outgoings would be. There is no evidence before me 
 that, except by means of the letter which is addressed to Messrs. Fox, 
 the valuers chosen by Mr. Allen, Mr. Allen did in any way ascertain 
 or endeavor to ascertain whether the particulars thus given to him 
 were correct, and there is no indication in this letter, as there was in 
 the letter to Messrs. Bridgen in the former case, even to check the cor- 
 rectness of the rentals, or to insert the particulars of the tenancies. 
 There is still less any direction to ascertain whether the statement 
 as to the amount of rates and outgoings was correct. Now, in point 
 of fact, it turns out that at the time, out of the twenty-one houses said 
 to be let at weekly rents, four were unlet. It turns out that in point 
 of fact the sum payable for rates and outgoings was very much larger 
 than stated. It appears that in Goole the rates are very high, they 
 amount to 6s. in the pound, and the statement which is made in evi- 
 dence in reference to them is, that on this property alone the amount 
 of rates would come to very nearly £60. Then, of course, if the se- 
 curity had to be enforced, the trustees could not themselves collect 
 weekly rents, the one residing in London and the other residing in 
 Manchester, and it would have been necessary that a collector should 
 be employed. That would be another deduction from the amount. 
 And then there was the ordinary average amount of repairs to be con- 
 sidered. Now, there is no evidence that in this respect Mr. Allen 
 made any inquiry or gave any direction whatever, except the letter 
 to Messrs. Fox, the valuers. Mr. Fox has made an affidavit, and 
 he states what he did in the matter, and he says that he found four of 
 the houses were unlet, that is to say, a fifth part of the property, and 
 that he made inquiries of certain of the tenants of the houses as to 
 the rents which were then paid, and that the result of the inquiries 
 was his finding that, after deducting the rates and taxes from the gross 
 rentals, the net annual value of the property was £217. That is ob- 
 viously insufficient. He only inquired of some of the tenants. He 
 did not report, as he ought to have clone, that the property was new. 
 But that was a matter which a trustee ought to have ascertained, and 
 there was no inquiry made at all, so far as appears, as to the amount 
 of the rates and taxes, which turned out to be very different from 
 what they were represented to be. [His Lordship then referred to 
 the alteration in Messrs. Fox's report of the 10th April 1878 and 
 continued:] In the first instance, the valuation which was given by 
 Messrs. Fox went quite up to the limit to which, according to the 
 rule I have already referred to, and of which Mr. Allen was perfectly 
 aware, a prudent trustee would prima facie lend. It is now in- 
 creased to £2,400., going considerably beyond that limit ; and if Mr. 
 Allen is to rely upon that valuation so altered, it is surely incumbent 
 on him to show that there were circumstances in the case which jus- 
 tified his lending that additional sum on the property. He has given 
 no evidence as to the inquiries he made beyond this letter, which is in 
 evidence, which passed between him and Mrs. Partington. It seems
 
 510 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 to me again there that he has fallen short of the duty which a trustee 
 i un lertakes when he lends on property of this kind, and that again the 
 valuation he obtained is not sufficient under the circumstances to 
 justify what he did. Then, we have to consider whether, notwith- 
 standing that the valuation is nol satisfactory, the property is one on 
 which a prudent man would have lent. It seems to me again, the 
 burden being on him, he falls far short of justifying it, and that, in 
 fact, the evidence is the other way. [His Lordship referred to the 
 evidence, and continued:] Upon the whole, I have come to the con- 
 clusion that this again was an improper investment. [His Lordship 
 then dealt with the mortgage for £1,500., coming to the conclusion 
 that that also was an improper investment. He continued:] I hold, 
 therefore, as regards all the three mortgages, they were improper in- 
 vestments made from time to time by Mr. Mien, and that he is at all 
 events liable. But there still remains the question to consider whether 
 Mrs. Partington, who did not take so active a part in the transaction 
 is. as between her and the cestuis que trust, also liable. It was con- 
 tended in the first place on her behalf that she was not: and the 
 trustees' indemnity clause, which goes somewhat beyond the usual 
 form, was relied upon. That clause runs in this way: "1 declare 
 that my trustees shall not he answerable for each other's acts or re- 
 ceipts/nor for any hank or banker to whom any trust property may 
 be intrusted for the purpose of, or until an investment, or any other 
 loss whatever happening without their own respective wilful default, 
 hut shall he responsible for so much money only as shall come to 
 their own respective hands," and so forth. It does not seem to me 
 that that meets this case. What is complained of is that the money 
 subject to the trust was invested in an improper security. That 
 money was standing to the joint account of Mrs. Partington and Mr. 
 Allen. The check was drawn upon that account, and signed by Mrs. 
 Partington as well as by Mr. Allen, and the money was handed over, 
 as I assume, to the mortgagor. That was her act just as much as it 
 was Mr. Allen's, and, if the investment was an improper one, it does 
 not seem to me that she can, on the ground of this indemnity clause. 
 be exonerated from it. But then it was said that she, under the 
 terms of the will, was employing Allen as her solicitor, that she was 
 entitled to employ a solicitor within the proper scope of his business, 
 and that she did employ him to do matters which were within the 
 scope of that business, and that she acted on his advice, and, conse- 
 quently, if he made a mistake, or was guilty of any negligence, the loss 
 must fall on the trust estate, and not on her. Now the answer which 
 was given, as 1 understood, in the first instance, to that argument 
 was this— that it does not in the least matter that Mrs. Partington em- 
 ployed Mr. Allen as her solicitor; that, even if she had employed an 
 independent solicitor, and he had been guilty of negligence, still she 
 was answerable for his acts. I am not prepared to decide this case 
 on that broad view. There are certainly a number of cases from
 
 Sec. 6) WHO MAY EXECUTE A TRUST. 511 
 
 which I do not desire to dissent in any way in which it has been held 
 that the advice of a solicitor, or the opinion of counsel, does not in- 
 demnify trustees. If a trustee is distributing a fund, and any diffi- 
 culty arises as to the persons who may be entitled, he can have re- 
 course to the court, and he would be completely indemnified by the 
 order of the court. If under those circumstances he chooses to rely 
 on the advice of a solicitor or the opinion of counsel, he gets no in- 
 demnity, and he must take the consequences of so doing. The same 
 remarks apply to many other acts of trustees, and the facilities which 
 are now given by the present practice to trustees for coming and 
 obtaining the opinion of the court as to matters in the administration 
 of the trust are so great, that in that class of cases the rule to which 
 I have referred is not in the least likely to be relaxed. But, leaving 
 all those cases in full and perfect force and entirely undisturbed, there 
 remain a large class of cases in which the opinion of the court can- 
 not be got, and yet in which it is necessary to have the advice of a 
 solicitor. The present case is an illustration. Here trustees are about 
 to invest on mortgage security. They must employ a solicitor to 
 investigate the state of the title, and it cannot be that at every stage 
 they are to come to the court and ask the court to say whether the 
 solicitor is doing what is right. Yet it has been held, in cases of which 
 Hopgood v. Parkin, 22 L. T. Rep. N. S. 772; L. Rep. 11 Eq. 74, is 
 one, that a trustee employing a solicitor as to whose competence no 
 objection could be raised, and who yet is guilty of some negligence, is 
 liable to make good a loss of the trust fund arising from the solicitor 
 having failed to take proper precautions. Lord Romilly in that case 
 says : "It is material to consider the course pursued by the solicitor 
 of the trustee. It is true that his conduct is not theirs; but he is 
 appointed by them, he is their agent for the management of the affairs 
 of the trust, and if he misconducts himself, through ignorance or neg- 
 ligence, or wilfully, he is answerable to the trustees, and they cannot, 
 in my opinion, throw any of the loss thereby occasioned on the cestuis 
 que trust." 
 
 That case of Hopgood v. Parkin was cited in the case of Speight v. 
 Gaunt. Sir George Jessel does not, so far as I observe, comment 
 on it directly, but he does observe that there are cases which have been 
 decided against trustees which would be now repudiated. I do not 
 know whether Hopgood v. Parkin was one of those which he had in 
 view; but Lindley, L. J., expressly deals with Hopgood v. Parkin, and 
 he says in respect to it : "That case certainly goes much further than 
 I should have thought right ; but in the result the case was appealed — 
 an infant was concerned, and the Court of Appeal sanctioned a com- 
 promise in behalf of the infant." Then he adds this: "I wish most 
 emphatically to say, if trustees are justified by the ordinary course of 
 business in employing agents, and they do employ agents of good 
 repute, and whose fitness they have no reason to doubt, and employ 
 those agents to do that which is in the ordinary course of their busi-
 
 512 THE DUTIES OF A TRUSTEE. (Ch. 5 
 
 ncs?, I protest against the notion that the trustees guarantee the hon- 
 esty or solvency of the agents employed." That is laid down with 
 respect to the employment of a broker, and T must say, speaking for 
 myself, that I do not see why a similar observation should not apply 
 to the case of a trustee employing a solicitor in good repute whose 
 fitness he has no reason to doubt, and where the employment is only 
 to do that which is in the ordinary course of business. I do not see 
 why in a case of that sort a trustee should be held to guarantee the 
 solvency or competency of his solicitor any more than he guarantees 
 the solvency or honesty of his broker, and, if ever the case arises in 
 which that has to be decided, I shall, if it come before me, consider 
 long before I follow Hopgood v. Parkin. But, in my opinion, in the 
 present case that question does not arise. In the first place, Mrs. Part- 
 ington was tenant for life, and she was interested to a certain extent 
 in getting a good income ; and it is possible — I say no more — that that 
 may have influenced her mind, perhaps unconsciously, and rendered 
 her less cautious than she would otherwise have been. And, sec- 
 ondly, — and I here desire to express myself with the greatest caution, 
 because there is still an important question remaining to be decided 
 between her and Mr. Allen— I think, giving her the full benefit of 
 everything which may be said for her, and having regard to the cor- 
 respondence which took place, I should, if I held she was free from 
 liability in this case, be allowing her to do that which the authorities 
 say a trustee is not at liberty to do, namely, delegate the responsibility 
 which he himself must assume. She could not delegate that responsi- 
 bility to Mr. Allen in his capacity of co-trustee, because the cestuis 
 que trust are entitled to the benefit of the independent judgment of 
 every trustee. She could not properly in this case delegate it to him 
 if she employed him as solicitor, because she was bound, according to 
 what was laid down in Speight v. Gaunt and Whiteley v. Learoyd, not 
 to delegate her duty as trustee to the solicitor, but simply to take 
 his advice, and then consult and act on it as a prudent trustee would 
 do. In this case, without going into the evidence, for the reasons I 
 have mentioned, I think Mrs. Partington failed in that respect, if she 
 relied on Mr. Allen ; and, if I were to hold her free from responsibility 
 in the matter, I should be allowing her to delegate to him the respon- 
 sibility she was bound to take upon herself. I therefore hold, with- 
 out prejudice to any question between her and Mr. Allen, that, as be- 
 tween her and the cestuis que trust, she is responsible for the invest- 
 ments made, jointly and severally, with Mr. Allen.
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 513 
 
 CHAPTER VI. 
 
 CONSTRUCTIVE TRUSTS AND EQUITABLE LIENS— TRAC- 
 ING PROPERTY WRONGFULLY APPROPRIATED 
 INTO ITS SUBSTITUTE. 
 
 FERRARS v. CHERRY et al. 
 
 (In Chancery, 1700. 2 Vernon, .383.) 
 
 The defendant purchased from the plaintiff's father and mother the 
 lands in question by deed and fine, whereby they conveyed to him 
 and his heirs ; whereas pursuant to an agreement made on their mar- 
 riage, the estate was settled to the plaintiff's father for life, part 
 to the mother for her jointure, remainder of the whole to the first 
 and other sons in tail male, etc. And it appeared by the proofs in the 
 case, that the defendant Cherry had notice of the settlement, and that 
 the same amongst the other writings was delivered to him. Upon his 
 purchase, the defendant took in a mortgage term, which was prior to 
 the settlement, and enters, and afterwards sold the estate, part to How- 
 land, and other part to Harwood, who were made defendants to the 
 bill, and pleaded they were purchasers without notice ; and the plain- 
 tiff not being able to prove any notice upon them, the bill as against 
 them was dismissed ; but as against the defendant Cherry, the court 
 decreed him to account for the consideration money for which he 
 sold the estate, with interest, from the decease of the plaintiff's father 
 and mother, thereout discounting what was due on the mortgage made 
 prior to the settlement. * * * i 
 
 LOWTHER v. CARLTON. 
 
 (In Chancery, before Lord Chancellor Hardwicke, 1741. 2 Atkins, 212.) 
 
 Lord Chancellor. 2 This is a bill brought to impeach a purchase 
 made thirty-two years ago: the defendant was a purchaser with no- 
 tice from the Marquis of Wharton, who bought without notice. 
 
 It is certainly the rule of this court, that a man who is a purchaser 
 with notice himself from a person who bought without notice, may 
 shelter himself under the first purchaser, or otherwise it would very 
 much clog the sale of estates. * * * 
 
 i A part of the case is omitted. 2 Only part of the case is given. 
 
 Ken.Tr. — 33
 
 514 CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. (Cll. 6 
 
 BOVEY v. SMITH. 
 
 (Tn Chancery, before Lord Chancellor Nottingham, K.S2. 1 Vernon, 60.) 
 
 A trustee having sold the land to a stranger, that had no notice of 
 the trust, and a fine with proclamations and five years past, the trus- 
 tee afterwards, for valuable consideration really paid, purchases these 
 lands again of the vendee. And it was decreed by the Lord Chan- 
 cellor, with the concurring opinion of the Lord Chief Justice North, 
 that the trustee, notwithstanding the fine, proclamations, and non- 
 claim for five years, should stand seized in trust as at first, as if the 
 land had never been sold, nor any line levied. 
 
 BRAINARD SHALER and Others v. MARY E. TROW- 
 BRIDGE and Others. 
 
 (Court of Errors and Appeals of New Jersey, 1877. 28 N. J. Eq. 595.) 
 
 Van Syckel, J. 3 In January, 1865, Joseph A. Trowbridge, Brain- 
 ard Shaler, John Kiersted and Wynkoop Kiersted entered into part- 
 nership in the leather business, which was terminated by the death of 
 Trowbridge December 14th, 1869. During its continuance Trowbridge 
 had charge of the books and finances. The contested question on this 
 appeal is, whether certain real estate and certain policies of life in- 
 surance, to which Mary E. Trowbridge held the legal title at her 
 husband's death, should be decreed to be in equity the property of the 
 firm. The evidence shows that Trowbridge alone drew the firm's 
 checks, and exclusively managed its money affairs, and that the yearly 
 balance-sheets, made up and presented by him to the firm, were false 
 and fraudulent. Checks of the firm to the amount of $103,155.97 were 
 drawn by him to his own individual use, and paid at the bank, none 
 of which were either included in his yearly balance-sheets, or charged 
 to him on the books of the firm. At the same time the amount drawn 
 by him during the existence of the partnership, and actually charged 
 to his accounts, exceeded what he would have been entitled to, by the 
 articles of co-partnership, by more than $15,000; so that, upon an 
 adjustment of the partnership concerns, he will be indebted to the firm 
 in more than $118,000. 
 
 ( hit of the moneys drawn upon the uncharged checks, or by the 
 checks themselves in some instances, Trowbridge paid for the real 
 estate and the policies of insurance now in controversy. The policies 
 were issued, in the first place, in favor of Trowbridge himself, and 
 the half-yearly premiums paid by the uncharged checks of the firm 
 to the insurance company's agent. In April, 1868, they were changed, 
 
 3 The opinion of the master is omitted.
 
 Ch. G) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 515 
 
 by Trowbridge's request, so as to be payable to his wife, who, after 
 her husband's death, received the several amounts due upon the policies 
 from the insurance companies. Upon this statement of facts, which 
 the case satisfactorily establishes, shall the real estate and the pro- 
 ceeds of the policies, be declared to be held in trust by the wife as the 
 property of the firm? 
 
 This is not a case of resulting trust, where the trust results, or is 
 implied, from the contracts andl relations of the parties. It arises, 
 ex maleficio, out of the active fraud and dishonest conduct of the 
 partner Trowbridge and may be termed a constructive trust, which 
 equity will fasten on the conscience of the offending party, and con- 
 vert him into a trustee of the legal title, and order him to hold and 
 execute it in such manner as to protect the rights of the defrauded 
 party, and promote the interests and safety of society. It differs from 
 other trusts in that it is not within the intention or contemplation of 
 the parties at the time the contract is made upon which it is con- 
 strued by the court, but it is thrust upon a party contrary to his in- 
 tention and against his will. 1 Perry on Trusts, § 166. 
 
 If a person, occupying a fiduciary capacity, purchases property with 
 fiduciary funds in his hands, and takes the title in his own name, he 
 will, by construction, be charged as a trustee for the person entitled 
 to the beneficial interest in the fund with which such purchase was 
 made. This rule applies to a partner who fraudulently purchases for 
 himself with the partnership funds, and it extends to personal as well 
 as real estate ; in every case the equitable ownership rests in the per- 
 son from whom the consideration moves. Johnson v. Dougherty, 18 
 N. J. Eq. 406 ; Cutler v. Turtle, 19 N. J. Eq. 558 ; Dyer v. Dyer, 1 
 Lead. Cas. in Eq. 203 ; 1 Perry on Trusts, §§ 127-130. 
 
 In Taylor v. Plumer, 3 M. & S. 575, Lord Ellenborough said that 
 if A is trusted by B with money to purchase a horse for him, and he 
 purchases a carriage with that money, B is entitled to the carriage. 
 That it made no difference, in reason or in law, into what other form, 
 different from the original, the change may have been made, for the 
 product of or substitute for the original thing still follows the nature 
 of the thing itself, as long as it can be ascertained to be such, and the 
 right ceases only when the means of ascertainment fail. This is de- 
 clared to be the settled rule, in Story's Eq. Juris. §§ 1258, 1259. 
 
 So completely are the two things identified, even at law, where the 
 conversion can be clearly traced, that in equity a distinction can never 
 be drawn, between the money misappropriated and the results of its 
 investment, in favor of the fraud-doer. 
 
 Nor does it make any difference that the investment turns out to be 
 a profitable one, for, whatever the profit may be, it must belong to 
 the cestui que trust. It is a constructive fraud upon the latter to use 
 his property unlawfully and to retain the profit of the misapplication, 
 it being a fundamental principle in regard to a trustee that he shall 
 derive no gain to himself from the employment of the trust fund.
 
 516 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Cll. 6 
 
 2 Story's Eq. juris. § 1261; McKnight's Ex'rs v. Walsh. 24 X. J. 
 Eq. - : 
 
 Much more does puhlic policy require that one who has corruptly 
 thrust himself into the position of a trustee, shall not profit by his 
 fraud. The fact that this property has been passed into the hands of 
 the wife floes not prevent the application of the equitable principles. 
 She received it as a gift from her husband, without paying any con- 
 sideration whatever for it. When once a fraud has heen committed, 
 not only is the person v. rutted the fraud precluded from de- 
 
 riving any benefit from it. hut every innocent person is so, likewise, 
 unless he has, in good faith, acquired a subsequent interest for value; 
 for a third person, by seeking to derive any benefit under such a 
 transaction, or to retain any benefit resulting therefrom, becomes par- 
 tices criminis, however innocent of the fraud in the beginning. 1 
 Perry on Trusts. § 172, and cases cited. 
 
 It is urged that a life policy should be exempt from the equitable 
 rule which applies to other transactions, because it differs in its char- 
 acter from ordinary investments, and is a beneficial provision for the 
 family, which should be favored. 
 
 Puhlic policy clearly forbids the adoption of this suggestion; it 
 would invite the commission of the wrong by assuring the wrongdoer 
 that there is one mode in which he could surely profit by his turpitude, 
 in securing a provision for his family. The policy is the thing which 
 the partnership money purchased, and it stands in the place of what 
 was corruptly abstracted. Whether the policy would be productive, 
 when terminated by death, of more or less than the premiums paid 
 upon it, would depend upon the length of the life insured. The fact 
 that it has a contingent value does not distinguish it, in principle, 
 from an investment in the purchase of stock, or of an annuity, and 
 can give no support to the claim of the widow, that nothing should be 
 exacted of her beyond the amount of premiums paid upon it out of 
 the firm funds. If this suit had heen prosecuted in the lifetime of the 
 husband, and the policy had been disposed of to the company for its 
 surrender value, it would hardly have been insisted that he could claim, 
 in a court of conscience, a right to any excess of the proceeds after 
 refunding to his firm the amount of the premiums. All the premiums 
 were paid with the partnership funds — nothing was paid by the wife. 
 The transfer to her, therefore, cannot change the equities, nor divest 
 the trust. 
 
 The inflexible rule, in equity, will he equally violated, whether she 
 takes the value of the policies in excess of the premiums paid, or the 
 appreciation in the real estate. 
 
 Trowbridge contributed nothing, in money or otherwise, to the pur- 
 chase or support of the policies. The entire sum derived from them 
 is the product of the partnership money. He did no act upon which 
 he could have based the slightest claim in equity to be benefitted by 
 the transaction. It would be idle to denounce his turpitude, and, at
 
 Cll. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 517 
 
 the same time, to reward it by allowing him to transmit its fruits to 
 his family. His wife can derive, through so corrupt a source, no 
 equitable rights to these policies ; neither public policy, nor the intrin- 
 sic justice of the case, would be promoted by allowing her to do so. 
 
 In my opinion, the decree below should be affirmed, and the case 
 remitted, that it may be proceeded in accordingly. 4 
 
 Decree unanimously affirmed. 
 
 RICHARD G. WATSON v. ROBERT THOMPSON, Admin- 
 istrator, et al. 
 
 (Supreme Court of Rhode Islaud, 1879. 12 R. I. 4G6.) 
 
 Bill in equity to establish a title to realty. The facts are stated in 
 the opinion of the court. 
 
 Durfee. C. J. 5 This is a suit in equity by Richard G. Watson, a 
 son and one of the heirs at law of Elisha Watson, Jr., late of South 
 Kingston, deceased, against said Elisha's widow and the other heirs, 
 and against the administrator of his estate. The bill sets forth that 
 Susan Watson, a former wife of Elisha, died May 7, 1834, intestate, 
 and the owner of an undivided moiety of the Burke Farm, so called, 
 in South Kingston. She left her husband and two children by him, 
 to wit. the complainant and Henry C. Watson, then infants, surviving 
 her. Elisha Watson, Jr., was subsequently appointed guardian of the 
 two children, and as such was authorized by the General Assembly, 
 at its January session in 1842, to sell all their right, title, and interest 
 in the Burke Farm, under the advice and direction of the Court of 
 Probate of South Kingston, first giving bond with surety, to make 
 the sale according to the direction of said court, and to invest the 
 proceeds in other real estate or productive property for the benefit of 
 the children after his decease, he being entitled, as tenant by the 
 curtesy, to the use and income of the property during his life. Elisha 
 Watson, Jr., accordingly sold the Burke Farm under the direction 
 of the court, first giving bond as directed. He received $2,000 for 
 the half in which his children were interested. Subsequently, in 1843, 
 he purchased a farm, called the Bentley Farm, at or near Narragansett 
 Pier, in South Kingston, containing about one hundred and eighty- 
 three acres, for which he paid the sum of $8,250. The bill alleges 
 that the $2,000, proceeds of the sale of one-half of the Burke Farm, 
 were used in making up said sum of $8,250., and were invested by 
 Elisha Watson, Jr., in the Bentley Farm for the benefit of his children 
 
 * Lehman v. Gunn. 124 Ala. 213, 27 South. 475. 51 L. R. A. 112, 82 Am. St. 
 Rep. 159 (1899); Holmes v. Gilman, 138 N. Y. 369, 84 N. B. 205, 20 L. R. A. 
 566, 34 Am. St. Rep. 463 (1893); Dayton v. Claflin Co., 19 App. Div. 120, 45 
 N. Y. Supp. 1005 (1897); Bromley v. Cleveland. Cincinnati, Chicago & St. 
 Louis Ry. Co. and Others. 103 Wis. 562. 79 X. NY. 741 (1899). 
 
 6 A part of the opinion is omitted.
 
 518 CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. (Ch. 6 
 
 after his decease. We think the evidence shows that the $2,000. were 
 used in the purchase of the Bentley Farm. After 1843, Elisha Wat- 
 son, Jr.. sold and conveyed to different persons many different parcels 
 of the Bentley Farm, until, at the time of his decease, he had reduced 
 the Farm to between fifty and sixty acres, a part of which he had 
 mortgaged. He died May 31, 1877, dleeply insolvent. Henry C. Wat- 
 son had died before him, December 9, 1863, being childless and unmar- 
 ried. The bill alleges and claims that the complainant succeeded to the 
 interest of Henry C. Watson in the Bentley Farm as his sole heir at 
 law. The bill also alleges and claims that the part of the Bentley Farm 
 remaining unsold was reserved by Elisha Watson, Jr., for the com- 
 plainant as his equitable part thereof. The prayer is, that a decree 
 may be entered vesting the title of the remaining part, or of so much 
 thereof as he is equitably entitled to, in the complainant. 
 
 [After holding that the complainant was not the heir at law of 
 Henry C. Watson the Chief Justice continued:] 
 
 2. The second question is, Is the complainant entitled to any, and 
 if any, to what relief? The defendant contends that the complainant is 
 not entitled to relief, because Elisha Watson, Jr., did not invest the 
 $2,000. which he received from the sale of the Burke Farm in the 
 purchase of the Bentley Farm, for the benefit of the complainant and 
 his brother, but solely for his own benefit, having borrowed it for 
 that purpose, and that subsequently, after the complainant came of 
 age, he settled with him for it, fully repaying him. In support of this 
 view, a good deal of evidence was submitted ; but we are not satis- 
 fied that the money was ever repaid. Elisha Watson, Jr., was entitled 
 to the use or income of it during his life, andJ therefore no inference 
 of payment can be drawn from mere lapse of time. And as to the 
 point that he borrowed the money, the answer is, that he could not 
 borrow it from anybody but himself, his wards having no capacity to 
 lend it ; and it is settled that if a guardian uses the money of his ward 
 in the purchase of real estate, a trust will result to the ward, and the 
 ward has his election either to have the estate conveyed to him, or to 
 have the money repaid with interest. Perry on Trusts, §§ 127, 128. 
 
 It is contended that no trust resulted in favor of the complainant, 
 because the Bentley Farm was paid for in part only out of the pro- 
 ceeds of the Burke Farm. We do not think this position is tenable. 
 On the contrary, it is now well settled, that if land is conveyed to a 
 person who pays for it partly out of his own funds and partly out of 
 funds which he holds in trust for another, a trust will result to the 
 other in proportion to his interest in the funds employed. Botsford v. 
 Burr, 2 [ohn. Ch. (N. Y.) 405; Finney v. Fellows, 15 Vt. 525; Buck 
 v. Swazey, 35 Me. 41, 56 Am. Dec. 681 ; Perry on Trusts, § 132. The 
 rule goes even farther, and holds that if a trustee purchase an estate 
 with trust funds, adding funds of his own, a trust will result to the 
 cestui que trust, and the burden will be on the trustee to show the 
 amount of his own funds, or otherwise the cestui que trust will take
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 519 
 
 the whole. Russell v. Jackson, 10 Hare, 204, 214; McLarren v. 
 Brewer, 51 Me. 402; Seaman v. Cook, 14 111. 501, 505. 
 
 The price paid for the Bentley Farm was $8,250. Of this $1,000, 
 being four thirty-thirds of the whole sum, belonged to the complain- 
 ant, subject to a life interest in Elisha Watson, Jr. It follows that the 
 equitable fee of an undivided four thirty-thirds of the Bentley Farm 
 resulted to the complainant, subject to a life estate in Elisha Watson, 
 Jr., the moment the farm was conveyed to Elisha Watson, Jr. If 
 Elisha Watson, Jr., had kept the farm entire until his decease, then 
 the complainant, unless his claim were in some way impaired, would 
 have been entitled to a conveyance of an undivided four thirty-thirds 
 of the farm. 
 
 We have seen that Elisha Watson, Jr., did not preserve the farm 
 entire, but sold and conveyed away the larger portion of it. What 
 effect had this on the equitable interest of the complainant? We 
 think it is perfectly clear that every time Elisha Watson, Jr., sold and 
 conveyed away any part or parcel of the Bentley Farm, he sold and 
 conveyed away the complainant's equitable interest in that part or 
 parcel, provided the grantee was a purchaser for value and without 
 notice, and that after every such sale and conveyance there remained 
 for the complainant in the farm only his resulting trust in an un- 
 divided four thirty-thirds of what was left. The complainant seems 
 to suppose that, having lost his resulting interest in what was sold, 
 he can have the loss made good to him by a proportional increase of 
 interest in what is left. But this surely cannot be so. His interest 
 was inherent in every part. As soon as any part was sold his in- 
 terest in that part was converted into an interest in the price re- 
 ceived for it. It remained a resulting trust or equity in the price, or 
 in the property in which the price was invested, so long as it could be 
 traced specifically ; and when it ceased to be specifically traceable, it 
 became simply a personal debt or demand to be recovered of Elisha 
 Watson, Jr., or out of his estate, like any other personal debt or de- 
 mand. Thompson's Appeal, 22 Pa. 16. * * * 
 
 We decide that the complainant is entitled to have four undivided 
 thirty-thirds of the part of the Bentley Farm remaining unsold and 
 not under mortgages, free and clear of all claims of the widow, heirs, 
 or creditors of Elisha Watson, Jr. We also decide that he is en- 
 titled in like manner to four thirty-thirds of the mortgaged part, sub- 
 ject to the mortgage, the other twenty-nine thirty-thirds, however, 
 being primarily chargeable with the mortgage debt. 
 
 The decree may be drawn to carry the decision into effect. 6 
 
 Decree accordingly. 
 
 a Docker v. Somes, 2 Myl. & K. 655 (1834); In re Mulligan. 116 Fed. 715, 
 717 (1902) ; Kyle v. Barnett, 17 Ala. 306 (1850) ; Tilford v. Torrey, 53 Ala. 
 130 (1875) ; Kelly v. Browning, 113 Ala. 420, 21 South. 928 (1896) ; Howison 
 v. Baird, 145 Ala. 683, 40 South. 94 (1905); Byrne v. McGrath, 130 Cal. 316, 
 62 Pac. 559. 80 Am. St. Rep. 127 (1900) ; Bazemore v. Davis, 55 Ga. 504 (1875); 
 Harris v. Mclntyre, 118 111. 275, 8 N. E. 182 (18S6); Reynolds v. Sumner,
 
 520 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. fi 
 
 .AIRS. A. E. FANT el al. v. JAS. DUNBAR, Administrator, et al. 
 (Supreme Court of Mississippi, 1893. 71 .Miss. .lit;. 15 South, yo.) 
 
 From the Chancery Court of Noxubee County. 
 
 In 1871, S. P. bunt died intestate, leaving as his heirs his widow 
 and three minor children, Ida. [ley and S. I'. Fant. With the excep- 
 tion of an insurance policy of $5,000 in favor of his heirs, he left no 
 estate. Soon after his death. Dr. J. C. Fant qualified as guardian of 
 said minors, and collected their interest in the insurance policy, 
 ami uniting to $3,660. 2'-*, which sum he reported to the court in his in- 
 ventory and accounts. Without obtaining an order of court therefor, 
 he immediately loaned the entire amount to a mercantile firm, taking 
 their note for $4,026.27. due December 23, 1872, which amount in- 
 cluded interest to maturity. He reported the loan to the court, which 
 declined to approve it, and the amount, with interest thereon, was car- 
 ried forward in the accounts of the guardian as being money in his 
 hands, and, in his accounts, he was allowed credit for the interest, 
 which, as the only income of the wards, he had expended for their 
 support. Meantime, in 1873, the firm to which the guardian had 
 loaned the money of said wards, being unable to repay the loan, 
 executed to Dr Fant, in his own name, a deed to a store-house and 
 lot in Macon, Miss., reciting as the consideration the sum of $4,099.48, 
 being the amount of principal and interest due at that time. The deed 
 was executed and delivered with the understanding that it was to 
 stand as a mortgage until January, 1874, when, if the debt was not 
 sooner paid, it was to be absolute, and in full payment of the loan and 
 interest. The debt was not paid, and Dr. Fant took possession of the 
 store-house, and continued in possession until his death in 1889, and, 
 during this time, he paid the taxes, insurance and repairs, and col- 
 lected the rents. At his death, his widow took possession, and has 
 continued in possession ever since. 
 
 The guardianship was never settled, and the amount due by Dr. 
 Fant, as guardian, to his said wards, was not paid, and, in March, 
 I860, Hey \V. Fant filed his bill against the heirs of his said guardian, 
 reciting the circumstances of the purchase of the lot as above nar- 
 
 126 III. 58, 18 X. E. 334, 1 L. R. A. 327, 9 Am. St. Rep. 523 (1888); Fausler 
 \. Jones, 7 I inl. U77 (1855); Bitzer v. Bobo, :v.\ Minn. is. :;s \. \v. 609 (1888); 
 White v. Drew, \-J. Mo. 561 (1868); Bowen v. McKean, 82 .M<>. 594 (1884); 
 Shaw v. Shaw. 86 Mo. 594 (1885); Jones v. Elkins, L43 Mo. 647, 15 S. W. 
 26] (1898); Crawford v. Jones, 163 Mo. 577, 63 S. W. 838 (1901); McLeod 
 v. Venable, 163 Mo. 536, 63 S. W. 847 (1901); Johnston v. Johnston. 17. - ', 
 Mo. 91, 120, 73 S. W. 202, ni L. R. A. 166, '.it; Am. St. Rep. 486 (1902); ( 'row- 
 ley v. Crowley,72 N. II. 241, 56Atl. 190 (1903); Dayton v. Claflin Co., 19 App. 
 I»iv. 120, 45 N. Y. Supp. 1005 (1897); Collins v. Corson i.\. J. Ch.) 30 Atl. 862 
 (1894); Mayer v. Kane, 69 N. J. Eq. 7::::. C1 Atl. :!74 (1905); Lyon v. Akin, 
 78 X. c. 258 (1878); Wallace v. Duffield, 2 Serg. & R. (Pa.) 521, 7 Am. Dec. 
 
 660 (1816); Rupp's Appeal, 100 Pa. 531 (1882); Lloyd v. W Is. 176 Pa. 63, 
 
 34 Atl. 926 (1896); Greene v. Haskell, 5 It. I. 447 (1858); Moffatt v. Shepard, 
 2 Pin. (Wis.) tit;, :,•_> .\ni. Dec. 141 (1847).
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 521 
 
 rated, and praying that a resulting trust be established in his favor 
 to the extent of a third interest therein. This bill was answered by 
 the defendants, and, apart from the defence noticed in the opinion, 
 many other matters of controversy were introduced into the suit, 
 mostly relating to the course of the guardianship and the rights of 
 the parties growing out of the collection by the guardian of the rents 
 and profits of the lot and his expenditures for taxes, insurance and 
 repairs. In view of the opinion which is confined to the consideration 
 of a single point, it is not necessary to state the parts touching these 
 matters. 
 
 Pending the suit, complainant, Iley W. Fant, died, and the cause 
 was revived in the name of James Dunbar, administrator. Before a 
 final disposition thereof, S. P. Fant, another of the wards, having 
 come of age, also filed a bill, setting up substantially the same facts in 
 regard to the guardianship and the purchase of the store-house and 
 lot, but, instead of asking that a trust be declared in his favor as to 
 a one-third interest in the house and lot, he claimed the right of elect- 
 ing whether to take a proportionate interest therein, or to claim an 
 accounting for his money so expended and interest, as constituting a 
 charge on the property. 
 
 These two causes were by consent consolidated. The court below 
 rendered a decree finding the facts as to the guardianship and pur- 
 chase of the property as above stated, and decreeing that the com- 
 plainants, Iley W. Fant and S. P. Fant, by virtue of the unauthorized 
 loan of their funds, and the purchase by their guardian in his own 
 name of the house and lot in payment of the principal and interest of 
 the loan, became entitled each to a third interest in the house and lot, 
 and a like interest in the rents collected therefrom. On the other hand, 
 the decree allowed, as against the rents, all proper sums expended by 
 the guardian for taxes, insurance and repairs on the property. 
 
 The decree also adjusted other matters of controversy between 
 the parties, but the only portion thereof specially noticed by this court 
 is that which gave complainants each a third interest in the house 
 and lot, notwithstanding the consideration of the conveyance thereof 
 to Dr. Fant exceeded by about $700 the principal of the amount be- 
 longing to the wards, which had been loaned to the owners of the prop- 
 erty. Although such excess represented interest on the loan, it will 
 be borne in mind that the guardian in his accounts had been allowed 
 for expenditures in behalf of the wards as against this interest, which 
 represented their income. The defendants have appealed. 
 
 Cooper, J., delivered the opinion of the court. 
 
 On the evidence it is entirely settled what part of the purchase price 
 of the lot described in the pleading and evidence was the money of his 
 wards, and what part was the money of Dr. Fant, the guardian. Un- 
 der these circumstances, his wards had the right, at their election, to 
 charge their money, with interest, upon the lot, or to take an interest 
 therein proportionate to the amount of their money that went into it
 
 522 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. 6 
 
 as compared to the purchase price. They have not the right to elect 
 to take the entire interest in the property, for that would be to appro- 
 priate not their own but the property of the guardian. Before making 
 their election, the wards are entitled to have accounts stated in both 
 aspects, and. being thus advised, to elect that which is the more bene- 
 ficial to them. 7 
 
 Decree reversed and cause remanded. 
 
 JOHN C. BOHLE et al.. Appellants, v. DIEDRICH HASSEL- 
 BROCH, Respondent. 
 
 (Court of Errors and Appeals of NTew Jersey, 1002. 64 N. J. Eq. 334, 51 
 Atl. 508, 61 L. R. A. 32.'5.) 
 
 On appeal from a decree advised by Vice Chancellor Stevens, whose 
 opinion is reported in 61 N. J. Eq. 470, 48 Atl. 916. 
 
 Dixon, T. Anton L. Bohle, who died in 1863, leaving a widow and 
 lour children, by his will appointed his wife, Anna, his executrix and 
 gave her all his property in trust for the maintenance of herself and 
 his children during her life, and! gave it after her death to his children. 
 The will directed the trustee to keep the property invested "on good 
 first bonds and mortgages of real estate." In August 1864, the widow 
 married Diedrich Hasselbroch, by whom she afterwards had three 
 children. In January, 1868, she purchased two plots of land in Hobo- 
 ken, taking title thereto in her own name. The purchase price of 
 these lots was $14,700, but as they were encumbered for $2,000, only 
 $12,700 was to be paid in cash. Of this sum more than one-half, but 
 exactlv how much cannot be ascertained, was paid with money which 
 Mrs. Hasselbroch held in trust under Mr. Bohle's will. At that time 
 Mr. Bohle's children were all minors, living with their mother and 
 stepfather. In December, 1898, Mrs. Hasselbroch died, and by her will 
 devised her Hoboken lots to the three surviving children of Mr. Bohle, 
 who now own the interest of their deceased sister, and are in posses- 
 sion of the property. Mr. Hasselbroch having brought an action of 
 ejectment against these children, claiming that he was entitled to the 
 possession of the property as tenant by the curtesy of his wife's fee, 
 they filed the present bill to restrain that suit, on the ground that in 
 equity their mother was only tenant for life and they were owners of 
 the fee, because of the improper use of the trust funds in the purchase. 
 The Chancellor's decree denied this relief, but adjudged that the com- 
 plainants were entitled to a lien on the property, prior to the husband's 
 curtesy, for so much trust money as was shown to have been used in 
 
 7 A similar right of election between a trust in a proportionate share and 
 an equitable lien lor the money invested and interest was recognized in the 
 following cases: Bitzer v. Bobo, 39 Minn. 18, 38 N. YV. 300 (1888); Crawford 
 v. Jones, Ki;; Mo. 577, 03 S. W. 838 (1901); Greene v. Haskell, 5 It. I. 447 
 (1858).
 
 Cll. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 523 
 
 the purchase, viz., $6,423, and interest since Mrs. Hasselbroch's death, 
 less rents and profits. From this decree the complainants appeal. 
 
 It is clear that Mrs. Hasselbroch committed a breach of trust when 
 she used the trust fund in buying real estate, and took the title to her- 
 self without providing any bond and! mortgage as a first lien in favor 
 of the trust estate, as directed by the will of her deceased husband ; 
 and the question is, what equitable situation was thereby created? 
 
 Several settled doctrines of courts of equity are pertinent to this 
 inquiry. 
 
 It is a fundamental principle in regard to trust estates that the 
 trustee shall derive to himself no gain, benefit or advantage by the use 
 of the trust funds ; whatever profit may be made shall belong to and 
 become parcel of the trust estate. McKnight's Executor v. Walsh, 24 
 N. J. Eq. 498. An outgrowth of this principle is that, as between cestui 
 que trust and trustee andl all persons claiming under the trustee other- 
 wise than bv purchase for valuable consideration without notice, all 
 property belonging to the trust, however much it may be changed or 
 altered in its nature or character,' continues to be subject to or affected 
 by the trust. Pennell v. Deffell, 4 De G., M. & G. 372, 378. As a con- 
 comitant of the rule just stated, and to effectuate fully the fundamental 
 principle, another rule exists, that, when the trustee has improperly 
 changed the form of the estate, the cestuis que trust may elect whether 
 they will accept the estate in its form or will hold the trustee responsi- 
 ble for it in its original condition. Ferris v. Van Vechten, 73 N. Y. 
 113. If the improper conversion turns out to be advantageous, they 
 may adopt it and take the profit ; if it results in loss, they may insist 
 on having an equivalent for the estate as it was before the change ; 
 and when the cestuis que trust are infants, the court will deal with the 
 matter as it shall consider best for their interests. Holcomb v. Exec- 
 utor of Holcomb, 11 N. J. Eq. 281. This right of election by the cestuis 
 que trust is upheld by courts of equity in many cases where there has 
 been misconduct on the part of the trustee, as may be seen by refer- 
 ence to Fox v. Mackreth, 1 Lead. Cas. Eq. 115, and has been fully 
 approved by this court. Mulford v. Bowen, 9 N. J. Eq. 797 ; Stewart 
 v. Lehigh Valley Railroad Co., 38 N. J. Law, 505. It is enforced in 
 cases like the present, for if a trustee purchases property with trust 
 funds in his hands, and takes title in his own name and for his own 
 benefit, he will, at the option of the cestuis que trust, be decreed to 
 hold it in trust for them. Durling v. Hammar, 20 N. J. Eq. 220; 
 Story, Eq. Jur. §§ 1260, 1262. And if, in such a purchase, he has 
 mixed up moneys of his own with the trust funds, a trust will still 
 result to the cestuis que trust at their option, and the burden will be 
 on the trustee to show the amount of his own funds used in the pur- 
 chase, and so far as he fails to make that distinction the court holds 
 the property bound by the trust. Russell v. Jackson, 10 Hare. 204, 
 213; In re Pumfrey, L. R. 22 Ch. Div. 255; Perry, Trusts, § 128; 2 
 Pom. Eq. Jur. § 1076 (2).
 
 524 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. 6 
 
 Tn accordance with these doctrines we think that the complainants, 
 when their right to the possession of the trust estate matured by the 
 death of their mother, were entitled, upon showing that the trust funds 
 had formed a considerable part of the purchase money by which their 
 mother had acquired title to the Hnboken lots, to elect whether they 
 would claim a lien upon the- lots for the amount of the trust funds 
 \\-L-t\ in the purchase, or would claim the lots, subject to be charged, 
 in favor of the personal representatives of their mother, with so much 
 <>t the purchase money as consisted of her own funds, and that, in en- 
 deavoring to ascertain how much was trust money and how much was 
 the trustee's own, every reasonable intendment should be made against 
 the trustee through whose fault the trust had become obscure. 
 
 Since the complainants, being in possession of the lots, have filed 
 their hill in equity to have it decreed that by their trustee's purchase 
 they became owners of the fee in remainder after their mother's life 
 estate, they have thereby elected to take the real estate in lieu of the 
 tru>t money invested therein, and to hold it charged only with their 
 mother's own money so invested. Such a charge gives the husband 
 no right to maintain ejectment, and consequently the complainants are 
 entitled to a decree restraining his suit. 
 
 The present proceedings are not adapted to the ascertainment either 
 of the amount of the charge or of the persons entitled to enforce it. 
 
 Let the decree appealed from be reversed and a decree be entered as 
 above indicated. 
 
 JAMES A. CAMPBELL v. JOHN B. DRAKE et al. 
 
 (Supreme Court of North Carolina. 1844. 31) N. C. 94.) 
 
 Cause removed from the Court of Equity of Wake County, at the 
 Fall Term, 1845. 
 
 The hill states that the plaintiff kept a retail shop in Raleigh, and 
 that a lad, by the name of John Farrow, was his shopkeeper for sev- 
 eral years; and that, while in his employment, Farrow abstracted, to 
 a considerable amount, money and goods belonging to the plaintiff, 
 and that with the money of the plaintiff, taken without his knowledge 
 or consent, Farrow purchased a tract of land at the price of $500. The 
 bill states a great number of facts, tending to show that Farrow paid 
 for the laud with the effects of the plaintiff, which he dishonestly 
 converted to that purpose. Farrow afterwards died under age, ami 
 the land descended to his brothers and sisters; and the plaintiff, hav- 
 ing discovered his losses of money and merchandise, and that Farrow 
 had purchased the land as aforesaid, filed this hill against his heirs, 
 and therein insists, that he has a right to consider the purchase as 
 made, and the land held, for the use of the plaintiff, and that Farrow 
 should be declared a trustee for him.
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 525 
 
 The bill was answered, so as to put in issue the various charges of 
 dishonesty by Farrow, and the fact that the land was paid for with 
 money purloined from the plaintiff : and much evidence was read to 
 those points. 
 
 Ruffin, C. J. The Court, though naturally inclined to every pre- 
 sumption in favor of innocence, and especially of a young person, who 
 seems to have been so well thought of while he lived, is satisfied from 
 the proofs, that the plaintiff was much plundered by this youth ; and 
 we have no doubt, that every cent of the money with which he paid for 
 the land, he had pilfered from his employer. Nevertheless, we believe 
 the bill cannot be sustained. The object of it is to have the land itself, 
 claiming it as if it had been purchased for the plaintiff by an agent 
 expressly constituted ; and it seems to us, thus stated, to be a bill of 
 the first impression. We will not say, if the plaintiff had obtained 
 judgment against the administrator for the money as a debt, that he 
 might not come here to have the land declared liable, as a security, 
 for the money laid out for it. But that is not the object of this suit. 
 It is to get the land, which the plaintiff claims as his ; and, upon the 
 same principle, would claim it, if it were worth twenty times his 
 money, which was laid out for it. Now, we know not any precedent 
 of such a bill. It is not at all like the cases of dealings with trust funds 
 by trustees, executors, guardians, factors, and the like; in which the 
 owner of the fund may elect to take either the money or that in which 
 it was invested. For, in all those cases, the legal title, if we may use 
 the expression, of the fund, is in the party thus misapplying it. He has 
 been entrusted with the whole possession of it, and that for the pur- 
 pose of laying it out for the benefit of the equitable owner; and there- 
 fore all the benefit and the trustee ought, in the nature of his office, 
 and from his relation to the cestui que trust, to account for to that 
 person. But the case of a servant or a shopkeeper is very different. 
 He is not charged with the duty of investing his employer's stock, 
 but merely to buy and sell at the counter. The possession of the 
 goods or money is not in him, but in his master ; so entirely so, that he 
 may be convicted of stealing them, in which both a cepit and asporta- 
 vit are constituents. This person was in truth guilty of a felony in 
 possessing himself of the plaintiff's effects, for the purpose of paying 
 them out for his own lucre ; and that fully rebuts the idea of convert- 
 ing him into a trustee. If that can be done, there would be, at once, an 
 end to punishing thefts by shopmen. If, indeed, the plaintiff could 
 actually trace the identical money taken from him, into the hands of 
 a person who got it without paying value, no doubt he could recover 
 it ; for his title was not destroyed by the theft. But we do not see 
 how a felon is to be turned into a trustee of property, merely by show- 
 ing that he bought it with stolen money. If it were so, there would 
 have been many a bill of the kind. But we believe, there never was 
 one before; and, therefore, we cannot entertain this. But we think 
 the facts so clearly established, and the demands of justice so strong
 
 526 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. 6 
 
 on the defendants to surrender the land to the plaintiff, or to return 
 him the money that was laid out in it, that we dismiss the bill without 
 costs. 8 
 Per Curiam. Decree accordingly. 
 
 ELIZABETH S. NEWTON v. OLIVER PORTER et al. 
 
 (Court of Appeals Of New York, 1877. 69 N. V. 133, 25 Am. Rep. 152.) 
 
 Appeal from judgment of the General Term of the Supreme Court, 
 in the Third Judicial Department, affirming a judgment in favor of 
 plaintiff, entered upon a decision of the court at Special Term. 
 
 The nature of the action and the facts are set forth sufficiently in 
 the opinion. 
 
 Andrews, J. 9 This is an equitable action brought to establish the 
 right of the plaintiff to certain securities, the proceeds of stolen bonds, 
 and to compel the defendants to account therefor. 
 
 In March, 1869, the plaintiff was the owner of $13,000 of govern- 
 ment bonds, and of a railroad bond for $1,000, negotiable by de- 
 livery, which, on the 12th of March, 1869, were stolen from her, and 
 soon afterwards $11,500 of the bonds were sold by the thief and his 
 confederates, and the proceeds divided between them. William War- 
 ner loaned a part of his share in separate loans and took the promis- 
 sory notes of the borrower therefor. George Warner invested $2,000 
 of his share in the purchase of a bond and mortgage, which was as- 
 signed to his wife Cordelia without consideration. 
 
 In January, 1870, William Warner, George Warner, Cordelia War- 
 ner, and one Lusk were arrested upon the charge of stealing the bonds, 
 or as accessories to the larceny, and were severally indicted in the 
 County of Cortland. The Warners employed the defendants, who 
 are attorneys, to defend them in the criminal proceedings, and in any 
 civil suits which might be instituted against them in respect to the 
 bonds, and to secure them for their services and expenses, and for any 
 liabilities they might incur in their behalf, 'William Warner trans- 
 ferred to the defendants Miner and Warren promissory notes taken 
 on loans made by him out of the proceeds of the stolen bonds, amount- 
 ing to $2,250 or thereabouts, and Cordelia Warner, for the same pur- 
 pose assigned to the defendant Porter the bond and mortgage above 
 mentioned. 
 
 The learned judge at Special Term found that the defendants had 
 notice at the time they received the transfer of the securities, that they 
 were the avails and proceeds of the stolen bonds, and directed judg- 
 
 b Pascoag Bank v. Hunt. 3 Bdw. Ch. (N. Y.i 583 (1842); Ensley v. Balen- 
 tine, 4 Humph. (Tenn.) 233 (1843); Cunningham v. Wood, -l Humph. (Term.) 
 417 (1843); Hawthorne v. Brown, 3 Sneed (Tenn.) 462 (1856). 
 
 » A part of the opinion is omitted.
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 527 
 
 ment against them for the value of the securities, it appearing on the 
 trial that they had collected or disposed of them and received the pro- 
 ceeds. 
 
 The doctrine upon which the judgment in this case proceeded, viz., 
 that the owner of negotiable securities stolen and afterwards sold by 
 the thief may pursue the proceeds of the sale in the hands of the 
 felonious taker or his assignee with notice, through whatever changes 
 the proceeds may have gone, so long as the proceeds or the substitute 
 therefor can be distinguished and identified, and have the proceeds 
 or the property in which they were invested subjected, by the aid of 
 a court of equity, to a lien and trust in his favor for the purpose of 
 recompense and restitution, is founded upon the plainest principles of 
 justice and morality, and is consistent with the rule in analogous cases 
 acted upon in courts of law and equity. It is a general principle of 
 the law of personal property that the title of the owner cannot be di- 
 vested without his consent. The purchaser from a thief, however 
 honest and bona fide the purchase may have been, cannot hold the 
 stolen chattel against the true proprietor, but the latter may follow 
 and reclaim it wherever or in whosesoever hands it may be found. 
 The right of pursuit and reclamation only ceases when its identity is 
 lost and further pursuit is hopeless ; but the law still protects the in- 
 terest of the true owner by giving him an action as for the conver- 
 sion of the chattel as against any one who has interfered with his 
 dominion over it, although such interference may have been innocent 
 in intention and under a claim of right, and in reliance upon the title 
 of the felonious taker. The extent to which the common law goes to 
 protect the title of the true owner has a striking illustration in those 
 cases in which it is held that where a wilful trespasser converts a chat- 
 tel into a different species, as for example, timber into shingles, wood 
 into coal, or corn into whiskey, the product in its improved and chang- 
 ed condition belongs to the owner of the original material. Silsbury v. 
 McCoon, 3 N. Y. 380, 53 Am. Dec. 307 and cases cited. The rule" that 
 a thief cannot convey a good title to stolen property has an exception 
 in case of money or negotiable securities transferable by delivery, 
 which have been put into circulation and have come into the hands 
 of bona fide holders. The right of the owner to pursue and reclaim 
 the money and securities there ends, and the holder is protected in 
 his title. The plaintiff was in this position. The bonds, with the ex- 
 ception stated, had, as the evidence tends to show, been sold to bona 
 fide purchasers, and she was precluded from following and reclaiming 
 them. 
 
 The right of the plaintiff in equity to have the notes and mortgage 
 while they remained in the possession of the felons or of their as- 
 signees with notice, subjected to a lien and trust in her favor, and to 
 compel their transfer to her as the equitable owner, does not, we think, 
 admit of serious doubt. The plaintiff, by the sale of the bonds to 
 bona fide purchasers, lost her title to the securities. She could not
 
 528 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Cll. 6 
 
 further follow them. She could maintain an action as for a conver- 
 sion of the property against the felons. But this remedy in this case 
 Id be fruitless, as they are wholly insolvent. Unless she can 
 to regard the securities in which the bonds were invested as a 
 substitute, pro tanto, for the bonds, she has no effectual remedy. The 
 thieves certainly have no claim to the securities in which the proceeds 
 of the bonds were invested as against the plaintiff. The}-, without her 
 consent, have disposed of her property, and put it beyond her reach. 
 If the avails remained in their hands, in money, the direct proceeds of 
 the sale, can it he doubted that die could reach it? It is not neces- 
 sary to decide that, in the case supposed, she would have the legal title 
 to the money, hut if that question was involved in the case I should 
 have great hesitation in denying the proposition. That she could a»- 
 sert an equitable claim to the money, 1 have no doubt. And this 
 equitable right to follow the proceeds would continue and attach to 
 any securities or property in which the proceeds were invested, so long 
 as they could he traced and identified, and the rights of bona fide pur- 
 chasers had not intervened. 
 
 In Taylor v. Plumer, 3 M. & Sel. 562, an agent, intrusted with a 
 draft for money to buy exchequer hills for his principal, received the 
 money and misapplied it by purchasing American stocks and bullion, 
 intending to abscond and go to America, and absconded, hut was ar- 
 rested before he quitted England, and surrendered the securities and 
 bullion to his principal, who sold them and received the proceeds. 
 It was held that the principal was entitled to withhold the proceeds 
 from the assignee in bankruptcy of the agent, who became bankrupt 
 on the day he received and misapplied the money. Lord Ellenborough, 
 in pronouncing the opinion in that case, said : "It makes no difference, 
 in reason or law, into what other form different from the original the 
 change may have been made, whether it be into that of promissory 
 notes for the security of money produced on the sale of the goods of 
 the principal as in Scott v. Surman, Willes, 400, or into other mer- 
 chandise, as in Whitecomb v. Jacob, Salk. 160, for the produce or sub- 
 stitute for the original thing, still follows the nature of the thing it- 
 self so long as it can be ascertained to be such, and the right only 
 ceases when the means of ascertainment fails." 
 
 If. in the case now under consideration, the plaintiff had entrusted 
 the Warners with the possession of the bonds, and they had sold them 
 in violation of their duty, for the purpose of embezzling the proceeds, 
 and invested them in the notes and mortgage in question, the plaintiff 
 could, within the authority of Taylor v. Plumer, have claimed them 
 while in their hand-, or in the hands of their assignees with notice, 
 and would he adjudged to have the legal title. 
 
 In the courts of equity the doctrine is well settled and is uniformly 
 applied that when a person, standing in a fiduciary relation, misap- 
 plies or converts a trust fund into another species of property, the 
 beneficiary will be entitled to the propert) thus acquired. The juris-
 
 Cll. G) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 529 
 
 diction exercised for the protection of a party defrauded by the mis- 
 appropriation of property, in violation of a duty, owing by the party 
 making the misappropriation, is exceedingly broad and comprehensive. 
 The doctrine is illustrated and applied most frequently in cases of 
 trusts, where trust moneys have been, by the fraud or violation of 
 duty of the trustee, diverted from the purposes of the trust, and con- 
 verted into other property. In such case a court of equity will fol- 
 low the trust fund into the property into which it has been converted, 
 and appropriate it for the indemnity of the beneficiary. It is im- 
 material in what way the change has been made, whether money has 
 been laid out in land, or land has been turned into money, or how the 
 legal title to the converted property may be placed. Equity only stops 
 the pursuit when the means of ascertainment fails, or the rights of bona 
 fide purchasers for value without notice of the trust, have inter- 
 vened. The relief will be moulded and adapted to the circumstances 
 of the case, so as to protect the interests and rights of the true owner. 
 Lane v. Dighton, Ambler, 409; Mansell v. Mansell, 2 P. Wms. 697; 
 Lench v. Lench, 10 Vesey, 511 ; Lewis v. Madocks, 17 Ves. 56; Perry 
 on Trusts, § 829 ; Story's Eq. § 1258. 
 
 It is insisted by the counsel for the defendants that the doctrine 
 which subjects property acquired by the fraudulent misuse of trust 
 moneys by a trustee to the influence of the trust, and converts it into 
 trust property and the wrongdoer into a trustee at the election of the 
 beneficiary, has no application to a case where money or property ac- 
 quired by felony has been converted into other property. There is, it 
 is said, in such cases, no trust relation between the owner of the stolen 
 property and the thief, and the law will not employ one for the pur- 
 pose of subjecting the avails of the stolen property to the claim of the 
 owner. It would seem to be an anomaly in the law, if the owner who 
 has been deprived of his property by a larceny should be less favorably 
 situated in a court of equity, in respect to his remedy to recover it, or 
 the property into which it has been converted, than one who, by an 
 abuse of trust, has been injured by the wrongful act of a trustee to 
 whom the possession of trust property has been confided. The law in 
 such a case will raise a trust in invitum out of the transaction, for 
 the very purpose of subjecting the substituted property for the pur- 
 poses of indemnity and recompense. "One of the most common 
 cases," remarks Judge Story, "in which a court of equity acts upon 
 the ground of implied trusts in invitum, is when a party receives 
 money which he cannot consistently withhold from another party." 
 Sto. Eq. Juris. § 1255. And he states it to be a general principle that 
 "wherever the property of a party has been wrongfully misapplied, or 
 a trust fund has been wrongfully converted into another species of 
 property, if its identity can be traced, it will be held in its new form 
 liable to the rights of the original owner, or the cestui que trust. 
 (Section 1258. See, also, Hill on Trustees, p. 222.) 
 Ken.Tr.— 34
 
 530 CONSTRUCTIVE TRUSTS, ETC. — TRACING rnorERTT. (Cll. G 
 
 We arc of opinion that the absence of the conventional relation of 
 trustee and cestui que trust between the plaintiff and the Warners, 
 is no obstacle to giving the plaintiff the benefit of the notes and 
 mortgage, or the proceeds in part of the stolen bonds. See Bank of 
 America v. Pollock, 4 Edw. Ch. 215. 
 
 [The Court then concluded that the trial judge was justified by 
 the evidence in finding that the defendants had notice of the larceny 
 of the bonds, and the use made of the mone) arising from their sale, 
 at the time they received the notes and mortgage and therefore af- 
 firmed the judgment.] 10 
 
 AMERICAN SUGAR KKFIMW, CO. v. CHARLES II. 
 FANCHER, Assignee. 
 
 (Court of Appeals of New York, 1895. 145 N. Y. 552, 40 N. E. 206, 27 L. Ii. A. 
 
 757.) 
 
 Appeal from order of the General Term of the Supreme Conrt in the 
 First Judicial Department, made at the October Term, 1894, which re- 
 versed an interlocutory judgment in favor of plaintiff, entered upon 
 the report of a referee and the final judgment entered thereon, and 
 ordered anew trial. 
 
 This action was brought by plaintiff against defendant, as assignee, 
 for the benefit of creditors of the firm of C. Burkhalter & Co., to re- 
 cover the proceeds of the re-sale of certain goods alleged to have been 
 fraudulently purchased from plaintiff by said firm. 
 
 The interlocutory judgment adjudged defendant a trustee of the 
 goods mentioned in the complaint, and of the proceeds of such goods 
 as had come into his hands as assignee, and that he account for, trans- 
 fer and pay over to plaintiff all of said proceeds ; a reference was or- 
 dered for the purpose of the accounting. A stipulation was after- 
 wards entered into between the parties as to the amount of the pro- 
 ceeds received by defendant, and a final judgment in plaintiff's favor 
 in accordance therewith was rendered. 
 
 Andrews, C. J. This case presents a question of considerable prac- 
 tical importance. It relates to the equitable jurisdiction of the court 
 under special circumstances to follow proceeds of personal property 
 in the hands of a fraudulent vendee or his general assignee for the 
 benefit of creditors at the suit of a defrauded vendor, who by false 
 pretences was induced to part with the property on credit, the proceeds 
 sought to he reached being the sums due from sub-vendees of the fraud- 
 ulent purchaser arising on re-sales by him made before the discovery 
 by the plaintiff of the fraud. The facts upon which the question 
 
 loCattley v. Loundes, 34 W. R. 139 (1885); In re Ilulton, 39 W. R. 303 
 (1891); s. c. 8 Morrell, Bankpt. Rep. 69; Pirtle v. Price, 31 La. Ann. 357 
 (l.ST'.ti: National Mahaiwe Bank v. Harry, 125 .Mass. 20 (1878); Nebraska 
 Nat. Bank v. Johnson, 51 Neb. 546, 71 X. W. 294 ( 1SH7) ; Lamb v. Rooney, 
 72 Neb. 322, 100 N. W. 410, 117 Am. St. Rep. 795 (1904).
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 531 
 
 arises are substantially conceded and are free from complication. 
 Between the 20th day of September, 1892, and the 20th day of Oc- 
 tober following-, the plaintiff sold and delivered to the mercantile firm 
 of C. Burkhalter & Co., doing business in the City of New York, 
 sugars of various qualities on credit for the price in the aggregate of 
 $19,121.41, no part of which has been paid, the last sale having been 
 made October 19th, 1892. On the next day, the firm being insolvent 
 and owing debts greatly in excess of its assets, made a general assign- 
 ment to the defendant for the benefit of its creditors. Among the as- 
 signed assets were a portion of the sugars sold by the plaintiff to the 
 firm, which he replevied from the assignee, but the firm, prior to the 
 assignment, had sold to numerous persons, customers of the firm, in the 
 ordinary course of trade, portions of the sugars on credit, and claims 
 held by the firm against the sub-vendees arising out of such sales, ex- 
 ceeding in the aggregate the sum of $10,000, were among the assets 
 which passed by the assignment. These claims were collected by the 
 assignee after the assignment, and (excepting a small sum) after no- 
 tice had been served by the plaintiff on the assignee that it rescinded 
 the original sale for fraud, which notice was accompanied by a demand 
 for the sugars then in the possession of the assignee, and for an ac- 
 counting and the delivery to the plaintiff of the outstanding claims 
 against the customers of Burkhalter & Co., in their hands for the 
 sugars sold by the firm as above stated. The assignee declined to 
 accede to the demand made. On the trial the parties by stipulation 
 fixed the amount of the claims for sugars sold which had come to the 
 hands of the assignee and which had been collected by him. 
 
 The fraud of Burkhalter & Co. was not controverted. It was shown 
 that the sales were induced by a gross misrepresentation in writing 
 made by one of the members of the firm to the plaintiff as to the sol- 
 vency of the firm, made on or about September 20th, 1892, within 
 thirty days before the assignment, and when the firm was owing sev- 
 eral hundred thousand dollars more than the value of its whole assets. 
 
 The case presented is singularly free from any uncertainty in re- 
 spect to the facts upon which the equitable jurisdiction to follow the 
 proceeds of the sugars is claimed. They are definite and ascertained, 
 but it is insisted that the court is impotent to give relief by way of 
 subjecting the choses in action or their proceeds, representing the 
 sugars, to a lien in favor of the defrauded vendor, or to adjudge 
 that they shall be applied in partial recompense and restitution for the 
 property so wrongfully obtained, because, as is claimed, such relief is 
 not in any such case within the scope of the powers of courts of equity 
 as heretofore defined and exercised, and for the further reason that 
 new rights have intervened by reason of the assignment. The fraud 
 of Burkhalter & Co. was, as we have said, admitted. They are hope- 
 lessly insolvent, and were so at the time they took the plaintiff's goods. 
 They disposed of- a large part of the sugars before the plaintiff be- 
 came cognizant of the fraud. The plaintiff was only apprised of it
 
 532 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. 6 
 
 after the assignment was made. The remedy at law upon the contract 
 against the fraudulent and insolvent purchaser is, under the circum- 
 
 tices, ineffectual. The pursuit of the property, except the small 
 part of it which was unsold and passed to the assignee, is imprac- 
 ticable. If it yet be found unconsumed and capable of identification, 
 the multiplicity of suits which would he rendered necessary to reclaim 
 it would make the remedy expensive, burdensome and inadequate. 
 The identification of the proceeds sought to be reached is complete 
 and unquestioned. It is not claimed that the credits or the money into 
 which they have been converted are not the very proceeds of sugars of 
 which the plaintiff was defrauded. 
 
 The jurisdiction of a court of equity to follow the proceeds of prop- 
 erty taken from the true owner by felony, or misapplied by an agent 
 or trustee, and converted into property of another description, and 
 to permit the true owner to take the property in its altered state as 
 his own, or to hold it as security for the value of the property wrong- 
 fully taken or misapplied, or, in case the original property or its pro- 
 ceeds have been mingled with that of the wrongdoers in the purchase 
 of other property, to have a charge declared in favor of the person 
 injured to the extent necessary for his indemnity, so long as the rights 
 of bona fide purchasers do not intervene, has been frequently exerted 
 and is a jurisdiction founded upon the plainest principles of reason 
 and justice. The case of Newton v. Porter, 69 N. Y. 133, 25 Am. 
 Rep. 152. is an illustration of the application of this principle in a 
 case of the larceny of negotiable bonds, sold by the thieves, in which 
 the court subjected securities in which they invested the money, and 
 which they had transferred with notice to third persons as security for 
 services to be rendered, to a charge in favor of the owner of the stolen 
 bonds. The cases upon this head are very numerous, where there has 
 been a misapplication of trust funds by trustees, or persons standing 
 in a fiduciary relation, and the money or property misapplied has been 
 laid out in land or converted into other species of property. The court 
 in such cases lays hold of the substituted property and follows the 
 original fund, through all the changes it has undergone, until the 
 power of identification is lost or the rights of bona fide purchasers stop 
 the pursuit, and holds it in its grasp to indemnify the innocent victim 
 of the fraud. And even in case of money, which is said to have no 
 earmark, its identity will not be deemed lost, though it is mingled with 
 other money of the wrongdoer, if it can he shown that it forms a 
 part of the general mass. Pennell v. Deffell, 4 De G., M. & G. 372; 
 In re Hallett, 13 Ch. Div. 696; Holmes v. Oilman, 138 N. Y. 369, 34 
 N. E. 205, 20 L. R. A. 566, 34 Am. St. Rep. 463. In the cases of stolen 
 property, or of misapplication by a trustee or agent of the funds of 
 the principal or cestui que trust, the title of the real owner of the 
 property has been in most cases lost, without his consent, and the 
 court, by a species of equitable substitution, repairs, as far as prac- 
 ticable, the wrong, and prevents the wrongdoer from profiting by his
 
 Cll. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 533 
 
 fraud. And, indeed, courts of law, borrowing- the equitable prin- 
 ciple, in case of misapplication by agents, vest in the principal at his 
 election the legal title to a chattel or security in the hands of the agent, 
 purchased exclusively by the application of the embezzled or mis- 
 applied fund. Taylor v. Plumer, 3 M. & S. 562. 
 
 It is at this point that the controversy in the present case com- 
 mences, and the divergence arises which has led to this litigation. It 
 is claimed, on behalf of the defendant, that courts of equity in com- 
 mercial cases, where the claim of the plaintiff originates in a fraud 
 in the sale of personal property, does not undertake to follow proceeds 
 in the hands of the wrongdoer, but that the defrauded party having 
 consented to part with his title, is remitted exclusively to such legal 
 remedies as are given for the redress of the wrong. The jurisdiction 
 of courts of equity in cases of trusts or agency, or cases of like char- 
 acter, it is insisted, is founded upon the ancient jurisdiction of these 
 courts over trusts and fiduciary relations, and has not been and ought 
 not to be extended beyond these cases. It is very true that trusts and 
 trust relations are peculiarly cognizable in equity, and have been so 
 cognizable from the earliest period of equity jurisprudence. But it is 
 to be said that these are but branches of the larger jurisdiction over 
 frauds, which equity abhors, and of which it has cognizance admittedly 
 in many cases not connected with technical trusts or agency. It can- 
 not be denied that the protection of cestui que trusts against frauds of 
 the trustee is an object of peculiar solicitude in courts of equity. 
 They, in many cases, are incapable, by reason of age, inexperience or 
 other incapacity, from looking out for themselves, and the court stands 
 in the attitude of guardian of their interests. But, as has been said, a 
 court of equity does not restrict its remedial processes to the aid of 
 the helpless or the ignorant. It embraces within its view the general 
 claims included within what are called quasi trusts, and intervenes to 
 prevent violations of equitable duty by whomsoever committed or who- 
 ever may suffer from the violation. It goes altogether outside of trust 
 relations in many cases to prevent fraud, or to compel a restitution 
 of property obtained by fraud. The exercise of the jurisdiction to set 
 aside fraudulent transfers of real or personal property made in fraud 
 of creditors is familiar. And the jurisdiction is most beneficially in- 
 voked in cases of private fraud to rescind transfers of real estate 
 procured by fraudulent representations, and to restore to the defrauded 
 vendor the title of which he has been defrauded. It often happens in 
 cases of transfers of real estate procured by fraud, that before the ac- 
 tion is brought or the plaintiff is apprised of the fraud, the fraudulent 
 vendee has disposed of the land in whole or in part, or has created 
 liens thereon in favor of the bona fide purchasers for value. In such 
 cases the court will mould the relief to suit the circumstances, and 
 will, at the election of the plaintiff, rescind the contract and compel a 
 re-conveyance of the part of the land still remaining in the hands of 
 the vendee, and compel the wrongdoer to account for the proceeds of
 
 534 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. G 
 
 the land sold, or award compensation in damages. The court in many 
 cases resorts to the fiction of a trust, and, by construction, adjudges 
 that the proceeds in the hands of the wrongdoer are held by him as 
 trustee of the plaintiff. This was the exact nature of the relief 
 granted in the case of Trevelyan v. White, 1 Beav. 589, as appears by 
 the recital of the decree in the opinion of the master of the rolls, 
 where part of the estate had been sold by the fraudulent vendee. In 
 Cheney v. Gleason, 117 Mass. 5?7, a bill was filed by the defrauded 
 /endor of real estate to reach a mortgage taken by the vendee on the 
 land on a re-sale by him, and the court sustained the bill and granted 
 the relief. In Hammond v. Pennock, 61 X. V. 145, the court re- 
 scinded, at the instance of the plaintiff, a contract for the exchange 
 of real and personal property, owned by the plaintiff, for a farm of the 
 defendant in Michigan, which had hecn consummated on the plain- 
 tiff's part by a conveyance and transfer, the contract and conveyance 
 having been obtained by the defendant by fraudulent representations; 
 and the defendant having, after the conveyance to him, contracted to 
 sell part of the land conveyed to him by the plaintiff, the court adapted 
 the relief to the circumstances and rescinded the conveyance so far 
 as practicable, and adjudged that the defendant account for the pro- 
 ceeds of the personal property included in the sale. If the jurisdic- 
 tion exercised by courts of equity in respect to undoing fraudulent 
 conveyances of real estate and following the proceeds in the hands of 
 the fraudulent grantee, appertains in like manner and degree to sales 
 of personalty, it would seem that the plaintiff in the present case was 
 entitled to relief. 
 
 The fact that before the action was brought, Burkhalter & Co. had 
 made a general assignment for benefit of creditors to the defendant 
 is no obstacle to the relief, if, except for the assignment, the court 
 would have interposed, on the prayer of the plaintiff, its preventive 
 and other remedies, to have enabled the plaintiff to reach the unpaid 
 claims against the sub-vendee. As assignee for creditors he is not a 
 purchaser for value, and stands in no other or better position than his 
 assignor as respects a remedy to reach the proceeds of the sales. 
 Goodwin v. Wertheimer, 99 N. Y. 149, 1 X. E. 404; Barnard v. Camp- 
 hell. 58 N. Y. 76, 17 Am. Rep. 208; Ratcliffe v. Sangston, 18 Md. 
 383; Bussing v. Rice, 2 Cush. (Mass.) 48. It is claimed that the 
 general creditors of the firm will he prejudiced if the plaintiff is al- 
 lowed to prevail, and that he will thereby acquire a preference over 
 the other creditors of the insolvent firm. But general creditors have 
 no equity or right to have appropriated to the payment of their 
 debts the property of the plaintiff, or property to which it is equitably 
 entitled as 1 set ween it and Burkhalter & Co. They, so far as appears, 
 advanced nothing and gave no credit on the faith of the firm's pos- 
 session of the sugars, assuming that that element would have had any 
 bearing on the case. If the sugars had existed in specie in the hands 
 of the assignee it cannot be doubted that the plaintiff on rescinding the
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. JjiM 
 
 sale would have been entitled to retake them, and the general cred- 
 itors are in no worse position, if the plaintiff is awarded the proceeds, 
 than they would have been if the sugars had remained unsold. 
 
 Much was said on the argument upon the difference between a 
 trespasser taking and disposing of the property of another and the case 
 of a sale of personal property to a vendee induced by fraud. It is the 
 law of this State, as in England, that title passes on such a sale to the 
 fraudulent vendee, notwithstanding that the crime of false pretences 
 is included in the statute definition of a felony, but which was not 
 such at common law. Barnard v. Campbell, supra; Wise v. Grant, 
 140 N. Y. 593, 35 N. E. 1078; Benj. on Sales (6th Ed.) § 433; Fas- 
 sett v. Smith, 23 N. Y. 252; Benedict v. Williams, 48 Hun, 124. But 
 a purchase procured by fraud is in no sense, as between the vendor and 
 vendee, rightful. It was wrongful, and while a transfer so induced 
 vests a right of property in the vendee until the sale is rescinded, the 
 means and act by which it was procured was a violation of both a legal 
 and moral duty. But the rule is that a sale of personal property in- 
 duced by fraud is not void, but is only voidable on the part of the party 
 defrauded. "This does not mean that the contract is void until rati- 
 fied ; it means that the contract is valid until rescinded." When a 
 contract of sale infected by fraud of the vendee is consummated and 
 the property delivered, the vendor on discovering the fraud may pur- 
 sue one of several courses. He may affirm the contract, and an omis- 
 sion to disaffirm within a reasonable time after notice of the fraud will 
 be deemed a ratification. He may elect to rescind it, and thereby his 
 title to the property is re-instated as against the purchaser and all 
 persons deriving title from him, not being bona fide purchasers for 
 value, and a purchaser is not such who takes the property for an an- 
 tecedent debt or who purchased the property on credit and has not 
 paid the purchase money or been placed in a position where payment 
 to a transferee of the claim cannot be resisted. Barnard v. Campbell, 
 supra; Dows v. Kidder, 84 N. Y. 121; Matson v. Melchor, 42 Mich. 
 477, 4 N. W. 200; Benj. on Sales, p. 570, note. Upon rescission the 
 vendor may follow and retake the property wherever he can find it, 
 except in the case mentioned, or he may sue for conversion. 
 
 When these legal remedies are available and adequate, clearly there 
 is no ground for going to a court of equity. The legal remedies in 
 such case are and ought to be held exclusive. But in a case like the 
 present, where there is no adequate legal remedy, either on the contract 
 of sale or for the recovery of the property in specie, or by an action 
 of tort, is the power of a court of equity so fettered that where it is 
 shown that the property has been converted by the vendee and the 
 proceeds, in the form of notes or credits, are identified beyond ques- 
 tion in his hands, or in possession of his voluntary assignee, it cannot 
 impound such proceeds for the benefit of the defrauded vendor? The 
 only reason urged in denial of this power, which to our minds have any 
 force, is based on the assumption that it would be contrary to public
 
 536 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. G 
 
 policy to admit such an equitable principle into commercial transac- 
 tions. But with the two limitations adverted to, and which ought 
 strictly to be observed, i 1 1 that it must appear that the plaintiff has no 
 adequate remedy at law, either in consequence of insolvency, the dis- 
 persion of the property or other cause, and (2) that nothing- will be 
 adjudged as proceeds except what can be specifically identified as such, 
 business interests will have adequate protection. Indeed, the dis- 
 turbance would be much less than is now permitted in following prop- 
 erty from hand to hand until a bona fide purchaser is found. 
 
 'I'he case of Small v. Atwood, Younge, 507, is a very instructive case, 
 which involved a large amount, was argued by eminent counsel and re- 
 ceived great consideration. It supports, we think, the equitable ju- 
 risdiction invoked in the present case. It was an action by the pur- 
 chaser to rescind a contract for the sale of mines and mining property 
 induced by fraudulent representations, and to recover the purchase 
 money paid to the amount of about /200.000. The court found the 
 fraud and rescinded the contract, and made a decree for an account- 
 ing. On a supplemental bill being filed, showing that the purchase 
 money paid had been invested by the seller in public securities in his 
 name, which he afterwards caused to be put in the name of his mother, 
 and that the purchaser had no other means adequate to repay the pur- 
 chase money, the Chancellor, on an application for an injunction re- 
 straining the transfer of the securities, held that the money paid could 
 be followed into the stock purchased, and granted the injunction. 
 The case of In re Cavin v. Gleason, 105 N. Y. 256, 11 N. E. 504, was 
 an attempt to fasten upon the estate of an insolvent a preferential lien 
 for money put into his hands by the plaintiff for the purchase of a 
 mortgage for her, and which he applied, without authority, to the pay- 
 ment of his debts, before the assignment, with the exception of a small 
 sum ($30.00) which went into the hands of the assignee. The court 
 held that the money, which the insolvent had used to pay debts prior 
 to the assignment, was not a preferred debt, but sustained her right to 
 be paid the small sum which the assignee retained belonging to the 
 trust. This case points the distinction. The character of the debt 
 gave it no priority. The fund had been dissipated and could not be 
 traced among the assigned asset-. There was no equitable ground of 
 preference except for the small sum mentioned. 
 
 Upon the whole case, we are of the opinion that the judgment on 
 the report of the referee w 7 as correct, and the order granting a new 
 trial should, therefore, be reversed and the judgment on the report 
 of the referee affirmed, with costs. 11 
 
 Judgment accordingly. All concur. 
 
 ii Small v. Atwood, Younge, 107, 533 538 (1832) ; Taub v. McClelland-Colt 
 Co., 10 Colo. App. 190, 51 Pac. L68 (1897); Farwell v. Kloman, 45 Neb. 424, 
 63 x. w. 7'.^ (1895); Bank of America v. Pollock, 4 Edw Ch. (N. Y.) 215 
 (1843); Converse v. Sickles. 146 N. V. 200, 40 X. E. 777. 48 Am. St. Rep. 790 
 (1895); Reynolds v. /Etna Life ins. Co., 28 App. Div. 591, 51 N. Y. Supp. 446 
 (1898); affd. 160 N. Y. 635, 55 X. E. 305 (1899); .Men/, v. Beebe, 102 Wis. 342, 
 77 N. W. 913, 78 N. \Y. 601 (1899).
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 537 
 
 HUMPHREYS v.. BUTLER. 
 (Supreme Court of Arkansas, 18S8. 51 Ark. 351, 11 S. W. 470.) 
 
 Appeal from Pulaski Chancery Court; D. W. Carroll, Chancellor. 
 
 Battle, J. 12 Edward Johnigan enlisted in the army of the United 
 States during the late war between the States, and died in the service, 
 and before the close of the war. At the time he enlisted he had a wife, 
 Clarissa by name, and when he died he left her surviving. He also 
 had a brother Jacob, who survived him. In 1871 Jacob, without the 
 knowledge, consent or authority of his brother's widow, collected from 
 the United States $149.52, as bounty due his brother Edward, and in- 
 vested it in a certain lot in Little Rock, which he purchased, and which 
 cost him $400. Clarissa married one Butler. Having discovered 
 Jacob's collection and investment, they brought this action to divest him 
 of the title to the lot, and to vest it in Clarissa, or to recover a decree 
 for the amount collected in favor of Clarissa, and to have it decreed a 
 lien on the lot and the lot sold to satisfy the same. 
 
 The amount due Edward as bounty at the time of his death right- 
 fully belonged to his widow. There is no controversy about Jacob 
 having collected it, or the amount collected; and we think that the 
 evidence clearly shows that he invested it in the lot. But it is in- 
 sisted that he stood in no fiduciary relation to Clarissa, and that when 
 he collected the money due her, and invested it in the town lot, no 
 trust resulted to her. It is true that he stood in no relation of con- 
 fidence or trust to her. But it is not necessary that such a relation 
 should have existed to entitle her to relief against the lot. Equity 
 created a trust in invitum out of the collection and the investment of 
 her money in the lot, with the view of subjecting the lot to the pur- 
 poses of indemnity and recompense. 
 
 • "One of the most common cases," says Judge Story, "in which 
 a court of equity acts upon the ground of implied trust in invitum, is 
 where a party receives money which he cannot conscientiously with- 
 hold from another party." And he states it to be a general principle 
 that "whenever the property of a party has been wrongfully mis- 
 applied, or a trust fund has been wrongfully converted into another 
 species of property, if its identity can be traced, it will be held in its 
 new form liable to the rights of the original owner, or the cestui que 
 trust." Story's Eq. Jur. §§ 1255, 1258. 
 
 In 2 Pomeroy's Equity Jurisprudence, the author says : "In gen- 
 eral, whenever the legal title to property, real or personal, has been 
 obtained through actual fraud, misrepresentations, concealments or 
 through undue influence, duress, taking advantage of one's necessi- 
 ties or weakness, or through any other similar means or under any oth- 
 er similar circumstances, which render it unconscientious for the holder 
 of the legal title to retain and enjoy the beneficial interest, equity im- 
 
 12 A part of the opinion is omitted-
 
 538 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. 6 
 
 presses a constructive trust on the property thus acquired in favor of 
 the one who i» truly and equitably entitled to the same, although he 
 may never perhaps haw had any legal estate therein; and a court of 
 equity has jurisdiction to reach the property either in the hands of the 
 original wrongdoer, or in the hands of any suhsequent holder, until a 
 purchaser of it iu good faith and without notice acquires a higher right 
 and takes the property relieved from the trust. The forms and varie- 
 ties of these trusts, which are termed ex malcficio or ex delicto, are 
 practically without limit. The principle is applied wherever it is 
 necessary for the obtaining of complete justice, although the law may 
 also give the remedy of damages against the wrongdoer." Section 
 1053. 
 
 It has been held that equity will charge land paid for in part with 
 the proceeds of stolen property with a trust in favor of the owner 
 of the property for the amount so used. National Mahaiwe Bank v. 
 Barry, 125 Mass. 20; Newton v. Porter, 69 N. Y. 133, 25 Am. Rep. 
 152; Bank of America v. Pollock, 4 Edw. Ch. (N. Y.) 215. 
 
 There is no good reason why the owner of property taken and con- 
 verted by one who has no right to its possession, should be less favor- 
 ably situated in a court of equity, "in respect to his remedy to recover, 
 or the property into which it has been converted, than one who by an 
 abuse of trust has been injured by the wrongful act of a trustee to 
 whom the possession of trust property has been converted." "The 
 beautiful character, pervading excellence, if one may say so, of equity 
 jurisprudence," says Judge Story, "is that it varies its adjustments 
 and proportions so as to meet the very form and pressure of each par- 
 ticular case, in all its complex habitudes." While in the former case 
 no relation of confidence or trust exists, it impresses a constructive 
 trust upon the property obtained by the conversion for the benefit of 
 the party whose effects have been used in obtaining it; and, when such 
 effects or the proceeds thereof, were a part of the price paid, it makes 
 the property so obtained chargeable with an equitable lien in favor of 
 such party and entitles him to a "judgment for the sale of the property 
 a- upon foreclosure in default of payment within a time named." 
 Bresnihan v. Shehan, 125 Mass. 11, and cases cited; Wallace v. Duf- 
 
 field, 2 Serg. & R. (Pa.)' 521, 7 Am. Dec. 660; Day v. Roth, 18 X. Y. 
 /|/]g * * * 
 
 Appellee, Clarissa Butler is entitled to judgment for the $149.52, 
 and six per cent, per annum interest thereon. Inasmuch as the evi- 
 dence does not show wdien the money was actually received, and does 
 show that it was invested in the lot on the 14th of October, 1871, the 
 interest should be computed from that date. The $149.52 being only 
 a part of the price paid for the lot, she should have a lien thereon for 
 the amount due her, and a decree for the sale of the lot to satisfy the 
 lien in default of payment, within a specified time. 2 Perry on Trusts 
 (3d Ed.) § 842; Scale v. Baker, 28 Beavan, 91 ; Price v. Blackmore, 6 
 Beavan, 507; Lewis v. Maddocks, 17 Ves. 48.
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 539 
 
 The decree of the Chancery Court is reversed, and the cause is re- 
 manded, with an instruction to the Court below to enter a decree in 
 conformity with this opinion, and for other proceedings. 13 
 
 BONESTEEL v. BONESTEEL. 
 
 (Supreme Court of Wisconsin, 1872. 30 Wis. 516.) 
 
 Appeals from the Circuit Court for Dodge County. 
 
 The case presents two cross appeals from different parts of one and 
 the same judgment. The plaintiff, Belinda R. Bonesteel, brought her 
 action against the defendant, Jacob P. Bonesteel, upon a promissory 
 note executed by defendant to plaintiff. The answer admitted the 
 making of the note, but alleged that it was without consideration, hav- 
 ing been given under threats, and to avoid trouble and annoyance. 
 The answer further alleged, by way of counterclaim, that before the 
 making of the promissory note in question, defendant, with one Conk- 
 lin, was owner of certain gold claims of great value, in Colorado, the 
 title to which was in one Gorsline, in trust for defendant and Conklin, 
 and that Gorsline conveyed the claims to the plaintiff in trust for de- 
 fendant and Conklin, subject to Gorsline's claim for services in nego- 
 tiating the sale of the claims ; that by the terms of the agreement, plain- 
 tiff was to sell the claims, and after settling with Gorsline, to account 
 to defendant and Conklin for the balance of the proceeds received 
 on the sale of said trust estate; that plaintiff afterwards sold said 
 claims and trust estate, to one McLaughlin, but after settling with 
 Gorsline, had withheld from defendant his share of the proceeds, and 
 had neglected and refused to account for the money received by her, 
 out of said trust estate, and had converted the same to her own use. 
 Plaintiff, by her reply, admitted the ownership of the gold claims by 
 defendant and Conklin, the title being held in trust for them by Gors- 
 line, and alleged that her husband had purchased the claims of de- 
 fendant and Conklin, for value, and at the time of such purchase, and 
 before plaintiff conveyed to McLaughlin, it was agreed between her 
 husband, and the defendant and Conklin, but without her knowledge 
 and consent, that the conveyance from Gorsline should be taken in 
 the name of plaintiff; that in pursuance of such agreement, Gorsline 
 afterwards nominally conveyed the claims to plaintiff, but without her 
 knowledge, consent or privity ; that she never accepted of any trust in 
 relation to said claims, or any of the proceeds thereof under the deed, 
 nor was the deed ever delivered to her, and that she knew nothing 
 thereof, until one year afterward, when she joined with her husband in 
 conveying to McLaughlin, and that plaintiff never received any money, 
 
 is La ComitS v. Standard Bank, 1 Cababe & Ellis, 87 (1S83) ; In re Woods & 
 Malone (D. C.) 121 Fed. 599 (1903) ; Graves v. Pinchback, 47 Ark. 470, 1 S. 
 W. 682 (1886).
 
 540 CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. (Cll. 6 
 
 either as trustee or otherwise, from any person on account of said 
 claims, but that her husband had had the sole control thereof, and had 
 received all the money therefor. The evidence is sufficiently stated in 
 
 the opinion. The court found as facts: 1st, that the note set forth in 
 the complaint as the foundatii >n f< ir plaintiff's cause of action, was with- 
 out consideration, and that nothing was due plaintiff thereon; 2d, that 
 plaintiff did not receive the gold claims in trust, and was not liable 
 to account therefor. As conclusions of law, the court found: 1st, 
 that plaintiff take nothing by her complaint; 2d, that defendant take 
 nothing by his counterclaim. Judgment for defendant for costs. 
 Defendant excepted to the second finding of fact and second con- 
 clusion of law, and appealed. Plaintiff excepted to the first finding 
 of fact and first conclusion of law, and appealed. 
 
 Cole, J. 14 These are cross-appeals from different parts of the 
 same judgment. 
 
 In respect to the finding and judgment of the court below against 
 the counterclaim, set up in the defendant's answer, we think the 
 evidence was insufficient to charge the plaintiff as trustee of those 
 funds. It does not appear that she had any knowledge of the trust; 
 or accepted it. The facts, mainly relied on to show that she knew 
 of tiie trust and accepted it, are these: The trust property was con- 
 veyed to her by Judge Gorsline without any consideration being paid 
 by her therefor. She united with her husband in conveying this 
 same property to McLaughlin. A large portion of the proceeds of 
 the sale of the gold claims was subsequently placed to her credit, 
 on the hank books of Mr. Baker, which she drew out on her own 
 checks. 
 
 The conveyance by Gorsline was made in the absence of the plain- 
 tiff, and without her knowledge, at the instigation of the defendant 
 and the plaintiff's husband. She states, in her answer, that the deed 
 was never delivered to her, and testifies in her deposition that there 
 never was any property or gold claims conveyed to her by Gorsline, 
 in trust for the defendant and Conklin; that she never accepted 
 any such trust; never sold any such claims; nor received any money 
 for them. There is, really, no evidence to contradict her upon these 
 points. Suppose she had seen the conveyance from Gorsline to her. 
 It is not claimed that this conveyance expressed that the property 
 was conveyed in trust for any one. She states that after the commence- 
 ment of this suit, she was informed that her husband took a con- 
 veyance of these gold claims in her name, and she doubtless sup- 
 posed that they were his property. When she executed the deed to 
 McLaughlin with her husband, she was of the same impression. She 
 was entirely ignorant of the fact that the defendant had any interesl 
 whatever in the gold claims — if such was really the case — and the 
 parties conducting the business seem to have carefully concealed from 
 her, as well as others, the real nature of these transactions. Whether 
 
 i* A part of the opinion is omitted.
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 541 
 
 this concealment was resorted to for a fraudulent purpose, to place 
 these claims beyond the reach of creditors, we need not inquire. But 
 certain it is, that the plaintiff did not know, and had no means of 
 finding out, that these claims had been conveyed to her in trust, and 
 therefore the fact that she united with her husband, in conveying 
 them to McLaughlin, is not such an act as ought, under the circum- 
 stances, to charge her with the trust, for she doubtless supposed that 
 the claims belonged to her husband, and that the money which was 
 received from the sale of this property was likewise his. In this 
 case, if there was any evidence from which it could be assumed that 
 the plaintiff knew that the property was conveyed to her by Gorsline, 
 in trust ; or, that the proceeds of the sale belonged to the defendant, 
 there would be some ground for holding her liable in this action as 
 trustee. But there is no such evidence, and nothing whatever to in- 
 form her, that these moneys belonged to the defendant. We, therefore, 
 fully agree with the court below, in the conclusion that she never 
 received these moneys mentioned in the counterclaim in trust, and is 
 not liable to account therefor. * * * 
 Judgment affirmed. 
 
 MAST & CO. v. HENRY et al. 
 (Supreme Court of Iowa, 1884. 65 Iowa, 193, 21 N. W. 559.) 
 
 Action in equity to subject real estate to payment of certain judg- 
 ments recovered by the plaintiff against the defendant, G. W. Henry, 
 which real estate, the plaintiff claims, Henry conveyed to his daughter 
 and co-defendant, M. E. Henry, for the purpose of defrauding his 
 creditors. The court found for the defendant and entered a decree 
 accordingly. The plaintiff appeals. 
 
 Seevers, J. In 1874 Fiske & Co. recovered a judgment against 
 both of the defendants, and Hapgood & Co. recovered a judgment 
 about the same time against G. W. Henry alone. G. W. Bassett was 
 attorney for the judgment plaintiffs. The evidence warrants the 
 conclusion that M. E. Henry was the principal debtor on the Fiske 
 judgment. At that time G. W. Henry was the owner of Lot 1, in 
 Block 15 in Fort Dodge, and he conveyed the same to M. E. Henry 
 on the 1st day of September, 1874. No consideration was paid by 
 M. E. Henry for such conveyance. In the same month, but after- 
 wards, Fiske & Co. sold said lot under execution issued on their judg- 
 ment. It was sold in subdivisions 1, 2, 3 and 4, and D. B. Fiske be- 
 came the purchaser, and received a certificate of purchase. In June, 
 1875, Hapgood & Co. redeemed sub-lot 4 from said sale, and the 
 certificate of purchase was assigned to said firm. Afterwards, Hap- 
 good & Co. assigned the certificate of purchase to M. E. Henry, and 
 the sheriff conveyed sub-lot 4 to her in October, 1875, and sub-lots 
 1, 2 and 3 were at the same time conveyed to D. B. Fiske by the
 
 ."J-12 CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. (Cll. (J 
 
 sheriff, and in November thereafter, Fiske conveyed the same to 
 Bassett. A few days thereafter Bassett quit-claimed sub-lot 2 to 
 M. E. Henry, and she at the same time quit-claimed sub-lots 1 and 3 
 to Bassett. Afterwards, in November, 1875, all of said sub-lots were 
 -"Id for delinquent taxes to Bassett, and in 1878 the treasurer con- 
 veyed the same t<> him. Thereafter Bassett quit-claimed sub-lot 4 
 t<> M. E. Henry, and she quit-claimed sub-lot 2 to him. If these 
 several conveyances are regarded as valid against the plaintiff, then, 
 when this action was commenced, M. E. Henry only owned sub-lot 
 4, and the question is whether it can be subjected to the payment of 
 the plaintiff's judgments. There is no evidence showing bad faith 
 on the part of Bassett, and he must be regarded as a purchaser in 
 good faith and for value of D. B. Fiske. He held the title to sub-lots 
 1, 2 and 3 under such conveyance, free from equities in favor of the 
 plaintiff. Bui the contention of the plaintiff's counsel is that M. E. 
 Henry cannot be regarded as such a purchaser, because the whole 
 of lot 1 was conveyed to her in fraud of the rights of the plaintiff ; 
 that she had notice of the plaintiff's equities, and therefore cannot 
 be regarded as a purchaser in good faith ; and that she is not pro- 
 tected, although she obtained title from Bassett, who was a purchaser 
 in good faith and for value. In support of this proposition, 2 Pom. 
 Eq. § 754, is cited. 
 
 Counsel for the plaintiffs reply that the authority cited does not 
 apply, because no actual fraud on the part of either of the defendants 
 in making such conveyance has been established. It is conceded, 
 however, by counsel that M. E. Henry was a mere volunteer, and that 
 the conveyance to her was void as to existing creditors. To such a 
 party, however, counsel claim that the rule above stated has no applica- 
 tion. Counsel for the plaintiffs further contend that the conveyance 
 by the sheriff to M. E. Henry of sub-lot 4 should be regarded as a 
 redemption merely, because it was sold for her debt, which she was 
 primarily to pay. It is true that she was the principal debtor on the 
 Fiske judgment, but she was not liable on the Hapgood judgment. 
 To obtain the certificate of purchase, or to redeem from the sale, 
 whichever it may be regarded, required nearly $400, and we find that 
 the required amount was paid by M. E. Henry. To redeem from 
 the sale under the Fiske judgment did not require more than $175. 
 But Hapgood was the bona fide holder of the certificate of purchase, 
 and to obtain an assignment thereof, M. E. Henry was required to 
 and did pay, as we find from the evidence, about $225 in addition, 
 to Hapgood, for which she in no respect was liable. 
 
 We are unable from the evidence to conclude that M. E. Henry 
 received the conveyance of lot 1 from her father for the purpose of 
 defrauding his creditors. But the title, while it remained in her, 
 was liable to be divested at the instance of existing creditors of her 
 father, because she had paid no consideration therefor. While she 
 held the legal title of sub-lot 4 under the conveyance from the sheriff,
 
 Cll. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 543 
 
 said sub-lot was sold for delinquent taxes to Bassett, and he thereafter 
 obtained a treasurer's deed. The validity of the tax title in Bassett is 
 in no manner assailed, and the evidence warrants no other conclusion 
 than that Bassett acted, in procuring- such title, adversely to the de- 
 fendants. When the tax sale was made, M. E. Henry owned the 
 legal title to both sub-lots 2 and 4. When the title became vested in 
 Bassett, she and her father were in possession of sub-lot 2. For the 
 purpose of getting possession of the last named lot without litigation 
 Bassett quit-claimed all his interest in sub-lot 4 to M. E. Henry. 
 As Bassett's title under the tax deed was valid, and vested in him 
 the absolute title, we think he could convey to M. E. Henry, and she 
 would become vested with a good title, although she may have had 
 notice of the plaintiffs' equities, as above stated. She had not been 
 guilty of fraud, but, at most, was a mere volunteer, with notice. 2 
 Pom. Eq. § 754, and authorities cited in note 2. 
 
 WHEELER and GREEN v. GEORGE KIRTLAND and Others 
 
 (two cases). 
 
 G. W. KIRTLAND v. JOHN KIRTLAND and Others. 
 
 (Court of Chancery of New Jersey, 1872. 23 N. J. Eq. 13.) 
 
 These three suits were brought on for final hearing together, each 
 upon bill, answer, replication, and proofs. 
 
 Wheeler and Green, the complainants in the first two suits, had, 
 on the 16th day of December, 1869, recovered judgment in the Su- 
 preme Court of the state against the defendants, George Kirtland and 
 John Kirtland (who had been partners under the name of Kirtland 
 *& Co.), for $68,246. By an execution on this judgment they had 
 levied upon a lot of land of six and one-half acres, in Orange, known 
 as the Halsted Homestead, the title to which was in the name of 
 Emily G. Kirtland, the wife of George Kirtland; and on a tract of 
 land and messuage, the property of John Kirtland, also in Orange, 
 encumbered by two mortgages to George W. Kirtland, one for 
 $4,000 in his own right, and one for $75 to him as trustee for Cath- 
 arine Kirtland, the wife, and Jared T. Kirtland, the son of John 
 Kirtland, and by a judgment confessed by John Kirtland to George 
 W. Kirtland, in Essex County Circuit Court, for $16,714.42. 
 
 The bill in the first suit seeks to have the judgment of the com- 
 plainants declared a lien on the Halsted Homestead on the ground 
 that the same was purchased and paid for by George Kirtland out 
 of the assets of the firm when insolvent, and the title taken in the name 
 of his wife to protect it from the debts of the firm, and to hinder 
 and defraud their creditors. 
 
 The bill in the second suit alleges that the mortgage held by George 
 W. Kirtland on the premises of John, as trustee for Catharine and
 
 544 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. G 
 
 fared, was voluntary, and given without consideration when John 
 
 Kirtland and his firm were- insolvent, and seeks to have it declared 
 fraudulent and void as against the complainants and their judgment. 
 The third suit is by George W. Kirtland to foreclose his mortgage 
 $4,000, and his mortgage as trustee. It also seeks to have that 
 mortgage reformed by correcting a mistake of the scrivener, who. in 
 drawing it, had substituted the word "successors" for "heirs," after 
 the name of the mortgagee, in the granting clause; and further, to 
 have the amount due on his judgment made out of the sale of the 
 mortgaged premises. The defendant-. Wheeler and Green, contest 
 the bona fides and validity n\ both these mortgages, and of the judg- 
 ment, and allege that they all are without consideration, and intended 
 to delay and defeat creditors. 
 
 Tm: Chancellor [Abraham O. Zabriskie]. I shall first con- 
 sider the question with Emily G. Kirtland, as to the Halsted Home- 
 stead. 10 She was the daughter of M. ( ). Halsted, an old, respectable, 
 and wealthy resident of Orange, who had lived on this property for 
 more than forty years. Emily had been horn there, and had resided 
 on it until she was married to George Kirtland, in September, 1863, 
 and still continues to reside there. She continued, after her marriage, 
 to reside there in the family of her parents until March 5, 1864, when 
 the place was conveyed to her in fee by her father; after that, she 
 and her husband conducted the establishment, and her father and 
 mother boarded with them. For some time before her marriage her 
 father had talked of selling this place, and asked $25,000 for it. In 
 the winter after her marriage, and for some two months before the 
 conveyance, she had been bargaining with her father for the purchase 
 of this place, and concluded the bargain for the price of $25,000, of 
 which $5,000 was to be paid by charging it as an advancement to her, 
 and the $20,000 was to be paid in cash. This sum was advanced 
 by her husband by a check of his firm for that sum, intended as a gift 
 to her. She was the only remaining daughter or child, the others 
 having been previously married. Her father gave her the furniture 
 in the house. Mr. Halsted never drew the money for which the check 
 was given, or used it in any way, but handed it the next morning to 
 George Kirtland, who took it back to the firm, giving Mr. Halsted 
 credit in their books for the amount, $20,000. The firm from time to 
 time bought bonds for Mr. Halsted to that amount, their business 
 being that of bankers and stock and exchange brokers in the City of 
 Yew York. These bonds were left with Kirtland & Co., and were 
 used by them as collaterals for raising money, under an understanding 
 with Mr. Halsted. On the 10th day of November, 1864, Kirtland & 
 Co. failed, and stopped payment, and on the 25th made an assignment 
 of their New York assets for the benefit of certain creditors. 
 
 On the 24th day of November, 1864, two weeks after the failure, 
 Mr. Halsted advanced on a mortgage of the Homestead $14,000, 
 
 is Only so much of the opinion as deals with this question is given.
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY; 545 
 
 which was handed over to George Kirtland for the payment of the 
 debts of the firm, and on the 4th of November. 1865, he loaned $6,000 
 more on a second mortgage of the same property, which was handed 
 to George for the same purpose. These sums, or by far the greater 
 part of them, were used in paying the debts of the firm, part in pay- 
 ing a debt for which $10,000 of Mr. Halsted's bonds were pledged, 
 part in payment of a debt for which $17,000 of borrowed Tennessee 
 bonds had been pledged, and the rest for other debts. 
 
 Mrs. Emily G. Kirtland retained possession of her homestead, and 
 the lands having risen much in value, sold different parcels of it for 
 large prices, and with these moneys, and the amount which came to 
 her as her share of the estate of her father, who died in 1866, being 
 about $20,000, she has nearly paid off the mortgages. The judgment 
 of Wheeler and Green in this state was obtained more than five years 
 after the failure, and after these sales and payments. 
 
 The above statement of facts is the conclusion to which I have 
 arrived from consideration of the testimony, and is fully established 
 by the evidence. 
 
 I shall assume it also as established by the evidence, that the firm 
 of Kirtland & Co. were, on the 5th of March, 1864, largely insolvent, 
 although upon this point there is contradictory testimony. I shall 
 also assume that George Kirtland knew of the insolvency. He denies, 
 under oath, that the firm was then insolvent, or that he thought that 
 it was ; and his ignorance of, and incapacity for business displayed 
 in his testimony, if not simulated, is so great that perhaps I should 
 credit him as to his belief. 
 
 It is shown to my satisfaction that his wife Emily and her father 
 did not know of, or suspect, the insolvency of the firm at the advance 
 of the $20,000. His wife supposed he was wealthy and doing a good 
 business. This is shown by her responsive answer and testimony, 
 and confirmed by the fact that the complainants, Wheeler and Green, 
 and other dealers who trusted them with millions, treated and dealt 
 with them as responsible and wealthy. A young wife could not be 
 supposed to suspect her husband in matters as to which she saw 
 experts in business, not related by blood or affinity, trusting him with 
 such amounts. There is no reason to doubt her testimony. That 
 upon the failure, two-thirds of the advance, and, within a year after, 
 the residue of it, was repaid by the wife to the firm from whom 
 it was taken, is established and not disputed. 
 
 Wheeler and Green were creditors of the firm at the time the $20.- 
 000 was advanced. The firm were their bankers ; they deposited their 
 moneys with them, and drew from them as needed. Their account was 
 very active; the debt due to them from the firm at its failure was not 
 the same debt as was due at the advance to Mrs. Kirtland. It may be 
 that there was a time when their account was overdrawn, and the firm 
 owed them nothing. But as at its failure, it owed them over $40,- 
 Kex.Tk.— 35
 
 546 CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. (Cll. 6 
 
 000, as the dealing was continuous, and the over-draft, if any, ac- 
 cidental, I shall assume their rights to be the same as to this property, 
 as if some indebtedness to them had continued from the advance to 
 the failure. 
 
 The question then presented is this: If a man when insolvent or 
 in debt, advances money as a gift to his wife or his son, they being 
 at the time ignorant of the indebtedness or insolvency, and they pur- 
 chase property or enter into business with this money, but afterwards, 
 upon learning of the embarrassment of the donor, pay back in full 
 the amount received, does this transaction impress the property pur- 
 chased, or the profits of the business in which they engaged with such 
 an indelible trust for creditors that at any distance of time afterwards 
 the creditors can claim the property purchased and its advances, or 
 the profits made in such business, both before and after refunding 
 the advance? 
 
 I am of opinion that if the donee in such case receives the money 
 in good faith, supposing that it was advanced by a perfectly solvent 
 person, and that the gift could not injure his creditors, present and 
 future, and was not intended for such purpose, and the amount is 
 afterwards repaid in full to the source from which it was received, 
 there is no fraud or other ground to infer or create a trust for future 
 or even existing creditors, in the profits of the business or advance 
 of the property after the money is returned, or even while it is kept 
 in good faith. There is no privity or confidence between the donee 
 and the creditor, or any other thing out of which a trust can arise. 
 Fraud may create a trust; but here is in the donee neither actual 
 nor legal fraud. 
 
 I have no doubt that a voluntary conveyance or gift of property, 
 made at this time by Kirtland to his wife, even if received in perfect 
 good faith, would have been void as against his creditors. If the gift 
 had been in money she could have been compelled to repay it ; but if 
 it had been repaid or refunded before a creditor obtained a judgment 
 or other lien, she could not again be compelled to pay it to the creditor, 
 unless the payment was made so as to aid her husband in defrauding 
 creditors. It is not necessary to decide whether if the money had not 
 been repaid, the property purchased with it and held by the donee 
 would be in trust for creditors beyond the amount of the advance. 
 
 The rights of creditors should be protected. No property of the 
 debtor should be allowed to be conveyed away and held by a donee 
 without consideration or in trust for the debtor. It should be followed 
 into whosesoever's hands it may be, except that of a bona fide pur- 
 chaser for value, and given to the creditor. Beyond this the creditor 
 has no right. And there are other persons who have rights to be pro- 
 tected as well as creditors. The wife or son of one who has been un- 
 fortunate or attempted to defraud, should not, to gratify a feeling of 
 vindictiveness against a wrongdoer with whom they are so nearly con- 
 nected, be stripped of what fairly belongs to them. When the creditor
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 547 
 
 has his three thousand ducats he must not seek for the penalty of the 
 pound of flesh or for a single drop of blood. 
 
 There can be little doubt, from the great rise in its value since, that 
 this property, in March, 1864, when it was conveyed, was worth more 
 than $25,000. At that time the depressing effect of the first years of 
 the war was being relieved. The increase of money by the immense 
 circulation of irredeemable legal tender notes had raised the money 
 value of land by reducing the value of money, and if this property in 
 1860 was worth $25,000, it was worth much more then. The price of 
 $5,000, charged by a father to a cherished daughter, was very likely, to 
 his knowledge, below its value, and the conveyance intended as a favor 
 to her. It would be gross injustice to take from that daughter, anxious 
 and uniting with her father to preserve the home of her childhood, 
 all the benefits, advantages, and profits of that purchase above the 
 naked $5,000, and hand them over to the creditors of her husband, to 
 whom they never, in law, equity or right, belonged. 
 
 I know of no precedent for declaring the honest recipient of a 
 temporary gift, fully returned, a trustee for the benefit of creditors. 
 The only precedent I find for declaring such a trust is where the prop- 
 erty was purchased by the husband himself, and the deed taken in the 
 name of his wife — not for her benefit, but to be held in her name for 
 the benefit of the husband to defraud his creditors. 
 
 A trust is held to result by operation of law, where one purchases 
 land with his own money and takes the conveyance in the name of 
 another; in such case the title is deemed to be in trust for him who 
 advanced the money, for the presumption is that he intended to pur- 
 chase for his own benefit. So where one employs an agent, and 
 furnishes him with money to purchase land, and the agent purchases 
 the land with this money, and takes the title in his own name, a trust 
 results for the principal ; but not if one employed as an agent purchas- 
 es the land with his own money. But if one purchases land and 
 takes the title in the name of his wife or child, it will be held to be a 
 settlement on the wife, or an advancement to the child, unless it is 
 shown to have been otherwise intended, and no trust will result. 2 
 Story's Eq. Jur. §§ 1201-1205; Guthrie v. Gardner, 19 Wend. (N. 
 Y.) 414. But in such case, if the purchaser takes the deed in the 
 name of his wife or child, for the purpose of defrauding or delaying 
 creditors, and not for the purpose of making a settlement or advance- 
 ment, a trust will result to the purchaser, and the land be liable to his 
 debts. 
 
 In Belford v. Crane. 16 N. J. Eq. 265, 84 Am. Dec. 155, this doc- 
 trine was applied by Chancellor Green, and a trust was held to result 
 for the husband, and the land held liable to his debts. But it is put 
 by the Chancellor on the ground that the whole of the property of the 
 husband was put in the name of his wife to place it beyond the reach 
 of his creditors. He says: "The transfer was not made by deed of 
 settlement. There was no declaration of a purpose by the husband to
 
 548 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. 6 
 
 appropriate a specific portion of his property for the use of his wife, 
 but the property from time to time was purchased in the name of his 
 wife, and a house subsequently erected thereon with the means of the 
 husband." And in that case, as the Chancellor declared, every vestige 
 of property that the husband owned was in the name of his wife; 
 and it was held that "the land having been purchased with the money 
 of the husband, there is a resulting trust in his favor." But the rea- 
 son of the case shows that had the land been purchased with a specific 
 sum set apart for a settlement upon the wife, the conclusion would 
 have been different. The gift might have been declared void as 
 against creditors, but no trust could have resulted. 
 
 In (huh rie v. Gardner the same doctrine was held and applied by 
 Chief Justice Nelson. In that case the husband purchased and paid 
 for the land and took the deed in the name of the wife, for the avowed 
 purpose of keeping the property from his creditors; and the Chief 
 fustice held that it was perfectly clear from the facts that the husband 
 had no intent to make provision for his wife, and a resulting trust 
 arose to the husband; that the fee thus passed to him and was sub- 
 ject to his debts. 
 
 But this is not a case of a purchase made by a husband in the name 
 of his wife. It was a purchase made by the wife herself, of her 
 father, of the family homestead for her own benefit ; she herself 
 made the bargain. 1 fully believe her testimony on this point. She 
 got from her husband a large part of the purchase money which she 
 paid for the conveyance. There is no authority for the creation of a 
 resulting trust from such facts. When the person to whom the con- 
 veyance is made makes the bargain for the purchase for his own bene- 
 fit, and obtains part, or even the whole of the purchase money from 
 another, who knows that it is to be paid for a conveyance to the grantee 
 for his own benefit, no resulting trust can arise. Else any stranger or 
 banking institution that advances the money to make a purchase that 
 turns out advantageous, might take the property and the profits of 
 the purchase as cestui que trust. In this case the purchase was made 
 by Mrs. Kirtland for her own benefit, and was understood to be made 
 for that purpose by her father and her husband. The $20,000 was ad- 
 vanced by her husband as a gift to her. There is no principle or au- 
 thority on which this can be declared to create a resulting trust in him 
 for the benefit of his creditors. 
 
 There is another principle that will prevent in this case a resulting 
 trust. When the person to whom the conveyance is made pays part 
 of the purchase money, no trust results to anyone who advances the 
 residue, unless, in the language of Justice Hoar, in McGowan v. Mc- 
 ( '.< iwan, "the part of the purchase money paid by him in whose favor 
 the resulting trust is sought to be enforced, is shown to have been 
 paid for some specific part or distinct interest in the estate — for some 
 aliquot part, as it is sometimes expressed." lie declares "that a gen- 
 eral contribution of a sum of money toward the entire purchase money
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 549 
 
 is not sufficient." 14 Gray (Mass.) 119, 74 Am. Dec. 668. To the 
 same effect are the decisions in Crop v. Norton, 2 Atk. 74; White v. 
 Carpenter, 2 Paige (N. Y.) 240, and Say re v. Townsend, 15 Wend. 
 (N. Y.) 647. The doctrine is commented on and approved in Browne 
 on Frauds, 86. 
 
 In this case there was no intention to purchase in fifths, nor was the 
 advance intended to represent four-fifths or any other aliquot part of 
 the estate; it was the intention of the father to convey the whole 
 estate, upon the payment of $20,000 in cash, and to charge her $5,000 
 only on the advancement, even if the surplus of value was twice that 
 sum. 
 
 For these reasons I am of opinion that no trust by reason of any 
 fraud of Mrs. Kirtland, and no resulting trust, did arise or could 
 arise, either for her husband or his creditors. And even if it was a 
 case on which a resulting trust might have arisen, the fact that the 
 whole amount advanced was returned by her to her husband, for his 
 firm, from which the money was taken, and accepted by them four 
 years before the complainants acquired any lien upon the property, 
 and while the partners had full power to settle their own affairs, 
 would have released the property from the trust. If she had given 
 a mortgage to the firm for this $20,000, payment in 1864 and 1865, if 
 made without fraud, would have discharged it, even although the 
 partners had squandered the money and not applied it to the payment 
 of debts. 
 
 In this case the great increase of value has accrued since the $20,000 
 was refunded and accepted, and it would be gross injustice to declare 
 that creditors of her husband were entitled to this, if the doctrine of 
 trusts had required it. 
 
 The view I have taken of this question being on the assumption 
 that Wheeler and Green were creditors at the time of the advance of 
 the $20,000, and that they continued such until the failure, relieves 
 me from the investigation of the accounts and examinations of the 
 piles of firm ledgers, and accounts exhibited and produced to show 
 that the debt to them at the time of the advance was paid off and dis- 
 charged long before the failure, and that no part of their present claim 
 is for any debt then existing, and that about the 1st of July, 1864, 
 the firm for a period of some days owed them nothing — questions not 
 without doubt ; and also from discussing and applying the question of 
 law, whether an advance made to a wife or child can be questioned by 
 a subsequent creditor, if all debts existing at the time of the advance- 
 ment had been paid and settled, and there is no actual intent by the 
 advancement to defraud subsequent creditors. 
 
 The bill against Emily G. Kirtland and others must be dismissed.
 
 550 CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. (Ch. 6 
 
 TRUESDELL v. BOURKE. 
 
 {Supreme Court of New York, Appellate Division, Fourth Department, 1898. 
 29 App. DIv. 95, 53 N. V. Supp. !"'.».) 
 
 Appeal by the plaintiff, John \V. Truesdell, as administrator, etc., 
 of John Fitzgerald, deceased, fr< m a judgment of the Supreme Court 
 in favor of the defendant, entered in the office of the Clerk of the 
 County of Onondaga, on the 27th day of February, 1896, upon the 
 dismissal of the complaint by direction of the court, after a trial at 
 the Onondaga Trial Term, with notice of an intention to bring up for 
 review upon such appeal an order bearing date the 26th day of Febru- 
 ary. 1X96, dismissing the complaint. 
 
 This action was begun March 28, 1885, to recover $1,000, with 
 interest from March. 1882. alleged to have been fraudulently trans- 
 ferred by the plaintiff's intestate to Kate Fitzgerald to defraud his 
 creditors, and by her transferred, with like intent, to William J. 
 Rourke. Plaintiff's intestate died February 28, 1882, hopelessly in- 
 solvent. April 15. 1887, William J. Bourke died leaving a last will 
 and testament, which was duly probated, and letters testamentary is- 
 sued thereon to Hannie L. Bourke, who was substituted as the defend- 
 ant herein. In January, 1893, a trial was held, and a verdict directed 
 for the plaintiff, a judgment entered thereon, which was reversed, and 
 a new trial granted, on the ground that there was a question of fact 
 for the jury. 69 Hun, 613, 25 N. Y. Supp. 1130. In 1894 a second 
 trial was held, which resulted in a verdict for $1,000, with interest 
 from May 28, 1885, a judgment was entered thereon, which was af- 
 firmed (80 Hun, 55, 29 N. Y. Supp. 849), but was reversed by the Court 
 of Appeals and a new trial granted. 145 N. Y. 612, 40 N. E. 83. The 
 third trial occurred in February, 1896, and, at the close of the plain- 
 tiff's evidence, the court dismissed the complaint, and from the judg- 
 ment entered on the dismissal this appeal is taken. 
 
 Follett, J. This action was begun pursuant to Chapter 314 of the 
 Laws of 1858, which provides that an administrator of an insolvent 
 estate may treat as void all transfers made by the intestate in fraud 
 of the rights of creditors, and authorizes the administrator to main- 
 tain actions for the recovery of property so transferred. That the 
 estate of John Fitzgerald was largely insolvent, and had been for some 
 time preceding his death, is an undisputed fact. 
 
 It has always been the rule that a creditor of an insolvent decedent 
 might maintain an action to set aside as fraudulent a voluntary con- 
 veyance or transfer made in the lifetime of the decedent. Frazer v. 
 Western, 1 Barb. Ch. 220, affirmed How. Ct. App. Cas. 448; Loomis 
 v. Tifft, 16 Barb. 541 ; Estes v. Wilcox. 67 X. Y. 264. The statute 
 above referred to has made no change in the law, except it confers 
 the right upon the representative to recover property fraudulently 
 transferred by his insolvent intestate for the benefit of all the creditors, 
 which right did not exist previous to the statute. William J. Bourke
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 551 
 
 testified in his lifetime that the $1,000 were given him for the benefit 
 of the Church of St. John the Baptist for the Sacred Heart School. 
 The transfer being- voluntary, and the intestate insolvent when it was 
 made, and remaining so until his death, it is immaterial whether Wil- 
 liam J. Bourke knew that the intestate was insolvent or not, provided 
 he had not transferred the money to the Church or School without 
 notice and in good faith. 
 
 In case a person makes a voluntary conveyance or transfer of his 
 property, and is insolvent at the time, such voluntary conveyance or 
 transfer is fraudulent as against his creditors, even though the trans- 
 feree was without knowledge or notice that the transferer was in- 
 solvent. Mohawk Bank v. Atwater, 2 Paige, 54; Smart v. Harring, 
 52 How. Prac. 505 ; Salomon v. Moral, 53 How. Prac. 342 ; Emmerich 
 v. Hefferan, 26 J. & S. 217. If an insolvent debtor makes a voluntary 
 conveyance or transfer of his property, real or personal, and that fact 
 be clearly established, the inference is inevitable that the conveyance 
 is fraudulent as against creditors. Coleman v. Burr, 93 N. Y. 17, 45 
 Am. Rep. 160. It being undisputed that John Fitzgerald was insolvent 
 at the time when the $1,000 were given to William J. Bourke, it fol- 
 lows, as a matter of law, that as against the creditors of the former 
 the gift or transfer was fraudulent in law and invalid. See cases above 
 cited, and Wait, Fr. Conv. § 208; Bump, Fr. Conv. 276, and cases 
 cited. This species of fraud is treated of in works on equity juris- 
 prudence, under the head of constructive fraud and voluntary convey- 
 ances and transfers, and the rule of law herein declared has never, 
 so far as I am aware, been questioned. 
 
 The important question is, was the evidence given on this trial 
 sufficient to raise a question of fact for the jury, whether William J. 
 Bourke, before he transferred the gift to the church or school, if he 
 ever did, had knowledge or notice that the intestate was insolvent 
 when the gift was made? 
 
 William J. Bourke was a Catholic priest, and pastor of the Church 
 of St. John the Baptist, at Syracuse, N. Y., which maintained a school 
 known as Sacred Heart. At the death of John Fitzgerald, and for 
 some time before, his money, amounting to more than $3,000, had been 
 kept on deposit with the Trust and Deposit Company of Onondaga 
 in the name of "Kate Fitzgerald," on whose passbook was written 
 "John Fitzgerald may draw." March 14, 1882, fourteen days after 
 the death of John Fitzgerald, Kate Fitzgerald drew the balance of 
 this account, amounting to $3,520.41, and on the same day the State 
 Bank of Syracuse drew a draft on the First National Bank of New 
 York for $1,000 payable to the order of Kate Fitzgerald, which was 
 endorsed by her to William J. Bourke, and it also bore the following 
 restrictive endorsement: "Pay Union Trust Co. for collection on 
 account Syracuse Savings Bank." On the same day, March 14, 1882, 
 $1,000 were credited to the account of "Rev. Wm. J. or Hannie L. 
 Bourke" with the Syracuse Savings Bank.
 
 552 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. 6 
 
 I tannie L. Bourke was a sister of William J. Bourke and is now the 
 executrix of his estate. In 1882 there was an account in the Syracuse 
 Savings Hank kept in the name of "Rev. Win. J. or Hannie L. Bourke." 
 In the same year the Syracuse Savin--. Hank held a mortgage on the 
 property of the Church of St. John the Baptist, on which William J. 
 Bourke paid, July 8, 1882, $1,000 by a check drawn on the Salt Springs 
 Bank, as testified by Reidel, an employee of the Syracuse Savings 
 Bank, and he also testified that there was no withdrawal on that day 
 from the account of "Rev. Win. J. or Hannie L. Bourke." This ac- 
 count is in evidence, and there were no withdrawals therefrom during 
 1882, except two items of $100 each, one item of $150. and another 
 item of $200. So it is apparently established that the $1,000 paid on 
 the mortgage came not from the account into which the $1,000 belong- 
 ing to the estate of the intestate was traced, but from some other 
 source. 
 
 April 11, 1882, John W. Truesdell was appointed administrator of 
 the estate of John Fitzgerald. George EC. Collins, an attorney, testified 
 that within a week, he thinks, after Truesdell's appointment the claim 
 against Bourke was placed in his hands, and he wrote him requesting 
 an interview, that Bourke came to his office and he told Bourke that 
 the estate had a claim of $1,000 or $1,100 which he would better pay, 
 as to keep it back would injure him. He told Bourke that he under- 
 stood that he claimed the sum as a gift, but that it was not good. 
 He testified that Bourke did not admit that he had received the money, 
 hut said it would be time enough to give it up when it was shown that 
 he had it. James Keefe testified that he had a conversation with Wil- 
 liam J. Bourke about five or six months after the death of John Fitz- 
 gerald, which would he in July or August, 1882, in wdiich Bourke 
 -aid: "He said he had the thousand dollars that came from John 
 Fitzgerald, and he spoke one time that he thought he could secure a 
 judgment from George Porter. That it was a question whether he 
 could keep this money or not, and he understood that George Porter 
 had a judgment that he could secure for nothing as an offset against 
 this thousand dollars." 
 ^ ( ictober 2, 1882, William J. Bourke was examined in the Surrogate's 
 Court of the County of Onondaga, and testified: "John Fitzgerald 
 gave me one thousand dollars in charity for a school; he gave it me 
 about one year ago. I got this money after his death ; I got the money 
 through the hands of Kate Fitzgerald; I deposited the money or 
 check in the Syracuse Savings Hank in my own name. It was just 
 one thousand dollars. I had no papers or writing in respect to this 
 money from John Fitzgerald. I knew he left one thousand dollars 
 for me as agent of the church. I asked Kate Fitzgerald for this 
 thousand dollars. She said John Fitzgerald had spoken to her about 
 it and left it with her for me as treasurer of the church, that John 
 Fitzgerald had left for that purpose. * * * I paid this one thou- 
 sand dollars to the Syracuse Savings Bank on a mortgage the Bank
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 553 
 
 held against St. John the Baptist Church, of which I am the pastor." 
 
 April 15, 1887, about two years after this action was begun, and be- 
 fore the first trial, William J. Bourke made his last will and testament, 
 which after his death was duly probated. The following is a copy of 
 the 4th clause of his will : 
 
 "Fourth. There is also deposited in the Syracuse Savings Bank the 
 sum of one thousand dollars which belonged to the Sacred Heart 
 School under the supervision of the Sisters of St. Joseph, unless a 
 judgment is rendered against me or my estate in the action pending 
 in favor of John W. Truesdell, as administrator of the goods, chattels 
 and credits of John Fitzgerald, in which event I direct said money to 
 be applied in satisfaction of said judgment." 
 
 The evidence referred to is quite sufficient to raise an issue of 
 fact for the jury whether William J. Bourke had notice when he paid 
 the money over for the benefit of the Church, if he ever did, that the 
 donor was insolvent and that the money was claimed by his admin- 
 istrator. 
 
 The rule is elementary that in case an innocent transferee, acting 
 as trustee, of money transferred in fraud of creditors, pays it over be- 
 fore notice of the fraudulent character of the transfer, according to 
 the terms of the transfer, he is not liable, but in case he pays it over 
 according to the terms of the transfer, after notice of the fraudulent 
 character of the transfer, he is liable in an action brought for the 
 benefit of creditors. Bump, Fr. Conv. (2d Ed.) c. 24, and cases cited. 
 
 It should be stated that the evidence contained in this record in 
 respect to notice is quite different from the evidence contained in the 
 record reviewed by the Court of Appeals. 
 
 The view taken of this case renders it unnecessary to consider the 
 exceptions to the rulings on the admission or rejection of evidence 
 which have been argued. 
 
 The judgment should be reversed and a new trial granted, with 
 costs to the appellant to abide the event. 
 
 In case the jury finds the following propositions the plaintiff will 
 be entitled to recover: (1) That the intestate or his estate was in- 
 solvent when the gift was made. (2) That William J. Bourke had not 
 paid over to the church or school the money given him when this 
 action was begun. Or in case the jury finds the first proposition above 
 stated and finds that William J. Bourke paid the money to the church 
 or school before this action was begun, but with knowledge or notice 
 that the intestate's estate was insolvent, then the plaintiff will be en- 
 titled to recover. 
 All concurred. 
 
 Judgment reversed and a new trial ordered, with costs to the ap- 
 pellant to abide the event.
 
 554 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Cll. 6 
 
 GEORGE DIXi >N, Jr.. v. JUDSON W'. CALDWELL. 
 (Supreme Court of Ohio, 1864. L5 Ohio St. 412, 86 Am. Dec. 487.) 
 
 Error to the District Court of Ross County. 
 
 The defendant in error, Caldwell, was the owner of a military bounty 
 land warrant, Xo. 31,694, for 160 acres, issued to him by the govern- 
 ment of the United States, under the act of congress of February 11, 
 1847; and shortly after he received the same, it was fraudulently ob- 
 tained from him, and replaced by a spurious or forged warrant, which, 
 for a long time, he supposed genuine. 
 
 Without the knowledge or consent of Caldwell, the general war- 
 rant was sold and assigned to George Dixon, Jr., the plaintiff in error, 
 by some person representing Caldwell, and who forged his name there- 
 to. 
 
 Dixon, being ignorant of the fraudulent manner in which the war- 
 rant had been obtained, and alike ignorant of the forged assignment 
 thereof, on the seventh day of February, 1849, purchased the war- 
 rant, and paid therefor one hundred and thirty dollars, believing the 
 assignment to lie the genuine assignment of Caldwell, and that, by his 
 purchase, he was acquiring full and complete title to the warrant. 
 
 Having thus in good faith acquired, as he supposed, the warrant, 
 Dixon, without any notice of the fraudulent manner in which it had 
 been obtained, or of the forgery, located the same upon the land de- 
 scribed in the petition, and obtained a patent therefor before the com- 
 mencement of the orginal suit. 
 
 Upon this state of fact Caldwell sought to charge Dixon, as his 
 trustee, for the land so located ; and, in his petition, prayed for a con- 
 veyance of the portion of the lands remaining unsold ; for an account 
 of the proceeds of the part which had been soldi, and for a judgment 
 against Dixon for the amount found, with interest; also for an ac- 
 count of the rents and profits. 
 
 In the court of common pleas Dixon was adjudged to be a trustee 
 of the plaintiff for the lands ; and the relief prayed for was granted. 
 
 This judgment was, on error, affirmed by the district court, and to 
 revise this judgment of affirmance is the object of the present peti- 
 tion in error. 
 
 White, J. The distinction between legal and equitable rights exists 
 in the subjects to which they relate, and is not affected by the form 
 or mode of procedure that may be prescribed for their enforcement. 
 The code abolished the distinction between actions at law and suits 
 in equity, and substituted in their place one form of action; yet, 
 the rights and liabilities of parties, legal and equitable, as distinguished 
 from the mode of procedure, remain the same since, as before, the 
 adoption of the code. Dixon, the defendant below, is the legal owner 
 of the land in controversy, as patentee. This is conceded by Caldwell, 
 the plaintiff below, hut he claims to be the equitable owner, and that
 
 Ch. G) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 555 
 
 Dixon is his trustee, and as such, in equity, bound to account for the 
 proceeds of the portion of the land sold, and surrender the remainder. 
 There is no pretense of an express trust ; nor is it claimed that the 
 defendant acquired the property by fraud or by other unfair means. 
 The property, therefore, having been fairly acquired, before a con- 
 structive trust can be raised in equity, and fastened upon the defend- 
 ant, so as to convert him into a trustee for the plaintiff, the circum- 
 stances of the transaction must appear to be such that it would be vio- 
 lating some principle of equity, to allow the defendant to retain the 
 legal title to the land for his own benefit. 
 
 The controversy here is not solely in regard to the land warrant. 
 
 The legal title to that was clearly vested in the plaintiff, and for its 
 
 conversion he has a plain legal remedy against the defendant for its 
 
 ' value ; and, before it was lost in entering the land, for its recovery 
 
 in specie. 
 
 The question is, whether, in the light of equity, the measure of legal 
 relief is to be regarded as inadequate; and the defendant required, 
 by a court of equity, to surrender the land to which he acquired the 
 legal title in good faith, and, as he supposed, for his own benefit, by 
 the combined use of the warrant and his own means, industry and 
 enterprise. 
 
 The defendant claims to be a bona fide purchaser of the land in 
 controversy, for value, without notice of the plaintiff's rights; and 
 relies for his defense upon the rules of equity for the protection of 
 such purchasers. 
 
 The land warrant in question was assignable in law, was in the 
 possession and apparent ownership of the vendor, and the assignment 
 was regular in form. The defect in the vendor's title was not appar- 
 ent, and there was no reasonable ground for suspicion that the assign- 
 ment had been forged. The defendant purchased and paid full value 
 for the warrant, and is not chargeable with a want of reasonable dili- 
 gence in so doing. Having no reason to suspect the existence of plain- 
 tiff's title to the warrant, he was in equity and good conscience, charge- 
 able with no duty toward him in relation to its future use. If he with- 
 held it from entry he would have been liable to return it to the plaintiff, 
 or pay him its value. The good faith of his purchase would have been 
 no answer to the plaintiff's legal demand. After the location of the 
 warrant, the holder of the legal title thereof acquired an equity in 
 the land upon which the location was made ; and before the defend- 
 ant clothed himself with the legal title, and while the equities were 
 open between the parties, Caldwell's equity, being older in time, would 
 have been better in right. But Dixon, unaffected with fraud or notice, 
 and upon a valuable consideration paid, having obtained the legal title 
 to the land in controversy, brings himself within the protection award- 
 ed in equity to the holder of the legal title. 
 
 A court of equity, says Sugden in his Treatise on Vendors (vol. 3, 
 side p. 417), acts upon the conscience, and as it is impossible to attach
 
 556 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. 6 
 
 any demand upon the conscience of a man who has purchased for a 
 valuable consideration, bona fide, and without any notice of any claim 
 on the estate, such a man is entitled to the peculiar favor and pro- 
 tection of a court of equity. 
 
 Where a court of equity cannot deal directly with the thing which 
 is the subfect matter in controversy, but has to reach it through the 
 consciences of the parties, its jurisdiction is necessarily limited to en- 
 forcing the fulfillment of their equitable obligations, and cannot extend 
 to compelling the relinquishment of any right or the abandonment of 
 any interest which can be retained consistently with equity and with 
 conscience. 
 
 This principle applies especially where the aid of a court of chan- 
 cery is sought to enforce the surrender of an estate in land. As in 
 such case, the court can only act on the land, through the medium of 
 the parties, it must first inquire whether the party against whom its 
 assistance is sought, is conscientiously hound to comply with the de- 
 mand urged against him, for if he is not, the case may fall without 
 the scope of a jurisdiction which is founded upon the obligations of 
 conscience. See notes of the American Editor to Bassett v. Nosworthy, 
 2 Lead. Cas. in Eq. pp. 67, 68, and the authorities there cited. Mit- 
 ford's Eq. Plead, side p. 135; Cottrell v. Hughes, 29 Eng. L. & Eq. 
 R. 358; s. c, 80 Eng. C. L. R. 556; Wallwyn v. Lee, 9 Yes. Jr. side 
 p. 25 ; Gibler et al. v. Trimble, 14 Ohio, 340.' 
 
 In Jones v. Powles, 3 Myl. & Keen, 581, the equitable title of the pur- 
 chaser who had got in the legal estate, depended upon a forged will, 
 and he was held entitled to the protection of the court. In this case a 
 per -on advanced money upon the mortgage of an estate, which the 
 mortgagor claimed under a will, which ultimately turned out to be 
 forged, and got a conveyance of the legal estate, which was outstand- 
 ing in a mortgagee whose debt had been satisfied. On a bill filed by 
 the heiress-at-law, it was held by Sir John Leach, M. R., that the 
 mortgagee, being a purchaser without notice of the plaintiff's title, 
 could protect herself by the legal estate. The court observed, that its 
 impression at the opening of the case was, that the protection of the 
 legal estate extended only to cases where the title of the purchaser 
 for valuable consideration without notice, was impeached by reason 
 of some secret act or matter done by the vendor or those under whom 
 he claimed ; but upon full consideration of all the authorities and dicta of 
 judges and text writers, and the principles upon which the rule is 
 grounded, the court was of opinion that the protection of the legal 
 estate was to be extended not merely to cases in which the title of the 
 purchaser for valuable consideration without notice is impeached by 
 reason of some secret act done, but also to cases in which it is im- 
 peached by reason of the falsehood of a fact of title asserted by the 
 vendor, or those under whom he claims, where such asserted title 
 is clothed with possession, and the falsehood of the fact asserted could 
 not have been detected by reasonable diligence. 2 Lead. Cas. in Eq.
 
 Cll. 0) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 557 
 
 side page 7. This case is approved by Mr. Sugden in his Treatise al- 
 ready cited, page 417, and is founded upon clear principles of equity ; 
 although they would not, here, be applicable to the case of a satis- 
 fied mortgage. 
 
 It is not deemed necessary to examine in detail, in this opinion, the 
 authorities relied upon by the counsel of the defendant in error. 
 Where the benefit of the rule has been denied, the party was found 
 to be affected with notice ; and, as we have already stated, it is indis- 
 pensable for the party holding the legal title, and seeking protection 
 in equity, to show that he is a purchaser for a valuable consideration ; 
 that his purchase was in all respects fair, and free from every kind 
 of fraud ; and that at the time of his purchase he was not chargeable 
 with notice of the adverse claim. 
 
 The conclusion, therefore, at which we have arrived, is, that Dixon 
 cannot be required to surrender the legal title of the unsold land to 
 the plaintiff below, nor to account for the proceeds of the part sold ; 
 and that the court erred in requiring him to do so. But, as before 
 stated, he is under a clear legal liability for the value of the warrant. 
 The judgment of the district court and of the court of common pleas, 
 is therefore reversed and the cause remanded to the common pleas for 
 further proceedings. 
 
 Brinkerhoee, C. J., and Scott, Day and Welch, J J,, concurred. 
 
 In re HALLETT'S ESTATE. 
 
 KNATCHBULL v. HALLETT. 
 (Court of Appeal, 1880. Law Reports, 13 Chancery Division, 69G.) 
 
 Sir George Jessel, Master of the Rolls. 16 This is an appeal from 
 a decision of Mr. Justice Fry, and the singularity of the appeal is, that 
 it is an appeal in favor of Mr. Justice Fry's opinion and against his 
 decision ; the explanation of that being, that the learned Judge con- 
 ceived himself bound by some decisions of the Appeal Court to decide 
 against his own opinion ; and I am far from saying that I dissent from 
 it on either point — either on principle as to how he thought the case 
 ought to be decided, or on the question whether a Judge in his posi- 
 tion as a Judge of first instance, could very well have decided otherwise. 
 
 The question we have to consider depends on very few facts. I will 
 first state all those which I think material, or on which it appears to 
 me my judgment ought to be based. A Mr. Hallett, a solicitor, was 
 a trustee of some bonds. Without authority and improperly he sold 
 them, and on the 14th of November, 1877, by his direction the proceeds 
 of these bonds were paid to his credit at Messrs. T witlings' Bank, 
 
 is The statement of facts and the concurring opinion of Baggallay, L. J., 
 and the dissenting opinion of Thesiger, L. J., are omitted.
 
 558 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. 6 
 
 and there mixed with moneys belonging to himself, to the credit of 
 the same banking account, and he also drew out by ordinary check 
 moneys from the hanking account, which he used for his own pur- 
 poses. He died in February, 1878, and at his death the account stood 
 in this way ; that there was more money to the credit of the account 
 than the sum of trust money paid into it; but if you applied every 
 payment made a fur November, 1877, to the first items on the credit 
 side in order of date, a large portion of the trust money would have 
 been paid out. The question really is, whether or not, under these 
 circumstances, the beneficiaries — that is, the persons entitled to the 
 trust moneys, who are the present appellants — are or are not entitled 
 to say that the moneys subsequently drawn out — that is, drawn out 
 by Mr. Ilallett subsequently to November 1877 — and applied for his 
 own use, are to be treated as appropriated to the repayment of his 
 own moneys, or whether the respondents, the executors, are right in 
 their contention that they are to be treated as appropriated in the 
 way I have mentioned, so as to diminish the amount now applicable to 
 the repayment of the trust funds. 
 
 I will first of all consider the case on principle, and then T will con- 
 sider how far we are bound by authority to come to a decision opposed 
 to principle. It may well be, and sometimes does so happen, that we 
 are bound to come to a decision opposed to principle. Now, first upon 
 principle, nothing can be better settled, either in our own law, or, I 
 suppose, the law of all civilized countries, than this, that where a man 
 does an act which may be rightfully performed, he cannot say that 
 that act was intentionally and in fact done wrongfully. A man who 
 has a right of entry cannot say that he committed a trespass in entering. 
 A man who sells the goods of another as agent for the owner cannot 
 prevent the owner adopting the sale, and deny that he acted as agent 
 for the owner. It runs throughout our law, and we are familiar with 
 numerous instances in the law of real property. A man who grants a 
 lease believing he has sufficient estate to grant it, although it turns 
 out that he has not, but has a power which enables him to grant it, 
 is not allowed to say he did not grant it under the power. Wherever 
 it can be done rightfully, he is not allowed to say, against the person 
 entitled to the property or the right, that he has done it wrongfully. 
 That is the universal law. 
 
 When we come to apply that principle to the case of a trustee who 
 has blended trust moneys with his own, it seems to me perfectly plain 
 that he cannot be heard to say that he took away the trust money when 
 he had a right to take away his own money. The simplest case put 
 is the mingling of trust moneys in a bag with money of the trustee's 
 own. Suppose he has a hundred sovereigns in a bag, and he adds to 
 them another hundred sovereigns of his own, so that they are com- 
 mingled in such a way that they cannot be distinguished, and the next 
 day he draws out for his own purposes £100., is it tolerable for any- 
 body to allege that what he drew out was the first £100., the trust
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 559 
 
 money, and that he misapplied it, and left his own £100. in the bag? 
 It is obvious he must have taken away that which he had a right to 
 take away, his own £100. What difference does it make if, instead of 
 being in a bag, he deposits it with his banker, and then pays in money 
 of his own, and draws out some money for his own purposes? Could 
 he say that he had actually drawn out anything but his own money? 
 His money was there, and he had a right to draw it out, and why 
 should the natural act of simply drawing out the money be attributed 
 to anything except to his ownership of money which was at his bankers. 
 
 It is said, no doubt, that according to the modern theory of bank- 
 ing, the deposit banker is a debtor for the money. So he is, and not a 
 trustee in the strict sense of the word. At the same time one must 
 recollect that the position of a deposit banker is different from that 
 of an ordinary debtor. Still he is for some purposes a debtor, and it 
 is said that if a debt of this kind is paid by a banker, although the 
 total balance is the amount owing by the banker, yet considering the 
 repayments and the sums paid in by the depositor, you attribute the 
 first sum drawn out to the first sum paid in. That was a rule first 
 established by Sir William Grant in Clayton's Case, 1 Mer. 572; a 
 very convenient rule, and I have nothing to say against it unless there 
 is evidence either of agreement to the contrary or of circumstances 
 from which a contrary intention must be presumed, and then of course 
 that which is a mere presumption of law gives way to other considera- 
 tions. Therefore, it does appear to me there is nothing in the world 
 laid down by Sir William Grant in Clayton's Case, or in the numerous 
 cases which follow it, which in the slightest degree affects the principle, 
 which I consider to be clearly established. 
 
 Then I come to the great difficulty in the case, the difficulty which, 
 as I shall show from an extract or two from Mr. Justice Fry's judg- 
 ment, weighed with him. What he says is this: "If the matter were 
 unfettered by authority, it would appear to me clear that where a man 
 has a balance to his credit consisting in part of funds which are his 
 own, and which he may legally draw out and apply for his own pur- 
 poses, and in part of trust funds which he cannot lawfully draw out 
 and apply for his own purposes, his drawings for his own purposes 
 ought to be attributed to his own funds and not to the trust funds. But 
 it appears to me I am not at liberty, in the existing state of the author- 
 ities, to act according to the inclination of my own mind;" and then 
 he refers to Pennell v. Deffell, 4 D., M. & G. 372, and one or two 
 cases that have followed it. In a second judgment in the same case, 
 Mr. Justice Fry says this : "I have already expressed the opinion I 
 should have been inclined to act on if I had been at liberty, but I am 
 not at liberty." So it is plain that, as far as Mr. Justice Fry was con- 
 cerned, he would have decided otherwise if he had not been fettered 
 by authority. 
 
 Now, the only authority worth considering for this purpose is that 
 of Pennell v. Deffell itself. I will, in a moment, say a word about the
 
 SCO CONSTRUCTIVE TRUSTS, ETC.- — TRACING PROPERTY. (Ch. 6 
 
 subsequent decisions. First of all lVnin.ll v. 1 nihil, I must remember, 
 is the decision of a court of co-ordinate jurisdiction with this Court, 
 namely, the Court of Appeal in Chancery, and was decided several 
 years ago. Hut, on the other hand, we must remember that the law as 
 contained or laid down in tin- decision or judgment which guides a 
 future Judge or another Judge in applying it, is simply the expression 
 of principle which is to be ascertained Erom the judgment. No doubt 
 a part of the decision in Pennell v. Deffell was exactly this case, and 
 the court applied the law, as correctly stated by Mr. Justice Fry, by 
 applying Clayton's Case even to such a case as this, and to that extent 
 destroyed the chum of die cestui que trust. But that was not the whole 
 case of Pennell v. Deffell. The main part of Pennell v. Deffell was 
 giving effect to the right of cestuis que trust in the case of blended 
 trust moneys, and upon the very principle which I have endeavored to 
 explain, and which, if I may say so, was so clearly explained by Mr. 
 Justice Fry in his judgment. If, therefore, we are to ascertain the 
 principle on which Pennell v. Deffell is decided, we must look at the 
 whole of the judgment, and not at part of it only. That being so, I 
 have come to this conclusion, that the principle is rightly laid down, and 
 it is rightly applied throughout the judgment except as to this portion, 
 and that as to this portion of the case there has been a mistake, not in 
 the principle, but in the application of the principle. Therefore, if 
 I am to be guided by the principle as laid down, I think the principle 
 must prevail without regard to a mere slip in its application. 
 
 Put it will be said that this part of Pennell v. Deffell has been fol- 
 lowed in subsequent cases. So it has. As regards subsequent cases 
 in the inferior courts, we need not trouble ourselves with them. Judges 
 of first instance would not have overruled the mistaken application 
 of principle. As regards the Court of Appeal, it seems to have been 
 followed certainly in one, if not in two cases, without question; but 
 although there are cases in our law where erroneous decisions, not 
 reconcilable even with the judgment on which the decision proceeded, 
 have created a rule of conduct, and as to which, after the lapse of 
 years, Judges have not felt themselves at liberty to review the decision 
 even by the light of the judgment on which the first decision was 
 pronounced, yet no such considerations apply to this case. No human 
 being ever gave credit to a man on the theory that he would mis- 
 appropriate trust money, and thereby increase his assets. No human 
 being ever gave credit, even beyond that theory, that he should not 
 only misappropriate trust moneys to increase his assets, but that he 
 should pay the trust moneys so misappropriated to his own banking 
 account with his own moneys, and draw otit after that a larger sum 
 than the first sums paid in for the trust moneys. It never could have 
 been made a rule of conduct, or have affected the transactions of 
 mankind, and therefore it dors not come within the line of cases 
 which, having established a rule of conduct, no Judge could interfere 
 with. It appears to me we should not be deferring to authority but
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. Hdl 
 
 making a misuse of authority, which is to declare the law, if hy rea- 
 son of this, which appears to me a mere slip in the case of Pennell 
 v. Deffell, and which, it must be recollected was a very small portion 
 of the contest in that case, we were to consider ourselves bound to 
 decide against what is the settled principle. 
 
 Therefore, in my opinion, the appeal must be allowed. 
 
 MERCANTILE TRUST CO. v. ST. LOUIS & S. F. RY. CO. 
 
 (Circuit Court, D. Missouri, E. D., 1900. 99 Fed. 485.) 
 
 In the matter of the intervening petition of A. L. Wolff, Receiver of 
 the Kansas Midland Railway Company. 
 
 Adams, District Judge. In the year 1888 the Kansas Midland Rail- 
 way Company delivered certain of its bonds to the St. Louis & San 
 Francisco Railway Company in trust to sell the same, and apply the 
 proceeds of the sale in the equipment and improvement of the railroad 
 of the Kansas Midland Railway Company. The St. Louis & San Fran- 
 cisco Railway Company (hereafter called the "Frisco Company") sold 
 the bonds, realized therefor $367,586.50, andi expended in the due ex- 
 ecution of the trust $324,554.82, leaving a balance of $43,031.68, un- 
 accounted for. On receipt of the proceeds of the sale of the bonds in 
 1888, the Frisco Company deposited the same in a general account 
 kept by it, together with other moneys, and thereafter, from time to 
 time, deposited in that account its current and other receipts, and drew 
 out, as occasion required, money for the equipment and improvement 
 of the road of the Kansas Midland Railway Company, as well as for 
 the payment of its other and personal obligations. The balance to 
 the credit of the Frisco Company in this general account varied from 
 time to time according to the deposits in, and checks against, the ac- 
 count; at all times, however, up to December 23, 1893, showing some 
 balance on hand. On November 15, 1890, the balance amounted to 
 $2,265.55. This remained unchanged from November 15 to December 
 12, 1890, after which further deposits were from time to time made, 
 resulting in fluctuating balances until December 23, 1893, the date of 
 the appointment of the receiver for said Frisco Company, when it 
 stood at $36,522.28. This last mentioned sum came into the possession 
 of the receiver. It appears that the St. Louis & San Francisco Rail- 
 road Company, or the "New Frisco Company," as it is called, which 
 became the purchaser of all the property of the old Frisco Company at 
 a sale under a decree of foreclosure in the main case, took its rights 
 under and subject to the provisions of the decree, requiring it to pay, 
 among other things, all liabilities incurred by the old Frisco Company, 
 which were prior in lien to the consolidated mortgage under which the 
 foreclosure was had. The special master to whom this intervention 
 Ken.Tr.— 36
 
 562 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Cll. 6 
 
 was referred reports that the balance which came into the hands of 
 the receiver, namely $36,522.28, was subject to the original trust in 
 favor of the Kansas Midland Railway Company, and should be now 
 paid to the intervener, who is the duly appointed receiver of the Kan- 
 sas Midland Railway Company, by the New Frisco Company, under 
 the provisions of the decree of foreclosure in the main case. 
 
 Numerous exceptions are taken to the report of the special master, 
 but two of them only were seriously argued, and involve all that is 
 necessary for a final disposition of the case. The first is that the 
 special master erred in holding that the Old Frisco Company ever 
 became a trustee with respect to the bonds in question, or ever became 
 subject to the equitable doctrine governing trustees, but became a simple 
 debtor to the Kansas Midland Railway Company for any unexpended 
 balance of the money received by it as proceeds of the sale of the 
 bonds in question. The second is that the special master erred in sub- 
 jecting all the balance found to the credit of the Old Frisco Company 
 in its depositories at the time the receiver was appointed for that Com- 
 pany, to the satisfaction of the intervener's claim. 
 
 As to the first of these two questions, I am entirely satisfied with 
 the conclusion reached by the special master, and will content myself 
 by the statement that the documentary proof in the case clearly creates 
 the relation of trustee and cestui que trust between the Old Frisco 
 Company and the Kansas Midland Railway Company with respect to 
 the proceeds of the bonds in question, and that as a result the defend- 
 ant, as successor of the Old Frisco Company, under and by virtue 
 of the decree of foreclosure in this case, must be held to an account 
 on the theory of an original trust in the Old Frisco Company, so far as 
 the principles of equity applicable to the facts of the case will permit. 
 
 The second exception raises the question whether, under the facts 
 as already stated, the trust and obligation of the Old Frisco Com- 
 pany attached to the entire $36,522.28 turned over to the receiver, or 
 only to the $2,265.55, which is the minimum balance at any one time 
 of all the funds with which the trust fund was commingled. Counsel 
 have called attention to a large number of cases, both state and fed- 
 eral, in which the doctrine applicable to this case has been discussed ; 
 and, while there is some diversity of opinion found in the cases, I have 
 reached the conclusion that the weight of authority, as well as reason, 
 conduces to the result that the intervener's right to recover the trust 
 fund in question must depend upon his ability to trace it, or the fund 
 with which it was commingled, into the hands of the receiver of the 
 Old Frisco Company, h is now the settled doctrine that commingling 
 a trust fund with the private funds of the trustee does not destroy the 
 right of the cestui que trust to follow it. The commingling being 
 wrong, the entire fund is impressed with the trust; and, as long as an 
 amount equal to the trust fund remains in the commingled mass, the 
 same and all of it, to the extent of the trust fund, will be made to re- 
 spond to the claim of the cestui que trust. This last mentioned rule
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. 563 
 
 is in perfect correspondence with the rule first announced, requiring 
 a cestui que trust to show that his money or property is in the hands 
 of the trustee. It simply enlarges the rule, and allows recovery when 
 and so far as the commingled fund in which the trust fund has been 
 inexplicably confused is found in the hands of the trustee. The fore- 
 going propositions I believe to be fully supported by the authorities, and 
 they are well set forth in the able opinion of Judge Philips, in the 
 case of Metropolitan Nat. Bank of Kansas City v. Campbell Com- 
 mission Co. (C. C.) 77 Fed. 705. A large number of cases are refer- 
 red to and commented upon in this last mentioned case, supporting the 
 conclusion reached. There is another line of authority announcing 
 the proposition that because a trust fund, when appropriated by a trus- 
 tee to his own use, swells his assets, the general estate of the trustee, 
 when insolvency supervenes, will be impressed with a trust for the re- 
 imbursement of the cestui que trust, on the ground that such estate 
 has been benefited to an equal amount by the trustee's breach of duty. 
 But this rule, as I understand, has not received the sanction of any 
 federal court, and of but few state courts. The equity, or, rather, 
 want of equity of such a rule is well characterized by the court of ap- 
 peals of New York in the case of Cavin v. Gleason, 105 N. Y. 256, 11 
 N. E. 504, in which it is said: "We think this is quite too vague an 
 equity for judicial cognizance, and we find no case justifying relief 
 upon such a circumstance. In a very general sense, all creditors of an 
 insolvent may be presumed to have contributed to the assets which 
 constitute the residuum of his estate." 
 
 So it seems to me. If the fact that the money or property trans- 
 ferred to the trustee has so increased his assets as, in and of itself, to 
 entitle the creditor to a preference, why will not all general creditors 
 be entitled to the same preference? The consideration of their debts 
 has at some time enhanced the funds or estate of the debtor. Following 
 the well settled rule already stated, that the entire account with which 
 trust funds have been commingled may be appropriated for the satis- 
 faction of the trust, and giving the intervener the full benefit of that 
 rule, I am of opinion that the minimum amount found at any one 
 time in the account of the Frisco Company must be the maximum 
 amount of the trust fund which by any possibility can be traced into 
 the receiver's hands. Between November 15 and December 12, 1890, 
 this minimum amount stood at $2,265.55. This may possibly have in- 
 cluded a part of the original trust funds. At any rate, it is the remnant 
 of the fund with which it was originally commingled. All the trust 
 fund, excepting this remnant, had been before November 15, 1890, dis- 
 sipated or appropriated to the trustee's own use. The identification of 
 the original trust fund is here lost, as to all thereof except the remnant 
 of $2,265.55, ; and certain it is that no part of the original trust fund 
 can be traced into any of the deposits clearly shown to have been made 
 by the Frisco Company after December 12, 1890. It was conceded at 
 the argument that if in November, 1890, the whole account had been
 
 564 CONSTRUCTIVE TRUSTS, ETC.— GRACING PROPERTY. (Cll. 6 
 
 drawn out by the Frisco Company, so that nothing remained, the 
 tracing or identification of the trust fund would no longer have been 
 possible, and that no subsequent deposits would have been subject to 
 the original trust. This concession was manifestly made on the ground 
 that no part of the original trust fund could be said to be mingled 
 with that which was subsequently deposited. If that argument is 
 sound— and I think it is— the same conclusion should follow as to all 
 funds subsequently deposited over and above the small remnant then 
 on hand— (for it is clear that all trace of the trust fund was lost, ex- 
 cept as to that remnant), and that this remnant represented the full 
 amount of which, by any possibility, the original trust fund could then 
 have formed a part. It follows that the intervener has failed to prove 
 that any of the money of the Kansas Midland Railway Company, ei- 
 ther in its original or commingled form, came into the hands of the re- 
 ceiver of the Frisco Company beyond the sum of $2,265.55, and that 
 all trace or identification of the balance of the original trust fund is 
 impossible. All the exceptions to the report of the special master, 
 made- by both parties, other than those relating to the amount of re- 
 covery, will therefore be overruled, and the exception of the defend- 
 ant to such parts of the report as relate to the amount of recovery will 
 be sustained; and, the case, now being submitted to the court, a de- 
 cree will be entered requiring the defendant, the St. Louis & San 
 Francisco Railroad Company, to pay to the intervener the sum of $2,- 
 265.55, with interest thereon from May 15, 1897, the date of filing the 
 intervening petition herein, to the present time, at the rate of 6 per 
 cent, per annum. 
 
 MASSEY et al. v. FISHER. 
 
 (Circuit Court, E. D. Pennsylvania, 1894. 62 Fed. 958.) 
 
 Suit by J. R. Massey & Son against Benjamin F. Fisher, Receiver 
 of the Spring Garden National Bank. Decree for complainants. 
 
 Butler, District Judge. 17 There is no controversy about the facts; 
 and the plaintiff's statement may therefore be adopted : 
 
 "On February 3, 1891, J. R. Massey & Son, who were depositors 
 with the Spring Garden National Bank, indorsed and had discounted 
 by the Bank a note, dated February 2, 1891, made by Samuel Young 
 to the order of Ephraim Young for $1,225, at four months, which had 
 been indorsed by the payee and by one Edward Phair. This note fell 
 due June 5, 1891. On February 17, 1891, the Spring Garden National 
 Bank deposited the note with the clearing-house committee of the 
 clearing-house association of the banks of Philadelphia in substitution 
 for some other notes then matured or about to mature, which had there- 
 tofore been pledged to secure advances made to the bank by that com- 
 
 17 A part of the opinion is omitted.
 
 Ch. G) CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. 505 
 
 mittee. On April 30, 1891, Frank H. Massey, one of the complainants, 
 being ignorant that the bank no longer held the Young note, called at 
 the office of the bank and stated to the cashier that he desired to pay 
 it. The cashier sent a clerk to fetch the note, but the latter returned 
 without it and informed him that it had been delivered to the clearing- 
 house committee. The cashier then said to Mr. Massey: 'You pay 
 me the money, and the next time we send to the clearing house we will 
 take up this Young note and send it to you.' Massey thereupon gave 
 the cashier $1,225, in bank bills, and was handed a receipt for them 
 in the following form : 
 
 " 'The Spring Garden National Bank, 
 " '12th and Spring Garden Streets. 
 
 " 'Philadelphia, Apr. 30, 1891. 
 " 'Received of J. R. Massey & Son twelve hundred and twenty-five 
 ($1225) dollars, being in full payment of note signed Edward Phair 
 for that amount, due June 5-91, said note to be handed Messrs. Massey 
 upon the return of this receipt. 
 
 " '[Signed] H. H. Kennedy, Cash.' 
 
 "The money thus received by the cashier was handed by him to the 
 note clerk of the bank, and he, on the same day, transferred it to the 
 receiving teller, by whom it was put into the drawer with the other 
 money of the bank in his possession, and on the next morning turned 
 over in bulk with other moneys to the bank's paying teller. On the 
 diary of the bank, and on its book of bills discounted, credit entries 
 were made indicating that the Young note had been paid. The bank, 
 however, did not take up the note. On May 8, 1891, the Spring Garden 
 National Bank suspended payment, and its assets were taken possession 
 of by the bank examiner, who, on June 1, 1891, transferred them to 
 Benjamin F. Fisher, the receiver appointed for the bank by the comp- 
 troller of the currency. Among the other assets which came into the 
 hands of the bank examiner on the failure of the bank was the sum 
 of $34,042.73 in bills, silver dollars and fractional currency, which sum, 
 less about $1,000 paid out by him for wages, etc. was turned over to 
 the receiver. At no time between April 29, 1891, and the day on 
 which it closed its doors, did the bank have on hand in cash less than 
 $24,000. On June 17, 1893, judgment was entered against the com- 
 plainants in favor of the clearing-house committee, in an action in- 
 stituted by the latter for collection of this note, in court of common 
 pleas No. 4 for the county of Philadelphia, of December Term, 1892, 
 No. 881, for the amount of $1,377.50, and this judgment, with interest 
 and costs, was paid by the complainants November 9, 1893." 
 
 The plaintiffs claim that the transaction established a fiduciary rela- 
 tion between the parties, while the defendant claims that it established 
 the relation of debtor and creditor only. If the question was new, its 
 proper solution might be open to doubt. Even in such case however, 
 I would adopt the plaintiff's view. The money was delivered and
 
 5G6 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Cll- G 
 
 received to extinguish the note. Neither party contemplated that the 
 bank would use it for another purpose, leaving the note outstanding, 
 and the plaintiffs' liability unextinguished. Such application Of it, 
 however, would be a violation of duty, and a fraud. 
 
 But the question is nut new: It arose, and was decided, in People 
 v. City Bank of Rochester, 96 X. Y. 32. The facts there were sub- 
 stantially like those before us. It is true that the check in that case 
 was drawn in terms to pay the note. This, however, is an immaterial 
 difference. It is as plain here as it was there that the money was de- 
 livered and received to take up the note. In Teak v. Ellicott, 30 Kan. 
 156, 1 Pac. 4 1 ' 1 '. 46 Am. Rep. 90, the facts were identical with those 
 before us. In each of these cases it was held that the transaction es- 
 tablished a fiduciary relation between the parties. 
 
 The bank having failed to apply the money to the note, can it be 
 recovered from the receiver? His counsel thinks not, because the bank 
 placed the money in its vaults with other money of its own, whereby its 
 identity was lost. Why should this wrongful act defeat the plaintiffs' 
 right? Xobody is injured by allowing the plaintiffs to take the amount 
 from the deposit. The receiver and creditors stand on no higher plane 
 than the bank, and can no more assert that it was the bank's money 
 than the bank could. It is true they are entitled to all the bank's prop- 
 erty ; but this was not its property. It is not important that plaintiffs' 
 money bore no mark, and cannot be identified. It is sufficient to trace 
 it into the bank's vaults, and find a sum equal to it (and presumably 
 representing it), continuously remained there until the receiver took it. 
 The modern rules of equity require no more. Knatchbull v. Hallett, 
 13 Ch. Div. 696; National Bank v. Insurance Co., 104 I'. S. 54, 26 L. 
 Ed. 693; Bank v. King, 57 Pa. 202, 98 Am. Dec. 215; Stoller v. 
 Coates, 88 Mo. 514; McLeod v. Evans, 66 Wis. 401, 28 N. W. 173, 
 214, 57 Am. Rep. 287; People v. City Bank of Rochester, 96 N. Y. 
 32; Hank v. Weems, 69 Tex. 489, 6 S. W. 802, 5 Am. St. Rep. 85; 
 Harrison v. Smith, 83 Mo. 210, S3 Am. Rep. 571 ; Beach Eq. Jur. § 
 2X5 ; Fisher v. Knight, 9 C. C. A. 582, 61 Fed. 491. 
 
 I have not overlooked Bank v. Dowd, 38 Fed. 172, 2 L. R. A. 480. 
 If that case can be distinguished from Knatchbull v. Hallett, as the 
 judge who decided it believes, then it can as readily be distinguished 
 from this. If it cannot, with all respect for that distinguished judge, 
 I must disregard it. * * * 
 
 The hill is, therefore, sustained, and a decree may be drawn ac- 
 cordingly. 18 
 
 is Wiisson v. Hawkins (C. C.) 59 Fed. 233 (1894); Boone County Bank v. 
 Latimer (C. C.) 67 Fed. L'7 (1895); < 'lev.. land, (".. C. & St. Louis Ry. Co. v. 
 Hawkins (('. C.) 7!» Fed. lilt (1897); Merchants' National Bank v. School Dist. 
 N«». s. 94 Fed. 705, 36 C. C. A. 132 (1899); Quia v. Earle (C. C.) 6J Fed. 728 
 (1899); Uicliardson v. New Orleans, etc., Co., 102 Fed. 780, 42 C. C. A. 619, 
 
 52 L. R. A. 67 (1900); Richardson v. Olivier, 105 Fed. 277. 44 C. C. A. 468, 
 
 53 L. R. A. 113 (1900); In re Swift (D. C.) 108 Fed. 212 (1901); Woodhouse 
 v. Crandall, 197 111. 104, 64 X. El 292, 58 L. R. A. 385 (1902); Sherwood v. 
 Savings Bank, 103 Mich. 109, 61 N. W. 352 (1894); Wallace v. Stone, 107
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 507 
 
 THE EVANGELICAL SYNOD OF NORTH AMERICA 
 
 v. SCHOENEICH, Administrator of S. H. MER- 
 
 TEN & CO., Appellant. 
 
 (Supreme Court of Missouri, 1898. 143 Mo. 652, 15 S. W. 647.) 
 
 Burgess, J. 19 This is a proceeding in equity by which it is sought 
 to charge the partnership estate of S. H. Merten & Company with a 
 lien amounting to $3,000 and interest, alleged to have been plaintiff's 
 money, and to have been converted by said Company. 
 
 The firm of S. H. Merten & Company was composed of Stephen H. 
 Merten, John F. Hackmann and William Hackmann. The firm did a 
 general milling business for about twenty years in the city of St. 
 Charles, and was dissolved by the death of John F. Hackmann on the 
 eighteenth day of September. 1893. On the twenty-seventh of Sep- 
 tember, 1893, the defendant Henry J. Schoeneich, took out letters of 
 administration on the partnership estate, and two days thereafter took 
 out letters of administration on the individual estate of said John F. 
 Hackmann. The partnership estate proved to be insolvent, paying 
 not more than twenty-five cents on the dollar of its indebtedness. 
 Both Stephen H. Merten and William Hackmann are insolvent ; John 
 F. Hackmann died insolvent. The plaintiff is a corporation duly in- 
 corporated under the laws of Missouri. Ever since 1887, one Rev. 
 Reinhard Wobus who had charge of a congregation of the Evangelical 
 Church at St. Charles, Missouri, was the treasurer of said synod up 
 to the time of his death, November 5, 1894; and as such was the cus- 
 todian of the funds and moneys belonging to said corporation. Dur- 
 ing the time of his service as treasurer said Wobus received in his 
 capacity as such, various sums of money for said corporation, which he 
 deposited with Stephen H. Merten & Company ; this he did without 
 the knowledge of the president of the synod who was during most of 
 the time a resident of Burlington, Iowa. The firm knew that the funds 
 deposited by Wobus really did not belong to him, but were the funds 
 of the plaintiff, and were only held by him as its treasurer. Most of 
 the money left by Wobus with S. H. Merten & Company consisted of 
 checks for small amounts, payable to him individually as treasurer, 
 which said firm deposited on its own account and to its credit in the 
 
 Midi. 190, 65 N. W. 113 (1S95) ; Board, etc., v. Wilkinson, 119 Mich. 655, 7* 
 N. W. S93, 44 L. R. A. 493 (1899) ; Bishop v. Mahoney, TO Minn. 238, 73 X. W. 
 9 (1897); Shields v. Thomas, 71 Miss. 200, 14 South. 84, 42 Am. St. Rep. 458 
 (1893); State v. Bank of Commerce, 54 Neb. 725, 75 X. W. 28 (1898); State 
 v. Bank of Commerce, 61 Neb. 181. 85 X. \V. 4:;. 52 L. R. A. 858 (1901); City 
 of Lincoln v. Morrison, 64 Neb. 822, 90 N. W. 905, 57 L. R. A. 885 (1902); 
 Arnot v. Bingham. 55 Hun, 553, 9 N. Y. Supp. 68 (1890); People v. Mer- 
 chants' Bank, 92 Hun, 159, 3G N. Y. Supp. 989 (1895); Kimmel v. Dickson. 
 5 S. D. 221, 58 N. W. 561, 25 L. R. A. 309, 49 Am. St. Rep. SG9 (1894) ; Plan,. 
 Mfg. Co. v. Auld, 14 S. D. 512, S6 N. W. 21, S6 Am. St. Rep. 769 (1901) ; Bank 
 v. Weems, 69 Tex. 489, 6 S. W. 802, 5 Am. St. Rep. 85 (1S88) ; State v. Foster, 
 5 Wyo. 199, 38 Pac. 926, 29 L. R. A. 226, 63 Am. St. Rep. 47 (1S94). 
 i9 Only a part of the opinion is given.
 
 r>lN CONSTRUCTIVE TBUSTS, ETC. — TRACING PROPERTY. (Ch. 6 
 
 Union Savings Bank of St. Charles. Xo interest was ever paid by 
 the firm on these deposits, and whenever Wobus needed the money it 
 was returned to him. On the twenty-fourth of August, 1893, there 
 were $3,300 in the hands of the firm thus deposited, of which Wobus 
 on the fourteenth day of September, 1893, received $300. When, 
 er, he demanded the balance the firm was unable to return it 
 for the reason that they had used it in their business. 
 
 Without the knowledge or consent of the president or other ex- 
 ecutive officers of the German Evangelical Society of North America, 
 .Mr. Wobus, on November 13, 1893, went before the probate court of 
 St. Charles county, and had said $3,000 allowed in his own name, 
 against the partnership estate of Stephen H. Merten & Company, and 
 $300 in offset. Nothing was ever paid on this allowance and as soon 
 as the president of the synod learned of it he denied that the synod had 
 anything to do with it, and that Wobus had any authority to act for 
 it in respect to said allowance, and soon thereafter instituted this suit. 
 There was a decree in favor of plaintiff for $3,000 with interest from 
 the time of the institution of this suit ; which was made a special lien 
 upon the assets of the firm of Merten & Company in the hands of the 
 administrator. Defendant in due time filed his motion for a new trial 
 which being over-ruled he saved his exceptions and brings the case 
 here by appeal for review. * * * 
 
 II. It is next contended by defendant that the relation between 
 Wobus, or the plaintiff, and S. H. Merten & Company was that of 
 creditor and debtor, general depositor and depositary, and not of 
 cestui que trust and trustees, or special depositors and depositary. 
 Upon the other hand plaintiff claims that the relation between the 
 plaintiff and S. II. Merten & Company was that of cestui que trust 
 and trustee. There can be no question under the facts disclosed by 
 the record but that Wobus received and held the moneys and the 
 checks upon which the funds in question were collected, as trustee for 
 the plaintiff, and not otherwise, lie had no personal interest in the 
 funds and of this Merten & Company had full knowledge, so that 
 whether he loaned the money to them or deposited it with them from 
 time to time for safe keeping, makes no difference in this case. The 
 administrator of the partnership estate is simply the representative of 
 the partnership and occupies precisely the same position toward Wobus 
 and plaintiff as the firm did. And the firm of Merten & Company, 
 having received the benefit of the fund by unlawful conversion, the 
 question is, should the partnership estate be charged with the amount 
 of the converted iuud^ as a preferred demand? 
 
 The general ride is, where trust funds have been so mingled with 
 other funds of the trustee or agent, or with his bailee or depositary, 
 and have not been invested in specific property so that it can be traced, 
 the cestui que trust loses his lien, and can only come in and share with 
 the general creditors of the insolvent estate which wrongfully con- 
 verted the funds. The rule announced in Little v. Chadwick, 151
 
 Ch. G) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 569 
 
 Mass. 109, 23 X. E. 1005. 7 L. R. A. 570. is as follows: "When trust 
 money becomes so mixed up with the trustee's individual funds that 
 it is impossible to trace and identify it as entering into some specific 
 property, the trust ceases. The court will go as far as it can in thus 
 tracing and following trust money; hut where, as a matter of fact, 
 it cannot be traced, the equitable right of the cestui que trust to follow 
 it fails. Under such circumstances, if the trustee has become bankrupt, 
 the court cannot say that the trust money is to be found somewhere in 
 the general estate of the trustee that still remains; he may have losl 
 it with property of his own ; and in such a case the cestui que trust 
 can only come in and share with the general creditors." [Authorities 
 cited.] 
 
 In the case at bar there is no such thing as tracing the money de- 
 posited by Wobus with S. H. Merten & Company, into any particular 
 property, nor was it attempted to be done. The most that can be said 
 is that the Company had this money and other moneys of their own, 
 all of which were deposited by them in the Union Savings Bank at 
 St. Charles from time to time in their own name, and checked out by 
 them for their own use and benefit as occasion might require. Merten 
 & Company only had on deposit to their credit in said Bank at the time 
 of the dissolution of the firm the sum of $15.92. In the Elevator Com- 
 pany Case [3 N. D. 26, 53 N. W. 175] , supra, it was held that : "Where 
 the property of one is received by another, this, of itself does not en- 
 title the owner to priority of payment out of the general assets of the 
 one receiving the property. To recover his property, the owner must 
 be able to trace and identify it in some form. When it is mingled 
 indistinguishably with the mass of property of the one receiving it, or 
 when, as in the case of money, it is paid out by him, the right to pursue 
 it is lost, because identification is impossible. Mere enrichment of the 
 estate or extinguishment of debts with the property received, will not 
 make the owner thereof a preferred creditor." The case of Bank v. 
 Ins. Co. [104 U. S. 54, 26 L. Ed. 693], supra, is regarded as the lead- 
 ing American authority on the question now under consideration, and 
 the rule announced in that case is, that trust property will be followed 
 by a court of equity so long as it can be traced, even though it be trans- 
 formed, or be merged in a mass of which it forms a part ; that the right 
 rests upon principles of equity which entitle the beneficiary to a lien 
 upon the property, but who, when seeking to recover the specific 
 property, or to fix a charge upon a mass, must trace it, and show that 
 the specific property claimed is his property, or that his property has 
 gone into it and remains in the mass he seeks to recover. From the 
 authorities cited, the rule seems to be that when the depositary keeps 
 the trust fund separate and the original money is capable of being 
 identified, there is no question as to the right of the cestui que trust to 
 have it applied to his benefit, but where the depositary mingles the 
 trust money with the mass of his own funds, and uses the entire fund 
 indiscriminately, as was done in this case, and it is not invested in
 
 570 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Cll. G 
 
 specific property to which it can be traced, there is no possible way 
 
 1 y which it can he identified and the right to pursue it is lost. 
 
 But the modern doctrine, and especially the adjudications by the ap- 
 pellate courts of this state go farther, and hold that when a trustee 
 or bailee wrongfully mixes trust money with his own, so that it can- 
 not be distinguished what particular part is trust money and what part 
 is private money, equity will follow the money by taking out of the 
 insolvent estate the amount due the cestui que trust, although it can- 
 not be identified or separated from other funds with which it was 
 mixed. In Harrison v. Smith. 83 Mo. 210, 53 Am. Rep. 571, a bank- 
 in this State undertook to make a loan of money on real estate se- 
 curity here for a party who resided in the State of New York, and 
 kept a hank account there, and the plaintiff sent the bank making the 
 loan a check for the sum to be loaned, payable to it, which wasto 
 be paid to the borrower when the terms of the loan were complied 
 with. The bank credited the amount received to plaintiff and sent 
 the check to its own correspondent in New York by whom it was col- 
 lected and credited to the bank here, and in the meantime the latter 
 led the plaintiff to believe that the loan had been perfected, and there- 
 after made an assignment for the benefit of its creditors. And it was 
 held that the relation of trustee and cestui que trust, and not that of 
 depositor and depositary, existed between the bank and the plaintiff. 
 And that when a trustee mixes trust money with his own so that it 
 cannot be distinguished what particular part is trust money and what 
 part is private money, equity will follow the money by taking out of 
 the assigned estate the amount due the cestui que trust. The same 
 rule is announced in Stoller v. Coates, 88 Mo. 514, in which it is held 
 that the general. assets of an insolvent bank having received the benefit 
 of the unlawful conversion of a trust fund, the hank was chargeable 
 with the amount of the converted fund as a preferred demand; that 
 while it may be impossible to follow a fund into its diverted use, it is 
 always possible to make it a charge upon the estate or assets, to the 
 increase or benefit of which it had been appropriated, and the general 
 assets of the bank having received the benefit of the unlawful conver- 
 sion, there is nothing inequitable in charging them with the amount of 
 the converted fund, as a preferred demand. To the same effect is 
 Snorgrass v. Moore, 30 Mo. App. 232; Clark v. Rank. 57 Mo. App. 
 281 ; Rank v. Sanford, 62 Mo. App. 394; Brick Co. v. Schoeneich. 65 
 Mo. App. 283; Leonard v. Latimer, 67 Mo. App. 138; Peak v. Ellicott, 
 30 Kan. 156, 1 Pac 499, 46 Am. Rep. 90; Thompson v. Bank (N. J.) 
 S \tl. 97; Plow Co. v. Ramp, SO Iowa, 722, 45 X. W. 104'). 20 Am. St. 
 Rep. 442. See, also, Phillips v. Overfield, 100 Mo. 466, 13 S. W. 
 
 jq: 20 * * * 
 Judgment affirmed. 
 Gantt, P. J., and Sherwood, J., concur. 
 
 ^o Banks & Bros. v. Rice, 8 Colo. App. 217, 45 Pac. 515 (1896); Hopkins v. 
 Burr, 24 Colo. 5U2, 52 Pac. 670, ti5 Am. St. Rep. 2:38 (1898); Davenport Plow
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC — TRACING PROPERTY. 571 
 
 THE DROVERS' & MECH WITS' NATIONAL BANK 
 v. D. & W. ROLLER. 
 
 (Court of Appeals of Maryland, 1897. 85 Md. 495, 37 Ail. 30, 36 L. It. A. 707, 
 
 60 Am. St. Rep. 344.) 
 
 Appeal from an order of the Circuit Court of Baltimore City (Den- 
 nis, ].), over-ruling exceptions to an Auditor's report and finally rati- 
 fying same. 
 
 McSherry, C. J., delivered the opinion of the court. 21 
 There are two questions to be disposed of on this appeal, and they 
 both arise upon exceptions to an Auditor's report. One involves 
 quite an interesting question of law, the other chiefly a question of 
 fact. The circumstances out of which the first arose are these : The 
 firm or copartnership of Sheeler & Ripple had for a number of years 
 been engaged in the live stock commission business in Baltimore. On 
 the seventeenth day of January, 1895, D. & W. Roller of Tennessee, 
 consigned to Sheeler & Ripple for sale a quantity of live hogs which 
 when received by the consignees on the twenty-first, were sold in sev- 
 eral lots for the consignors ; and on January the twenty-fourth an ac- 
 count of sales, together with a check for the net amount of the pro- 
 ceeds after deducting commissions and freight charges was mailed to 
 the consignors. On the thirty-first of January, Sheeler & Ripple, be- 
 ing then and apparently having been for some months anterior thereto 
 hopelessly insolvent, executed a deed of trust for the benefit of their 
 creditors, and when the check given to D. & W. Roller reached in due 
 course on the second of February the Drovers' & Mechanics' National 
 Bank upon which it had been drawn, there were no funds in bank to 
 the credit of the drawers — they having previously overchecked their 
 account — and the check was dishonored. The funds actually received 
 by Sheeler & Ripple for the hogs sold had been paid out on other 
 checks given for other demands. Most of the hogs were sold for cash 
 and the proceeds, without earmark or identification, were placed to 
 the credit of Sheeler & Ripple intermingled with funds of their own 
 in the Drovers' & Mechanics' National Bank where the partnership ac- 
 count was kept ; but a portion of the hogs had not been paid for by the 
 purchasers of them when the deed of trust was made, and afterwards 
 the trustees collected and now have in their hands these particular 
 proceeds of sales. D. & W. Roller filed their claim in the trust estate 
 for the whole net proceeds of sale and insist that they are entitled to 
 a priority over other creditors to the extent of the whole net proceeds 
 
 Co v Lamp. SO Iowa, 722. 45 N. W. 1049, 20 Am. St. Rep. 142 (1800); Peak 
 v. Ellicott, 30 Kan. 150, 1 Pac. 499, 46 Am. Rep. 90 (1883); Peeves v. Pierce, 
 64 Kan. 502, tiT Pac. 1108 (1902); Carley v. Graves, 85 Mich. 483, 48 X. W. 
 710. 21 Am. St. Rep. 99 (1891); Harrison v. Smith, 83 Mo. 210. 53 Am. Rep. 
 •Ml (1884); Stoller v. Coates, 88 Mo. 514 (1885); Pnndmann v. Schoenich, 144 
 iMo. 1411. 4.-, S. W. 1112 (is; is i. 
 
 2i Only so much of the opinion as deals with the first question is given.
 
 572 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. 6 
 
 of the sales of their hogs. The assets in the hands of the trustees 
 consist of collections made by them, but except as just stated, do not 
 represent the proceeds of the sales of Roller's consigned hogs, or the 
 proceeds of the sale of any other property in which the proceeds of the 
 sales of those hogs had been invested. The first question is: Are D. 
 & W. Roller entitled, under these circumstances, to a preferential lien 
 upon the general assets of Sheeler and Roller in the hands of the trus- 
 tees, for the full amount of the claim they have against the insolvent 
 firm for the proceeds of the sale of the consigned hogs? 
 
 With respect to the proceeds of sale which actually went into the 
 hands of the trustees after their appointment there can be and there is 
 no difficulty whatever. When goods or chattels are consigned to a 
 commission merchant or broker for sale, the title does not vest in the 
 latter, but remains in the consignor and the money arising from a sale 
 of them is the money, not of the agent, but of the owner of the con- 
 signed property. Hence, whenever the money can be traced it may 
 be claimed by its owner, and upon an assignment being made for the 
 benefit of creditors, the trustee can have no greater right to the money 
 than his grantor, the consignee, possessed. The proceeds of the sales 
 of Rollers' hogs that have actually gone into the possession of the trus- 
 tee and which are capable of identification, belonged to the Rollers and 
 must be paid over to them ; but quite another and a different condition 
 exists in regard to the proceeds received by the insolvent firm and 
 spent or dissipated by them before the trustees were appointed. 
 
 The general doctrine in relation to the right of the owner of prop- 
 erty or the cestui que trust to follow and reclaim his property is, we 
 think, thoroughly settled. The early English cases only went to the 
 extent of holding that the owner of property intrusted to an agent, 
 factor or trustee could follow and re-take his property from the pos- 
 session of such agent, factor or trustees or others in privity with him, 
 whether such property remained in its original, or had been changed 
 into some different or substituted form, so long as it could be ascer- 
 tained to be the same property or the product or proceeds thereof un- 
 less the superior rights of bona fide purchasers for value and with- 
 out notice had intervened ; but that such right of reclamation ceased 
 when the means of ascertainment failed, as when the subject of the 
 trust was money or had been converted into money and then mixed and 
 confounded in a general mass of the same description, so as to be no 
 longer divisible or distinguishable. The more recent rule, however, 
 in England as to following trust moneys is broader and goes to the 
 extent of holding that if money held by a person in a fiduciary char- 
 acter has been paid by him to his account at his bankers, the person 
 for whom he held the money can follow it and has a charge on the bal- 
 ance in the bankers' hands ; and that if a person who holds money in 
 a fiduciary character pays it to his account at his bankers' and mixes 
 it with his own money, and afterwards draws out sums by checks in 
 the ordinary manner, the drawer must be taken to have drawn out his
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. TRACING PROPERTY. 573 
 
 own money in preference to the trust money. Knatchbull v. Hallett, 
 13 Ch. Div. 696. This court in Englar v. Offutt, 70 Md. 78, 16 Atl. 
 497, 14 Am. St. Rep. 332, following closely the Supreme Court of the 
 United States in Central National Bank v. Connecticut Ins. Co., 104 
 U. S. 54, 26 L. Ed. 693, has announced the same principles. But it is 
 now insisted that the doctrine has been expanded and amplified, and 
 that though the funds cannot be traced or identified, a lien still exists 
 upon the debtor's general assets in the hands of his trustee, in favor 
 of the owner or cestui que trust whose property or money has been 
 mingled with that of the fiduciary, and has been used by him in liqui- 
 dating other claims against himself ; and that this lien is a preferential 
 one over other creditors of the debtor. The theory upon which this 
 supposed enlarged doctrine rests, is that inasmuch as the wrongful 
 application of the trust funds reduces the general indebtedness of the 
 fiduciary, his assets, swelled to the extent of that reduction, ought to 
 be impressed with a trust or lien in favor of the person whose money 
 or property has been improperly employed and used to discharge the 
 individual indebtedness. There are some cases which support this 
 view. People v. City Bank, 96 N. Y. 32; McLeod v. Evans, 66 Wis. 
 401, 28 N. W. 173, 214, 57 Am. Rep. 287; Francis v. Evans, 69 Wis. 
 115, 33 N. W. 93; Bowers v. Evans, 71 Wis. 133, 36 N. W. 629; Har- 
 rison v. Smith, 83 Mo. 210, 53 Am. Rep. 571, and some others. But it 
 is obvious, even if these cases were not opposed to the general prin- 
 ciples already alluded to, and even if they had not been questioned 
 and some of them flatly overruled, that they proceed upon a wholly 
 fallacious and untenable theory. They are founded upon the assump- 
 tion that the misapplication of the trust funds by the fiduciary to the 
 payment of his own debts actually swells the volume of his assets. 
 This is the introduction of a new and unsound principle into an old 
 and well known doctrine of equity. But instead of such a misappro- 
 priation swelling the volume of the debtor's assets, it would merely 
 diminish the amount of his indebtedness, and this would benefit the 
 estate only to the extent that it increased the percentage that the 
 other creditors would receive provided the amount of the misappro- 
 priation were not deducted as a preferred demand. The case of People 
 v. City Bank, 96 N. Y. 32, which was followed in McLeod v. Evans, 
 66 Wis. 401, 28 N. W. 173, 214, 57 Am. Rep. 287, if it can be held to 
 support this new doctrine (for it is a brief opinion resting on no well 
 defined principle), is in conflict with a more recent case of Cavin v. 
 Gleason, 105 N. Y. 256, 11 N. E. 504, wherein it was expressly decided 
 in disposing of this very contention, that it was "quite too vague an 
 equity for judicial cognizance," and that there was "no case justifying 
 relief on such a circumstance." McLeod v. Evans, supra; Francis v. 
 Evans, supra; Bowers v. Evans, supra; determined by a bare ma- 
 jority of the court, were subsequently over-ruled in Nonotuck Silk Co. 
 v. Flanders, 87 Wis. 237, 58 N. W. 383, the opinion of the court being 
 delivered by one of the Judges who dissented in McLeod v. Evans,
 
 574 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. (J 
 
 and those cases are consequently no longer authority even in the State 
 of Wisconsin. In Slater v. Oriental Mills, 18 R. I. 352, 27 Atl. 443; 
 Shields v. Thomas, 71 Miss. 260, 14 South. 84, 42 Am. St. Rep. 458; 
 Ferchen v. Arndt, 26 ( >r. 121, 37 Pac. 161, 29 L. R. A. 664, 46 Am. St. 
 Rep. 603; Philadelphia National Bk. v. Dowd, Receiver (C. C.) 38 
 Fed. 172. 2 L. R. A. 480; Little. Trustee, v. Chadwick et al., 151 Mass. 
 109, 23 X. E. 1005, 7 L. R. A. 570, the doctrine of the Wisconsin, 
 Iowa. Kansas. Missouri and Texas cases is criticized and repudiated. 
 The distinction between the two conditions that are presented when, 
 first, trust funds remain in the insolvent estate and go to swell it, and 
 when, secondly, trust funds have been dissipated or spent and used in 
 the payment of debts due by the fiduciary, and, therefore, no longer 
 constitute a part of his estate, is a perfectly manifest one; and the 
 fundamental error underlying the cases we have been reviewing con- 
 sists in confusing or confounding these essentially dissimilar condi- 
 tions, and a consequent failure to distinguish between property which 
 may be either specifically identified as belonging to the claimant, or 
 money traced to and remaining in the hands of the factor or trustee, 
 on the one hand; and, on the other hand, money arising from the sale 
 of property confessedly never owned by the claimant or cestui que 
 trust, or confessedly not purchased with money belonging to him. 
 Creditors have no right to share in that which is shown not to belong 
 to the debtor, and, conversely, a claimant has no right to take from 
 creditors that which he cannot show to be equitably his own. But just 
 here comes the argument that it is equitably his own, because the 
 debtor has taken the claimant's money and mingled it with his estate, 
 whereby the estate is swelled precisely that much. P>ut obviously, as 
 applicable to all cases, the argument is unsound. Where the property 
 or its equivalent remains there can be no contention that the claim is 
 just and enforceable; but where it has been dissipated and is gone, 
 the appropriation of some other property in its stead simply takes from 
 creditors that which clearly belongs to them. In one of the cases 
 the illustration was used by Knight Bruce of a debtor mingling trust 
 funds with his own in a chest ; and in another Sir George Jessel likened 
 the situation to that of a debtor who had mingled trust funds with his 
 own in a bag. Though the particular money cannot be identified, the 
 amount is swelled just so much and the amount added belongs to the 
 cestui que trust. But where all the money has been spent — where 
 Knight Hruce's chest and Jessel's bag is empty — there is no swelling 
 of the estate at all : and in such a contingency it comes to this, that a 
 court of equity is asked to order a like amount to be taken out of some 
 other chest or bag, or out of the debtor's general estate, not because 
 the creditors who are entitled to be paid out of that general estate have 
 done any wrong, but because the debtor has been guilty of misconduct 
 as a trustee.- It comes down to the ordinary case of misfortune on the 
 part of the claimant or cestui que trust whose confidence in a trustee 
 has been abused. Slater v. Oriental Mills, supra.
 
 Ch. 6) CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. ~o~~> 
 
 But the case of Englar v. Offutt, 70 Md. 78, 16 Atl. 497. 14 Am. St. 
 Rep. 332, affords, in our judgment, a complete answer to the conten- 
 tion of D. & W. Roller as respects that portion of their claim now 
 under consideration. In that case it appeared that John P. Shriner 
 had been engaged in business as a merchant and manufacturer under 
 the name and style of John P. Shriner & Company. In May, 1883, he 
 was appointed guardian of two infants and received something over 
 ten thousand dollars belonging to them. On the day he received this 
 money he deposited nearly all of it in the Howard Bank to his own 
 credit in an account kept in the name of John P. Shriner & Company. 
 Against this and all other credits, aggregating considerably more than 
 double the guardianship fund, he checked and drew out. as he needed 
 the money, the whole amount of his deposits, except the trifling sum 
 of forty-eight dollars and forty-nine cents. In December, 1885, Ed- 
 ward C. Shriner became a partner of his brother John P. Shriner. 
 In November, 1886, the firm made a deed of assignment for the benefit 
 of creditors, and the trustees sold all the assets of the firm and these 
 realized about nine thousand five hundred dollars. Thereupon the in- 
 fants whose money had gone into the business of John P. Shriner filed 
 a petition in the trust estate claiming a priority over the other creditors 
 of the firm in the distribution of the net proceeds of the sales of the 
 firm's assets. After stating the general rule as we have heretofore 
 announced it, we said : "The sole question therefore in every case 
 where trust property is attempted to be traced is, whether it can or can- 
 not be identified either in the original or altered form." Then after 
 discussing the evidence and showing that the whole trust fund had 
 been drawn out, and that there was nothing in the testimony tending 
 to show that the stock which went into the hands of the trustees had 
 been purchased with the trust funds, the opinion proceeds : "And 
 such being the case, the claim of the appellants upon the fund for dis- 
 tribution is altogether too indefinite. At most it is but matter of con- 
 jecture, for it is impossible to say, as this case is presented, and after 
 the great lapse of time that has occurred, whether any, or, if any, 
 what portion of the stock of goods that passed into the hands of the 
 assignee, under the general assignment for benefit of creditors, was the 
 proceeds of the trust fund belonging to the appellants. * * * It is 
 clear, therefore, that the fund now in court for distribution cannot be 
 identified as the product of any investment of the original trust fund 
 belonging to the appellants," who were the infants. And because this 
 could not be done, the relief was denied, though, had the doctrine of 
 the Wisconsin and other cases heretofore cited, been considered the 
 law, the fund, notwithstanding the trust money had not been traced 
 into the purchase of the firm's assets, could have been impressed with 
 a preferential trust and the ward's claim would have prevailed over the 
 debts due to the general creditors of the firm. 
 
 In our opinion, then, so much of the claim of D. & W. Roller as the 
 firm of Sheeler & Ripple actually collected before the appointment of
 
 576 CONSTRUCTIVE TRUSTS, ETC. — TRACING PROPERTY. (Ch. 6 
 
 the trustees, is not entitled to a priority because the funds had been 
 spent or dissipated and did not in any form go into the hands of the 
 trustees, and, therefore, as to that portion of their claim they are simply 
 general creditors standing on the same footing with other general cred- 
 itors of Sheeler & Ripple ; though as to so much of the proceeds of the 
 sales of the consigned hogs as the trustees have collected and which, 
 consequently, is capable of identification, the Rollers are entitled to a 
 priority. 22 * * * 
 
 22 Multnomah County v. Oregon Nat. Bank (C. C.) 61 Fed. 012 (1894); 
 Spokane County v. First Nat. Bank, 68 Fed. 979, 16 C. C. A. 81 (1895); 
 City Bank v. Blackmore, 75 Fed. 771, 21 C. C. A. 514 (1896); Metropolitan 
 Nat. Bank v. Campbell Commission Co. (O. C.) 77 Fed. 70r> (1896); St. 
 Louis Brewing Association v. Austin, Receiver, 100 Ala. 313, 13 South. 908 
 (1893); Hank of Florence v. United States Savings & Loan Co., 104 Ala. 297, 
 16 South. 110 (1893); Winston v. Miller, L39 Ala. 259, 35 South. 853 (1903); 
 Ober Co. v. Cochran. US Ca. 396, 45 S. F. 3S2. 9S Am. St. Rep. 118 (1903); 
 Lanterman v. Travous, 174 111. 459, 51 N. E. 805 (1898); Estate of Seiter 
 v. Mowe, 182 111. 351, 55 N. F. 526 (1899); Windstanley v. Second Nat Bank, 
 13 Ind. A|M>. 544, 41 N. E. 956 (1895); McComas v. Long, 85 Ind. 549 (1882); 
 Pearce v. Dill, 149 Ind. 136, 48 N. B. 788 (1897); Robinson v. Woodward, 48 
 S W. 1082, 20 Kv. Law Rep. 1142 (1899); Englar v. Offutt, 70 Md. 78, 16 
 Atl. 497. 14 Am. St. Rep. 332 (1889); Little v. Chadwick, 151 Mass. 109, 23 
 X. F. 1005, 7 L. R. A. 570 (1890); Bishop v. Mahoney, 70 Minn. 238, 73 N. 
 W. 6 (1897); Twohv Mercantile Co. v. Melbye, 78 Minn. 357, 81 N. W. 20 
 (1899i; Shields v. Thomas, 71 Miss. 260, 11 South. 84, 42 Am. St. Rep. 458 
 (1892); City of Lincoln v. Morrison, 04 Neb. 822, 90 N. W. 905, 57 L. R. A. 
 ss5 (1902); Perth Anibov Light Co. v. Middlesex County Bank, 60 N. J. Eq. 
 M, 45 Atl. 704 (1900); Ellieott v. Knbl, 60 N. J. Eq. 333, 46 Atl. 945 (1900); 
 O'Callaghan's Case, 04 N. J. Eq. 287, 51 Atl. 04 (1902); Matter of Cavin v. 
 Gleason, 105 N. Y. 256, 11 X. E. 504 (1887); Atkinson v. Rochester Printing 
 Co., 114 N. Y. 168, 21 N. F. lis (1889) ; Matter of North River Bank, 60 Hun, 
 91, 14 N. Y. Supp. 261 (1891); People v. American Loan & Trust Co., 2 App. 
 Div 193, 37 N. Y. Supp. 780 (1896); Cole v. Cole, 54 App. Div. 37, 00 N. Y. 
 Supp. 314 (1900) ; Matter of Hicks, 170 N. Y. 195, 63 N. E. 270 (1902) ; North 
 Dakota Elev. Co. v. Clark, 3 N. D. 26, 53 N. W. 175 (1892); Ferehen v. 
 Arndt 26 Or. 121, 37 Pac. 161, 29 L. R. A. 064. 46 Am. St. Rep. 603 (1S94) ; 
 Muhlenberg v. Loan & Trust Co., 20 Or. 132, 38 Pac. 932, 29 L. R. A. 667 
 (1894); Re Assignment Bank of Oregon, 32 Or. 84, 51 Pae. 87 (1897); Frei- 
 berg v. Stoddard. 161 Pa. 259. 28 Atl. 1111 (1894); Bank's Assigned Estate, 
 166 Pa. 622. 31 Atl. 334 (1895); Slater v. Oriental Mills, 18 R. I. 352, 27 
 Atl. 443 (1893); Arbuekle Bros. v. Kirkpatrick, 98 Tenn. 221, 39 S. W. 3, 36 
 L. It. A. 285, 60 Am. St. Rep. 854 (1890); Nonotuck Silk Co. v. Flanders, S7 
 Wis. 237, 58 N. W. 383 (1894); Burnham v. Barth, 89 Wis. 302, 62 N. W. 90 
 (lspr,); Thuemmler v. Barth, 8!) Wis. 381, 02 N. W. 94 (1895); Henika v. 
 Heinemann, 90 Wis. 478, 63 N. W. 1047 (1895); Gianella v. Momsen, 90 Wis. 
 476, 63 N. W. 1018 (1895); Stevens v. Williams, 91 Wis. 58, 04 N. W. 422 
 (1895); Dowie v. Humphrey, 91 Wis. 98, 64 N. W. 315 (1895); Hyland v. Roe, 
 111 Wis. 361, 87 N. W. 252, 87 Am. St. Rep. 873 iP.mHi; State v. Foster, 5 
 Wyo. 199, 38 Pac. 926, 29 L. R. A. 226, 63 Am. St. Rep. 47 (1895).
 
 Ch. ?) CONSTRUCTIVE TRUSTS AND TIIK STATUTE OF FRAUDS. 577 
 
 CHAPTER VII. 
 CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. 
 
 BURT et al. v. BOWLES et al. 
 (Supreme Court of Indiana, 1879. 69 Ind. 1.) 
 
 From the Orange Circuit Court. 
 
 Biddle, J. 1 Complaint in four paragraphs by the appellants against 
 the appellees. The substantial facts averred in the first paragraph 
 are as follows : 
 
 That the plaintiffs were possessed in their own right of a consider- 
 able estate in moneys ; that the defendant, Julia Bowles is the widow 
 of William A. Bowles, deceased, and the said defendants William A. 
 Dill and Mary Mac. Dill are the grandchildren and heirs-at-law of 
 William A. Bowles; that said Bowles became the guardian of the 
 persons and property of the plaintiffs, and became possessed of the 
 property, as such guardian, during their minority, and, after their ma- 
 jority, as their friend and agent, had the control and management there- 
 of until his death, on the 28th of March, 1873; that, by the death of 
 an aunt, Evaline Burt, the plaintiffs became possessed of an additional 
 estate of great value; that said Evaline, in contemplation of death, and 
 reposing great faith, confidence and trust in said Bowles, who pretended 
 great interest and friendship for the plaintiffs, and who was reputed a 
 man of great wisdom, financial skill and acumen, committed to his 
 charge the custody, care and control of the plaintiffs and their inter- 
 est in her said estate, enjoining upon these plaintiffs, who were then 
 of full age, that they should allow the said Bowles to control their 
 said affairs, which, in deference to the wish of their dying relation, 
 they agreed to do, themselves believing that he was, and would con- 
 tinue to be, their friend and faithful adviser; that said Bowles ac- 
 cepted said trust, and promised the said Evaline and these plaintiffs 
 that he would guard and protect their interest and manage their af- 
 fairs ; that certain lands, the title to which was then in the said Bowles, 
 but the purchase money of which was paid out of the moneys belonging 
 to the plaintiffs, should be conveyed to the plaintiffs, and improved for 
 their future home; that said Bowles did convey to the plaintiffs, as ten- 
 ants in common, in the year 1867, the said lands, to wit: (Here the 
 lands are described) ; that, in the year 1868, the said Bowles, pretending 
 great affection for the plaintiffs, and being involved in domestic trou- 
 bles, and being old, and plaintiffs feeling a great regard for him, in- 
 
 i A part of the opinion is omitted. 
 Kex.Tr.— 37
 
 578 CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. (Ch. 7 
 
 duced the plaintiffs to move upon said lands, and did thereafter for a 
 period of years furnish him a home, nursing and caring for him in 
 sickness and in health; that said Bowles, with the money and means 
 of the plaintiffs, made valuable and lasting improvements on the said 
 land, at the cost of five thousand dollars; that, in the year 1868, the 
 then wife of Bowles, from whom he had separated, in an action for 
 divorce, obtained a decree for alimony in the amount of twenty-five 
 thousand dollars, which, being still unpaid, amounts in the aggregate 
 to the sum of thirty-five thousand dollars; that by reason of said de- 
 cree, and other judgments, he became and was greatly embarrassed 
 financially, during all which time he continued to act as agent of the 
 plaintiffs, and manager of their moneys and estate— the plaintiffs being 
 ignorant of these facts— he falsely and fraudulently pretending to be 
 able to pay off all said liens upon his land, and account to them; that 
 having the full confidence of the plaintiffs, and knowing that they 
 were ignorant of his financial condition, and intending to cheat them, 
 as hereinafter set forth, he entered into a matrimonial alliance with the 
 said Julia; that immediately after his marriage with Julia, they began 
 to conspire together to cheat, wrong and rob the plaintiffs of their 
 moneys and lands; that, pretending to set their hearts upon said lands 
 and house of plaintiffs for a home for themselves, the said Bowles, 
 with the connivance and procurement of said Julia, did, on the 8th day 
 of July, 1872, and in divers times thereafter, represent to the plain- 
 tiffs that he was old, that said land and house suited him, that he had 
 other lands which would better suit them, and that, in view of his 
 kindness to them, they ought to convey to him their said house and 
 place heretofore mentioned, and fraudulently represented to them that, 
 if they would do so, he would, with his said wife, convey to Rachel 
 Hurt, for her interest therein, certain lands described, by a deed of war- 
 ranty, and that, before doing so, he would discharge said lands of all 
 liens and incumbrances, so that the plaintiffs should have a good title 
 thereto; that, still confiding in said Bowles, and believing that he 
 could and would do as he promised, they did, on the 3d day of July, 
 1872, convey, by deed of warranty, to the said Bowles, the said lands 
 hereinbefore first described, which were wholly unincumbered and of 
 the value of ten thousand dollars, and that they put said Bowdes and 
 said Julia in possession thereof ; that, at the time the said Bowdes and 
 Julia well knew that said Bowles could not and did not intend to dis- 
 charge said lands of their liens, which were greater than the value of 
 the lands ; that said Bowles knew that these plaintiffs were ignorant of 
 the fact that without a writing the said promise to convey by the said 
 Bowles could not be enforced, and that they were ignorant that the said 
 Julia could not be compelled to join in said conveyance, which facts he 
 suppressed and kept from them, though he well knew that they relied 
 upon him for the protection of their rights and interests ; that, at the 
 time, said Bowles well knew these facts, and that said Julia would not 
 and did not intend to join in making said conveyance to said plaintiffs,
 
 Ch. 7) CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. 579 
 
 and well knew that he was not able and could not an 1 did not intend 
 to discharge said liens nor make such conveyance, but so fraudulently 
 pretended and represented, to cheat and wrong these plaintiffs; that 
 Bowles never paid any part of said liens, but afterwards died, at the 
 date before stated, intestate, leaving Julia his widow, and these plain- 
 tiffs his grandchildren, and sole heirs at law, as aforesaid; that the 
 assets of his estate are not sufficient to pay off said liens on said lands, 
 and there is no person of whom they can obtain title thereto. Prayer 
 that this conveyance to Bowles be set aside, cancelled and held for 
 naught, and that the title to said lands be quieted and the possession 
 thereof given to them and for damages in one thousand dollars. 
 
 The second paragraph of the complaint is not substantially dif- 
 ferent from the first ; but the averments are not as fully made, and 
 it prays for a rescission of the contract, for the recovery of rents, and 
 that the title may be quieted in the plaintiffs, etc. 
 
 The third paragraph of the complaint is in the following words : 
 
 "And, for a further and third paragraph herein, said plaintiffs say 
 that they are the owners by complete equitable title, and entitled to the 
 possession, of a tract of land, to wit : The west half of the north-east 
 quarter of section 3, in township 1 north, of range 2 west, lying and 
 being in said county and State ; and that defendants now hold pos- 
 session of the land without right, and for three years last past have 
 unlawfully kept plaintiffs out of possession of the same. Wherefore 
 they demand judgment for the recovery of the land and the legal 
 title thereto, and two thousand dollars for being kept out of the pos- 
 session, and for other proper relief." 
 
 The fourth paragraph of the complaint contains a brief and imper- 
 fect statement of the facts averred in the first, with a similar prayer. 
 
 A separate demurrer, alleging a want of sufficient facts to constitute 
 a cause of action, was sustained to each paragraph of the complaint, 
 upon which, the plaintiffs refusing to amend, the court rendered judg- 
 ment for the defendants. 
 
 These rulings are assigned as error in this court, and present the 
 only questions reserved in the record for our consideration. 
 
 The appellants have presented us with a careful and elaborate brief, 
 but the appellees have not favored us with any argument. 
 
 It will be observed, upon the face of this complaint, that the repre- 
 sentations alleged to be false are not concerning facts existing at the 
 time they were made, except as to the fact of the great confidence the 
 plaintiffs reposed in William A. Bowles. The representations touching 
 the alleged exchange of lands which Bowles sought to effect were, 
 that he would pay off the incumbrances on the lands which he proposed 
 to convey to the plaintiffs in exchange for the lands which the plaintiffs 
 conveyed to him, and he would convey the said lands to the plaintiffs, 
 and that his wife, Julia, should join in the deed. These representations 
 are not of facts existing at the time he is alleged to have made them, 
 but were promises to be performed at a future time. It is well set-
 
 ."») C0NSTR1 CTIVE TR1 STS AND Tin: STATUTE OF FRAUDS. (Cll. 7 
 
 tied that representations, to be fraudulent, must be made concerning 
 existing facts, and that promises made to be performed in the future, 
 though fraudulently made and afterward broken, do not constitute 
 fraud. The authorities upon this point are numerous. We cite some 
 of the latest. Fouty v. Fouty, 34 Ind. 433; President and Trustees 
 of Hartsville University v. Hamilton, 34 Ind. 506; Bacon v. Markley, 
 46 Ind. 116; lagers v. lagers, 49 Ind. 428; Welshbillig v. Dienhart, 
 65 Ind. 94. 
 
 The other false representations, or rather suppressions of the truth, 
 are that Bowles suppressed and kept from the plaintiffs the fact, which 
 he well knew, that his promise to convey the lands which he agreed to 
 give the plaintiffs in exchange for the land conveyed to him by them 
 could not be enforced unless it was made in writing, and that his wife 
 Julia could not be compelled to join her husband in the conveyance of 
 them, which fact Howies also well knew and concealed from the plain- 
 tiff-. These facts are concerning the law. upon which fraud cannot 
 be predicated, however false and fraudulent they may be, and whether 
 they are suppressions of truth or representations of falsehood. Every 
 person is bound to know the law, and not to be deceived by its suppres- 
 sion or false representation. This is a necessary maxim, lying at the 
 foundation of government and jurisprudence, and without which nei- 
 ther government nor jurisprudence could exist as a system. 
 
 If the alleged representations of Bowles had been made affirmatively, 
 that his promise to convey the lands could be enforced without being 
 in writing, and that his wife, Julia, could be compelled by law to join 
 him in the conveyance, however fraudulently made, they would not 
 amount to a legal fraud. Piatt v. Scott, 6 Blackf. 389, 39 Am. Dec. 
 436; Mears v. Graham, 8 Blackf. 144; Dickerson v. Board of Commis- 
 sioners of Ripley County, 6 Ind. 128, 63 Am. Dec. 373; Clem v. New- 
 castle & Danville Railroad Co., 9 Ind. 488, 68 Am. Dec. 653; Reed v. 
 Sidener, 32 Ind. 373; Boland v. Whitman, 33 Ind. 64; President, etc., 
 of Hartsville University v. Hamilton, 34 Ind. 506; Smither v. Calvert, 
 44 Ind. 242; City of Lafayette v. State ex rel. Jenks, 69 Ind. 218. 
 
 I '.ut, because there was no legal fraud committed on the appellants 
 by Bowles, and because the statute of frauds stands in the way of 
 the enforcement of the contract against Bowles, it does not follow that 
 the facts stated in the first paragraph do not constitute a cause of 
 action. It is a familiar principle that money paid, or personal propertv 
 delivered, or real estate conveyed, under a void contract or a contract 
 which cannot be enforced, may be recovered back or compensation re- 
 covered therefor. In the case before us, as the alleged express con- 
 tract of Howies cannot be enforced, the implied contract arises at once 
 that he will return the property obtained under it, or render compen- 
 sation therefor; and we do not see why the contract may not be re- 
 scinded as between the representatives o£ Bowles and the appellants, 
 unless other rights have intervened to prevent a rescission. As, by the 
 allegations, the appellants received nothing under the contract, they
 
 Ch. 7) CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. 581 
 
 have nothing to restore before asking a rescission. And, as between 
 the parties, they can be placed in statu quo." 
 
 We think the demurrer to the first paragraph should have been 
 over-ruled. * * * 
 
 The judgment is reversed, at the costs of the appellees, and the 
 cause remanded with instructions to over-rule the demurrers to the 
 complaint, and for further proceedings. 2 
 
 HAIGH v. KAYE. 
 
 (Court of Appeal in Chancery, 3872. Law Reports 7 Chancery Appeal Cases, 
 
 4G9.) 
 
 This was an appeal from a decree of the Master of the Rolls. 
 
 On the 8th of December, 1860, the plaintiff, G. A. Haigh, conveyed 
 a freehold estate, called the Thorncliffe estate to the defendant, Robert 
 Kaye, in consideration of the sum of £850. 
 
 Although that sum was expressed in the deed to be paid by the de- 
 fendant to the plaintiff, the money was in fact the plaintiff's money, 
 and he handed it to the defendant in order that it might be repaid as 
 the nominal consideration for the conveyance. Under these circum- 
 stances the plaintiff alleged that the estate was conveyed to the de- 
 fendant as a trustee for him. 
 
 On the 23rd of November, 1867, disputes having arisen between 
 the plaintiff and defendant, an agreement was signed by them to refer 
 all matters in dispute respecting the transfer of the Thorncliffe estate 
 and other money transactions to arbitration ; but the defendant subse- 
 quently withdrew from the arbitration and no award was made. 
 
 The plaintiff having applied to the defendant to re-convey the es- 
 tate, and the defendant having refused, the plaintiff filed his bill pray- 
 ing that the defendant might be declared to be a trustee for the plain- 
 tiff of the Thorncliffe estate, and might be directed to convey it to him. 
 
 Defendant in his answer said as follows: 
 
 "Near the end of the year 1860 the plaintiff, who is my brother-in- 
 law, being a party to the suit of Haigh v. Haigh, then pending in this 
 Honorable Court, and fearing an adverse decision in such suit, made 
 overtures to me for the sale of the said estate ; but I was unable at that 
 time to withdraw from my business the money required to pay for 
 the purchase thereof. The plaintiff had previously, as I believe, at- 
 tempted to sell the said estate to another person, who, however, de- 
 clined to give more than £600. for it. The plaintiff then, being de- 
 sirous to sell the said estate for the reasons above referred to, and 
 being also desirous that I should purchase such estate, and that the 
 
 2 Ramey v. Slone, 62 S. W. 879, 23 Ky. Law Rep. 301 (1901) ; Dickerson v. 
 Mays, GO Miss. 3S8 (1882), supra, p. 14.
 
 .">^2 CONSTRUCTIVE TRUSTS AND Till: STATUTE OF FRAUDS. ( Ch. 7 
 
 same should be vested in me (but not, save as appears by this my an- 
 swer to the statements contained in other parts of it to which 1 refer, 
 as trustee for the plaintiff), induced me to take a conveyance thereof, 
 it being understood that I should account to the plaintiff for the rents 
 and profits until such time a- I could make arrangements for purchas- 
 ing or paying the purchase money for the property; and, in fact, by 
 a deed bearing date about the 8th day of December, and in considera- 
 tion of the sum of £850. therein expressed to have been paid by me 
 to the plaintiff, the plaintiff did convey the said estate to me. my heirs 
 and assigns. * * * I admit that it was intended that I should con- 
 vey the estate to the plaintiff when he should desire me to do so, un- 
 less arrangements were completed for the purchase or payment of the 
 purchase money by me, and that in the meantime I should, until such 
 arrangements were finally made, account to the plaintiff for the rents 
 and pr< (fits of the property." 
 
 The defendant also stated as follows: 
 
 "The rents and profits of the said Thorncliffe estate have been re- 
 ceived by me since the date of the said conveyance, and T have ac- 
 counted to the plaintiff for the same, or at all events for the amount 
 thereof up to the 3rd of February, 1863. when the arrangements for 
 purchasing the property and paying the purchase money therefor were 
 finally settled." 
 
 The defendant also alleged that he had expended several hundred 
 pounds of his own money on repairs and improvements on the prop- 
 erty. He now claimed to hold the estate as his own, discharged from 
 any trust for the plaintiff; and he claimed the benefit of the Statute 
 of Frauds. 
 
 In his affidavit in support of his case the defendant said: "On the 
 3rd of February, 1863, the arrangement for my purchasing the Thorn- 
 cliffe estate was completed by my agreeing to pay, and by the plaintiff 
 agreeing to accept, the sum of £800. for such estate. It was arranged 
 between us that this sum should be paid by instalments, as I could 
 spare the money from my business. I paid the full amount of such 
 purchase money by instalments, between the 11th of February, 1863, 
 and the 29th of January, 1867. I also paid divers sums of money to 
 various persons by the order and direction of the plaintiff ; and for 
 other moneys due to me on the settlement of account with the plain- 
 tiff I take credit." 
 
 The .Master of the Rolls declared that the defendant was a trustee 
 of the Thorncliffe estate for the plaintiff, and ordered an inquiry what 
 sums had been received by the defendant on account of the rents and 
 profits, and of his application thereof, and also what sums had been 
 properly expended by him in permanent improvements on the estate, 
 or in the management thereof, and declared that the defendant had a 
 charge on the estate for the amount (if any) which was due to him; 
 and he ordered that, without prejudice to the lien, the defendant 
 should convey the estate to the plaintiff.
 
 Ch. 7) CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. 583 
 
 The defendant appealed from this decree. After the institution 
 of the suit the plaintiff, G. A. Haigh, died, and the suit was revived by 
 his son, the present plaintiff. 
 
 Sir Wm. James, L. J. I am of opinion that the decree of the Mas- 
 ter of the Rolls must stand. 
 
 The defendant admits that there was a conveyance given to him 
 purporting to be executed in consideration of £850. paid by him to 
 the original plaintiff, G. A. Haigh, by which he became, by purchase, 
 owner of the estate. He admits that there was no such transaction 
 in fact as any sale to him, but that the payment of the ±850. was a 
 mere form, and that the plaintiff paid the expenses of the conveyance 
 to him, or gave him the money to pay them. That being so, he goes 
 on to admit that he was to hold the estate upon trust to pay the rents 
 and profits to the plaintiff and when the plaintiff called upon him for a 
 re-conveyance he was to re-convey it. The plaintiff has called upon 
 him to re-convey the estate, and he suggests by way of answer to that, 
 first of all vaguely and faintly, that this transaction was not altogether 
 a straightforward transaction; that this transaction was entered into 
 with a view to defraud somebody else. The defendant says in ef- 
 fect, "I am to remain in possession of the estate, because we were 
 both of us engaged in a transaction contrary to the law, and you will 
 not take it away from me to give it to a man who was as bad as I was 
 in the matter; in fact it was an illegal and fraudulent transaction 
 against somebody else, and where there is an equal crime the court 
 ought to hold that in pari delicto melior est conditio possidentis." 
 However the defendant has not raised that defense in the way in 
 which, according to my judgment, such a defense ought to be raised. 
 If the defendant means to say that he claims to hold property given to 
 him for an immoral purpose, in violation of all honor and honesty, 
 he must say so in plain terms, and must clearly put forth his own 
 scoundrelism if he means to reap the benefit of it. Here he has simply 
 said that the plaintiff, fearing an adverse decision in the suit of Haigh 
 v. Haigh, conveyed the property to him. I think that is not suffi- 
 cient. 
 
 The next objection taken was upon the Statute of Frauds. The de- 
 fendant admits that he took the estate upon the most positive agree- 
 ment to return it ; but in another part of his answer he sets up the 
 Statute of Frauds, and claims the estate as a right. Now the Statute 
 of Frauds no doubt says, that a person claiming under any declaration 
 of trust or confidence must show that in writing; but the statute goes 
 on to say that no resulting trust, and no trust arising from operation 
 of law, is within that enactment. I apprehend that it is clear that the 
 Statute of Frauds was never intended to prevent the court of equity 
 from giving relief in a case of a plain, clear and deliberate fraud. 
 The words of Lord Justice Turner, in the case of Lincoln v. Wright 
 [4 De G. & J. 16], where he said, "The principle of this court is that 
 the Statute of Frauds was not made to cover fraud," express a prin-
 
 oS4 CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. (Ch. 7 
 
 ciple upon which this court has acted in numerous instances, where the 
 court has refused to allow a man to take advantage of the Statute of 
 Frauds to keep another man's property which he has obtained through 
 fraud. It is difficult to distinguish this case from that of Childers 
 v. Childers [1 De G. & J. 482]. It is consistent entirely with Davies 
 v. Otty [35 I>eav. 208], which does not seem to me to carry the mat- 
 ter at all further than the decision of Lord justice Turner in Lincoln 
 v. Wright, where the Statute of Frauds was attempted to be set up in 
 the same way by a man who claimed to take under an absolute con- 
 veyance instead of a mortgage. 
 
 That being so, the Statute of Frauds and the ground of supposed 
 illegality of the whole transaction being set aside, the defendant comes 
 into possession of this property as a trustee for the plaintiff. Then he 
 says that although he was made a trustee there was a talk about his 
 being the purchaser. He does not pretend to say that at that time 
 there was any bargain, but he says that it was understood, before he 
 was called upon to re-convey the property, that if he could make an 
 arrangement to purchase it he was to have it. 
 
 [His Lordship then referred to the statements in the defendant's 
 answer, and to the evidence on this subject, and continued : | 
 
 There is no direct evidence in writing in support of the defendant's 
 contention, and it appears to me that the correspondence which passed 
 between the plaintiff and defendant with reference to the arbitration 
 is inconsistent with the existence of any such agreement. I am of 
 opinion that defendant has failed to prove his case, and therefore 
 that the decree is quite right in declaring that he is to be treated as a 
 trustee of the property, and must re-convey it to the representatives 
 of the original plaintiff. 
 
 Sir G. Melusii, L. J. I am of the same opinion. 3 
 
 FATRCIIILD v. RASDALL. 
 
 (Supreme Court of Wisconsin, 1859. 9 Wis. 379.) 
 
 By the Court, Paint:, J. 4 This suit was brought by the plaintiffs 
 as administrator and administratrix of the estate of Abel Rasdall, de- 
 ceased, to enjoin the defendant from proceeding in a suit to recover 
 possession of certain real estate in the city of Madison, and to compel 
 a conveyance by him to the plaintiffs. The grounds set forth for 
 
 ■• Davies v. Otty, 35 Beav. 208 (1865); Booth v. Tourle, L. R. 10 Eq. 1S2 
 (1873); Davis v. Whitehead, I,. R. 2 Ch. 133 (1894); Rochefoucauld v. Bou- 
 stead, L, i:. (ixi)7) 1 Ch. ijm; (isn<i); Clarke v. Eby, 13 Grant's Chy. Rep. 
 (Upper Canada) 371 (1867); Catalini v. Catalani, 124 Ind. 54, 24 N. E. :'>ir>, 
 19 Am. St. Rep. 7.". (1889); Ryan v. O'Connor, 41 Ohio St. 368 (1884); Pea- 
 cock v. Nelson, 50 .Mo. 256 (1872). 
 
 ■* The statement of facta and part of the opinion are omitted.
 
 Ch. 7) CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. 585 
 
 relief are that the plaintiffs' intestate, having in a personal encounter 
 in 1843, dangerously wounded a man named Smith, and being appre- 
 hensive of arrest and prosecution, and desirous to so arrange his af- 
 fairs that he might escape from the country, conveyed the property in 
 question to the defendant, who was his brother; and that although the 
 deed was absolute on its face, and purported to be for the sum of 
 $2,000, yet that it was without consideration, and that the defendant 
 agreed to hold the property in trust, for the use and benefit of the 
 deceased and his heirs. * * * 
 
 We have no doubt, from the evidence presented, that the convey- 
 ance was made by the deceased under the circumstances, and with the 
 understanding set forth in the bill, though this is denied by the answer. 
 And were this evidence proper to be received, it would fully sustain 
 the decision of the court below. But it was parol evidence, it was all 
 objected to by the defendant's counsel, and the objection is fatal. 
 
 It is one of those cases where the real merits and justice of the 
 matter create a strong desire to escape from the application of the 
 stern rule of law, which prohibits an inquiry by means of parol evi- 
 dence. But the barrier is too strong to be broken over ; and while it 
 restrains us, furnishes its own justification in the fact, that though, 
 in individual instances like the present, it may work hardship, yet in 
 the main it promotes private security and the general good. 
 
 We do not feel called upon to cite authorities, to show that in the 
 absence of fraud, accident, or mistake, parol evidence cannot be re- 
 ceived to prove that a deed, absolute on its face, was given in trust 
 for the benefit of the grantor ; and we have not been able to find any- 
 thing in this case to make it an exception. We cannot see why, if 
 this evidence is to be received to establish this trust, every other deed 
 in the state cannot be shown by parol to have been given on trust, and 
 the statute of frauds be entirely annulled. 
 
 But the counsel for the complainants, seeming conscious of the dif- 
 ficulty of sustaining the admissibility of this evidence for the purpose 
 of establishing the trust, yet contended that though inadmissible for 
 that purpose directly, it should be admitted, and relief granted, on 
 the ground of fraud. This presents a question of very great im- 
 portance, and in view of the authorities on the subject, of no little dif- 
 ficulty. There is no doubt that if any fraud had been alleged, by 
 means of which the defendant procured the conveyance from his 
 brother to himself, or any mistake, by which the instrument was made 
 absolute, instead of expressing the trust intended, parol evidence would 
 have been admissible to show such fraud or mistake. This convey- 
 ance would thus stand upon the same footing with all other contracts, 
 and come within the conceded power of courts of equity to inquire, 
 by parol evidence, into frauds or mistakes in their procurement or ex- 
 ecution. 
 
 But no such fraud or mistake is alleged here. On the contrary, it 
 appears from the whole tenor of the complaint, that the conveyance
 
 586 CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. (Cll. 7 
 
 was made by Abel Rasdall upon his own motion, and without any 
 solicitation or instigation of the defendant, and that it was intended 
 to be, as it is, absolute on it-- 1. 
 
 The only fraud alleged, therefore, is that of the defendant's now 
 claiming the property in violation of the parol trust, and whether 
 that constitutes such a fraud, as will justify a court of equity in over- 
 turning the written contract of the parties, upon parol evidence, is 
 tHe question presented. 
 
 It cannot be denied that if the court can, by any legal means, arrive 
 at the existence of the parol trust, then the violation of it by the de- 
 fendant, in wresting their inheritance from the family of his deceased 
 brother, is most grossly fraudulent. And to avoid such injustice, 
 courts of equity have frequently seized upon the slightest circumstances 
 connected with the procurement of the conveyance to avoid the opera- 
 tion of the statute of frauds. And there are cases, the principle of 
 which would warrant the assertion that the attempt by the defendant to 
 claim the rights which this deed, on its face, gives him, contrary to 
 the parol trust, is such a fraud as would justify the relief upon parol 
 evidence. But I confess my inability to see how, upon principle, this 
 position can be sustained, consistently with a due observance of the 
 statute. Placing the relief in such cases upon the ground of fraud, 
 is implied by admitting that the parol evidence cannot be admitted to 
 establish the trust, for the purpose of enforcing it, directly as a trust. 
 And this is also expressly admitted. But it seems apparent to my 
 mind that to say, in such a case, it shall be admitted to establish the 
 fraud, is equally a violation of the statute. Because the fraud con- 
 sists only in the refusal to execute the trust. The court, therefore, 
 cannot say that there is a fraud, without first saying that there is a 
 trust. And the parol evidence, if admitted, must be admitted to es- 
 tablish the trust, in order that the court may charge the party with 
 fraud in setting up his claim against it. Conceding then, that they 
 cannot execute the trust directly in such case, because it cannot be 
 proved by parol, is it not a mere evasion of the statute to say, that 
 they will allow it to be proved by parol for the purpose of enforcing 
 it indirectly, by charging the party with fraud and for refusing to ex- 
 ecute it? Such a course does not relieve the court from the charge of 
 violating the statute, but subjects it to the odium of an attempted, but 
 unsuccessful evasion. 
 
 It may be said that fraud ought not to be tolerated. That is very 
 true, but that is not the question. The question is, whether the court, 
 without violating the law, can get at the fraud. There is no doubt that 
 trusts ought to be enforced; but that is not a sufficient reason for ad- 
 mitting parol evidence to establish it. When the party offers this, the 
 court says no ; the law forbids it. 
 
 So, however desirable it is to prevent fraud, if the fraud cannot be 
 established, except by first showing a trust by parol, is not the same 
 answer equally applicable? If not, it is difficult to see that the statute
 
 Cll. ?) CONSTRUCTIVE TBI STS AND THE STAT1 TE OF FRAUDS. 581 
 
 of frauds is to have any practical effect; for although trusts and 
 agreements contrary to the written contracts of parties, cannot be 
 proved by parol so as to be enforced as such, yet they may be proved 
 and held of sufficient force to charge the party with fraud in nol ob- 
 serving them. And the result is practically the same, ft is for courts 
 to say to the parties, "These agreements are not valid, not binding; 
 we cannot compel you to observe them ; yet if you do not observe them 
 without being compelled, we will hold that to be a fraud on your part, 
 and for the fraud, will compel you to execute them." 
 
 It is impossible to reconcile with principle very many of the ad- 
 judications upon the statute of frauds. Courts seem to have been so 
 intent upon administering justice in the particular case, that they have 
 frequently lost sight of its provision, and their action has often 
 amounted to little less than the exercise of the right to appeal, or sus- 
 pend its operation whenever they deem that the real justice of the 
 case required it. Rut the progress of adjudication upon the subject 
 has been marked by many strong protests against the wide departure 
 from principle, and the regrets expressed by courts that it had ever 
 obtained. And the current of modern authority is in favor of return- 
 ing to the due observance of the provisions of this law, according to 
 their obvious intent. 
 
 But the distinction between fraud in procuring a conveyance, and 
 that which arises only from the refusal to execute a parol trust or 
 agreement, connected with a conveyance obtained without fraud, is 
 not only clear upon principle, but is not without sanction. 
 
 In YVhitton v. Russell, 1 Atk. 448, a testator was about to alter his 
 will, so as to give one of the legatees fourteen pounds per annum more 
 than he had already given him. It was suggested by the attorney, that 
 if the other legatees would give a bond to pay the amount, it would 
 be sufficient, and one of the others being present, promised that they 
 would do it, and the will was not altered. The bill was filed to en- 
 force the promise, but the Chancellor held it to be "against the stat- 
 ute of frauds," and he adds, "neither is there any ground for relief 
 on the head of accident or fraud. Every breach of promise is not a 
 fraud, nor does it appear that the testator was drawn in by this 
 promise not to add the legacy to this codicil." The inference pro- 
 duced by the statement of facts in that case, is that the promise did 
 induce the testator not to alter his will, in which case it would have 
 been a fraud in procuring the will ; but assuming it to be otherwise, 
 as stated by the Chancellor, it was then the refusal by one having the 
 legal title without fraud, to execute a trust which the testator had by 
 parol declared, and which the devisee had promised to execute. And 
 •this the Chancellor held was not a fraud. He could only have meant 
 that it was not such a fraud as to be relieved against, because in morals 
 it was certainly a fraud. 
 
 In the case of Hoge v. Hoge, 1 Watts (Pa.) 163. 26 Am. Dec. 52, 
 this very point was decided. The question arose as to the admissibility
 
 5S8 CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. (Ctl. 7 
 
 of parol evidence to show that a devise of land was in trust, and it 
 was conceded on all hands that it could not be admitted, except on the 
 ground of fraud; and the question then occurred whether the mere 
 refusal to perform the trust, was such a fraud as would justify its 
 admission. Upon this point the court says: "The question has been 
 as to the circumstances which constitute such a fraud as will be made 
 the foundation of a decree. A mere refusal to perform the trust is 
 undoubtedly not enough, else the statute, which requires a will of land 
 to be in writing, would he altogether inoperative, and it seems to be 
 requisite that there should have been an agency, active or passive, on 
 the part of the devisee, in procuring the devise." And having found 
 as a matter of fact that there was such agency in that case, they 
 granted relief on the ground of fraud. And all the authorities refer- 
 red to in the opinion, are cases in which there was some promise on 
 the part of the defendant, by which the property was procured by 
 himself, or by which he prevented a different disposition of it. The 
 same distinction is recognized in Pinnock v. Clough, 16 Yt. 500, 42 
 Am. 1 )ec. 521. 
 
 In the cases of Dean v. Dean et al., 6 Conn. 285. Bandor v. Snyder, 
 5 Barb. (X. V.) 63, Lathrop v. IToyt, 7 Barb. (N. Y.) 59, and other 
 similar cases which might be cited, the hardship of enforcing the 
 statute was equally great as in this case, and in some of them the 
 courts expressed their willingness to escape from its application if pos- 
 sible. But there was no suggestion that the mere refusal of the de- 
 fendants to execute the parol trusts, was such a fraud as would take 
 the case out of its provisions. 
 
 1 hit the strongest support that seems to exist for the opposite view, 
 may perhaps be derived from the cause of decision admitting parol 
 evidence to show that a deed absolute on its face was given as se- 
 curity, and thereby converting it into a mortgage. It is true, there 
 are some cases which have denied its admissibility for that purpose, as 
 in Streator v. Jones, 5 N. C. 449, and in Thompson v. Patton, 5 Ljtt. 
 ( Ky.) 74, 15 Am. Dec. 44, which also both sustain the position that the 
 fraud which justifies the admissibility of parol evidence, must be such 
 as affects the transfer or disposition of the property. But there is a 
 very long list of cases which have held parol evidence admissible thus 
 to convert a deed into a mortgage. Some of them however recognize 
 the distinction we have asserted, as in Thomas v. McCormack, 9 Dana 
 (Ky.) 109. But many others have gone to the extent of saying that 
 while there was no fraud or mistake in procuring or executing the 
 deed, yet that the mere attempt to use the deed as absolute, is such a 
 fraud as justifies the admissibility of parol evidence and the relief upon 
 it. See Mclntyre v. Humphreys, 1 Iloff. Ch. 34, where the Yice- 
 Chancellor says it is "too late" to dispute the general doctrine, and 
 that "the restriction of the rule adopted in some cases, that it must 
 be shown that a defeasance was not made through accident, fraud or 
 mistake, does not prevail'' in New York.
 
 Ch. 7) CONSTRUCTIVE TRUSTS A.ND THE STATUTE OF FRAUDS. •>'.» 
 
 The question is discussed to some extent in Rogan v. Walker et al., 
 1 Wis. ?27, decided by Justice Smith on stipulation. In that case 
 there was a condition in the deed itself, and a bond was given by the 
 complainant, which alone justifies the decision made; and so the 
 learned judge held. But he then proceeded to show that even if there 
 had been no such written evidence, parol evidence would have been 
 admissible on the ground of fraud, and that the attempt to use a 
 deed given as security, as absolute, was a sufficient fraud for the pur- 
 pose. He cites many authorities which undoubtedly sustain the posi- 
 tion, but in commenting on the cases heretofore cited from Barbour's 
 Reports he held them not applicable, because they were cases of "ex- 
 press trusts" sought to be proved by parol, and says: "The court very 
 properly decided that the statute of frauds was an insurmountable bar- 
 rier." The ground of distinction suggested is, that the equity of re- 
 demption arises out of the transactions of the parties, and not out of 
 the parol agreement. This distinction may be material in determining 
 whether the admissibility of parol evidence is to be determined by the 
 statute of frauds, or by the general rule prohibiting such evidence to 
 contradict the written contracts of the parties. 
 
 It is conceded that fraud may take a case out of either the statute 
 or the rule. But I suppose it would not be contended that in the ab- 
 sence of fraud there is anything in the peculiar nature of the equity 
 of redemption that can have that effect. On the contrary, justifying 
 its admission on the ground of fraud, which is the ground upon which 
 it is placed by all these cases, is admitting that the case could not other- 
 wise be taken out of the rule. 
 
 The question under consideration therefore was, what was a suffi- 
 cient fraud for the purpose? And in determining this question, I can 
 see no distinction between an express trust and a parol agreement mak- 
 ing a deed a mortgage. If the refusal to abide by the latter is to be 
 held on principle, to be such a fraud as takes the case out of the rule. 
 and justifies parol evidence, I can see no reason why a refusal to exe- 
 cute an express trust, evidenced only by parol, should not be so held. 
 The injustice, the wrong and the fraud are not only as great, but 
 greater in the latter case than in the former. For in the former the 
 party would only get the land for the money he had loaned, while in 
 the latter he would get it for nothing. And if these cases are to be 
 held correct upon principle, we can see no reason why the refusal by 
 any party to perform a parol agreement, within the statute of frauds, 
 should not be held such a fraud as would take the case out of the stat- 
 ute whenever such a refusal would work hardship and injustice upon 
 the opposite party. But we must say that we think these decisions 
 cannot be sustained upon principle, and that, if established by authority 
 too firmly to be shaken, it must be regarded as an invasion upon the 
 statute which cannot justify still further encroachment. And it is 
 perhaps not so settled on authority as to be beyond question.
 
 590 CONSTRUCTIVE TRUSTS AND THE STATUTE OP FRAUDS. (Ch. 7 
 
 In Stevens v. Cooper, 1 John. Ch. (N. V.) 425, 7 Am. Dec. 4 ( >), 
 the question was, whether the effect of a mortgage could be varied by 
 parol evidence, and Chancellor Kent, after referring to the general 
 rule prohibiting such evidence as settled beyond discussion, adds: "Nor 
 does this case come within any exception admitted here to the opera- 
 tion of the rule ; for there is no allegation of fraud, mistake or sur- 
 prise in making or executing the mortgage, and those I believe, are 
 the only cases in which parol evidence is admissible in this court 
 againsl a contract in writing." 
 
 It seems impossible upon principle to distinguish this case from that 
 of the admissibility of parol evidence to vary the effect of a deed. And 
 in Webb v. Rice, 6 Hill ( X. Y.) 219, it is decided that such evidence 
 is inadmissible in a curt of law, and it is intimated that it could not 
 be received in equity except to show fraud or mistake in the execution 
 of the instrument. The dissenting opinions of lustice Bronson in 
 Webb v. Rice. 1 Hill I X. Y.) 606. and Swart v. Service, 21 Wend. 
 ( X. V.) 36, 34 Am. Dec. 211. show clearly that he confines the fraud, 
 which is to justify the admission of parol evidence, to such as affected 
 the execution of the instrument. And Mr. Justice Cowen, who de- 
 livered the opinion of the court in the latter case, rested it entirely on 
 previous decisions in that state, by which they felt bound, lint in 
 speaking of these decisions he says: "For one, I was always at a 
 loss to see on what principle the doctrine could be rested either at 
 law or in equity, unless fraud or mistake were shown in obtaining an 
 absolute deed, where it should have been a mortgage." "Short of that 
 the evidence is in direct contradiction of the deed ; and I am not aware 
 that it has ever been allowed in any other courts of equity or law." 
 
 We will not pursue this part of the subject further. We do not of 
 course purpose to pass upon the question, whether in the absence of 
 fraud or mistake in its execution, an absolute deed can be converted 
 into a mortgage. That question is not before us, but it is so nearly 
 allied to the one before us, that we could not well determine the latter, 
 without inquiring how it was affected by the decisions to which we 
 have alluded. And as we think the rule they have established does 
 not rest upon principle, however it may be determined upon au- 
 thority, we do not feel warranted in following the rule which they 
 would by analogy suggest. And we must hold that as the deed was 
 made absolute to the defendant without any mistake, or fraud on his 
 part, his mere refusal to perform the trust, is not such a fraud as 
 will justify the admission of the parol evidence, and the enforcement 
 of the trust. The reason is, that the law forbids us to be informed 
 that there was ;1 trust by that kind of evidence. It may andl does un- 
 doubtedly work hardship in this case, and that we regret; but if par- 
 ties will, in face of tin- positive provisions of the statute, risk their 
 interests upon the honor or justice of others, and the security fails 
 them, they have no right to ask courts to violate the law to furnish re- 
 lief.
 
 Cll. 7) CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. 591 
 
 The counsel for the complainants contended that if we should be 
 of the opinion that the trust could not be established, then it appearing 
 that the consideration was not paid, they should be entitled to a ven- 
 dor's lien for the amount expressed in the deed. The case of Leman 
 v. Whitley, 4 Russ. 423, is relied on, and would seem to sustain the 
 position. The bill was filed to establish a trust and obtain a re-convey- 
 ance. The court held parol evidence inadmissible, but decreed a ven- 
 dor's lien for the consideration, under the prayer for general relief. We 
 have felt a strong desire to follow this case, but upon a careful ex- 
 amination of the whole subject, have come to the conclusion that we 
 cannot do so. The bill does not claim a vendor's lien. It proceeds 
 upon an entirely- different hypothesis. It alleges, it is true, that the 
 consideration never was paid; but not for the purpose of recovering it. 
 hut because it was never intended or agreed to be paid. There is noth- 
 ing in the bill to indicate to the defendant that he was to resist the 
 claim for a vendor's lien, and we cannot but see that it would work a 
 surprise upon him to grant such relief upon this bill. Rathbun v. 
 Rathbun, 6 Barb. (N. Y.) 98; and Philbrook v. Delano, 29 Me. 410; 
 and Dean v. Dean, 6 Conn. 285, all hold that such relief could not be 
 granted upon a bill filed to establish the trust, without indicating in 
 any way an intent to proceed for a lien. And we think this the only 
 just rule upon the subject. 
 
 We are compelled therefore upon the whole case, to reverse the 
 judgment of the court below, and direct a decree to be entered dismiss- 
 ing the complaint. At the same time we may express the hope that 
 the defendant's conscience, to which his brother has trusted, may not 
 suffer him so far to violate that trust as to detain their just inheritance 
 from his wife and children. 5 
 
 ALEXANDER CAMPBELL v. JOHN B. DEARBORN. 
 
 (Supreme Judicial Court of Massachusetts, 1*72. 109 Mass. 130, 12 Am. Rep. 
 
 (171.) 
 
 Bill in equity, filed July 12, 1869, to compel a re-conveyance of land 
 by the defendant to the plaintiff, on the ground that the plaintiff's con- 
 veyance of it to the defendant, although in form absolute, was in sub- 
 stance a mortgage. The bill alleged that the plaintiff on June 11, 1866, 
 agreed with Artemas Tirrill for the purchase by him from said Tirrill 
 iA a parcel of land in Charlestown, and at the same time Tirrill gave 
 him a bond to convey the land at any time within three years from 
 said June 11, upon the payment to him of $5,500, the plaintiff to pay all 
 a— e-sments on the land in the meanwhile; that since taking the bond 
 the plaintiff has occupied the land); that in the early part of June 1869 
 
 BWolford v. Farnham, 11 Minn. 159, 46 X. W. 295 (1890); Marvel v. Marvel, 
 70 Nel'. 498, 97 x. W. 640, 113 Am. si. Rep. 792 (1903); Sturtevant v. iSturte- 
 vant, 20 X. Y. 39, 75 Am. Dec. 371 (1859).
 
 592 CONSTRUCTIVE TRUSTS AXI» THE STATUTE OP FRAUDS. (Ch. 7 
 
 he made arrangements to borrow the sum of $5,500 from Charles J. 
 \\ alker, in order to tender the same to Tin-ill, and secure performance 
 of his obligation to convey, within the time fixed in the bond; that 
 "ii June 11, 1869, being disappointed in finding Walker, he met the 
 defendant ; that the defendant expressed regret that the plaintiff should 
 be obliged to lose fulfilment of the bond through not having in time the 
 money required!, and voluntarily offered to lend to the plaintiff the 
 required amount, and the plaintiff accepted the offer as an act of 
 friendship, as he supposed; that the defendant and the plaintiff went 
 immediately to Tirrill and tendered to him said sum of $5,500, and 
 Tirrill thereupon delivered to the plaintiff his deed of the land in fee 
 simple, in compliance with the bond, which deed was dated May 21, 
 and was acknowledged before the defendant as a justice of the peace 
 on said June 11, 1869; that upon leaving Tirrill the defendant said 
 to the plaintiff that he ought to be secured for his loan in some way, 
 and proposed that they should go to the defendant's attorney, to have 
 the necessary papers prepared; that they thereupon went to the at- 
 torney's office, where the defendant and the attorney consulted together 
 privately, and, without consulting the plaintiff, an instrument was 
 drawn, and handed to him to sign, which upon reading he found to be 
 drawn to convey the land in fee simple to the defendant ; that the plain- 
 tiff objected to this form of conveyance, and desired to have a mort- 
 gage drawn instead, but was assured by both the attorney and the 
 defendant that the instrument prepared would have the same ef- 
 fect; that, being ignorant of the legal effect of said instrument made 
 under such circumstances, and relying on the statements of the attor- 
 ney and the defendant, he on said June 11 executed and delivered 
 said dvvd to the defendant; and that it was recorded in the registry of 
 deeds at the same time with Tirrill's deed. 
 
 The bill also alleged that the plaintiff believed, and, from the manner 
 and declarations of the defendant at the time, had every reason to be- 
 lieve, that the loan was prompted by the kindness of a friend, and was 
 a gratuitous loan, and one which he was to immediately repay, and 
 he accepted it accordingly ; that on the same day he asked the defend- 
 ant how soon the money must be repaid, and the defendant replied, 
 "In a few days;" that the plaintiff at the same time said to the de- 
 fendant that lie had arranged for a permanent loan on the land and 
 that the matter could he settled on the next day, June 12; that on said 
 June 12 Charles J. Walker, who had agreed to loan the plaintiff $5,000 
 upon a mortgage on the land, was not ready to do so, as his attorney 
 desired more time to examine the title, and the plaintiff went to the 
 defendant and stated the occasion of delay, and asked him to be ready 
 to receive the money advanced and execute a dved conveying the land 
 back to the plaintiff the next Monday; that the defendant replied that 
 he was going to Philadelphia on that day, hut would settle the matter 
 upon his return, which would he about June 17; and that at this in- 
 terview, the plaintiff, feeling very grateful to the defendant for what
 
 Cll. 7) CONSTRUCTIVE TRUSTS AND TOE STATUTE OF FRAUDS. 593 
 
 he had done, suggested that he was disposed to pay him for his trouble 
 in the premises, but the defendant replied, "Never mind now, we will 
 make that all right," from which the plaintiff inferred that the defend- 
 ant would make no charge for the loan. 
 
 The bill further alleged that on the 17th, 18th and 19th of June 
 the plaintiff endeavored to find the defendant and repay his loan and 
 obtain his deed, but was unable to find him; that on the 21st of June 
 the plaintiff saw the said attorney of the defendant, who had told him 
 that the attorney was authorized to settle the matter, and said attorney 
 informed the plaintiff that the defendant would not re-convey the land 
 unless he was paid the sum advanced and $500 besides for the use 
 of the money, whereat the plaintiff was greatly astonished and so 
 stated to the attorney; that the plaintiff afterwards saw the defendant, 
 and objected to the charge, and gave him to understand that he sup- 
 posed the loan to be gratuitous, but rather than have any ill feeling he 
 would pay $250; that the defendant refused to accept that sum; and 
 that the plaintiff has been desirous of obtaining a re-conveyance of the 
 land, and has tendered the defendant the said sum of $5,500, with legal 
 interest from the time of the loan, and has also tendered a deed recon- 
 vening the land to the plaintiff, to be executed by the defendant ; but 
 that the defendant refused to accept the tender and to execute the deed. 
 
 The prayer was "that the plaintiff may have proper relief in the 
 premises ; that an account may be taken of what, if anything, is due 
 to the defendant for principal and interest on said loan ; that the plain- 
 tiff may be permitted to redeem the land, he being ready and willing, 
 and hereby offering, to pay what, if anything, shall appear to be due 
 in respect of said loan and interest accrued ; and that the defendant 
 may be decreed to convey the land to the plaintiff in fee, free from all 
 incumbrances made by him or any person claiming under him, and 
 may be restrained from making any sale or conveyance thereof to any 
 person or persons pending this bill." 
 
 The defendant, in his answer, denied that he ever made or offered 
 to make any loan to the plaintiff ; alleged that, on the contrary, he 
 refused a request of the plaintiff for a loan ; and further alleged that 
 "the defendant agreed to pay Tirrill the said sum of $5,500 for the 
 premises described in the bill, provided the title to said premises should 
 stand in the defendant's name," and the plaintiff agreed that immedi- 
 ately on payment of the sum to Tirrill the land should be conveyed 
 in fee simple to the defendant, "and the plaintiff should not have any 
 interest or title thereto ;" that thereupon the defendant paid the $5,500 
 to Tirrill, and Tirrill executed and delivered to the plaintiff a deed 
 of the land; that the plaintiff did not have any title or interest in the 
 purchase money or any part thereof, but the whole of it was prop- 
 erty of the defendant; that the land was not purchased of Tirrill 
 for the benefit of the plaintiff, "neither did the defendant agree to pur- 
 chase it for the benefit of the plaintiff, but for the use and benefit of the 
 
 Ken.Tr.— 38
 
 594 CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. (Ch. 7 
 
 defendant ;" that by said purchase the equitable title to the land was 
 voted in the defendant ; and that the plaintiff, in pursuance of his said 
 agreement, did convoy the land to the defendant in fee simple, "for the 
 purpose of vesting hoth the legal and equitable title in the defendant ;" 
 that the agreement between the plaintiff and the defendant that the 
 plaintiff should make such an absolute conveyance, and no other, was 
 fair and distinct; that "before and at the time of said payment to said 
 Tirrill" the defendant refused "to lend the plaintiff said money, and to 
 allow the plaintiff to have any interest in said money or the premises 
 purchased therewith:" and that the plaintiff's deed was read in his 
 presence and hearing before he executed it, and he was then and there 
 informed that it was an absolute conveyance and that he thereby 
 ceased to have any interest whatever in the land. 
 
 The answer also alleged that afterwards, and as an independent 
 transaction, the defendant at the plaintiff's request orally agreed to 
 re-convey the land to him for the consideration of $6,000 to be paid on 
 fune 18, 1869, together with such charges as the defendant should 
 make for his expenses incident to the several conveyances; that al- 
 though the defendant then well knew, and still insists, that this agree- 
 ment had no legal force or effect, for the reason that it was not in 
 writing, yet on the day named he was ready and willing to perform his 
 part of it, but the plaintiff neglected and refused to perform his own 
 part or pay any sum whatever, and thereupon the defendant consider- 
 ed himself released from all obligations to the plaintiff; that on June 
 19, 1869, lie made another oral agreement with the plaintiff to re-con- 
 vey the land to him for the sum of $6,000, together with such expenses 
 as the defendant had incurred by reason of said conveyances, provided 
 the agreement should be carried into effect forthwith, and the plaintiff 
 then and there agreed to pay said sum; that the defendant on the 
 same day executed a quit claim deed, with the usual covenants, con- 
 veying the land to the plaintiff in pursuance of this agreement, and 
 has repeatedly tendered this deed to the plaintiff; but that the plaintiff 
 refused to comply with the agreement, and to pay the expenses incurred 
 by the defendant in the premises; and that the defendant "now and 
 always has denied that the plaintiff had any right to or interest in said 
 premises, except such as he may have acquired under said parol agree- 
 ments made subsequently to and independently of the conveyance'' 
 from the plaintiff to the defendant. 
 
 The answer then denied "that the defendant, or anyone in his behalf, 
 or at his request, or with his knowledge, ever made any representations 
 or intimation to the plaintiff that the conveyance of the plaintiff to 
 the defendant was or had the effect of anything but an absolute can- 
 veyance in fee simple;" alleged "that the plaintiff well knew the con- 
 tents and the legal effect thereof, and the same was fully explained to 
 and understood by the plaintiff before the execution thereof, and no 
 assurances or intimations were made, at or before the execution or 
 delivery thereof, that the land would be re-conveyed;" denied "that
 
 Ch. 7) CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. 595 
 
 the plaintiff had ever tendered to the defendant the amount paid by 
 him and interest thereon, or any other sum as alleged;" set up the 
 statute of frauds "in answer to the several averments of contracts, 
 agreements, promises and trusts concerning the premises with, to or 
 for the benefit of the plaintiff in the bill contained, and to so much of 
 the bill as sets forth any pretended contract, agreement, trust or con- 
 fidence between the plaintiff and the defendant, or as seeks any relief 
 or discovery of the defendant, of or concerning any pretended contract, 
 agreement, trust or confidence between the plaintiff and the defendant 
 touching the land or premises mentioned in the bill or any part 
 thereof ;" denied "that the defendant, or any person thereunto by him 
 lawfully authorized, did ever make or sign any writing whatsoever, 
 of or containing any such contract, promise, agreement, grant or dec- 
 laration with, to or for the benefit of the plaintiff touching the said 
 land, or creating any estate or interest therein, or creating or declaring 
 any trust respecting the same, in or for the benefit of the plaintiff"; 
 and finally denied all the plaintiff's allegations which were not above 
 expressly admitted. 
 
 The plaintiff filed a general replication, and the case was heard by 
 Colt, J., who made the following report thereof: 
 
 "The plaintiff was the only witness in support of his case, and 
 testified substantially to the facts contained in the bill. The defend- 
 ant testified in substance to the facts stated in his answer, and was 
 confirmed in the main part of his evidence by the testimony of the 
 attorney who prepared the deed from the plaintiff to him, but who also 
 testified more fully to what was said between the parties at his office 
 at the time the deed was executed. The witnesses appeared to me to 
 be equally entitled to credit. 
 
 "I find as a fact, that the deed to the defendant was executed by 
 the plaintiff intelligently, and not by accident or mistake; and that no 
 fraud was practiced to procure its execution, other than may be in- 
 ferred, if any, from the facts testified to and here found by me. I find, 
 from all the circumstances surrounding the transaction, and from the 
 acts and declarations of the parties at the time, that the plaintiff believ- 
 ed, and had reason to believe, that the payment made to Tirrill was 
 made to prevent a forfeiture of the plaintiff's rights under the contract, 
 as a friendly act on the part of the defendant, with a view to give him 
 further time to raise the money due thereon, and that the defendant 
 would within a few days, on being repaid the purchase money and a 
 compensation for his trouble, re-convey the same to him. It appeared 
 that no definite time was named for the re-payment, and no definite 
 amount was fixed as compensation; and that the defendant refused to 
 take a mortgage instead of an absolute deed, insisting upon the owner- 
 ship of the property, and the right to charge what he had a mind to 
 for his services, in case he should re-convey. 
 
 "I report the case for the consideration of the full court, such order 
 or decree to be entered as law and justice may require."
 
 596 CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. (Ch. 7 
 
 Wells, J. 6 Regarding the money paid to Tirrill for the land as 
 the money of the plaintiff, by loan from the defendant, there is still 
 no resulting trust in favor of the plaintiff arising from the whole trans- 
 action. A deed was taken to the plaintiff, according to his equitable 
 interest ; and he thereupon conveyed to the defendant by his own deed. 
 The recitals and covenants of that deed preclude him from setting up 
 any trusts by implication, against its express terms. Blodgett v. Hil- 
 dreth, 103 Mass. 484. His agreement with the defendant for a re-con- 
 vcvance cannot be enforced as a contract for an interest in lands, Gen. 
 St. c. 105, § 1 ; nor will it create an express trust, Gen. St. c. 100, § 
 19. The question then is, Can the deed be converted into a mortgage, 
 or impeached and set aside, or its operation restricted, upon any ground 
 properly cognizable in a court of chancery? 
 
 This question was somewhat discussed, though not decided, in New- 
 ton v. Fay, 10 Allen (Mass.) 505. Some suggestions were made as to 
 the bearing of the statute of frauds upon it in Glass v. Hulbert, 102 
 Mass. 24, 3 Am. Rep. 418. For the reasons there suggested, we do 
 not regard the statute of frauds as interposing any insuperable ob- 
 stacle to the granting of relief in such a case; because relief, if 
 granted, is attained by setting aside the deed ; and parol evidence is 
 availed of to establish the equitable grounds for impeaching that 
 instrument, and not for the purpose of setting up some other or differ- 
 ent contract to be substituted in its place. If proper grounds exist 
 and are shown for defeating the deed, the equities between the parties 
 will be adjusted according to the nature of the transactions and the 
 facts and circumstances of the case; among which may be included 
 the real agreement. It does not violate the statute of frauds, to admit 
 parol evidence of the real agreement, as an element in the proof of 
 fraud or other vice in the transaction, which is relied on to defeat the 
 written instrument. 
 
 What will justify a court of chancery in setting aside a formal 
 deed, and giving the grantor an opportunity to redeem the land, on 
 the ground that it was conveyed only for security, although no de- 
 feasance was taken, is a question of great difficulty, and one upon 
 which there exists a considerable diversity of adjudication, as well as 
 of opinion. In Story, Eq. § 1018, it is stated in general terms to be 
 "fraud, accident and mistake." In 4 Kent, Com. (6th Ed.) 142, 143, 
 it is laid down that "parol evidence is admissible in equity, to show 
 that an absolute deed was intended as a mortgage, and that the defea- 
 sance was omitted or destroyed by fraud, surprise or mistake." 
 
 "It is determined, on the statute of frauds, that, if a mortgage is 
 intended by an absolute conveyance in one deed and a defeasance ren- 
 dering it redeemable in another, the first is executed, and the party 
 goes away with the defeasance, that is not within the statute of 
 frauds." Dixon v. Parker, 2 Ves. Sen. 219, 225. Similar declarations 
 
 • A part of the opinion has boon omitted.
 
 Ch. 7) CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. 597 
 
 are to be found in Walker v. Walker, 2 Atk. 98, Joynes v. Stathem, 3 
 Atk. 388, and Maxwell v. Montacute, Prec. Chy. 526; and adjudica- 
 tions in Washburn v. Merrills, 1 Day (Conn.) 139, 2 Am. Dec. 59, 
 Daniels v. Alvord, 2 Root (Conn.) 196, and Brainerd v. Brainerd, 15 
 Conn. 575 ; and see Story, Eq. § 768. 
 
 This indeed is only one form of application of the general rule of 
 equity, that one, who has induced another to act upon the supposition 
 that a writing had been or would be given, shall not take advantage 
 of that act, or escape responsibility himself, by pleading the statute 
 of frauds on account of the absence of such writing, which has been 
 caused by his own fault. Besides the cases cited in Glass v. Hulbert, 
 102 Mass. 24, 3 Am. Rep. 418, see Bartlett v. Pickersgill, 1 Eden, 515 ; 
 s. c. 1 Cox Ch. 15 ; Browne on St. of Frauds, § 94. But this principle 
 will not help the plaintiff here, because he does not allege that any 
 defeasance was intended or expected ; and it is found by the report 
 that the deed "was executed by the plaintiff intelligently, and not by 
 accident or mistake, and that no fraud was practiced to procure its 
 execution, other than may be inferred" from the facts stated. 
 
 From those facts and from the bill and answer, we think that these 
 points must be taken to be established, to wit, 1st, that the plaintiff had 
 purchased the parcel of land in controversy and held a contract from 
 Tirrill for its conveyance to himself upon payment of the sum of 
 $5,500; 2d, that the money was paid to Tirrill, and the land conveyed 
 by Tirrill to the plaintiff, in fulfilment of that contract ; 3d, that the 
 money was advanced by the defendant to the plaintiff as a loan, and 
 the deed from the plaintiff to the defendant was given by way of se- 
 curity therefor. The report finds, "from all the circumstances sur- 
 rounding the transaction, and from the acts and declarations of the 
 parties at the time, that the plaintiff believed and had reason to be- 
 lieve" this to be the case. 
 
 The defendant, in his answer, does not pretend that he ever made 
 any contract, either with Tirrill or the plaintiff, by which a price was 
 agreed upon to be paid by him as and for the purchase of the prem- 
 ises for himself. His only allegation to this point is, at most, in- 
 direct and equivocal. He denies that said estate was purchased of 
 Tirrill for the plaintiff's benefit, "neither did this defendant agree to 
 purchase it for the benefit of the plaintiff, but for the use and benefit 
 of the defendant." This is followed by an argumentative assertion 
 of equitable title acquired as a resulting trust from payment of the 
 purchase money, and that the deed from the plaintiff was given "for 
 the purpose of vesting both the legal and equitable title in the defend- 
 ant." He does allege that he "agreed to pay Tirrill the said sum 
 of $5,500 for the premises described in the bill, provided the title to 
 said premises should stand in the defendant's name." He alleges, with 
 sufficient fulness and minuteness, that he refused to make a loan of 
 the money to the plaintiff both "before and at the time of said pay- 
 ment to said Tirrill," and refused "to allow the plaintiff to have any
 
 u98 CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. (Ch. 7 
 
 interest in said money, or the premises purchased therewith," and that 
 it was agreed that the premises should be conveyed in fee simple to 
 the defendant, "and the plaintiff should not have any interest or title 
 thereto." He further avers, "that, before the plaintiff signed and ex- 
 ecuted his deed to this defendant, said deed was read in the presence 
 and hearing of the plaintiff, and he was then and there informed that 
 the same was an absolute conveyance, and that he ceased thereby to 
 have any interest whatever therein." Taking the facts to be literally 
 as thus alleged, they significantly suggest the inference that the money 
 was advanced by the defendant for the accommodation of the plaintiff 
 in his purchase of the land, and the deed given to the defendant for 
 his security therefor; but that it was agreed between them that the 
 plaintiff should retain no legal right of redemption. He was to trust 
 himself wholly to the good faith and forbearance of the defendant. 
 
 It is alleged in the bill, and not denied in the answer, that the land 
 has been all the time in the occupation of the plaintiff. We think it is 
 also to be inferred that the land is of considerably greater value than 
 the sum advanced by the defendant. 
 
 From the whole ease we are satisfied that it was a transaction be- 
 tween borrower and lender, and not a real purchase of the land by the 
 defendant. We are brought then to the question, Can equity relieve 
 in such a case? 
 
 The decisions in the courts of the United States, and the opinions 
 declared by its judges, are uniform in favor of the exercise of the pow- 
 er, and the propriety of its exercise by a court of chancery. Hughes 
 v. Edwards, 9 Wheat. 489, 6 L. Ed. 142; Sprigg v. Bank of Mount 
 Pleasant, 14 Pet. 201, 208, 10 L. Ed. 419; Morris v. Nixon, 1 How. 
 118, 11 L. Ed. 69; Russell v. Southard, 12 How. 139, 13 L. Ed. 927; 
 Taylor v. Luther, 2 Sumn. 228, Fed. Cas. No. 13,796; Flagg v. Mann, 
 2 Sumn. 486, Fed. Cas. Xo. 4,847; Jenkins v. Eldredge, 3 Story, 181, 
 Fed. Cas. Xo. 7,266 ; Bentley v. Phelps, 2 Wooclb. & M. 426, Fed. Cas. 
 Xo. 1.331 ; Wyman v. Babcock, 2 Curtis, C. C. 386, 398, Fed. Cas. No. 
 18,113 ; s. c. 19 How. 289, 15 L. Ed. 644. Although not bound by the 
 authority of the courts of the United States, in a matter of this sort, 
 still we deem it to be important that uniformity of interpretation and 
 administration of both law and equity should prevail in the state and 
 federal courts. We are disposed therefore to yield much deference 
 to the decisions above referred to, and to follow them, unless we can 
 see that they are not supported by sound principles of jurisprudence, or 
 that they conflict with rules of law already settled by the decisions of 
 our own courts. 
 
 We cannot concur in the doctrine advanced in some of the cases, 
 that the subsequent attempt to retain the property, and refusal to per- 
 mit it to be redeemed, constitute a fraud and breach of trust, which 
 affords ground of jurisdiction and judicial interference. There can be 
 no fraud or legal wrong in the breach of a trust from which the stat- 
 ute withholds the right of judicial recognition. Such conduct may
 
 Ch. 7) CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. 599 
 
 sometimes appear to relate back, and give character to the original 
 transaction, by showing, in that, an express intent to deceive and de- 
 fraud. But ordinarily it will not be connected with the original trans- 
 action otherwise than constructively, or as involved in it as its legiti- 
 mate consequence and natural fruit. In this aspect only can we re- 
 gard it in the present case. 
 
 The decisions in the federal courts go to the full extent of affording 
 relief, even in the absence of proof of express deceit or fraudulent 
 purpose at the time of taking the deed, and although the instrument 
 of defeasance "be omitted by design upon mutual confidence between 
 the parties." In Russell v. Southard, 12 How. 139, 148, 13 L. Ed. 
 927, it is declared to be the doctrine of the court "that, when it is al- 
 leged and proved that a loan on security was really intended, and the 
 defendant sets up the loan as payment of the purchase money, and the 
 conveyance as a sale, both fraud and a vice in the consideration are 
 sufficiently averred and proved to require a court of equity to hold 
 the transaction to be a mortgage." The conclusion of the court was, 
 "that the transaction was in substance a loan of money upon security 
 of the farm, and, being so, a court of equity is bound to look through 
 the forms in which the contrivance of the lender has enveloped it, and 
 declare the conveyance of the land to be a mortgage." 
 
 This doctrine is analogous, if not identical with that which has so 
 frequently been acted upon as to have become a general if not uni- 
 versal rule, in regard to conveyances of land where provision for re- 
 conveyance is made in the same or some contemporaneous instrument. 
 In such cases, however carefully and explicitly the writings are made 
 to set forth a sale with an agreement for re-purchase, and to cut off 
 and renounce all right of redemption or re-conveyance otherwise, most 
 courts have allowed parol evidence of the nature of transaction to be 
 given, and upon proof that the transaction was really and essentially 
 upon the footing of a loan of money, or an advance for the accommoda- 
 tion of the grantor, have construed the instrument as constituting a 
 mortgage; holding that any clause or stipulation therein, which pur- 
 ports to deprive the borrower of his equitable rights of redemption, 
 is oppression, against the policy of the law, and to be set aside by the 
 courts as void. 4 Kent, Com. (6th Ed.) 159; Cruise, Dig. (Greenl. 
 Ed.) tit. xv, c. 1, § 21 ; 7 Washb. on Real Prop. (3d Ed.) 42; Williams 
 on Real Prop. 353: Story. Eq. § 1019; Adams, Eq. 112; 3 Lead. Cas. 
 in Eq. (3d Am. Ed.) ; White & Tudor's notes to Thornbrough v. 
 Baker, p. 605 [*874] and seq. ; Hare & Wallace's notes to same case, 
 p. 624 [*894] and seq. 
 
 The rule has been frequently recognized in Massachusetts, where, 
 until 1855, the courts have held their jurisdiction of foreclosure and 
 redemption of mortgages to be limited to cases of a defeasance con- 
 tained in the deed or some other instrument under seal. Erskine v. 
 Townsend, 2 Mass. 493, 3 Am. Dec. 71 ; Kelleran v. Brown, 4 Mass. 
 
 i See Wright v. Bates, 13 Vt. 341 (1S41), ante, p. 11.
 
 dOO CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRATTDS. (Ch. 7 
 
 443; Taylor v. Weld, 5 Mass. 109; Carey v. Rawson, 8 Mass. 159; 
 Parks v. I [all, 2 Pick. (Mass. I 206, 211; Rice v. Rice, 4 Pick. (Mass.) 
 349; Flagg v. Mann. 14 Pick. (Mass.) 467, 478; Eaton v. Green, 
 22 Pick. ( Mass.) 526. The case of Flagg v. Mann is explicit, not only 
 upon the authority of the court thus to deal with the written instru- 
 ments of the parties, but also upon the point of the competency of 
 parol testimony to establish the facts by which to control their opera- 
 tion; although, upon consideration of the parol testimony in that case, 
 the court came to the conclusion that there was a sale in fact, and not 
 a mere security for a loan. 
 
 By the statute of 1855, c. 194, § 1, jurisdiction was given to this 
 court in equity "in all ca-.cs of fraud, and of conveyances or transfers 
 of real estate in the nature of mortgages." Gen. St. c. 113, § 2. The 
 authority of the courts, under this clause, is ample. It is limited only 
 by those considerations which guide courts of full chancery powers 
 in the exercise of all those powers. 
 
 If then the advantage taken of the borrower by the lender, in re- 
 quiring of him an agreement that he will forego all right of redemp- 
 tion in case of nonpayment at the stipulated time, on an absolute deed 
 with a bond or certificate back, which falsely recites the character of 
 the transaction, representing it to be a sale of the land with a privi- 
 lege of repurchase, be a sufficient ground for interference in equity by 
 restricting the operation of the deed, and converting the writings into 
 a mortgage, contrary to the expressed agreement, it is difficult to see 
 why the court may not and ought to interpose to defeat the same wrong, 
 when it attempts to reach its object by the simpler process of an ab- 
 solute deed alone. In each case the relief is contrary to the terms of 
 the written agreement. In one case it is against the express words of 
 the instrument or clause relied on as a defeasance, on the ground 
 that those words are falsely written as a cover for the wrong prac- 
 ticed, or an evasion of the right of redemption. In the other it is 
 without an instrument or clause of defeasance, on the ground that it 
 was oppressive and wrongful to withhold or omit the formal defea- 
 sance. In strictness, there is no defeasance in either case. The wrong 
 on the part of the lender or grantor, which gives the court its power 
 over his deed, is the same in both. "For they who take a conveyance 
 as a mortgage without any defeasance are guilty of a fraud." Cotterell 
 v. Purchase, Cas. temp. Talbot, 61. See, also, Bernhart v. Green- 
 shields, 9 Moore, P. C. 18; BaKer v. Wind, 1 Ves. Sen. 160; Mellor 
 v. Lees, 2 Atk. 194; Williams v. Owen, 5 Myl. & Cr. 303; Lincoln 
 v. Wright, 4 De Gex & Jones, 16. 
 
 As a question of evidence, the principle is the same. In either case 
 tin- parol evidence is admitted, not to vary, add to or contradict the 
 writing, but to establish the fact of an inherent fault in the transac- 
 tion or its consideration, which affords ground for avoiding the effect 
 of the writings by restricting their operation, or defeating them al- 
 together. This is a general principle of evidence, well established and
 
 Ch. 7) CONSTRUCTIVE TRUSTS AND THE STATUTE OF FRAUDS. 601 
 
 recognized both at law and in equity. Stackpole v. Arnold, 11 Mass. 
 27, 6 Am. Dec. 150; Fletcher v. Willard, 14 Pick. (Mass.) 464; 1 
 Greenl. Ev. § 284 ; Perry on Trusts, § 226. 
 
 The reasons for extending the doctrine, in equity, to absolute deeds, 
 where there is no provision for reconveyance, are ably presented by 
 Hare & Wallace in their notes to Woollam v. Hearn, 2 Lead. Cas. 
 in Eq. (3d Am. Ed.) 676, and to Thornbrough v. Baker, 3 lb. 694. 
 See, also, Adams, Eq. Ill; 1 Sugd. Vend. (8th Am. Ed.) Perkins' 
 notes, pp. 267, 268, 302, 303. The doctrine thus extended is declared, 
 in numerous decisions, to prevail in New York ; also in Vermont and 
 several other states. Mr. Washburn, in his chapter on Mortgages, § 1, 
 has exhibited the law as held in the different states, in this particular ; 
 and the numerous references there made, as well as by the annotators 
 in the other treatises which we have cited, render it superfluous to re- 
 peat them here. 2 Washb. Real Prop. (3d Ed.) 35 and seq. 
 
 Upon the whole, we are convinced that the doctrine may be adopted 
 without violation of the statute of frauds, or of any principle of law 
 or evidence, and, if properly guarded in administration, may prove a 
 sound and salutary principle of equity jurisprudence. It is a power to 
 be exercised with the utmost caution, and only when the grounds of in- 
 terference are fully made out. so as to be clear from doubt. * * * 
 
 In the present case, we are able to arrive at the clear and satis- 
 factory conclusion that there' was no real purchase of the land by the 
 defendant, either from Tirrill or from the plaintiff; that his advance 
 of the purchase money at the request of the plaintiff created a debt 
 upon an implied assumpsit, if there was no express promise ; and that 
 it was the expectation of both parties that the money would be repaid 
 soon and the land re-conveyed. Whatever may have been the inten- 
 tion of the defendant, he must have known that this was the expecta- 
 tion of the plaintiff ; and it is most favorable to him to suppose that 
 it was his own expectation also. These conclusions are not in the least 
 modified in his favor by an examination of his answer. 
 
 We must declare therefore that in equity he holds the title subject 
 to redemption by the plaintiff in such manner and upon such terms 
 as shall be determined upon a hearing before a single justice. 
 
 Decree accordingly.
 
 602 TRUSTS AND THE STATUTE OF LIMITATIONS. (Cll. 8 
 
 CHAPTER VIII. 
 TRUSTS AND THE STATUTE OF LIMITATIONS. 
 
 O. and J. KANE v. BL< >ODGOOD and Others. 
 
 (In Chancery, before Kent, Chancellor, 1823. 7 Johns. Ch. (N. Y.) 90, 11 Am. 
 
 Dec. 117.) 
 
 On a re-hearing. The bill, filed July 5th, 1821, stated, that an act 
 was passed, March 30th. 17 1 '7, incorporating the Hamilton Manufac- 
 turing Society; and that, by an act of the 28th of March, 180'), its 
 duration was extended to the 1st of March, 1821. That on the 1st of 
 April, \7 K )~ . the stock of the society consisted of 41 shares, at 1,000 
 dollars each; that Leonard Gansevoort then owned one share, worth 
 1,000 dollars, and, afterwards, on the 10th of September, 1804, being 
 entitled to six other shares, he assigned, for a valuable consideration, 
 all the seven shares to J. & A. Kane, with all the profits arising there- 
 from, from the 1st of May, 1804. That the assignment was under the 
 liand and seal of L. G., and endorsed on the certificates of the shares 
 held by him. under the seal of the society. That the certificates and as- 
 signments thereof were delivered by J. & A. K. to the society, who 
 retained them ; and, on the 9th of October, 1804, gave new certificates 
 under their seal for the six shares; "thus recognizing the right of J. & 
 A. K. to the shares and the profits thereon from the 1st of May, 1804." 
 That the society, notwithstanding they became trustees to J. & A. K., 
 for the profits on the shares as aforesaid, neglected and refused to pay 
 the profits of the seven shares, from the 1st of May to the 9th of 
 Oct ber, 1804, amounting to 565 dollars and 52 cents, though the same 
 frequently demanded of the society, and of their factor, G. Pear- 
 son, under the false and fraudulent pretence, that the profits had been 
 carried to the account of L. G. with the society, and that on such ac- 
 count, he was, on the first of October, 1804, indebted to the society 
 beyond the amount of the profits. That the account of L. G., with the 
 factor, (who received all the rents and profits, and kept all the accounts 
 with the stockholders, and paid them their dividends, under the author- 
 ity of the society,) stood in the books, on the 9th of October, 1804, 
 with a credit of dividends, to the 1st of May, 1804, and a balance due 
 the society, of 867 dollars and 79 cents, for glass. That the credits for 
 those dividend were for dividends or profits due L. G., on the seven 
 shares. That the further dividends on the seven shares, from the 1st 
 of May to the 9th of October, 1804, were actually credited to L. G., 
 in the books of the factor, to the exact amount of 565 dollars and 52 
 cents, notwithstanding the assignment of the shares, and the new cer- 
 tificates as above stated. That these dividends were declared, or sane-
 
 Ch. 8) TRUSTS AND THE STATUTE OF LIMITATIONS. 603 
 
 tioned, or authorized by the society, or the directors. That there were 
 never any actual payments of the last mentioned dividends to L. G., 
 and the society, notwithstanding their false and fraudulent pretence 
 aforesaid, received and held the same, in trust for J. & A. K., and are 
 now liable to account for the same, with interest. That they have not 
 paid the same, under the false and fraudulent pretence of their having 
 accounted for the same to L. G. 
 
 That James Kane, the survivor of J. & A. Kane, on the 5th of July, 
 1819, assigned to the plaintiff Oliver Kane, all the said claim to the 
 said dividends on the said seven shares, from the 1st of May to the 
 9th of October, 1804. 
 
 As to so much of the bill as sought a discovery and satisfaction, 
 for or on account of any dividend or profit on seven shares assigned, 
 etc., and accruing from the 1st of May to the 9th of October, 1804, 
 the defendants pleaded the statute of limitations ; and that the cause 
 of action, if any, arose above six years before the filing of the bill, etc. 
 
 The Chancellor. 1 The defendants have pleaded the statute oi 
 limitations to so much of the bill as seeks satisfaction for the div- 
 idends or profits on seven shares of the stock of this society, assigned 
 by Leonard Gansevoort to J. & A. Kane, and which accrued between 
 the 1st of May and 9th of October, 1804. * * * 
 
 The cause was set down for hearing, and argued upon the bill and 
 plea; and on the 16th of October, a decretal order was entered, de- 
 claring and adjudging the plea to be good and sufficient to so much 
 of the bill as it covered. A re-hearing was applied for, in respect to 
 the claim for the dividends, and granted. * * * 
 
 The cause has been well and ably argued upon the re-hearing, and 
 I have attentively examined all the authorities to which I have been 
 referred, or to which I have been directed by my own researches. I 
 have likewise bestowed the best consideration in my power, on the rea- 
 soning of the counsel, and the doctrine of the cases, with a view to 
 arrive at a just and satisfactory conclusion. 
 
 1. The first point is as to the dividends or profits on the seven shares 
 between May and October, 1804. 
 
 The bill charges that L. G., on the 10th of September, 1804, owned 
 seven shares of stock of the Hamilton Manufacturing Society, and! 
 that he then, for a valuable consideration, assigned them to J. & A. 
 Kane, with all the profits arising thereon, from the first of May pre- 
 ceding, by an endorsement on the certificates for those shares, and 
 which certificates were under the corporate seal of the society. The 
 certificates were delivered by J. & A. Kane to the society, or to their 
 factor for them, and by them retained, and on the 9th of October, 1804, 
 new certificates for six of the shares were given in lieu of the former 
 ones, "thus recognizing," as the bill charges, "the right, of J. & A. 
 Kane to the shares, and to the profits thereon, from the 1st of May 
 
 i The statement of facts is abridged and part of the opinion is omitted.
 
 004 TRUSTS AND TIIE STATUTE OF LIMITATIONS. (Ch. 8 
 
 preceding." The bill further charges, that the society, notwith- 
 standing they became trustees for J. & A. Kane for the profits afore- 
 said, refused to pay the profits arising on the seven shares between 
 May and October, though they were frequently demanded of the 
 society and of their factor, and that die refusal was under "the false 
 and fraudulent pretence" that the profits had been carried to the account 
 of L. G. with the society and their factor, and that on such account 
 he was indebted to the society, on the 9th of October, 1804, beyond 
 these profits. 
 
 It is further stated in the bill, that the account of L. G. with the 
 factor (and which factor received the rents and profits due to the 
 society, and kept the accounts of the society, and with the stock- 
 holders, and paid them their profits under the direction of the society) 
 stood on his books of the date of the 9th of October, 1804, with a 
 credit of dividends to the first of .May, 1804, and a balance due to the 
 society of 867 dollars and 79 cents for glass, and that the dividends, 
 so credited, had arisen on the seven shares, and been duly declared and 
 authorized to be paid. The further credit which had accrued to L. G. 
 for profits on the seven shares, from the 1st of May to the 9th of 
 October, 1804, amounted to 565 dollars and 52 cents, and had been 
 actually credited to L. G. on the books of the factor to that amount, 
 and had been duly declared and authorized to be paid on those shares. 
 But it is averred, that there never had been any actual payment of 
 these dividends, so accruing between May and October, to L. G., and 
 that the society, notwithstanding "the false and fraudulent pretence 
 aforesaid!," received and held the same in trust for J. & A. Kane, 
 and are now liable to account for the same with all the interest which 
 has accrued thereon. The payment has been withheld under the false 
 and fraudulent pretence that these profits had been accounted for with 
 L. G. The bill then states, that the claim to the dividends on the seven 
 shares, from the 1st of May to the 9th of October, 1804, was duly as- 
 signed for a valuable consideration, on the 5th of July, 1819, by J. K., 
 survivor of J. & A. Kane, to the plaintiff O. Kane, who now claims 
 the same. 
 
 These are all the material facts in the bill, respecting that particular 
 claim; and I cannot consider that claim as being, on the 9th of Octo- 
 ber, 1804, or at any time since, a mere technical trust, the creature of 
 a court of equity, and cognizant only in equity. The profits on those 
 shares, from the 1st of May, passed with the assignment of the shares 
 on the 10th of September. They were growing profits, not then ascer- 
 tained and liquidated or appropriated, and they passed with the shares 
 themselves as incident thereto, not only by the express words, but 
 by the legal operation of the assignments ; and the society, by issuing 
 new certificates to J. & A. Kane, on the 9th of October following, 
 founded upon the assignments, did, in the language of the bill, recog- 
 nize their right under the assignments, and which right was just as 
 valid to the intermediate profits, as to the shares to which they were
 
 Ch. 8) TRUSTS AND THE STATUTE OF LIMITATIONS. G05 
 
 attached. The society, as to those profits, were liable to account to J. 
 & A. Kane, as being owners of the stock before those profits had been 
 ascertained and declared. An action of account would have lain against 
 the society, in the character of receivers of so much money for the use 
 of J. & A. Kane. I apprehend, also, that an action on the case, for so 
 much money had and received to the use of the assignees, would have 
 lain against the society. The pretence that those intermediate profits 
 had been accounted for with L. G., the bill avers to have been a 
 false pretence, and that there never had been any payment of those 
 profits to L. G., and that the society held the same in trust for J. & 
 A. Kane. The society had been put in default by a demand and refusal, 
 which is averred. We must assume these allegations of fact in the bill 
 to be just and true; and a plain case of a demand, actionable at com- 
 mon law, is stated in the bill. The facts charged prove the validity 
 and legality of the demand. There is not even color given by the bill 
 to the inference of any real defense on the part of the society, if an 
 action at law had been brought by J. & A. Kane after the 9th of Octo- 
 ber, 1804. If the factor had credited these profits to L. G., he did it 
 without authority from the society, for none is pretended, and L. G. 
 had no right to ask, demand or receive these profits on the face of his 
 assignment. The right of J. & A. Kane to these profits was not con- 
 tingent or executory, but absolute ; and from the facts charged in the 
 bill, the conclusion was very properly drawn, that the pretences upon 
 which the society refused to accede to the demand of payment, were 
 false and fraudulent. 
 
 But it is quite unnecessary to examine into the merits of the defense 
 which the society might have set up in opposition to the claim of J. & 
 A. Kane, in case an action at law or in equity, had been brought in due 
 season. It is sufficient, for the purpose of the present inquiry, that the 
 assignees of the stock had a remedy at law for the profits or dividends ; 
 and we have no reason to suppose that their legal remedy would not 
 have been as full and effectual, in reference to that specific demand, as 
 a bill in equity ; or that the society had the means of making a better 
 defense at law than in equity. What, then, I may be permitted to ask, 
 is to take this part of the demand out of the statute of limitations? 
 The counsel for the plaintiffs contend, that this is a case of a direct 
 or express trust between trustee and cestui que trust, and so not within 
 the statute; and they have likewise contended, (though I do not per- 
 ceive that this point has been pressed upon the re-hearing,) that the 
 defendants, upon the dissolution of the corporation, became trustees, 
 by virtue of the act of the 9th of April, 1811, (1 N. R. L. Sess. c. 235,) 
 and were bound, by the directions of the statute, to pay all the cor- 
 porate debts, of which this was one. 
 
 The objection, that the society held the money in question in the 
 character of trustees, and that this was a trust which, upon equity 
 principles, was not within the statute, has been the main object of dis- 
 cussion in the cause ; and there is ground for a great deal of embar-
 
 006 TRUSTS AND THE STATUTE OF LIMITATIONS. (Ch. 8 
 
 rassment in the examination of the question, arising from the loose 
 manner in which the rule is often mentioned in the hooks, and the want 
 of consistency, as well as precision, in the series of cases applicable to 
 the point. 
 
 I cannot assent to the proposition, that all cases of direct and ex- 
 press trust, and arising between trustee and cestui que trust, are to be 
 withdrawn from the operation of the statute of limitations, notwith- 
 standing a clear and certain remedy exists at law. The word trust 
 is often used in a ver) broad and comprehensive sense. Every deposit 
 is a direct trust. Every person who receives money to be paid to an- 
 other, or to he applied to a particular purpose to which he does not ap- 
 ply it, is a trustee, and may he sued either at law for money had and 
 received, or in equity, as a trustee, for a breach of trust. Willes, C. 
 J., in Scott v. Surman, Willes's Rep. 404, 405. The reciprocal rights 
 and duties founded upon the various species of bailment and growing 
 out of those relations, as between "hirer and letter to hire, borrower 
 and lender, depositary and person depositing, a commissioner and an 
 employer, a receiver and a giver in pledge," are all cases of express 
 and direct trust ; and these contracts, as Sir William Jones observes. 
 (Jones on Bailment, p. 2.) are, "among the principal springs and wheels 
 of civil society." Are all such cases to be taken out of the statute of 
 limitations under the notion of a trust, when one of the parties selects 
 his remedy in this court? A review of the decisions will enable us, as I 
 apprehend, to deduce from them a safer and sounder doctrine; and to 
 establish, upon the solid foundations of authority and policy, this rule, 
 that the trusts intended by the courts of equity, not to be reached or 
 affected by the statute of limitations, are those technical and continu- 
 ing trusts which are not at all cognizable at law, but fall within the 
 proper, peculiar and exclusive jurisdiction of this court. 
 
 The earliest case I have met with on the subject, is that of Harrison 
 v. Lucas, 1 Ch. Rep. 67, 15 Car. I, in which a plea of the statute of 
 limitations was overruled, and the court was of opinion the plaintiff 
 had no remedy at law. The case is so briefly stated, that we cannot 
 attach much weight to it. We do not know even the cause of action ; 
 and it is only to be noted for suggesting the very distinction taken 
 and acted upon afterwards. But in the time of Charles II there were 
 some decisions which applied the doctrine, that trusts were not within 
 the statute, to cases that would not now be deemed to warrant the 
 application. 
 
 Thus, in Heath v. Henley, 1 Ch. Cas. 20, 2 Ch. Rep. 5, 15 Car. II, 
 the defendant was sued for an account of moneys received by him as 
 a prothonotary of the K. B., for and on behalf of the Ch. J., who was 
 the plaintiff's testator. The plea of the statute of limitations was ob- 
 jected to, on the ground that this was a trust not within the statute, 
 and the defendant was ordered to answer. According to this case, then, 
 every person who receives money to another's use. is a trustee, who is 
 to be placed out of the protection of the statute, if the party elects to
 
 Ch. 8) TRUSTS AND THE STATUTE OF LIMITATIONS. 607 
 
 sue him in chancery, instead of suing him at law ; but I am persuaded 
 that, upon the authority of the more modern cases, such a proposition 
 cannot be maintained. So, in Sheldon v. Weldman, 1 Ch. Cas. 26, 15 
 Car. II, the bill was for an account of money delivered by the testator 
 to the defendant to compound for his estate sequestered by govern- 
 ment, and the statute was pleaded, and the plea overruled, because 
 the money was delivered on a trust. The same observation will ap- 
 ply to this case ; an action at law would lie for money had and received ; 
 and if the decision was sound equity doctrine, it would follow, that 
 the party seeking for an account of his money could, at his pleasure, 
 escape from the bar of the statute, by shifting a suit from one forum 
 to another. It would likewise put an end to the well known and vastly 
 convenient and remedial action at law for money had and received, 
 in every case where the demand was of six years standing, and it 
 would go very great lengths towards defeating the policy and provi- 
 sions of the statute. Again ; in Lord Hollis's Case, 2 Vent. 345, 26 
 Car. II, £100. was lent by his wife, to be disposed of as she should 
 direct ; and on a bill for the money, the plea of the statute was over- 
 ruled, as this was looked upon as a depositum, and a trust thereon to 
 the wife. This case, if it were a just authority, would, in a great de- 
 gree, annihilate the action at law for money lent ; and as Lord Hard- 
 wicke observed, in a case which I shall presently mention, "every bail- 
 ment might as well be said to be a trust as this." I have, therefore, 
 no difficulty in disregarding the authority of these few loose and care- 
 lessly reported cases in the time of Charles II, in which we have only 
 a brief note of the decisions, without any reasoning or illustration. 
 
 It is well settled, that the statute of limitations is a good plea in 
 equity as well as at law. This has been the uniformly acknowledged 
 doctrine ever since the statute of Jac. I was enacted. A demand for 
 £2,000 was held barred by the statute, as early as 9 Charles I, in 
 Kennedy v. Vanlove, 1 Ch. Rep. 38, and again in Pearson v. Pulley, 
 1 Ch. Cas. 102, 20 Car. II, the Lord Keeper said, he considered 20 
 years to be a fit time within which a mortgage was to be redeemable, 
 in imitation of the statute of limitations in real actions. So early 
 were the statutes of limitations admitted to be the rule of decision in 
 equity, as well as at law ; and though the courts of equity were not 
 within the words of the statutes, the time adopted by them was adopted 
 by analogy, as a fit and just period for a bar in equity of analogous 
 claims. The great and marked exception to this ordinary application 
 of the statute to equity cases, exists in the matter of trusts falling ex- 
 clusively within equity jurisdiction. 
 
 The first case that gave anything like precision to the definition of a 
 trust, not affected by the statutes, was that of Lockey v. Lockey, de- 
 cided by Lord Macclesfield, in 1717. Prec. in Ch. 518. That was a 
 bill for an account of the profits of an estate received while the plain- 
 tiff was an infant, and the bill was not filed until six years after he 
 came of age. The Case does not state the exact character and rela-
 
 GOS TBUST8 AND TnE STATUTE OF LIMITATIONS. (Ch. 8 
 
 tion of the defendant; though I should infer, from one part of the 
 case, that the defendant had been in possession, and received the profits, 
 not as a tort-feasor, hut under an agreement, constituting him a trus- 
 tee for the infant. The Lord Chancellor was clearly of opinion, "that 
 where one receives the profits of an infant's estate, and, six years after 
 his coming of age, he brings a bill for an account, the statute of 
 limitations were a bar to such suit, as it would be to an action of ac- 
 o 'tint at common law ; for this receipt of the profits of an infant's 
 estate was not such a trust as, being a creature of a court of equity, 
 the statute shall be no bar to, for he might have had his action of ac- 
 count against him at law. and, therefore, no necessity to come into this 
 court for the account. If the infant lies by for six years after he comes 
 of age, as he is barred of his action of account at law, so shall he be of 
 his remedy in this court ; and there is no sort of difference in reason 
 between the two cases." 
 
 The doctrine of this case is, that the trusts which are not within 
 the statutes, are those which are the creatures of the court of equity, 
 and not within the cognizance of a court of law; and that as to those 
 other trusts which are the ground of an action at law, the statute 
 is, and in reason ought to be, as much a bar in one court as in the 
 other. The statute is a bar to a bill for an account, when it would 
 be a bar to an action of account at common law for the same matter, 
 and for which the party might have had his action of account. The 
 case was so understood by Lord Redesdale, and he cites it with ap- 
 probation in a case which I shall hereafter refer to, to show that a 
 court of equity is as much barred as a court of law by the statute of 
 limitations. 
 
 This single case, resting upon such authority, and with such marked 
 and significant discrimination between the character of the trusts that 
 are within and without the operation of the statute, appears to me to 
 be decisive upon the point now under consideration. 
 
 The case of Lawley v. Lawley, 9 Mod. Rep. 32, 9 Geo. I, arose 
 soon after, and before the same Lord Chancellor; and it cannot readily 
 be supposed that he intended, by anything in this case, to interfere 
 with a rule he had shortly before so explicitly declared and illustrated. 
 In this case, lands were settled by will on trustees; and one of the 
 trusts was, that if the son's wife survived, she was to receive the rents 
 and profits of the lands, as the same were at that time let. Her 
 husband afterwards greatly increased the rents, and upon his death 
 the wife enjoyed the whole of the rents, making no distinction be- 
 tween the original and the additional rent. A number of years after 
 her death, her executor was sued, by the devisee in tail, being a grand- 
 son of the testator, for an account of the surplus rents received by 
 her and by her executor. The plea of the statute of limitations was 
 over-ruled, "because the estate in law was in trustees," and the ex- 
 ecutor was decreed to account for the improved rents received by 
 her, or by him since her death.
 
 Ch. 8) TRUSTS AND THE STATUTE OF LIMITATIONS. 609 
 
 There is no reason given for this decree, but what is to be inferred 
 from the single observation, that the estate in law was in trustees, 
 and that must be understood to mean that the plaintiff in the bill had 
 not the legal title, and could not have maintained an action at law. 
 The legal estate was in trustees, in trust "to the first and every other 
 son and sons of Sir Thomas in tail male," and the plaintiff was such 
 a son. This construction of the case renders Lord Macclesfield per- 
 fectly consistent with himself in the preceding case. "It is clear," 
 says Sir Wm. Grant, when commenting upon this case, (2 Merivale, 
 360), "that under any other circumstances, the demand for these rents 
 would have been barred ; but it was considered that so long as the 
 trust subsisted, so long it was impossible that the cestui que trust could 
 be barred. The cestui que trust could only be barred by barring and 
 excluding the estate of the trustee." I cannot but think, with very 
 great respect, that the master of the rolls is not very clear and sat- 
 isfactory in his commentary upon the case. It was not a suit between 
 trustee and cestui que trust. The trustees seized of the legal estate 
 under the settlement were not sued, and yet he says, the cestui que 
 trust could only be barred, by barring the estate of the trustee. It 
 was a suit by one cestui que trust against the representative of another 
 cestui que trust, for receiving more of the rents than belonged to 
 her; I see no good reason why, as between them, the statute should 
 not have applied, unless we adopt the plain rule upon which alone 
 the decision is intelligible and just, that the plaintiff was a cestui que 
 trust, without any title or remedy at law. 
 
 It is a general rule in the books, that there is no statute of limita- 
 tions to a charge upon an estate. Thus, in Collins v. Goodall, 2 Vern. 
 235, the statute was pleaded to a bill for rent charged on land by will. 
 and it was held that it did not apply ; and so again, in the modern 
 case of Stackhouse v. Barnston, 10 Vesey, 453, the Master of the 
 Rolls said, that in equity the statute is never permitted to prevail 
 against a legal rent charge. And, in Norton v. Turvill, 2 P. Wms. 
 144, a wife, before marriage, had conveyed her estate in trust to her 
 separate use, and during coverture had borrowed money upon bond. 
 The bond was held void, and after her death a bill was filed against 
 her husband and her executors. The Master of the Rolls held, that 
 her separate estate was a trust estate for the payment of debts ; and 
 speaking in reference to that trust, he said the trust was not within 
 the statute of limitations. These cases of charges upon land I have 
 alluded to as going in support of the distinction, which I apprehend 
 is the prevailing one, that the trusts upon which the statute does not 
 operate, are those trusts of which equity has the proper and the ex- 
 clusive cognizance. I take it for granted as the assumed doctrine in 
 all these cases, that an action at law will not lie in the case of a mere 
 charge upon land, where there is no personal undertaking. And if 
 there be a personal contract, the statute cannot be pleaded at law in 
 Ken.Tr.— 39
 
 G10 TBUSTS A.ND THE 8TATUTB OF LIMITATIONS. (Cll. 8 
 
 the case of rent, if it be reserved by indenture, or even on a lease in 
 writing, according to what was said in Hodsden v. Harris in 2 
 Saund. 66. 
 
 We have a series of decisions of Lord Hardvvicke on this subject, 
 in which I think it will appear, that the distinction taken by Lord 
 Macclesfield, in respect to the statute of limitations, has been preserved. 
 
 In Prince v. Heylin, 1 Atk. 493, Lord Hardvvicke held that the 
 statute was a bar to any demand from one tenant in common against 
 another for an account, farther hack than six years. "An action of 
 account," he observes, "lies for one tenant in common against an- 
 other, and such action is expressly mentioned in the statute of limita- 
 tions; and as there is no remedy at law, (meaning after six years,) 
 there can be no reason for any in equity." All this is perfectly intel- 
 ligible, and so far applicable as the case before him was one concern- 
 ing tenants in common. But the observation respecting the limitation 
 was quite unnecessary; for the chancellor admitted that no ad- 
 vantage could be taken of the statute of limitations, as it had neither 
 been pleaded nor insisted on in the answer ; and I have referred to 
 the case, because it contained the sanction of Lord Hardwicke to the 
 rule, that where the party has a remedy at law, by an action of ac- 
 count, for the same subject matter for which the bill is filed, "there 
 can be no reason" why the statute of limitations should not apply to 
 the suit in equity, as well as to the suit at law. What shall we say, 
 then, to the other remark in the same case, that "in the case of joint 
 tenants or parceners, there is a mutual trust between them, and they 
 are accountable to each other without regard to the length of time?" 
 Is it possible, I would ask, to make such a distinction between tenants 
 in common and joint tenants, when, by the common law, no action of 
 account lay by one joint tenant, or tenant in common, against another, 
 unless he had constituted him his bailiff ; and when, by the statute of 
 4 Anne, c. 16, an action of account was given equally to joint tenants 
 and tenants in common against each other, for receiving an undue 
 proportion of the profits of the estate? The observation of Lord 
 Hardwicke was entirely extra-judicial; and, probably, it might safelv 
 be placed to the account of the inaccuracy of the reporter ; as it is well 
 known, that the reports of Atkyns abound in mistakes. Afterwards, 
 in Brereton v. Gamul, 2 Atk. 240, which was a case of a bill for dis- 
 covery, and to be let into possession of real estate, and the statute of 
 limitations was pleaded in bar, Lord Hardwicke held that, if the 
 plaintiff had lost his right by a legal bar, he could have no remedy 
 in equity. This case very clearly shows that, where there is a legal 
 and an equitable remedy, in respect to the same subject matter, the 
 is under the control of the same statute bar with the former. 
 
 Again, in Sturt v. Mellish, 2 Atk. 610, Lord Hardvvicke expressly, 
 and after much deliberation, adopted the distinction of Lord Mac- 
 clesfield, as to the character of the trust, which was to be exempted 
 from the statute. An account was stated between the plaintiff and one
 
 Ch. 8) TRUSTS AND THE STATUTE OF LIMITATIONS. 611 
 
 Villa Real, and a considerable debt was due from S. to V. R., and the 
 plaintiff constituted V. R. his attorney, to recover moneys in Portugal, 
 and the whole transaction was with the government of Portugal. The 
 bill was filed against the executor of V. R., for an account, and the 
 statute of limitations was held to be a bar to the suit ; and that it was 
 not the case of a trust unaffected by the statute. "A trust," he ob- 
 served, "is where there is such a confidence between parties, that no 
 action at law will lie, but is merely a case for the consideration of this 
 court; and every bailment might as well be said to be a trust as this." 
 In the next case, of Pompfret v. Windsor, 2 Ves. 472, the effect of 
 the statute upon a trust was considerably discussed. It was a bill 
 to have, among other things, execution of a trust for raising £20,- 
 000. out of a real estate, at a distance of 27 years ; and, although 
 a fine had been levied, Lord Hardwicke held, that a fine by persons in 
 possession and non-claim, the legal estate being in trustees, was no 
 bar to an equitable charge under a deed of trust, and to a claim of 
 the cestui que trust, calling upon the administrator for an execution 
 of the trust of the real estate. The fine was levied by Lady Windsor, 
 as administratrix, and guardian in possession of the real estate, and a 
 trustee of the £20,000., which was the charge upon the land. The 
 possession was not an adverse one, and the claim was purely of 
 equitable cognizance in respect to the charge. Yet even here. Lord 
 Hardwicke observed, that the statute of limitations did not stand in the 
 plaintiff's way, for "it was not pleaded or insisted upon at the bar." 
 And, further, the admissions were so strong, "that, if this had been a 
 case within the statute, and that insisted upon against the account, it 
 had been sufficient to take the case out of the statute." This case, 
 therefore, is in no respect inconsistent with the distinction which has 
 been deduced from the preceding cases. And when we come down to 
 a later period, we shall perceive that the analogy between the legal and 
 the equitable remedy, when both existed in respect to the same subject 
 matter, has been strongly and emphatically declared, and strictly and 
 uniformly preserved. 
 
 Thus, in Smith v. Clay, 3 Bro. 639, note, Lord Camden observed, 
 that, "as often as parliament had limited the time of actions and 
 remedies to a certain period in legal proceedings, the Court of 
 Chancery adopted that rule, and applied it to similar cases in equity. 
 For when the legislature had fixed the time at law, it would have been 
 preposterous for equity to countenance laches beyond the period that 
 law had been confined to by parliament. In all cases, where the legal 
 right has been barred by parliament, the equitable right to the same 
 thing has been concluded by the same bar." Again, in Harwood v. 
 Oglander, 6 Ves. 199, 8 Ves. 106, the question was concerning a trust, 
 in respect to real estate, and time was not allowed to operate as a bar, 
 but by way of evidence, as raising a presumption of ouster. The 
 party claiming did not dispute the title of those in possession, but 
 alleged a title in himself, as tenant in common; and the case contains
 
 G12 TRUSTS A.ND THE STATUTE OF LIMITATIONS. (Ch. 8 
 
 nothing more on that point, than the doctrine at law, (Doe v. Prosser, 
 Cowp. 217.) that the possession of one tenant in common, eo nomine, 
 as tenant in common, can never bar his companion, because such pos- 
 session is not adverse, but in support of the common title; and in that 
 case, the Master of the Rolls observed, that he "should be sorry to 
 have it understood to be the rule of the court, that there is no limita- 
 tion whatsoever to trust estates ; and that, let the legal title once get 
 into a trustee, the cestui que trust may permit others to enjoy the 
 property, and come to this court at any distance of time for an ac- 
 count. It would he perfectly alarming." He expressed a strong 
 opinion against granting the account farther back than six years. 
 
 In Stackhouse v. Barnston, 10 Ves. 453, the Master of the Rolls 
 said, that though the statute of limitations does not apply to any 
 equitable demand, yet equity takes the same limitation in cases that 
 are analogous to those in which it applies at law; and he said, that 
 an account of rents and profits was limited to six years, by analogy 
 to legal limitations. 
 
 This application of the statute by analogy cannot well be made to 
 cases of those peculiar trusts which are the mere creatures of equity — 
 for there is no ground for comparison; but when the same subject 
 matter of the demand in equity can also be made the subject of an 
 action at law, the rule of analogy applies in all its force, as Lord 
 Redesdale observed, in Bond v. Hopkins, 1 Sch. & Lef. 413, the statute 
 of limitations does not apply in terms to proceedings in courts of 
 equity, but equitable titles are affected by analogy to it. If the 
 equitable title be not sued upon, within the time within which a legal 
 title of the same nature ought to be sued upon, to prevent the bar of 
 the statute, the court, acting by analogy to the statute, will not relieve. 
 
 Lord Redesdale, afterwards, in Hovenden v. Lord Annesley, 2 
 Sch. & Lef. 607, went much more at large into the doctrine of the 
 limitation of actions in equity ; and the principle of that case is, that 
 if the equitable title be not acted upon in the same time the legal title 
 should be, it is barred. "Courts of equity are bound to yield obedi- 
 ence to the statute of limitations upon all legal titles and legal demands, 
 and cannot act contrary to the spirit of its provisions." I understand 
 this proposition to mean, that if the party has legal title, and a legal 
 right of action, and, instead of proceeding at law, resorts to equity; 
 instead of bringing his action of account, or detinue, or case, for 
 money had and received at law, files his bill for an account, the same 
 period of time that would bar him at law will bar him in equity. This 
 is the principle that pervades the cases. Lord Redesdale proceeds to 
 observe, that 'Courts of equity have constantly guided themselves by 
 the principle, that wherever the legislature has limited a period for 
 law proceeding';, equity will, in analogous cases, consider the equitable 
 rights as barred by the same limitation. I take it for granted," he 
 says, "that the position that trust and fraud are not within the statute 
 is qualified just as Lord Macclesfield qualifies it in the case of Lockey
 
 Cll. 8) TRUSTS AND THE STATUTE OF LIMITATIONS. G13 
 
 v. Lockey." We have already seen in what manner Lord M. qualifies 
 the position as to trusts ; and what stronger sanction could Lord 
 Redesdale have given than this to the principle contained in that lead- 
 ing case, and upon which this whole argument rests? 
 
 He adds, further, in this case, that if the trustee is in possession, 
 (speaking of real estate), and does not execute his trust, the posses- 
 sion of the trustee is the possession of the cestui que trust; and if 
 the only. circumstance be, that he does not perform his trust, his pos- 
 session operates nothing as a bar, because his possession is according 
 to his title. As, in the case of a lessee for years, though he does not 
 pay his rent for 50 years, his possession is no bar to an ejectment after 
 the expiration of his term, because his possession is according to the 
 right of the party against whom he seeks to set it up. Again, he says, 
 that every new right of action in equity that accrues to the party, 
 whatever it may be, must be acted upon, at the utmost, within 20 
 years. If a mortgagee has been in possession for a great length of 
 time, but has acknowledged that his possession was as mortgagee, 
 and therefore liable to redemption, a right of action accrues upon that 
 acknowledgment. But if not pursued within 20 years, the statute may 
 be pleaded ; and so in every case of equitable title, (not being the case 
 of a trustee, where possession is consistent with the title of the claim- 
 ant,) it must be pursued within 20 years. 
 
 It is easy to perceive, that the doctrines here laid down are the same 
 as govern courts of law in analogous cases, and the statute of limita- 
 tions receives the same construction and application at law and in 
 equity. It is equally said, that fraud, as well as trust, is not within 
 the statute, and it is well settled that the statute does not run until the 
 discovery of the fraud ; for the title, to avoid it, does not arise until 
 then, and pending the concealment of it, the statute ought not in 
 conscience to run; but after the discovery of the fact imputed as 
 fraud, the statute runs as in other cases. This was the true ground 
 of the case of Booth v. Lord Warrington, 1 Bro. P. C. 455, and this 
 was the rule declared in the case of the South Sea Company v. Wy- 
 mondsell, 3 P. W. 143, and Lord Redesdale, in the case on which I 
 have so long dwelt, approves of the rule. 
 
 In the case now before me, if the directors of the Hamilton Manu- 
 facturing Society had passed the dividend to the credit of J. & A. 
 Kane, and there had been no demand and refusal, the possession of the 
 fund would have been consistent with the title of the cestui que trust, 
 and the statute would not have been a bar. But, after a refusal to 
 pay, and a denial of title, the possession becomes adverse, and it is 
 as just and reasonable that the statute should run and bar the party, 
 who is apprised that his right is denied, and yet sleeps on that right, 
 as that it should bar the party who has knowledge of the fraud, and 
 neglects his remedy. 
 
 The case of Beckford v. Wade, 17 Vesey, 87, arose upon a construc- 
 tion to be given to an exception in the statute of limitations of the
 
 G14 TRUSTS AND THE STATUTE OF LIMITATIONS. (Ch. 8 
 
 I -land of Jamaica, which declared that the act should not be held to 
 extend to a possession held by trustees The master of the rolls held, 
 in that case, that the exception meant not constructive trusts, but only 
 direct or express trusts between cestui que trusts and their trustees, 
 upon which length of time does not bar, and ought to have no effect, 
 and that they did not extend to every equitable question relative to 
 real property. 
 
 The case concerned real estate; and the observation of Sir Wm. 
 Grant, and which is so frequently met with in the honks, that time does 
 not bar a direct trust, as between trustee and cestui que trust, is pre- 
 cisely the same principle that applies at law to tenants in common, 
 where the statute does not run but from actual ouster, because the pos- 
 session of one is not adverse to the right of the other, but is in support 
 of the common title. It does not bar, so long as the trust is a con- 
 tinuing and acknowledged trust. In Harwood v. Oglander, already 
 cited, it was considered by Lord Alvanley, and afterwards by Lord 
 Eldon, that if a trust subsisted, so that the trustee could recover as 
 having the legal estate, it would follow, that the right of the cestui 
 (pie trust, as against the trustee, could not be barred. But supposing 
 the trustee was to deny the right of the cestui que trust, and assume 
 absolute ownership, is there any case in equity that would allow the 
 latter his remedy, beyond the period limited for the recovery of legal 
 estates at law? So long as the trust is a subsisting one, and admitted 
 by the act or declarations of the parties, no doubt the statute does not 
 affect it ; but when such transactions take place between trustee and 
 cestui que trust, as would, in the case of tenants in common, amount 
 to an ouster of one of them by the other, I can hardly suppose that a 
 court of equity would consider length of time afterwards as of no 
 consequence. There is no good reason why the statute of limita- 
 tions should not apply to such a case, as well as to cases of construc- 
 tive trusts, and to cases of detected fraud, and to all other cases in 
 which the statute is assumed as a rule of decision. 
 
 "The general doctrine in this country," says the Master of the Rolls, 
 in Beckford v. Wade, "is against applying statutory limitations to 
 cases of trust. As our statute bars only legal remedies, of course it 
 has no direct operation upon trusts, for which there was no remedy 
 but in courts of equity." This last sentence shows what kind of 
 trusts Sir W. Grant had in contemplation, when he said the statutory 
 limitations did no1 apply to trusts: and he assumes as correct the dis- 
 tinction between those trusts which are the creatures of equity, and 
 known there only, and the other cases of trust, over which courts of 
 law have concurrent jurisdiction. It is as to those "trusts for which 
 there was no remedy but in courts of equity" that the statute does not 
 operate; and Lord Camden, as we have seen, considered it as pre- 
 posterous, that the statute should not apply to the equitable, when it 
 would apply to the legal remedy.
 
 Cll. 8) TRUSTS AND THE STATUTE OK LIMITATIONS. 615 
 
 The successor of Lord Redesdale expressed his opinion on the ap- 
 plication of the statute to equity cases in Medlicot v. O'Donnell, 1 
 Ball & B. 156, and declared that he considered the statute of limita- 
 tions as founded upon the soundest principles, and the wisest policy; 
 and that the Court of Chancery, for the peace of families, and to quiet 
 titles, was bound to adopt it in cases where the equitable and legal 
 titles so far corresponded, that the only difference between them was, 
 that the one must be enforced in a court of equity, and the other in 
 a court of law. He added, further, that where there was no continu- 
 ing or subsisting trust, the same principle would apply. In Cholmon- 
 deley v. Clinton, 2 Merivale, 93, there was much discussion on this 
 subject. The plaintiff claimed to be entitled to the equity of redemp- 
 tion of a mortgaged estate which was subsisting in trustees, and he 
 prayed that the defendant might be decreed to re-convey, and to de- 
 liver up possession, and to account for the rents and profits. The de- 
 fendant insisted, that trustees had been in quiet possession for up- 
 wards of twenty years, and he claimed the benefit of the statute. The 
 master of the rolls, in giving his opinion, stated, that it was admitted 
 that an equity of redemption subsisted in the case, and so long as it 
 did subsist, the question to whom it belonged was open, and some per- 
 son was entitled to redeem it. The trust subsisted. The mortgagee 
 was trustee of the legal estate for the plaintiff, who had the equity of 
 redemption. He held that the statute did not apply, because the pos- 
 session of twenty years was not in the character of owner of the legal 
 estate, nor under any claim of being so entitled. The subsistence of 
 the mortgage had been all along recognized. Even at law, mere pos- 
 session is not sufficient to bar the claim of the true owner ; there must 
 be something tantamount to a disseisin. 
 
 I refer to this case, as containing a clear illustration of what is 
 meant by the doctrine that no time bars in the case of a direct or ex- 
 pressed trust, continuing and subsisting, as between the parties to the 
 trust. In that case, the trustee had done nothing adverse to the title 
 of the plaintiff. The legal estate remained untouched,. and the case 
 contains, throughout, an acknowledgment of the principle, that equita- 
 ble demands will be barred by the same length of time, by which, if it 
 were a legal question, in an action by which the party sought to re- 
 cover, it would be barred. 
 
 There have been some decisions in this court, which have been 
 referred to, as being unfavorable to the plea. 
 
 In Decouche v. Savetier, 3 Johns. Ch. 216, 217, 8 Am. Dec. 478, 
 I observed, that no time bars a direct trust, as between trustee and 
 cestui que trust, so long as the trust subsists, and I referred to the 
 case of Cholmondeley v. Clinton. But these general expressions must 
 be taken under the same restriction that is applied to them when used 
 in the books. We have seen the sense in which they must have been 
 used by the master of the rolls, in one of the cases mentioned ; and
 
 ♦ JIG TRUSTS AND THE STATUTE OF LIMITATIONS. (Cll. S 
 
 the same undefined language is used by Lord Hardwicke, in Lewellin 
 v. Mackworth, 15 Vin. 125, T, pi. 1, note, and by Mr. J. Ashurst, 
 as one of the commissioners in Town-end v. Townsend, 1 Cox, 28. 
 The maxim is, doubtless, to In- received subjeet to the distinctions 
 which the decisions authorize. I'm I am now led to apprehend, in con- 
 sequence of a more thorough examination of the question, that I did 
 not lay sufficient stress in that case, upon the circumstance, that by 
 the statute law of this state actions at law, of debt, detinue, or ac- 
 count, may be brought for legacies and distributive shares. Tn Eng- 
 land, it is the proper and exclusive province of the Courts of Equity 
 to enforce the payment of legacies and distributive shares ; and, fol- 
 lowing the English cases, I concluded that the statute of limitations 
 did not apply to such demands. The rule, as to a legacy, has some- 
 times been said to be upon the ground of a trust, and sometimes that 
 it is impossible to say from what time the statute shall run, as the 
 legacy is payable when the executor shall have possessed assets suffi- 
 cient for debts and legacies, which may be at an indefinite time. The 
 master of the rolls, in Smallman v. Lord Hamilton, 2 Atk. 71, seemed 
 rather to be dissatisfied with the doctrine, that the statute of limita- 
 tions was not applied to a legacy, as well as to other cases ; but I 
 assume it to be well settled in England that the statute does not apply 
 to legacies and distributive shares, and that the remedy, to enforce 
 payment, must be sought in chancery. As we, however, have a legal 
 remedy provided, by action at law, it becomes a very serious question, 
 whether this Court, possessing now only a concurrent jurisdiction, 
 is not bound, upon established principles, to apply the same limitation 
 to the equitable, which is given to the legal remedy? And if we as- 
 sume it to be the rule at law, that the statute of limitations does apply 
 to actions at law, for legacies and distributive shares, then in that 
 view, and in that view only, I have doubts as to the soundness of the 
 decision in Decouche v. Savetier. 
 
 In the still more recent case of Coster v. Murray, 5 Johns. Ch. 522, 
 I referred, generally, to what was said by me in the preceding case, 
 that the statute did not reach to matters of direct trust, as between 
 trustee and cestui que trust ; and I held, that the statute did not apply 
 to the case of a gratuitous bailment or trust. But though that decree 
 was affirmed in the Court of Appeals, yet, I understand, it was upon 
 other ground than that upon which I had rested the decree, and that 
 the judges of the Supreme Court did not consider it as the case of a 
 trust not within the reach of the statute, because an action at law, of 
 account, or for money had and received, could have been sustained 
 for the same matter, and the equitable remedy, in a case of concurrent 
 jurisdiction, was subject to the same limitation as the legal. If I am 
 not misinformed as to the decision, (for the case has not, as yet been 
 reported,) it is a decisive authority in favor of the doctrine which 
 I have now endeavored to deduce from the history of the cases; and
 
 Ch. 8) TRUSTS AND THE STATUTE OF LIMITATIONS. 617 
 
 it was the discussion upon the appeal in that very case, that led me to 
 suspect that I had been misled by some of the earlier decisions, in the 
 time of Charles II, on which I have now ventured freely to comment, 
 and by the exceedingly loose manner in which the rule, as to trusts, 
 had been spoken of in the books. 
 
 My conclusion upon this branch of the plea is, that J. & A. Kane, 
 according to the statement in the bill, had a legal cause of action 
 existing in 1804, for the dividends or profits arising on the seven 
 shares, and that, upon the demand and refusal charged in the bill, 
 interest commenced, and a right of action accrued against the society. 
 That right, not having been pursued within six years, the plaintiffs 
 are barred at law, and by analogy and in obedience to the statute, they 
 are, upon established principles of equity, equally barred in this 
 
 Court. * * * 
 
 *
 
 INDEX 
 
 [the figures eefer to pages] 
 
 BARGAINS AND SALES, 
 
 consideration requisite in, 24. 
 
 application of statute of inrollinents to, 34. 
 
 CESTUI QUE TRUST, 
 who may be, 89. 
 creditors of, and their rights, 309-328. 
 
 CESTUI QUE TRUST'S INTEREST, 
 enforceable in equity only, 110-116. 
 
 enforceable against trustee personally, not against trust res, 116-118. 
 gives him no remedies against a stranger, 119. 
 gives him neither the rights nor the burdens of ownership of trust res, 
 
 134-140, 146-152. 
 dependent upon trustee's laches and neglect, 140-145. 
 when enforceable against a transferee of the trust res, 153-184. 
 assignants of, 185-201. 
 effect of trustee's death on, 201-205. 
 effect of his own death on, 205-216. 
 effect of forfeiture of trust res, by trustee on, 216-219. 
 effect of disseisin of trustee on, 219-222. 
 effect of marriage of trustee on, 223, 224. 
 effect of his own marriage on, 224-235. 
 effect of bankruptcy of trustee on, 236. 
 effect of his own bankruptcy, etc., on, 237-260. 
 rights which it gives against creditors of trustee, 261-30S. 
 
 CESTUI QUE TRUSTS INTEREST, TRANSFER OF, 
 
 by act of cestui que trust, 185-201. 
 
 by death of cestui que trust, 206-216. 
 
 by marriage of cestui que trust, 224-235. 
 
 by bankruptcy, etc., of cestui que trust, 237-260. 
 
 by act of creditors of cestui que trust, 309-328. 
 
 CONSIDERATION, 
 
 necessity of, to create a use, 21-24. 
 
 character of, in a bargain and sale, 24, 25. 
 
 character of, in a covenant to stand seised, 25-33. 
 
 strangers to, in a covenant to stand seised, 33. 
 
 law of, unaffected by statute of uses, 34, 35. 
 
 necessity of, to a declaration of trust, 39-42. 
 
 necessity of, to an equitable release of a chose in action, 43-46. 
 
 necessity of, to a covenant to assign, 47. 
 
 necessity of, to an assignment, 47-69. 
 COVENANTS TO STAND SEISED, 
 
 consideration requisite in, 25-33. 
 
 deed necessary for, 32, 33. 
 
 effect of statute of inrollments on, 34, 35. 
 
 FRAUDS, STATUTE OF, SECTIONS VII-IX, 
 trusts to which they apply, 99-102. 
 purpose for which they require writing, 99-102. 
 party enabled to declare a trust within said sections, 102-105. 
 
 Ken.Tb. (619)
 
 G20 INMKX 
 
 [The figures refer to pages] 
 GIFTS, 
 
 Imperfect gifts as declarations of (rust, c.i-69. 
 LIENS, EQUITABLE, 
 
 when the owner of misappropriated property may enforce an equitable 
 lien for the value of the property misappropriated, 537-539, 557 576. 
 INROLLM i:\ts. STATUTE OF, 34, 
 
 LIMITATIONS, STATUTE OF, 
 
 when a Par to the enforcement of trusts. 602 617. 
 
 TRUST, 
 
 essentials of every. 1. 
 
 TRUSTEE, 
 
 who may be. !)M !)7. 
 
 creditors of ami their rights, 260 308. 
 
 his rights ami burdens of ownership of trust res, 134-140, 145-152. 
 
 duty of. to convey trust res as directed by cestui que trust. 335-359. 
 
 duty of. to put cestui que trust in possession of trust res. ::.">!) 369. 
 
 duly of. to give cestui que trust information as to trust res, 369-375. 
 
 duty of. to take steps to recover trust res, 376-388. 
 
 duty of, to convert trust res into money for the purpose of investment, 
 
 389 117. 
 duty of, to invest trust funds, 417-463. 
 duty of. as to custody of trust res. 468-472. 
 
 TRUSTEE'S [NTERBST, TRANSFER OF, 
 
 by act of trustee, 153-184. 
 
 by death of trustee, 201-205. 
 
 by forfeiture of trustee, 216-219. 
 
 by disseisin of trustee, 219-222. 
 
 by marriage of trustee, 22.''>. 224. 
 
 by bankruptcy of trustee, 236. 
 
 by act of creditors of trustee, 260-308. 
 
 TRUSTS, CREATION OF, 
 
 manner and purpose of, 1-15. 
 
 language necessary for, 16-21. 
 
 consideration necessary for, 21-74. 
 
 subject-matter necessary for, 74-77. 
 
 necessity of definite cestui que trust for, 77-*!). 
 
 necessity of notice to cestui que trust for, 97-99. 
 
 necessity of writing for, 99-102. 
 
 TRFSTS, WHO MAY EXECUTE, 
 
 when less than all named may, 472, 473. 
 
 when all the trustees qualifying must, 473-175. 
 
 when a majority of the trustees may, 475. 
 
 when the surviving trustees or trustee may, 476, 477. 
 
 when the testamentary assignee of a surviving trustee cannot, 478-480. 
 
 when the testamentary assignee of a surviving trustee can, 481, 4S2. 
 
 when the heir of a surviving trustee can, 482. 483. 
 
 when trustees may appoint new trustees to execute, 483, 484. 
 
 When Tin assignee of the trustee cannot, 484, 485. 
 
 when the trustee must personally execute it and not delegate its execu- 
 t ion. 485^87. 
 
 when the trustee may employ agents to execute the trust and his re- 
 sponsibility for their misconduct or neglect, 487-512. 
 TRUSTS, CONSTRUCTIVE, 
 
 when the owner of property wrongfully misappropriated may enforce a 
 constructive trust. 513 536, 539 557. 
 
 when a constructive trust may be enforced to prevent unjust enrichment 
 by means of the statute of frauds, 577-601. 
 TRUSTS, REVOCAUILITY OF, 110.
 
 INDEX 621 
 
 [The figures refer to pages] 
 USES, STATUTE OF, 34. 
 
 application to chattels, 35. 
 
 application to chattels real, 36. 
 
 application to active trusts of real property, 36. 
 
 application to a use upon a use, 36, 37. 
 USE UPON A USE AS A TRUST, 38, 39. 
 WILLS, STATUTE OF. 
 
 application to trusts, 107-110. 
 
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