Cornell University Law Library The Moak Collection PURCHASED FOR The School of Law of Cornell University And Presented February 14, 1893 IN HEnORY OF JUDGE DOUGLASS BOARDMAN FIRST DEAN OF THE 3GH00L By his Wife and Daug^hter A. M. BOARDMAN and ELLEN D. WILLIAMS KD 148o!u55"l88r"'' "-""^ Cornell University Library The original of tinis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924021862374 UNDEEHILL'S LAW OF TRUSTS. hKciml m\b €omu |l;tmral OE THE LAV RELATING TO PRIVATE TRUSTS AND TRUSTEES BY ARTHUR ipfDERHILL, M.A., LL.D., OF Lincoln's inn, and the chancery bae, BAitRisTEE-Ax-LAw, LATE LECTURER ON EQUITY TO THE INCORPORATED LAW SOCIETY OF THE UNITED KINGDOSI, AND AUTHOR OP "A TREATISE ON THE SETTLED LAND ACTS," "a MANUAL 01*" CHANCERY PROCEDURE," '* A SUMMARY OP THE LAW OF TORTSj" ETC., ETC. THIRD EDITION ENLARGED AND HE VI SEE, ■WITH J5,. s"cr:pi=x.E3ycEisrT CONTAINING THE TROSTEE ACT, 1888. LONDON : BUTTEEWORTHS, 7, FLEET STREET, XalD ^u6Itsi^«rs to tije Cgue«n's most cicdknt JBlajtstB. DUBUIir: HOD&ES, PIGGIS & CO., GRAFTON STEEET. CALCUTTA: THACElJE, SPINK & CO. MELBOURNE; G. ROBERTSON & CO. MANCHESTER: MEREDITH, RAY & LITTLER. EDINBURGH: T. & T. CLARK; BELL & BEADFUTE. 1889 LONDON : PEINTBD BY C. F. EOWOETH, OEEAT NEW STEBEI, PETTEE LANE — E.O. TO THE EIGHT.-^H.dNO'URABLE HARDINGE STANLEY BAEOK HA&Buil, LORD HIGH CHANCELLOR OF GREAT BRITAIN, fe Wtirfe BY HIS lordship's PERMISSIOK MOST RESPECTFULLY DEDICATED. PREFACE. In -writing this Manual, it has been my desire to pro- duce a hook bearing the same relation to Mr. Lewin's elaborate treatise as Mr. Hawkins' work on the Con- struction of Wnis bears to that of Mr. Jarman. That I have satisfied that desire I cannot truly say, for " Hawkins on Wills " is a model treatise ; and, in spite of much care and labour, I am conscious that my efforts leave much to be desired. Still my olject has been to produce a work like his, of a reaUy practical, but at the same time concise, character. °f The law libraries are rich in great works of reference, the store-houses, so to speak, of the law ; but such works are, in a great measure, merely classified collections of "that codeless myriad, that wilderness of single in- stances," from which it requires many years of study and experience to extract general principles. That this is so has Ijeen vigorously expressed by Mr. Justice Stephen in the preface to his Digest of the Law of Evidence, where he says : "It becomes obvious, that if a lawyer is to have anything better than a familiarity with indexes, he must gain his knowledge in some other TIU PREFACE. way than from existing tooks on the suhject. No doubt such knowledge is to be gained. Experience gives by degrees, in favourable cases, a comprehensive acquaint- ance with the principles of the law with which a prac- titioner is conversant. He gets to see that it is shorter and simpler than it looks, and to understand that the in- numerable cases, which at first sight appear to constitute the law, are really no more than illustrations of a com- paratively small number of principles." That great and lamented man, the late Six Greorge Jessel, has also pointed out that " the only use of authorities or decided cases is the establishment of some principle which the judge can follow out in deciding the case before him " (a). Now, in this work I have endeavoured to extract and formulate the principles of the law of Private Trusts and Trustees, and, by way of example, I have quoted or referred to all the important modern decisions, and a fair collection of the more ancient ones. Thus the reader is enabled to see, at a glance, the law {i.e. the principle) governing any particular poiut, and then he is further presented with a series of decided cases which illustrate and explain the application of that principle. I have chosen modern cases (nearly every case re- ported in the authorized reports and relevant to this (a) L. E., 13 Ch. D. 712. PREFACE. IX work will he found noted) in preference to ancient ones, because, as has been truly said, " it must not be for- gotten that the rules of Courts of Equity are not, like the rules of the Common Law, supposed to have been established from time immemorial. It is perfectly well known that they have been established from time to time — altered, improved and refined from time to time. The doctrines are progressive, refined and improved; and if we want to knotv what the rules of Equity are, we must look rather to the more modern than the more ancient cases" {h). The present Edition has been very considerably en- larged by the addition of all the important decisions since May, 1884 (the date of the second Edition), and by two new articles, viz., one on the persons to whom property results under a resulting trust, and the other on the incidence of outgoings in the administration of a trust, a subject on which other text writers are singu- larly silent. For the reasons above stated, it is hoped (and perhaps in this third Edition it may be added, believed) that this will prove a useful work to practitioners in both branches of the Legal Profession. (J) Per Sir Geo. Jessel, M.K., in He HalUtt, Knatchbull v. Sallett, L. R., 13 Ch. D. at p. 710. PEEFACB. But, in addition to practitioners, there is the large class of students. I do not expect that they will he able to remember all the illustrative cases; hut I am sure that the fact of these being somewhat numerous win not render the work less useful to them, but will rather tend to elucidate any difficulties which they might feel in the application of the principles which those cases exemplify. A person of ordinary industry and capacity may easily master the 84 Articles of this work, and may, without great effort, remember the main facts of such of the illustrative cases as are specially named in the body of the text, and are what may be called " leading ;" and when he has done so I feel no doubt that he will possess such a knowledge of the principles upon which the court acts with regard to Private Trusts, as will enable him to pass his exa- mination without difficulty, and also to answer all such questions as occur in the every-day experience of a general practitioner. Lastly, I have to thank my friends and pupils, Mr. T. Needham Wilson, of the Inner Temple, Barrister- at-Law, and Mr. Gr. "W. "Wallace, of the Inner Temple, for their assistance in the passage of this book through the press. ARTHUR UNDBRHILL. 8, Old Squaee, Lincoln's Ihn, W.C. April, 1888. ( xi ) TABLE OF CONTENTS. pAaE Peeface ■ , - - . . - vii Table of Contents - - ■ - xi Table of Cases cited ------- xvii DIVISION I.— PRELIMINARY DEFINITIONS. AnT. 1. Definitions of Trust, Trustee, Trust Property, Bene- ficiary, and Breach, of Trust 1 ,, 2. Definitions of Legal and Equitable Estates 8 ,, 3. Definitions of Declared (or Express) and Construc- tive Trusts 12 ,, 4. Definitions of Simple and Special Trusts, and Passive, Bare and Active Trustees - - - 14 DIVISION II.— DECLARED OR EXPRESS TRUSTS. Chapter I. — Introduction. Art. 5. Analysis of a Declared Trust - - - - 18 XU TABLE OF CONTENTS. Chapter II. — Matters essential to the prima facie Validity of a Declared Trust. Abt. 6. Language evinoing an intention to create a Trust - 20 («) Imperative Directions. (/3) Contracts to create Trusts. (7) Powers in tlie nature of Trusts, (S) Precatory Words. „ 7. lUusory Trusts - 39 ,, 8. How far Valuable Consideration necessary to bind Settlor or Ms Eepresentatives - 43 («) "Where Trust completely declared, no con- sideration required. ((3) Wbere mere intention, or contract, to create a Trust at future date, considera- tion necessary. (7) Wills are an exception. (S) Parties privy to valuable consideration, (s) Volunteers. ,, 9. What Property capable of being made tbe subject of a Trust ^ 63 ,, 10. The Legality of the expressed object of the Trust - 68 ,,11. Necessity of Writing in certain cases 81 \Chapter III. — Yalidity of Declared Trusts in relation to latent matters. 12. Who may be a Settlor 91 13. Who may be Beneficiaries - 95 14. Validity as between Settlor and Beneficiary 97 \l5. Validity as against Creditors - 108 16. Validity as against Trustee in Bankruptcy - 123 \7. Validity as against subsequent Purchasers 127 TABLE Of CONTENTS. XIU Chapter IV. — Construction of Declared Tetists. PASB Aet. 18. Executed Trusts construed strictly, and Executory liberally- . - - 13Y DIVISION III.— CONSTRTJCTIVE TRUSTS. Chapter I. — Introduction. Art. 20. Analysis of Constructive Trusts - 150 Chapter II. — Eesulting Trusts. Art. 21. Where Equitable Interest not wboUy disposed of - 152 „ 22. Where Trusts' declared are Illegal - 158 ,, 23. Where Purchase made in another's Name 164 ,, 24. To whom Property results - 1Y4 Chapter III. — Constructive Trusts which are NOT Resulting. Art. 25. Constructive Trusts of Profits m.ade by Fiduciary Persons - 181 ,, 26. Constructive Trusts -where Equitable and Legal Estates are not vested in one Person - 185 DIVISION IV.— THE ADMINISTRATION OF A TRUST. Chapter I. — Preliminary. Art. 27. Disclaimer of a Trust 192 ,, 28. Acceptance of a Trust 195 XIV TABLE OF CONTENTS. Chapter II. — The Estate of the Trustee, and ITS Incidents. PAQB Akt. 29. Where the Trustee takes any Estate - - 198 ,, 30. The Quantity of Estate taken by the Trustee of Lands - 202 ,, 31. Devolution of the Trustee's Estate 214 „ 32. De-vise of the Trustee's Estate before 1882 - 218 „ 33. Bankruptcy of the Trustee - -220 „ 34. The Incidents of the Trustee's Estate at Law - 221 „ 33. Failure of Beneficiaries - - 224 Chapter III. — The Trustees' Duties Art. 36. Trustees must obey the Terms of the Settlement - 22T ,, 37. Trustees must act fairly between the Beneficiaries- 229 ,, 38. Trustees must exercise reasonable care 238 „ 39. Trustees must in general see that right Persons get the Trust Property 249 ,, 40. Trustees must only invest in certain Securities, or in those authorized by the Settlement - 252 ,, 41. Trustees must not obtain Stock Certificates to Bearer 265 ,, 42. Trustees must act jointly 265- , , 43. Trustees must in general act personally, and not by Deputy 267 ,, 44. Trustees must not set up Jus tertii - 283 ,, 45. Trustees must be ready with their Accounts 286 , , 46. Trustees must not make a Profit out of their Trust 287 ,, 47. Trustees must in general act gratuitously 296 Chapter IY. — The Authority of the Trustee. Art. 48. General Authority of Trustees, Express and Tm - phed 301 ,, 49. Power of Trustees to conduct Sales publicly or privately 312 „ 50. Power of Trustees to give effectual Eeceipts - 317 TABLE OF CONTENTS. XV PAGE Art. 51. Power of Trustees to compoimd and settle Disputes 324 ,, 52. Power of Trustees to allow Maintenance to Infants 326 ,, 53. Delegation of Trustee's authority - 328 , , 54. Suspension of the Trustee's authority by Adminis- tration Action - 331 Chapter V. — The Authority of the Beneficiaries. Abt. 55. The Authority of the Beneficiaries in a Simple Trust - - - 334 ,, 56. The Authority of the Beneficiaries collectively in a Special Trust - 335 ,, 57. The Authority of one of several Beneficiaries in a Special Trust 341 Chapter VI. — The Death, Eetirement, or Removal of a Trustee. Art. 58. Survivorship of the Office - - 345 ,, 59. Devolution of the Office on Death of Survivor - 347 „ 60. Devise of the Office before 1882 - - - 350 ,, 61. Retirement or Eemoval from the Office - 352 ,, 62. Appointment of new Trustees under express Power - - 355 , , 63. Appointment of new Trustees under Conveyancing and Law of Property Act, 1881 - 363 „ 64. Vesting of Trust Property in new Trustees 366 ,, 65. Appointment of new Trustees by the Court - - 371 ,, 66. Severance of Trust on appointment of new Trustees 377 Chapter VII. — The Protection and Eelief accorded TO Trustees. Art. 67. Reimbursement - - 379 ,, 68. Protection against acts of Co-trustees - 388 ,, 69. Concurrence of or Release by Beneficiaries - 390 70. Laches of Beneficiaries - 395 XVI TABLE OF CONTENTS. PAOE Abt. VI. Entitled to be indemnified by Party wio bas gained by or instigated Breacb of Trust 402 ,, 72. Eigbt to Discbarge 405 „ 73. Advice of a Judge 407 „ 74. Wben entitled to pay into Court or to seek its administrative assistance - 411 Chapter YIII. — The Incidence of Outgoings in the Administkation of a Trust. Aet. 75. Wbat Costs and Outgoings cbargeable to Capital and -wbat to Income - - 423 DIVISION v.— THE CONSEQUENCES OF A BREACH OF TEUST. Chapter I. — The Liability of the Trustees. Art. 76. Tbe Measure of tbe Trustee's Eesponsibility 435 „ 77. Tbe Liability wbere Joint qua tbe Beneficiaries may be distributable qua tbe Trustees 444 „ 78. No Set-oil allowed of Grain on one Breacb against Loss on anotber 448 ,, 79. Any of tbe Beneficiaries may compel Performance of a neglected Duty, or prevent tbe Commission of a Breacb 451 , , 80. Property acquired, eitber wboUy or partly out of Trust Property, becomes Hable to tbe Trust 455 ,, 81. Fraudulent Breacb of Trust is a Crime - 464 Chapter II. — Liability of Parties other than the Trustees. Art. 82. Liabibty of Beneficiary wbo is a Party to a Breach 466 ,, 83. Liability of Third Parties privy to a Breacb -469 ,, 84. Following Trust Property into tbe Hands of Tbird Parties - 47 1 INDEX - - - - 485 ( xvii ) TABLE OF CASES CITED. A. , . PAOE Abebawatt Iron-worts v. Wickens 189 Aberdeen Kail. Co. v. Blaokie 183 Town V. Aberdeen Unireraity 287 Abrabam v. Abrabam 30 Ackland ». Lutley,. 8 L. J. Q. B. 164 203, 209, 214 Ackroyd v. Smitbson 153, 155, 174, 176 Acton V. Woodgate 39, 40 Adame3 v. Hallett 120 Adams, Re, 28 W. E. 163 ; 48 L. J. Cb. 613 ; 41 L. T. 667 354, 366 V. Clifton 267 V. Kensington Vestry, 32 W. R. 883 22, 26, 31 Addlington v. Cana -,..... , 83, 162 Agar V. George, 24 W. R. 696 ; 34 L. T. 487 61 Alexander v. Duke of Wellington 67 Alford, Re, Hunt v. Parry 310 AQan, Re, Havelook v. Havelock, 29 W. R. 859 ; 44 L. T. 168 310 V. Backhouse 425 AUcardu. Skinner, 36 W. R. 251 98, 103 AUen v. Bewsey, 37 L. T. 688 63, 67, 68, 71 V. Jackson, 24 W. R. 306; 45 L. J. Cb. 310; 33 L. T. 713 69, 79 V. Seokbam, 48 L. J. Cb. 611 481 Allbusen v. WbitteU, 36 L. J. Cb. 929 ; 16 L. T. 695 ... . 427 Alton V. Harrison, 17 "W. R. 1034 ; 20 L. T. 1001 115 Alwyn, Re , 75 Ames, Re, Ames v. Taylor, 32 W..R. 287 29» Anderson v. Elswortb 97 Andrewes, Re, 26 W. R. 572 ; 38 L. T. 137 124 Angibau, Re 44 Anstis, Re, Cbetwynd v. Morgan 44, 45. Antrobns v. Smitb .- 44, 65 Arbutbnot D. Norton . ..-...,..,,-, 67: XTUl TABLE OF CASES CITED. PAGE Ardeu, Ee 376 Armstrong v. Timperon 54 Arnold v. Garner 188 V. "Woodhams, 42 L. J. Ch. 578 ; 28 L. T. 351 ; 21 W. E. 694 335, 391 Amould V. Grinstead 257 Ashty V. BlackweU 249, 250 Astley V. Miller 189 Att-Gen. v. AKord, 19 Jur. N. S. 361 ; 24 L. T. 265 ; 3 W. E. 200 435,440 v. Aspinal 93 V, Dangars 444 V. Downing 62 J,. (Lady) 62 V. Gore 334 V. Gower 472 V. Hall 32 V. Murdooli 386 ■■ V. Owen 308 ■ 1). Sands 68 V. Scott 328 V. Stephens 62 V. Wilson 444 Austen, Ee 361 Austin V. Austin, 26 W. E. 346 ; 46 L. J. Ch. 92 ; 36 L. T. 96 302 O.Taylor 137, 138, 139 Aveline v. MeUmish, 12 W. E. 1020 ; 10 Jnr. N. S. 788. . 391 AveUng v. Knipe 1 66 Avery ii. Griffin, 18 L. T. 849 362 Ayerst v. Jenkins, 21 "W. E. 878 ; 29 L. T. 126. .158, 159, 162 Ayliff V. Murray 296 Aylwin's Trust, Ee, 21 "W. E. 864 ; 28 L. T. 865 343 B. Backhouse v. Backhouse 62 Badderley v. Badderley, 26 W. E. 850 ; 38 L. T. 906 . .54, 59 Bagnall v. Carlton, 36 L. T. 750 184 Bagshaw v. Spencer 208 Bahin v. Hughes, 55 L. J. Ch. 472 ; 54 L. T. 188 . . 362, 444, 446 Bailey, Ee 413 V. Gould 240 r- V. Young 247 Bainbrigge v. Brown, 29 W. E. 782 ; 50 L. J. Ch. 522 ; 44 L. T. 705 98, 104 Baker v. Monk 105 V. White, 44 L. J. Ch. 651 ; 23 W. E. 670 ; 33 L. T. 347 200, 201 Baldwin J!. Bannister 188 TABLE OF CASES CITED. XIX PAGE Balfour v. WeEand 319, 323 Banner v. Berridge, 29 W. R. 844 ; 50 L. J. Ch. 630 ; 44 L. T. 680 395 Barber, Ke, Burgess jj.Viniconie, 34 "W. E. 395 ; 54 L. T. 375 298 Barclay v. Wain-wright 237 Bardswell v. BardsweU 36 Barker, Ex parte, 28 W. K. 522 ; 42 L. T. 411 465 , Ee, 24 W. R. 264 ; 45 L. J. Ch. 52 354, 366 V. Greenwood, 8 L. J. Ex. 5 199 V. Peile, 13 W. R. 573 ; 12 L. T. 50 354, 413, 421 Barling v. Bishop 109 Barlow V. Grant 310 Barnes v. Wood, 17 W. R. 1080 476 Barrack v. McCuUock, 5 W. R. 38 ; 26 L. J. Ch. 105 ; 28 L. T. 218 108 Barratt v. Hartley, 14 W. R. 684 ; 14 L. T. 474 ; 12 Jur. N. S. 426 296, 299 V. Wyatt 251, 403 Barrington, Re 407, 409 Barrow v. Wadkin, 6 "W. R. 695 ; 3 Jur. N. S. 679 . . 95 Barrs v. Fewke 154 Barry, Ex parte, 22 W. R. 205 220 Bartlett v. Piokersgill 164, 165 Bartley v. Bartley 330 Barton, Re 230 V. Briscoe 339 Basham, Re, Hannay v. Basham 387 Bassett ». Nosworthy, Einoh, 102 472 Bastard v. Proby 144 Bateley v. Windle 154 Bateman v. Davis 228 V. Hotokin 71 Bathurst, Re 356 Baud 1). Fardell, 4 W. R. 40 ; 25 L. J. Ch. 21 ; 26 L. T. 83 ; 19 Jur. N. S. 1214 252 Beale v. Symonds , 225 Beattie v. Curzon, 17 "W. R. 132 ; 38 L. J. Ch. 161 ; 20 L. T. 61 413 Beauclerc, Re 414 V. Ashbumham 258 Beaufoy, Re 237 Beaumont v. Salisbury (Marquis) 206 Beck V. Kantorowiez 184 Beckford v. Beckford 165, 173 • V. Wade 395, 396 Beckley v. STewland 65 Beotone v. Hodgson , 177 Beddoes v. Pugh 285 Bedford (Duke) v. Abercom (Marquis) 141 -. «. 0»ke 158 62 XX TABLE OF CASES CITED. PAGE Begbie v. Crook 193 Belchier, Ex parte 268, 269, 273, ?77, 281 BeU, Ke, Lake v. BeU 397 D. Bamett 183 V. Curetpn 39 I'. Turner 386 Bellamy and Metropolitan Board, Be, 31 W. R. 900 ; 48 L. T. 801 267, 272, 280, 329 Bellasis, Re, 19 W. B. 699 ; 24 L. T. 466 54, 146 Belliss, Be, 25 W.,B. 456 ; 46 L. J. Ch. 353 ; 36 L. T. 644 . . 220 Benbow v. Towns^nd 82 Benoe v. Gilpin, le.W. .B..705; 37 L.J. Ex. 36; 17 L. T. 655 196 Bendysbe, Re, 6 W. E. 816 309, 415 Bennett, Ex parte 291 j>. Colley 452 V. Davis 62, 222 V. Gas Light and Coke Co., 52 L. J. Ch. 98 ; 48 L. T. 156 289 V. Wyndham 267, 380 Bentham v. Hainoourt 187 Benyon v. Nettlefold 163 Berkeley (Earl), Be 432 Berry v. Berry, 47 L. J. Ch. 182 ; 2.6 W. B. 327 209 V. Gibbons, 21 W. B. 754 ; 29 L. T. 88 332 Bethell v. Abraham, 22, W. B. 179 ; 43 L. J. Ch. 180 ; 29 L. T. 715 256, 257, 332 Bevan, Be 73 Biddulph V. Williams 153 Bignold, Re, 26 L. T. 176 ; 41 L. J.Ch. 235 ; 21 W. B. 345 354, 357, 365, 366 BiUingsley v. Critchet 310 Billson V. Crpftft .21 W..B. ,504 ; 42 L. 3., Ch. 531 .... 75, 343 Bindley v. Mulloney, 17 W. R. 510 ; 20 L. T. 263 78 Bingham v. Clanmorris 193 V. Lamb 231 Binks V. Rokeby (Lord) , 321 Binney v. Ince Hall Co 266 Birch V. Blagrare 159, 161, 166 . V. Ws-de 29 Bird,, Re!, 21 W.B. 725; 28 L. T. 658 ....202,267,271,279 . V. M^ybury , 37 Birkett, Be 81 Birks V. Mioklethwaite,, 34 L, J. .Ch. 362 ; 10 Jur. N. S. 302 444 Birtf;. Birt 457 Bishop, Ex parte, 21 W. E. 716 ; 28 L. T. 862 124, 126 Bizzey v. EKght , 48 Blackburn v. Stables , 143 Blacklow f . Laws 229 Bladwell v. Edjcar.ds 69, 76 Elagr»Ts:,^..Bl»,graTe, 4 Ex., 550; 19 L. J. Ex. 414 ..207, 214 TABLE OF CASES CITED. XXI PAGE Blagrove v, Handcook .,,, ,.,, 145 Blake, Re, Jonea v. Blake 302, 305, 413, 418 Blakeley Co., He, 16 "W. E. 533; 37 L.J. Ch. 418; 1« L. T. 132 472 Blaker v. Ansoombe 202 Bland t>. Bland , 32 Blandy v. De Burgli 45 Bleazard ». Wlialley, 2 W. E. ,608 308 Blount V. O'Connor 256 Bluef. Marshall. , 240 Bodmin (Lady) v. Vandertendy 472 Boldero v. L. & "West. .Discount Co., 28 W. E. 154 ; 42 L. T. 57 115 BoUand,, Ex parte, 22 W. E. 152 ; 43 L. J. Bk. 16 ; 29 L. T. 545. 113 Boud,.Ee, Colei). Hawes, 46L.. J. Ch. 488 ; 25 W. E. 95 22, 30, 35 .V. Walford 97, 101 Bone 4). Poland . . , 166, 169 Booth, v.Turle, 21 W. E. 721 90 Bostook V. Eloyer,,14 W. E. 120; 35 L. J. Ch. 23; 13 L. T. 489.;. 11 Jur. N. .S.. 962 250, 271, 279 Bott .«!. Smith , 109 Bouch V. Sproule, 36 W. E. 193 230, 237 Boughton V. James. 74 Boursot V. Savage, 35 L.J. Ch. 627; 14 W. R. 565; 14 L. .T. 299 472, 478 Bowes «). E. L.,W..Co ,... 302, 308 V. Strathmore (Earl) 309 Bowles V. Stewart 391 Box, Ee , 407, 409 Boyd, Ee,,28 W:..E.,233;-42L. J. Ch. 506 261 V. Boyd, 15,W. E. 107 ; 16 L. T. 660 310 Boyes, Ee, Boyes v. Carritt 83, 87 Boyle, Ee 290 Braokenbury v. Brackenbury , ,. 158, 162 Bradford Bank v. Briggs, 35 W. E. 521 ; 56 L. J. Ch. 364; 56 L. T. 62 475 Bradley v. Eiches, 26 W. E. 910 ; 38 L. T. 810 478 Brandon r. Eobinson 69, 76, 343 Braybrooke v. Inskip 219 Breed, Ee, 24 W. E. 200 ; 45 L. J. Ch. 191 310 Breedon v. Breedon 319 Brentwood Co., Ee,, 25 W. E. 481 ; 46 L. J. Ch. 554 ; 36 L. T. 343 187 Breton,!;. Mookett, 26 W. E. 850; ,47L. J. Ch. 754 .... 32 V. Woolvem, 29 "W. E. 777 ; 60 L. J. Ch. 906 . . 55, 59 Brewer v. Swirles, 2.W. E. 339.;. 23 L. J. Ch. 542 393 Brioe*. Stokes,. ., 238, 268, 281, 390 Brewster v. Angell 142 Bridge, Ee , 411 r-T- v.. Brown. 308 XXU TABLE OF CASES CITED. PAQE Bridgeman v. GSl 469, 470 Brier, Re, Brier v. Evison 272 Briggs V. MasBey, 30 W. B,. 325 ; 5] L. J. Ch. 447 ; 46 L. T. 354 437 ■ V. Penney 29, 83 Bright V. Legerton 396 V. North 302, 307 Brintoni-. Lulham 182,289 Brooke i>. Haynes 196 Brooker v. Pearson , 75 Brown, Ee 255, 259, 338 ■ , Dixon V. Brown 469 V. Brown, 17 W. R. 98 ; 38 L. J. Ch. 153 ; 19 L. T. 594 105 V. Burdett, 31 "W. R. 854 ; 48 L. T. 753 81 V. Casamajor 37 V. De Tastet 299 ■ ■ V. GeUatly, 15 W. R. 1188 233 • V. Higgs 21 V. Howe 334 V. Litton 296, 299 — V. Maunsell 402 V. Sibley 220 V. Smith 302 • • 4). Whiteway 210 Browne v. Collins 237 Brumridge v. Brumridge 388 Brydges ti. Brydges 137 Bubb V. Padwick, 28 W. R. 382 ; 49 L. J. Ch. 128 ; 41 L. T. 116 337 Buchanan v. Hamilton 353 Buckeridge v. Glass, 10 L. J. Ch. 134 195, 391 Buokland v. Pocknell 186 Buckmaster v. Buokmaster, 35 W. E. 438 ; 56 L. T. 795 ; 56 L. J. Ch. 379 92 Bucknill V. Morris 256 Budge v. Gummon, 20 W. B. 1022 ; 42 L. J. Ch. 22 ; 27 L. T. 666 262 Buhner v. Hunter 114 Bulwer v. Astley 427 Burdickj). Garrick, 18W.R.387; 39L.J.Ch. 369 396,435,440 Burdou V. Burdon 298 Burgess v. Wheate, 1 Ed. 177 68, 223, 224 Bumaby v. Griffin 141 Burnet v. Maun 93 Bumie v. Getting 256 Buron v. Husband 64 Burrough v. Philoox 21, 27, 29 Burrows v. Walls, 3 W. R. 327 ; 25 L. T. 18 286, 391 Burton v. Hastings 141 Buxtt, Ee 349 TABLE OF CASES CITED. XXIU PAGE Busli V. MLe-a 203, 208 Butler v. Butler, 26 "W. R. 85 ; 47 L. J. Ch. 77 ; 37 L. T. 518 289, 445, 448 V. Compton, 17 W. E. 24; 38 L. J. Ch. 35 ; 19 L.T.274 393 Buttanshaw v. Martin, 33 L. T. 300 ; 5 Jur. N. S. 647 .. 338, 341 Butterworth, Re 112 Buxton V. Buxton 239, 246 Byam v. Byam, 3 W. E. 95 ; 24 L. J. Ch. 209 ; 19 Jur. 79 330 Byles, Ee 76 Byrne v. Noroott 386 C. CadeUj;. Pahner, 1 CI. & Fin. 372 69, 71 Cadett 1). Earl, 46 L. J. Ch. 798 257 Cadogan d. Essex (Lord) 258 Caffrey v. Daley 240 Calvin's case 95, 96 Cambridge v. Rouse 73 Camden (Marq.) v. Murray 305 Cameron and Wells, Ee, 36 W. R. 5 45 Camoys (Lord) v. Best 357 Campbell v. Bambridge 386 V. Walker 245, 288, 290, 295 Candler v. TiUett 282 Cann v. Cann 269 Cardross, Ee, 26 W. E. 389 ; 47 L. J. Ch. 327 ; 38 L. T. 778 358 Carew «. Cooper 67 Cargill V. Oxmantown 229 Carlyon, Ee 411 V. Truscott, 44 L. J. Ch. 186 ; 32 L. T. 50 ; 23 W. E. 302 208 Carrick v. Errington 161 Carson v. Sloane , 468 Carter v. Carter, 27 L. J. Ch. 74 ; 30 L. T. 349 ; 4 Jur. N. S. 63 484 V. Seabright 379 Cartwright v. Cartwright 68 Case V. James 481 Castle V. Castle 37 Cave V. Cave, 49 L. J. Ch. 656 ; 43 L. T. 158. . . .10, 473, 478 Cavendish v. Cavendish 252 Cawthome, Ee 414 Chadwick v. Heatley 495 Challen v. Shippam 276 Chambers v. Chambers 141 V. aoldwin 297 V. HoweU 295 XXIV TABLE OF CASES CITED. PAGE Ctam'bers K.Minohin 267, 270 Chaplm, Ex parte 252 Chappie, He, Newton v. Chapman, 33 W. R. 235 ; 51 L. T. 748 297 Chaston, Re 337 Chennell, Re, Jones v. Cheniiell 261 Chertsey Market, Re 268 Chesterfield (Earl), Re 234 ■ i V. Jansen 391 Childers i). ChUders, 5,"W. R. 686 ; 26 L. J. ,Ch. 743. .159, 162 Chippendale, Ex. parte ..,....- 380 Christie v. Gosling 142 V. Ovington, 24 W. R. 204 14, 215, 217 Christ's Hospital v. Grainger 71 Clare v. Clare 386 Clark V. Girdwood, .26 W. R. 90 ; 47 L. J. Ch. 116 ; 37 L.T.,614, 97 ^ — V. Malpas 105 ■ -.V. Swaile 288, 291 aarke v. Wright, 30 L.J. Ex. 115.;. 4.L. T. .21 ; 9 W. R. 571 45, 128, 134 Clayton v. Gresham 237 Clegg V. Edmonston, 27 L. T. 117 ; 3 Jur. N. S. 299 401 . V. Fishwick 183 Clint, Re 113 Clive V. Carew, 7 W. R.,433 ; 33 L. T.. 161 405 Clough 41. Bond, 8L. J..Ch. 51. 267 V. Dixon 282 aowes V. Hilliard, 25 W. R. 224 ; 46 L. J. Ch. 271 .... 452 Coard v. Holdemess 154 Coates and Parsons, Re, 35 W.B,. 375 ; 56 L. J. Ch. 242 ; 56 L. T. 16 357, 364 Cook V. Goodfellow 256, 258 Cockbum v. Edwards 293 V. PeUe, 9 W. R. 725 ;. 30.L, J. Ch. 575 ; 4 L. T. 671 266,259 Cockoroft «;. Sutoliffe 386 Cookerill v. Cholmeley 391 Cocksedge v. Cocksedge 68 Coe, Re, 4 Jur. N. S. 168. 413 Cogan V. DufBeld, 24 W.. R. 905 ; 45 L. J. Ch. 307 ; 34 li. T. 593 138, 146 V.Stephens 175 Coggs V. Bernard 5 Colchester t>. Lowton 93 Cole V. Hawes, 25 W. R. 95 ; .46 ,L, J. .Ch. 488 ... . 22, 30, 35 -v. Muddle 466 Coleman,!!. .Tiadal 202, 206 Coles «.,Trecothiok , 288, 291 Colgan, Re 310 Collier, v. MoBean, ,.. 139, 484 TABLE OF CASES CITED. XXY PAGE Collier D.Walters, 22 W. E. 209;. 43. L. J. Ch. 216; 29 L. T.868 . 211 CoUins, Ee, Collins v. CoUins, 55 L. J. Ch. .672 ; 55 L. T. . • . . 21 .;. 34 W. E. 650 326 V. ColKns ..,.., 186, 310 Columbine v. Penhall 109, 114 Colyer, Ee, 50 L. J. Cli. 79 ; 43 L. T. 454 372 Colyear.ii.. Lady Mulgrave 44, 50 Conaterdine v. Consterdine, 31 L. J. Ch. 807 ; 10 W. E. 727 282 Conyngham v. Conyngham 196 Cook, Ex parte, 46 L. J. Bk. 52 ; 25 "W. E. 171 ; 35 L. T. .... 649- 456 ■ , Ee, 25W. E. 218;,46L. J.Bk. 34; 35L.T. 715 346 V. Addison, 17 W. E. 480 ; 38 L. J. Ch. 322 ; 20 L. T. 212 455, 461 V. Crawford, 11 L. J. Ch. 40.6 351 -.v.ruUer , 339 V. Hutchinson 153, 165 V. La Motte 97 Cookson V. Eeay ,. , 340 Cooper, Ee 239, 277 and AJleu,. Ee, 25 W. E. 301 ; 46 L. J. Ch. 133; ..- 35 L. T..890 242,245, 280,312,314, 341 . V. Kynook, . 20. "W.. E. 503.;. 41. L. J. Ch. 299 ; 26 L. T, 566 202, 205 V. Maodonald, 26 W. E. 377 ; 47 L. J. Ch. 373 ; 38 L. .T. 195 344 -«. Todd 377 Coppard, Ee 73 Coppring v. Cooke „,. . „ 187 Cordall'scase 203, 209 Cord-well 4). MackriU, Amb.. 515;, 2Ed. 344 475 Commell v. Keith, 24 W. E. 633 ; 45 L. J. Ch. 689 ; 35 L. T. 29 61 Cornth-waite v. JFrith. 40 Corsellis, Ee,.Lawton v. Elwes, 55 L. J. Ch. 675 297 Costabadie ii.. Costabadie 303 Costello V. O'Eourke 231 Cotham v. West 303, 309, 327 Cothay v. Sydenham 250 Cottam V. E. C. EaU. Co 270 Cottington v. Fletcher 158 Cotton, E6,.24 W. E. 243; 45 L. J. Ch. 201 ; 33 L. T. . . 720 310,326,327 and London School Board, Ee, 30 W. E. 610 ; 51 L. J. Ch..514; 46L. T. 813 334, 340 Coulson, Ee 414 Courtier, Ee, . Coles v. Courtier, 35 W. E. 85 ; 56 L. J. Ch. 350 ; 55 L. T. 574 248, 304, 306, 424, 430 Coutts V. Aokworth, 17,W. E. 1121 ; 3.8 L. J. Ch. 694 . . ,102 XXTl TABLE OF CASES CITED. PAOE Coventry v. Coventry 354 Cowel V. Gatoombe 267 Cowin V. Gravell 286 Cowley (Earl) v. Wellealey 431 Cowman v. Harrison 32, 36 Cox V. Page 20 Crabbe v. Crabbe 97, 99, 166 Cradock v. Piper 298 Craven v. Brady, 17 W. E. 505 ; 38 L. J. Cb. 345 69 ». Craddock 228 Creaton -j. Creaton, 5 W. R. 125 ; 26 L. J. Ch. 266 ; 2 Jut. N. S. 1223 201 Cresswell v. Dewell 390 Crewe v. Dicken 329 Crockett v. Crockett 37 Croker v. Martin _, 128 Croome, Re 153, 156 Cropton V. Daviea 208 Crosby v. Church 405 Cross, Ee, Harston ». Tennison, 30 W. E. 376 ; 51 L. J. Ch. 645 ; 45 L. T. 777 400 Crossley v. Elworthy 120 Crouch V. Credit Foncier, 21 W. E. 946 472 Crowe, Ee, 28 W. E. 885 370 Cudden v. Cudden 426 Culbertson v. Wood 409 CuU, Ee, 23 W. K. 850 ; 44 L. J. Ch. 664 ; 32 L. T. 853 251, 386, 415 Cunard, Ee, 27 "W. E. 164 ; 40 L. T. 52 361 CunhfCe v. Brancker, 46 L. J. Ch. 148 ; 35 L. T. 578 ... . 208 Cumick V. Tucker 31 Currant v. Jago 165, 173 Currie v. Nind 127 Curteis, Re, 41 L. J. Ch. 631 ; 26 L. T. 863 165, 167 • • V. Wormald, 27 "W. E. 419 ; 40 L. T. 108. . 174, 176, 178 Curtis V. Perry 158 . V. Price 203, 206 Cusack V. Cusack 140 Custance v. Cunninghame 155 D. D'Adhemar v. Bertrand 371 Dakin v. Whymper 129 Dale, Ex parte, 27 W. E. 815 ; 48 L. J. Ch. 600 ; 40 L. T. 712 459 Dalgleish, Ee, 25 W. E. 122 ; 35 L. T. 829 370 D' Ahnaine v. Moseley 154 Dance v. Goldingham, 21 W. E. 761 ; 29 L. T. 166 ; 42 L. J. Ch. 777 243, 313, 316, 452, 454 TABLE OF CASES CITED. SXVU PAGE Daniel, Ee, 24 W. E. 227 ; 45 L. J. Ch. 105 ; 34 L. T. 308 97 Daubeney v. Cockbura 110, 115 Davenport v. Bishopp 44 Davies, Ex parte 432 V. Davies, 18 W. E. 634 ; 39 L. J. Ch. 343 ; 22 L. T. 606 98, 106, 141 V. Hodgson, 6 "W. E. 365 ; 27 L. J. Ch. 449 ; 31 L. T. 49 251, 359, 403 V. Otty 159, 160, 174 V. Westcomhe 230 Davis, Re 371 , Muokalt V. Davis 382 ■ V. Angel 452 ■ V. Duke of Marlborough 66 Dawson v. Clark 164, 388 -^.Prince, 6 W. E. 171; 27 L.J. Ch. 169; 30 L. T. 237 481 „. Small, 22 W. E. 614 ; 43 L. J. Ch. 406 ; 30 L T 252 • . 95 Dean v. McDowel,' 26 W." E." Vse ; '47 L.' J. "ch".' 537 '; ' 38 L. T. 862 183 De la Warr (Earl), Efi 424, 432 Dennis, Ee 407 Dent V. Bennett 97 De Visme, Ee, 12 "W. E. 140 ; 33 L. J. Ch. 332 ; 9 L. T. 668 170, 172 Dewar v. Brooke 271 Dewhirst, Ee, 35 W. E. 147 ; 55 L. T. 427 ; 55 L. J. Ch. 842 370 De Witt V. Palin, 20 W. E. 858 ; 26 L. T. 825 303, 310 Dickinson v. Player 256 Dickson, Ee, Hill v. Orant 311, 326 Dimes v. Scott 449, 450 Dipple V. Corles, 1 W. E. 47 ; 22 L. J. Ch. 15 20, 44 Dix 1}. Burford 388 Dixon V. Dixon, 27 "W. E. 282 ; 48 L. J. Ch. 592 ; 40 L. T. 208 400,469 V. Gayfere 187, 340 Dobson V. Land 188, 247 Docksey v. Docksey 163 Docwra, Ee 14 DoddsD.HiUs 484 V. Tuke 380, 384 Dodkin v. Brunt 44, 371 Doe V. Barthropp 210 I). Biggs 199,200 V. Bolton, 3 Per. & D. 135 199, 202, 210 V. BottrieU 127 . -«).Cafe 207 • V. Davies, 10 L. J. Q. B. 169 214 V. Edlin, 5 L. J. K. B. 137 202, 210 XXVm TABLE OF CASES CITED. PAOE Doei). Ewart, 7 L. J. Q. B. 177 202, 209 «;. Field 201, 209 V. Godwin ' 346 V. Harris, 16 L. J. Ex. 190 193, 195 V. Homfray, 1 N. & P. 401 , 203 V. Manning- 127, 130, 136 V. Moses 127 ■ • V. Nichols, 1 L. J. K. B. 124 203 V. Eoutledge 136 V. Kusham 130 .». Simpson 203, 209,214 Dolphin V. Aylward 127, 128, 209 Donaldson I'.'Donaldson, 24 W. E. 1137 ; 34 L. T. 900. .51, 91 Doran v. Wiltshire 320 Dorin v. Dorin, 23 W. E. 570 76 Douglas V. Andrews , 310, 327 ■ V. Arohbut, 6 W. B. 306 ; 31 L. T. 4 ; 47 L. J. Ch. 291 296 DoTe V. Everard , 197 Dowling i>. Dowhng, 12 Jur. 720 ; 14 "W. E. 1003 . . 408, 410 Doyle «>. Blake 193, 238, 268 Drayson v. Pooock 330 Drew «). Martin, 12 W. E. 547; 33 L.J. Ch. 367; 10 L. T. 291 48 Driiikwater v. Coombe 189 Drosier v. Brereton 260, 262 Dubois, Ex parte 222 Duboso, Ex parte 54 Dumas, Ex parte . .• 457, 459 Dimgannon v. Smith 72 Dunni;. Elood,,32 W;.,E.,197; 49 L. T. 670 ....243,313,317 Dunnage v.. White 154 Dutton V. Thompson 101 Dyer v. Dyer 164 Dyke «»..Eendall 187 E. Eady v. Watson 433 East, Ee, 42 L. J.. Ch. 480 366 Eastern Counties Eail. Co. ». Hawkes , 245 Eastwood V. Clarke , 331 Eaton 1!. Watts,, 16 L. T. 311 35 EaTes V. Hiokson,, 10 W. E. 29 ; , 5 L. T.,o98 ; 7 Jur. N. S. 1297 249, 260, 267, 469, 471 Ebrand v. Dancer 164, 173 Edwards v. Dewar, 54 L. J. Ch. 1049 ; 53 L. T. 422 384 V. Eashion 166 V. Harben Ill V. Jones 61 TABLE OF CASES CITED, XXIX PAOE Edwards v. Merrick , 293 Egbert «. Butler 282, 466 Egmont (Earl), v. Smith, 46 L. J. Ch. 356 185, 249, 295 Eland «>. Eland, L B. .235 ; 4M;..&C. 429 320,324 Eloook V. Mapp 154 EUiott, Ee, 21 "W..E,. 455 ; 42 L. J. Ch. 289 413, 418 1). Merryman....... , 318, 320 EUis,. Ee, 22 W. E. 448 ; 43 L. J. Ch. 444 341 . V. Barker 232 EUison, Ee 193, 194 «). Ellison, 6 V. 656 .,., 43 Elmore, Ee 43U Elton «;. Elton .. 142 Emma Silver Mining Co. «;. Grant, 40 L. T. 804 184 Emmet, Ee, Emmet v. Emmet, 29 W. E. 464 ; 50 L. J. Ch. 341; 44 L. T. 173. 438, 440 Emmett v. Clarke, 9 "W. E. 515 ; 30 L. J. Ch. 472 ; 4 L. T.319i 7Jur. N. S. 404 , 356 Equitable Society v. EuUer 432 Ernest Vi Croysdill 455 Essery i;. Cowlard 97, 101, 157 Evans, Ee > -. 407, 425, 432 V. Bicknell 223 V. Carrington, 30 L. J. Ch. 364 ; . 4 L. T. 65 105 1), Coventry .,,,... 453 V. Edmonds 105 V. Jackson 308 . V. John 197 Everett v. Prythergch .,..., 454 Everitt v. Everitt, 18 W. E. 1020 ; 23 L. T. 136 102 Evroy v. Nicholas 359 Eyre «;. Dolphin 182 i\ Shaftesbury (Countess) 345 Eyston, Ex parte 343 F. Eanshawe v. Welsby 97, 104 Earhall v. Farhall, 20 W. E. 157 ; 41 L. J.. Ch. 146 ; 25 L. T. 685 223 Farmer v. Deane 288, 295 Farrant v. Blanchford, 11 W. E. 178 ; 32 L. J. Ch. 107 ; 7 L. T. 607 392, 400 Fawcett v. Whitehouse 184 Featherstone v. West 445, 447 Featherstonhaugh.v. Fenwick .,..,. 183 Feistel v. St. John's College 67 FeUows, Ee 432 . !!. Mitchell, 2 Vern..516;.lE. W. 82 ...281 XXX TABLE OF CASES CITED. PAQE Fenwick v. Clarke, 10 W. E. 636 ; 31 L. J. Ch. 728 ; 6 L.T.593 269 Ferris v. Mulliiis 187 Festing v. Allen 208 Field V. Donoughmore 4:0 Finden v. Stephens 41 Finney, Re 220 Firmin i>. Pulham 386 Fish V. Klien 361 Fiskf. Att.-Oen., 15W. K. 1200 95 Fitch V. Webber 176 Fitzgerald, Be 39 Fitzpatriok v. Wary 308 Flanagan ». G. W. Kail. Co 183 Fletcher ». Fletcher 451 V. Green 266, 393, 444, 445, 451 Flo-wer and Met. Board, Ee, 32 W. K. 1011 . .265, 266, 281, 329 Floyer v. Banks 69, 76 V. Bostook 275 Foley V. Barry 29 V. Burnell 451 V. Hill 397 V. Wortner 346 Foligno, Re 413,418 Forbes v. Peacock ". 320, 323 Forrest v. Forrest, 11 L. T. 763; 34 L. J. Ch. 428 ; 11 Jur. N. S. 311 165 Forshaw v. Higgiuson, 5 W. R. 424 ; 26 L. J. Ch. 342 ; 29 L. T. 43 ; 3 Jur. N. S. 476 240, 354, 413 Forster v. Abraham , 359 Fortescue v. Burnett 51 Foster and Lister, Re, 25 W. R. 553 ; 46 L. J. Ch. 480 ; 36 L. T. 582 133 ■ V. Dauber, 8 W. E. 646 193 V. Elsley, 30 W. R. 596 ; 51 L. J. Ch. 275 41 V. Hale 81, S3 Fonlkes i>. Met. Dist. Ey. Co 5 Fountain v. Pellet 423, 428 Fowler, Ee , 375 , Fowler v. Odell, 29 W. R. 891 ; 44 L. T. 99 248, 307, 431 V. Fowler 9,t Fox V. Buckley, 25 W. E. 107 466, 468 V. Fox 36 V. Hawkea, 28 W. E. 656 ; 49 L. J. Ch. 579 ; 42 L. T. 622 69 V. Mackreth, 2 Cox, 320 287 Francis v. Francis 266, 290 Freeman, Ee 299 V. Pope, 18 W. E. 906 ; 39 L. J. Ch. 689 ; 23 L. T. 14 109, 116, 122 TABLE OF CASES CITED. XXXI PAGE Preme v. Clement, 44 L. T. 398 204 French v. Hobson 390 Frith V. Cartland, 14 "W. R. 493 ; 34 L. J. Ch. 301 ; 12 L. T. 179 221, 455, 457, 483 Fry V. Tapson, 33 W. R. 113 ; 54 L. J. Ch. 224 ; 51 L. T. 326 245, 262, 268 Fryer, Re, 5 W. R. 552 ; 26 L. J. Ch. 398 ; 3 Jur. N. S. 485 268, 281 Fnlham, Re 432 Fuller V. Knight 466, 468 G. Gadd, Re, Eastwood i). Clarke, 31 W. R. 417 ; 52 L. J. Ch. 396 ; 48 L. T. 395 356, 365 Gaffee, Re 330, 341 Gainsborough (Lord) v. "Watoombe Terra Cotta Co., 53 L. T. 117 437 Gale V. Gale, 25 "W". R. 772 ; 36 L. T. 690 44, 135 Gardiner, Re, 35 W. R. 28 ; 55 L. T. 261 ; 55 L. J. Ch. 714 375 Gardner, Re 370 Garland, Ex parte 223 Gamer v. Moore, 3 W. R. 497 332 Games v. Applin, 55 L.- J. Ch. 303 ; 54 L. T. 141 ; 34 W. R. 127 359, 410 Gamett, Re, Gandy v. Macauley 391 Gamiam v. Skipper, 55 L. J. Ch. 263 ; 53 L. T. 940 10 Garrard v. Lauderdale, 2 Sim. 1 ; 2 E. & M. 451 39 Garrett v. Wilkinson 170 Garrod, Re, 34 W. R. 157 ; 54 L. T. 251 374 Gasooigne v. Thwing 153 Gaskell v. Chambers 184 Gee V. Liddell 53 General Estates Co., Re, 16 W. E. 919 ; 18 L. T. 894. .472, 484 Gent V. Harrison 311 George, Re, 37 L. T. 204 311, 326 V. Howard 155 V. Milbank 110 German Mining Co., Re 379 Gibbons, Re, 20 W. E. 287 ; 45 L. T. 756 371 Gibbs V. Glamis 39 V. Eumsey 154, 161 Gibson v. Jeyes 293 r- V. Lord Montford 208 Gilbert v. Overton 50, 91 Giles, Ee 414, 422 Gilroy v. Stephen, 30 W. R. 755 ; 46 L. T. 761 247, 437 Gisbome v. Gisbome, 25 "W. R. 516 ; 46 L. J. Ch. 556 ; 36 L. T. 564 235, 302, 303, 305, 309, 332 Gladden v. Stouemau 454 XXXll TABLE OF CASES CITED. PAGE Glenny j). Hartley, Re, 32 W. K. 457 ; 53 L. J. Ch. 417 ; 50 L. T. 79 356 Gleuorcliy (Lord) v. Eosville 138, 140 Glover v. Monckton, 3 L. J. C. P. 189 214 V. Strothoffi 68 Godfrey, Re, Godfrey v. Faulkner 262 GodolpMn i>. GodolpMn 362 Goodier v. Jolmsoii 73 Goodson V. Ellison 413 Goodwin, Re, 22 "W. R. 619 ; 43 L. J. Ch. 258 76 Gordon, Re, 46 L. J. Oh. 794 ; 37 L. T. 627 194 Gosling V. Gosling 337 Gough r. Butt 29 V. Etty 386 V. Smith 266 Gould, Re ..: 124 V. Robertson 40 Gouldsworth t>. Enight 266 Gow D. Forster 430 Gowan, Re, Gowan v. Gowan • 146, 147 Grange v. Tiving 358 Grant v. Grant .■ 69 Graves v. Dolphin , 69, 75, 76 Gray, Ex parte, 4 D. & C. 778 ; 2 M. & A. 283 222 V. Siggur, 29 "W. R. 13 ; 49 L. J. Ch. 819 235 Graybum V: Glarkson, 17 "W. R. 716 ; 18 L. T. 495 246 Great Luxembourg Rail. Co. f . Magnay 183 Greaves v. Simpson 140 Green, Ex parte 222, 303, 310 V. Carmi, 46 L. J. Ch. 477 62 s;. Marsden, 1 W. R. 511 30 V. Paterson, 54 L. T. 738 ; 34 W. R. 724 44, 49 V. Spioer 75, 76, 343 V. Wynn, 17 W. R. 385 ; 38 L. J. Ch. 220 ; 20 L. T. 131 156 Greenwood v. Wakeford 354 Gregg V. Coates 248 Gregory v. Gregory 268 • ». Henderson 200 Gregson, Re, 56 L. J. Ch. 286 ; 35 W. R. 286 352, 364 Grenfell v. Dean, &c. of Windsor 65 Grenville-Murray J). Clarendon (Earl), 18 "W. R. 124; 39 L. J. Ch. 221 ; 21 L. T. 448 42 Gresley v. Mousley, 31 L. J. Ch. 537 ; 8 Jur. N. S. 320 401 Grey *. Grey . ; 171 Grieveson ». Kirsopp 21 Grif&n, Ex parte 265, 270 «). Brady 386 Griffith V. Buckle 140 V. Porter 251, 403 " i\ Ricketts , , . , , 40 TABLE OF CASES CITED. XXXIU PAGE Griffiths K. Vere, 9 Ves. 127 69, 74 GunneU v. "Whitear, 18 "W. R. 883 ; 22 L. T. 645 416 H. H.'s Estg,te, Ee, 2t W. R. 317 ; 45 L. J. Ch. 749 454 Habergham v. Vincent 83 Haddesley v. Adams, 27 L. T. 148 208 Hadley, E^ 365 Haigh V. Kaye, 20 W. E. 597 ; 41 L. J. Ch. 567; 26 L. T. 675 82, 158 Hales V. Cox 136 V. Saloon Omnibus Co 115 HaH, Ee 376 ■ V. Hall, 21 W. E. 373 ; 42 L. J. Ch. 444 ; 28 L. T. 383 100 V. May, 5 W. E. 869 351 HaUett, Ee, Knatohbull v. Hallett, 28 W. E. 321 ; 49 L. J. Ch. 61; 41 L. T. 723 221, 455, 457 V. HaUett, 28 W. E. 321 ; 49 L. J. Ch. 61 ; 41 L. T. 723 469 Hamilton v. Molloy 132 Hanbuxy v. KirHand 271, 282 Harbin v. Darby, 8 W. E. 512 ; 2 L. T. 531 297 Harcourt v. Seymour 340 Hardcastle, Ex parte, 29 W. E. 615 ; 44 L. T. 525 464 Harden v. Parsons 281 Harding v. Glyn, 1 Atk. 469 22 V. Harding 44, 51 Hardwicke v. Mynd 268 Hardy v. Eeeves 475 Harman v. Eichards 109, 115 Harris v. Harris, 7 Jur. N. S. 955 256, 258 Harrison, Ee, 20 L. T. 123 354, 357, 365 V. Forth 471 Hart V. Middlehurst 141 Harton v. Harton 200, 210 Harvey v. Oliver 385 Harwood v. Tooke 65' Haseldine, Ee, Grange v. Sturdy 410" Hastie n. Hastie, 24 W. E. 564 ; 34 L. T. 747 61 Hawkins v. Gardiner 82: V. Luscombe , . . . ■ 210' Haycock, Ee, 24 W. E. 291 ; 45 L. J. Ch. 247 411 Hayes v. Kiagdome 155 Headington, Ee, 27 L. J. Ch. 176 415 Heardson v. WilHamson 203, 209, 214 Heartley v. Nicholson 55 Heaseman e>. Pearce 71 Hemmings, Ee ,.,, 411 U. C XXXIV TABLE OF CASES CITED. PASE Henderspn v. Bothschild 39 Henriquez v. Bensusan 39 Henry v. Armstrong, 44 L. T. 918 46, 98, 100 Hepworth v. Hepworth, 19 W. K. 46 ; 40 L. J. Ch. Ill ; 23 L. T. 388 170 Hibbert v. Hibbert 41 Hickley v. Hickley, 24 W. R. 604 ; 45 L. J. Cb. 401 ; 34 L. T. 441 288 Higginbottom v. Holme 75, 113 Higgins V. HiU 65 Highway v. Banner 141 Hill 1!. Bishop of London , . . . . 152 Hindmarsh v. Soutbgate, 8 W. R. 203 ; 1 L. T. 475 .... 359 Hinton v. Hinton 222 Hirst V. Hirst 285, 421 Hitchens v. Congreve 184 Hoare v. Osborne, 14 W. E. 383 ; 14 L. T. 9 ; 35 L. J. Ch. 345 81 Hobbs V. Wayt 381 Hodge V. Att.-Gen 362 Hodgson, Ex parte 75, 113 Hoghton V. Hoghton 97, 100 Holden, Re 384 HoUoway v. Radoliffe 339 Holmes v. Dring 257 V. Penny, 5 W. R. 132 ; 26 L. J. Ch. 179 ; 28.L. T. 156 118 Hood V. Oglander, 34 L. J. Ch. 528 76, 343 Hooper, Re, 9 W. R. 723 ; 7 Jur. N. S. 695 407 Hopgood V. Paulin, 18 W. R. 908 ; 22 L. T. 772 ... . 263, 276, 279 Hopkins, Re 237 Hopper V. Conyers, 14 W. R. 628 ; 12 Jur. N. S. 328. .455, 463 Hora V. Hora 37 Horlook V. Horlock 341 Homv, Horn 321 Home, Ex parte , . . ," 114 V. Barton 141 Hoskins, Re, 46 L. J. Ch. 274 ; 35 L. T. 935 ; 25 "W. R. 779 413 Hotohkys, Re, Freke v. Calmady, 34 "W. R. 669 ; 55 L. J. Ch. 546 ; 55 L. T. 110 424, 431 Hotham, Re, 19 W. R. 794 409 Household v. Household 410 Houston V. Hughes 201 Hovey v. Blakeman 282 Howe V. Dartmouth (Earl) 230, 233, 259 Howel V. Howel 141 Howortji, Re, 21 W. R. 449 ; 42 L. J. Ch. 316 ; 28 L. T. 64 , 303, 310 Hughes, JJxpart^ 290 TABLE OF CASES CITED. XXXV PAOE Hughes V. Empson 246 V. Kearney 186 V. WilHams 187 »). "WiUa 391 Hughes-HaUett v. Ind. M. Gold Mines Co., 52 L. J. Ch. 418 ; 48 L. T. 107 ; 31 W. R. 285 381 Huguenin v. Basely 97, 103 Hulkes, Ke, Powell v. Hulkes, 35 W. E. 794 . . . .249, 251, 437 Humberston v. Humberston 138, 145 Hume V. Richardson, 10 W. R. 558 ; 31 L. J. Ch. 713 ; 6 L. T. 624 ; 8 Jur. N. S. 686 255, 259 Hunt V. Bateman 398 Hunt-FoTilston v. E'urber, 24 W. R. 756 339 Hunter v. Atkins 98 ,v. Bullock, 20 W. E. 460 ; 41 L. J. Ch. 637 ; 26 L. T. 349 95 Hutchings, Re , , 29 Hutohins v. Lee 165 Hutchinson and Tenant, Re, 26 W. R. 904 ; 39 L. T. 86 . . 22, 34, 38 Huxtable, Ex parte, 24 "W. R. 686 ; 45 L. J. Bkcy. 59 ; 34 L. T. 608 124 Hylton V. Hylton 98 I. Ibbetson v. Elam 237 Imperial Land Co. of Marseilles, Re, 46 L. J. Ch. 235 287 Ingle «>. Partridge 245, 262 Ingram, Re, 11 W. R. 980 260 Inwood V. Twyne 302 Irby, Re 414 Irrine v. Suffivan, 17 W. R. 1083 153 Ithell V. Beane , 321 J. Jackson v. Talbot 312 J). Welsh 183 Jacob, Re, 9 "W. R. 474 ; 4 L. T. 104 ; 7 Jur. N. S. 302 ... . 407 V. Lucas 346 Jacubs V. Rylance, 43 L. J. Ch. 280 466 James, Ex parte 288, 380 V. Couohman 102 V. Deane 182 V. Erearson 193, 195 V. May- , 381 c2 XXXVl TABLE OF CASES CITED. PAQE Jarratt v. Aldam, 18 W. R. 511 ; 39 L. J. Ch. 349 ; 22 L. T. 192 106 Jeffries v. Jeffries 46 Jenkins v. Eemish 127 V. Vaughan 109 Jervoise v. Northumberland (Duke of) 137, 139 — — V. Silk 310 Jesse 1). Lloyd 312 Jodrell V. Jodrell 78 Johns V. James, 39 L. T. 54 ; 26 W. E. 821 39 Johnson, He 268 V. Pesemeyer 293 V. Kennett 320 V. Legard 128, 134 V. Newton 269 • V. Telford 382 Johnston v. Johnston 98, 107 V. Rowlands ■ 30 Johnstone v. Baker 229 Jones r. FoxaU 436, 439 • V. Goodohild 225 V. Higgins, 14 W. R. 448; 35 L. J. Ch. 403; 14 L. T. 126 393, 399 V. Jones 426 ■ ■ V. Langton 140 V. Lewis 246 V. Locke, 14 W. R. 149; 13 L. T. 514; 35 L. J. Ch. 117 55, 57 V. Morgan 139 V. PoweU 332 ■ • V. Searle 247, 440 V. Smith 480 V. Thomas 472 Josselyn v. Josselyn 336 Joy V. Campbell 267, 270, 282 Joyce V. De Moleyns 482 Judkin, Re 311, 326 K. Kaye v. Powell 334 Kekewich v. Manning, 21 L. J. Ch. 577 51, 55, 91 Kempson v. Aehbee, 23 W. R. 38 ; 44 L. J. Ch. 348 ; 20 L. T. 71 104 Kendal v. Granger 155 Kenriok v. Beauclerc (Lord) 201 Kent V. Riley, 20 "W. R. 862 ; 41 L. J. Ch. 569 121 Kevan «>. Crauford, 26 W. R. 49 ; 46 L. J. Ch. 729 ; 37 L. T. 322 110, 114 Kidney .t>. Cpussmaker. ....,,, 109 TABLE OF CASES CITED. XXXVll PAGE Kilbee v. Sneyd 268 Kilpin V. Kilpin 86, 173 Kilworth v. Mountcashel 466 Kimter v. Barber, 21 W. K. 651 ; 27 L. T. 526 184 King V. Bellord , 358 V. Denison 152, 156, 158 V. King, 27 L. J. Ch. 29 ; 6 W. E. 85 ; 30 L. T. 177 415, 416 Kingdom v. Castleman 241 Kinloch ?;. Secretary of State for India, 30 W. R. 845 ... . 42 Kirwan v. Daniel 40 Knight, Be, 33 L. T. 54; 6 Jur. N. S. 326 ....238, 413, 418 V. Bowyer 63 V, Brown 75 V. Knight 21, 22, 36 o. Majorihanks, 2 M. & G. 10 290,294 1). Plymouth (Earl) 271 Knott, Re, Bax v. Palmer 380, 386 Knowlea, Re 409 Knox V. Gye, 42 L. J. Ch. 284 186, 295 Kronheim v. Johnson, 26 W. R. 142 ; 47 L. J. Ch. 132 ; 37 L. T. 761 82 L. Lacey, Ex parte 287 Lake v. Gibson, 1 Eq. Ca. Ab. 290 166 Lambe v. Eames, 40 L. J. Ch. 447 ; 23 L. T. 175 ; 19 "W. R. 659 25, 33, 38 Lambert v. Peyton 141 Lane, Re, 3 W. R. 134 415 V. Debenham, 1 W. R. 465 346 V. Dighton 455 Langdale v. Briggs, 4 W. R. 703 408 Langford V. Angel 219 V. Gascoigne- 267, 270 i>. Mahoney 382 Langham v. Sandford 153 Langmead, Re 320 Langston v. Oliphant 258 Lavender v. Blackstone 127, 130 V. Stanton 319 Law t>. Law 159 LawBon v. Copeland 240, 413 Leaoh v. Leach 164, 390 Leake, Re 414 Leclunere v. Larie > 82, 35 Lee V, Brown > 302, 311 V. Lee, 25 W. R. 225 ; 46 L. J. Ch. 81 ; 36 L. T. 138 44, 61 V. Sankey, 21 W. R. 286 ; 27 L. T. 809 266 XXXVIU TABLE OF CASES CITED. PAGE Leedham v. Ohawner, 32 L. T. 221 229, 380, 387 Lees V. Sanderson 282 Le Hunt v. Webster, 9 W. R. 918 248 Leigh V. Leigii, 5.5 L. T. 634 ; 35 W. B. 121 261 Lemann, Ee, 31 W. R. 520 ; 52 L. J. Ch. 660 ; 48 L. T. 389 353, 374 Le Maroliant v. Le Marchant, 22 "W. E. 839 31, 33 Leonard v. Sussex (Lord) 145 Leslie, Ee, 24 W. E. 546 ; 45 L. J. Ch. 668 ; 34 L. T. 239 432 -v. BailHe 250, 251 Le Touche v. Luoan (Earl) 40 Lewis, Ex parte , 312, 316, 449 v. Maddocks 61 V. Nobbs, 47 L. J. Ch. 662 ; 26 W. E. 631 . . 247, 270, 282 V. Trask 386 Lidiard, Ee, 28 W. E. 574 ; 49 L. J. Ch. 373 ; 42 L. T. 621 361 Life Association of Scotland v. Siddal, 9 W. E. 541 ; 4 L. T. N. S. 311 ; 7 Jur. N. S. 785 390 Lightbody, Ee 360 Lingard v. Bromley 444 Linquate v. Ledger 105 Linyee, Ee 339 Lister i). Hodgson, 15 W. E. 547 106 Little V. Neil 29 Lloyd V. Attwood 118 V. Baldwin 321 V. Banks 477 • V. Lloyd, 17 W. E. 702 ; 38 L. J. Ch. 458 ; 20 L. T. 898 69, 78, 95, 154, 222 Lockhart v. Eeilly, 4 W. E. 438 ; 27 L. T. 49. .245, 252, 260, 444, 446 Locking V. Parker, 42 L. J. Ch. 35 ; 27 L. T. 635 ; 21 W. E. 113 396 Lofthouse, Ee 304 London & S. "W. Eail. Co. v. Gomm 71 Longley v. Longley, 20 W. E. 227 ; 41 L. J. Ch. 168 ; 25 L. T. 736 154 Longuet V. Hockley 432 Lonsdale (Lord) v. Beckett , 356 Lord V, Bunn , 330 Lord Southampton v. Lord Hertford 71 Lorentz, Ee, 9 W. E. 567 ; 4L. T. 501 ; 7 Jur. N. S. 402. . 409 Love, Ee, ECiU v. Spurgeon 383 Low V. Peers 69 Lowndes, Ee , , 126 Lowry v. Eulton, 8 L. J. Ch. 314 197 Luddy's Trustee v. Peard 293 Luke V. South Kensington Hotel Co., 27 W. E. 514 ; 48 L. J, Ch. 361 ; 40 L. T. 638 265 TABLE OF CASES CITED. XXXIX PAOE Lupton v. WMte 456 Lush, Re, 3« L. J. Ch. 650 ; 21 L. T. 376 ; 17 W. R. 974 391, 394 Lyddou v. Ellison, 2 W. R. 690 14a Lynn v. Beaver 153 Lysaght t>. Edwards, 24 "W. R. 778 ; 45 L. J. Ch. 564 ; 34 L. T. 787 219 Lyae v. Kingdom 444 Lyster v. Burroughs 61 M. Maberley v. Turton 302, 309, 327 Macdonald -o. Irvine, 26 W. R. 381 ; 38 L. T. 165 ; 47 L. J. Ch. 494 233 Mackay i>. Douglas, 20 W. R. 652 ; 41 L. J. Ch. 539 ; 26 L. T. 721 113 Mackie v. Herhertson 45 Mackreth v. Symmons 186, 472, 475 Maclean, Re 415 Macnamara v. Carey , 241 1). Jones 382 MoCormick v. Grogan, 17 W. R. 961 36, 82, 89, 189 MoCuUook V. McCullock, 1 N. R. 535 30 McDonnell v. White 395, 399 McEwen v. Cromhie 387 McPadden v. Jenkins, 1 Ha. 461 ; 1 Ph. 153 82, 86 McGacheu v. Dew 466 MoKinnon v. Stewart 40 M'Queen v. Earquhar 471 Maddocks j). "Wren 187 Maddy v. Hale, 24 W. R. 1005 ; 35 L. T. 134 233 Magrath v. Morehead 336 Maguire v. ScuUy 141 Mahon v. Stanhope 230 Malcolm V. O'CaUaghan 387 Mangles ti. Dixon 472 ManseU v. Mansell 481 Mansfield v. Shaw 454 Marker v. Marker 391 Marler v. Tommas, 22 W. R. 25 ; 43 L. J. Ch. 73 .... 48, 57 Mamer, Re 425, 432 Marples i). Bambridge 69 Marsh, Ex parte 220 ■!;. Att.-Gen 407, 409 Marshall V. Crowther ,. 423, 427 • V. G-ingeU, 31 "W. R. 63 ; 61 L. J. Ch. 818 ; 4 7 L. T. 169 201, 208 V. Sladden 229, 386 Martin, Re ; ; i. .... ii 372, 376 xl TABLE OF CASES CITED. PAGE Martin v. Laverton, 18 W. B. 661 ; 39 L. J. Ch. 166 ; 22 L. T. 700 220 V. Martin. 68 Martins v. Joliffe 471 Massey v. Banner 238 Mathison v. Clark 188 Matthew f . Northern Assurance Co., 47 L. J. Ch. 562 ; 38 L. T. 468 411 Matthews v. Brise 276 V. Feaver 108 Matthias v. Matthias, 32 L. T. 25 ; 4 Jur. N. S. 780 .... 380 May V. Taylor ; 221 Meinertzhagen v. Dafis 356 Mennard v. Welford 357 Mercer, Ex parte, 54 L. T. 720 109, 110, 118, 121 Meredith v. Heneage, 1 Sim. 542 ; 10 Pr. 230 30 Merryweather v. Jones 68 MetcaUe, Ke 416 V. Pulvertoft 1 36 Metham v. Duke of Devon 76 MicheU, Re, 36 L. T. 915 ; 25 W. K. (dig.) 251 44 Michells t). Corbett , ^ 308 Middleton v. Dodswell 452 V. PoUock, 25 "W. R. 94 ; 46 L. J. Ch. 39 ; 35 L. T. 608 82, 115, 463 V. Spicer 224 MiU f . HUl 182 Millar v. Priddon 356 Millard v. Byre 353 Miller V. Huddleston 428 V. Miller,; 20W. E. 324 ;. 41 L. J. Ch. 291 235 V. Race 458 MiUigan v. Mitchell 454 Mills, Re 216, 218 Milner v. Harwood (Lord) 106 Mihroy v. Lord, 35 L. J. Ch. 798 ; 6 L. T. 875 ; 8 Jur. N. S. 808 43, 57 Minors v. Battison, 35 L. T. 1 331 Mitohelson v. Piper 331 Mockett, Re, 8 W. R. 235 ; 29 L. J. Ch. 294 ; 1 L. T. 136 ; 6 Jur. N. S. 142 407 v'. Mockett, 20 "W. R. 860 38 Moggridge v. Thackwell 62 Molton V. Camroux 94 Montefiore v. Brown, 4 Jur. N. S. 1201 40 V. GuedaUa 260 Montford (Lord) v. Cadogan (Lord) 195, 390, 391, 402 Moore v. Frond 296 V. Roche 27 Moravian Society, Re, 6 W. R. 851 354, 357 More V. Mahon 472 TABLE OF CASES CITED. xli PAaE Morgan, Ex parte 219 , Ke, Pilgrim v. Pilgrim, 30 W. H. 223 ; 50 L. J. Ch. 834 ; 45 L. T. 183 182, 482 V. Chetwynd, 54 L. T. 742 ;, 34 W. K. 483 .... 49 ti.Elford, 25 W. K. 136 469 V. MaUeson, 18 AV. E. ] 125 ;- 39 L. J. Ch. 493 ; 22 L. T. 593 64 V. Swansea Local Board, 27 W. R. 283 14 Morice v. Bishop of Durham 165 Morland v. Cook 481 Morley, Ee 220 ■ V. Morley 188, 246 V. Keynoldson , 69 Morrett v. Baske 184 Morrin v. Morrin 27 Morrison v. Morrison 379 Morse v. Eoyal 287 Mortimer i\ Ireland,. 11 L. J. Ch. 418 349 Mortlock j>. BuUer 230 Moseley, Ee, 18 W. E. 126 ; 21 L. T. 384 415 Moss, Ex parte 187 Motz V. Morreau 106 Moyleu. Moyle 247, 269, 276 Muoklow «.. Fuller 196, 388 Muggeridge, Ee,, 8 W. E. 234 ; 29 L. J. Ch. 288 ; 1 L. T. 436 407 Mulin V. Blagrave 249 Mundel, Ee 372 MuToh V. Eussel 391 Mu.s80urie Bank v. Raynor, 46 L. T. 633 21, 22, 27, 32, 33 Mutlow V. Bigg, 22 W. E. 469 ; 45 L. J. Ch. 282 395 Mycock V. Beatson, 28 W. E. 319 ; 49 L. J. Ch. 127 ; 42 L. T. 141 189 N. Nail V. Punter 390, 392 Nandiok v. Wilkes. 141 Nanney v. Williams 1 05 Nash, Ee, 29 W. E. 294 372 V. AUen 200 V. Coates 208 V. Preston 222 Natal Co., Ee 484 National Finance Co., Ee, 18 L. T. 895 ; 16 W. E. 994 . . 381 Naylor v. Amitt , . 308 Neale v. Davis, 2 W. E. 358 284 Needham, Ee 197 xlii TABLE OF CASES CITED. PAQE Neligan v. Eoohe 285 Nelson V. Bridport 63, 68 New V. Jones 297 Newman v. Newman 292 Newsome v. Flowers 283 Newstead v. Searles 45 Newton V. Newton, 17 W. R. 238 ; 19 L. T. 588 ; 38 L. J. Ch. 145 482 Nicholson i!. Tuttin 40 Nlckisson v. CookMU 306 Niel V. Morley 93 Nightingale v. Lawson 424 Noard v. Backhouse 452 Noel V. Jeavon 222 Noreutt v. Dodd 108 Norfolk's (Duke of) case, 6 Ch. Ca. 5 ; 1 Vem. 164 68 Norris, Ex parte, 38 L. J. Bky. 5 ; 17 W. R. 452 ; 19 L. T. 755 444 , Re 356, 360 V. Wright 245, 252, 260 North V. Crompton 153 Northern Counties Ass. Co. v. Whipp 10 Norton V. Johnstone 423, 427 V. Pritchard 248 Nunneley v. Nunneley 295 0. Ocoleston v. Pullalove, 22 W. R. 305 ; 43 L. J. Ch. 297 ; 29 L. T. 785 76 Ogle, Ex parte, 21 W. R. 938 325, 443 Oldham v. Oldham, 15 W. R. 300 ; 36 L. J. Ch. 205 .... 343 Olive, Re, OHve f. Westerman, 56 L. J. Ch. 75 ; 65 L. T. 583 262 Oliver v. Court 245, 268 ■ V. Oliver 146 Onslow V. Wallis 225 Ord V. Noel 244 11. White 472 Orr V. Newton 246 Orrett v. Corser 24 1 O'Rorke v. BoHngbroke, 26 W. R. 239 105 Osborne and Rowlett, Re, 28 W. R. 365 ; 49 L. J. Ch. 310 ; 38 L. T. 195 349, 351 Osgood V. Strode 45, 128 Osmond v.. Fitzroy 97 Owen ». Delamere, 21 W. R. 218 ; 42 L. J. Ch. 232 ; 27 L.T.647 223 TABLE OF GASES CITED. xllii P. PAUB Packman and Moss, Re, 24 W. E. 170 ; 45 L. J. Ch. 54 ; 34 L. T. 100 220 Paddon v. Eichardson, 26 L. T. 33 ; 19 Jur. 1192. . . . 193, 246 Paine, Re ' 360 Paliaret v. Carew, 11 W. R. 449 ; 8 L. T. 139 ; 9 Jur. N. S. 426 248, 333, 386 Palmer ». Simmons, 2 W. R. 313 36 ■ «. Toiing- 183 Papillon v. Voice 144, 145 Parker v. Bolton 145 V. Brook 475 V. Caloraft 187 11. Carter 131 Parkhurst v. Smith 205 Pamall v. Pamall, 26 "W. R. 851 32 Parrott, Re, Walter ». Parrott 141, 145, 147, 360 1). Sweetland 187 Pass V. Dundas, 29 "W. R. 332 ; 43 L. T. 066 390 Patman v. Harland, 29 W. R. 207 ; 50 L. J. Ch. 642 ; 44 L. T. 728 479 Patten v. Edmonton Guardians, 31 W. R. 785 ; 52 L. J. Ch. 787; 48L. T. 870 465, 457 Patterson v. Woolen 386 Paul V. Compton 29 D. Paul, 30 W. R. 801 49 Paulett V. Att.-Gen 362 ». Hood 409 Pawson V. Brown, 28 W. R. 652 ; 49 L. J. Ch. 193 ; 41 L. T. 339 164 Payne, Re, Kibble v. Payne 182, 294 V. Evans 287 Peacock v. Monk 96, 336 Peard v. Kedewiok 145 Pearks i'. Moseley 72 Pearse f . Green 286 Pearson, Re, 25 W. R. 126 ; 35 L. T. 68. .76, 109, 113, 264, 278 . V. Amicable Ass. Co., 7 W. R. 629 51 Pease, Exparte 220 Peohel 1). JFowler 244, 454 Pemberton v. Gill 405 Pennell v. DeffeU, 1 W. R. 499 466 Perry, Re 196 V. Merritt, 22 W. R. 600 ; 43 L. J. Ch. 608 32 Pethybridge v. Burrows 65, 58 Petre ». Petre, 1 W. R. 362 ; 2 L. T. 136 395 Peyton, Re, 38 L. J. Ch. 477 ; 20 L. T. 728 262, 407 Phelps, Re, 54 L. T. 480 353, 374 xliv TABLE OF CASES CITED. PAGE PhilHps, Ee 91 V. James, 13 W. E. 934 141 V. MulUnffs, 20 W. E. 129; 41 L.J. Ch. 211.. 97, 98, ° 100 ■ u. Phillips 472 Pickard v. Anderson, 26 L. T. 725 257 Pickering v. Stamford ^2^ Pieroy v. Eoterts ^' PUclier V. Eawllns, 41 L. J. Ch. 485 ; 20 W. E. 281 ; 25 L. T. 921 472, 474 PUling, Ee 369 Pine V. Cooper 428 Pitt ^. Pelham 63 Platamore v. Staple 139 Playfair v. Cooper 427 Poad V. Watson, 3 W. E. 488 ; 25 L. J. Q. B. 396 ; 2 Jur. N. S. 113S 212 Poooek V. Beddington 257 Pole D.Pole 169, 183 Poole V. Pass 432 Pooley V. Quilter, 6 W. E. 402 ; 27 L. J. Ch. 374 ; 31 L.T.64; 4 Jnr. N. S. 345 291 Porter v. Baddeley 233 Potts V. Britton, 19 "W. E. 651 ; 24 L. T. 409 257 Powell V. Price 141 Powys V. Blagrave, 2 W. E. 700 . . .■ 248 V. Mansfield 172 Pratt, Ee, 55 L. T. 613 368 1). Sladden 154 Prevost V. Clarke 29 Price V. Berrington 94 V. Blakemore 463 V. Jenkins, 26 W. E. 427 ; 37 L. T. 51 ; 46 L. J. Ch. 85 45, 127, 132, 134, 135 V. Price 436 Pride i>. Bubb, 20 W. E. 220 ; 41 L. J. Ch. 105 ; 25 L. T. 890 336 V. Fooks 386 Prime v. Savell 402 Pritchard v. Ames 62 Proctor V. Eobinson, 15 W. E. 138 ; 15 L. T. 431 78 Prodgers v. Langham 129 Pryce f . Bury, 2 W. E. 87, 216 ; 22 L. T. 324 187 Pugh, Ee 257 Pumphrey, Ee, Worcester, &c. Bg. Co. v. Blick. .385, 456, 460 Pybus V. Smith 341 Pye, Ex parte, 18 Ves. 140 ; 2 W. & T. L. Ca. 356 .... 44, 54 TABLE OF CASES CITED. xlv R. FAOE Raby v. Ridehalgh, 3 W. R. 344 ; 25 L. T. 19 ; 19 Jur. 363 231, 402, 403 Eackstraw, Re, 33 W. R. 659 369 RadclifBe, Re, European Ass. Co. v. Eadoliffe 333 Raikes v. Raikes 359 Ramskill v. Edwards, 34 W. R. 96 ; 53 L. T. 949 445 Randall v. Errington 288 Ranelagh (Lord), Re 183, 289 Rathbone, Re, 45 L. J. Ch. 631 ; 24 W. R. 566 370 Reddington v. Reddington 170, 188 ReeceRiverCo.v.Atwell, 17W.R.601; 20L.T. 103. .109, 111 Reeves v. Baker 30 Reg. V. Day 223 ». Stapleton 223 V. Sterry ~. 223 Rehden ». Wesley 276 Reid v. Raid 92, 336 Revel V. Watkinson 427 Reynell v. Spry, 1 D. M. & G. 660 159 Reynolds v. Godlee 178 Richards, Re 414 Re, Shenstone v. Brock 44 V. Delbridge, 22 W. R. 584 ; 43 L. J. Ch. 459 . . 43, 55 Richardson v. Richardson, 15 "W. R. 690 ; 36 L. J. Ch. 653 . . 54 1). Smallwood 109 Riokards v. Robson 81, 95 Ridder v. Eidder 108 Rider t: Kidder 165 Ridler, Re, 31 W. R. 93 ; 52 L. J. Ch. 343 ; 48 L. T. 396 , 132 Eigden v. Vallier 166 Rigley, Re 81 Eingham i). Lee 188 Ritson V. Stordy 95 Roberts, Re, L. R. 4 Ch. App. 561 ; 17 W. R. 718 ; 38 L. J. Ch. 488 415 Robinson, Re 372 . ■ V. Lowater, 2 W. R. 181 ; 23 L. T. 17 ; 18 Jur. 363 320 V. Pett 188, 192, 296 V. Preston 166 V. Robinson 246, 252, 438 Robson V. FUght, 13 W. R. 393 ; 34 L. J. Ch. 226, 311 ; 12L.T. 725; llJur. N. S. 147 44,62,328 Rodbard v. Cooke, 36 L. T. 504 282 Rogers v. Rogers 157 Rolfe V. Budder 62 xlvi TABLE OF CASES CITED. PAGE EoUe V. Gregory, 13 W. E. 355 ; 34 L. J. Ch. 274 ; 12 L. T. 162 469 Eoiuf ord Canal Co. , Be 484 Roper Curzon v. Eoper Curzon, 19 W. E. 519 ; 24 L. T. 406 310 Eose V. Watson 189 Eosher i>. WilUams, 23 W. R. 561 ; 44 L. J. Ch. 419 ; 32 L. T. 3S7 132 Eowbotham v. Dunnett, 26 W. E. 629 ; 47 L. J. Ch. 449 ; 38 L. T. 278 162 Eowland «. Morgan 414 t). Witherden 271, 275 Eowley v. Adams 240 Royds V. Royds 263 Rudkin «'. Dolman 82, 134 Rush-worth's case , ; ; 183 Eussell, Ex parte, 30 W. E. 584 ; 51 L. J. Ch. 521 ; 46 L. T. 113 112 «. Eussell 187 Eyall v.- Eyally eited Amb. 412 164 v. Eoil .... i 459 Eyder v. Biokerton- 257, 402 S. Sahiu v. Heape, 29 L. J. Ch. 79 ; 8 W. E. 120 ; 1 L. T. 51 323 Saokville West v. Holmesdale, 39 L. J. Ch. 505 138, 142 Saffron -Walden ». Eayner, 28 W. E. 681 ; 49 L. J. Ch. 465 ; 43 L. T. 3 478 Salisbury v. Denton 29 Salloway v. Strawbridge, 3 W. E. 335 ; 24 L. J. Ch. 393 . . 351 Salter v. Cavanagh 395 Sampson and Wall, Ee 91 Sandford v. Keech 182, 289 Sarley v. Clookmakers' Co 62 Saunders v. Dehen 127, 484 V. Vantier 336 Saunderson, Ee 75 Savile V. Cooper, 56 L. T. 907 378 Sawyer v. Sawyer 402, 403 Sayre v. Hughes, 16 W. E. 662 ; 37 L. J. Ch. 401 ; 18 L.T.347 171 Scales ». Baker, 8 W. E. 287 ; 2 L. T. 659 455 Schrieber v. Diokel 133 Scott V. Beeoher 452 V. Surmau 459 Scrivener u. Smith , 433 Sculthorpe i>. Burgess 155 V. Tipper, 20 W. E. 276 ; 41 L. J. Ch. 266; 26 L. T. 119 246 TABLE OF CASES CITED. xlvU PAOB Seagram v. Knight, 15 W. R. 1152 ; 36 L. J. Ch. 918 ; 17 L. T. 47 302, 308, 311 1>. Tick, 29 "W. R. 784 ; 60 L. J. Ch. 572 ; 44 L. T. 800 395 Seagrave v. Seagrave , 105 Selby V. Wood 425 Sellack v. Harris 89 Sewell,Ee, 19W.E. 220; 40L. J. CJi. 135 ; 23L. T.835.. 236 V. IQng, 28 W. E. 344 51 Shafto V. Adams 64 Shalloross v. Wright 176 Shapland v. Smith 199 Sharp V. Foj, 17 W. E. 65 ; 19 L. T. 541 391, 394 Sharpe v. St. Saveur, 20 W. E. 269 ; 41 L. J. Ch. 576 ; 26 L. T. 142 95, 96 Sharpies v. Adams, 11 W. R. 450 484 Shaw, Ee, 19 W. R. 1025 ; 25 L. T. 321 409 V. Foster, 20 W. R. 907 ; 42 L. J. Ch. 49 185 • ■ V. Lawless 41 V. Weigh ; 208 Sherwood, Re 296 Shewiu V. Vanderhorst 331 Shield, Ee, Pethybridge v. Burrow 55, 58 Shore «!. Shore 423, 429 Shnrmer v. Sedgwick, 31 W. E. 844 ; 49 L. T. 166 . .132, 133 Sidmouthw. Sidmouth 97, 170 Sigger V. Evans 40 Simpson, Re 409 Sisson V. Shaw 302, 309, 327 SleemaxL v. Wilson, 20 W. E. 109 ; 25 L. T. 408 399 Smallwood v. Eutter 414 Smethurst v. Hastings, 33 W. E. 496 ; 62 L. T. 567 .... 261 Smirthwaite, Ee 371 Smith, Ee 425, 432 ■ V. Bolden 386 V. Cherril, 15 W. E. 919 ; 16 L. T. 517 . . 118, 128, 134 V. Egmont (Earl) 186 ■ V. Gill, 53 L. T. 623 ; 34 W. E. 134 . . . , 372 V. Matthews, 30 L. J. Ch. 445 ; 9 W. E. 644 ; 4 L. T. 266 , 84 v. Smith 72, 201, 362 V. Wheeler 334 Snowdon v. Dales 69, 75, 76, 343 Soar V. Foster, 6 W. E. 265 ; 4 Jnr. N. S. 406 165 Sooiete Geuerale v. Walker, 34 W. R. 662 ; 55 L. J. Q. B. 669 ; 54 L. T. 389 475 Somerset, Re 374 Sowarsbyv. Laoey 319, 322 Speight V. Gaunt, 32 W. R. 435 ; 63 L. J. Ch. 419 . .264, 269, 272, 277, 280 SpenoAj).. Spenoe ......,, ,.,...,,,. 201 xlviii TABLE OF CASES CITED. PAGE Spencer v. Topham, 28 L. T. 56 293 Spenser v. Slater, 27 W. K. 134 ; 48 L. J. Q. B. D. 204 ; 39 L. T. 424 115 Spiller, Re, 8 W. K. 333 ; 2 L. T. 71 ; 6 Jur. N. S. 386. . 407 Spink v. Lewis 155 Spirrett v. WiUows, 14 W. E. 941 ; 34 L. J. Ch. 365 ; 11 L. T. 720 109, 111, 117 Sporle V. Bumaby , 249 Spring «. Pride 288 Springett v. Dashwood, 3 L. T. 542 ; 7 Jur. N. S. 93 . . . . 286 V.Jennings, 19 W. B. 575; 40 L. J. Ch. 348; 24L. T. 643 162 Spurgeon v. Collier 481 St. John V. St. John 159 St. Paul 4). Dudley 189 Stacey v. Elph, 2 L. -J. Ch. 50 192, 193, 197, 291 Stackhouse ». Bumston 392 Staokpoole v. Stackpoole 128 Stafford «;. Kddou 247, 435, 437 V. Stafford 391 Stamford (Earl) v. Hohart 138 Standing v. Bowring, 55 L. J. Ch. 218 ; 54 L. T. 191 ; 34 "W. R. 204 165, 166, 167 Standon v. Bullock 127 Stanley v. Lennard 137, 138 . V. Stanley, 26 W. R. 310-; 47 L. J. Ch. 256; 37 L. T. 777 335, 391, 393, 403, 467 Stanniar v. Evans 41 Stead V. MeUor, 25 "W. R. 508 ; 36 L. T. 498 29, 35, 36 Stevens v. Robertson 228 Stewart «>. Sanderson, 18 W. R. 278; 39 L. J. Ch. 337; 22 L. T. 10 258 Stiokney v. SeweU 262, 266, 290 Stikeman v. Dawson 359 Stock 4>. MoAvoy, 21 W. R. 521 ; 42 L. J. Ch. 230 ; 27 L. T. 441 169 Stookeu ti. Dawson 298 Stokes, Re, 29 W. R. 396 ; 41 L. J. Ch. 290 ; 26 L. T. 181 354, 413 Stokoe V. Cowan , 108 Stone v. Lidderdale 67 Stoner v. Cirwan 141 Stones V. Rowton, 1 W. R. 499 356 Stott V. Milne 239, 307, 424, 431, 432 Straker v. Wilson 237 Strange v. Eooks 391 Streatfield v. Streatfield 140 Stretton v. Ashmall, 3 W. R. 4 ; 24 L. J. Ch. 277 262 Strickland v. Aldridge 82, 89 v. Symons 41 Strong V, Strong. 109 TABLE OF CASES CITED. xHx PAGE Stuart V. Norton 328 V. Stuart 231 Stubbs V. Sargou, 2 Ke. 255 ; 3 M. & 0. 507 163, 155 Styles V. Guy, 19 L. J. Ch. 186 267, 282 Suffolk V. Lawrence 411 Simter ». a. W. Ry. Co 229 Sutton, Ee, 27 W. K. 529; 48 L. J. Ch. 350 411 V. Jones 291 V. WUder, 19 W. K. 1021 ; 41 L. J. Ch. 30 ; 25 L. T. 292 ; 250 Swaffield v. Nelson 252, 260 Swan, Re 309, 415 Sweetapple v. Bindqn 142 Swinnoek v. De Crispe 303, 310 Sykes v. Sykes, 20 W. R. 90 ; 41 L. J. Ch. 25 ; 25 L. T. 560 69, 76 Symes v. Hughes, 39 L. J. Ch. 304 ; 22 L. T. 462. . 159, 163, 174 Synnot v. Simpson 40 T, T ,Re 432 Tabor v. Brooks, 48 L. J. Ch. 130; 39 L. T. 628.. 235, 302, 304 Tait V. Lathbery 142 Talbot i>. O'Sullivan 37 ■ V. Radnor (Earl) 249, 413 (Earl) V. Soott 452 TaUatire, Re 359, 366 Tanqueray, WOIaxime, and Landau, Re, 30 W. R. 801 ; 51 L. J. Ch. 434 ; 46 L. T. 642 209 Tappenden v. Walsh 62 Tarleton v. Hornby , .... 444 Tasker v. Small 44 Tatam v. Williams 401 Tate t>. Wilhamson, 18 W. R. 321; 15L.T. 549. .98, 104, 294 Taylor v. Blacklook, 34 W. R. 175 ; 55 L. J. Ch. 99 .... 10 a. Cartwright, 20 W. R. 603 ; 41 L. J. Ch. 529 ; 26 L. T. 571 393 V. Chester 158 V. Coenen, 34 L, T. 18 109, 120 V. Haygarth , 224 . J). Meades, 13 W. R. 394 ; 34 L.J. Ch. 203. .93, 96, 336 V. Plumer 455, 456 V. Tabrum 312 —«. Taylor 176 Teasdale v. Braithwaite, 46 L. J. Ch. 725 ; 36 L. T. 601 ; 25W. R. 646 133 XJ. d 1 TABLE OF CASES CITED. PAGE Tebbs V. Carpenter 240 Tempest v. Camoys (Lord), 31 W. B. 326 ; 61 L. J. Ch. 785; 48 L. T. 13 62, 305 Temiant v. Trenchard, 38 L. J. Ch. 169 ; 20 L. T. 856 . . 288 Thatcher, Be 310 Thellusson v. Woodford 73 Thompson v. Eastwood 396 V. Finch, 25 L. J. Ch. 681 ; 27 L. T. 330. .282, 444, 446 v. Fisher 145 V. Shakespeare, 8 W. B. 265 ; 29 L. J. Ch. 276; 2 L. T. 479 95 V. Simpson 475 Thomborough i). Baker 187 Thomdike v. Hunt, 7 W. B. 246 ; 28 L. J. Ch. 417 ; 32 L. T. 346 481 Thorpe v. Owen, 2 W. B. 208 ; 23 L. J. Ch. 286 54 Thnrsby v. Thnrsby, 23 "W. E. 500 ; 44 L. J. Ch. 289 ; 32 L. T. 187 235 Tibbets i>. Tibbets 29 Ticker v. Smith 240 Tickuer ■». Old, 22 W. B. 871 ; 31 L. T. 29 233 Tidd V. Lister 342 Tiemey v. Wood, 3 W. B. 577 ; 23 L. T. 266 82 Titley a. Wolstenhohne 351 Todd, Ex parte, 56 L. J. Q. B. 431 ; 35 W. B. 676 .... 123 1). Moorhouse 428 ToUer v. Atwood, 20 L. J. Q. B. 40 210 Tooke V. Hollingworth 457 Topham v. Spencer 184 Townley i!. Sherborne 266, 281 Townsend i). Barber 282 v. Westacott 109 Townson v. Tickell 193 TrafPord v. Boehm 402 Travis v. lUingworth 356 Tregonwell i>. Sydenham 155, 168, 161 Trevor v. Trevor 140, 144 Trowell v. Shenton 130 Tucker v. Burron, 11 Jur. N. S. 526 165, 174 i>. Homeman 414 Tullett V. Armstrong 335, 338, 341 Tunbridge v. Cane 165 Turner v. Collins, 20 W. B. 305 ; 41 L. J. Ch. 558 ; 25 L. T. 779 106 V. Corney 267 V. Maule, 15 Jur. 761 357, 366 V. Sargent 145 Tumley, Be 432 Turpin, Ex parte 466 Turton v. Benson 472, 483 TABLE OF CASES CITED. ll PAOB Tweddle v. Atkinson 45, 48 Tweedale v. Tweedale, 26 W. R. 457 ; 47 L. J. Ch. 530 ; 38L. T. 151 21, 29 Twynne's case 110 Tyler ». Tyler 393 Tyrwhitt v. TyrwMtt 189 U. Underwood i>. Stevens 390 Ungless V. TuS 259 TJniaoke, Ee 197 XJpfuU, Re 414 Upton V. Brown 429 V. Vansittart v. Vansittart 78 Vaughan, Re, Vaughan v. Thomas 81 Vaughton v. Noble 466 Venables v. Poyle 188 1). Morris 202 Vernon, Re, 36 "W. R. 225 ; 55 L. T. 416 10 Vicary v. Evans 252, 264 Vicat, Re 370 VOUers v. VUUers 209 Vincent v. Vincent 58, 87 Vyse V. Foster, 23 W. E. 355 ; 44 L. J. Ch. 37 ; 31 L. T. 177 289, 308, 435, 441, 448 W. Wagg 11. Shand 410 Waite V. Littlewood, 42 L. J. Ch. 216 ; 21 W. E. 131 ; 28 L. T. 123 ; L. E. 8 Ch. 70 259 Waloot V. Lyons 262, 263 Waldo V. Smith 311 V. Waldo 302, 308 Walker v. Smallwood 332 V. Symonds 266, 281, 282, 390 V. Wetherell 310 Walsham v. Stainton, 33 L. J. Ch. 68 402 Walters v. Woodbridge, 26 W. E. 469 ; 47 L. J. Ch. 516 ; 38 L. T. 83 -. . 380 Walton «. Walton 152, 153 Walwyn v. Coutts 39 Want V. StaUibrass, 29 L. T. 293 ; 21 W. R. 685 ; 42 L. J. Ex. 108 229 lii TABLE OF CASES CITED. PAOE Warbuiton v. Sandys 345 Ward V. Butler 196 V. Ward 239, 302, 306 Ware v. Canu 76 V. Gardner, 17 W. R. 439 ; 38 L. J. Ch. 348 ; 20 L. T. 71 , 112 Waring v. Waring 245, 262 Warriner v. Bogers, 21 W. E. 766 ; 42 L. J. Ch. 581 ; 28 L. T. 863 55 Warwict v. Warwick 475 Water v. Anderson 387 Watlrins V. Cheek 324 Watson V. Hayes 153, 156 . ». Pearson, 18 L. J. Ex. 46 202, 203, 207, 208 D.Young 73 Watts, Ee 357, 366 . 41. Girdlestone ' 229 Waugh, Ee 429 Weaver, Ee, 31 W. E. 224 ; 48 L. T. 93 305 Webh 11. Lugan 183 1!. Shaftesbury (Earl) 287, 288, 296, 454 1). Wools 30 Wedderbum, Ee, 27 W. E. 53 ; 47 L. J. Ch. 743 ; 39 L. T. 904 228, 255, 258 V. Wedderbum 299 Wellesley v. WeUesley 61 Wells V. Malbon, 31 L. J. Oh. 344 ; 8 Jur. N. S. 249 . .414, 422 Wesley v. Clark 282 West of England Bank v. Murch, 31 W. E. 467 ; 52 L. J. Ch. 650 ; 48 L. T. 417 364 Westmeath v. Westmeath 78 Wetherby v. St. Giorgio 321 Wethered v. Wethered 64 Wheeler v. Smith 164 V. Warner 21 Whitbread v. Smith 423, 427 White and Hindle, Ee 205 . V. Briggs, 15 Sim. 33 27 V. Parker, 4 L. J. C. P. 178 199 V. White 424 Whitefield v. Brand 220 Whiteley v. Learoyd 239, 263 WHtney t>. Smith, 17 W. E. 579 ; 20 L. T. 468. .262, 289, 448 Whitton, Ee 432 Wiohcote v. Lawrence 287 Wigg V. Wigg 29 Wightman v. Townroe 223 Wild V. Banning, 35 L. J. Ch. 594 ; 14 L. T. 845 ; 12 Jur. N. S. 464 157 WUday v. Sandys, 17 W. E. 603 235 WUes V. Gresham, 3 W. E. 87 ; 24 L. J. Ch. 264 . . 240, 325, 449 TABLE OF CASES CITED. Hii PAGE ■Wilkins v. Hogg, 10 W. E. 47 ; 8 Jur. N. S. 25 ; 31 L. J. Ch. 41 388 Wilkiiison v. Parry 352, 390 ■Williams, Ke 369, 413, 415 V. Allen 466 V. Corbet 41 f. Teale 145 V. Waters 200 ». Williams, 11 W. R. 636 165, 169, 470 Willis V. Kibble 296 V. Kyner, 26 W. R. 161 ; 47 L. J. Ch. 96 ; 38 L. T. 207 148 1). WiUia 153 Wilson, Ee, Alexander v. Calder, 33 W. E. 579 ; 54 L. J. Ch. 487 410, 418 V. BeU, 17 W. R. 944 38 V. Hoare 222 V. Moore 444 V. Wilson 78 Winch V. Brutton 36 Winslow V. Tighe 183 Wise, Re 109, 118, 121 V. Piper 141 V. Wise 197 Withers v. Withers 81 Withington v. Witliington 357 WoUaston v. Tribe, 18 W. R. 83; 21 L. T. 449. .45, 102, 128, 134 Wood V. Cox 30, 153, 158 v. Patteson 303, 308 V. Weightman, 20 W. E. 469 ; 26 L. T. 386 . . 267 Woodbum, Re 413, 418 Woodhouae v. Woodhonse, 38 L. J. Ch. 481 ; 20 L. T. 209 ; 17 W. E. 583 241 Woods V. Woods 37 Woodyatt v. Gresley 466, 468 Worcester, &o. Co. v. BKck, 31 W. E. 195 ; 52 L. J. Ch. 228 ; 48 L. T. 516 456 Worral v. Harford 41, 379 Worssam, Ee 291 Worthington v. M'Crear 310 Wray v. Steele 164 Wren o. Barton 271 Wright, Ex parte 187 • , Ee 405 V. Pearson 137, 139 V. Snowe 369 V. Vanderplank 106 V. Wright 338 Wyatt V. Sharratt 245 Wykham v. Wykham 202 V. (' liv TABLE OF CASES CITED. PAGE WyUey, Ee, 8 W. E. 645 415 Wynne v. Hawkins 32 V. Hiimberston 223 Y. Yew V. Edwards 182 York, &o. Co. V. Hudson 184 Younghusband v. Gisbome 75, 344 ADDENDA ET COEEIGENDA. Note.— jSt«c« the body of this work has been printed the Trustee Act, 1888, has been passed, and the General Order of the Supreme Court of Novem- ber, 1888 (considerably extending the class of securities in which trust funds may be invested), has been made. It has, therefore, been deemed desirable to issue this list of Addenda et Corrigenda; and the Author has availed himself of the opportunity of noting several decisions reported since this edition was first published. The reader is earnestly requested to note up these Corrigenda et Addenda on the pages referred to. The Trustee Act, 1888, ivith notes, will be found in the Supplement. PAQE 101, note {p). — See also Tucker v. Bennett, 38 Ch. Div. 1. 105, note (d). — See Tucker v. Bennett (ubi sup.). 156, note (s).— Reversed by C. A., W. N. 18S8, p. 152. 235, note (»). — And see also Be Sheldon, Nixon v. Sheldon, 39 Oil. Div. 50. 239, note [d) . — Add ' ' The only excuse for not taking action to enforce payment is a "well-founded belief on tlie part of the trustees that such action would be fruitless. The burden of proving the grounds of such belief lies on the trustees. (Re Brogden, Billing v. Brogden, 38 Ch. Div. 546.)" 243. — See now as to depreciatory conditions, Trustee Act, 1888, s. 3, which practically reverses the old law. 251, note (i). — And see also Sallows v. Lloyd, 39 Ch. Div. 636. 252. — By virtue of a General Order of the Supreme Court of November, 1888 (Ord. XXII. r. 17), coupled with the Statute 23 & 24 Vict. c. 38, s. 11, in addition to the securities specified in Art. 40, trus- tees may now invest in the following, viz. : — (1) Indian Guaranteed EaUway Stocks or Shares not liable to be redeemed within iifteen years from the date of iavestment. (2) Debenture, preference, guaranteed, or rent charge stocks of railways in Great Britain or Ireland having for ten years next before the date of investment paid a dividend on ordinary stock or shares. (3) Nominal deben- tures or nominal debenture stock issued under the Local Loans Act, 1875, not liable to be redeemed within fifteen years from the date of investment. ADDENDA ET CORRIGENDA. PASE 261, note (c). — This is now modified, as to terms exceeding 200 years, "by sect. 9 of Trustee Act, 1888. Trustees are not entitled to invest on contributory mortgage. [Webb v. Jonas, 39 Ch. Div. 660.) 262, note (»).— Sect. 4 of Trustee Act, 1888, -with some modifications, carries out the idea embodied in this note. 264, note («).— See Trustee Act, 1888, s. 4. 267, note (z). — This section was rejected ; but by sect. 2, the Trustee Act, 1888, permits trustees to delegate the receipt of purchase-money to a solicitor, and of policy moneys to a solicitor or banker, in certain cases mentioned in the section (q.v.). 272, note ((). — The Trustee Act, 1888, s. 2, reverses this decision. 298, note (m). — See Ee Pooley, 40 Ch. Div. 1, where a solicitor attested the will giving him power to make professional charges, which were consequently disallowed. 317, note (t). — The Trustee Act, a. 3, practically abolishes the law as to depreciatory conditions. 329, notes (rf) and (e). — By sect. 2 of the Trustee Act, 1888, the decision in Bellamy v. Metropolitan Board is reversed ; but not that in Flower v. Metropolitan Board. 370, note (5).— And see Re Batho, 39 Ch. Div. 189. 395, note (g). — By the Trustee Act, 1888, s. 8, the benefit of the Statutes of Limitation have been extended to non-fraudulent trustees ; but this provision does not take effect until after the 1st January, 1890. 402, art. 71.— By sect. 6 of the Trustee Act, 1888, the Court is em- powered to impound the interest of any beneficiary instigating, or in writing consenting to, a breach of trust, even though she be a married woman restrained from anticipation. 422, note (i).— But see Re Parlcer, 39 Oh. Div. 303. 424, para. S. — As to raising money for renewal of leases now, see Trustee Act, 1888, s. 10. 429, end of para. 6. — This clause was passed, and is section 7 of the Trustee Act, 1888. 453. — Before paragraph a add " Where the breach consists in his having advanced too large a sum on mortgage he will only have to make good the sum advanced in excess of that which ought to have been advanced with interest." (Trustee Act, 1888, s. 5; as to former liabihty, see Fry v. Tapson, 28 Ch. Div. 282, and Supplement, p. 25.) 454, note (z).— Modified by sect. 3 of Trustee Act, 1888. 466. — By sect. 6 of the Trustee Act, 1888, the Court is now empowered to impound the interest of any beneficiary instigating, or in writing consenting to, a breach of trust, even although she be a married woman restrained from anticipation. A OP THE LAW KELATINQ TO PEITATE TEUSTS AND TEUSTEES. Division I. PRELIMINARY DEFINITIONS. Abt. 1. Definitions of Trust, Trustee, Trust Property, Bene- ficiary, and Breach of Trust. „ 2. Definitions of Legal and Equitable Estates. ,, 3. Definitions of Declared {or Express) and Constructive Trusts. ,, 4. Definitions of Simple and Special Trusts, andPassice, Bare, and Active Trustees. Art. 1. Definitions of Trust, Trustee, Trust Properfij, Beneficiary, and Breach of Trust. A TEUST is an equitable obligation, either expressly undertaken, or constructively imposed by tlie court, under whicli the obligor (who is called a trustee) is bound to deal with certain property over which he has control (and which is Z PRELIMINARY DEFINITIONS. called the trust property), for the benefit of certain persons (who are called the beneficiaries or cestuis que trust), of whom he may or may not himself be one. Any act or neglect on the part of a trustee which is not authorized or ex- cused by the terms of the trust in- strument, or by the doctrines of judicial equity, is called a breach of trust. Examination of the above definition. — It is by no means an easy task to give a definition of that creation of judicial equity which is known to lawyers as a trust. More than one are to he found in the recognized text books ; but none of these learned and excellent works contain a definition which is alto- gether satisfactory. The late Mr. Lewin, in his treatise on Trusts, adopts Lord Coke's definition of a use as equally applicable to a trust, namely, "A confidence re- posed in some other, not issuing out of the land, but as a thing collateral, annexed in privity to the estate of the land, for which cestui que trust has nO' remedy but by subpoena in Chancery." This defi- nition would seem, however, to be applicable to real estate only, and certainly not to trusts of ehoses in action, the equities attaching to which are, generally speaking, not merely collateral. The expression " some other " is also apt to mislead, and to convey the impression that the trustee must be some other than either the person who creates the trust, or the DEFINITIONS OF TRUST, TRUST PROPERTY, ETC. d teneficiary under it ; whereas, as will be seen further on, such an impression would be incorrect. Then, so far as the remedy is concerned, the definition is obsolete. The Court of Chancery no longer exists, and all branches of the High Court take cognizance of equitable rights, although the Chancery Division is the proper branch in which to enforce express trusts. Another eminent author, the late Mr. Spenee, defines a trust as " a beneficial interest in, or beneficial ownership of, real or personal property, unattended with the possessory or legal ownership thereof " ; and this definition was adopted by the late Mr. Snell, and the late Judge Josiah Smith, in their respective works on Equity. An almost similar definition is given by Mr. Justice Story, in his comprehensive work on Equity, where he says : " A trust may be defined to be an equitable right, title, or interest in property, real or personal, distinct from the legal ownership thereof." It would seem, however, with most unfeigned respect for the memory of those four eminent and learned writers, that their definitions are not defini- tions of a trust at all, but rather of the beneficial interest or property of persons in whose favour a trust is created. Mr. H. A. Smith in his " Principles of Equity " also points out, that Mr. Spence's definition omits to take account of what are known as special trusts, in which the object of the trust is the performance of some particular duty, rather than the vesting of beneficial ownership in some person other than the b2 4 PRELIMINARY DEFINITIONS. legal owner; and he defines a trust, as "a duty, deemed in Equity to rest on the conscience of a legal owner." This definition, however, although decidedly supe- rior to those hitherto discussed, is not quite accurate, being both too wide and too narrow. In the first place, it is too wide ; because it would be almost, if not quite, as good a definition of any other equitable obligation. In the second place, it is too narrow ; because a person may be a trustee, without being the legal owner of property; e.g., he may be trustee of an equity of redemption, or of an equitable interest arising under another trust, or even of an expec- tancy. I have therefore felt myself obliged to reject all the definitions above referred to, and to endeavour to construct an independent one. And in doing so it became necessary to consider the nature of a trust. Mr. Frederick Pollock, in his learned work on Contracts, concludes that a trust is, in its inception, a form of contract; but admits that the complex relations involved in a trust cannot be conveniently reduced to the ordinary elements of a contract, and that there is sufficient justification for the course adopted by all English writers in treating trusts as a separate branch of law. And indeed, it is sufficiently obvious that, accord- ing to English Law, there are at least two important distinctions between contracts and trusts. In the first place a trust, once properly declared, is binding in equity, although no. valuable consideration was DEFINITIONS OF TRUST, TRUST PKOPERTY, ETC. D given for it; whereas a valuable consideration is a sine qua non to the validity of a contract not under seal. In the second place, an executed trust may- be enforced by a person for whose benefit it was made, although he may not have been party or privy to it. At the same time, there can be no doubt that trusts are somewhat analogous to that class of common law cases, which lie on the border line between contract and tort, of which C'o(/gs v. Bernard [a) is the leading instance; the principle of which is, that the con- fidence induced by undertaking any service for another, is a sufiicient legal consideration to create a duty in its performance. However, whatever a trust may be in its inception, it radically differs from all other duties in this, that prior to recent legislation it was a duty which could not be enforced at common law, and which was only enforceable in Chancery, on the ground that a breach of the duty was so unconscientious as to call for the equitable interference of the Chancellor. It is therefore convenient to regard a trust as " an obligation," that is to say, "a tie of equity {vin- culum juris), whereby one person is bound to perform or forbear some act for another" {h). The obligation is, or at all events in its inception was, an equitable one, enforceable only in courts of equity, although, by recent legislation, all courts take (a) 1 Smitli's L. C. 177, 6t]i ed., and see also FouL Metropolitan District Bail. Co., 5 0. P. D. 157. (i) Enoyo. Brit., Art. " Obligation." b PEEI.IMINARY DEFINITIONS. cognizance of trusts. It is also an obligation relating exclusively to property. An obligation to do or forbear some act not relating to property is not a trust, whatever else it may be. For a trust is purely a creature of equity, and equity concerns itself solely with property. It is, further, an obligation, the due performance of which necessarily implies that the obligor has some control over the property which is the subject of the trust, otherwise he would be unable to deal with it for the benefit of the beneficiaries ; and although, as will be seen hereafter, in the case of simple trusts, the control is merely nominal (consisting solely in the trustee being the depositary of the legal title), yet some scintilla of control is absolutely necessary to the existence of a trust. It is believed, therefore, that the definition adopted in this work is fairly accurate. Illtjsts. — 1. If a testator bequeath 1,000^. to A., upon trust to invest it in government stock, and to pay the dividends to B. for life, and after B.'s death to sell the stock and divide the proceeds among B.'s children, and A. accepts the bequest, a trust is at once created in A. In other words, he would be under an equitable obligation to deal with the 1,000/. (the trust property) for the benefit of B. and B.'s children (the beneficiaries) according to the testator's directions. 2. It is, however, by no means necessary that the creator of the trust, the trustee, and the benefi- ciaries, should be all different people. Two parties at least, but no more, are always necessary, viz., DEFINITIONS OF TRUST, TRUST PROPERTY, ETC. 7 trustee, and some benefioiary beside the trustee. Thus, A. may, by deed, declare that he holds 1,000^. govern- ment stock standing in his own name and belonging to him, in trust to pay the dividends to himself for life, and after his death, upon trust to pay the divi- dends to his wife for life, and, after the death of the survivor of them, upon trust to sell the stock and divide the proceeds among their children. Here it will be perceived that A. is both creator of the trust, trustee, and one of the beneficiaries. If he were the sole beneficiary, the trust would never arise. Or, if he became such by surviving his wife and children, and becoming the sole personal representative and next of kin of the latter, it would cease ; because the trusteeship would merge and become extinguished in the beneficial ownership. 3. Sometimes a trust is contingent on the happening of some future event, until the happening of which, the trustees have no control. In such cases, although the persons nominated to exercise the control are commonly called trustees, they do not in reality be- come so until the happening of the specified event. Thus, trustees for the purposes of the Settled Land Act, are not in reality trustees in the strict technical sense, unless and until capital-money is paid to them under the act. Until that is done, they have no estate, and no trust to perform, and are merely watch- men, whose sole duty is to keep an eye on the tenant ior life, and if he should attempt to use the powers of sale, &c conferred on him by the act, with gross want of care, or with fraud, then to bring the matter to the notice of the court. The same remark applies O PRELIMINAKT DEFINITIONS. to " trustees " under a settlement of freeholds, wliO' generally take no estate, but merely a discretionary power of sale and of revoking the uses and appoint- ing new uses to a purchaser. No doubt such persons are trustees in the sense that the settlor trusts in their discretion, but they are not trustees in the sense in which that term is used in the law of trusts, unless and until purchase-money comes into their hands by reason of their having exercised the power of which they are donees. Art. 2. Definitions of Legal and EquitaMe Estates. The beneficial interest of a beneficiary in trust property is called an equitable estate, because it was originally only recognized in courts of equity. A legal estate, on the other hand, is that pro- prietary interest which has been ac- quired, with all the formalities which are required by the common or statute law for perfecting the owner's legal title, or which has devolved by legal descent. A trustee mostly, but not necessarily or always, has a legal estate in the trust property. Distinction still important. — When the Judicatur& DEriNITIONS OF LEGAL AND EQUITABLE ESTATES. • 9' Act of 1873 was first passed, it Was thought by many that the old distinctions between legal and equitable estates were abolished, and that henceforth every equitable interest would be, in effect, a legal one. Such persons, 'however, overlooked the fact that, even if the fusion of law and equity justified the applica- tion of the adjective " legal " to rights and interests- formerly ignored by the common law, and invented by judicial equity, such a change of nomenclature would not do away with the fundamental and in- eradicable distinctions which exist between legal and equitable estates. As Lord Selborne said, in introducing the Judicature Act into the House of' Lords, "If trusts are to continue, there must be a, distinction between what we call a legal and an equitable estate. The legal estate is in the person who holds the property for another; the equitable estate is in the person beneficially interested. The distinction between law and equity is, within certain limits, real and natural, and it would be a mistake to suppose that what is real and natural ought to be disregarded, although under our present system it is often pushed beyond these limits" (c). The old legal estate, therefore, still subsists ; and although equitable estates are now recognized by all branches of the Supreme Court (and may therefore in a sense be called legal), it has been found more convenient to retain the old nomenclature, signifying,, as it does, a real and substantial difference, which (c) Hansard, N.S., Vol. 214, p. 333. 10 PRELIMINARY DEFINITIONS. would still exist, even although the tertn equitable estate were abolished. It must not, however, be assumed that the estate of a trustee is always legal. The estate of the bene- ficiary is always equitable, so long as the trust sub- sists ; but so also may be the estate of the trustee. For instance, the trust property may consist of land mortgaged to a third party. In that case the legal estate would be in the mortgagee, an equity of re- demption (which is a purely equitable estate) in the trustee, and another equitable estate in the bene- ficiary. The difference between legal and equitable estates is not merely of theoretical interest. In cases of breach of trust, as will appear later on in this treatise, it is of vital importance, owing to the maxim that " Where the equities are equal the law prevails." In other words, where a question of priority arises be- tween two claimants, each of whom has an equally just claim, then, if one of them has the legal estate, he will be preferred to the latter, even though the title of such other arose before that of the claimant having the legal estate [d). Illusts. — 1. A., the owner of a freehold estate, -conveys it by a formal deed of grant to B., to hold in trust to receive the rents and pay them to C. dur- ing his life, and after C's death, upon trust to sell (d) Tlie reader, wlio is desirous of verifying this statement is referred to the following cases, wMcli have arisen since the ■Judicature Acts came into operation, viz. : — Gave y. Cave, 15 Ch. Div. 639; Northern Counties Ass. Society y. Whipp, 26 (a. Div. 482 ; Garnham v. Shipper, 34 W. E. 135 ; Taylor y. JilacUoch, 00 L. J. Oh. 99 ; Ee Vernon, 35 W. E. 225. a)ET'IIossess at her death be equally divided between my children." It was contended (6) 9 Ch. Div. 96 ; and see also for other instances of the absence of a, definite subject-matter, AU.-Oen. v. Hall, Fitzgib. 314 ; Lechmere v. Lavie, 2 M. & E. 197 ; Bland v. Bland, 2 Cox, 349 ; Wynne v. Hawhins, 1 Bro. 0. C. 179 ; Perry v. Merritt, L. E., IS Eq. 152 ; Coiuman v. Harri- son, 10 Ha. 234 ; Mussoorie Bank v. Eaynor, 7 App. Cas. 321, and Bretton v. Mochett, 9 Oh. Div. 95. INTENTION TO CKBATE A TRUST. 33 that these latter words constituted a trust in favour -of the children ; but Yice-Chancellor Malins held that no trust was created, and that the widow took absolutely. His lordship said: "In this case there is no precatory trust, for there is not a definite gift over as there was in Le Marchant v. Le Marchant, and there is no obligation here for the widow to possess anything at her death. In order to create a trust which can be carried into execution, there must he a definite subject-matter. Here the widow has a right to spend the whole of the property, and so there can be no trust affecting it." 10. The recent case of Mussoorie Bank v. Ray- nor (c) both exemplifies the modern tendency against construing precatory words as trusts, and also the rule as to uncertainty. There, a testator gave to his widow the whole of his real and personal estate, " feeling confident that she will act justly to our children in dividing the same when no longer required by her." It was held by the Judicial Committee of the Privy Council, that the widow took an absolute interest, and that the doctrine of precatory trusts did not apply. Sir A. Hobhouse, in ■delivering judgment, said: — "Their lordships are of opinion that the current of decisions, now prevalent for many years in the Court of Chancery, shows that the doctrine of precatory trusts is not to be extended ; and it is sufiicient for that purpose to refer to the judgments given by Lord Justice James in the case of Lambe v. Eames, and by Sir George Jessel in the case (c) 7 App. Cas. 321. TJ. D 34 DECLARED TKTJSTS. of Re Htdchinson and Tennant .... Now these niles are clear, with respect to the dootrine of pre- catory trusts, that the words of gift used by the testator must he such that the court finds them to he imperative on the first taker of the property, and that the subject of the gift over must he well-defined and certain. If there is uncertainty as to the amount or nature of the property that is given over, two difficulties at once arise. There is not only difficulty in the execution of the trust, because the court does not know on what property to lay its hands, but the uncertainty in the subject of the gift has a reflex action upon the previous words, and throws doubt upon the intention of the testator, and seems to show that he could not possibly have intended his words of confidence, hope, or whatever they may be — his appeal to the conscience of the first taker — to be imperative words. In this case nothing is given over to the children of the testator, except by an expres- sion of confidence in his wife that she will deal justly in dividing the property among them, and that she will do it when the property is no longer required by her. If the testator had given to his children such property as was not required by his wife, or if he had given over his property if it was not required by his wife, the gift over would, accord- ing to a very well-known and well-established class of cases, have been void, because of the uncertainty. It would have been void, not merely because the words of the gift over were precatory only, but it would have been void notwithstanding that the most INTENTION TO CREATE A TRUST. 35 direct and precise words of gift over migM be used"((;). 11. The case of Lechmere v. Lavie (e) further ex- emplifies the principle that precatory words are not to be construed as imperative apart from the context, and also the rule as to certainty in relation to the property. There a testatrix said in her will, "I hope none of my children will accuse me of partiality in having left the largest share of my property to my two eldest daughters, my sole motive for which is to enable them to keep house so long as they remain single ; but in case of their marrying, I have divided it amongst all my children. If they die single, of course they ivill leave what they have amongst their brothers and sisters, or their children." The eldest of the two daughters died, leaving all her property to the second. The second died, leaving her property otherwise than in accordance with her mother's will. Upon this state of facts. Sir J. Leach, M. li., said : "I consider the words of this codicil as words ex- pressing the expectation of the testatrix, but not as words of recommendation, or as intended to create an obligation upon the two eldest daughters. The words apply, not simply to the property given by the testatrix, but to all property which the daughters might happen to possess at their deaths, leaving what she gives by her wiU. at their disposition during id) See also Be Hutchinson and Tennant, 8 Oh. Div. 540 ; and Me Bond, Cole v. ffawes, 4 Ch. Div. 238 ; wtere the ■words were rather more imperative, but the decision was the same. (e) 2 M. & K. 1.97 ; and see also Saton v. IVatts, L. E., 4 Eq. 151 ; Stead v. Mellor, 5 Oh. Div. 225. d2 36 UECLAKED TRUSTS. their lives, and extending to property which might never have belonged to her, and wanting altogether certainty of amount." 12. So in the leading case of Knight v. Knight (/), the words were: "I trust to the liberality of my successors to reward any others of my old servants and tenants according to their deserts, and to their justice in continuing the estates in the male succes- sion according to the will of the founder of the family, my grandfather." Lord Langdale, M. E., held that these words were not suflSciently imperative, and that the subject intended to be affected, and the interest intended to be enjoyed by the objects, were not sufficiently defined to create trusts, either in favour of the servants and tenants or of the male liae((7). 13. In McCormick v. Grogan [h), C. made a wHL leaving the whole of his property to Gr., whom he also appointed his executor. When about to die, C. sent for Gr., and in a private interview told him of the will, and on G.'s asking whether that was right, said he would not have it otherwise. C. then told G. where the wiU was to be found, and that with it would be found a letter. This was all that was known to have passed between the parties. The letter named a great many persons to whom C. (/) 3 B. 148; and see also Stead v. Mettor, 5 Ch. Div. 225. (g) For instances of trusts held void for uncertainty as to tlie property, see Bardswell v. Bardswell, 9 Sim. 319 ; Winch V. Brutton, 14 Sim. ^19 ; Fox v. Fox, 27 B. 301 ; Palmer v. Simmovds, 2 Dr. 221 ; Cowman v. Harrison, 10 Ha. 234. (/i) L. E., 4 H. L. 82. INTENTION TO CKEATE A TRUST. 37 wislied sums of money to be given, and annuities to be paid, but it contained several expressions as to Gr. carrying into effect the intentions of the testator as he " might think best," and also this sentence : — " I do not wish you to act strictly on the foregoing instructions, but leave it entirely to your own good judgment to do as you think I would if living, and as the parties are deserving ; and as it is not my wish that you should say anything about this docu- ment, there cannot be any fault found with you by any of the parties, should you not act in strict ac- cordance with it." Gr. paid the money to some of the persons mentioned in the letter, but not to others, who accordingly sued him ; but it was held that there was no trust created binding on Gr. («). 14. A legacy is given to a father " the better to enable him to bring up his children." No trust is thereby created, for such words are not imperative, but only explanatory of the donor's motive {j). But where, on the other hand, there is a bequest of in- come to A., " that he may use it for the benefit of himself, and the maintenance and education of his childrein," it has been held that a trust was intended to be imposed upon A. to maintain and educate his children (k). It is, however, submitted that the (j) Apart from tlie direction not being sufficiently impera- tive, it would seem that it was void as a trust, under the principle as to testamentary trusts enunciated in Art. 9, infra. (y) Brown v. Casamafor, 4 Ves. 498. (k) Woods V. Woods, 1 M. & 0. 401 ; Crockett v. Crockett, 2 Ph. 553 ; and Talbot v. 0' Sullivan, 6 L. E., Ir. 302 ; and see Bird V. Mayhery, 33 B. 351 ; Hora v. Hora, 33 B. 88 ; Castle V. Castle, 1 De G. & J. 352. 38 DECLARED TRUSTS. English courts would not in these days hold that- such words constitute a trust, as the current of modem English decisions tends against construing mere precatory words as imperative (l). Obs. — In order to obviate any confusion in the reader's mind, it is desirable at this place to draw attention to the fact that he must carefully distin- guish between cases in which (as in the foregoing) it has been held that the precatory words are not imperative and raise no trusts at all, and cases in which the words actually used, or the surrounding circumstances, make it clear that, although the donor has not sufficiently specified the property, the objects, and the way it shall go, yet he never meant the donee to take the entire beneficial interest. In such cases, which are treated of in Division III., a con- structive trust is created in favour of the donor or his representatives. Oases of precatory words must also be carefully distinguished from those construc- tive trusts which arise out of the fraud of those to whom a settlor communicates a disposition which he has formally made in their favour, but at the same time tells them that he has a purpose to answer, which he has not expressed in the formal instru- ment, but which he depends upon them to carry into effect, and to which they assent. (Z) See Mockett v. Mockett, L. E., 14 Eq. 49 ; Lamhe v. Eames, L. E., 6 Cli. 597 ; see also Wilson v. Bell, L. E., 4 Ch. 581 ; and Hutchinson v. Tennant, 8 Oh. Div. 540. OF ILLUSORY TKUSTS. 39 Art. 7. — Of Illusory Trusts. Where persons are, by the form of the set- tlement, apparently cestuis que trust, but the object of the settlor, as gathered from the whole settlement, does not appear to have been to create a trust for their benefit, they will not in general be considered as cestuis que trust, and cannot call upon the trustee to carry out the settlement in their favour. Illust. — 1. Thus, where a person who is indebted, makes provision for payment of his debts, by vesting property in trustees upon trust to pay them, but does so behind the backs of the creditors and without communicating with them, the trustees do not become trustees for the creditors. The arrangement is one supposed to be made by the debtor for his own con- venience only. It is as if he had put a sum of money into the hands of an agent with directions to apply it in paying certain specified debts. In such a case there is no privity between the agent and the cre- ditor (?»), and the trust is revocable by the settlor at any time before the money is paid to the creditor. The case is, however, different where the creditor is (m) Walwyn v. Goutts, 3 Sim. 14 ; Garrard v. Lauderdale, 3 Sim. 1; Acton\. Woodgate, 2 M.y. &K. 495; Belly. Gureton, ibid. 511 ; Oibhs v. Olamis, 11 Sim. 584 ; Henriquez v. Ben- susan, 20 W. E. 350 ; Johns v. James, 8 Cli. Div. 744 ; Henderson v. Bothschild, 33 Ch. Div. 459. But see Re Fitz- ■gerald, 37 Ch. Div. 18, deciding contra as to trusts for creditors after settlor's death. 40 DECLARED TRtFSTS. a party to the arrangement ; the presumption then is, that the deed was intended to create a trust in his favour, which he therefore is entitled to call on the- trustee to execute («). And so, even though he he not made a party, if the dehtor has given him notice- of the existence of the deed, and has expressly or impliedly told him that he may look to the trust property for payment of his demand, the creditor may become a cestui que trust (o) if he has been thereby induced to exercise forbearance in respect of his claims which he would not otherwise have exercised {p) ; or if he has assented to the deed and has actively (and not merely passively) acquiesced in it, or acted under its provisions and complied with its terms, and the other side has expressed no dissatis- faction, but not otherwise {q). 2. So, where there was an assignment of property to trustees upon trust to pay all costs, charges and expenses of the deed, and other incidental charges and expenses of the trust, and to reimburse them- selves, and then to pay over the residue to third parties, it was held, that a solicitor who had prepared the deed, and had acted as solicitor to the trustees, was not a beneficiary. It was not that the trust [n) Mackinnon v. Steivarf, 1 Sim. N. S. 88 ; Le Touche v^ Earl of Lucan, 7 C. & F. "ili ; Montefiore T. Brown, 7 H. L.. 0. 241. (o) Lord Oran-wortli in Synnot v. Simpson, 5 H. L. 0. 241. (p) Per Sir John Leaoh. in Acton v. Woodgate, supra. [q) Per Lord St. Leonards in Field v. Donoughmore, 1 Dru. & War. 227 ; see also Nicholson v. Tuttin, 2 K. & J. 23 ^ Kirman v. Daniel, 5 Ha. 499 ; Griffith v. Biclcetts, 7 Har. 307 .: Oornthwaite v. Frith, 4 De Gr. & S. 552 ; Bigger v. Evans, » Ell. & B. 367 ; Gonld v. Robertson, 4 De G. & S. 509. OF ILLUSORY TEVSTS. 41 did not provide for the costs, or that they were not to be paid, but simply that the solicitor was not a beneficiary under the trust for the payment of them ; the trust might of course be enforced, but not by the solicitor (>•). It is obvious that the principle also excludes from the benefit of a trust all persons who are merely auxiliary to the real object of the trust, as, for instance, auctioneers, valuers, solicitors,, and other persons carrying out a sale, although the trust instrument contains a trust for payment of costs and expenses. 3. It was at one time considered that a positive direction to the trustees of a will to employ a par- ticular person and to allow him a salary created a trust in his favour (s) ; but this view can no longer- be supported, the House of Lords having decided the contrary in the leading case of Shaw y. Laivlessit). Thus, a direction in a will appointing a particular person solicitor to the trust estate, imposes no trust or duty on the trustees of the will to continue such person as their solicitor in the management and affairs of the estate {u). 4. The funds voted by Parliament for the public service are not trust funds in the hands of the secre- (r) Worral v. Harford, 8 Ves. 4 ; Foster v. Elsley, 19 Ch. Div. 518. See also Strickland v. Symons, 26 Cli. Div. 243 ; and Stanniar y. Evans, 34 Ch. Div. 470, negativing the right of a creditor of trustees to proceed against the estate. (s) Williams v. Gorhett, 8 Sim. 349 ; Hibhert v. EiUert, 3 Mer. 681. {t) 5 01. & F. 129. (m) Foster v. Elsley, 19 Ch. Div. 318 ; Finden v. Stephens,. 2 Ph. 142. 42 DECLARED TKUSTS. taries of state who receive them from the treasury (x) ; and even where her Majesty by royal warrant granted booty of war to the secretary of state for India in trust to distribute amongst the persons found en- titled to share in it by the Court of Admiralty, it was held that the warrant did not operate as a decla- ration of trust, but merely made the secretary of state the agent of the Sovereign for the purpose of distri- buting the fund (y). The late Lord Justice James, in giving judgment, said : " The instrument was a warrant, and I am of opinion, although the term ' grant ' is used as being the effect of the warrant, that the instrument is what it purports to be, a warrant. It is a direction by the Sovereign, order- ing and authorizing that Sovereign's servant, haviag possession of the Sovereign's money, to deal with it in a certain way, and the word 'trust' introduced into the warrant has really no magical effect. It does not become a trust in the sense of a trust cog- nizable and enforceable in a court of law because that word is used The secretary of state (which- ever secretary of state for the time being it is who has to deal with this matter), deals with it as the agent of the Crown, bound no doubt under his re- sponsibility to Parliament, and the moral responsi- bility which the Crown itself has undertaken from having once made this intimation of bounty, but subject to accounting to the Sovereign, and subject (a;) Orenville-Murray v. Clarendon {Earl), L. E., 9 Eq. 11. {y) Kinloch Y. Secretary of State for India, 15 Cli. Div. 1. VOLUNTAKY TRUSTS, ETC. 43 "to accounting to Parliament in case there is any malfeasance or nonfeasance in the matter "(s). Art. 8. — How far Valuable Consideration necessary to hind Settlor or his Representatives. Where language evincing an intention to create a trust has been used, it depends upon the following considerations whe- ther the Court will enforce the trust : — a.. If the settlor has transferred, or done all in his power to transfer, his entire interest in the trust property, legal or equitable, to a trustee, or has explicitly declared himself a trustee of it, or has, by his acts, afforded evidence that he considered himself to be a trustee of it (as distinguished from evidence that he contemplated the future creation of a trust, or that he erroneously con- sidered that he had made an actual gift), it will be enforced at the suit of any person interested, even if purely voluntary (a). (z) Ibid., p. 8. (a) Ellison v. Ellison, 1 L. C. 245 ; Milroy v. Lord, 4 De •G., E. & J. 264 ; Richards v. Delhridge, L. E., 18 Eq. 11 ; Ex 44 DECLARED TRUSTS. /3. But if the settlor has not done any of the aforesaid acts, and has merely undertaken, or even covenanted, to create a trust, or otherwise manifested an incomplete intention to do so, or to confer a benefit, the trust will only be enforced if valuable consideration was given to induce the settlor to create it, and if some person privy to that con- sideration seeks to have it enforced (5). In the latter case it will be enforced in favour of all the beneficiaries, and not merely of persons privy to the considera- tion ; and the settlor, or his successors in title (other than purchasers for value without notice), will be regarded as pas- sive trustees, charged with the duty of transferring the trust property to active trustees when appointed (c). 7. Beneficiaries under a trust created ■parte Pye, 18 Ves. 140; Dipple v. Corks, 11 Ha. 184; An- irobus V. Smith, 12 Ves. 39 ; Be Angihau, 15 Oh. Div. 222 ; ReAnstis, 31 Ch. Div. 606; Green v. Paterson, 32 Oh. Div. 95 ; Re Richards, Shenstone v. Brock, 36 Oh. Div. 541 ; Hard- ing V. Harding, 34 W. B. 775. (6) Oases cited in last note, and Oale v. Gale, 6 Oh. Div. 144 ; Colyear v. Lady Mulgrave, 2 Kee. 81 ; JDavenport v. Bishopp, 2 T. & 0. 451 ; Tasker v. Small, 3 My. & Or. 69. (c) See Davenport v. Bishopp, supra ; Dodkin v. Brunt, L. E., 6 Bq. 580 ; Lee v. Lee, 4 Oh. Div. 175 ; Re Michel!, 6- Oh. Div. 618 ; Rolson v. Flight, 4 De G., J. & S. 608. YOI.UNTARY TRUSTS, ETC. 45 by will are in the same position as par- ties to the consideration under a trust based on valuable consideration. S. Persons privy to valuable considera- tion comprise : (1) The person by or at whose re- quest it is given [d). (2) The children of a marriage, where that marriage is itself the considera- tion (e). (3) The children of a widow who, on a second marriage, makes or pro- cures a trust in their favour (/). (4) Trustees for any of the fore- going (^). e. A beneficiary under a voluntary trust, or who is not privy to valuable consideration (where the trust is based on value), is called a volunteer. {d) See per Wilde, 0. J., Blandy t. De Burgh, 6 C. B. 634 ; Tweddle v. Atkinson, 1 B. & S. 393. (e) See Osgood v. Strode, 2 P. W. 245 ; Gale v. Oale, supra. (/) Gale V. Gale, supra; Price v. Jenkins, o Ch. D. 617 ; Newstead v. Searles, 1 Atk. 265 ; Clarke v. Wright, 6 H. & N. 849 ; Mackie v. Herlertson, 9 App. Cas. 303, 337. It would seem that children of a future marriage are not privy to the ■consideration; WoUaston v. Tribe, L. E., 9 Eq. 44; nor the children of a widower on a second marriage ; Be Cameron and Wells, 37 Ch. Div. 32. [g) See per Lindley, L. J., Be Anstis, Chetwynd v. Morgan, 31 Ch. Div. 596, 606. 46 DECLARED TRUSTS. It is a -well-known maxim that equity gives no- assistance to volunteers ; but, like many other epi- grammatic expressions, it cannot be accepted literally. The true rule is, that equity will give no assistance to volunteers for the purpose of enforcing an inchoate- intention to confer a bounty. Where a trust has once been completely declared, or a gift completely made, equity will enforce the trust, or uphold the gift, whether the party applying for relief gave valu- able consideration or not. As Mr. Justice Kay said in Henry v. Armstrong (h), "As I understand it, the law is, that anybody of full age and sound mind, who has executed a voluntary deed by which he has denuded himself of his own property, is bound by hi& own act." And the same result follows if he has declared himself, or afforded clear evidence that he considered himself, a trustee of it in preesenti. At one time it was considered, that where a man was under the erroneous belief that he had made an actual gift of property, equity would construe that as evidence that he considered himself a trustee of it for the donee. It will, however, be seen from the illustrations given below that this view can no longer be supported. For the fact that a person supposes that he has denuded himself of property cannot reasonably be accepted as evidence that he considered himself a trustee of it. On the contrary, it is inconsistent with any such theory, for a man cannot at the same time believe that he has given away property, and yet that he holds it upon trust for another. In fact, the intention (h) 18 Ch. Div. 668. VOLUNTARY TRUSTS, ETC. 47 to confer a Yoluntary benefit is not suffioient ; there must be either a benefit actually conferred by a legal transmutation of the thing given from the donor to the donee, or to a trustee for the donee, or else evi- dence that the donor actually constituted himself a trustee of the property for the donee, which evidence is afforded either by the declarations of the donor, or from a course of conduct showing that he considered himself in the position of a trustee. With regard, however, to trusts based on valuable consideration, equity will enforce them, at the suit of a person privy to that consideration, wherever an intention appears to create a trust, whether in the present or the future. For equity considers that to be done which ought to be done ; and the settlor, having received value for the creation of a trust, will be made to carry out his bargain according to the- intention of the parties, however informally that intention may have been expressed, and even although no trustee has been named. For the court will never allow a trust to fail for want of a trustee, but will, if the parties have used language sufiiciently explicit to enable the court to gather their intentions, fasten tho trust on the estate, and, if necessary, appoint active trustees to carry it out. Even, however, where value is given, an inchoate trust will only be enforced at the instance of a person privy thereto ; and, notwithstanding some dicta which seem to indicate a contrary view, it is believed that there is no authority for supposing that a person who is made party to a contract for a settlement, but who is not privy to the consideration, can enforce 48 DECLARED TRUSTS. it (»'). Where, however, a person privy to the con- sideration seeks to enforce an executory trust, the •court will enforce it not only in his favour, but in favour of aU parties, volunteers included. Illust. — 1. Part vested in trustees and part not. — In Jeffries v. Jeffries (j), a father voluntarily conveyed freeholds to trustees upon certain trusts in favour of his daughters, and also covenanted to surrender copy- holds to the use of the trustees, to be held by them upon the trusts of the settlement. The settlor after- wards died without surrendering the copyholds, having devised certain portions of both freeholds and copy- holds to his wife. Upon a suit by the daughters to have the settlement enforced, it was held, that the court would carry out the settlement of the freeholds, for with respect to them the trust was executed, the title of the daughters complete, and the property actually transferred to the trustees ; but that it would not decree a surrender of the copyholds, for with respect to them the settlor had neither declared him- self a trustee nor had he transferred them to the trustees, but had merely entered into a voluntary contract to transfer them, which, being a nudum pactum, was of no greater validity in equity than at law(/i;). It will be borne in mind, that not only was there no evidence that the settlor considered that he had constituted himself a trustee, but the fact that (i) Dreio t. Marten, 2 H. & M. at p. 133 ; Fry, Spec. Perf. sect. 92; Tweddle v. Atkinson, 30 L. J., Q. B. 265; Ohitty on Contracts (ed. 1881), p. 54. (/) Or. & Pli. 138 ; and. see also Bhzey v. Flight, 24 W. E. 957. (/«) And see Marler v. Tommas, L. E., 11 Eq. 8. VOLUNTARY TRUSTS, ETC. 49 lie assumed to deal witli the property in his will was of itself strong evidence to the contrary. 2. Trust based on value, when enforceable by volun- teers. — By a marriage settlement, the wife's property was settled (after life estates in the husband and wife), in default of children, in trust for the wife if \she should survive the husband, but in the event of ^^"C the husband surviving the wife, then upon such trusts ^ as the wife should hy icill appoint, and in default of ..^ appointment in trust for her next of kin. There was ^^ no issue of the marriage, and the wife was past the ^^ age of child-bearing, and the husband and wife \ sought to have the capital of the trust fund paid to \_3 them, on the ground that, although the trust was based on value, the next of kin were mere volun- ^< teers. The Court of Appeal, however, refused to , permit this, Jessel, M. E., sayiag : " The fund has been transferred to the trustees. The fact of the next of kin being volunteers does not enable the trustees to part with it without the consent of their cestuis que trusts. That has been the rule ever since the Court of Chancery existed." And Cotton, L. J., added: "I assume that this trust would not have been enforced if it were still executory. But this trust is executed, and the next of kin have an interest as cestuis que trusts. It is immaterial that they are volunteers. The trust cannot be broken on that ac- oount " {I). In the recent case of Green v. Paterson {m) , (I) Paul V. Paul, 20 Ch. Div. 742. (m) 32 Oil. Div. 95 ; and to same effect, Morgan v. Chet- wynd, 31 Ch. Div. 596. U. E 50 DECLARED TRUSTS. it was held that the Lord Justice Cotton's assumption was correct, and that a covenant to settle future pro- perty contained in a marriage settlement could not be enforced by persons who were not privy to the con- sideration of marriage. 3. Another excellent example of the rule that a contract to create a trust, even where founded on valuable consideration, cannot be enforced by a volunteer, is afforded by the case of Colijear v. Lady Mul(jrave[n). There, a father, who had four natural daughters and a legitimate son, entered into an agreement with the son, whereby the father cove- nanted to transfer the sum of 20,000/. to a trustee- for the benefit of the four daughters, and the son covenanted to pay the father's debts. The son paid some of the debts, and died before the covenant by the father was performed, having by his will left the- father his sole legatee and executor. It was held, that the daughters could not force the father to per- form the covenant to settle 20,000/. upon them, as,, although the son gave value for the father's cove- nant, the daughters were not privy to that con- sideration. 4. Voluntary transmutation of equitable interests. — ■ In Gilbert v. Overton (o), A., having an agreement for a lease, executed a voluntary settlement assigning- all his interest in the agreement to trustees upon certain trusts. It was objected that he had not declared himself a trustee, nor intended to declare- n) 2 Eee. 81. o) 2 H. & M. 110. VOLUNTARY TRUSTS, ETC. 51 liimself one, and had not conveyed the leasehold pre- mises to the .trustees ; but Yice-Chanoellor Wood said : " In the inception of this transaction, there is nothing to show that the settlor had the power of obtaining a lease, before the time when he did so, after the execution of the settlement. There is, there- fore, nothing to show that the settlor did not by the settlement do all that it was in his power to do to pass the property." 5. In Kekeicich v. Manning {p), residuary personal estate was bequeathed to a mother for life, with re- mainder to her daughter absolutely. The daughter, on her marriage, assigned all her interest under the will to trustees upon certain trusts, not material to be stated, with a final trust in favour of her nieces. Although, qua the nieces, the settlement was volun- tary, it was held that it was good, on the ground that the daughter had done all she could do to divest herself of her interest under the will. For she had a mere equitable remainder, and the only way in which she could transfer it was by assign- ment. If she had been the legal owner of the fund it would have been necessary for her to transfer it in the proper way in the books of the bank ; but not being the legal owner, she did all she could do to transfer it {q). ip] 1 De G., M. & G. 176. (q) The chief difficulty is to determine what is a complete assignment and what is not. See Donaldson T. Donaldson, Kay, 711 ; Edwards v. Jones, 1 My. & Or. 226 ; and Pearson T. Amicable Assurance Co., 27 B. 229 ; and Fortescue v. Bur- nett, 3 My. & K. 36 ; Seioell v. King, 14 Oh. Div. 179; and Harding v. Harding, 34 W. E. 775. e2 S2 BECLAKKD TRUSTS. 6. Declaration of trust implied from conduct. — A testator bequeathed 2,000/. on certain. trusts, and he empowered his executor (who was also his residuary- legatee) to retain the amount in his hands unin- vested, he paying interest thereon at four per cent, per annum. After the testator's death, the executor, heing satisfied that the testator intended to bequeath 3,000/. and not 2,000/., said to the legatee's father : " It shall make no difference, and I will take care that he (the legatee) shall have 1,000/. more than he is entitled to by the will." Subsequently he signed a memorandum in these words : " By the will, &c. of the late S. G. the said J. G. (the executor) pays to T. W. (the legatee), the annual sum of 120/. by two equal payments, viz., the 6th July and the 6th January in each year, being interest at four per cent, on 3,000/." He also signed a further memo- randum, stating that he had told the legatee that he should make the 2,000/. up to 3,000/. ; and down to his death he in fact paid interest on the 3,000/. On these facts, it was held that the executor had effec- tually declared himself a trustee of the additional thousand. The late Lord Eomilly, in giving judg- ment, said : " The distinction between the cases is, that where a trust, though voluntary, is complete, the cestui que trust (although he cannot call on the court to complete a trust) may call on the court to execute one that is completed. I have, therefore, only to consider whether in this case the relation of trustee and cestui que trust exists. . . . The testator says to his son and executor, 'Tou may invest this or not as you please, but if you retain it. VOLUNTARY TRUSTS, ETC. 53 you must pay interest for it at four per cent.' Could lie (the executor) after proving his father's will, and taking possession of assets amply sufficient for pay- ment of the legacy, say he was not a trustee of that 2,000/.? That would be impossible. . . . Then what takes place is this : — Upon the death of the testator, his son (the executor) says, in substance, ' My father told me that he intended to bequeath the sum of 3,000/., not 2,000/., and he firmly believed that he had put 3,000/. in the wiU, whereas it was only 2,000/. ; and that being so, I intend to follow his directions.' Thereupon he signs this statement. How can I distinguish the 3,000/. from the 2,000/. ? Is he not in the same relation with respect to the 3,000/., as he would have been with regard to the 2,000/. ? If he had invested 2,000/. only, and not 3,000/., something might have been said. But sup- pose he had invested the 3,000/., would it not have been clear that there was a declaration of trust in respect of that 3,000/. though invested in his own name ? This paper is a clear declaration of trust of that 3,000/., and according to the permission con- tained in his father's will, he, instead of investing it, holds it in his own hands, and the whole fund stands in the same situation " (r) . 7. Again, a testatrix gave her personal estate to B. for the benefit of B.'s daughters. B. invested the produce, together with 1,000/. of his own moneys, in the funds in his own name, and afterwards treated and admitted the aggregate fund as held in trust for (r) Gee v. Lxdddl, 35 B. 621. 54 DECLARED TRUSTS. his daughters. On his death the fund was found mixed with like funds of his own. It was held that, under the circumstances, there was sufEcient to show that B. considered himself a trustee of the 1,000/. in favour of his daughters (s). 8. In Ex parte Duhosc {t) the alleged settlor wrote to an agent in Paris, authorizing him to purchase (and the agent accordingly did purchase) an annuity for the benefit of a lady whom he named ; but as the lady was married, and also deranged, the annuity was purchased in the name of the settlor. The settlor then sent the agent a power of attorney, authorizing him to transfer the annuity to the lady, which he did not do till after the settlor's death. It was never- theless held, that the settlor had considered himself a mere trustee for the lady, and had never intended the annuity for himself, but for her, and that there- fore the trust was good. 9. Imperfect gift not construed as declaration of trust. — On the other hand, although some judges have held that an instrument executed as a present assignment (but in reality not operative as such) is equivalent to a declaration of trust («), the balance (s) Thorpe v. Owen, 5 B. 224 ; and see also Armstrong v. Timperon, W. N. 1871, p. 4. (t) IS Ves. 140 (otherwise Ex parte Pye) ; and see also Be Beilasis, L. E., 12 Eq. 218. (m) In Richardson v. Richardson, L^ E. 3 Eq. 686, Vioe- Clianoellor Wood (afterwards Lord Halaerley), and in Morgan V. Malleson, L. E. 10 Eq. 473, Lord Eomilly, and in Badder- ley V. Badderley, 9 Ch. Div. 113, Vice-Chanoellor Malins. The former very learned j udge said : " An instrument executed as a present and complete assignment, not being a mere covenant to assign on a future day, is equivalent to a declaration of trust; tlie IMPERFECT GIFTS. Oi> •of authority is unmistakeably the other way, on the ground that an intention to create a trust is essential to the creation of one ; and that when a man purports to make a gift or an assignment, he cannot reason- -ably he supposed to have intended to declare himself a trustee — a character which assumes that he retains the property. Thus in Antr obits v. Smith («), the real distinction that should be made is between an agreement to do something when called upon, something distinctly- expressed to be future in the instrument, and an instrument ■which ailects to pass everything, independently of the legal ■estate The expression used by the Lord Justice in Kekewich v. Manning is this : ' A declaration of trust is not confined to any express form of words, but may be indicated by the character of the instrument.' Eeliance is often placed on the circumstance that the assignor has done all that he •can — that there is nothing more for him to do ; and it is con- tended that he must, in that case only, be taken to have made a complete and effectual assignment. But that is not the sound doctrine on which the case rests, for )/ there he an actual declaration of trust, although the assignor has not done •all he could do — for example, although he has not given notice to the assignee, yet the interest is held to have effec- tually passed as between the donor and the donee. The difference must rest on this — aye or no, has he constituted himself a trustee?" It will be perceived that the learned Vice- Chancellor did not dissent from or add to the recognized rule stated in Article 6. Where he differed from the previous authorities was in deciding that an instrument, purporting to be an assignment, although void as such, was nevertheless _good as a declaration of trust. This view has been expressly dissented from by Vice-Chanoellor Bacon in Warriner v. Rogers, L. E. 16 Bq. 340, and by Sir George Jessel, M. E., in Richards v. Delbridge, L. E. 18 Eq. 11, and by Vice-Chan- cellor Hall in Breton v. Wolvern, 19 Oh. Div. 416. The ■decision also seems to, be inconsistent with Lord Cranworth's , j udgment in Jones v. TjOcIc, infra, and with Heartley v. Nichol- son, L. E. 19 Eq. 233, and Re Shield, Pethybridge v. Burrow, W. N. 1885, p. 83, and it is respectfully submitted, that both on principle and authority, the law as laid down by the Master of the EoUs in Richards v. Delbridge is accurate. {x) 12 Ves. 39. 66 DECLARED TRUSTS. alleged settlor made tlie following endorsement on £t share held by him in a public company : "I do- hereby assign to my daughter B. all my right, title and interest of and in the enclosed call, and all other calls, in the F. and 0. Navigation." The share was not handed over to the daughter, and the endorse- ment did not operate as a valid assignment of the share; but it was attempted to enforce the assign- ment by contending that the endorsement operated as a valid declaration of trust. The court, how- ever, rejected this view, the Master of the Rolls saying : " Mr. Crawfurd (the alleged settlor) was not in form declared a trustee, nor was the mode of doing what he proposed in his contemplation .... He meant a gift, and there is no case in which a party has been compelled to perfect a gift which in the mode of making it he has left imperfect." 10. Agaia, a settlor had children by a first wife^ and one son (an infant) by a second wife. One day returning from a journey, the infant's nurse said, "You have come back from Birmingham, and have not brought baby anything ; " upon which the- settlor said, " Oh ! I gave him a pair of boots, and now I will give him a handsome present." He then went upstairs and brought down a cheque which he had received for 900/., and said, "Look you here, I give this to baby; it is for himself; I am going to put it away for him, and will give him a great deal more with it ; it is his own, and he may do what he likes with it." He then put the cheque away. He had previously told his solicitor that he intended adding 100/. to the cheque, and investing it for the IMPERFECT GIFTS. 57 infant's benefit. A few days after the above took place,, be suddenly died, leaving the cbild penniless. Tbe cbild's mother contended, that the settlor had made a valid declaration of trust in favour of tbe cbild. Lord Cran-worth, however, said («/) : " I regret to say that I cannot bring myseK to think, either on principle or authority, there has been any gift or any valid declaration of trust. No doubt a gift may be made by any person, sui juris and compos mentis, by con- veyance of real estate, or by delivery of a chattel, and there is no doubt also that, by some decisions,, a parol declaration of trust of personalty may be per- fectly valid, even when voluntary. If I give any chattel, that of course passes by delivery ; and if I say, expressly or impliedly, that I constitute myself a trustee of personalty, that is a trust executed and capable of being enforced without consideration. The- cases all turn upon the question whether what has been said was a declaration of trust or an imperfect gift. In the latter case the parties would receive no- aid from a court of eauity if they claimed as volun- teers. But when there has been a declaration of trust, then it will be enforced, whether there has been consideration or not." 11. So in Milroij v. Lord {z), Lord Justice Turner laid it down that, " In order to render a voluntary settlement valid and effectual, the settlor must hav& done everything which, according to the nature of {y) Jones v. Locke, L. E., 1 Ch. 25 ; and see also Marler v.. Tommas, L. E., 17 Eq. 8. , (z) 4DeG., P. & J. 264. •58 DECLARED TEUSTS. the property comprised in the settlement, was neces- sary to be done in order to transfer the property, and render the settlement binding upon him. He may of course do this by actually transferring the property to the persons for whom he intends to pro- vide, and the provision will then be effectual ; and it will be equally effectual if he transfers the property to a trustee for the purposes of the settlement, or de- clares that he himself holds it in trust for those pur- poses. But in order to render the settlement binding, one or other of these modes must (as I understand the law of this court) be resorted to, for there is no ■equity in this court to perfect an imperfect gift." 12. An excellent example of the rule now under •consideration is afforded by the recent case of Tetliy- hriclge v. Burroios (a) . A. informed F. that he intended to give her a debenture bond for 1,000^. Shortly afterwards he signed the following memorandum: — " I wish to communicate to my executors, that I have to-day given to P. my 1,000^. debenture bond of the S. and L. Co. But as I shall require the annual dividends to meet my necessary expenses, I retain the document in my possession for my lifetime, requesting you on my decease to hand it over to F., -and communicate to the secretary of the railway ■company relative to the transfer of the said bond being entered in their books. Given under my hand this 9th day of February, 1882. As witness my hand, Gr. S. P.S. — You wiU find the bond in my deed- box, attached to this memorandum." After the testa- (a) 53 L. T. 5 ; and see also Vincent v. Vincent, 35 W. E. 7. IMPERFECT GIFTS. 59 tor's death, the certificate was found as stated. Held, reversing Pearson, J., that the memorandum was not -equivalent to a declaration of trust, and that F. was not entitled to the bond. 13. It was at one time thought that there was an •exception (or a seeming exception) to this principle in the case of husband and wife. In Grant v. Grant {b),^e Master of the Eolls said: "I appre- hend the fact of the transaction taking place between husband and wife, instead of between strangers, makes no difference further than this, that in the case of a gift of chattels from one stranger to another, there must be a delivery of the chattels in order to make the gift complete, whereas in the case of husband «nd wife there cannot be a delivery, because, assum- ing they are given to the wife, they still remain in the legal custody of the husband." Vice- Chancellor Malins also took the same view in Badderleij v. Badderleyic), and was followed by Yice-Chancellor Bacon in Fox v. Saivkes [d). However, the more recent decision of Vice-Ohancellor Hall, contra, in Breton v. Wolvernie), has thrown considerable doubt on the soundness of these cases. There, a husband, by three letters written and signed by him and handed to his wife, gave her furniture and other .articles for her sole and absolute use. It was con- tended on the part of the wife, that the husband had by these letters constituted himself a trustee for the (&) 34 Bea. 623. [c) 9 Oh. Div. 113. [d) 13 Ch. Div. 822. [e) 19 C'li. Div. 416. 60 DECLABED TRUSTS. wife, because it was impossible for the husband to make a gift of them to her, inasmuch as the legal interest would have at once revested in him jure mariti, and that therefore there was a diiierence between an imperfect gift to a stranger and an attempted gift to a wife. However, the learned Yice-Ohaneellor in an elaborate judgment, while expressing his sorrow that he could not decide in favour of the wife, " because it is a monstrous state of the law which prevents effect being given to such gifts," found himself unable to support the gift, and pointed out that the above quotation from the judg- ment of the M. El. in Grant v. Grant was merely a dictum, and that in his opinion Badderky v. Badderley and Fox v. Hawkes could not be supported. The point has now lost some of its interest, from the fact that since the passing of the Married Women's Pro- perty Act, 1882, gifts made by a husband to a wiffr are as valid as gifts made by one stranger to another. 14. Form immaterial where parties to valuable consideration sue. — With regard to trusts based on valuable consideration, and which are sought to be enforced by persons privy to that consideration, the following examples may serve to elucidate the doc- trine of the court. A marriage settlement contains a covenant by the intended husband that he will transfer to the trustees any property which may accrue to him in right of his wife during the mar- riage. Upon any property so becoming vested in him, he immediately becomes a trustee of it, upon trust to transfer it to the trustees ; and until that is done he himself holds it upon the trust declared in. TKUSTS BASED ON YALTJE. 61 the settlement (/). Not only, therefore, is there an action for breach of covenant maintainable against him, but the actual property is burdened and charged •with the executory trust {g), and any volunteer taking it would take it burdened with that trust; and so would a purchaser if he had notice of the trust, as will be seen hereafter. 15. As an example of how much more equity regards the intention than the/orw, the case of Lee v. Lee (Ji) may be cited. There, by an ante-nuptial -agreement made in consideration of the marriage between the plaintiff and the lady who afterwards became his wife, the wife's parents agreed to appoint to her a share in real estate, and the plaintiff agreed that he would settle such share upon certain trusts. The wife was a party to, and executed, the agree- ment, but did not expressly covenant to settle the property. She afterwards died without the property having been settled in accordance with the agree- ment, and the property descended at law to her heir. It was, however, held that the obvious intention of all parties to the agreement was that the property should be settled, and although the wife did not in express terms undertake to settle it, yet as she was a party to the agreement she was bound to do all in her power to carry it out, and that consequently the (/) Lewis V. MaddocJcs, 8 Ves. 150 ; Wellesley v. Wellesley, 4 M. & 0. 561 ; Lyster v. Burroughs, 1 Dr. & W. 149. {y) Lewis v. Maddochs, supra ; Eastie v. Hastie, 2 Cli. Div. ^04 ; Agar v. George, ib. "706 ; Cormell v. Keith, 3 Oh. Diy. "767. {h) 4 Ch. Div, 175. 62 DECLARED TRUSTS. proj)erty was bound by the executory trust, and the- heir (at the suit of a person privy to the considera- tion) was bound to do all things necessary for getting- the property settled according to the agreement. 10. No Trustee. — Where, before the Married Women's Property Act, 1882, money was bequeathed to a married woman for her separate use, it became- at law the husband's property ; but in equity he was regarded as a mere trustee for his wife («). 17. So if the trustee appointed, fails, either by death (&), or disclaimer (/), or incapacity (w) , or other- wise (w) , the trust does not fail, but fastens upon the conscience of any person (other than a purchaser for value without notice) into whose hands the property comes (o) ; and such person holds it as a passive trustee, whose duty is to convey it to new trustees- properly appointed ( p) . 18. Again, if a testator directs a sale of lands and a division of the proceeds, but names no person to sell, and does not in terms devise the property, it descends at law to his heir ; but the latter is regarded in equity as a mere passive trustee, who is bound to (i) Bolf V. Budder, Bumb. 187 ; Tappenden v. TTafe/i, 1 Ph. 352 ; Fritcliard v. Ames, T. & E. 2:22 ; Oreen v. Carlill, 4 Oh. Div. 882 ; and see Bennett v. Davis, 2 P. W. 216. (7c) Moggridge v. Thackwell, 3 B. 0. 0. o'2S ; Att.-Gen. v.. Downing, Amb. 552 ; Tempest v. Lord Camay s, 35 Beav. 201.. {I) Backhouse v. Backhouse, quoted by Le-w. 678 ; Bohson v. Flight, 4 De G., J. & S. 608. (m) Sarley v. Clockmakers' Co., 1 B. 0. 0. 81. (n) Att.-Qen. v. Stephens, 3 M. & K. 347. (o) See per Wilmot, 0. J., Att.-Qen. v. Lady Downing,. "Wil. 21, 22. {p) Bohson V. Flight, 4 De G., J. & S. 608. WHAT PROPERTY THE SUBJECT OF A TRUST. 63- convey tlie legal estate to trustees appointed by the court for the purpose of carrying out the trust (q) . Art. 9. — What Property is capable of being made the Subject of a Trust. All proj)erty, real or personal, legal or equitable, at home or abroad, and wbether in possession or action, re- mainder, reversion, or expectancy, may be made the subject of a trust, unless the policy of the law or any statutory enactment prohibits the settlor from parting with the beneficial interest in it ; or, in the case of real estate, unless the tenure under which it is holden is inconsistent with the trust sought to bo created (r). Illust. — 1. Equitable Interests. — A person, hold- ing an agreement for a lease, assigned all his inte- rest under it to trustees upon certain trusts. Here, although the legal term was not in the settlor, it was held to he a good settlement, because he had con- veyed his equitable interest in the property (s). {q) lb., and Pifi v. Pelhain, Free. 134. (r) See Nelson v. Bridport, 8 B. 574; and Allen T. Bewsey, 7 Oh. Div. 453. (s) 2 H. & M. 110; and see also Knight v. Bowyer, 2li Beav. 635. '64 DECLARED TRUSTS. 2. Choses in Action. — A. owes 1,000J. to B. B. assigns this debt to trustees upon certain trusts. This transaction is perfectly good [t). 3. Reversionary Interests. — A. settled upon his wife and children certain real estate to which, under the will of his uncle, he was entitled in reversion. Held good {ii). 4. Expectancies. — In Wethered v. Wethered (x) an agreement was entered into between two sons, to divide equally whatever property they might receive from their father in his lifetime, or become entitled to under his will, or by descent, or otherwise. It was held that this agreement was binding, although [t] Prior to tlie Judicature Act, 1813, debts and other legal choses ia action were not assignable at law on the ground (as put by Lord Coke), that it " would be the occasion of multiplying of contentions and suits, of great oppression of the people, and the subversion of the due and equal execu- tion of justice " (10 Co. 48). But even at law negotiable in- struments (as debentures, bills of exchange, and promissory notes made negotiable) were exceptions to the rule ; and so were all contracts where a novation took place, that is to say, where both parties to the original contract assented to the transfer of the interest of one of them. [Buron v. Husband, 4 B. & Ad. 611). Equity, however, almost always, from, its earliest days, disregarded the legal doctrine, and freely en- forced contracts for the sale of choses in action ; and now, by 8 & 9 Vict. c. 106, s. 6, contingent and future interests and possibilities, coupled with an interest in real estate, may be granted or assigned at law. By 30 & 31 Vict. o. 144, poli- cies of life assurance may be legally assigned, and by 31 & 32 Vict. c. 86, a similar relaxation of the law was intro- duced in favour of marine policies ; and finally, by the 6th section of the Judicature Act, 1873, debts and other legal choses in action may be assigned at law, where the assign- ment is absolute and not by way of charge only. (u) Shafto V. Adams, 4 Gife. 492. {x) 2 Sim. 183. WHAT PKOPEETY THE SUBJECT OF A TRUST. 65 made in respect of a mere possibility, and V.-O. Shadwell said : " It is clear that if the testator meant that his devisee should have the personal enjoyment •of his bounty, he might so devise as to stint the en- joyment of the devisee, and restrain him from alienating the subject of the gift ; but that if the testator did not so devise, it must be intended that he meant that his devisee should not be so stinted, but should have the full enjoyment of the property, and that it should be liable to all his antecedent ■debts and all his antecedent contracts ; and therefore, that where there was a general devise, the property was liable to be encumbered in any way that the devisee might think proper either before or after he took it "(«/). 5. Property inalienable by reason of public Policy. — As instances of property not assignable on the ground of public policy, may be mentioned salaries ■or pensions given for the purpose of enabling persons to perform duties connected with the public service, or to enable them to be in a fit state of preparation to perform those duties. In Grenfell v. Dean and Canons of Windsor (z), the Master of the Rolls ex- 3)lained the true reasons for this doctrine. In that case, a canon of Windsor had assigned the canonry and the profits to the plaintiff to secure a sum of money. There was no cure of souls, and the only -duties were residence within the castle and attend- (j/) See also Bechley v. Newland, 2 P. W. 182 ; Harwood v- Tooke, 2 Sim. 192 ; and Higgins v. Hill, 56 L. T. 426. (z) 2 Beav. 354. U. F 66 DECLARED TRUSTS. ance in the chapel for twenty-one days a-year. In giving judgment for the plaintiff and -upholding the- assignment, his Lordship said: "If he (the Canon) had made out that the duty to be performed by him was a public duty, or in any way connected with the public service, I should have thought it right to attend very seriously to that argument, because there are various cases in which public duties are concerned in which it may be against public policy that the income arising from the performance of those duties should be assigned ; and for this simple reason, because the public is interested not only in the performance from time to time of the duties, but also in the fit state of preparation of the party having to perform them. Such is the reason in the cases of half -pay, where there is a sort of retainer, and where the payments which are made to officers from time to time are the means by which they — being liable to be called into public service — are enabled to keep themselves in a state of preparation for performing their duties." So, in Davis v. Duke of Marlho- roucjh {a), the Lord Chancellor said : " A pension for past services may be aliened, but a pension for sup- porting the grantee in the performance of future duties is inalienable." The emoluments of ecclesi- astical livings were expressly made inalienable by 13 Eliz. c. 20, and 57 Geo. 3, c. 99. 6. Property inalienable by Statute. — Some classes of property are expressly made inalienable by statute. Thus, in Davis v. Duke of Marlborough, a pension was (a) 1 Sw. 74. WHAT PROPERTY THE SUBJECT OF A TRUST. 67 granted by statute to the duke and his successors in the title " for the more honourable support of the dignities." It was held, that the object of parlia- ment being, that " it should be kept in mind that it was for a memento and a perpetual memorial of national gratitude for public services," it was in- alienable. Pay, pensions, relief, or allowance pay- able to any ofEcer of her Majesty's forces, or to his widow, or to any person on the compassionate list, are also made unassignable by statute (b) . So also is the pay of seamen in the navy (c), and half-pay in the marine forces (d) ; but it would seem that the right to pay actually due at the date of the assign- ment is assignable (e). Salaries or pensions, not given in respect of public services, are freely assign- able (/). 7. Trust inconsistent with tenure. — Where, with respect to copyhold lands, there is no custom to create an estate tail in the manor of which they are holden, an equitable estate tail cannot be created by way of trust : for that would be inconsistent with the tenure (in other words, with the conditions) under which the lands are holden (g). But, on the other (b) 47 Geo. 3, sess. 2, o. 25, ss. 1—14. (c) 1 Geo. 2, c. 14, s. 7. (d) 11 Geo. 4 & 1 Will. 4, c. 20, s. 47. (e) Ibid. s. 54. (/) Feisiel v. St. John's College, 10 Beav. 491 ; and for other cases bearing on assignments of salaries and pensions, see Stone Y. Lidderdale, 2 Anst. 533 ; Arhuthnot y. Norton, o Moore, P. 0. 0. 219; Oarew y. Cooper, 10 Jur. N. S. 429 ; Alexander v. Duhe of Wellington, 2 Euss. & My. 35. [g) Alien v. Bewsey, 7 Ch. Div. at p. 466. f2 68 DECLARED TRUSTS. hand, where a trust is not inconsistent witli the custom of a manor, it will he valid, although legal estates to the same extent could not he created {h). 8. Trusts 0^ foreign land. — The same principle holds in the case of lands situated abroad, even if such lands are capable of being settled by way of special trust at all, a point which is not free from doubt (?'). Art. 10. — The Legality of the Expressed Object of the Trust. a. The expressed object of a trust must be such as is consistent with the policy of the law (as distinguished from mere technical rules of pleading or tenure) (^"), and must be such as is not opposed to any statutory enactment. Where a trust contravenes these principles, it will not vitiate other trusts or provisions in the settlement unconnected with such illegal object (?), but will itself be wholly void. (A) Allen v. Bewaey, 1 Ch. Div. at p. 466. (i) Glover v. Stroihoff, 2 B. 0. C. 33 ; Nelson v. Bridport, 8 B. 570 ; Martin v. Martin, 2 E. & M. 567. (7c) Lew. 74; Att.-Qen. v. Sands, Hard. 494; Pawletty. Att.-Oen., ib. 469; Burgess v. Wheate, 1 Ed. 595; Duke of Norfolk's case, 3 Oh. Cas. 35. (i) S.Y. W.,3 K. & J. 382; Cartivright v. Cartwright, 3 D. M. & G. 982 ; Merryweather v. Jones, 4 GifE. 509 ; Cocks- edge V. Cocksedge, 14 Sim. 244. The reader must not, how- •CTsr, assume from this, that where a trust is void under the lEGAlITY OF EXPRESSED OBJECT OE THE TKUST. 69 /S. The chief cases in which trusts have been held invalid on account of their expressed objects being contrary to the policy of the law, are where those ob- jects have been unreasonable accumu- lation (m), or the tying up of property for an unreasonable period ; the con- tinued personal enjoyment of property in derogation of the rights of creditors under the bankruptcy laws(w); restric- tions upon that power of alienation which the law has annexed to the owner- ship of property (o) ; the promotion or encouragement of immorality (/>), fraud or dishonesty, and general restraint of marriage (§') (unless of a second mar- riage) (r). The objects forbidden by rale against perpetuities, subsequent remainders are vaKd, and are merely accelerated. All remainders after a remote- gift are void. (m) Gadell y. Palmer, Tud. L. 0. Oonv. 424 ; Griffith v. Yere, ib. 497. [n) Graves Y. DolpJiin, 1 Sim. 66 ; Snowdon v. Dales, 6 Sim> 524 ; Brandon v. Bobinson, 18 Ves. 429. (o) Floyer v. Bankes, L. E., 8 Eq. 115; Syhes T. Sylces, L. E., 13 Eq. 56. {p) Bladwell v. Edwards, Ore. Eliz. 509. (2) See per WUmot, L.C.J. , in Low v. Peers, WU. Op. & Jud. 375 ; Morley v. Beynoldson, 2 Ha. 570 ; Lloyd v. Lloyd, 2 Sim., N. S. 255; Story, 283. (r) Marples v. Bambridge, Mad. 590; Lloyd v. Lloyd,. supra; Graven v. Brady, L. E., 4 Ch. App. 296; and, as to second marriage of a man, Allen v. Jackson, 1 Ch. Div. 399. 70 DECLARED TRUSTS. statute are too numerous to mention, but those which chiefly arise with refer- ence to trusts are such as are simoniacal or in derogation of the Mortmain Acts. Illust. — 1. Conditional limitations. — At common law a fee simple estate could not (except by execu- tory devise) be made to shift from one person to another; but before the Statute of Uses the same object was gained by means of shifting uses, which were then mere equitable interests; and by means of that statute it was rendered allowable at law. 2. Special trust of chattels. — So, again, a chattel cannot at law be limited to one for life, with remain- der to another absolutely ; but the same object can nevertheless be attained through the medium of a trust (s). 3. Period of suspended vesting of beneficial interest. — At law the freehold must always be in some per- son in esse, which is often expressed by saying, that a remainder requires a particular estate of freehold to support it. This is, however, a rule of tenure, the reasons for which do not now apply ; and a trust im- posed upon the legal owner to deal with the equitable freehold in a particular way would be perfectly valid, although it provided for a period of suspended vest- ing — as, for instance, a trust to accumulate the rents and profits. But if, on the other hand, a trust is inconsistent with the conditions or customs under (s) Lew. 75. LEGALITY OF EXPRESSED OBJECT OF THE TRUST. 71 ■whicli land is held {ex. gr., a devise of copyholds to A. in fee, in trust for B. in tail, where the custom of the manor does not allow the copyholds to be en- tailed), the trust will be void (t). 4. Eule against perpetuities. — It is against public policy that property should be settled on special trusts for an indefinite period, so as to prevent it being freely dealt with ; and consequently the power of doing so has been curtailed by a rule known as the rule against perpetuities. That rule is, that every future limitation, whether by way of legal remainder, executory devise, or trust of real or per- sonal property, the vesting of which absolutely as to personalty, or in fee or tail as to realty, is postponed beyond lives in being and twenty-one years after- wards, (with a further period for gestation where it exists), is void(t(). This rule does not, however, ■apply to interests following estates tail, as they can be barred («) ; nor to charitable bequests [y) ; nor to parliamentary grants for distinguished services ; nor to trusts for the accumulation of income for payment of the settlor's debts (s) . It is impossible within the scope of this work to go into the numerous questions (f ) But see as to trusts wtioh. would, if legal estates, be void as contrary to the customs of a manor, Allen v. Bewsey, 7 Oh. Div. 453. (u) Cadell v. Palmer, 1 01. & Fin. 372 ; London & S. W. Ry. Co. V. aomm, 20 Ch. Div. 562. (x) Heaseman v. Pearce, L. E., 7 Oh. App. 275. {y) Christ's Hospital v. Grainger, 1 M. & Gr. 460. (z) Lord Southampton v. Lord Ilertford, 2 V. & B. 54, 65 ; Bateman v. Hotckin, 10 B. 426. 72 DBULAKED TRUSTS. which arise under this rule, for the elucidation of which the reader is referred to Mr. Lewis's learned Treatise on Perpetuities. All that need he said here is, that in considering whether limitations or trusts- offend against the rule (or are in legal language "too remote"), possible events are to be considered. If the trust mm/ in any event he too remote, it will be void, notwithstanding that in the events which have actually happened it would have vested within the prescribed period. In short, to be good, the limitation must be one of which, at its creation, it could be predicted that it must necessarily vest within the prescribed period (a). It may also be mentioned, that if the vice of remoteness affect an unascertained number of members of a class, it affects the class as- a whole. Thus, where a trust is for A. for life, and after her death for her children who may attain twenty-one, and the issue pe?' stirpes of such of them as shall die under age, wMeh issue shall attain twenty- one, the whole of the limitations after the life estate of A. are void. For although the children must attain twenty-one within the prescribed period, the- issue of deceased children may not; and the gift being to a class as a whole, the one cannot be sepa- rated from the other (5). "Where there is a valid trust, with a gift over in certain contingencies, which is void for remoteness, the valid trust remains un- (a) Dungannon v. Smitli, 12 CI. & F. 546 ; S^nithY. Smithy L. E., 5 Oil. App. 342. (J) Pearlca v. Moseley, 5 App. Cas. 714. LEGALITY OF EXPRESSED OBJECT OF THE TRUST. 73- affected (c) . All remainders after a gift void for remoteness are themselves void {d). 6. The Thellusson Act. — At common law, the power of tying up money so as to accumulate at compound interest, was co-extensive with the period for which property might be tied up under the rule against perpetuities ; viz., during any number of lives in being, and twenty-one years afterwards. The late Mr. Thellusson having, by his will, directed his personalty to be invested in land, and the rents of the land so bought and of his other real estate to be accumulated during the lives of all his descendants living at his death (e), the attention of Parliament was called to the unreasonable nature of such a power. Accordingly, by the statute 39 & 40 Greo. 3, c. 98 (commonly known as " The Thellusson Act"), the period allowed by the common law for accumulations was further restricted to the life or lives of the grantor or grantors, settlor or settlors ; or (not ctnd) twenty-one years from the death of any grantor, settlor, devisor, or testator ; or during the- minorities of any persons who shall be living, or en ventre sa mere, at the time of the death of the grantor, settlor, devisor, or testator ; or during the minorities of any persons who, under the instrument directing the accumulation, would for the time being. (c) Ooodier v. Johnson, 18 Cli. Div. 441. Tor otlier re- cent examples of the question, whetlier or not a trust is void for remoteness, the reader is referred to Re Sevan, 34 Ch. Div. 716, and Be Coppard, 35 Ch. Div. 350. (d) Cambridge v. Bouse, 8 Yes. 24, and see Watson v. Young, 28 Ch. Div. 436. (e) Thellusson v. Woodford, 11 Yes. 112. 1 1 ■ UECLAllED TRUSTS. if of full age, he entitled to the income directed to be accumulated. The statute, however, does not extend to any provision for payment of debts, or for raising portions for the children of the settlor, grantor, or •devisor, or of any person taking any interest under the instrument directing such accumulations, nor to any direction as to the produce of timber upon any lands. It might perhaps be thought that by analogy to the action of the courts with regard to trusts which transgress the common law period, a trust which endeavoured to go beyond the period allowed by the statute would be wholly void ; but this is not so. The statute is merely prohibitory of accumula- tions going beyond the period prescribed by it, and being in derogation of a common law right, is con- strued strictly ; consequently, as accumulations which ■exceed that period, but are within the common law period, are not contrary to public policy as defined by common law, such a trust is good pro tanto (/). If, however, the trust is to accumulate beyond the common law period, it is altogether void {g). 6. Settlements against policy of bankruptcy law. — A trust, with a proviso that the interest of the cestui que trust shall not be liable to the claims of creditors, is void so far as the proviso is concerned ; and if it can be only ascertained that the cestui que trust was intended to take a vested interest, the mode in which, or the time when, he was to reap the benefit, is im- (/) See Oriffiih v. Vere, Tud. L. C. Conv. 497, and cases there noted. {g) Tud. L. 0. Oonv. 506, notes on Griffiths v. Vere, citing Boughton v. James, 1 Ooll. 26, and other cases. LEGALITY OF EXPRESSED OBJECT OF THE TRUST. 75 material, and the entire interest may either be dis- posed of by the act of the cestui que trust, or may enure for the benefit of his creditors under the opera- tion of the bankruptcy law (/*) . The question gene- rally depends upon whether, on the decease of the cestui que trust, his executors would have a right to call upon the trustees retrospectively to account for the arrears (t). Of com-se, however, a trust to A. until he becomes bankrupt, or aliens the property, and then over to B., is good (A) ; but a man cannot make a settlement upon himself until bankruptcy, -and then over {}), not even by an ante-nuptial mar- riage settlement (where it might fairly be urged to be part of the wife's terms of the marriage bargain) ; for the express object of such a trust is to take the settled property out of the reach of the bankruptcy laws, an object contrary to public policy and there- fore void {m). 7. Restraint on alienation. — Trusts framed with ihe object of preventing the barring of entails or imposing restrictions on alienation of property, are contrary to the policy of the law, and are therefore [li) Lew. 87. For example, see Younghushand v. Giahorne, 1 Coll. 400 ; Green v. Spicer, IE. & M. 395 ; Graves v. Dol- phin, 1 Sim. 66 ; Piercy v. Roberts, 1 M. & K. 4 ; Snowdoii v. Dales, 6 Sim. 524. (») See Be Saunderson's Trusts, 3 K. & J. 497. [k) See Billson v. Crofts, L. E., 15 Eq. 314; Be Alwyn's Trusts, L. E., 16 Bq. 585, and cases therein cited. (l) Knight v. Brown, 7 Jur., N. S. 894; Brooher v. Pearson, 57 Beav. 181 ; Be Pearson, 3 Gh. Div. 807. (to) Higginbottom v. Holme, 19 V. 88; Ex parte Hodgson, ib. 208. 76 DECLARED TRUSTS. void («) ; with the single exception that trusts limit- ing the power of married women to alienate their separate property during coverture, are regarded as valid. 8. Trusts for future illegitimate cMldren. — Where a man hy deed creates a trust in favour of future illegitimate children (putting aside the objection as to want of certainty in the oestuis que trusts), the trust will be void as being contrary to public policy, and conducive to immorality (o). Similarly, a trust hy will in favour of the future illegitimate children of another, would clearly be a direct encouragement to such other to continue his illicit intercourse after the- testator's death, and would be therefore void {p). The same objection does not, however, apply ta the case of a testator creating a trust by will in favour of his oivn future bastards. Thus, in Occleston V. FuUalove {q), a testator by his will gave a share of the proceeds of his residuary estate to his reputed children, Catherine and Edith, " and all other children which I may have, or be reputed to have, by the said M. L., now born, or hereafter to be born." This gift (ra) Floyer v. Sankes, L. E., 8 Eq. 115; SyJces v. Sylces, L. E., 13 Eq. 56; aad as to alienation, Snowdon v. Pales, 6 Sim. 524 ; Cfreen v. Spicer, 1 B. & M. 395 ; Graves \. Dol- phin, 1 Sim. 66 ; Brandon v. Robinson, 18 Ves. 429 ; Ware v. Oann, 10 B. & 0. 433 ; Sood v. Oglander, 34 B. 513. (o) Bladwell v. Edwards, Cro. Eliz. 509 ; Moo. 430 ; and see per Mellish, L. J., in Occleston v. FuUalove, L. E., 9 Oh. Ap. 147. (p) Metliam v. DuJce of Devon, 1 P. W. 529; Dorin v. Darin ^ L. E., 7 H. L. 568 ; Re Byles, 1 Oh. Div. 282. {q) L. E., 9 Oh. Ap. 147 ; and see also Re Goodwin, L. E.>, 17 Eq. 345. LEGALITY OF EXPRESSED OBJECT OF THE TKUST. 77 in favour of future-born children was held valid, and Lord Justice James said : "If there he any induce- ment to wrong, the law can and does deal with it. If there be a covenant for a turpis causa, the cove- nant is void. If there be an illicit condition, prece- dent or subsequent, to a gift, it either avoids the -gift or becomes itself void. If the gift requires or implies the continuation of wrong-doing, that is in substance a condition of the gift, and falls within the rule of the condition. But how can that apply to an instrument like a will, with reference to gifts taking effect at the death in favour of persons then in existence ?" And Lord Justice Mellish said : " In the present case, the will being the will of the puta- tive father himself, it is impossible that it can en- ■courage an immoral intercourse after his death. If the bequest is to be held to be contrary to public policy, it must be because it tended to promote an immoral intercourse in his lifetime. There was no evidence that M. L. knew that the will was made ; and if she did know it, she must also have known that it could be revoked at any moment. Then, can it be said that the testator himself would be en- couraged in immorality by having the power to make a will in favour of his future children. I cannot see that he would ; or, at any rate, I think that this is too uncertain to be made a ground of decision. I am of opinion that a wiU. no more comes into opera- tion for the purpose of promoting immorality, or for effecting something contrary to pubho policy during a testator's lifetime, than it does for any other pur- pose." 78 DECLAEEU TRUSTS. 9. Separation deeds, — ^A trust to take effect upon the future separation of a husband and wife is void, as being contrary to public morals (r) ; but a trust in reference to an immediate separation, already agreed upon, is good and enforceable (s). If, however, the separation does not in fact take place, the trust be- comes wholly void {() . The reason of all this is at once obvious, when we consider that a provision for hus- band or wife, to take effect upon a future separation , is a direct encouragement to misconduct which may eventuate in a separation ; whereas, when a sepa- ration is actually agreed on — when both parties have decided that they wiU. no longer remain together — there can be no encouragement to marital misconduct in agreeing to the distribution of their income in a particular manner and for their mutual benefit and advantage. .10. Trusts in general restraint of marriage. — Where property is settled in trust for a woman until she marry a man with an income of not less than 500^. a-year (««), or until she marry any person of a parti- cular trade («), and then over in trust for another, the latter trust is bad, as its object, as gathered from its pro- bable result (y) , is to restrain marriage altogether. If, (r) Westmeath v. Westmeath, 1 Dow., N. S. 519; Proctor v. Itobinson, 35 B., and on Ap. 15 W. R. 138. (s) Wilson Y. Wilson, 1 H. L. Cas. 538 ; 5 H. L. Cas. 40 ; Vansittart v. Vansittart, 2 D. & J. 249 ; Jodrell v. Jodrell, 9 B. 45 ; and see 14 B. 397. {t) Bindley v. Mulloney, L. E., 7 Eq. 343. (m) Sm. E. & P. Prop. 80 ; Story, 280—283. (x) Ibid. {y) Sm. E. & P. Prop. 80 ; and Story, 274—283 ; Lloyd v. Lloyd, 2 Sim. N. S. 255. LEGALITY OF EXPRESSED OBJECT OF THE TEUST. 7& however, the trust over is to take effect only upon the first beneficiary marrying a particular person, it would be good, as it would not be in general restraint of marriage (s), 11. Restraint on second marriage. — So where («) a person by her will gave her residuary estate to trus- tees, upon trust to pay the income to her nephew and his wife (the testatrix's niece) for their joint lives and the life of the survivor, with a gift over (in the event of the nephew surviving and marrying again) in trust for the children of her said niece, and in default of such children, for the children of the testatrix's, sister, it was held that the gift over was good. Mel- lish, L. J., in delivering his judgment, said : " It has been said with respect to this rule against restraint of marriage, that it has no foundation on any prin- eiple, that ' it has nothing to do with public policy, but that it is a positive rule of law, adopted nobody can tell why ; and that, because it is a positive rule of law, adopted nobody can tell for what reason, and without any regard to public policy, therefore it is impossible to make an exception to it, and that the court can do nothing with it but carry it out. I cannot agree with that. It may be, no doubt, that in these modern times we should not for the first time establish such a rule of public policy; but of course if a rule has been established as a rule of law because it was thought agreeable to public policy and (z) Sm. E. & P. Prop. 81—107. (a) Allen v. Jaclcson, 1 Oh. Div. 399. 80 DECLARED TKTJSTS. to the interests of the nation at the time it was estab- lished, it may be that the court cannot alter it because circumstances have altered. ... If then there was such a rule of public policy, we are to consider how does that rule apply to second marriages ? It has never been decided that it applies to second mar- riages. ... It appears to me very obvious that, if it is regarded as a matter of policy, there may be very essential distinctions between a first and a second marriage. At any rate there is this, that in the case of a second marriage, whether of a man or a woman, the person who makes the gift may have been in- fluenced by his friendship towards the wife in the one •case, and towards the husband in the other case. That is to say, regarding the case of some member of the husband's family, he may make a gift to the husband for life, and then make a gift to the wife because she is the wife of that particular husband, and because he thinks it is more for the benefit of the children that the wife should have the money while the children are young, rather than that the children should have it." 12. Trusts in favour of no human object. — Where property is given upon trust to do certain things for the benefit of no beneficiary, the trust is void. Thus, where a testatrix devised a house to trustees in fee, upon trust to block up all the rooms (except four, in which she directed that a housekeeper and his wife should live) for twenty years, and subject thereto upon trust for A. in fee, it was held that the trust for sealing up the house for twenty years was void, and that the house was undisposed of by the will NECESSITY OF WRITING AND SIGNATURE. 81 for the term of twenty years from the testatrix's -death (b). 13. So a trust for keeping up family tombs is void, because there would be no human beneficiary (c). On the other hand, a trust for keeping a church in repair, might be valid as a charitable trust ; for it would, in effect, be a trust for the benefit of the con- gregation [d). Art. 11. — Necessity or othenvise of Writing and Signature. ■ By the Statute of Frauds, all declarations of trusts of freehold, copyhold (e), or leasehold (/) lands, tenements or here- ditaments (not intended to be testamen- tary) must be proved by some writing, showing clearly what the intended trust is, or referring to some other document which does so; and the declaration of trust (but not necessarily any other writing referred to thereby) must be (b) Brown v. Burdeti, 21 Ch. Div. 667; Be Vaughan, Vaughan v. Thomas, 33 Oh. Div. 187. ^(c) Bichard v. Bohson, 31 B. 244 ; Be Birhett, 9 Oh. Div. 576 ; Be Vaughan, Vaughan v. Thomas, supra. [d) Hoare Y.Vshorne, L. E., 1 Eq. 585 : BeBiqley's Trusts^ 1 W. E. 342. (e) Withers v. Withers, Amb. 152. (/) Foster v. Hale, 3 Ves. 696. 82 DECLARED TRUSTS. signed by the party who is by law en- abled to declare the trust, or else it is wholly void(y). The rule does not apply, however, where it would operate so as to effectuate a fraud {h). Where the legal estate is vested in a trustee for an absolute beneficial owner, the latter is the proper party to declare the trust [i). P- Declarations of trust of personalty other than chattels real (not intended to be testamentary), may be made by word of mouth (k). 7- Declarations of trust of any kind of pro- perty whatsoever, if intended to be tes- tamentary, must be declared by a duly executed and attested will or codicil (I). In the absence of fraud, a person who appears on the face of a will to be a beneficial devisee or legatee, cannot be subsequently converted into a trustee by a declaration of the testator not executed {g) Statute of Prauds, 29 Car. 2, c. 3, s. 1. (h) See per Lord Westbury in M'Gormick v. Orogan, L. E., 4 H. L. 82 ; Strickland v. Aldridge, 9 V. 219 ; Saigh v. Kaye, L. E., Y Oh. Ap. 469. (i) Kronheim v. Johnson, 7 Ch. Div. 60 ; Tierney v. Wood, 19 B. 330 ; Rudkin v. Dolman, 35 L. T. 791. (7c) McFadden v. Jenkins, 1 Ph. 157 ; Hawkins v. Gardner, 2 Sm. & G. 451 ; Senhoiu v. Townsend, 1 M. & K. 506 ; Mid- dleton V. Pollock, 4 Ch. Div. 49. (I) 1 Yict. c. 26, s. 9, and Stat. Frauds, s. 5. NECESSITY OF WETTING ANJD SIGNATURE. 83 as a will or codicil ; nor wtere property is devised or bequeathed to a person as trustee can tlie trust be declared by a subsequent instrument otter than a will or codicil {m). But as it would be obvious that the testator did not intend him to take beneficially there would be a resulting trust in favour of the tes- tator's heir or next of kin. Illust. — 1. Trust evidenced by letters. — In Foster T. Hale (n), a gentleman named Bnrdon had a share in a colliery, and the suit was commenced for the purpose of fixing a tmst upon his share for the benefit of his partners in a bank, in which he was also concerned. Lord Alvanley, after commenting upon the conduct of the plaintiffs, said: " But it is insisted that, though their names do not appear upon the lease, nor that they publicly, even by inquiry, ever busied themselves about the colliery, yet, in fact, an agreement took place that he (Burdon) should be a trustee, as to his share, for them (the plaintiffs) and himself, in equal shares. They say they can make it out satisfactorily to the court and within the Statute of Frauds, and that, not by any formal declaration of trust, but by letters under his (Burden's) hand, and signed hy him. (ro) Addlingion v. Gann, 3 Atk. 141 ; Briqgs v. Penny, 3 De Gr. & S. 547 ; Ee Boyes, Boyes v. Carritt, 26 Ch. Div. 531 ; Sahergham v. Vincent, 2 Ves. jun. 230. (m) 3 V. 696. g2 84 DECLARED TRUSTS. in which they allege he admitted himself such trustee, and that, under the true meaning of the statute, it is sufEeient if it appears in writing under the hand of a person having a right to declare himself a trustee, and that is a formal declaration of trust. It was contended for the defendants that there is great danger in taking a declaration of trust arising from letters loosely speaking of trusts, which might or might not be actually and definitely settled be- tween the parties with such expressions as ' our,' 'your,' &c., intimating some intention of a trust; that upon such grounds the court may be called upon to execute a trust in a manner very different from that intended, and that it is absolutely necessary that it should be clear from the declaration what the trust is. That I certainly admit. The question, therefore, is, whether sufficient appears to prove that Burdon did admit and acknowledge himself a trustee, and whether the terms and conditions on tcMch he teas a trustee sufficiently appear. I do not admit that it is absolutely necessary that he should have been a trustee from the first. It is not required by the statute that a trust should be created by a toriting .... but tliat it shall be manifested and proved by writing ; plainly meaning that there should be evidence in writing, proving that there was such a trust. Therefore, un- questionably it is not necessarily to be created in writing, but it must be evidenced by writing, and then the statute is complied with. I admit that it must be proved in toto not only that there was a gift, but what that gift was." 2. Trust not sufficiently evidencsd. — In Smith v. NECESSITY OF WRITING AND SIGNATURE. 85 Mattheio's (o) the husband of one Mrs. Matthews, being a person of dissolute habits, got into difficulties. Thereupon, one Clark, the brother of Mrs. Matthews, entered into an arrangement with Matthews, whereby the latter conveyed to him certain real property and a certain business, in consideration of his undertaking to pay off all his (Matthews') debts. Clark entered into possession, and carried on the business for the benefit of his sister and her children. There was no explicit and formal declaration of trust by Clark, but, from several letters, it appeared that Clark con- sidered that he held the property "for the benefit of Mrs. Matthews and her family " ; and by a memo- randum given to the mortgagee, upon paying off the mortgage on the property, it was expressly stated that the title deeds had been handed over to Clark " as the trustee of the real and personal estate of Mrs. Matthews." Clark having died intestate, the lands descended at law to Mrs. Matthews as his heir- at-law, and thereupon her husband tried to get pos- session of them jure mariti. In order to resist this attempt, it was contended that Clark had constituted himself a trustee for Mrs. Matthews and her children, and that the property therefore devolved, burdened with the trust. Lord Justice Turner, however, held that the trust was not expressed with sufficient cer- tainty in any of the documents; and said : " It must be manifested and proved by writing, signed as re- quired, what the trust is ; . . . the main reliance was (o) 3 De G. F. & J. 139. 86 DECLAKED TKUSTS. placed on the memorandum ; . . . but I think it by no means improbable that, in speaking of himself as trustee in that memorandum, Clark may have meant no more than that he considered himself a trustee with reference to the duty which he had under- taken for the payment of Matthews' debts; and at all events the memorandum does not show what was the trust to which it refers, and I think, there- fore, that no trust in favour of Mrs. Matthews can be founded upon it." 3. Verbal trust of stock. — In Kilpin v. Kilpm{p), a person transferred stock into the name of an ille- gitimate daughter and her husband and their two eldest children, and by parol declaration, confirmed by an unsigned entry in a memorandum book, declared that such investments were to be for the benefi.t of all his daughter's children. Held, a good declaration of trust, as the stock was mere personalty. 4. RecLuest to debtor to hold debt in trust. — So in McFadden v. Jenkins {q), a creditor desired his debtor to hold the debt in trust for A. The debtor acqui- esced, and paid over part of the money to A. ; and it was held that the creditor had made a valid declara- tion of trust, and had constituted the debtor a trustee of the debt for A. 5. Verbal testamentary trust, void. — But where the trust is testamentary, that is to say, only intended to operate after death, the trust must, in the absence of fraud, be contained in a duly executed or attested [p) IM. &K. 521. (j) 1 Ph. 153. NECESSITY or WRITING AND SIGNATURE. 87 will or codicil. Thus, in the recent case of Re Boyes, Boyes v. CarriU{r), a testator, who died in 1882, made a wiH devising and bequeathing aU his property to the defendant Oarritt, and appointing him sole executor. Mr. Oarritt, who was the solicitor of the testator and drew the will, gave evidence to the efEect that the intention of the testator was that he should hold the property as trustee for objects of the testator's bounty, who were to be afterwards indicated by him. No direction, however, on the subject was given by the testator in his lifetime, but after his death two letters were found, written by him to Mx. Oarritt, and sealed up, in both of which he expressed a desire that Mr. Oarritt should have 251. to buy a trinket in memory of him, and that all the rest of the property should go to a lady named Brown. That lady gave confirmatory evidence, stating that the testator told her that he had written the two letters, and that he had written two for further security in case one should be lost ; that he also informed her where the letters were, and directed her, in case of his death, to forward them to Mr. Oarritt, which she did. Under these circumstances, it being clear that Mr. Oarritt was a trustee, the question was whether the trust for the lady, Mrs. Brown, was valid and effectual, or whether he was a constructive trustee for the next of kin. Mr. Justice Kay, after examin- ing the authorities, came to the conclusion that, as the law stood, if a trust was not declared by (r) ^6 Ch. Div. 531 ; and see also Vincent v. Vincent, 35 W. E. 7. 88 DECLAEBD TRUSTS. a testator when his will was made, then, in order to- make the trust binding, it was essential that it should be communicated to the devisee or legatee in the tes- tator's lifetime, and that he should accept that par- ticular trust. A devisee or legatee could not, by- accepting an indefinite trust of this kind, enable a testator to make an unattested codicil. His lordship regretted that the trust should fail, but he was bound to declare, Mr. Carritt having admitted himself to be a trustee, that the trust was for the next of kin. The reader must, in reading this case, bear in mind that Mr. Carritt admitted that he knew, when he- prepared the will, that he was not meant to take beneficially, and therefore, of course, it would have been personal fraud on his part if he had claimed to do so. If, however, he had not known the non- beneficial nature of the bequest, the subsequent letters of the testator would not have been sufficient to have deprived Mr. Carritt of the beneficial in- terest, and consequently neither Mrs. Brown nor the next of kin would have taken anything. Whether, however, Mr. Carritt had or had not known, when the will was made, that he was only intended to take as trustee, yet, if the testator had subsequently communicated to him that he was not to take bene- ficially, and had either declared specific trusts of the property, or had simply said that he had not yet made up his mind upon what trusts it should be held, and if Mr. Carritt had exprcssh/ assented to act as trustee, then, as his assent would have operated to induce the testator not to alter his will, Mr. Carritt would have been bound to take the property NECESSITY OE WRITING AND SIGNATURE. 89 as trustee simply, and to carry out the testator's in- tention. 6. Fraud an exception to rule, — And so, where a father is induced not to make a "will by statements of his heir presumptive that the latter would make siutahle provision for his immediate relatives, th& court considers that that is a fraud, and, notwith- standing the statute, will oblige the heir to make a provision in conformity with his implied obliga- tion (s) . For (as was said by Lord Westbury, in McCormick v. Grogan{t)) "the court has from a. very early period decided that even an act of par- liament shall not be used as an instrument of fraud ; and if in the machinery of effectuating a fraud an act of parliament intervenes, a court of equity does, not, it is true, set aside the act of parliament, but it fastens upon the individual who gets a title under that act, and imposes upon him a personal obligation, because he applies the act as an instrument for accomplishing a fraud. In this way a court of equity has dealt with the Statute of Frauds, and in this manner also it deals with the Statute of Wills. And if an individual on his death-bed, or at any other time, is persuaded by his heir-at-law or next of kin to abstain from making a will, or if the same individual, having made a will, communicates the disposition to the person on the face of the will benefited by that disposition, but at the same time (s) Sellach v. Harris, 5 Yin. Ab. 521 ; Strickland v. Aid- ridge, 9 V. 219. (*) L. E., 4 H. L. 82. •90 UECLAKEU TRUSTS. says to that individual tliat he has a purpose to answer "which he has not expressed in the will) but which he depends upon the disponee to carry into effect, and the disponee assents to it (either expressly or by any mode of action which the disponee knows must give to the testator the impression and belief that he fully assents to the request), then undoubtedly the heir-at- law in one case, and the disponee in the other, will be converted into trustees ; simply on the principle that an individual shall not be benefited by his own per- sonal fraud." 7. And so where the plaintiff had assigned to the defendant an agreement for a lease, in form abso- lutely, but there appeared to have been a parol collateral arrangement that the defendant should hold part of the premises in trust for the plaintiff, it was held that such a trust could be proved by parol evidence ; for (assuming the arrangement to have been in fact made) to exclude parol evidence would operate to effectuate a fraud (m). (tt) Booth V. Turle, L. E., 16 Eq. 182. ( 91 ) GHAPTEE III. Validity of Declared Teusts ix relation TO Latent Matters. Art. 12. Who may he a Settlor. 13. Who may be a Beneficiary. 14. Validity as heiween Settlor and Beneficiary. 15. Validity as against Creditors, 16. Validity as against Trustee in Bankruptcy. 1 7. Validity as against subsequent Purchasers. Art. 12. — -Wlio may he a Settlor. Every person wlio can hold and dispose of any legal or equitable [a) estate or interest in property may create a trust in respect of it. Illust. — 1. Infants. — Practically speaking, an infant cannot now effectually dispose of property so as to bind himself; and, therefore, cannot, except under the statute next mentioned, make an irrevo- cable settlement. However, males over the age of twenty, and females over the age of seventeen, years can now, upon marriage or afterwards {h), with the (a) Gilbert v. Overton, 2 H. & M. 110 ; Kehewich v. Manning, 1 Hare, 464; Donaldson v. Donaldson, Kay, 711. (6) Be Phillips, 34 Oh. Div. 467 ; Re Sampson and Wall, 2,5 ib. 482. 92 VALIDITY OF DECLARED TRUSTS. approbation of the High Court (acting in pureuance- of the power given to it by the statute 18 & 19 Vict. e. 43, explained by 23 & 24 Vict. c. 83), make binding settlements of real and personal estate be- longing to them in possession, reversion, remainder or expectancy. This act, however, has only removed the disability of infancy, leaving unaffected other disabilities (if any), such as lunacy or coverture. In fact, under it, a married female infant may do all that an adult married woman could do, and no- more (c). Consequently, in a case where a female infant was entitled to a reversionary interest in per- sonal estate, under a settlement executed prior to Malins' Act (d), she could not, before 1883, settle the reversion under the Infants' Settlement Act so as effectually to bind her. For Malins' Act did not apply, and, without its assistance, women married before 1883 cannot alienate reversionary interests in personal estate not settled to their separate use (c). 2. Married Women. — Women married since the 31st of December, 1882, are in the same position with regard to property as spinsters (e). They can, there- fore, create trusts in relation to it, either by act inter- vivos, or by testamentary disposition. Women married prior to that date are in the same position with regard to any property as to which theu' title first accrued (whether as a possessory or a reversion- ary title (/) ) mice the 31st December, 1882. With (c) Buchmaster v. Buchmaster, 35 Ch. Div. 21. \d) 20 & 21 Vict. c. 57. le) Married Women's Property Act, 1882. (/) lb.; and see Reid v. Reid, 31 Oh. Diy. 402. WHO MAY BE A SETTLOK. 93 regard to other married women, they can only alienate (and therefore can only create trusts) in the following cases, viz. : — (1) where they are donees of a power of appointment {g) ; (2) where the property is settled to their separate use (/;) without restraint on antici- pation ; (3) where the property is their separate pro- perty under the repealed Married Women's Property Act of 1870 ; (4) where the property is real estate, and their husbands join in an acknowledged deed; (6) where the property is reversionary personalty, their title to which is derived under an instrument (other than their marriage settlement) executed after the 31st of December, 1857, and their husbands join in an acknowledged deed {i). 3. Corporations. — Prior to 5 & 6 Will. 4, c. 76, municipal corporations were able to create trusts of their property {j) ; but since that act, corporations included in the schedule to it are themselves made trustees of their property for public purposes, and •consequently cannot create trusts of it (Jc). 4. Lunatics. — It is clear that a lunatic cannot •create either a testamentary trust, or a trust inter vivos in favour of volunteers {I) . On the other hand, where a person who is a lunatic in fact, but is not known to be so to persons privy to valuable conside- (g) Burnett v. Mann, 1 Ves. 156. (h) Taylor v. Meads, 34 L. J., Ch. 203. (i) 20 & 21 Vict. c. 57. U ) Colchester v. Lowton, 1 V. & B. 226. (/<;) 5 & 6 Will. 4, 0. 76, s. 94; Att.-Oen. v. Aspinal, 2 M. & 0. 613. {I) See Niel v. Morky, 9 Ves. 47S. 94 VALIDITY OF UECLARBD TRUSTS. ration, executes a settlement for valuable considera- tion, it -would seem that the settlement would not be set aside, either at law or in equity («). It must, however, be borne in mind that a lunatic is incapable of contracting a valid marriage, and that, conse- quently, a settlement executed by a lunatic in con- sideration of an intended marriage could not be said to be a settlement based on value. I am not aware of any case where the point has arisen ; but if it did arise, it might well be argued (at all events on behalf of a woman who had gone through the ceremony of marriage with a lunatic without knowledge of his incapacity) that it would be inequitable for the court to set aside the settlement, as the innocent beneficiary could not be replaced in her former position. 5. Convicts. — A convict {i.e., one sentenced to death or penal servitude for treason or felony (;/)) is. incapable, until the expiration of his sentence, or until his death (o), of alienating or charging his property ; and therefore he is incapable of declaring a trust of it, at all events by act inter vivos. This incapacity, however, is suspended for any period during which the convict may be at large under a ticket of leave (p). 6. Aliens. — By the statute 33 Yict. c. 14, aliens (m) See Molton v. Camroux, 2 Exoli. 487, 503; afi. 4 Exoh. 17 ; and Price v. Berrington, 3 M. & Gr. 486 ; Neill v. Morley, 9 Ves. 478. (n) 33 & 34 Yiot. c. 23, s. 6. (o) lb. ss. 7 and 8. Queers, -wlietlier this act -would pre- vent a oonviot making a valid -will. (p) lb. s. 30. WHO MAY BE BENEFICIARIES. 95 are placed in the same position as natural-torn sub- jects with regard to the acquisition and alienation of property. As, howeyer, the act is not retrospective, it would seem that aliens who acquired lands by devolution before the act, are not protected, and might still be dispossessed by the crown {q). Art. 13. — Who may he Beneficiaries. Every person who is capable of holding- property may lavpfuUy be a beneficiary of it under a trust (r) ; but a beneficiary must be a human being (s). Illust. — 1. Corporations. — A corporation cannot be cestui que trust of lands without licence under the Mortmain Acts {t) ; for without such licence it cannot hold lands, and therefore cannot take through the medium of a trust. 2. Aliens. — Similarly, before the act 33 Yict. c. 14, an alien, as he could hold property against every- one except the crown, could also be a beneficiary of land as against everyone except the crown {u) . But (5) See Sharpe v. St. Saveur, L. E., 7 Ch. App. 3ol ; Calvin's case, 7 Eep. 49. (r) Lewin, 40. (s) Ridcard v. Bobson, 31 B. 244 ; Lloyd y. Lloyd, 2 Sim,, N. S. 255 ; Thompson v. Shakespeare, Johns. 612 ; Fowler v. Fowler, 33 B. 616; Fish v. Att.-Oen., L. E., 4 Eq. 521; Hunter v. Bullock, L. E., 14 Eq. 45 ; Dawson v. Small, L. E., 14 Eq. 104 ; and see p. 81, supra. (t) Lew. 40. (m) Barrow v. Wadkin, 24 B. 1 ; Ritson v. Stordy, 3 Sm. & Giff. 230; Sharpe v. St. Saveur, L. E., 7 Ch. 351. •96 VALIDITY OF DECLARED TRUSTS. as he could not take a legal estate by operation of law, so likewise lie could not be a beneficiary by act of law(«)). As the above act is not retrospective, it would seem that aliens who acquired lands anterior to the passing of the act, are not protected by it, and that the crown is entitled to all lands of which they are beneficiaries {id). '6. Married women. — Although, by recent legisla- tion, married women are as capable of holding pro- perty as other people, they were not, previously to 1883, in so favourable a position. At common law, the husband was entitled to all his wife's personal •chattels in possession ; to the rents and profits of her freeholds during their joint lives ; to all her choses in action which he should reduce into possession during the marriage ; and to all her leaseholds. But if he did not reduce the choses in action into possession, or dispose of the leaseholds during the marriage, they reverted to the wife if she survived him. Courts of equity, however, in this instance, did not follow the law, but invented that peculiar equit- able estate known as a " separate use." Property, therefore, which is settled in trust for a woman for her separate use, is freed from the jus mariti; and "with regard to it a married woman is regarded as a feme sole. She may dispose of it without her hus- band's consent, either by act inter vivos, or by will («), unless she be by the trust restrained from (v) Calvin's case, 1 Eep. 49. (w) Sharps v. St. Savear, supra. (x) Peacock v. Monk, 2 Yes. sen. 190 ; Taylor v. Meads, 34 L. J., Ck 203. "WHO MAY BE BENEFICIAHIES. 97 anticipation. In the latter case she cannot dispose of it at all without the sanction of the Court, which may, however, be obtained where it is clearly for her interest, on summons under sect. 39 of the Convey- ancing and Law of Property Act, 1881. Art. 14. — Validity as between Settlor and Beneficiary. a. A settlor cannot, in the absence of ex- press power, revoke or vary even a voluntary trust [y). (i- But the Court will do so at the suit of the settlor or his representatives (s), if the very object with which the trust was created has ceased to exist {a) ; or there has been some fraud or undue influence exercised to induce the settlor to create the trust (b) ; or if he executed the settle- ment in ignorance or mistake as to its legal effect (c). [y) Crahh v. Crabh, 1 M. & K. 311 ; Sidmoiith v. Sidmouth, 2 B. 453; Phillips v. Mvllings, L. E., 7 Ch. App. 244. {z) Anderson v. Elsworth, 3 Griff. 154. (a) See Estery v. Cowlard, 26 Oh. Div. 191 ; Bond v. Walford, 32 Ch. Div. 238. (6) Osmond v. Fitzroy, 3 P. "W. 129 ; Ilaguenin v. Baseley, 14 V. 273 ; Dent v. Bennett, 4 M. & 0. 277 ; Hoghton v. Hoghton, 15 B. 299 ; Cooke v. Lamotte, 15 B. 234. (c) Phillips Y. Mailings, L. E., 7 Ch. 244; Fanshawe v. Wdshy, 30 B. 343 ; and see as to mistake where a provisiou for daughters was omitted by the engrossing clerk, Re Daniell, 1 Ch. Div. 375 ; and see Clarke v. Girdwoud, 7 Ch. Div. 9. V. H 98 VALIDITY OF DECLARED TRUSTS. y- It will not be revoked or varied in the two latter cases, if the settlor has ac- quiesced in or acted upon the settlement after the influence has ceased, or after he has become aware of the legal effect of the settlement (e) ; nor where the status of the parties has been irrevocably altered as part of the transaction (/). ^- But (at all events where the cestui que trust stood in the relation of parent (e), guardian, counsel, solicitor, doctor, priest, or trustee {g) to the settlor) it is incumbent upon the beneficiaries under a voluntary trust to prove that all the provisions are proper and usual; or, if there are any unusual provisions, that they were brought to the knowledge of, and were understood by, the settlor (Ji). No general rule can be laid down as to what are proper and usual provisions ; but a power of revocation is not essen- tial [h), nor is the advice of an inde- pendent solicitor («'). (c) Davies v. Davies, L. E., 9 Eq. 468, and oases cited; Allcard V. Skinner, 36 Ch. Div. 145. (f) Johnston v. Johnston, 52 L. T. 76. (g) Hylton t. Hylton, '1 Ves. 547 ; Hunter v. Atkins, 3 M. & K. il3; Tate -v. Williamson, L. E., 2 Ch. Ap. 55. (7») Phillips V. Mullimgs, supra ; and see Henry y. Arm- strong, 18 Ch. Div. 668. (?) Bainhrigge v. Browne, 18 Ch. Diy. 188, per Fry, J. VALIDITY AS BETWEEN SETTLOR AND BENEFICIARY. 99 Illust. — 1. Attempted cancellation of voluntary trust. — A father transferred a sum of stock into tlie . joint names of his son and a banker, and told the latter to carry the dividends to the son's accountl The father subsequently made a codicil to his will, ignoring the trust thus declared. The Master of the Bolls, however, said : " If the transfer is not am- biguous, but a clear and unequivocal act, I must take it on the authorities that for explanation there is plainly no place. If, then, it cannot be admitted to explain, still less can it be allowed to qualify the operation of the previous act ; the transfer being held an advancement, nothing contained in the codicil, nor any other matter ex post facto, can ever be allowed to alter what has been already done " (j). 2. Onus of proof on attempt to cancel voluntary trust. — ^In Phillips v. Mullings {k) the facts were these. A young man of improvident habits, being entitled to a sum of money, was induced bona fide, by the trustee of the money and by a solicitor, to execute a settlement. By it he assigned a part of the money to trustees, upon trust to invest, and to pay him during his life the income thereof as they should think fit ; and after his death upon trust for his wife and children (if any), and in default thereof and subject thereto upon trust for certain of his cousins. There was no power of revocation or of appointment, nor a power to nominate new trustees ; the deed was, however, fully explained to him before (./) Crahh y. Crahh, supra. (k) Supra. h2 100 VALIDITY OF DECLAEED TRfSTS. its execution, and his attention called to the par- .ticular clauses. Some years afterwards he attempted to upset this deed, but the court held that it was irrevocable. Lord Hatherley said : "It is clear that anyone taking any advantage under a voluntary deed and setting it up against the donor, must show that he thoroughly imderstood what he was doing ; it cannot, however, be laid down that such a deed would be voidable unless it contained a power of revocation " (l). In HennjY. Armstrong (m) Kay, J. (whose attention does not seem to have been called to Phillips V. MulUngs), laid down the law rather more favourably to the beneficiaries, saying : " No doubt there are to be found in the reported cases, dicta to the effect that the onus of supporting a voluntary deed rests upon those who set it up ; but I do not think that these dicta go so far as to say, that whenever a voluntary settlement is impeached on any ground whatever, the onus is at once thrown on those who would maintain it. As I understand it, the law is, that anybody of full age and sound mind, who has executed a voluntary deed by which he has denuded himself of his own property, is bound by his own act ; and if he comes to have the deed set aside — especially if he comes a long time afterwards — he must prove some substantial reason why the deed should be set aside." It is respectfully apprehended that Mr. Justice Kay's dictum is quite consistent with Lord Hatherley's ; for the latter (?) See also Hoghton v. Tlogliton, 15 B. 27S ; and Hall v. Hall, 8 Oh. Div. 329. (m) 18 Ch. Div. 668. VALIDITY AS BETWEEN SETTLOR AND BENEFICIARY. 101 merely says that where the beneficiaries set up the deed against the donor, the onus is upon the bene- ficiaries, while Mr. Justice Kay says, that where the settlor asks to //are the deed set aside, the onus is upon him (unless indeed the beneficiaries occu- pied a fiduciary position towards the settlor). In short, the onus is, in general, upon the person seeking relief. 3. Total failure of consideration. — In the recent case of Essery v. Cowlard {n), by a settlement exe- cuted in 1877, in consideration of a then intended marriage, it was declared that a sum of stock, the property of the intended wife, which had been trans- ferred by her to two trustees, should be held by them on trust for the benefit of the intended wife, the intended husband, and the issue of the intended marriage. The marriage was not solemnized, but the parties cohabited without marriage, and three children were born. In 1883 an action was brought by the father and mother of these children against the trustees to have it set aside ; and it was held that the contract to marry having been absolutely put an end to, the court could cancel the settlement. A similar decision was arrived at in the more recent case of Bond v. Walford (o), where an intended mar- riage had been simply broken ofE. 4. Improvident provisions how far evidence of mis- take. — In the recent case of Button v. Thompson {p)f (n) 2G Ch. Div. 191. (o) 32 Oil. Div. 238. (jp) 23 Oh. D. 278. 102 VALIDITY OF DECLARED TRUSTS. the late Sir George Jessel, M. E., said, " I emphati- cally disagree with the ground on which some judges have set aside voluntary settlements, namely, that there were provisions in them which were not proper to be inserted in such settlements. It is not the province of a Court of Justice to decide on what terms or conditions a man of competent understand- ing may choose to dispose of his property. If he thoroughly understands what he is about, it is not the duty of a Court of Justice to set aside a settlement which he chooses to execute, on the ground that it contains clauses which are not proper. No douht if the settlement were shown to contain provisions so absurd and improvident that no reasonable person would have consented to them, or if provisions were omitted that no reasonable persons would have allowed to be omitted, that is an argument that he did not understand the settlement. But in no other way would it be a reason for setting it aside." This ease, coupled with Phillips v. Mullings (supra), must be taken to have definitely overruled so much of the previous decisions in Coutts v. Acworth (q), Wollaston V. Tribe (r), and Everitt v. Hveriti (s), as laid it down that the absence of a power of revocation was fatal to the validity of a voluntary settlement. 5. In the recent case of James v. Couchman (t), it appeared that the plaiatiff had, by a voluntary settle- ment (made with the object of protecting himself (g) L. E., 8 Eq. 558. (r) L. E., 9 Eq. 44. (s) L. E., 10 Eq. 405. (t) 29 Oh. Div. 212. VALIDITY AS BETWEEN SETTLOR AND BENEFICIARY. 103 against extravagant habits), assigned property to trustees, upon trust for himself for life, remainder to his wife (if any) for life, remainder to his issue, and in default of issue to his paternal next of kin. Mr. Justice North, while refusing to set aside the settle- ment, thought that the ultimate limitation was unusual, and that the settlor's attention was not called to it, and that he did not understand the efEect of it; and accordingly his Lordship ordered the settlement to be rectified so as to give the settlor a power of appointment in default or failure of issue. His Lordship, however, was careful to add : " The fact that a usual power was omitted here would not weigh with me in the least, if I were satisfied that the omission of such a power had been brought to the attention of the settlor, as he would then have been competent to judge for himself ; but it seems to me that in the present case his attention was not called to it." 6. Undue Influence. — On the other hand, in the leading case of Huguenin v. Bmeley (u), where a widow lady, very much under the influence of a clergyman, made a voluntary settlement in his favour, it was held to be invalid. As Bowen, L. J., said in a recent and most important leading case (x), " It is plain that Equity will not allow a person who exercises or enjoys a dominant religious influence over another, to beneflt directly or indirectly by the gifts which the donor makes under or in consequence (m) 14 V. 273. (x) AlUard, v. Skinner, 36 Ch. Div. 145, 190. 104 VALIDITY OF DECI.AUED TRUSTS. of suoli influence, unless it is shown that the donor at the time of making the gift, was allowed full and free opportunity for counsel and advice outside — ^the- means of considering his or her worldly position, and exercising an independent will about it. This is not a limitation placed on the action of the donor ; it is a fetter placed on the conscience of the recipient of the gift, and one which arises out of public policy and fair play." 7. So, where a deed conferring a benefit on the settlor's father is executed by a child who is not yet emancipated from his father's control ; if the deed is subsequently impeached by the child, the onus is on the father to show that the child had independent advice, and that he executed the deed with full knowledge of its contents, and with the full intention of giving the father the benefit conferred by it (z). 8. Mistake. — "Where a person, apparently at the point of death, executed a voluntary settlement, of which he recollected nothing, which was never read to him, and in which a power of revocation was purposely omitted by the solicitor, on the ground that he knew the variable character of the settlor, and there was also evidence that the settlor thought that he was executing the settlement in place of a will,, it was held that the settlement was revocable (a). 9. Fraud. — Where a settlor has been induced by fraud to make a settlement (whether voluntary or (z) Bainhrigge T. Browne, 18 Cli. Div. 188 ; and see Tate v. Williamson, L. E., 2 Ch. Ap. 65 ; Kempson v. Askbee, L. E.,. 10 Ch. App. 15, and cases cited. (a) Fanshawe v. WeUhy, 30 B. 243. VALIDITY AS BETWEEK SETTLOR AXD liENEEICIARY. 105 based upon value), it will not be enforced; as, for instance, where a wife induces her husband to execute a deed of separation, in contemplation of a renewal of illicit intercourse [h). Where, however, it is not in her contemplation at the time, but she does in fact subsequently commit adultery, then as there was no origiaal fraud, the subsequent adultery will not avoid the settlement (c). 10. Even where there is valuable consideration given, but the settlor is infirm and ignorant, and there is reason to suppose that he did not fully understand the transaction, it will be set aside, unless, it be proved that full value was given [d). 11. The case of Nanney v. Williams {e) is another instance of the action of the court where mistake or undue influence or both combined exist. There th& settlor made an irrevocable voluntary settlement in favour of a relation who acted as his solicitor in the matter. The court considered on the evidence, that the settlor believed that he had a power of revocation ; and as by his will, made subsequently, he purported to devise the settled property, it was held that he had thereby, in effect, exercised the power of revocation which he thought was contained in, and which ought to have been contained ia, the settlement. And con- (J) Brown v. Brown, L. E., 7 Eq. 185; and see Evans v. Carrington, 2 D., P. & J. 481 ; and Evans v. Edmonds, IS 0. B. 777. (c) Seagrave v. Seagrave, 13 V. 443. (d) Baker v. MIonk, 33 B. 719 ; Clark v. Malpas, 31 B. 80 ; Liriquaie v. Ledger, 2 Griff. 137 ; and see O'Borke v. Boliiig- broke, 2 App. Cas. 814. (e) 22 B. 452. 106 VALIDITY OF DECLARED TRUSTS. sequently the court held that the settlement was efPectually cancelled. 12. Acquiescence. — Where a father induced a young son, who was still under his roof, and subject to his influence, to make a settlement in favour of his step-brothers and sisters, it was held, that if the son had applied promptly, the court would have set it aside. But as he had remained quiescent for some years, and had made no objection to the course which he had been persuaded to foUow, he was not ■entitled to relief. For by so doing, he had in his maturer years practically adopted and confirmed that which he had done in his early youth (/). Nor will the court interfere where the settlor subsequently acts under the deed, or does something which shows that he recognizes its validity ; unless, indeed, he was ignorant of the, effect of the settlement at the date of such recognition (g) . 13. So where a lady entered a religious sisterhood, and, under circumstances which amounted to undue influence, made a vokmtary settlement in favour of the sisterhood, but omitted, for more than six years after severing her connection with it, to seek to have the settlement set aside, it was held that her acqui- escence barred her claim for relief. As Lindley, L. J., said: "In this particular case, the plaintiff considered when she left the sisterhood, what course (f) Turner v. GoUins, L. E., 7 Ch. 329. [g] Jarratt v. Aldon, L. E., 9 Eq. 463 ; Motz v. Moreau, 13 M. P. C. 376 ; Wright v. VanderplanJc, 2 K. & J. 1 ; Milner V. Lord Harewood, 18 V. 259 ; Davies v. Davi's, L. B,., 9 Eq. 468. As to ignorance, see Lister v. Hodgson, L. E., 4 Eq. 30. VALIDITY AS BETWEEN SETTLOR AND BENEFICIARY. 107 she should take ; and she determined to do nothing, but to leave matters as they were. She insisted on having back her will, but she never asked for her money until the end of five years or so after she left ihe sisterhood. In this state of things I can only come to the conclusion that she deliberately chose not to attempt to avoid her gifts, but to acquiesce in them. I regard this as a question of fact, and upon the evidence I can come to no other conclusion than that which I have mentioned" {h). 14. Change of status, — An instance of the effect of change of status in preventing the settlor from procuring the cancellation of a settlement, even where its execution was induced by most serious misrepresentations, is afforded by the case of John- ston V. Johnston {i). There the settlor had married a lady who represented to him that she had divorced her first husband for adultery and cruelty ; whereas, in point of fact, she herself had been divorced for adultery at his suit. The settlor, on discovering this, commenced an action to have the settlement set aside. Pearson, J., dismissed it as being frivolous and vexa- tious ; and the Court of Appeal confirmed his de- cision, on the ground that the plaintiff could not set aside the settlement and yet keep the only considera- tion which was given for it ; one essential condition of cancellation being (as Fry, L. J., observed) restitutio in integrum, which was there impossible. (A) Allcard v. Skinner, 36 Ch. Div. 145. (i) 52 L. T. 76. 108 -WiLlDITY OF DECLAKED TRUSTS. Ari\ 15. — Validiti/ as against Creditors {J). «. A settlement of hereditaments (k), cor- poreal or incorporeal, or of such kinds of personal property as are capable of being taken in execution [l), is void as against existing and future creditors of the settlor if it be executed with intent (y) In this article I have attempted to digest tlie decisions upon the construction of the statute 13 Eliz. c. 5, passed " for the avoiding of feigned, covinous, and fraudulent feoilments, &c., contrived of malice, fraud, covin, collusion, or guile, to delay, hinder, or defraud creditors or others," by which it was enacted, that "all and every feoffment, gift, grant, alienation, bargain, and convej^ance of lands, tene- ments, hereditaments, goods, chattels, or any of them, by writing or otherwise, and all and every bond, suit, judgment, and execution to and for any intent or purpose before declared and expressed, shall be deemed and taken only as against that person or persons, his or their heirs, successors, executors, administrators and assigns whose action, suits, debts, ac- counts, damages, penalties, forfeitures, heriots, mortuaries and reliefs by such guileful, covinous or fraudulent devices and practices as is aforesaid are, shall, or might be in any ways disturbed, delayed or defrauded, to be clearly and utterly void , frustrate and of none effect ; any pretence, colour, feigned consideration, or any other matter or thing- to the contrary notwithstanding." By the fifth section it was provided that the act should not extend to any estate or interest in lands, &c., or goods, &c. assured upon good con- sideration and bond fide to any person not having at the time- of such assurance any notice or knowledge of such covin, fraud or collusion. {k) Copyholds formerly not included {Matthews v. Feaver, 1 Cox, 212), but now included by effect of 1 & 2 Vict. c. 110, s. U. {I) Rider v. Kidder, 10 V. 360. As to what goods come under this description, see Barrack v. McCul/ock, 3 K. & J. 110 ; StokoeY. Cowaii, 29 B. 637. And as to choses in action, mrcut V. Bodd, Or. & Ph. 100 ; and 1 & 2 Tict. >.-. 110. VALIDITY AS AGAINST CREDITORS. 109 to defeat or delay their claims, even al- thougli it did not, in fact, have that effect (m). In the absence of direct proof of intent to defeat or delay creditors, that intent will be [semhle irrebuttably) presumed, where, at the date of a voluntary settle- ment, the settlor is indebted and would, but for the trust property, be unable to pay his debts in full (n). The fact that the then existing debts may have been subsequently discharged is imma- terial (o). If the settlor is solvent at the date of a voluntary settlement, without resorting to the trust property, the mere fact that the settlement has in fact necessarily de- feated or delayed creditors, will not raise an irrebuttable presumption that it was (m) Freeman v. Pope, L. E. , 5 Cli. Ap. 540 ; Spirett v. Willows, 11 Jur., N. S. 70; Ilarman v. Richards, 10 Ha. 89; Strong V. Strong, 18 B. oil ; Columhine v. Penliall, 1 Sm. & G. 228 ; Bott V. Smith, 21 B. 511; Reese River Co. y. Attwell, L. E., 7 Eq. 347 ; Barling v. Bishop, 29 B. 417 ; Re Fearson, 3 Oh. Div. 807. (n) Freeman v. Pope, supra ; and Taylor v. Coenen, 1 Ch.. Div. 636, as modified by Ex parte Mercer, Re Wise, 17 a. B. D. 290. (o) Taylors. Coenen, supra; tut see Kidney y. Coussmaher, 12 V. la6; Townsend v. Westacott, 4 B. 58; Richardson v. Smallwood, Ja,o. 558; JenkynY. Vaughan, 3 Dr. 4:19; Freeman. v. Popje, supra. 110 VALIDITY OF DECLAEED TRUSTS. intended to do so, if the evidence nega- tives such intention (/>). ^- Provided, nevertheless, that settlements otherwise void under this article, are valid in favour of persons (whether original beneficiaries or their assigns) who have acquired their beneficial in- terests by giving, or being pi'ivy to,, valuable consideration (q). Illtjst. 1. Direct fraud. — In Ticynnes case (r) Pierce was indebted to Twynne in 40/. and to C. in 200/. 0. brought an action for his debt, and, pending the result, Pierce conveyed all his goods, to the value of 300/., to Twynne in satisfaction of his debt ; but Pierce continued in possession of them. Here the court held that there was direct evidence of an inten- tion on the part of Pierce to hinder and delay C. ; and that although Twynne had given valuable consideration for the goods, yet he was privy to the fraud, and consequently could not avail him- self of the proviso. Stress was laid upon the fact that Pierce was allowed to remain in possession of the goods, although the conveyance purported to be not a mere mortgage, but an absolute alienation. ip) Ex parte Mercer , Re Wise, supra. (?) Oeorffe v. Milbanhe, 9 V. 189 ; Daubeny v. Cockburn, 1 Mer. 638. And where the consideration for a settlement ia marriage, and the intended wife knows nothing of the fraudu- lent intention, the settlement is good qua her and her children {Kevan v. Oraiuford, 6 Ch. Div. 29). [r) 1 Sm. Lead. Ca. 1. TALIDIXT AS AGAINST CKEDITOES. Ill Had it been a mortgage, of course the mere fact of the mortgagor retaining possession would have been no badge of fraud, as it is one of the nsual incidents of a mortgage («). The main and substantial point, however, which the court decided was, that it was obvious, for divers reasons, that the conveyance was a mere fraudulent arrangement between Twynne and Pierce to shelter the latter from the just demands of his creditors, and was therefore void under the statute. 2. Direct intent to avoid anticipated judgment. — So, again, where a director of a company was sued by the company, and fearing that a judgment would be given against him, made a voluntary assignment to his daughter of aU his property, it was held that the fraudulent intention was manifest, and that the settlement was void as against the company, although they were not creditors at the time, and it did not appear that there were any creditors at the time (t) . Even though the daughter was no party to the fraud, yet she' was not protected, because she had not given valuable consideration. 3. Direct intent to delay future creditors. — And so, again, in Spirrett v. WiUoics [a), the settlor being solvent at the time, but having contracted a con- siderable debt which would fall due in the course of a few weeks, made a voluntary settlement by which he withdrew a large portion of his property from the (s) Edwards v. Harhen, 2 T. E. 587. (<) Reese River Go. v. Attiuell, L. E., 7 Eq. 347. (a) 3 De G., J. & S. 293. 112 VALIDITY OF DECLAKEB TRUSTS. payment of debts, after wliioli he collected the rest of his assets and spent them in the most reckless way, thus depriving the expectant creditor of the means of being paid. In that case there was clear and plain evidence of an actual intention to defeat creditors, and accordingly the settlement was set aside. 4. Again, a trader, who had for many years car- ried on the business of a baker and had saved money, being about to purchase a grocery business which he intended to carry on in addition to the other, made a voluntary settlement of the bulk of his property for the benefit of his wife and children. He after- wards bought the grocery business and carried it on for about six months, but lost money by it. He then sold it for as much money as he had given for it, and afterwards carried on the baker's business alone until, about three years after the execution of the settlement, he filed a liquidation petition, his liabili- ties largely exceeding his assets. The debts which he owed at the date of the settlement had been all paid. On these facts, it was held that (independently of the question whether he was solvent at the date of the settlement) the settlement was void as against his creditors, on the ground that it was evidently exe- cuted with the view of putting the settlor's property out of their reach, in case he should fail in the specu- lation on which he was about to enter in carrying on a new business of which he knew nothing (b). 5. And so generally " a man is not entitled to go (6) Ex parte Russell, Re Butterworth, 19 Ch. Div. 588; and see also Ware v. Gardner, L. E., 7 Bq. 317. VALIDITY AS AGAIXST CEEDITOES. 113 into a hazardous business, and immediately before doing so, to settle all his property voluntarily; the object being, ' If I succeed in business, I make a fortune for myself. If I fail, I leave my creditors unpaid. They will bear the loss.' That is the very thing which the statute of Elizabeth was meant to prevent" (c). 6. Marriage settlement executed with fraudulent intent. — Most of the above examples have been cases of voluntary settlements ; but where there is an ex- press intention to defeat creditors, and all parties to the consideration are 2}arties to that intention, the fact that it was a settlement based on value will not render it valid against the settlor's creditors. Thus, where one, by marriage settlement, settles his own property on himself until bankruptcy, and then over, it is so clearly intended to defraud creditors that the wife must be assumed to have been party to that intention, and the trust over on bankruptcy will therefore, as against creditors, be void {d). 7. And so where a person marries his mistress, and with the intention of defeating his creditors, and with her knowledge of that intention, settles all or a considerable part of his property upon her, the marriage consideration will not render the settlement valid as against the settlor's creditors ; for such a . (c) Per Jessel, M.E., Ex 'parte Russell, supra; following Mackay t. Douglas, L. E., 14 Eq. 106. {d) Higginhottom v. Holme, 19 V. 88 ; Ex parte ITodgsvn, ib. 208 ; Re Pearson, 3 Oh. Div. 807 ; and see also Ex parte Holland, Re Glint, L. E., 17 Eq. 115, for another instance of a settlement clearly fraudulent. TJ. I 114 DECLARED TRDSTS. marriage is a mere cloak for the fraud, and the wife is partieeps criminis (c). 8. Fraudulent settlement upheld in favour of bona fide parties to valuable consideration. — But, on the other hand, where a trust based on value would, as between the settlor and his creditors, be clearly void, yet it will be supported as between the creditors and persons parties to the consideration, where such parties are not privy to the settlor's fraudulent in- tentions. Thus in Kcvan v. Crairford (/), the facts were, that C. (who carried on the business of a flax spinner at S. Mills, in partnership with E.) by a settlement made in contemplation of his marriage, after reciting that he was indebted to his intended wife in a sum of 20,000^., covenanted to pay that 6um to the trustees, upon trust that as soon as he should become owner in fee simple of S. MiUs (which he had agreed to purchase) they should advance the 20,000/. to him on mortgage of those mills. It was further declared that the trustees should stand possessed of the 20,000/. when so invested, upon trust to pay the income to the intended wife for life for her separate use, with remainder to the husband during his life or until he should become bankrupt, with remainder to the children of the marriage. The recital that 0. was indebted to the intended wife in 20,000/. was quite false, and C. was at the time of the marriage in insolvent circumstances ; but the (e) Bulmery. Hunter, L. E., 8 Eq. 46 ; and see Golombinev. Penliall, 1 Sm. & Giff. 228. (/) 6 Ch. Dir. 29; and see Ex parte Home, 54 L. T. 301. VALIDIT'X AS AGAINST CREDITORS. 115 intended wife had no knowledge of his insolvent circumstances, and understood nothing ahout the recitals in the deed. The settlor subsequently pur- chased the S. Mills estate, and mortgaged it to the trustees for securing the 20,000/., but no money actually passed. The settlor subsequently became bankrupt, and the creditors claimed that the settle- ment was void as against them. It was, however, held that, notwithstanding the falsity of the recitals, the settlement and the mortgage deed consequent thereon were valid so far as concerned the interests of the wife and children; for the former was no party to the settlor's fraud, and gave valuable considera- tion (viz. marriage) for the settlement, and the latter were parties privy to that consideration. 9. Where a trust, based on value, is sought to be in- validated as against a party privy to the consideration, or where a voluntary trust is sought to be invalidated as against a purchaser for value from a cestui que trust, it must be conclusively shown that such party was privy and party to the fraudulent intent. For, although he may have known that the effect of the assignment would be to hinder or defeat the assignor's creditors, or expectant creditors, yet if the transaction was a bona fide purchase, and not a mere collusive arrangement between the parties with the intention of causing such hindrance or delay, it will be upheld {g). {g) See Darville v. Terry, 6 H. & N. 807 ; Hale v. Saloon Omnibus Co., 4 Dr. 492 ; judgment in Harman v. Richards, 1() lia. 89 ; Alton v. Harrison, L. E., 4 Oh. Ap. 622 ; Middleton V. PoUoch, 2 Oh. D. 104 ; BoUero v. L. & W. Discount Co., 5 Ex. Div. 47 ; but see Spencer v. Slater, 4 Q. B. D. 104. i2 116 DECl.AKED TKUSTS. 10. Fraudulent intent presumed from surrounding- circumstances. — In Freeman v. Po2W {Ji) the circum- stances, so far as they are material as illustrating the principle laid down in paragraph /3 of this article, were- as follows : — The settlor was a clergyman, with a life income of about 1,000/. a year; but at the date of the settlement in question his creditors were pressing him, and he had to borrow from his housekeeper a sum wherewith to pay the most urgent. He handed over to her as security the only property he had in the world and a policy of insurance for 1,000/. upon his own life. The security to the housekeeper exceeded in value her debt by about 200/. ; but the settlor also owed a debt of 339/. to his bankers, which was subsequently increased at the date of the settlement to 489/. under an arrangement that he- would allow his solicitor to receive part of his income, and out of it pay 100/. a year towards liquidating the 489/., and would pay the residue into the banker's, bank upon a current account. There was no bargain, however, that the bankers would not sue. Being in these circumstances, he executed a voluntary settle- ment of the life policy in favour of a Mrs. Pope, and having done so, was consequently in this position, that he had nothing wherewithal to pay, or to give security for the debt of 489/., except the surplus, value of the furniture ; and he was clearly and com- pletely insolvent the moment he executed the settle- ment. Upon these facts, a subsequent creditor insti- tuted a suit to set aside the settlement ; on the ground ill) L. E., 5 Oh. Ap. 540. A'ALIUITY AS AGAINST CREDITORS. 117 that although there was no actual fraud, yet the •effect of the settlement was to defraud creditors, and that as there were creditors antecedent to the settle- ment still unpaid, he could ask for it to be set aside. And the court held that this was so, Lord Hatherley saying : " The principle on which the statute of Elizabeth proceeds is this, that persons must be just before they are generous, and that debts must be. paid before gifts can be made. The difficulty the Yice- Chancellor seems to have felt in this case was, that if he, as a special juryman, had been asked whether there was actually any intention on the part of the settlor in this case to defeat, hinder or delay his creditors, he should have come to the conclusion that he had no such intention. It appears to me, that this does not put the question exactly on the right ground, for it would never be left to a special jury to find whether the settlor intended to hinder, delay or defeat his creditors, without a ■direction from the judge that if the necessary effect ■of the instrument was to defeat, hinder or delay creditors, that necessary effect was to be considered as evidencing an intention to do so Of course there may be cases (of which Spirett v. Willoics is an example) in which there is direct and positive evidence to defraud ; . . . but it is esta- blished by the authorities, that, in the absence of any such direct proof of intention, if a person owing debts makes a settlement which subtracts from the property, which is the proper fund for the payment of those debts, an amount without which the debts cannot be paid, then, since it is the necessary conse- 118 BECLARED TRUSTS. quence of the settlement (supposing it effectual) that some creditors must remain unpaid, it would be the duty of the judge to direct the jury that they must infer the intent of the settlor to have been to defeat or delay his creditors, and that the case is within the statute." And Lord Justice Giffard said : " There is one class of cases, no doubt, in which an actual and express intent is necessary to be proved ; that is, in such cases as Holmes v. Fenney and Lloyd v. Att- icood, where the instruments sought to be set aside were founded on valuable consideration. But where the settlement is voluntary, the intent may be in- ferred in a variety of ways. For instance, if, after deducting the property which is the subject of the voluntary settlement, sufficient available assets are not left for the payment of the settlor's debts, the law infers intent. Again, if, at the date of the set- tlement, the person making the settlement was not in a position actually to pay his creditors, the law would infer that he intended, by making the voluntary settlement, to defeat and delay them That being so, the appeal must be dismissed." However, the dictum of Lord Hatherley, in Free- man V. Fope, that " if the necessary effect of the- instrument was to defeat, hinder, or delay creditors, that necessary effect was to be considered as evi- dencing an intention to do so," must, since the recent decision of the Court of Appeal in Ex parte Mercer,, Re Wise («'), be taken with some qualification. At first sight the dicta of the learned judges in that case (0 17 Q. B. Div. 290. VALIDITY AS AGAINST CREDITORS. 119 (the facts of which are set out in Illust. 14, infra) appear to be scarcely consistent with former decisions. A careful perusal of the report, however, shows that they only qualify Lord Hatherley's phrase to tliis extent, viz., that the settlement must not only neces- sarily have the effect of delaying or defeating credi- tors, but the circumstances must be such that the effect could have been foreseen by a man of ordinary common sense. No doubt, where a trust has neces- sarily had the effect of defeating creditors, that wiH be some evidence of intention ; but unless the effect was so obvious that any man of common sense ought to have foreseen it, it will be competent for the de- fendant to rebut the inference. Whether he would be permitted to rebut it where he ought obviously to have foreseen the effect of the trust {ex. gr., as in Freeman v. Pope), was not in issue in that case ; but it is apprehended that, both on principle and authority, he could not. 11. A lady, being indebted to the plaintiff at the time of her marriage, settled all her property (except jewels and furniture) upon certain trusts in favour of herself and her husband and issue, and in default of issue in favour of certain collateral relatives. Before the debt was paid, she and her husband died without issue ; and it was held that, qua the collateral relatives, the settlement was voluntary, and that, therefore, as between them and the plaintiff, the settlement was void {k). It would seem, however, that where a trust is based on value, which, if volun- tary, would be void as against the settlor's creditors, {Ic) Smith V. Gherrill, L. E., 4 Eq. 390. 120 DECLARED TRUSTS. the fact that the cestuis que trusts are not parties to the consideration, ought not to affect the question in the absence of express intent to defeat or delay ; and that, in fact, a volunteer under a trust based on value, may be in a far better position, qu^ the settlor's creditors, than a volunteer under a voluntary trust. 12. Again,- a trader doing business to the amount of 100,000/. a year, executed two voluntary settle- ments in favour of his wife, the first being two years, and the last one year before his death. By the first, he settled two policies of insui-ance, each for 1,000/. ; by the second he settled his furniture, worth about 1,000/. An inquiry into the state of his affairs having been directed, it was found that at the date of the first settlement his debts would have exceeded his assets by 1,293/., and at the date of the second settlement his debts were 10,726/. over his assets. A creditor whose debt was contracted after the date of the first, but before the date of the second settlement, commenced proceedings to set aside both settlements. It was held that, as the settlor's debts exceeded his assets when both deeds were executed, he was then insolvent, and the deeds must be declared frau- dulent and void as against the plaintiff and his other creditors ; and that the fact that all the settlor's debts in existence at the date of the first settlement had been subsequently paid was immaterial, the implied intention being the gist of the matter (/). [l] Taylor v. Coenen, 1 Oh. Div. 636; and for other examples, see Crossley v. Ehworthy, L. E., 12 Eq. 159; and Adames v. Eallett, ib. 6 Bq. 468. A^ALIUITY AS AGAINST CKEMTORS. 121 13. Fraudulent intent not presumed merely from 'effect. — And, conversely, where (as in the two last illustrations), without any actual intention to defeat, delay, or hinder creditors, a voluntary settlement is made by a settlor in embarrassed circumstances, btit having property not included in the settlement ample for payment of the debts owing by him at the time ■of making it, such settlement may be supported against creditors, although debts due at the date of the settlement may, to a large extent, remain unpaid. For the circumstances existing at the date of the settlement are not such as necessarily render the settlement one which would inevitably and obviously hinder or delay creditors {m). 14. This was very well exemplified in Ux 2^(irie Mercer, Re Wise {n). The facts of that case were as follows : — A master mariner was married at Hong Kong on May 31st, 1881. In the following August an action for breach of promise of marriage was commenced against him, and the writ served upon him at Hong Kong on October the 8th. By the ^ame mail he heard that a legacy of 500/. had be- come payable to him. On the 17th October he exe- cuted a post-nuptial settlement of the 500/. in favour ■of his wife and issue, being then indebted to no one. In July, 1882, judgment in the breach of promise action went against him for 500/. ; and in November, 1884, he was adjudicated bankrupt. It was there- upon attempted to set aside the post-nuptial settle- ment under Lord Hatherley's dictum in Freeman v. (m) Kent v. liileij, L. E., 14 Eq. 190. (n) 17 a. 13. Div. 290. 128 DECLARED TRUSTS. Pope. The bankrupt, however, swore that when he- made the settlement he was in no way influenced by the action having been commenced against him, which he thought would come to nothing. On this state of facts the Divisional Court and the Court of Appeal declined to set aside the settlement, on the ground that there was not sufficient evidence to warrant a judge or jury in finding that the settle- ment was intended to delay, hinder, or defraud creditors. Grxantham, J., said : " When learned judges have said that, if the necessary result of a settlement is to hinder creditors, it must be taken to have been executed with that intent, this observation must be taken as applied to the character of the particular case in which it was made. In all the cases which have been referred to, the settlor had considerable debts or liabilities, and in none of them was there the same reason for making the settlement which existed in the present case, viz., the wish to settle on the wife of the settlor, property to which he had become unexpectedly entitled after his marriage ;. and it cannot be said that, with the exception of the writ having been served upon him, there was any such inducement for him to make the settlement as there was in all the other cases which have been cited." And Lord Esher, M.E., said : " No doubt, in coming to a particular conclusion as to the inten- tion in a man's mind, you should take into account the necessary result of the acts which he has done. I do not use the words ' necessary result ' meta- physically, but in their ordinary business sense, and of course, if there was nothing to the contrary, you would come to the conclusion that the man did intend VALIDITY AS AGAINST CREDITORS. 123- the necessary result of his acts. But if other circum- stances make you believe that the man did not intend to do that which you are asked to find that he did intend — to say that because that was the necessary result of what he did you must find, contrary to the other evidence, that he did actually intend to do it, is. to ask one to find that to be a fact which one really believes to be untrue in fact." Lord Justice Lindley added : " The language which has been used in a great many cases, that a man must in point of law be held to have intended the necessary consequences of his own acts, is apt to mislead by confusing the boundary between law and fact, between consequences which can be foreseen with those which cannot." Art. 16. — Validity as against Settlor^ Trustee in Banlxruptey or Liquidation (o) . Even vs^here a settlement is valid as against creditors under the last preceding article, yet (as to traders where the settlement was executed before 1884, and as to all persons where the settlement was exe- cuted since that date (jt?) ) it will be void (o) Bankruptcy Act, 1883, s. 47 (1). Queers, whether under this section a bond fide purchaser from a beneficiary under a voluntary trust is not bound to satisfy himself, -within ten- years from its date, of the settlor's solvency. (p) These provisions were limited to traders by the Bank- ruptcy Act, 1869, but are extended to the public generally by the Act of 1883, which is nst retrospective (Ex parte Todd, 19 Q. B. Div. 186). 124 DECLARED TRUSTS. as against the settlor's trustee in bank- ruptcy or liquidation (§■) under the follow- ing circumstances, viz. : — a. If it be voluntarj, and the settlor becomes bankrupt or liquidates his af- fairs within two years. /3. If it be voluntary, and the settlor becomes bankrupt or liquidates his affairs after two but within ten years ; unless it can be shown (1) that he was solvent at the date of the settlement without the aid of the property comprised in it, and (2) (if the settlement was executed since 1883) (r) that his estate or interest in such property passed to the trustee of the settlement on the execution thereof. 7. If it consists of a mere covenant or contract made in consideration of niarriage, for the futiire settlement upon the settlor's wife or children, of any specific and ear-marked (s) money or property wherein he had not at the date of his marriage any estate or in- terest, whether vested or contingent (t), (and not being money or property of or (g) The section does not apply to the -winding up of de- ceased insolvent settlors' estates [Re Gould, 19 U. B. D. 92). (r) Ex parte Todd, supra. (s) Hx parte Bishop, lie Tonnies, L. E., 8 Ch. Ap. 'TIS. (<) See Re Andrews, 7 Ch. Div. 035. VALIDITY 0:S settlor's BANKRUPTCY. 125- in right of his wife), unless such pro- perty or money has been actually trans- ferred or paid pursuant to such contract or covenant (««). J. This article does not extend to or affect a settlement of property which has accrued to the settlor since marriage in right of his wife, or the trusts of a policy of assurance effected in favour of a wife or children under sect. 11 of the Married Women's Property Act, 1882. Illtjst. 1. Thus, a person made a voluntary settlenaent of an estate ■wHch was subject to a mort-- gage, and covenanted with, the trustees that he would pay the interest on the mortgage, and, when required,, would pay o£E the principal. It subsequently, and within two years, turned out that his assets (exclusive- of the estate in question) were sufficient to pay his. debts other than the mortgage debt, but not sufficient to pay both, and he became bankrupt. It was held, that whether the settlement was fraudulent or not within the 13th Elizabeth it was not material to in- quire, but that it was clearly within the provisions of the Bankruptcy Act, and was therefore void (r). 2. Upon an application to set aside a post-nuptial settlement under clause /3 of this article, it appeared that, by the settlement, a life interest was reserved to u) Bankruptcy Act, 1883, s. 47 (2). ) Ex parte Iluxtable, Be Oonibeer, 2 Ch. Div. 54. 126 DECLAKED TRUSTS. the settlor himself, and that, if this life interest were taken into account, he was ahle to pay his debts at the date of the settlement ; but that if it was not taken into account, he was insolvent. The court held that the settlor's life interest ought to be taken into account in estimating his solvency, and that the settlement was valid as against his trustee in bank- ruptcy (x). 3. Clause y of the above article only applies to specific or ear-marked property; and, therefore, where a person by his marriage settlement covenants that he will pay a sum of money to the trustees, such a covenant is perfectly valid. The intention of the act is to prevent settlements of property expected to accrue at a future time, in which the settlor has at the date of the settlement no present interest. As Mellish, L. J., put it in & parte Bishop, lie Tonnies {y) : " The object of the legislature was to provide that specific money or property which but for the section would have gone to the trustees [of the settlement] exclusively, should be divided among the creditors [of the settlor]. A covenant to settle such money or property would, in equity, have bound it when it came into actual possession, and the in- tention was, that if the covenantor had no interest at the time, it should go to the creditors, and not to the trustees, of the settlement. If this had been a covenant that in case any property was left to the covenantor by his father or any other person, he (a) Ee Lowndes, 18 Q,. B. Div. 677. ly) L. E., 8 Oh. Ap. 721. VALIDITY ON SETTLOK's BANKRUPTCY. 127 ■would settle it, and the covenantor had no interest in it at the time, the covenant would be void against the trustee in bankruptcy ; and any property which might be realized would be divisible among the creditors. The word ' money,' in my opinion, refers to something of the same nature as 'property,' namely, something specific, and does not apply to that which is a mere debt due from the settlor." Art. 17. — Validity as against subsequent Purchasers. «■■ A settlement of lands (z) is void, as against subsequent bon^ fide purchasers for value from the settlor, if made with intent to defeat such purchasers (a) ; or (in the absence of express intent) if the trust was voluntary {h) ; or if it is revo- cable by the settlor (c). (3. For the purposes of this article, trusts in favour of volunteers [d) made to take (z) As to copyholds, see Doe v. BoUriell, 5 B. & Ad. 131 ; Currie v. Nind, 1 M. & C. 17 ; and as to leaseholds, last note to Saunders v. Dehen, 2 Ver. 272. But remember that a settlement by way of assignment of leaseholds cannot in general be voluntary {Price v. Jenkins, 5 Ch. Div. 619). (a) 27 Eliz. 0. 4. The word "purchasers" includes mort- gagees and lessees {Dolphin v. Aylward, L. E., 4 11. L. 486; Doe v. Mores, 2 W. Bl. 1019). (5) Doe V. Manning, 9 East, 59. (c) 27 Eliz. 0. 4; and see Standon v. Bullock, cit. 3 Eep. 82 b ; Lavender y. Blackston, 3 Keb. 526 ; Jenkins v. Kemiss, 1 Lev. 150. {d) See, for meaning of volunteers, Art. 8, p. 45, supra. 128 DECLARED TRt'STS. effect by way of remainder, after satis- faction of trusts in favour of parties- privy to valuable consideration, are con- sidered to be voluntary (e), unless they were expressly or impliedly stipulated for by the party from whom the con- sideration proceeded (/). In a marriage settlement, there is a presumption that ultimate limitations of the wife's property in derogation of the jus mariti, were stipu- lated for by her {g). y- The fact that a purchaser had notice of such a settlement does not affect his priority (A). ^. Where there is no express intent to defeat purchasers, a voluntary settlement will be void so far only as may be necessary to give effect to the subse- quent purchase (i). Nevertheless, the beneficiaries have no equitable right to- (e) Osgood v. Strode, 2 P. W. 243 ; Johnson v. Legard. 3 Mad. 283 ; Stachpoole v. Stackpoole, -t Dr. & War. 320 : Smiths. Oherrill, L. E., -i Eq. 390 ; WoUaston-f. Tribe, L. E., 9 Eq. 44. (/) See Dart's V. & P. 6th ed. p. 1012, approved byBlack- burn and Willes, JJ., in Clarke y. Wright, 6 H. & N. 849. (?) lb- [h) Doe V. Manning, supra. [i] Groher y. Martin, 1 Bl. N. S. 5T3 ; Dolphin v. Aylward, L. E., 4 H. L. 486. VALIDITY AS AGAINST SUBSEQUENT PUKCHASEES. 129 the j)urchase-money, as against the settlor (k). e. Provided always, that this article in nowise prejudicially affects bonS. fide purchasers for value (I), whether bene- ficiaries under a trust based on value, but fraudulent in inception, or assigns of beneficiaries under a voluntary trust, although having notice of its voluntary character [m). Illust. 1. — Express intent to defraud. — Settle- ments made with intent to defraud subsequent pur- chasers, and settlements containing a clause of revocation at the settlor's pleasure, were expressly made void, as against subsequent purchasers from the settlor, by the statute 27 Eliz. c. 4. Instances of settlements framed with the express intention of de- frauding subsequent creditors are rare ; but if A. and 33. were to conspire together, that A. should sell his lands to B., and that A. should retain the title deeds in order to enable him to sell the land over again to C, the conveyance to B. would be void under the statute as against C. 2. Power of Revocation. — So again, where there was, under a marriage settlement, a power reserved to the settlor to grant a long lease with or ivithont rent, it was held that that was practically a power of (k) Dahin v. Whymper, 26 B. 568. ll) 27 Eliz. c. 4, s. 4. {m) Frodgers v. Langham, Keb. 486. TJ. K 130 DECLARED TRUSTS. revocation pro tanto, and that a subsequent mort- gagee of the settlor was entitled to the property for the period during which a lease could have been granted (m). 3. Voluntary conveyances. — Although the statute 27 Eliz. c. 4 does not in any way speak of voluntary conveyances, it has for nearly 300 years been held, in' a long line of decisions, that every voluntary con- veyance or settlement is impliedly fraudulent within that statute as against subsequent purchasers, even although no actual intention to defraud existed at the date of the settlement impeached (o). This is, of course, purely judge-made law, and seems to rest on the presumption that, by selling the property after- wards for valuable consideration, the settlor so en- tirely repudiates the former voluntary settlement, and shows his intention to sell, as that it shall be taken conclusively against him and the beneficiaries that such intention existed token he made the voluntary settlement, and consequently that the latter was made with intent to defeat the subsequent purchaser {jp). This principle appears to be somewhat far-fetched, and of late years has frequently been alluded to with disapprobation by learned judges, but accom- panied by an intimation that nothing less than legis- lative interference could now alter a rule which has been uniformly acted on for so long a period. An excellent example of it is afforded by the case of in) Lavender v. Bladeston, 3 Keb. 526. (ol Doe V. Manning, 9 East, 57 ; Troioell v. Shenton, 8 Ch. biv. 318. (p) Per Campljell, C.J., Doe v. Buaham, 17 Q. B. 723. VALIDITY AS AGAINST SUBSEQUENT PURCHASERS. 131 Trowell v. Shenton (q). There, an infant had written to his hetrothed, promising that on coming of age he would settle seven specified houses on her. No settlement was made for fifteen years, at the ex- piration of which, he settled these seven and two other houses upon her, but on different trusts to those mentioned in the letter, and without in any- way referring to that letter. Some few years after this, he agreed to sell three of the houses to a purchaser. In an action by the purchaser for specific performance of this agreement, it was held that the settlement was void as against him. Por as the settlement did not refer to any previous agreement, dealt with other property than that mentioned in the letter, and settled the property in a different way, there was no ratification in writing of the promise contained in that letter, and the settlement was therefore purely post-nuptial and voluntary. It must, however, be pointed out that, as the invalidity of voluntary deeds as against subsequent purchasers depends entirely on an original intention presumed from the fact of the settlor's sub- sequent attempt to sell, the doctrine can only apply when the settlor himself subsequently sells, and not where the subsequent vendor is his heir, or a second voluntary grantee of the settlor (r). 4. However, a very small consideration will suffice to remove a bona fide settlement from the category of voluntary settlements for the purposes of this act : (g) 8 Ch. Div. 318. (r) Per Campbell, O.J., JDoe v. Busliam, supra; and see Farker v. Carter, 4 Ha. 409. k2 132 DECLARED TRUSTS. far less than will suffice to support a settlement made hy an insolvent as against his creditors («). Thus it was held, in Price y. Jenkins (t), that a settlement of leaseholds to which liability to pay rent and perform covenants is attached, is, from the very nature of the property, based on value ; for the cestuis que trusts thereby take upon themselves the primary discharge of those liabilities. It is, however, humbly ques- tioned whether the decision in Price v. Jenkins could stand if it should ever come before the House of Lords. For, if undertaking the liability to pay rent and keep in repair, is a valuable consideration for a settlement or gift of leaseholds, it would seem to follow that the liability to pay rates and taxes would be a valuable consideration for a gift of freeholds, in which case no gift of real estate could ever be volun- tary — a palpable reductio ad absurdum. It is therefore conceived that a consideration can only be considered valuable, which entails on the party rendering it the liability to give or do something which is not merely incidental to the omiership of the property for which the consideration is given, but something entirely beyond and apart from such incidents. Anyhow, the de- cision in Price v. Jenkins has no application where leaseholds are settled by way of sub-demise, as no onus is thereby imposed on the trustees (((). 5. Valuable consideration. — However it is quite clear that where there is any substantial bona fide consideration, the statute does not apply in the ab- (s) See Be Eidler, 22 Ch. Div. 74; Hamilton v. Molloy, & L. E., Ir. 339 ; Rosher v. Williams, L. E., 20 Eq. 210. [t) 5 Ch. Div. 619. {u) Shurmer v. Sedgwick, 31 W. E. 884. VALIDITY AS AGAINST SUBSEQUENT PUKCHASEES. 133 sence of express fraud. For instance, where there are mutual promises, each is a valuable consideration for the other. Thus it is settled, that if husband and wife, each of them having interests, no matter how much, or of what degree or what quality, come to an agree- ment which is afterwards embodied in a settlement, that is a bargain between husband and wife, which is not a transaction without valuable consideration {r). But where property is devised to the wife for her separate use, the husband has no estate or interest in it ; and consequently, if it be settled by the husband and wife, such a settlement would not be based on value, inasmuch as the husband has no rights to modify (;<•). And the same principle will of course apply to property belonging to a married woman under the Married Women's Property Act, 1882. 6. What remainders are considered voluntary. — With regard to what trusts are considered as voluntary for the purposes of this article : in general a marriage settlement by an intended husband, where there are the usual life estates to himself and wife, with re- mainder to the issue, and in default of issue to the settlor's nest of kin, the latter limitation is volun- tary ; because it cannot be presumed that the benefit of the husband's next of kin out of his property was one of the terms of the bargain for the settlement insisted on by the wife {x) . It was merely returning {v) Teasdale v. Braitliwaite, 4 Ch. Div. 90; affirmed, 5 OK. Div. 630 ; He Foster and Lister, 6 Ch. Div. 87 ; and Schrieher v. Dinkel, 54 L. J., Ch. 241. {w) Shurmer v. Sedgwick, 24 Ch. Div. 604. (x) See note (/), ante, p. 128. 134 DECLARED TRUSTS. to the husband's representatives what remained after the bargaia between the spouses was exhausted ; the expression, in short, of what would, but for that ex- pression, have been a resulting trust. But where the presumption can naturally arise that the ultimate limitation was part of the marriage bargain, it is apprehended, as above stated (in spite of some autho- rities to the contrary {y) ), that it is not then volun- tary, although made in favour of a volunteer. Thus, in Clarke v. Wright (2), Blackburn, J., said, " It seems to me, that though in general it may be supposed that on a marriage treaty, after the interest of the intended husband and wife and the issue of the marriage is provided for, the remainder of the estate is left to be disposed of as the party to whom that would revert pleases ; yet that when we find the interests of the husband, wife and issiie so much affected by the settlement, we must take it that it was agreed by all parties, as part of the marriage hargain, that the estate should be thus settled — ^that the wife agreed to marry the husband on the terms that this settlement should be thus made. If this be so, the question comes to be, if a limitation in favour of a third person, not merely inserted in the marriage settlement, but a2}pearing from its nature to have been made one of the terms of the marriage hargain, is to be, considered voluntary, or is to be considered as made for the valuable consideration of marriage ? {y) WMaston v. Tribe, L. E., 9 Eq. 44; Johnson v. Legard, T. & E. 66, 281 ; Smith v. Gherril, L. E., 4 Eq. 390; I'rice V. Jenkins, 4 Ch. Div. 483, per Hall, V.-C. (2) 6 H. & N. 849. VALIDITY AS AGAINST SUBSEQUENT PUKCHASERS. 135 In my opinion the case would have been the same if the plaintiff had heen some distant relation of the wife's first husband, or even a stranger in blood. The husband got the enjoyment of some part of the wife's property, which he could not have had if the marriage had not taken place. He may have got this on cheaper terms ; he may have been allowed to take a larger portion of her personal estate than he would have been permitted to take if this settlement had not been made ; or he may have been allowed to keep free a greater portion of his own property than he would otherwise have done, and in consideration of these substantial benefits to himself he may have become a party to a contract for this limitation It seems to me, that as on every marriage settlement there are reciprocal considerations between husband and wife, we ought not to hold a limitation, which is not merely included in the marriage settlement, but appears from its nature to have been really one of the terms of the marriage bargain, to be voluntary." The judgment in Clarke v. Wright has, however, been severely criticised by Y.-O. Hall («), but the Court of Appeal subsequently reversed the Yice-Chancellor's decision on another point, and ex- pressly refrained from expressing any opinion as to the validity of his strictures : and in the subsequent case of Gale v. Gale (Ij), Mr. Justice Fry quoted Clarke v. Wright with approval. 7. Notice of voluntary settlement does not aifect purchaser. — It has been repeatedly held, and cannot (a) Price v. Jenkins, 4 Cli. Div. 483. (6) 6 Ch. Div. 144. 136 DEOLAKEB TRUSTS. now be doubted (although modem judges have expressed strong disapproval of it), that knowledge of the existence of a voluntary settlement by a subsequent purchaser does not deprive him of the statutory priority (c). In the United States this view has been considered so manifestly unjust, as to call for the interference of the legislature {d). Even here, however, the voluntary settlement will not be cancelled unless the subsequent sale is a real bona fide alienation. Thus, where the consideration for the subsequent purchase is grossly inadequate, the sale may be impeached by the voluntary beneficiaries, on the ground that it is on the face of it a collusive arrangement between the settlor and the so-called purchaser for the purpose of relieving the former from the settlement (e) . 8. Void only pro tanto. — As an illustration of the principle, that the settlement is void so far only as is necessary to give effect to the subsequent transaction, the case of property subsequently mortgaged may be instanced. In such a case, the beneficiaries under the voluntary trust will be entitled, subject to the mortgage; and if unsettled estates are included in the mortgage, the beneficiaries are entitled to throw the mortgage on to the unsettled estates, if they are sufficient to answer it (/). (c) Doe v. Manning, 9 East, 59. (d) New York Eev. Statutes, vol. 2, p. 134. (e) Doe v. Itoutledge, Cowp. 705 ; Metcalfe v. Pulvertofty 1 V. & B. 184. (/) Hales V. Cox, 32 B. 118. ( 137 ) CHAPTEE IV. The Construction of Declared Trusts. Art. 18. — Executed Trusts construed strictly, and Executory liberally. a-. A trust in which the limitations of the- estate of the trustee and the beneficiaries are perfected and declared by the settlor is called an executed trust {a). In the construction of executed trusts, technical terms are construed in their legal and technical sense {V). /3. A trust in which the limitations of the estate are not perfected and declared by the settlor, but only an agreement made for the subsequent creation of a trust,. or certain instructions or heads of settle- ment indicated from which the trustee is subsequently to model, perfect and [a] See Stanley v. Lennard, 1 Eden, 9j. (i) Wright v. Pearson, 1 Ed. 125 ; Austen v. Taylor, ibid. 367 ; Brydges v. Brydges, .3 Ves. jun. Vlo ; Jeruoise y. Duke of Northumberland, 1 J. & W. 5*71. 138 DECLARED TRUSTS. declare the trust (c), is called an execu- tory trust. In the construction of exe- cutory trusts, the court is not confined to the language used by the settlor. And where that language is improper or informal (c?), or would create an illegal trust (e), or would otherwise defeat the settlor's intentions (as gathered from the motives which led to the settlement, and from its general object and purpose, or from other instruments to which it refers, or from any circumstances which may have influenced the settlor's mind(/) ), the court will not direct an executed settlement according to the strict mean- ing of the words used, but will order it to be made in a proper and legal manner so as best may answer the intent of the parties (ff). Illust. — 1. Instances of executed and executory trusts. — A father conveys freeholds to trustees upon (c) See Austen v. Taylor, 1 Eden, 366 ; Lord Ghnorchy v. Bosville, For. 3 ; and Stanley v. Lennard, supra. And see per Cairns, L.C., in Sachville West t. Eolniesdale, L. E., 4 H. L. 543. {d) See Earl of Stamford v. Sir John Ilohart, 3 Br. P. C. Tarl. ed. 31—33. (e) Humherston v. Humherston, 1 P. W. 332. (/) See per Lord Chelmsford in Sackville IVesf v. Hohnes- dale, L. E., 4 H. L. 343. ( g) Earl Stamford v. Sir John Holart, supra ; and see (Jocjan V. Duffield, 2 Oh. Div. 44. CONSTRUCTION OF DECLAKED TRUSTS. 139 certain trusts in favour of his daughters, and also covenants to surrender copyholds to the same trustees, to be held by them on similar trusts. Here the trust of the freeholds is an executed trust ; for the estates of the trustee and of the cestuis que trusts are perfect, and require nothing more to be done. The trust of the copyholds, on the other hand, is an excr cutory trust ; for something remains to be done in order to perfect the settlement, viz., that the property should be legally vested in the trustees. 2. So, where a testator by will gives property to trustees, in trust to cause it to be settled on his daughter in strict settlement, that is an executory trust ; and so are agreements for settlements, such as marriage articles. 3. Uule in Shelley's case, when applied. — If an estate is vested in trustees and their heirs, in trust for A. for life without impeachment of waste, with re- mainder to trustees to preserve contingent remainders, with remainder in trust for the heirs of A.'s body, the trust being an executed trust, A. (according to the rule in Shelley's case, which is a rule of Icm and not merely of construction) will be held to take an estate taU. (A). Of course, where the doctrine could not apply in law (owing to the life estate being equitable and the remainder legal, or vice versa), the rule will not apply in equity (i) ; nor where the word " heir " (/i) Wright V. Pearson, 1 Ed. 119; Austen y. Taylor, ibid. 361 ; Jones v. Morgan, 1 Bro. C. C. 206 ; Jervoise v. Duhe of Northumberland, 1 J. & W. 559. (i) Collier v. M'Bean, 34 Beav. 426. 140 DECLAKED TRUSTS. is used in the sense of persona designata (/c) ; as, for example, ■where the ultimate limitation is "to the person who may then be the heir of A." 4. On the other hand, in the leading case of Lord Glenorchy v. Bosiille {I), the settlor devised real estate- to trustees upon trust, upon the happening of the marriage of his grand- daughter, to convey the estate to the use of her for life, with remainder to the use of her husband for life, with remainder to the issue- of her body, with remainders over. It was held, that though the grand-daughter would have taken an estate tail had it been an executed trust, yet as the trust was executory, it was to be executed in a more careful and accurate manner ; and that as the testa- tor's intention was to provide for the children of the marriage, that intention would be best carried out by a conveyance to the grand-daughter for life, with remainder to her husband for life, vdth remainder to her first and other sons in tail, with remainder to her daughters. 5. And so in marriage articles, a covenant tO' settle estates to the use of the husband for life, with remainder to wife for life, with remainder to their heirs male and the heirs of such heirs male, is always construed to mean that the settlement shall be so drawn as to give life estates only to the husband and wife successively {m) ; for it is not to be pre- (h) Greaves v. Simpson, 10 Jur., N. S. 609. (l) IW. &T. L. C. 1. (m) Trevor v. Trevor, 1 P. W. 622 ; Streatfield v. Streatfield, 1 W. & T. L. C. 333 ; Jones v. Langton, 1 Eq. 0. Ab. 392 ; Cusack v. Cusach, 5 Bro. P. C. Tom. ed. 116; Griffith v. COXSTRUCTION OF DECLARED TRUSTS. 141 fiumed that the parties meant to put it in the power of the husband to defeat the very object of the settlement, which is to make a provision for the issue of the marriage (n). 6. Executory trusts, when construed strictly. — But where the articles show that the parties understood the distinction, (as, for instance, where part of the property is limited in strict settlement, and part not,) the trust will be construed strictly (o). 7. Powers implied in executory trusts. — It would seem that, under a direction to settle on a woman and her children, the usual powers of maintenance and advancement ought to be inserted (p), and also powers of sale and exchange (q). So where marriage articles provide for " powers usually contained in settlements of a Kke nature," powers of sale, ex- change, and reinvestment are authorized (r) . So, where a settlement of personalty contains a power to vary investments, and a covenant to settle after- acquired property on similar trusts, a settlement of after-acquired real estate should contain a power of Buclde, 2 Vern. 13 ; Stoner v. Carwen, 5 Sim. 268 ; Davies v. Davies, 4 Beav. 54 ; Lambert v. Peyton, 8 H. L. Gas. 1. (m) As to the meaning of "issue" in marriage articles, see Nandick v. Wilkes, Gil. Eq. Eep. 114; Burton v. Hastings, ibid. 113; Hart v. Middlehurst, 3 Atk. 371; Maguire v. Scully, 2 Hy. 113; Burnahy v. Oriffin, 3 Ves. 206 ; Home v. Barton, 19 Ves. 398 ; Phillips v. James, 2 D. & Sm. 404. (o) Howel V. Howel, 2 Ves. 358 ; Powel v. Price, 2 P. W. 535 ; Chambers v. Chambers, 2 Eq. C. Ab. 35, c. 4 ; Highway V. Banner, 1 Bro. G. G. 584. (jp) Me Parrott, Walter v. Parrott, 33 Cb. Div. 274. (2) Wise V. Piper, 13 Cb. Div. 848. {r) D. of Bedford v. M. of Abercorn, 1 M. & 0. 312. 142 DECLARED TRUSTS. sale, as that is analogous to a power of varying in- vestments of personalty (s) . On the other hand, a reference to certain powers, will, it would seem, prima facie negative any others (t) . 8. Construction of executory trusts in wills. — In a will it is obvious that the same presumption will not arise as in the case of marriage articles. Therefore, where a testator gave 300^. to trustees, upon trust ta lay it out in the pm-chase of lands, and to settle such lands to the only use of M. and her children, and if M. died without issue, " the land to be divided between her brothers and sisters then living," it was held that this gave M. an estate tail {u). 9. There is, however, no diiference between the- construction to be put on an executory trust created by marriage articles, and on an executory trust created by will, except so far as the former (by its very nature) furnishes more emphatically the means of ascertaining the intention of those who- created the trust (f). In Sackvilk West v. Viscount Solmcsdalc, Lady A., by a codicil to her will, de- clared her intention to be, to give certain real and personal property to trustees, in trust to settle it (as near as might be), with the limitations of the barony of Buclihurst, in such manner as the trustees should consider proper, or as their counsel should advise. (s) Elton V. Elton, 27 B. 63-1 ; and see Tait T. Lathhury, L. E., 1 Eq. 174. (i) See Brewster v. Angell, 1 J. & W. 625. (u) Siueetapph r. Bindon, 2 Ver. 536. [v] Sackville West v. Holmesdale, L. E., 4 H. L. 543; and see also Christie v. Gosling, L. E., 1 H. L. 543. CONSTEUCTIOTS OF DECLAKED TRUSTS. 143 The tarony was limited to Lady De la Warr for life, with remainder to E.., her second son, and the heirs male of his hody, with remainder to the third, fourth, and other sons in like manner. It was held, that the property ought not to be settled upon R. in tail like the barony, but that it ought to be limited in a course of strict settlement to E. and other younger sons of Lady De la Wan' for their respective lives, with remainder to their sons successively in tail male, in the order mentioned in the patent whereby the barony was created. And Lord Chelmsford said : " The best illustration of the object and purpose of an instrument furnishing an intention in the case of executory trusts, is to be found in the instance of marriage articles, where, the object of the settlement being to make a provision for the issue of the mar- riage, no words, however strong (which in the case of an executed trust would place the issue in the power of the father), will be allowed to prevail against the implied intention. So, as Sir W. Grrant said, in Blackburn v. Stahles («■), ' in the case of a will, if it can be clearly ascertained from anything in the will that the testator did not mean to use the expressions which he has employed in their strict technical sense,. the court, in decreeing such settlement as he has directed, will depart from his words to execute his intention.' . . . There are cases of executory trusts in wills, where the words ' heirs of the body ' have been made to bend to indications of intention that the estate should be strictly settled ; and a direction in a will, that a settlement ' shall be made {w) 2 V. & B. 369. 144 DECLARED TRUSTS. as counsel shall advise,' has been held sufficient to show that the words were not intended to have their strict legal effect («•). . . . It appears to me that the words of the codicil express an intention that the barony and the estates should go together to the same person, but not that the limitations of the two should be identical. . . . The word ' correspond ' does not mean that the limitations are to be exactly the same, but that they are to be adapted to each other so as to carry out the testatrix's intention that the estate and title should go together. ... If the settlement were framed with a limitation in the words of the letters patent. Lord Buckhurst would be able to defeat this intention, and, by converting his estate tail into a fee simple, to separate the estate and the title for ever." 10. So, again, a testator bequeathed money to trustees upon trust to purchase real estate, and settle it upon A. for life without impeachment of tcaste, with remainder to trustees to preserve contingent remainders, with remainder to the heirs of A.'s body, and with a power to jointure. He also devised land to A. upon exactly similar uses. It was held, that the testator manifested an intention to give A. a life estate only ; and that consequently, in the case of the executory trusts, this intention should be carried out ; but that in the case of the devise, that being executed, must be construed according to the rule in 8helkj/'s ■case (y). In fact, any indication that the first taker is (x) Bastard v. Prohtj, 2 Cox, 6. \y) Papillan v. Voice, 2 P. W. 511; Trevor v. Trevor, 1 H. L. 239. CONSTRUCTION OF DECLAKED TRUSTS. 145 not to take in tail or fee is sufficient ; as, for instance, a direction that he is to be unimpeachable for waste, or that he shall not have power to bar the entail, or the like (s). 11. Where strict construction would make trust illegal, — A. devised lands to a corporation in trust to convey to A. for life, and afterwards, upon the •death of A., to his first son for life, and then to the first son of that first son for life, with remainder (in ■default of issue male of A.) to B. for life, and to his ■sons and their sons in like manner. Lord Cowper said, that though the attempt to create a perpetuity was vain, yet, so far as was consistent with the rules of law, the devise ought to be complied with ; and he directed that all the sons already bom at the testa- tor's death should take estates for life, with limita- tions to their unborn sons in tail {a). 12. Simple direction to settle. — A fund is bequeathed to trustees, upon trust to settle it on a lady and her children. In the absence of any indication to the contrary, the proper form of the settlement will be as follows : — ^A life interest to the lady for her separate Tise without power of anticipation (b) ; then a life interest to the husband ; then a joint power to the husband and wiie to appoint among their chil- (z) See Papillan y. Voice, supra ; Leonard v. Lord Sussex, 2 Ver. 526 ; Thompson v. Fisher, L. E., 10 Eq. 207 ; Parker V. Bolton, 5 L. J., Oh. 98. (a) Humbertson v. Humlertson, 1 P. W. 332 ; Williams v. Teale, 6 Ha. 239 ; Lyddon v. Ellison, 17 B. 565 ; Peard v. Kelcewich, 15 B. 173 ; but see Blagrove v. Handcoch, 18 Sim. 378. (J) Re ParroU, Walter v. ParroU, 33 Ch. Div. 274 ; Turner V. Sargent, 17 B. 515. U. L 146 DECLARED TRUSTS. dren; and, subject thereto (semble) {c), alike power to the survivor (hut if the wife be the survivor, the power is to extend to children by a future marriage) ; and, subject thereto, the fund should be made to go equally to such of the children of the wife as, being sons, attain twenty-one, or, being daughters, attain that age or marry ; or, in the alternative, to children equally, with gifts over in favour of others, if any of them, being sons, die under twenty-one, or, being daughters, under that age and unmarried {d). It would appear that such a settlement ought also to contain the usual powers of maintenance and advance- ment, and a power of appointment to the lady in de- fault of issue, with the usual limitations to herself or next of kin in default of appointment (e). 13. Where a f and was bequeathed to a man until marriage, and then to be settled on his toife and chil- dren, and in default of issue to revert to the testa- trix's estate ; the court directed that the settlement should contain a limitation of the fund to the hus- band for life, with remainder to the wife for life, with remainder to the children as the husband and wife should jointly appoint, with remainder as the survivor should by deed or will appoint (but if the husband were survivor, he was to have power to appoint (c) See Re Q-owan, Oowan v. Oowan, 17 Ch. Div. TVS, where, in the case of a fund left to a man xmtil marriage, and then to be settled on his wife and children, such a power was given to him ; see also Ee Bellasis, L. E., 12 Bq. 218. {d) Cogan v. Duffield, 2 Ch. Div. 44, 49, per BaggaUay, L.J. ; and see Be Oowan, Oowan v. Oowan, supra. (e) Re Parrott, Walter v. Parrott, supra, distinguishing Oliver v. Oliver, 10 Oh. Div. 765. , CONSTRUCTION OF DECLARED TRUSTS, 147 amongst Ms children by a future marriage), with an ultimate remainder to all the children of the hushand attaining twenty-one, or, in the case of daughters, marrying under that age, and in default of children the fund to fall into the testatrix's residuary estate (/) . 14. Departures from ordinary form. — Where, how- ever, there are indications that the settlor contem- plates a different form of settlement to the above, his wishes will have effect given to them. Thus, in the recent case of Re Parrott, Walter \. Parr ott {g), a testator had bequeathed as follows : — " To my daughter A., wife of M. W., I bequeath 10,000^., this amount to be settled upon her for her life, and to be invested for her in good securities, in the names of two or more trustees. At her death, 8,000^. of the above sum to be divided equally amongst her children, and the remaining 2,000/. to be given to her husband, if living ; if deceased, then the whole amount is to be equally divided amongst her chil- dren." It was held by the Court of Appeal that, on the construction of the will, the settlement must be so framed as to make the contingent gift of 2,000/. to " her husband, if living," apply only to M. "W., and not to any future husband ; and also, so as to confine the trusts in favour of the daughter's children, to her children by him. It was further held, that the settlement ought to be framed so as to restrain the daughter from anticipating the income, and sO' (/) Ee Gowan, Oowan v. Qowan, supra, where the form of judgment is given, showing the limitations in full. {g) 33 Ch. Div. 274. l2 148 DECLARED TRUSTS. as to make the fund divisible only among cMldreii who, being sons, should attain twenty-one, or, being daughters, attain that age or marry. It was further held, that the settlement ought to contain the usual powers of maintenance and advancement, and a power of appointment by the daughter in default of children, with the usual limitations to herself or next of kiu in default of appointment, but not any jiower of ap- pointment among the children, as such power would be inconsistent with the direction for equal division. 15. Separate use imported in executory trust. — As a last illustration may be quoted the case of Willis v. Kymer {h). There a testatrix had by her will, after requesting her sister Eliza to perform her wishes as therein expressed, bequeathed various legacies to her brothers and sisters and their children, including a legacy of 3,000/. to her brother John for life, " the principal to be divided at his death between his children, John, Sophia, and Mary Ann." The testatrix subsequently made a codicU, whereby she bequeathed to Eliza " all I possess," requesting that at her death she "will leave the sums as I have directed heretofore." Eliza by her will appointed the shares of Sophia and Mary Ann to them to their separate use, and the question then arose whether she could do so ; and Sir George Jessel, M.R., said, " I am of opinion that Eliza had power to attach a limitation to separate xise. . . . The original will and codicil say nothing about separate use. {h) L. E., 7 Oh. Div. 181. CONSTKUCTION OF DECLARED TRUSTS. 149 They merely direct her to leave the money after her brother's death to his children, and nothing more. She is therefore hound not to make a different disposition. Well, she has conformed to that direc- tion by leaving the money to the children, and, in doing so, has taken care to dispose of it in such a manner that the shares of the daughters shall, in case of their marriage, still remain for their own benefit, thus effectually carrying out her sister's inten- tion." ( 150 ) Division III. CONSTRUCTIVE TRUSTS. Chapteb. I. — Introduction. Art. 20. Analysis of Constructive Trusts. Chapter II. — Resulting Trusts. Art. 21. Where Equitable Interest not wholly disposed of. ,, 22. Where Trusts declared are Illegal. ,, 23. Where Purchase made in another^ s Name. „ 24. To whom Property results. Chapter III. — Constructive Trusts which are NOT Resulting. Art. 25. Constructive Trusts of Profits made hy Fiduciary Persons. „ 26. Constructive Trusts inhere Equitable and Legal Estates are not vested in one Person. CHAPTBE I. Introduction. Art. 20. — Analysis of Constructive Trusts. Constructive trusts are either resulting trusts (in which the equitable interest INTKODUCTION. 151 springs back or results to a settlor or his representatives), or non-resulting trusts. Resulting trusts arise in the three following cases, viz. : — a. When a legal estate is given to another, but the equitable interest is not, or is only partially disposed of (^). /3. When the equitable interest is dis- posed of in a manner which the law will not permit to be carried out {Ji). y. When a purchase has been made in the name of some other person than the real purchaser {I'). Constructive trusts which are not resulting- arise : — I. When some person holding a fidu- ciary position has made a profit out of the trust property (iii). £. In all other cases where there is no express trust, but the legal and equitable estates in property are nevertheless not co-equal and united in the same indi- vidual (w). (0 Art. 21. (m) Art. 25. (//) Art. 22. (n) Art. 26. {I) Art. 23. 152 CONSTKUCTIVE TRUSTS. CHAPTER II. Resulting Trusts. Aet. 21. Where Equitable Interest not ivholly disposed of. ,, 22. Wliere Trusts declared are Illegal. „ 23. Where Purchase made in another's Name. ,, 24. To whom Property results. Akt. 21. — Where Equitable Interest not tcholhj dhpo&ed of. When property is given to a person, and it appears on the trust instrument to- have been tlae probable intention of the donor [a) that the donee was not to take it beneficially, there will be a resulting trust in favour of the donor or his repre- sentatives in the following cases, viz. : — a. If the instrument is either silent as to the way in which the beneficial inte- rest is to be applied ; or jS. If it directs that it shall be applied for a particular purpose (as distinguished [a) Per Lord Hardwicke, Hill v. Bishop of London, 1 Atk. 620 ; Walton v. Walton, 14 V. 322 ; King v. Denison, 1 V. & B. 2*79. EQUITABLE INTEREST NOT WHOLLY DISPOSED OF. 153 from a mere subjection to such pur- pose (b) ) whicli turns out to be insuffi- cient to exhaust the property ; or y. If an express trust cannot be carried into effect (c). Where the non-beneficial character of the gift appears on the face of the instru- ment, no evidence to the contrary is admissible (d). But where it is merely presumed from the general scope of the instrument, parol evidence is (at all events in the case of gifts inter vivos) admissible, both in aid and in contra- diction of the presumption (e). Illust. — 1. Devise to trustees eo nomine. — Thus, where real estate was devised to " my trustees," but no trusts were declared in relation to it, it was held that the trustees must hold it in trust for the testator's- heir. For by the expression " trustees," unexplained (5) See 1 Jarm. 533 ; Watson v. Hayes, 5 M. & 0. 125 ; Wood V. Cox, 2 M. & 0. 684. (c) Stuhhs V. Sargou, 3 M. & C. 507; Ackroyd v. Smithaoji,. 1 B. 0. C. 503. (d) See Langham Y. Sand/ord, 17 V. 442; Irvine Y. Sullivan, L. E., 8 Eq. 673 ; iJe Croome, W. N. 1888, 37. (e) 29 Car. II. c. 3, s. 8 ; Qascoigne v. Tliwing, 1 Vev. 366; Willis v. Willis, 2 Atk. 71; Cook v. Hutchinson, 1 Ke. 50. As to parol evidence explanatory of a testator's inten- tion, see Docksey v. Docksey, 2 Eq. 0. A. 506 ; North v. Crompton, 1 Oh. Ca. 196 ; Walton v. Walton, 14 V. 322 ; Langham v. Sandford, supra ; Lynn v. Beaver, 1 T. & E. 66 ;, and Le-win, 52 etseq., and 130; and seeBiddulphy. Williams, 1 Ch. Div. 203. 154 CONSTRUCTIVE TRUSTS. by anything else in the instrument (/), all notion of a. beneficial interest in the gift to those individuals was excluded (g). 2. Devise upon trusts not declared. — A testator devised and bequeathed all his estate and effects to A. and B., their heirs, executors, and administrators, vpon trust to convert his personal estate, and to stand possessed of the proceeds and of the residue of his estate and effects, upon trusts only applicable to personalty. It was held that the real estate of the testator passed to the trustees by the use of the word ■"devise" in the gift, and the word "heirs" in the limitation; but that as the trusts were rigidly and -exclusively applicable to personal property, and as the trustees had been designated by that name, and so could not take beneficially, there was a resulting trust of the real estate in favour of the settlor's heirs (h). 3. lands vested in trustee, no trust witMa Statute of Frauds, — Where lands have been conveyed to a trustee, and the trusts have not been manifested and proved by a signed writing in accordance with the Statute of Frauds, there will be a resulting trust to the settlor (i). ( / ) As, for instance, if the expression is used with reference to one only of two separate funds. Bateley v. Whidle, 2 13. C. 0. 31 ; Pratt v. Sladden, 14 V. 193 ; Oihbs v. Bumseti, 3 V. & B. 294. ((/) Dawson v. Olarh, 18 V. 254; Barrs v. Feivhe, 2 H. & M. (iO ; and see Elcuch v. Mapp, 3 H. L. Oas. 492. [h) Lonqley v. Longley, L. E., 13 Eq. 133; Dunnage v. White, 1 J. & W. 583; Lloyd v. Lloyd, L. E., 7 Eq. 458; ■comp. D'Almaine v. Moseley, 1 Dr. 629 ; Goard v. Holderness, 20 B. 147. (j) Budhin v. Dolman, 35 L. T. 791. EQUITABLE INTEREST NOT WHOLLY DISPOSED OF. 155 4. Uncertainty or failure of express trust. — So, if a declared trust is too uncertain or vague to be execu- ■ted (k), or fails by lapse (l) or otherwise, then, as it is expressed on the face of the instrument that the trustee was not intended to take beneficially, there will be a resulting trust. 5. Voluntary grants, — Real property is granted to another, either without any consideration at all, or for a merely nominal one (m) . If no trust is declared of any part of it, and the grant is to a stranger, and no intention of passing the beneficial interest appears •either by the instrument, or by parol or other evi- dence (w), the law presumes that the probable in- tention of the grantor was not to confer a benefit (o), and accordingly looks upon the grantee as a trustee for the grantor or his representatives. 6. But where the gift is of chattels, it would seem that an intention to confer beneficially would be presumed, on the ground of the utter fatuity of the proceeding on any other supposition (p). But this presumption is, of course, rebuttable by evidence (q) . 7. Residue after satisfaction of express trust. — Where there is a devise to A. upon trust to pay (Jc) Stubhs Y. Bargou, 2 Ke. 25i) ; Morice v. Bisliop of Dwr- lam, 9 V. 399, and 10 V. 522 ; Kendal v. aranger, 5 B. 300. [1) Ackroyd v. Smithson, 1 B. 0. 0. 503; Spink v. Lewis, -3 B. 0. C. 355 ; or becomes in the event too remote ; Tregon- luell V. Sydenham, 3 Dow, 210. (m) Hayes v. Kingdome, 1 Ver. 33 ; ScuUhorpe v. Burgess, 1 V. jun. 92. (m) Cook V. Hutchinson, 1 Ke. 50. (o) Sculthorpe v. Burgess, supra ; and see Huichins v. Lee, 1 At. 447. As to grants to wife or cliildren, see art. 23. (p) George v. Howard, 7 Pr. 651. (q) Custance v. Ounninghame, 13 B. 363. 156 CONSTRUCTIVE TRUSTS. debts or to answer an annuity, there is a resulting trust of what remains, after payment of the debts or satis- faction of the annuity (r). Thus, in the recent case of Be Croome («), a testator gave to his brother all his real estate, "on trust nevertheless to pay thereout" two sums of 800^. and 300/. in certain annuities. He also gave all his personal estate after payment of funeral expenses and just debts, "except the two above- mentioned sums of 800/. and 300/.," to his said brother and to his sister, share and share alike. The brother was also appointed sole executor. Stirling, J., said that it had been held, since the case of King v. Benison, that where there was a devise to A. on trust for a particular purpose which did not exhaust the whole property, the eilect was to give the devised property for that particular purpose only, and not to give A. any beneficial interest, unless it were shown, from something else in the iciU, that the devisee should take beneficially. Here there was no such intention expressed, and as he was of opinion that parol evidence of such intention was inadmissible, he held that there was a resulting trust in favour of the testator's heir. 8. And so where one assigns his property to a trustee, in trust to sell and divide the proceeds amongst his creditors in payment of their debts, there is a resulting trust in favour of the debtor of any surplus which may remain after all the debts are paid {t). 9. Again, where, under a similar assignment to {r) King v. Dennison, 1 V. & B. 2*79 ; Watson v. Hayes, supra. (s) W. N. 1888, p. ST. («) Green v. Wynn, L. E., 4 Oh. Ap. 204. EQUITABLE INTEREST NOT WHOLLY niSPOSEU OF. 157 that mentioned in the last illustration, there is not enough to pay all the creditors in fuU, any unclaimed dividends must be applied in augmentation of the dividends of the creditors who do claim (m). 10. Total failure of consideration for express trust. : — So where a settlement is executed in contempla- tion of a marriage which is subsequently broken off, there is a total failure of the consideration on which the settlement was based, and the property results to the settlor (v). 11. No resulting trust where it appears that donee was to take beneficially. — But where (iv) one made his will, and thereby gave 51. to his brother (who was also his heir-at-law), and made and constituted his " dearly beloved wife " his " sole heiress and execu- trix " of all his lands and real and personal estate, to sell and dispose thereof at her pleasure, and to pay his debts and legacies, it was held, that the wife was entitled to the real estate for her own benefit, and that there was no resulting trust to the heir. The ground of this decision was, that the direction that the wife should be sole heiress, did in every respect place her in the stead of the heir-at-law, and not as trustee for him, and that this was " rendered plainer by reason of the language of tenderness and affection, which must intend to her something beneficial, and not what would be a trouble only ; " in addition to which the heir was not forgotten, but had 51. left him. (u) Wild v. Banning, L. E., 2 Eq. 577. v) Essery v. Gowlard, 26 Oh. Div. 191. w) Rogers v. Rogers, 3 P. W. 193. 158 CONSTRUCTIVE TKUSTS. 12. Charge does not imply resulting trust of residue^ — And so under a devise to A., charged with the payment of debts and legacies («), or charged with the payment of a contingent legacy {y) which does not take effect, there will be no resulting trust, but the whole property will go to the devisee beneficially, subject only to the charge. Art. 22. — Resulting Trusts, tchere Trusts declared are^ Illegal. When a person has intentionally vested property in another for an illegal pur- pose, then, (if the trustee expressly relies (0) upon the maxim " in pari delicto- potior est conditio possidentis") the settlor cannot recover it back (a), except in the following cases, namely : — a. Where the illegal purpose is not carried into execution and nothing is done under it. In such cases there is a locus pceniten- tise, and the mere intention to effect an illegal object will not deprive the settlor of the right to the beneficial ownership, (k) King v. Dennison , supra ; Wood v. Cox, supra. (y) Tregonwell-v. Si/denham, 3 Dow, 210. (z) Haigh T. Kaye, L. E., 7 Ch. Ap. 469. (a) Duke of Bedford v. Coke, 1 V. sen. 116 ; Curtis t. Perry, 6 V. 739; CoUington v. Fletcher, 2 At. 156; Bracken- hury V. Braclcenhury , 2 J. & W. 391 ; Taylor v. Chester, L. E.. 4 Q. B. 309 ; Ayerst v. Jenkins, L. E., 16 Eq. 275. EESULTING TRUST, WHERE LIMITATION ILLEGAL. 159* to which the trustee has no honest claim ; and there will consequently be a result- ing trust in favour of the settlor (b). 13. Where the effect of allowing the trustee to retain the property might be to effec- tuate an unlawful object, or to defeat a legal prohibition, or to protect a fraud. In such cases equity will, (on the ground of public policy,) enforce a resulting- trust in favour of the settlor, so as to prevent the illegal trust being carried into effect (c). Illust. — 1. Fraudulent conveyance. — Thus, in Symes v. Hughes {d), the plaintiff, being in pecuniary difSculties, assigned certain leasehold property to a trustee with the view of defeating his creditors. Two and a-half years afterwards he was adjudicated bank- rupt, but obtained the sanction of his creditors, under sect. 110 of the Bankruptcy Act, 1861, to an arrange- ment, by which his estate and effects were re-vested [h] Symes v. Hughes, L. E., 9 Bq. 475 ; Ghilders v. Childers,. 1 D. & J. 482 ; Davies v. Otti/, 35 B. 208 ; BircJi y. Blagrave,. Amb. 264 ; Platamore v. Staple, Q. Coop. 250. (c) See per Lord Selborne in Ayerst v. Jenkins, L. E., 16- Eq. 283 ; and see per Enight-Bruoe, L. J., in Beynell v. Spry, 1 De Gr., M. & G. 660, where lie said: "Where the parties are not in pari delicto, and where public policy is considered as adyanoed by allowing either party, or at least the more excusable of the two, to sue for relief, relief is given to him." And see also, to same effect, Law v. Law, 3 P. W.- 393, and St. John v. St. John, 11 V. 535. {d) Supra. 160 CONSTRUCTIVE TRUSTS. in him, he covenantirig to prosecute a suit for the recovery of the assigned property, and to pay a com- position of two and sixpence in the pound to his creditors, in case his suit should prove successful. Xiord Eomilly, M.E., in delivering judgment, said : " The assignment v^as made for an illegal purpose, and it is said that, such being the case, the court ■will not interfere. I think the correct answer to this was given by Mr. Southgate, namely, that where the purpose for which the assignment was given is not carried into execution, and nothing is done under it, ihe mere intention to effect an illegal object when the assignment was executed does not deprive the assignor of his right to recover the property from the assignee who has given no consideration for it." 2. Conveyance to avoid forfeiture for felony. — So, again, the plaintiff, being apprehensive of an indict- ment for bigamy (conviction for which involved forfeiture of property), conveyed his real estate to the defendant, on a parol agreement to re-transfer when the difficulty should have passed over. It subsequently transpired that the plaintiff was not liable to be indicted, and thereupon he filed a bill praying for a re-transfer of his property. It was held, that although there was no express trust, (in- asmuch as there was no written proof of it,) yet there was a resulting trust to which the statute did not apply ; and as there was no illegality in fact, but only in intention, the court ordered the transfer prayed for (e). (e) Davies v. Otty, supra. eestiltinct tkust, "wheke limitation illegal. 161 3. Conveyance to escape serving as sheriff. — And where a father conveyed the legal estate in property to his daughter, with the intention of thus escaping from serving as sheriff, but afterwards repented, and paid the fine, Lord Hardwicke said: "I am of opinion that the conveyance ought not to take effect against his intention unless he had actually taken the oath " that he had not the requisite qualification (/) . 4. Attempt to evade rule against perpetuities. — Where a settlor attempts to settle property so as to ' contravene the policy of the law with regard to per- petuities, such trusts will not only not be carried into effect, but the person nominated to carry them out is held to be a mere trustee for the settlor or his representatives. For the attempt was made either through ignorance or carelessness, or else with a direct intention to contravene the law. In the former case, as there would be no delictum, the usual maxim would not apply. In the latter, equity would not allow the trustee to retain the property and so put it in his power to carry out the illegal intentions of the testator, and to defeat the policy of the law {g). 5. Attempt to evade mortmain acts. — And so again, where lands, or the proceeds of land, are devised to charitable uses, or are devised to one who is under a secret agreement with the testator pledged to apply them to charitable purposes, then, notwithstanding the improper intentions of the testator, there will be a resulting trust. For the result of allowing the ( f ) Birch V. Blagrave, supra. [g) Carrick v. Errington, 2 P. W. 361; Tregonwell v. Sydenham, 3 Dow, 194 ; Qihhs v. Bumsey, 2 V. & B. 294. V. M 162 CONSTKUCTIVE TRUSTS. gift to stand would probably be to efEeot an object prohibited by law (A). 6. Conveyance to qualify for game licence. — But where a father granted land to his son, in order to give him a colourable qualification to shoot game under the old game laws, and without any intention of con- ferring any beneficial interest upon him, the court would not enforce any resulting trust in favour of the father. For he and the son were in pari delicto, and there was no detriment to the public in allowing the son to retain the estate (*) . Of course, if there had been no illegality (if, for instance, a bare legal estate had been a sufficient qualification) , there would have been a resulting trust (/«) . 7. Settlement for immoral consideration. — So in Ay erst v. Jenldns{l), a- widower, two days before going through the ceremony of marriage with his deceased wife's sister (which ceremony was known to both parties to be invalid), executed a settlement. By this instrument i\ was recited that he was desirous of making a provision for the lady, and had trans- ferred certain shares into the names of trustees, upon the trusts thereinafter declared, being for the separate and inalienable use of the lady during her life, and after her death as she should by deed or will appoint. They afterwards lived together as man and wife (7() Arnold Y. Ghapvian, lY. sen. 108; Addlington x . Oann, Barn. 130 ; Springett v. Jennings, L. E., 10 Eq. 488 ; but see Jlowhotham v. Dunnett, 8 Ch. Div. 430. (?) Brackenbury v. BracJcenbur7/,.2 J. & W. 391. (k) Childers v. Childers, 1 D. & J. 482. {l) L. E., 16 Eq. 283. "RESULTING TRUST, WHERE LIMITATION ILLEGAL. 163 until the widower's death. Some time afterwards, his personal representatives instituted a suit to set aside the settlement, on the ground that it was founded on an immoral consideration. Lord Sel- borne, however, said : " Eelief is sought by the re- presentative, not merely of a particeps criminis, but of a voluntary and sole donor, on the naked groimd of the illegality of his own intention and purpose, and that, not against a bond or covenant or other obligation resting in fieri, but against a completed transfer of specific chattels, by which the legal estate in those chattels was absolutely vested in trustees for the sole benefit of the defendant. I know of no doctrine of public policy which requires or authorizes a court of equity to give assistance to such a plaintiff under such circumstances. When the immediate and direct eilect of an estoppel in equity against relief to a particular plaintiff might be to effectuate an unlmrfu! object, or to defeat a legal prohibition, or to protect a fraud, such an estoppel may well be regarded as against public policy. But the voluntary gift of part of his own property by one particeps criminis to another, is in itself neither fraudulent nor pro- hibited by law ; and the present is not the case of a man repenting of an immoral purpose before it is too late, and seeking to recall, while the object is yet unaccomplished {m), a gift intended as a bribe to iniquity. If public policy is opposed, as it is, to vice and immorality, it is no less true, as was said by Lord Truro in Benyon v. Nettlefold{n), that the law (to) As in Symes v. Hughes, supra, (w) 3 M. & G. 102. m2 16 i CONSTRUCTIVE TRUSTS. in sanctioning the defence of particeps criminis does so on the grounds of public policy, — namely, that those who violate the law must not apply to the law for protection." The practitioner must, however, care- fully bear in mind, that where property is transferred to trustees in trust for the settlor until an intended marriage with his deceased wife's sister is solemnized, and then in trust for the lady and the issue of the marriage, the trust will be void, inasmuch as such a marriage cannot take place (o). Art. 23. — Resulting Trusts where Purchase made in Another's Name. When real or personal property (jo) is taken in the names of the purchaser and others generally, or in the names of others with- out that of the purchaser, or in one name, or in several, and whether jointly or suc- cessively, there is a prima facie presump- tion of a resulting trust in favour of the person who (by parol (g-) or other evi- dence) is proved to have advanced the purchase-money (r) in the character of (o) Pawson v. Brown, 13 Ch. Div. 202. ( p) Dyer v. Diier, 2 Oox, 93 ; Ebrand v. Dancer, 2 Oh. Ca. 26 ; Wheeler v. Smith, 1 Gif. 300. {q) 29 Oar. II. o. 3, s. 8 ; Bartlett v. Pichersgill, 1 Ed. 515 ; Ilyall V. Myall, 1 Atk. 59; Leach v. Leach, 10 Ves. 517. (r) Dyer y. Dyer, supra ; Wray v. Steele, 2 V. & B. 388. RESULTING TRUST, PURCHASE IN ANOTHER'S NAME. 165 purchaser (s). But this presumption may be rebutted — a- By parol {t) or other evidence ; /3. By the fact that the person in whose name the purchase was made was the wife or child of the purchaser (t<), or was some person towards whom he stood in close relationship, and in loco parentis (a;), or was trustee of a settlement by which the purchaser has previously settled pro- perty (?/). In any of these cases a prima facie presumption will arise that the purchaser intended the ostensible grantee or grantees to take absolutely. But this last presumption is also capable of being rebutted by evidence, or by surrounding circumstances {z). Illust. — 1. No resulting trust where purchase- money only lent. — If one pay the purchase- money at the request of and by way of loan to the person in (s) Bartlett y. Pichersgill, supra. (<) Rider v. Kidder, 10 V. 360 ; Standing v. Bowring, 31 Ch. Div. 282. (m1 Soar v. Foster, 4 K. & J. 152 ; Bechford Y. Bechford, Lofit, 490. (a;) Bechford v. Bechford, supra ; Currant v. Jago, 1 Coll. 261 ; Tucher v. Burron, 2 H. & M. 515 ; Forrest v. Forrest, 13 W. E. 380. {y) Me Ourteis, L. E., 14 Eq. 220. (z) Tunlmdgev. Cane, 19 W. E. 1047; Williams Y. Williams, 32 B. 370. 166 CONSTKUCTIVE TEUSTS. whose name the property is taken, there -will he no resulting trust. Por the lender did not advance the purchase-money as purchaser (a), hut merely as a lender. 2. Where purchase-money furnished by two persons. — Where the purchase-money is advanced, partly by the person in whose name the property is taken, and partly by another, then, if they advance it in equal shares, they wiU (in the absence of evidence or cir- cumstances showing a contrary intention (S) ) take as joint tenants, because the advance being equal the interest is equal ; but if in unequal shares, then a trust results to each of them, in proportion to his advance (c) . 3. Advancement of Son. — In d'abb v. Crabb {d), a father transferred a sum of stock from his own name into the joint names of his son and of a broker, and told the latter to carry the dividends to the son's ac- count. The father, by a codicil to his wiU executed subsequently, Fequeathed the stock to another ; but it was held that the son took absolutely. The Master of the Rolls said : " If the transfer is not ambiguous, but a clear and unequivocal act, as I must take it on the authorities, for explanation there is no place ; if (a) Bartlett v. Pichersgill, supra; and see also Aveling v. Knipe, 19 Ves. 441. (h) See Robinson t. Preston, 4 K. & J. 505 ; Edwards v. Fashion, Pr. Oh. 332 ; Lake v. Qihson, 1 Eq. Ca. Ab. 290 ; Bone T. Polland, 24 Bea. 288. (c) Lahe v. Oihaon, 1 Eq. Ca. Ab. 291 ; Bigden v. Vallier, 3 Atk. Y35. [d) 1 M. & K. 511 ; and see also Birch v. Blagrave, Anib. 264 ; and Standing v. Bowring, 31 Cb. Div. 282. 167 then it cannot he permitted to explain, still less can it be allowed to qualify the operation of the pre- vious act. The transfer being held an advancement, nothing contained in the codicil, nor any other matter ex post facto, can ever be allowed to alter what had been already done." In short, a resulting trust will not be allowed to arise, merely because a donor subse- quently changes his mind and repents him of his generosity. 4. Augmentation of settled property. — Again, a sum of consols was vested in the trustees of a marriage settlement upon the usual trusts. The husband di- rected the bankers who received the dividends (and paid them to him as tenant for life under a power of attorney from the trustees), to invest an additional sum of 2,000/. consols in the names of the same trustees, so that they might receive the dividends as before. This was done, and the husband received the income of the whole during his life. No notice of the new investment was ever given to the trustees. It was held that there was no resulting trust of the 2,000/. for the husband, but that it became subject to the trusts of the settlement as an augmentation of the trust fund (e) . 5. Evidence of intention to benefit. — In the recent case of Standing v. Bowring (/) the facts were as follows : — The plaintifE, a widow, in the year 1880 transferred 6,000/. consols into the joint names of herself and her godson, the defendant. This she did (e) Be Ourteis, L. E., 14 Eq. 220. (/) 31 Ch. Div. 282. 168 CONSTRUCTIVE TRUSTS. with the express intention that the defendant, in the event of his surviving her, should have the consols ; but that she herself should retain the dividends- during her life. She had been previously warned that her act was irrevocable. It was held that the plaintiff could not claim a retransfer under the doc- trine of constructive trust, the evidence clearly show- ing that she did not, when she made the transfer, intend to make the defendant a mere trustee for her except as to the dividends. In delivering judgment. Cotton, L. J., said : " Though the defendant was the nephew of the first husband of the plaintiff, she was not in loco parentis to him, and the rule is well settled that where there is a transfer by a person into his own name jointly with that of a person who is not his child, or his adopted child, then there is prima facie a resiilting trust for the transferor. But that is a presumption capable of being rebutted, by show- ing that, at the time, the transferor intended a benefit to the transferee ; and in the present case there is- ample evidence that at the time of the transfer, or for some time previously, the plaintiff intended to confer a benefit, by this transfer, on her late husband's- godson." 6. Rebutting evidence of advancement. — But a declaration made by the father at or before the date of the pm-chase is admissible to rebut the presump- tion, although it might not be good as a declaration of trust, on account of its not being reduced into writing. For, " as the trust would result to the father were it not rebutted by the sonshij) as a cir- cumstance of evidence, the father may counteract that RESULTING TRUST, PUKCHASE TN ANOTHEK's NAME. 16& circumstance by the evidence arising from his parol declaration" {g). 7. Surrounding circumstances may also tend to rehut the presumption. Thus, a father, upon his son's marriage, gave him a considerable advancement, having several younger children who had no provision. He subsequently sold an estate, but 500/. only of the purchase-money being paid, he took a security for the residue in the joint names of himself and his said son. He himself, however, received the interest, and a great part of the principal without any opposition from the son, as did his executrix after his death, the son writing receipts for the interest. Under these cir- cumstances it was held that the son took nothing ; the Lord Chancellor saying : " Where a father takes an estate in the name of his son, it is to be considered as an advancement ; but that is lia,ble to be rebutted by subsequent acts. So if the estate be taken jointly, so that the son may be entitled by survivorship, that is weaker than the former case, and still depends on circumstances. The son knew here that his name was used in the mortgage, and must have known whether it was for his own interest or only as a trustee for the father ; and instead of making any claim, his acts are very strong evidence of the latter ; nor is there any colour why the father should make him any further advancement when he had so many children unprovided for" (A). The dictum of the (5) Williams v. Williams, 32 B. 370. (A) PoleY. Pole, 1 V. sen. 76; Stock v. McAvoy, L. E., 15- Eq. 55 ; Bone v. Polland, 24 B. 283. 170 CONSTEXJCTIVE TRUSTS. learned Chancellor, that the presumption may be re- butted by subsequent acts, cannot be taken to mean subsequent acts of thefatJier, which are only admissible against, and not for, him (i) : but must, it is appre- hended, refer only to subsequent acts of the son (and only to them when there is nothing to show that the father did actiially intend to advance the son (y ) ) ; or to subsequent acts of the father so ac- quiesced in by the son as to raise the presumption that the son always knew that no benefit was intended for him. It is also to be remarked, that the fact of the father having previously made provision for the son, would not of itself have been sufficient to rebut the usual presumption, although taken together with ■other circumstances, it is a strong link in the chain (A-) . 8. So the relationship of solicitor and client between the son and the parent has been considered a circumstance that wiU., of itself, rebut the presump- tion of advancement (/). 9. Whether presumption of advancement by married woman, — In Re Be Visme {m) it was laid down, that where a married woman had, out of her separate estate, made a purchase in the name of her children, no presumption of advancement arose, inasmuch as a married woman was under no obligation to maintain (t) Reddington v. Seddington, 3 Eidge, 197. ( / ) Sidmouth v. Sidmouth, 2 B. 435 ; Hepworth v. liepiuorth, L. k, 11 Eq. 10. (k) See per Lord Lougliborougli, 3 Eidge, 190. (I) Garrett v. Wilkinson, 2 D. & S. 244, sed quaere. {jit) 2 De G., J. & S. 17. But now that a married woman ■with separate estate is liable to maintain her children, this reasoning would appear inapplicable (4o & 46 Vict. c. 75, s. 21). RESULTING TRUST, PURCHASE IN ANOTHER'S NAME. 171 her children. But, with great respect, it is suh- mitted that the true ground for presuming that a parent intends to advance his child, is not duty, hut natural love and affection. On this point, the judg- ment of Vice- Chancellor Stuart in Say re v. Hughes («) is worthy of study. In that case, a icidowed mother, after making her will in favour of her two daughters, transferred East India Stock which had stood in her own name into the names of herself and the unmar- ried daughter, and died : and the Vice-Chancellor said, " If stock be found standing in the names of two persons, the presumption of law is that it is their property. But if there be evidence that ono of them purchased the stock, and that the name of the other was used without any consideration pro- ceeding from that person, the want of consideration induces the court to presume a resulting trust. The more simple case, and that generally referred to in the reported decisions, is the case of a purchase by one person in the name of another. As soon as you have the fact of the purchase in evidence, and show that the purchase-money was paid by a person other than the person to whom the conveyance was made, the fact of want of consideration almost necessarily ■creates the presumption of a resulting trust. In the <3ase, however, of a father purchasing property in the name of a son, and having the conveyance made to the son — the father paying the purchase-money — the circumstance of a relationship raises a presump- tion of benefit intended for the son, which rebuts the (n) L. E., o Eq. 376. 172 CONSTRUCTIVE TllUSTS. notion of a resulting trust. In the case of Grey v. Grey (o), before Lord Nottingham, there was, beyond the simple facts of the purchase and the conveyance, the fact of the receipt of the profits by the father. "Where the conveyance is to one person and the pur- chase-money is paid by another, the receipt of the profits by the person who paid the purchase-money, in an ordinary case strengthens the presumption that he is the beneficial owner, but in the case of a father and a son this circumstance was not enough to rebut the presumption of benefit to the son. The same doctrine extends to a purchase by a person in loco parentis. Lord Oottenham in Poicys v. Mamfielcl (p), commenting upon the meaning of that expression, said, ' It means a person in such a relation towards the individual in question as raises a presumption of ail intention to benefit him.' It has been argued, that a mother is not a person bound to make an advancement to her child, and that a widowed mother is not a person standing in such a relation to her child as to raise a presumption that in a trans- action of this kind a benefit was intended for the child. In the ease of Be Be Visme it was said, that a mother does not stand in such a relationship to a child as to raise a presumption of benefit for the child. The question in that case arose on a petition in lunacy, and it seems to have been taken for granted that no presumption of benefit arises in the case of a mother. But maternal affection as a motive o) i Sw. 594. p) 3 M. & 0. 359. KESTJLTING TRUST, PURCHASE IN ANOTHEr's NAME. 173 of bounty is perhaps the strongest of all, although the duty is not so strong as in the case of a father, inasmuch as it is the duty of a father to advance his child. That, however, is a moral obligation, and not a legal one." His honour then reviewed the cir- cumstances of the case, in order to see whether they rebutted the presumption of advancement, and, finding that they did not, decided in favoiu- of the daughter. 10. Advancement by persons in loco parentis. — With regard to the presumption of advancement in favour of persons to whom the purchaser stands in loco parentis, it has been held that the presumption arose in the case of an illegitimate child (<7), a grandchild tchen the father was dead (r), and the nephew of a wife who had been practically adopted by the husband as his child (.s) . But it would seem that the person .alleged to have been in loco parentis must have intended to put him- self in the situation of the person described as the natural father of the child with reference to those parental offices and duties which consist in making provision for a child. The mere fact that a grand- father took care of his daughter's illegitimate child and sent it to school, has been held to be insufficient to raise the presumption ; Yice- Chancellor Page-Wood saying: — "I cannot put the doctrine so high as to hold that if a person educate a child to whom he is under no obKgation either morally or legally, the [q) Bechford v. Bechford, Lofft, 490 ; Kilpin v. Kilpin, 1 M. ; K. 542, sed qucere, 4 K. & J. loT. (r) Ehrand v. Dancer, 2 Oh. Ca. 26. (s) Currant v. Jago, 1 Coll. Ch. 261. 174 CONSTRUCTIVE TRUSTS. child is therefore to be provided for at his ex- pense" (;(). Art. 24. — To ichom Property result. ■ Where a resulting trust arises under an instrument inter vivos thd beneficial interest results to the settlor himself (u). ■ Where the instrument under which the .resulting trust arises is a will, and con- tains no direction for conversion, the property results to the heir or devisee of the testator, if real estate, or to the personal representatives, if personal estate [x). ■ If the instrument under which the re- sulting trust arises is a will, and contains a direction for conversion, then, even although the conversion has actually taken place, the property results to the person who would have taken under paragraph /3, if no conversion had been directed (y). («) Tucker r. Burron, 2 H. & M. 515. (m) Symes v. Htwhes, L. E., 9 Eq. 475; JDavies v. Otty, 35 B. 208. (x) Achroyd v. Smithson, 1 W. & T. Lead. Cas. 949, and cases there cited. {y) Curteis y. Wormald, 10 Oh. Div. 172 ; Achroyd v^ Smithson, supra. TO WHOM PROPERTY REST3I.TS. 175 ^. Where a resulting trust has once arisen under an instrument which directs a con- version, the person in whose favour it iirst arises takes the property as of that nature in which it actually comes to him, and on his death it devolves accordingly (s). Illust. — 1. Resulting trust under marriage settle- ment. — By a marriage settlement, real estate of the husband, and personal estate of the wife, is vested in trustees, in trust for the husband for life, with remainder in trust for the wife for life, with re- mainder upon the usual trusts in favour of the issue of the marriage, without any gift over in default of issue. Upon the death of the wife without issue, the real estate will result to the husband ; and simi- larly on the death of the husband without issue, the personal estate will result to the wife. 2. Eesulting trust under will where no conversion directed. — A. by his will gives his real estate imto and to the use of trustees, and his personal estate to them absolutely, upon trust for certain persons for life, with an ultimate remainder in trust for the testator's two nephews B. and C. as tenants in common. B. dies in the testator's lifetime. His share of the real estate will result to the testator's- heir or residuary devisee, and his share of the per- sonalty to the testator's next of kin or residuary legatees. (z) Curteis v. Wor-mald, supra; Gogan v. Stevens, 5 L. J., Ch. 17. 176 COKSTEUCTIVE TRUSTS. 3. Eesulting trust where conversion directed. — The preceding examples speak for themselves, and require no comment. But the following case presents at first sight more difiiculty. A testator devises real estate to trustees, upon trust to sell and divide the proceeds between his nephews B. and 0. If B. should die in the testator's lifetime, his share of the proceeds of the sale will lapse and result to the testator's heir or residuary devisee, and not to his next of kin or residuary legatees, although it is pure personalty. The principle on which this proceeds (settled hy the leading case of Achroyd v. Smithson (a)) is, that con- version directed hy a will is presumed to be only intended for the purposes therein, expressed ; and so far as these purposes fail, equity presumes that the testator did not intend to rob his real representatives of property which, but for those objects, would have been theirs, and to give such property to his personal representatives, whose only possible ground of claim arises from the fact that the testator's expressed intentions have been disappointed (6). 4. The question was explained with his customary lucidity by the late Sir George Jessel in the case of Curteis v. WormaM{c). There, personal estate had been bequeathed upon trust to purchase real estate. (a) 1 W. & T. Lead. Gas. 949. (b) This presumption is not even rebutted by a declaration ibat the proceeds of tbe sale of realty are to be personalty for all purposes ; tbe latter words being construed as all ^purposes of the will {Shallcross v. Wright, 12 B. 505; Taylor V. Taylor, 3 D., M. & Gr. 190 ; and see also Fitch v. Welber, « Ha. 145). (c) 10 Cb. Div. 112. TO WHOM PROPERTY RESULTS. 177 which was to be held on trusts, some of which eventually failed. It was held, that land purchased before the failure resulted in favour of the testator's next of kin, and not his heir. The M.E., in giving judgment, after stating the facts, said : " The limi- tations took efEect to a certain extent, and then, by reason of the failure of issue of the tenants for life, the ultimate limitations failed, and there became a [resulting] trust for somebody. Now for whom? According to the doctrine of the Court of Equity, this kind of conversion is a conversion for the purposes of the will, and does not affect the rights of the persons who take by law independent of the wiU. If, therefore, there is a trust to sell real estate for the purposes of the will, and the trust takes effect, and there is an ultimate beneficial interest undis- posed of, that undisposed-of interest goes to the heir. If, on the other hand, it is a conversion of personal estate into real estate, and there is an ultimate limitation which fails of taking effect, the interest which fails results for the benefit of the persons entitled to the personal estate ; that is, the persons who take under the Statute of Distributions as next of kin (d). Their right to the residue of the personal estate is a statutory right independent of the will." 5. How the person to whom converted property results, holds it. — It is frequently an important question as to what nature property directed to be {(i) Cogan v. Stephen's, 5 L. J., Oh.. 17 ; Bectone v. Hodgson, 10 H. L. 656. U. N 178 CONSTRUCTIVE TRUSTS. converted assumes in the hands of persons to whoni it results. Tor instance, if, by a will, real estate be directed to be sold, and is actually sold, and the trusts as to one moiety of the proceeds fail, that moiety will of course result to the testator's heir. But the question then arises, does it become in his hands real or personal estate ? That is to say, in the event of his death, does it devolve on his heir or his personal representatives ? At one time it was considered that, as to this, there was a difference between a resulting trust of converted realty, and a resulting trust of converted personalty. It was thought that as to the former, where a sale of realty was necessary for carrying out the subsisting trusts of a will, that which resulted to the heir was retained by him as personalty, and on his death devolved as such. So far, that is still the law. But it was also considered that, wherever personal estate directed to be converted into land resulted to next of kin, they held it as personalty, although it came to them in the form of land (e). This view was, however, scouted by Jessel, M.E., and finally overruled by the Court of Appeal, in the case of Curteis v. Wormald (/). The M.E. said: "Then the nest question which arises is, how does the heir-at-law in the first case, or the next of kin in the second, take the undisposed-of interest. The answer is, he takes it as he finds it. If the heir-at-law becomes entitled to it in the shape of personal estate, and dies, there is no equitable recon- (e) Eeynolds v. Oodke, Jolins. 536 (overruled). (/) lb Cii. Div. 172. TO WHOM PKOPERTY RESULTS. 179 version as between his real and personal representa- tives ; and consequently his executor takes it as part of his personal estate. On the other hand, if the next of kin, having become entitled to a freehold estate [under a resulting trust of converted person- alty], dies, there is no equity to change the freehold estate into anything else on his death. It will go to the devisee of the real estate, or to the heir-at-law if he has not devised it, and will pass as real estate." And Lord Justice James, in the Court of Appeal,, said : " With all deference to the judgment of Lord Hatherley in Reynolds v. Godlee (g) , it is impossible,. I think, to arrive at any other conclusion than that at which the Master of the Eolls has arrived. It was settled by Cogan v. Stephens (h), that what was the right rule as between the real and personal estates where land was directed to be sold, was also the right rule as between the two estates in the case' where money was directed to be laid out in the purchase of land. . . . The same principle applies in both cases, which is this, that where you trace property into a man, there is no equity between his diiferent classes of representatives as to altering the position in which that property is. If it is money arising from the sale of land, it remains, money ; that is to say, the heir-at-law of the person who has become beneficially entitled to it as heir-at- law, has no right to have it reconverted into land.. If it is land purchased under a direction to invest in g) Ubi supra. h) 5 L. J., Oh. n. n2 180 CONSTKtrCTIVE TEUSTS. land, the persons interested in the personal estate of the persons who have heoome entitled to it as nest of kin, have no right to have it reconverted into money." 6. It must be pointed out that precisely the same rule applies where property results on failure of trusts created by instrument inter vivos. As has been pointed out above, such property results to the settlor in the first instance ; but the character in which he retains it is determined by precisely the same prin- ciples as have been indicated in the last illustration. That is to say, if the conversion has to take place, that which results is retaiued in its converted form, notwithstanding that the actual conversion may not be carried out until after the settlor's death; but where there has been a total failure of the objects for which conversion was directed, it results to the settlor in its unconverted form, and so devolves. ( 181 ) CHAPTER III. CONSTEUCTIVE TeUSTS WHICH ARE NOT Eesulting. Aet. 25. Constructive Trusts of Profits made hy Persons in Fiduciary Positions. ,, 26. Constructive Trusts ivhere EquitaVle and Legal Estates are not united in one Person. Akt. 25. — Constructive Trusts of Profits made hy Persons in Fiduciary Positions. Where a person holds, or has the manage- ment of property, either as an express trustee, or as one of a succession of per- sons partially interested under a settle- ment, or as a guardian, agent or other person clothed with a fiduciary character, he must not gain any personal profit by availing himself of his position. If he does so, he will be a mere trustee of such profit for the benefit of the persons equit- ably entitled to the property, in respect of which such profit was gained. Illust. — 1. Trustee renewing lease to himself. — In 182 CONSTRUCTIVE TRDSTS. the leading case of Sandford v. Keech («), a lessee of the profits of a market had devised the lease to a trustee for an infant. On the expiration of the lease, the trustee applied for a renewal, but the lessor would not renew, on the ground that the infant could not enter into the usual covenants. Upon this, the trustee took a lease to himself for his own benefit ; but it was decreed by Lord King, that he must hold it in trust for the infant, his lordship saying, " If a trustee, on the refusal to renew, might have a lease to himself, few trust estates would be renewed to cestuis que trust." 2. Tenant for life of leaseholds renewing to himself. — And so also a tenant for life of leaseholds (even though they be held under a mere yearly tenancy {b) ) , who claims under a settlement, cannot renew them for his own sole benefit. For he is not permitted to avail himself of his position, as the person in posses- sion under the settlement, to get a more durable term, and so to defeat the probable intentions of the settlor that the lease should be renewed for the benefit of all persons claiming under the settlement (c) . And even where the lessor refuses to renew, the tenant for life or his assigns cannot purchase the lessor's interest for their own benefit, but will be considered as mere (n) Sel. Oh. Ca. 61 ; and see Re Morgan, Pilgrim v. Pilgrim, 18 Oh. Div. 93 ; and Brinton v. Lulliam, 53 L. T. 9. (i) James v. Deane, 15 V. 236. (c) Eyre v. Dolphin, 2 B. & B. 290 ; Mill v. Hill, 3 H. L. C. 828 ; Yew v. Edwards, 1 D. cfe J. 598 ; James v. Deane, supra. Tlie reader is also referred to Re Payne, Kibble v. Payne, 54 L. T. 840, and infra, art. 46. PKOFITS MADE BY FIDUCIAKY PERSONS. 183 trustees of it for the persons who would be entitled to the leasehold interest if it had been renewed {d). 3. Tenant for life receiving money in relation to inheritance. — And upon similar grounds, if a tenant for life accepts money in consideration of his allow- ing something to be done which is prejudicial to the trust property (as, for instance, the unopposed pas- sage of an act of parliament sanctioning a railway), he will be a trustee of such money for all the persons interested under the settlement (c) . 4. Other partial owners. — The same principle applies to mortgagees (/), joint tenants {g), part- ners (A), and owners of land subject to a charge {i). 5. Profits made by directors or promoters. — So directors of a company cannot avail themselves of their position to enter into beneficial contracts with the company (/r) ; nor can they buy property, and then sell it to the company at an advanced price. Promoters of a company hold a fiduciary relation towards the company, and cannot be allowed to retain a secret commission received from the vendors of property which the company is formed for the {d) Be Lord Ranelagh, 26 Ch. Div. 590. (e) Pole V. Pole, 2 Dr. & S. 420. (/) RashwortK' s case, Free. 13. {(l) Palmer v. Young, 1 Ver. 276. [li) Featherstonhaugh v. Fenwick, 17 V. 311 ; Glegg v. Fish- wkk, 1 M. & G. 294 ; Bell v. Burnett, 21 W. E. 119 ; but as to partners, see Dean v. MacDowell, 8 Ch. Div. 34j. (i) Jackson v. Welsh, L. & G. t. Plunket, 346 ; Winsloiu v. Tighe, 2 B. & B. 195 ; Webh v. Lugar, 2 Y. & 0. 247. {k) Oreat Luxembourg Rail. Co. v. Magnay, 25 B. 586; Aberdeen Rail. Co. v. Blachie, 1 Maoq. 461 ; Flanagan v. O. W. Bail. Co., 19 L. T., N. S. 345. 184 CONSTRUCTIVE TRUSTS. piirpose of purchasing (l). Directors cannot receive commissions from other parties on the sale of any of the property of the company {m) ; and generally they cannot deal for their own advantage with any part of the property or shares of the company {n). 6. Profits made by agents. — ^Agents come under the same principle (o). Thus, where A., being aware that B. wished to obtain shares in a certain company, represented to B. that he, A., could pro- cure a certain number of shares at '61. a share, and B. agreed to purchase at that price, and the agreement was carried out, but B. afterwards discovered that A. was in fact the owner of the shares, having just previously bought them for 21. a share ; it was held that A. was an agent for B., and must be ordered to repay to B. the difference between the price given by B. and that given by A. for the shares {p). 7. Solicitor buying from client. — So a solicitor who purchases property from a client must, if the sale be impeached, not only show that he gave full value for it, but also that the cKent was actually benefited by the transaction. And persons who subsequently purchase from the solicitor with notice of the transaction are under a similar liability {q). {I) Hitchens v. Congreve, 1 E. & M. 150 ; Fawcett v. White- house, ibid. 132 ; Beck v. Kantorowicz, 3 K. & J. 230; Bagnall V. Carlton, 6 Oh. Div. 371 ; Emma Silver Mining Company V. Grant, 11 Oh. D. 918. (m) Gasledl v. Chambers, 26 B. 360. («) York, &c. Co. V. Hudson, 16 B. 485. (o) Morrett v. Paske, 2 At. 54; Kimher v. Barler, L. E., 8 Oh. App. 56. (p) Kimher y. Barber, supra. (2) Topham v. Spencer, 2 Jur., N. S. 865. GENERAL EQUITIES. 185 Akt. 26. — Constructive Trusts where Equitable and Legal Estates are not united in the same Person. In every case (not coming within the scope of any of the preceding articles) where the person in whom real or personal property is vested, has not the whole equitable interest therein, he is pro tanto a trustee for the persons having such equitable interest (h). Illust. — 1. Relation of vendor and purchaser be- fore completion. — Thus, where a binding contract is entered into between two persons for the sale of property by one to the other, then, in the words of Lord Cairns, in Shaw v. Foster (c), " There cannot be the slightest doubt of the relation subsisting in the eye of a court of equity between the vendor and the purchaser. The vendor is a trustee of the property for the purchaser ; the purchaser is the real beneficial owner in the eye of a court of equity of the property ; subject only to this observation, that the vendor (whom I have called a trustee) is not a mere dormant (6) This article, doubtless, inolTides all ttose relating to constructive trusts -wMcli liave preceded it; but as it would be a quite endless task to enumerate every kind of construc- tive trust (for tkey are, as lias been truly said, conterminous ■with equity jurisprudence), I have thought it better to call special attention to those classes which are most important, and to bring all others within one sweeping general clause. (c) L. E., H. L. 338; Earl of Egmont v. Smith, 6 Ch. Div. 475. 186 CONSTTIUCTIVE TRUSTS. trustee ; he is a trustee having a personal and sub- stantial interest in the property, a right to protect that interest, and an active right to assert that interest if anything should be done in derogation of it. The relation, therefore, of trustee and cestui que trust subsists, but subsists subject to the paramount light of the vendor and trustee to protect his own interest as vendor of the property." He is, however, only trustee pro tanto, and his duties are strictly matter of contract {cl ) . 2. Vendor's lien after conveyance. — In the con- verse case, where the vendor has actually conveyed the property, but the purchaser has not paid the purchase- money, or has only paid part of it, the vendor has a lien upon the property for the unpaid portion (c) ; and the purchaser will hold the estate as a trustee pro tanto, unless by his acts or declarations the vendor has plainly manifested his intention to rely not upon the estate, but upon some other security, ■or upon the personal credit of the individual (/) . A mere collateral security will not, however, suiSce (g) ; but where it appears that a bond, covenant, mortgage or annuity was itself the actual consideration — the thing bargained for — and not merely a collateral security for the purchase-money (/«), there will be no lien, and consequently no trust. (d) See per Lord Westbury in Knox v. Gye, L. E., 5 H. L. 6o(i ; but see Smith v. Earl Egmont, supra. (e) Mackreth v. Symmons, 1 Lead. Ca. 295. /) Ibid. ( g) OoUins v. Oollins, 31 B. 346 ; Hughes v. Kearney, 1 Sch. & L. 134. {h) 1 Lead. Oa. 317 ; Buckland v. Pocknell, 13 Sim. 499 ; GENERAL EQUITIES. 187 3. Equitable mortgages. — It need scarcely be pointed out that a mortgagor in the case of an equit- able mortgage, is pro tanto a trustee for the mortgagee. Per even where there is no written memorandum, a ■deposit of title deeds is of itself evidence of an agree- ment for the mortgage of the property (?) ; and in accordance with the maxim, that "equity regards that as done which ought to be done," the mortgagor holds the legal estate, in trust to execute a legal mortgage to the mortgagee. 4. Devolution of mortgaged property. — Upon the death of a mortgagee, the mortgaged property (if as- sured to him in fee) descended at law, previous to the Yendor and Purchaser Act, 1874, to his heir ; but being in reality only a security for money, it ■equitably belonged to his personal representatives, and the heir was, therefore, held to be a mere trustee for the administrators or executors of the mort- g-agee (/■:). 5. Mortgagee in possession. — So a mortgagee in possession is constructively a trustee of the rents and profits, and bound to apply them in a due course of administration (1). But there has been considerable Parrott v. Sweetland, 3 M. & K. 655 ; Dixon v. Oayfere, 21 B. 118; Dylce v. RtndaU, 2 D. M. & G. 209; and see lie Brentwood Brick and Coal Co., 4 Ch. Div. 362. («■) Russell v. Russell, 1 Lead. Ca. 674 ; Ex parte Wright, 19 V. 258 ; Pryce v. Bury, 2 Dr. 42 ; Ferris v. MulUns, 2 Sm. & Gif. 378; Ex parte Moss, 3 D. & S. 599. {k) Thornhorough v. Baher, 2 Lead. Ca. 1030. But see 437 & 38 Vict. 0. 78, ss. 4, 5. {I) Lew. 169 ; Goppring v. Coohe, 1 Ver. 270; Bentham v. Ilaincourt, Pr. Ch. 30 ; Parker v. Calcraft, 6 Mad. 11 ; Hughes V. Williams, 12 V. 493 ; Maddocks v. Wren, 2 Ch. Eep. 109. 188 CONSTRUCTIVE TRUSTS. conflict of opinion as to the extent of his responsi- bility. For instance, it has been held that he is liable even after transferring the mortgage without the mortgagor's consent {m) ; but this decision has been questioned, and it is respectfully apprehended, rightly so (n). In another case, it was said that a mortgagee in possession who, after the mortgagor's death, bought up the widow's right to dower, was obliged to hold it in trust for the heir, upon his paying the purchase- money (o) ; and although this case has called forth much comment (p), it is difficult to distinguish it in principle from the class of cases treated of in the last article. 6. Limited owners paying off charge on inherit- ance. — Another important illustration of the rule now under consideration occurs when a limited owner {ex. gr. a tenant for life) pays off a specific {q) in- cumbrance out of his own money. In such a case (in the absence of evidence showing an intention to extinguish the inciunbrance) he is held to be, in equity, in the position of a transferee of the incum- brance, notwithstanding that he took an ordinary reconveyance ; and, on his death, the remainderman holds the legal estate subject to the equitable lien or charge so created (r). (m) VenaUes Y. Foyle, 1 Cli. Oa. 3. In) Lew. 169 ; and consider Ringham v. Lee, 15 Sim. 400. (o) Baldwin v. Bannister, cited in Robinson v. Fett, 3 P. W. 251. {p) Bohso7i V. Land, 8 Ha. 330; Arnold v. Garner, 2 Ph. 231 ; Mathison v. Clarke, 3 Dr. 3. See Morley y. Morley, 25 L. J., Ch. 7. Redington v. Redington, 1 Ba. & B. 131 ; St. Paul v. i?i GENERAL EQUITIES. 189 7. Partnership liens. — So, again, where the plaintiff ■was induced by fraud of the defendant to purchase a share of his business, and to enter into partnership with him, and judgment was given for the rescission of the agreement and the dissolution of the partner- ship, it was held that the plaintiff was entitled, in respect of the purchase-money which he had paid, to a lien on the surplus of the partnership assets after satisfying the partnership debts and liabilities; and that, in respect of any sums which he had paid or might pay in satisfaction of partnership debts, he was entitled to stand in the place of the partnership creditors to whom he had made the payments (.s). 8. Property acquired by fraud. — Upon similar principles, a court of equity converts a party who has obtained property by fraud " into a trustee for the party who is injured by that fraud. But, that being a jurisdiction founded on personal fraud, it is in- cumbent on the court to see that a fraud, or mains animus, is proved by the clearest and most indisput- able evidence ; it is impossible to supply presumption in the place of proof " (t). Dudley, 15 V. 172; Drinkwater v. Coombe, 2 S. & St. 340; and, as to evidence showing contrary intention, see Astley v. Miller, 1 Sim. 298 ; TyrwUtt v. Tyrwhitt, 32 B. 244. (s) Mycoch v. Beafson, 13 Oh. D. 384; and as to sale of land obtained by fraud, see Rose v. Watson, 10 H. L. 0. 672 ; and see also Aberaman Ironworks v. Wickens, L. E., 4 Oh. Ap. 101. (t) Per Lord Westbury in McOormick v. Orogan, L. E., 4 H. L. 88. ( 190 ) Division IV. THE ADMINISTRATION OF A TRUST, Chapter I. — Preliminary. Art. 27. Disclaimer of a Trust. ,, 28. Acceptance of a Trust. Chapter II. — The Estate of the Trustee, and ITS Incidents. Aet. 29. Wliere the Trustee takes any Estate. „ 30. The Quantity of Estate taken by the Trustee of Lands^ ,, 31. Devolution of the Trustee's Estate. „ 32. Devise of the Trustee's Estate before 1882. „ 33. Banhrtiptcy of the Trustee. ,, 34. The Incidents of the Trustee's Estate at Law. ,, 35. Failure of Beneficiaries. Chapter III. — The Trustee's Duties. Aet. 36. Trustees must obey the Terms of the Settlement. 37. Trustees must act fairly between the Beneficiaries. ,, 38. Trustees must exercise reasonable care. ,, 39. Trustees must in general see that right Persons get the Trust Property. ,, 40. Trustees must only invest in certain Securities, or in those authorized by the Settlement. „ 41. Trustees must not obtain Stock Certificates to Bearer. ,, 42. Trustees must act Jointly. „ 43. Trustees must in general act personally, and not by Deputy. ,, 44. Trustees must not set up Jus tertii. ,, 45. Trustees must be ready with their Accounts. ,, 46. Trustees must not make a Profit out of their Trust. ,, 47. Trustees must in general act gratuitously. THE ADMINISTRATION OF A TETJST. 191 Chapter IV. — The Authority of the Trlstee. Art. 48. Oeneral Authority of Trustees, Express and Implied. 49. Power of Trustees to conduct Sales publicly or privately. 60. Power of Trustees to give effectual Beceipts. 51. Power of Trustees to compound and settle Disputes. 52. Power of Trustees to allow Maintenance to Infants. 33. Delegation of Trustee's Authority. 54. Suspension of the Trustee's authority hy Administra- tion Action. Chapter V. — The Authority of the Bene- ficiaries. Art. 55. The Authority of tlie Beneficiaries in a Simple Trust. ,, 56. The Authority of the Beneficiaries collectively in a Special Trust. ,, 57. The Authority of one of several Beneficiaries in a Special Trust. Chapter VI. — The Death, Eetirement, or Ee- MOVAL of a Trustee. Art. 58. Survivorship of the Office. „ 59. Devolution of the Office on Death of Survivor. „ 60. Devise o/the Office before 1882. ,, 61. Betirement or Bemoval from the Office. ,, 62. Appointment of new Trustees under express Power. ,, 63. Appointment of neiu Trustees under Conveyancing and Law of Property Act, 1881. ,, 64. Vesting of Trust Property in new Trustees. ,, 65. Appointment of new Trustees hy the Court. ,, 66. Severance of Trust on appointment of new Trustees. 192 the administration of a trust. Chapter YII. — The Protection and Relief ACCORDED to TRUSTEES. Art. 67. Reimbursement. „ 68. Protection against Ads of Co-trustees. ,, 69. Concurrence of or Release hi/ Beneficiaries. „ 10. Laches of Beneficiaries. „ 71. Entitled to he indemnified hy Partywho has gained hy hreach of Trust. ,, 72. Right to Discharge. ,, 73. Advice of a Judge. ,, 74. Whe7i entitled to pay info Court or to seek its ad- ministrative assistance. Chapter YIII. — The Incidence of Outgoings in THE Administration of a Trust. Art. 75. What Costs and Outgoings chargeable to Capital and ■what to Income. CHAPTER I. Peeliminaey. Art. 27. Disclaimer of a Trust. „ 28. Acceptance of a Trust. Art. 27. — Disclaimer of a Trust. No one is bound to accept the office of trustee [a). Both the office and the estate may be disclaimed before ac- ceptance, either by deed (b) or (save in ft) Rohinson v. Pett, 2 Lead. Ca. 238. h) Stacey y. Elph, 1 M. & K. 199. PRELIMINARY. 193 the case of a married woman, wlio imist disclaim by deed(c)) by conduct tanta- mount to a disclaimer (c?). The dis- claimer should be made within a reason- able period, having regard to the circum- stances of the particular case (e). Illust. — 1. Consent to undertake future trust not binding. — Thus, even though a person may have agreed in the lifetime of a testator to be his executor, he is still at liberty to recede from his promise at any time before proving the will (/). 2. Methods of disclaiming. — A prudent man will, of course, always disclaim by deed, in order that there may be no question of the fact ; but a dis- claimer by counsel at the bar, or even by conduct inconsistent with acceptance, is sufHcient {g). For instance, in Stacey v. Elph {h), a person, named as executor and trustee under a wiU., did not formally renounce probate until after the death of the acting executor, nor formally disclaim the trusts of the will; but he purchased a part of the real estate, and took a conveyance from the tenant for life and the heir-at- fc) 8 & 9 Vict. c. 106, s. 7. (d) Stacey v. Elph, supra; Townson v. Tickell, 3 B. & A. 31 ; Begbie v. Crook, 2 B. N. 0. 70 ; Bingham t. Clanmorris, 2 Moll. 253 ; but see He Ellison, 2 Jur., N. S. 262. (e) See Doe v. Harris, 16 M. & W. 522 ; Paddon v. Richard- son, 7 D., M. & G. 563; James v. Frearson, 1 Y. & C. 0. C, 370. (/) Doyle V. Blake, 2 Soh. & L. 239. (g) Foster v. Dawber, 8 W. R. 646. (h) Supra. V. O 194 THE ADMINISTEATIOX Of A TRUST. law to whom the estate must have descended on disclaimer of the trust. It was held, under these circumstances, that he had by his conduct disclaimed the office and estate of trustee under the will. Sir J. Leach, M.E,., in delivering judgment, said : " In this case there is no ambiguity in the conduct of the defendant ; he never interfered with the property, except as the friend or agent of the widow ; and it is plain from the confidence which the testator appears to have placed in him by his will that he was a particular friend of the family. . . . It is true he never executed a deed disclaiming the trust, but his conduct disclaimed the trust ; in the purchase of the small real estate made by him, he took by feoffment from the widow and eldest son of the testator, in whom the estates could only vest by the disclaimer of the trustee." 3. Deed of disclaimer not necessary. — In Re Ellison'' s Trusts (Ji), Sir W. Page Wood, Y.-C, expressed some doubt whether a freehold estate could be dis- claimed by parol, or otherwise than by deed; but his honour's attention does not appear to have been called to Stacey v. Elph, and as the case was only an imopposed petition for the appointment of new trustees, it can hardly be taken as an authority against the rules above laid down. And in the recent case of Re Gordon, Gordon v. Roberts («), where real estate was devised to trustees upon trust to sell and to form a mixed fund consisting of the proceeds of such sale and of the testator's personal 7s) Supra. )) 6 Ch. D. 531. ACCEPTANCE OF A TRUST. 195 estate, and thereout to pay debts and legacies, with divers trusts over, and the trustees were also nomi- nated executors, and renounced probate, and never acted in the trusts, it was held by Sir George Jessel, M.E.., that the renunciation of probate, coupled with the fact that the trustees had never assumed to act as such, was conclusive evidence of disclaimer. Aet. 28. — Acceptance of a Trust. A person may accept the office of trustee expressly; or lie may do so constructively by doing such acts as are only referable to the character of trustee or executor (/i); or he may do so by long acquiescence. Illtjst. — 1. Express acceptance. — A trustee ex- pressly accepts the office by executing the settle- ment (/), or by making an express declaration of his assent {m) . 2. Acceptance by accjuiescence. — Permitting an action concerning the trust property to be brought in his name (w), or otherwise allowing the trust pro- perty to be dealt with in his name (o), is such an acquiescence as will be construed to be an acceptance of the office. k) Spenoe, 918. I) Bucheridgey. Glasse, 1 Or. & Ph. 134. m) Doe V. Sarris, 16 M. & W. 517. n) Montford v. Cadogan, 17 V. 485. o) James v. Frearson, 1 T. & 0. C. 0. 370. 02 196 THE ADMINISTRATION OF A TRUST. ■ 3. Acceptance by exercise of dominion. — So, exer- cising any act of ownership, such as advertising the property for sale, giving notice to the tenants to pay the rents to himself or an agent, or requesting the steward of a manor to enrol a deed in relation to the trust property, is sufficient to constitute acceptance of a trust (/j) . 4. Acceptance by taking out probate. — So, where the office of executor is clothed with certain trusts, or where the executor is also nominated the trustee of real estate under a will, he is construed to have accepted the office of trustee if he takes out prohate to the will {q) ; and acceptance of the trusts of a will is constructive acceptance of the office of trustee of estates, devised thereby, of which the testator was trustee (r). 5. Acceptance by conduct. — In Conyngliam v. Con- yngham [s), one, Coleman, was appointed trustee of a will, but he never expressly accepted the appointment. One of the trusts was in respect of the rents of a plantation then in lease to the testator's son. Cole- man acted as the agent of the son, who was also heir-at-law, and received the rents of the estate from him. It was held that, by so interfering with the trust property, he could not repudiate the trust, and say that he merely acted as the son's agent. He {p) Beiue V. Gilpin, L. E., 3 Ex. 76. Iq) Mucldow V. Fuller, Jao. 198 ; Ward v. Butler, 2 Moll. 533. {r) Ee Perry, 2 Curt. 655; Broolce v. Haynes, L. E., 6 Eq. 25. (s) 1 V. sen. 522. ACCEPTANCE OF A TRUST. 197 received the property from the person who was nominally to have remitted the rents, and it was incumbent on him, if he would not have acted as trustee, to have refused, and not to leave himself at liberty to say he acted as trustee or not. It is, however, not every interference with trust property which will he construed as an acceptance of the office of trustee : for if such interference be plainly (not amhiguously) referable to some other ground, it will not operate as an acceptance {t) ; nor will merely taking charge of a trust until a new trustee can be found, be, of itself, a constructive acceptance (««). 6. Acceptance by long silence. — Where a trustee, with notice of the trust, has indulged in a passive acquiescence for some years, he will be presumed to have accepted it, in the absence of any satisfactory explanation {x). {t) Staceif V. Elph, 1 M. & K. 195 ; Dove v. Everard, 1 E. & M. 281 ; Lowry v. Fulton, 9 Sim. 115. [u\ Evans v. John, 4 B. 35. {x) Wise v. Wise, 2 J. & Lat. 412 ; Re Uniacke, IJ. & Lat. 1 ; Re Needliam, ibid. 34. 198 THE ADMINISTRATION OF A TRUST. CHAPTEE II. The Estate of the Trustee, and its Incidents. AnT. 29. Cases in ivhich the Trustee takes any Estate. 30. The Quantity of the Estate taJcen hy the Trustee. 31. Devolution of the Trustee's Estate. 32. Devise of the Trustee's Estate iefore 1882. 33. Bankruptcy of the Trustee. 34. The Incidents of the Trustee's Estate at Law. 35. Failure of Beneficiaries. Art. 29. — Cases in ichich the Trustee takes any Estate. «■• Where the trust is a simple trust, and the trust property is of freehold tenure, then, in consequence of (or in the case of wills by analogy to) the Statute of Uses, the trustee takes no estate unless the property be limited to his use, or unless there be a clear intention to vest an estate in him. But, where the trust is a special trust, the statute does not ap- ply, and the trustee will take a legal estate of some duration. y3. Where the trust property is of copyhold or leasehold tenure, or is pure person- alty, the Statute of Uses is inapplicable, CASES IN WHICH TRUSTEE TAKES ANY ESTATE. 199 and the trustee takes the legal estate, ■whether the trust be simple or special. 7- This article has no application where the legal estate is outstanding. Illust.— 1. Trust to permit beneficiary to receive Tents. — Thus, where the legal estate in freehold is limited to trustees, and the words used are " in trust to pay to " a specified person the rents and profits, there the trustees take the legal estate, because they must receive before they can make the required pay- ments. But where the words are " in trust to permit and suffer A. B. to take the rents and profits," there the use is divested out of them and executed in the party beneficially entitled, the purposes not requiring that the legal estate should remain in the trustees («) . 2. Trust to permit beneficiary to receive net rents. — Where, however, the trustees are to permit and suffer the beneficiary to receive the net or clear rents and profits, the trustees take the legal estate ; it being presumed that the trustees are to take the gross rents, and after payment of outgoings, to hand over the net rents to the beneficiary (6). 3. Trust to pay or permit beneficiary to receive. — Where the language is ambiguous, and may be read either as implying a simple or a special trust, the ■question must be determined according to the general (a) Per Parke, J., Barker v. Greenwood , 4 M. & W. 429 ; Doe d. Leicester v. Bi if he be a bare trustee. DEVOLUTION OF THE TEUSTEE's ESTATE. 217 Illust. — 1. Trustee of real estate dying between August 7tli, 1874, and January 1st, 1876.— The circum- stances stated in paragraph 7 (3) happened in the case of Christie v. Ovington («'). There, a sole surviving- trustee in whom the legal estate in the property in question was vested, died intestate between those dates. No one could be found who would take out administration to the deceased trustee, and the^ difficulty was how to get the legal estate in question vested in a purchaser of the property. The 5th section of the Vendor and Purchaser Act, 1874, had enacted, that upon the death of a bare trustee of real estate, the same should vest in the legal personal representative from time to time of such trustee ; but the 48th section of the Land Transfer Act, 1875, had repealed that section as from the 1st January, 1876, except as to anything duly done thereunder before- the latter date, and had re-enacted the section with the limit that it should only apply to the case of a trustee dying intestate after the 1st January, 1876. Y.-C Hall, on these facts, held, that the 5th section of the Yendor and Purchaser Act having been abso- lutely repealed ab initio, and nothing having been done under it, the estate became revested in the heir of the trustee by the fact of the repeal, although up to the- date of the repeal it had been in the trustee's per- sonal representatives. That this was scarcely the intention of the legislature admits of small doubt, but the logic of the Y.-C.'s decision seems faultless. 2. Trustee of copyhold dying between 1881 and 16th September, 1887. — Sect. 30 of the Conveyancing Act, (i) Supra. 218 THE ADMINISTRATION OF A TRUST. 1881, provides by sub-sect. (1), that where an estate of inheritance in any hereditaments is vested on any trust or by way of mortgage in any person solely, the same shall, on his death, notwithstanding any testamentary disposition, devolve to and become vested in his personal representatives or representative from time to time, in like manner as if the same was a chattel real vesting in them or him. Sub-sect. (3) provides that the section applies only in cases of death after 1881. Sect. 45 of the Copyhold Act, 1887, which came into operation on the 16th Sep- tember of that year, provides that the 30th section of the Conveyancing Act, 1881, shall not apply to lands of copyhold or customary tenure, vested in the tenant on the court rolls of any manor upon trust or by way of mortgage. A sole trustee of copyholds, tenant on the court rolls, died in 1884. His executors had not dealt with the copyholds. Held, that on the passing of the Act of 1887, the copyholds became vested in, and could be dealt with by the persons in whom they would have been vested if the 30th section of the Conveyancing Act had not been passed ; but that if the executors had made a disposition of them before the Copyhold Act came into operation, it would have been valid (i). Art. 32. — Devise of the Trustee's Estate. A trustee dying since December 31st, 1881, cannot devise the estate vested in him as trustee (unless it be of customary (i) Be Mills, supra. DEVISE OF THE TRUSTEE's ESTATE. 219 or copyhold tenure (/ ) ) ; and notwith- standing any attempt to do so, the same will devolve in the manner indicated in the last preceding article (/i^). ;3. A sole or last surviving trustee who died on or before the 31st December, 1881, was empowered to devise or bequeath the legal estate in the trust property of whatever tenure or nature (^); and a trustee of customary or copyhold lands can still do so. Trust estates capable of being devised pass under a general de- vise or bequest unless the will contains expressions authorizing a narrower con- struction, or the disposition of the estate so devised or bequeathed be such as a testator would be unlikely to make of property not his own (m). Illust. — For some years to come the old law will continue to be of importance in investigations of the title to freehold estates, and owing to the 46th section of the Copyhold Act, 1887, is still of importance on ( y ) Copyliold Act, 188Y, s. 45. [Ic) 44 & 45 Vict. c. 41 (Conveyancing and Law of Property Act, 1881), ri. 30. (I) Constmotive trust estates (as land agreed to be sold) passed under a devise of trust estates {Lysaght v. Edivards, 2 Oil. Div. 499) ; but see above-cited statute, sect. 4. (m) Braybrooke v. Insiip, 8 V. 436 ; Ex jparte Morgan, 10 V. 101 ; Langford v. Angel, 4 Ha. 313. 220 THE ADMINISTRATION OF A TRUST. the death of a sole trustee of customary or copyholi lands, and therefore a few examples of sub-clause /3 are desu'able. Thus, where a testator subjected the property, passing under a general devise, to the payment of debts or legacies {i>), or directed them to be sold (o) , or devised them to persons as- tenants in common (p), or to a numerous and unas- certained class (g), or limited them in strict settle- ment, or in any other way which made it impossible- to say the intention could be to give a dry trust estate, trust estates would not pass. Art. 33. — BanJiriqjlcij of the Trustee. The property of a bankrupt divisible among his creditors does not comprise property held by him as trustee for any other person (r), although it is property in his order and disposition at the com- mencement of the bankruptcy (s). If he has converted it into money or other property, and such money or other («) Me Morley, 10 Ha. 293 ; Be Packman and Moss, 1 Ch. Div. 214; Me Bellis's Trust, o Ch. Div. 504; but se& Brown v. Sibley, 24 W. E. 783, contra. (o) Me Morley, supra. (p) Martin v. Laverton, L. E., 9 Eq. 568. (q) Me Finney, 3 Grif. 465 ; see also Me Packman and MosSy supra ; and compare with Brown v. Sibley, supra. (r) 46 & 47 Vict. c. 52 (Bankruptcy Act, 1883), s. 44. (s) Ex -parte Barry, L. B., 17 Eq. 113 ; Ex parte Marsh, 1 Atk. 158. As to constructive trustees, see Ex parte Pease, 19 V. 46, and Whitefield v. Brand, 16 M. & W. 282. INCIDENTS OF THE TRUSTEE's ESTATE AT LAW. 221 property would be liable under Art. 80 in the hands of the trustee, it will also be liable in the case of the trustee's bankruptcy (if). Obs. — The only part of this rule which requires any illustration is sub-clause /S ; but as the doctrine -of following trust property into other property into which it has been converted is fully treated of in Ai't. 80, the reader is referred to that article. Art. 34. — The Incidents of the Trustee's Estate at Law. At law, the estate of the trustee is subject to the same incidents as if he were the beneficial owner, except where such in- cidents are modified by act of parlia- ment. Illust. — 1. Power to commence actions. — Thus, he is the proper person to bring actions arising out of wrongs formerly cognizable by common law courts, and which necessitated the possession of the legal €state in those bringing them (?*). But this does not prevent a cestui que trust doing so if the trustee ■declines. {t) Frith v: Curtland, 2 H. & M. 417 ; Be. Hallett, Knatch- hull V. Halhtt, 13 Oh. D. at p. 719. («) May V. Taylor, 6 M. & G. 261 ; and see E. S. 0. 1883, ■Ord. XVi. r. 8. 222 THE ADMINISTRATION OF A TRUST. 2. Curtesy and Dower. — So, at law, the estate of the trustee in real property was liable to curtesy («), dower (y), and if of copyhold tenure, to freebench (s) ; but of course the persons so taking could only take as trustees for those beneficially entitled («) ; and since the Conveyancing and Law of Property Act, 1881, the devolution of freehold trust estates is entirely changed, and dower and curtesy no longer attach. Formerly, the estate of a trustee was also liable to forfeiture and escheat, but there can no longer be forfeiture or escheat of a trust estate (b) . 3. Trustees of copyholds must be admitted. — So, again, trustees of copyholds who take an estate must be admitted by the lord of the manor on the custom- ary terms (c) . 4. Trustees prove in bankruptcies. — "Where a debtor to the trust estate becomes bankrupt, the trustee is the proper person to prove without the concurrence of the cestui que trust ((^), unless in the case of a simple trust. Where it is as likely as not that the debtor has paid the cestui que trust direct, then it lies in the discretion of the judge to require the concurrence of the cestui que trust (e) . 5. Trustee liable for rates. — The trustee of a private (x) Bennett v. Davis, 2 P. "W. 319. ly) Noel v. Jevon, !Pre. 43; Nash. v. Preston, Gro. Oar. 190. (z) Hinton v. Hinton, 2 V. sen. 638. (a) Noel v. Jevon, supra; Lloyd v. Lloyd, 4 Dr. & War. 354. h) 13 & 14 Vict. c. 60, s. 46. (c) Wilson V. Hoare, 2 B. & Ad. 350. (d) Ex parte Green, 2 Dea. & Oh. 116. (e) Ex parte Dubois, 1 Oox, 310 ; Ex parte Oray, 4 Dea. & Oh. 778. INCIDENTS OF THE TRUSTEe's ESTATE AT LAW. 223 trust is, as legal owner, liable to be rated in respect of the trust property (/). 6. Trustee of a business liable to creditors. — If the trustee, in pursuance of the trust, carry on a business for the benefit of the cestui que trust, he will yet be personally liable to the creditors of the business {g), and may be made a bankrupt {h). 7. Trustee entitled to custody of deeds. — A trustee in whom the legal estate is vested is entitled to the custody of the deeds («) ; but the cestuis que trusts are entitled, at all reasonable times, to inspect them(y). 8. Not entitled to exercise franchise. — On the other hand, the ordinary legal incident of voting for members of parliament does not belong to the trustee in respect of the trust estate, as the act 6 & 7 Vict. c. 18, s. 74, confers that right on the beneficiary. It would, however, seem that the trustee still retains the right of voting for coroners {k). if) Reg. v. Sternj, 12 A. & E. 84; Beg. v. StapMon, 4 B. & S. 629. () ) and liquida- tion or composition {q), or conviction of a dishonest crime {r), would seem to clearly unfit a person for the office ; but it has been held that infancy is not unfit- ness within the meaning of the section, although an infant will be removed by the court (s). Lastly, with regard to incapacity, the word is strictly limited to incapacity of the trustee arising from some per- sonal defect {t), as illness, lunacy (««), or, possibly, infancy. Aet. 64. — Vesting of Tntst Property in neic Trustees. On the appointment of a new trustee, everything requisite should be done for vesting the trust property jointly in the persons who are for the future to be the trustees [v). This may be done as follows : — a. It may be effected by the ordinary modes of conveying or transferring property. (p) See Re Barker, 1 Ch. Div. 43. But quaere whether sect. 147 of tlie Bankruptcy Act, 1883, does not impliedly limit the power of appointment, on bankruptcy, to the court. {a) See Re. Adams, 12 Ch. Div. 634. (r) Turner v. Maule, 15 Jur. 761. (s) Re Tallatire, W. N. 1885, p. 191. (<) See Be Watts, 9 Ha. 106 ; Turner v. Maule, 15 Jur. 761 ; Be Bignold, L. E., 7 Ch. App. 223. (u) Be East, L. E., 8 Oh. App. 735. {v) Conveyancing and Law of Property Act, 1881, s. 31, sub-s. 4. VESTING OF TRUST PROPERTY IN NEW TRUSTEES. 367 /3. Where the new trustee is appointed sub- sequently to the 31st December, 1881, the deed by which he is appointed may contain a declaration by the appointor, to the effect that any estate or interest in any land, or in any chattels, or the right to recover and receive any chose in action, subject to the trust, shall vest in the persons who, by virtue of the deed, became and are the trustees. Such a declaration, without any conveyance or assignment, operates to vest such estate, interest or right in those persons as joint tenants, with the exception of the legal estate in (1) copyholds or customary lands, (2) lands held by way of mortgage for securing money subject to the trust, and (3) shares, stocks, annuities or property only transferable in the books kept by a company or other body, or in manner prescribed by or under act of parliament (x). y. Where a trustee retires under the pro- visions set forth in Article 61, /3. (2), supra, a similar declaration, made by the retiring and continuing trustees, and (as) Conveyancing and LaTV of Property Act, 1881, s. 34, suD-ss. 1 and 3. 368 ' THE ADMINISTKATION OF A TRUST. by the other person (if any) empowered to appoint new trustees, will vest the trust property (save as aforesaid) in the continuing trustees alone, as joint tenants ( 2/). S. Where none of the foregoing means are feasible, application may be made, by petition, to the Chancery Division of the High Court of Justice (or, in case of lunacy or unsoundness of mind, to the Lord Chancellor or Lords Justices), for a vesting order under the provisions of the Trustee Acts, 1850 and 1852, in any of the following cases (0), viz. : — • (1) Where land, stock, or a chose in action is vested in a lunatic or person of unsound mind, or an infant, or per- son out of the jurisdiction, or a person who cannot be found, or about whom it is uncertain whether he be living or dead: (2/) Conveyanoing and Law of Property Act, 1881, s. 34, sub-s. 2. (z) See 13 & 14 Vict. c. 60, ss. 3—16, 22, 23, 24, 25, 32, and 34, and 15 & 16 Vict. c. 55, ss. 2, 3, 4, and 5. The court cannot, however, under this act make a vesting order where the legal estate in the entirety, and the beneficial interest in part, is vested in the Crown. In such a case the proper procedure is to issue a summons under sect. 5 of the Intestates Estate Act, 1884, for a sale. Me Pratt, 55 L. T. 313. VEST1^'G or TRUST PEOPERTY IN NEW TRUSTEES. 369 (2) Where it is not known which of several trustees of land was the survivor, or where a trustee of land has died in- testate, and without leaving an heir (or since 1881 with regard to freeholds, a personal representative («)), or where such heir or a devisee of trust estates is not known, or where stock is standing in the name of a deceased person whose personal representative is a lunatic or person of unsound mind, or where a chose in action is vested in such personal representative ; (3) Where lands are subject to a con- tingent right in any unborn person or class of persons, who, upon coming into existence, would become seised or pos- sessed thereof upon any trust ; (4) Where trustees of lands or stock refuse to convey such lands, or transfer such stock, for twenty-eight days after demand made by a person entitled to require the same. e. In any case not covered by the fore- going, the property, of whatever kind it may consist, may be vested by an ap- plication to the court to appoint new (a) See OonTeyancing Act, 1881, s. 30, andiJe Williams, 56 L. T. 884; ReBachatraw, 52 ibid. 612; and Re Pilling, 26 Oh. Div. 432. U. BB 370 THE ADMINISTRATION OF A TRUST. trustees, and vest the trust property in them under Article 65 (a). But the court has no jurisdiction to re-appoint trustees, already validly appointed, merely for the purpose of making a vesting order (b). Obs. — 1. Before the year 1882, difficulties used frequently to arise in. relation to the vesting of the trust property on the appointment of new trustees, owing to the fact that the legal estate could only he transferred by the persons in whom it was legally vested, or by a vesting order of the court, which latter was of course expensive. For instance, a trustee might leave the country permanently, or hecome a lunatic, or (being a sole trustee) die ia- testate and without any heir. The legal estate being vested in him, could only be got out of him by a duly executed conveyance or assignment, or by an order of the court ; and as the former could not be obtained, the latter became a matter of necessity. The new law, however (stated in sub-clauses j3 and y), in a great measure obviates this difficulty for the future, although not completely ; for it does not apply to all kinds of property, so that applications to the court for vesting orders will still have to be made in many cases. It will be perceived that the declaration must be contained in the deed by which the trustee is appointed. (a) 13 & 14 Vict. c. 60, ss. 32 and 34. (b) Be Fica*, 33 Oh. Div. 107 ; Me Bewhirst, ibid. 416 ; and Me Gardner, ibid. 599, overruling Re Mathhojie, 2 Ch. Div. 483; Me Dalgkish, 4 Cb. Div. 143 ; and Me Crowe (No. 2), 14 Ob. Div. 610. APPOINTMENT OF NEW TRUSTEES BY THE COUET. 371 2. Witt regard to property which does not pass hy a Testing declaration, copyholds must he vested by surrender and admittance, in the usual way. Mortgages are iavariahly transferred without dis- closing the trust, so as to keep it off the face of the mortgagor's title. Stocks, shares, &o., are trans- ferred by deed of transfer, duly registered with the bank or company. 3. Where it is necessary to apply to the court for a vesting order, it is done by petition ; but the prac- tice under the Trustee Acts is of too special a nature to be treated of in a work of this size and scope, and the reader is therefore referred to the last edition of Daniell's Chancery Practice, and to Messrs. Morgan and Chute's Chancery Acts and Orders. Art. 65. — Appointment of neiv Trustees hy the Court. a. Whenever it is expedient to appoint a trustee or trustees, whether of a settle- ment of vrhich no trustees were ori- ginally appointed (c), or the original trustees of which have died, retired or been removed, and it is found inex- pedient, difficult or impracticable to do so without the assistance of the court (but not otherwise ((?)), the court may, (c) Bodkin v. Brunt, L. E., 6 Eq. 580; B'AdAemar v. Bertrand, 35 B. 19 ; Be Smirthwaite, L. E., 11 Eq. 251 ; Be Davis, 12 ibid. 214 ; and see 15 & 16 Vict. c. 55, s. 9. [d) Be Gibbons, 30 W. E. 287. bb2 372 THE ADMINISTRATION OF A TRUST. on petition, appoint a trustee or trus- tees (e), and may, by order, vest in such new trustee or trustees any lands (/) subject to tbe trust {g), and the right to call for the transfer of any stock, or to receive the dividends thereof, and the right to sue for and recover any chose in action, or any interest in respect thereof (A). /3. When the court appoints new trustees it fills up all vacancies, unless there are exceptional circumstances (^). y. This article only applies to declared trusts (/t^) (semble). Illust. — 1. Thus, if a last surviving or sole trustee die intestate, and leave no personal estate, so that no one can take out letters of administration to him, and no one is named in the settlement to appoint new trustees, it vfould stQl be necessary to apply to the court under this article. The applica- tion is by petition, for the practice as to which the reader is referred to works treating of the practice of the Chancery Division of the High Court. (e) 13 & 14 Vict. c. 60, ss. 32, 33. There is no jurisdiction to do so on summons ; Smith v. &iU, 53 L. T. 623. (/) Clueere, leaseholds ; see Re Mundel, 6 Jux., N. S. 880; and Be Robinson, 9 Jur., N. S. 885. {g) 13 & 14 Vict. 0. 60, s. 34. (A) Ibid. s. 35. H) Be Nash, 16 Ch. Div. 503 ; Be Golyer, 50 L. J., Ch. Y9. [k) Be Martin, W. N. 1886, p. 183. APPOINTMENT OF NEW TRUSTEES B^T THE COUKT. 373 2. Where vesting order can only be obtained under sect. 34 of Trustee Act. — It is apprehended that where the donee of a power of appointing new trustees is in existence, but the trust property can only (for some reason) be vested in new trustees by a vesting order made under sect. 34 of the Trustee Act (which enables a vesting order to be made of any kind of trust property oit the appointment of netv trustees by the court), that would be a case in which the court would hold that it was " inexpedient " to appoint new trustees under the power without the assistance of the court, so as to enable the required vesting order to be made. Until recently, it was customary for the court to reappoint trustees already appointed under a power, in order to give the court jurisdiction to make the vesting order. That practice has, how- ever, been lately overruled (l) on the ground that the court has no jurisdiction to reappoint trustees already validly appointed. As, however, the ground on which the practice has been overruled does not touch the expediency of such applications, it is apprehended that it will now be considered equally expedient to apply to the court to appoint new trustees for the purpose of incidentally obtaining a vesting order, although it is not impracticable to appoint them without the assistance of the court. 3. Where a trustee has become, through old age and infirmity, incapable of acting in the trust, the (Z) See note (6), p. 370, supra. 374 THE ADMINISTRATION OF A TRUST. court has under this article appointed a new one in his place (m). 4. One of two joint donees of a power out of juris- diction. — So it has been held that where the power of appointing new trustees was given to a husband and wife jointly, and they were judicially separated, and the husband was living in Australia, it was a case in which it was " difficult or impracticable" to appoint new trustees, without the assistance of the court, so as to give the latter jurisdiction (91). 5. Power only exerciseable with consent of a lunatic, — It woTild seem that where the power of appointing new trustees is vested in a person who can only exer- cise it with the consent of a lunatic, the proper course is for the committee of the lunatic to apply to the Lords' Justices, for leave to give the required consent on behalf of the lunatic (0). In the absence of other circumstances, therefore, the mere fact of a necessary consenting party being a lunatic, affords no ground for an application to the court to appoint new trustees. 6. Court rarely reduces the number. — Where one of three trustees was an absconding bankrupt, the court refused, notwithstanding evidence of great difficulty in getting a third person to act as trustee, to appoint the solvent trustees in place of themselves and the bankrupt, and to make an order vesting the trust (m) Me Lemann, 22 Ch. Div. 633 ; Be Phelps, 31 Ch. Div. 251. in) Be Somerset, W. N. 1887, p. 122. (o) Be Garrod, 31 Ch. Diy. 164. APPOINTMENT OF NEW TRUSTEES BY THE COURT. 375 estate in the solvent trustees alone {p). For, apart from the objection that the court has no jurisdiction to appoint existing trustees to he new trustees, it was said by North, J., to be a well-settled rule that the court will not reduce the number of trustees of a continuing trust, although it will deviate from that rule if the trustees have no duties to perform except to distribute a fund which is immediately divisible. 7. On the other hand, in a subsequent case {q) to that last cited (in which it was referred to), Chitty, J., appointed three new trustees in the place of four original ones, where it had been found impossible to obtain four. His lordship is reported to have said, " The court has power to appoint three new trustees in place of the original four, and if special circum- stances are necessary for the exercise of this juris- diction, the disclaimer of one of the four trustees, and the difficulty of getting new trustees, are special circumstances sufficient to justify the maMng of the order." Under these circumstances the practice on the point is not so weU settled as could be wished. 8. New trustees only appointed on petition where trust has been declared. — On the occasion of the purchase of some land in 1880 by a land company, the conveyance was made to the secretary in fee as if he were the absolute beneficial owner. The whole of the purchase-money was paid by the company, and {p) Re Gardiner, 33 Ch. Div. 590, and cases cited in judg- ment of North, J. {q) Be Fowler, W. N. 1886, p. 183. 376 THE ADMINISTRATION OF A TRUST. the conveyances were taken in this form for con- venience in dealing with the property on its subse- quent resale by the company in smaU lots to other purchasers. No declaration of trust was ever exe- cuted by the secretary. In 1886 the secretary, according to the medical evidence, became ill, suf- fering from softening of the brain and general paralysis of the brain centres, and was quite in- capable of attending to or comprehending any busi- ness. Under these circumstances, the company presented a petition for the appointment of a new trustee and a vesting order. North, J., however, doubted whether he had jurisdiction to make the appointment on petition, and directed the company to issue a writ in an action in which the court might make a declaration that the secretary was in fact a trustee for the company (r). Obs. — Practice. — For the practice on petitions for the appointment of new trustees by the court, the reader is referred to Daniel's Chancery Practice and Morgan's Chancery Acts and Orders, with these additions, that only one affidavit of fitness is now required (s), and that the petition should state under what sections of the Trustee Acts the application is made(^). (r) Re Martin, W. N. 1886, p. 183. (s) Re Arden, W. N. 1887, p. 166. {t) Re Sail, W. N. 1888, p. 16. SEVERANCE OF TKUST ON APPOINTMENT. 377 Art. 66. — Severance of Trust on Appointment of new Trustees. a. Since the 31st December, 1881, on an appointment of new trustees, a separate set of trustees may be appointed for any part of the trust property, held on trusts distinct from those relating to any other part or parts of the trust property ; or if only one trustee was originally appointed, then one separate trustee may be so appointed for the first-mentioned part {u). ^. Before the above-mentioned date, a trust could be severed by the court (v) ; but (semble) not otherwise, except by consent of all the beneficiaries. Illust. — 1. Explanatory example. — Thus, if a tes- tator gives real and personal estate to trustees, upon trust to pay the income to A. during her life, and after her death to sell and divide the proceeds into two parts, and to hold one of such parts in trust for A.'s daughter Mary, for life, with remainder for her children, and the other of such parts in trust for A.'s daughter Ann, for life, with remainder to her chil- dren, then upon the death of A., and the appointment of new trustees, separate sets of trustees may now be (m) Conveyancing Act, 1882, s. 5. [v) Cooper v. Todd, 29 W. E. 502. 378 THE ADMINISXEATION OF A TKUST. appointed to administer the trusts of Mary's and Ann's respective shares. 2. Only applies when new trustees of entirety are being appointed. — A testator bequeathed a sum of 50,000^. to his trustees, on trusts distinct from the trusts of the residue of his personal estate ; and they desired to appoint a separate set of trustees of the 50,000^., they themselves remaining trustees of the residuary estate. It was, however, held by North, J., that the statutory rule stated in the above article only authorized the appointment of a separate set of trustees of part of the property when an appointment was beiug made of new trustees of the whole pro- perty, and that, consequently, the proposal could not be carried out (»). {x) Savile y. Couper, 35 W. E. 829. ( 379 ) CHAPTER VII. The Peotection and Relief accorded to Trustees. Aet. 67. Beimhursement. „ 68. Protection against ads of Co-trustee. „ 69. Concurrence of or Helease hy Beneficiaries. „ 70. Laches of the Beneficiaries. ,, 71. Entitled to he indemnified hy a Party wJio has gained hy or instigated Breach of Trust. ,, 72. Bight to Discharge. „ 73. Advice of a Judge. „ 74. When entitled to pay into Court or to seelc its adminis- trative assistance. Art. 67. — Reimhursement. "■■ A trustee is entitled to be reimbursed all expenses wbicb he has properly paid or incurred in the execution of the trust (a). /3. Although, as between the beneficiaries, such expenses are generally payable out of the capital of the trust property (b), [a) Worral v. Harford, 8 T. 8 ; Morrison v. Morrison, 4 K. & J. 458 ; Be German Mining Co., 4 D. M. & Q. 19 ; and see Art. 75, infra. (6) Carter v. Seahright, 26 B. 376. 380 THE ADMINISTEATION OF A TRUST. yet, until they are paid, the trustee has a lien for them, on both capital and in- come (c), in priority to the claims of the beneficiaries (^d ). 7. The question as to what expenses are, and what are not, properly incurred, de- pends upon the circumstances of each particular case {e). ^. Where a trustee has committed a breach of trust, he will not be allowed to reim- burse himself his expenses until he has made good the breach (/). Illust. — 1. Damages recovered by third parties. — In Bennett v. Wyndham (g), a trustee, in the due execution of his trust, directed a bailiff, employed on the trust property, to have certain trees felled. The bailiff ordered the wood-cutters usually employed on the property to fell the trees, in doing which they negligently allowed a bough to fall on to a passer- by, who, being injured, recovered heavy damages from the trustee in a court of law. These damages were, however, allowed to the trustee out of the trust property, the Lord Justice Knight-Bruce say- (c) Stott V. Milne, 25 Ch. D. 710 ; Ex parte James, 1 D. & 0. 272 ; Ex parte Chippendale, 4 D. M. & G. 19 ; and see Walters v. Woodbridge, 1 Ch. Div. 504. {d) Dodds V. Tuke, 25 Oh. Div. 617; Matthias v. Matthias, 3 Sm. & Giff. 552. (e) Leedham v. Ohawner, 4 K. & J. 458. (/) Be Knott, Sax v. Palmer, 56 L. J., Ch. 318. (V) 4 D. F. & J. 259. REIMBURSEMENT OF EXPENSES. 381 ing : " The trustee in this case seems to have meant well, to have acted with due diligenee, and to have employed a proper agent to do an act, the directing which to be done was within the due discharge of his duty. The agent makes a mistake, the consequences of which subject the trustee to legal liability to a third party. I am of opinion that this liability ought, as between the trustee and the estate, to be borne by the estate." 2. Calls on shares. — So where a trustee of shares has been obliged to pay calls upon them, he is entitled to be reimbursed (h) ; and the right to be indemnified accrues directly the liability is proved to exist. Thus, where certain moneys belonging to A. were invested in shares in a banking company, in the joint names of A. and B., of whom B. was the survivor, and eventually the company was wound up, and it was proved iliat calls would he made on the estate of B., it was held that B.'s executor was entitled forthwith to bring an action for a declaration of his right to in- demnity against the representatives of A., before any call was actually made (e). However, there must be some proof that the liability is not merely imaginary; for a person entitled to be indemnified cannot sue quia timet, or, in other words, he cannot claim a de- claration of his right to indemnity before the con- tingency which creates the damage has arisen {k). {h) Jamea v. May, L. E., 6 H. L. 328 ; Re National Finance Co., L. E., 3 Oh. App. 791. (i) Holhs v. Wayet, 36 Ch. Div. 256. {h) Hughes-Hallett v. Indian Mammoth Gold Mines Co., 22 Ch. Div. 561. 382 THE ADMINISTRATION OF A TRUST. Therefore, althougli a trustee may, as such, be a member of a company which is being wound up, he cannot bring an action to establish his right to an indemnity, unless he can establish the fact that calls must be made {k) . 3. Solicitor's costs. — A trustee or executor will be allowed the amount of a solicitor's bill of costs which he has paid for services rendered in the matter of the trust {I) ; even, it would seem, where the necessity for the services arose through want of caution on the part of the trustee : ex gr., where proceedings had to be taken by an administrator against an agent to whom he had entrusted moneys to make payments (m). However, under the SoUeitors Act (6 & 7 Vict. c. 73, s. 39), beneficiaries may, at the discretion of the court, obtain an order to tax the costs of the trustee's solicitor. Even before that act, if the trustee paid the solicitor's bill without taxation, the beneficiaries had a right to have the bill referred to a master " to be moderated ; " and if, on such reference, the charges were reduced, they were disallowed the trustee, and he was left to get them back, if he could, from the solicitor [n). 4. Costs of administration suit. — Unless trustees have been guilty of misconduct, they are entitled to their costs of an action for the administration of the trust as between solicitor and client, and not merely (k) Vide note {k), supra. h) Macnamara v. Jones, Dick. 587. (m) Be Davis, Muchalt v. Davis, W. N. 1887, p. 186, sed quaere. (») Johnson v. Telford, 3 Euss. 477 ; Langford v. Mahoney, 4 Dr. & "War. 110. REIMBURSEMENT OF EXPENSES. 383 as between party and party (o). And although, if they are co-plaintiffs or co-defendants, they ought, except under special circumstances, to sue or defend jointly {p), and will only be allowed one set of costs between them, yet where one rightly commences an action and makes his co-trustee defendant, they will each be allowed separate sets of costs as between solicitor and client (o). 6. Lien on trust property for trustees' expenses, — In an action by beneficiaries to have the rights of the parties ascertained, the usual accounts and enquiries were ordered; and, on further consideration, the costs of all parties were directed to be taxed as between solicitor and client, and the costs of the trustees to include any charges and expenses pro- perly incurred by them. It subsequently appeared probable that the trust fund would be insufficient for the payment of the whole of the costs in full, and the defendants moved to vary the minutes by the inser- tion of a direction that if the trust funds were insuf- ficient to pay the whole of the costs, charges, and expenses thereby directed to be taxed and payed, the costs, charges, and expenses of the defendants should be paid in priority to the costs of the plaintiffs. Bacon, V.-C, in giving judgment, said : " It is a good rule that trustees should have a priority for their costs, because, until those costs are provided for, it is impossible to say what the trust fund is. I, therefore, (o) -He Love, Hill v. Bpurgeon, 29 Ch. Div. 348. (p) Morgan & Wurtzburg's Treatise on Costs, 2nd ed., pp. 124—126, and 403. 384 THE ADMINISTKATION OF A TRUST. hold that these trustees are entitled to payment of their costs, charges, and expenses, in priority to the costs of all other parties, and the order must therefore be varied accordingly " {q). 0. Lien overrides all beneficial interests. — The trustees' lien takes precedence of all beneficial in- terests. Even where property is settled on a married woman for life, without power of anticipation, and she improperly commences administration proceedings, which are dismissed with costs against her personally, the court may authorize the trustees to recoup them- selves out of her life interest (r). 7. Trustees' lien good even where settlement void under Bankruptcy Act. — In a recent case {s), one Holden executed a post-nuptial voluntary settlement. He subsequently commenced an action to set it aside, but failed in his contention, the action being dis- missed with costs. He then became bankrupt within two years of the date of the settlement, which accord- ingly became void under sect. 47 of the Bankruptcy Act, 1883. It was held that, although the settle- ment was void, yet as it had originally been valid, and as the trustees had incurred costs in the execution of their duty which they could not recover from the bankrupt, they were entitled to be fuUy indemnified out of the trust funds. 8. Exception where trustee has mixed his money ■with trust fund. — Where, however, a trustee for pur- q) Bodds v. Tuhe, 25 Cli. Div. 617. r) Edwards v. Dewar, 34 W. E. 62. a) Re Holden, W. N. 1887, p. 212. REIMBURSEMENT OV EXPENSES. 385 chase has advanced money of his own to enable a particular property to be purchased, the price of which exceeded the whole trust fund, it was held that he had not a Jirsi charge on the property for re- imbursing himself his advance, but that the benefi- ciaries had a first charge on the estate for the amount of the trust fund, and that he only had a second charge for the amount of his advance (t) . The ratio decidendi in this case would seem to have been, that it was not so much a question of indemnity for costs and expenses incurred in the performance of his duty as of a gratuitous mixing of his own moneys with the trust moneys ; and that, under the rule expressed in Art. 80, infra, that gave the trust estate a first and paramount charge. 9. Other instances of costs allowed trustees. — It has been held that a trustee is entitled to be reimbursed costs of former trustees, paid by him to their personal representatives previously to the latter transferring the trust estate (ti). He is also entitled to be re- imbursed costs incurred by him. previously to his appointment, in obtaining a statement of the trust property, and ascertaining that the power of appoint- ing new trustees was being properly exercised (ii) ; and also costs incurred by the donee of the power of appointment in relation to the trustee's appoint- ment (m). 10. Costs of trustees who have coininitted a breach (t) Be Pumphrey, Worcester, &c. Banking Co. v. Blick, 22 Oh. Div. 255. (m) Harvey v. Oliver, W. N. 1887, p. 149. V. C C 386 THE AUMINISTEATION OF A TRUST. of trust, — Where the sole object of a suit is to make trustees answerable for breach of trust, and a judg- ment to that effect is obtained, the trustees wiU. not only not get their costs allowed, but will almost ia- variably have to pay the costs of the plaintiffs {y). And the same result will follow where the conduct of a trustee is vexatious or oppressive (s), or unreason- ably cautious (a). But where an administration suit is necessary, apart from the breach of trust, and the latter only forms an incidental feature of the suit, the trustee will, as a rule, be allowed his general costs of the suit as between solicitor and client, although he may have to pay the special costs caused by the breach ib). But he will not be allowed to receive them until he has made good the loss to the estate caused by his breach (c). And, iu spite of a decision of the late Y.-C. Hall to the contrary {d), the weight of authority is in favour of applying the same rule to costs incurred by a trustee defendant, even after he may have become bankrupt (e) . («/) Per Lord Langdale, Byrne v. Norcott, 13 B. 336; Gough V. Etty, 20 L. T. 358. (z) See Marshall v. Sladden, 4 D. & S. 468 ; Patterson v. Woolen, 2 Cli. Div. 586 ; Atf.-Gen. v. Murdoch, 2 K. & J. 571 ; Palairet v. Carew, 32 B. 564; Oriffen v. Brady, 39 L. J., Oil. 136. (a) Smith v. Bolden, 33 B. 262 ; Be Cull, L. E., 20 Eq. 561 ; Firmin v. Pulham, 2 D. & S. 99 ; Cochcroft v. Sutcliffe, 25 L. J., Oil. 313; and see also cases collected in Morgan and Wurtzbuxg's treatise on the Law of Costs, 2nd edit., p. 412 et seq. (b) Pride v. Fooks, 2 B. 430 ; Camphell v. Bainhridge, L. E., 6 Eq. 269 ; Bell v. Turner, 47 L. J., Oh. 75. (c) Be Knott, Bax v. Palmer, 56 L. J., Oh. 318. (d) Clare v. Clare, 21 Oh. Div. 865. (e) Lewis Y. Trash, 21 Oh. Div. 862 (North, J.); BeBasham, REIMBURSEMENT OF EXPENSES. 387 11. Unreasonable expenses disallowed. — Trustees will not be allowed to reimburse tbemselves every out of pocket expense, but only suob as are reason- able and proper under the circumstances. Thus, where a receiver (who is, of course, a trustee) made several journeys to Paris, in order that he might be present at the hearing of a suit brought ia the French courts in relation to the trust property, and it appeared that his presence was wholly needless (the sole question being one of French law, and not of fact), his travelling expenses were disallowed, on the ground that they were, under the circum- stances, improperly incurred (/). 12. And so where trustees attempted, at the solici- tation of their beneficiaries, some of whom were married women without power of anticipation, to sell the trust property before the date named in the settlement, it was held that they were not entitled to be indem- nified against the costs of an action for specific per- formance brought agaiust them by the purchaser {g). 13. Again, a trustee, although entitled to obtain legal advice in relation to the execution of the trust, is not entitled, out of an excess of caution, to charge the estate with unnecessary legal proceedings. For instance, on retirement, he is not entitled to have an attested copy of the settlement, or of the appointment of new trustees, made at the expense of the estate ill). Hannay v. BasJiam, 23 Oh. Div. 195 (Chatty, J.) ; McEwen y. Crombie, 25 Oh. Div. 175 (North, J.). (f) Malcolm y. O'Oallaghan, 3 M. & 0. 62. (g) Leedham v. Chawner, supra. (h) Water Y. Anderson, 11 Ha. 301. cc2 388 THE ADMINISTRATIOX OF A TRUST. Art. 68. — Protection against the Acts of Co- Trustee. A trustee is not answerable for the receipts, acts, or defaults of his co-trustee (/c), save only — a. Where he has handed the trust property to him without seeing to its proper ap- plication. /3. Where he allows him to receive the trust property without making due inquiry as to his dealing with it. y. Where he becomes aware of a breach of trust, either committed or meditated, and abstains from taking the needful steps to obtain restitution and redress, or to prevent the meditated wrong. And even in these three cases he may, by express declaration in the settlement, be made irresponsible {I). Illtjst. — 1. Thus, in the case of Wilkins v. Hogg (m), which now governs the subject, a testatrix, after appointing three trustees, declared that each of them should be answerable only for losses arising {k) Dawson v. Clarke, 18 V. 254 ; and as to settlements made since, see 22 & 23 Vict. c. 35, s. 31. (I) As to the whole of the article, see judgment of Westbury, L. 0., in Wil&ins v. Hogg, 3 Giff. 116 ; 8 Jur. N. S. 25 ; and sea also Dix v. Burford, 19 B. 409 ; Muchlow t. Fuller, Jac. 198 ; Brumridge v. Brumridge, 27 B. 5. (m) Supra. PROTECTION AGAINST THE ACTS OF CO-TKUSTEE. 389 from his own default, and not for involuntary acts or for the acts or defaults of his co-trustees; and particularly, that any trustee who should pay over to his co-trustees, or should do or concur in any act enahling his co-trustees to receive any moneys for the general purposes of her will, should not be obliged to see to the due application thereof, nor should such trustee be subsequently rendered liable by any express notice or intimation of the actual misapplication of the same moneys. The three trustees joined in sign- ing and giving receipts to two insurance companies for two sums of money paid by them, but two of the trustees permitted their co-trustee to obtain the money without ascertaining whether he had invested it. This trustee having misapplied it, it was sought to make his co-trustees responsible ; but Lord Westbury held that they were not, saying : " There are three modes in which a trustee would become liable accord- ing to the ordinary rules of law — first, where, being the recipient, he hands over the money without securing its due application ; secondly, where he allows a co- trustee to receive money without making due inquiry as to his dealing with it; and thirdly, where he becomes aware of a breach of trust, either committed or meditated, and abstains from taking the needful steps to obtain restitution or redress. The framer of the clause under examination knew these three rules, and used words sufficient to meet all these cases. There remained, therefore, only personal misconduct, in respect of which a trustee acting under this will would be responsible. He would still be answerable for collusion if he handed over trust money to his 390 THE ADMINISTRATION OF A TRUST. co-trustee with reasonable ground for believing or suspecting that that trustee would commit a breach of trust ; but no such case as this was made by the bill." 2. In the recent case of Pass v. Bundas [n), the settlement contained a similar protective clause to that stated in the last illustration. Part of the trust estate consisted of a business, and one of the trustees authorized his co-trustee to draw money out of the bank for the purposes of the business, which money the co-trustee misapplied. It was held that, under the words of the clause, the trustee was protected. Art. 69. — Concurrence of or Release by the Beneficiaries. A beneficiary who has assented to, or con- curred in, a breach of trust (o), or who has subsequently released or confirmed it [p), cannot afterwards charge the trus- tees with it : Provided — a. That the beneficiary was sui juris at the date of such assent or release {q) ; (n) 29 W. E. 332. (o) Brice v. Stokes, 11 V. 319 ; WilMnson y. Parry, 4 Euss. 272 ; Nail v. Punter, 5 Sim. 555 ; Life Association of Scotland V. Siddal, 3 De a., F. & J. 58 ; Walker v. Symonds, 3 Sw. 64. (^) FrencTiy. Hobson, 9V. 103; Wilkinson y. Parry, supra; Greswell v. Dewell, 4 Gifl. 465. (q) Underwood v. Stevens, 1 Mer. 717 ; Leach v. Leach, 10 V. 517 ; Lord Montford v. Oadogan, 19 V. 9. CONCURRENCE OE THE BENEFICIARIES. 391 /3. That he had full knowledge of the facts and knew what he was doing (r), and the legal effect thereof (s) ; y. That no undue influence was brought to bear upon him in order to extort the assent or release (t). A beneficiary, however, who is not sui juris, and who concurs in a breach of trust, will be prohibited from afterwards charging the trustees, if he employ fraud (tc) ; but a married woman without power of alienation (x) can under no cir- cumstances so concur in, or procure, a breach of trust as to estop herself from afterwards making the trustee respon- sible. Illust. — 1. Plaintiff party to breach of trust. — Stock was settled on a married woman for her sepa- (r) Se Oarnett, Qandy v. Macauley, 31 Oh. Diy. 1 ; BucJc- eridge t. CHass, 1 Or. & Ph. 135 ; Hughes v. Wills, 9 Ha. 773 ; OocTceriU v. GholmeUy, 1 E. & M. 425 ; Strange v. Fooks, 4 Giff. 408; Murch y. Russell, 3 M. & 0. 31 ; AvelineY. Melhuish, 2 D., J. & S. 288. (s) Be Garnett, Qandy v. Macaidey, supra ; Cockerill v. Gholmeley, supra ; Marker v. Marker, 9 Ha. 16 ; Burrows v. Walls, 5 D., M. & G. 254 ; Stafford v. Stafford, 1 D. & J. 202 ; Strange v. Fooks, supra. (<) Bmvles v. Stewart, 1 Sch. & Lef. 226 ; Chesterfield v. 1, 2 V. 158. (m) Lord Montford v. Cadogan, supra ; Sharpe v. Foy, L. E., 4 Oil. App. 35 ; Re Lush, ibid. 591. {x) Arnold v. Woodhams, L. E., 16 Eq. 33; Stanley v. Stanley, 7 Oh. Div. 589. 392 THE ADMINISTRATION OF A TETJST. rate use for life, with a power of appointment by will. The trustees, at the iastance of the husband, sold out the stock and paid the proceeds to him. The wife filed a bill to compel the trustees to replace the stock, and obtained a decree, under which the trustees transferred part of the stock into court, and were allowed time to re-transfer the remainder. The wife then died, having by her will appointed the stock to the husband. He then filed a bill against the trustees, claiming the stock under the appoint- ment, and praying for the same relief as his wife might have had. It is needless to say that his claim was promptly rejected (y). 2. Eelease. — A formal release under seal, or an express confirmation, will, of course, estop a bene- ficiary from instituting subsequent proceedings ; and it would seem that any positive act or expression in- dicative of a clear intention to waive a breach of trust, will, if supported hy valuable consideration {hoicevcr slight), be equivalent to a release (z). 3. Infants incapable of release or acquiescence. — An infant cannot lose his right to relief, either by concurrence or release ; for the law presumes that he has not the requisite discretion to judge. 4. Married women, how far capable of releasing or acquiescing. — Where property was settled, before the Married Women's Property Act, 1882, upon a married woman simply, and not to her separate use iy) Nail v. Punter, 5 Sim. 555. (z) See Stackhouse v. Barnston, 10 V. 456 ; per Sir W. Grant; and Farrard v. Blanchford, 11 W. E. 178 ; and Lew. 755. CONCUERENCE OF THE BENEFICIARIES. 393 (in wMch latter case she is in the same position as a feme sole (a) ), or where it is settled to her separate use but she is restrained from alienating or anticipat- ing it (6), she is not competent to consent to, or to release, a breach of trust; and her concurrence or release will afford no protection to the trustee. For instance, where money is settled upon a husband for life, with remainder to his wife for life or absolutely, her concurrence in a breach of trust during the life of her husband would have no effect, unless testi- fied by a duly acknowledged deed made with the approbation of her husband. Neither would it if she were the tenant in possession for her separate use if she were restrained from anticipation; for, as was said by Yice-Ohancellor Malins in Stanley v. Stanley (c), "In no case, and by no device whatever, can the restraint upon anticipation be evaded." The principle was very vigorously expressed by Lord Langdale in Tyler v. Tyler (d), in a passage which ought to be learnt by heart by every trustee. " We find," said his lordship, " a married woman throwing herself at the feet of the trustee, begging and en- treating him to advance a sum of money out of the trust fund, to save her husband and her family from utter ruin, and making out a most plausible case for (a) Braver v. Swirles, 2 Sm. & G. 219 ; Fletcher v. Oreen, 33 B. 426; Butler v. Gompton, L. E., 7 Eq. 16; Jones v. Biggins, L. E., 2 Eq. 538; Taylor v. Gartivright, L. E., 14 Eq. 175. (h) Stanley v. Stanley, 7 Ch. Div. 589. (c) Supra. {d) 3B. 563. 394 THE ADMINISTRATION OF A TRUST. that purpose. His compassionate feelings are worked upon, he raises and advances the money ; the object for which it was given entirely fails, the hushand becomes bankrupt, and in a few months the very same woman who induced the trustee to do this, files a bill in the Court of Chancery to compel him to make good that loss to the trust. These are cases which, when they happen, shock everybody's feelings at the time ; but it is necessary that relief should le given in such cases, for if relief tcere not given, and if such rights were not strictly maintained, no such thing as a trust could ever he preserved." 5. A. married woman is, however, legally respon- sible for a fraud, and her ordinary incapacity will , not avail her ; but if the property were settled upon her without 2}0icer of anticipation, her fraud will not prejudice her (e). A settlement was made on the marriage of a female infant, whereby the husband covenanted to induce her to settle her real estate upon attaining twenty-one, and to concur in such settle- ment himself. He neglected to do so, however, and they subsequently mortgaged the real estate, but the mortgagee had no notice of the covenant until just before the deed was acknowledged. It was held, that the wife's fraud in not disclosing the existence of the settlement bound her estate, and bound her not to consent to the settlement which the husband had covenanted that he would induce her to settle (/). (e) Stanley v. Stanley, supra. (/) Sharp V. Foy, L. E., 4 Oh. App. So ; and see He Lush, ibid. 591. LACHES OF THE BENEFICIARIES. 395 Art. 70. — Laches of the Beneficiaries. The Statutes of Limitation do not apply to declared trusts (y) (except where they are created by way of a charge on real estate Qi), unconnected with a duty(^) ), nor to trusts which on the face of a written instrument are resulting trusts (/f), nor to trusts created by the court(/), although they are applicable to other constructive trusts (m). But in taking an account for the purpose of charging a trustee with personal liability, every fair allow- ance ought to be made in his favour if it can be shown that he acted bon^ fide, and that the claim sought to be enforced is one which arose many years ago, of the nature and particulars of which the beneficiary was, at the time when it arose, perfectly cognizant, and which he has taken no steps to enforce (?z). (jr) 3 & 4 Will. 4, c. 27, s. 25, and Jud. Act, 18*73 ; and see also 37 & 38 Vict. c. 57, s. 10, and Judicature Act (Irish), s. 28, sub-s. 2. However, the reader must be warned that Lord Herschell's Trustee Bill, 1888, seeks to extend the pro- tection of the Acts to non-fraudulent trustees. (A) Banner v. Berridge, 18 Oh. Div. 254. (i) 3 & 4 WiU. 4, c. 27, s. 40. [h) Lew. 719 ; Salter v. Oavanagh, 1 Dr. & W. 668 ; Mut- low v. Bigg, L. E., 18 Eq. 246. (l) Seagram v. Tick, 18 Oh. Div. 296. (m) Beckford v. Wade, 17 V. 97; Betre v. Pefre, 1 Dr. 371. (n) See per Westbury, L. 0., in McDonnell v. White, 11 396 THE ADMINISTEATION Of A TRUST. Illxjst. — 1. Patent resulting trust. — If land be devised to a person upon trust to receive the rents and thereout to pay certain annuities, the surplus rents result to the heir-at-law upon the face of the instrument, and the heir-at-law is therefore not statute-barred by any length of possession of the trustee (o). 2. Latent resulting trust. — But a resulting or other constructive trust, depending upon evidence dehors the written instrument, is within the statute {p) ; and so a tenant for life of leaseholds who renews in his own name (q), or a mortgagee in possession (even though the mortgage is in the form of a trust) (r), is entitled to the benefit of the statute. 3. Trust apparently constructive, but really express. — However, although as a general rule constructive trustees can avail themselves of the statute, the mere fact that a person is called an affent instead of a trustee, does not confer on him the statutory pro- tection accorded to constructive trustees, if he was, in fact, expressly trusted with money or property for a particular purpose ; for in that case he becomes an express trustee. Thus, in Bur dick v. Garrick (s), an agent who was a solicitor in London, held a power of attorney from his principal in America to seE his property, and invest the proceeds in his name. The H. L. 0. 570 ; Thompson v. Eastwood, L. E., 2 App. Oas. 215;. Bright v. Legerton, 2 D., F. & J. 606. (o) Salter v. Cavanagh, supra. (p) BeckfordY. Wade, 17 V. 97. (q) Petre v. Betre, supra. (r) Loddng v. Barker, L. E., 8 Oh. 30. (s) L. E., 5 Oh. App. 233. LACHES OF THE BENEFICIAEIES. 397 agent received the money, and paid it into his hank to the general credit of his firm. In 1859 the principal died intestate, and in 1868 his widow and administratrix sued the agent. It was held that the agent received the money in trust for his principal, and that, therefore, the Statute of Limitations did not apply. Lord Hatherley said : "I apprehend that the true rule applicable to these cases is to be found in the case of Foley v. IHll{£), where it is clearly stated by Lord Oottenham, who distinguishes between the confidence reposed in a factor or agent, and the confidence reposed in a person who is merely in the position of a banker. A mere banker who takes charge of his customer's money, is not in any fiduciary relation whatever to liim with respect to the particular coins or notes deposited, because it is the ordinary course of trade to make use of them for his own profit But, in the present case, we have an agent who is intrusted with those funds not for the purpose of being remitted, when received, to the principal, hut for the purpose of being employed in a particular manner in the purchase of land or stock ; and which moneys the agent or factor is bound to keep totally distinct and separate from his own money, and in no way whatever to deal with or make use of them. How a person who is intrusted with funds under such circumstances dijf ers from one in an ordinary fiduciary position I am unable to see. That being so, the Statute of Limitations appears to me to have no application to the case " (?«). (i) 2 H. L. 0. 28. (m) See also Re. Bell, Lake v. Bell, 34 Oh. Div. 462. 398 THE ABMINISTEATION OF A TRUST. 4. Charges. — Simple charges are expressly pro- vided for by the statute («). Where, however, a charge is so coupled with a trust as to be in reality a trust itself, the statutes do not apply. For in- stance, where a testator charges his property with payment of his debts, and imposes an obligation on the devisee to exert himself actively in pay- ing the debts, the case wiU not fall within the statute (y). 5. An estate is devised to A. and his heirs, charged with the payment of 500/. to B. and C. upon certain trusts. Here, as between A. and the two trustees, there is a mere charge ; but as between the trustees and their beneficiaries there is a trust (z). 6. Laches. — As has been stated, even a beneficiary under a declared trust may disentitle himself to relief by great laches. Thus A., being greatly in debt, executed a deed of trust for the benefit of his creditors, and among the property was the benefit of a lease for lives, renewable for ever, on which the rent reserved was a high rack rent. The tenant under this lease complained, and the trustee, with the knowledge, but without the consent of A. (but with the consent and approbation of A.'s brother, who had the management of A.'s affairs), accepted a reduced rent. A. complained of the abatement, but took no steps to put an end to it for some years. It was held that after the expiration of the trust, the fa;) 3 & 4 WiU. 4, c. 27, s. 40. \y) Hunt V. Bateman, 10 Ir. Eep. Eq. 360. (z) Lew. 721. LACHES OF THE BENEFICIARIES. 399 trustee could not be called upon to make up the deficiency («) . 7. So where, with full knowledge of a breach of trust, no step was taken for thirty-eight years, it was held that the beneficiaries had lost their right to make any claim (b) . 8. So, again, in Jones v. Higgins (c), it was declared in a marriage settlement, that a sum of money, then in the hands of the lady's brother, should be held by three trustees, one of whom was the brother, upon trust, at the request in writing of the lady, to pay to her the whole or any part absolutely ; and until such request, upon trust, when and as the same should come into their hands, to invest the same, and pay the interest to the wife for life for her separate use, and after her decease as she should by will appoint, and ia default of appointment to her husband. The money was allowed to remain for thirteen years in the hands of the brother, who paid the interest to the husband, and also paid him part of the priacipal, with the wife's knowledge. The husband died, the brother became insolvent, and the wife filed a biU against the trustees ; but it was held, that although the trustees had been guilty of a breach of trust, the wife was debarred from relief on account of her long acquiescence. However, of course, a wife's long ac- quiescence in the payment of her separate income to (a) McDonnell v. White, supra. (6) Sleeman v. Wilson, L. E., 13 Eq. 36. (c) L. E., 2 Eq. 538. 400 THE ADMINISTEATION OF A TRUST. her husband, does not excuse the trustee paying him the capital («?). 9. Laches not always a bar. — But, although long acquiescence is a bar to relief, the reason for holding so is, that the fact of lying by for a considerable period, is evidence of an intention or election on the part of the beneficiary, not to exercise his strict rights. Consequently, where the circumstances are such as to afEord no ground for any such presumption, long acquiescence will be no bar to relief. Thus, in the recent case of Re Cross, Harston v. Tenison (e), it was held that a beneficiary, who, with knowledge that his trustee has committed a breach of trust, obtains from him a part only of that to which he is entitled, does not thereby waive his right to such further rehef as he may be able to obtain, unless an intention so to do can be clearly inferred from sur- rounding circumstances. There, in November, 1860, an order was made in a suit for administering the trusts of the will of John Cross, to which Hannah Cross, a former trustee, was defendant, directing her to pay into court a certain sum of money in respect of breaches of trust committed in 1843 and 1845. Hannah Cross, to avoid payment, went abroad ; and subsequently, in 1863, certain sums to which she was entitled, and her life interest under the testator's will, were ordered to be impounded in order to make good (d) Dixon v. Dixon, 9 Oh. Div. o81. (e) 20 Oh. Div. 109 ; and see also Farrant v. Blanchford, 11 W. E. 1Y8. LACHES OF THE BENEFICIAKIES. 401 the breaches of trust. She returned to England in 1870, and remained here until her death in 1880, but no further steps were taken against her. On her death, however, the surviving trustee of the will of John Cross brought an action against her executors, for the purpose of recovering the unpaid balance of the sum representing the breaches of trust ; and it was held, that, notwithstanding the lapse of time, the action was not an attempt to enforce a stale demand, and that the cestuis que trusts must not be taken to have elected to abandon their claim against her, and to rest content with impounding her life interest. 10. Inconvenience of relief after long delay. — However, apart from intention, wherever it is for the general convenience that a suit in respect of a long dormant grievance should be disallowed, the court will refuse relief on the ground that " Expedit rei- publicce ut sit finis litium" (/). For instance, where a plaintiff seeks to set aside a purchase obtained from him by his solicitor, a delay of less than twenty years may bar the right to relief, if it would be inconvenient to grant it (g) . So where, in an action for an account, the plaintiff by lying by has rendered it impossible or greatly inconvenient for the defendant to render the account, he will get no relief {h). if) Lew. 715. la) Oresley v. Mousley, 4 D. & J. "78. (A) See per Lord Alvanley, in Pickering v. Stamford, 2 V.. 272 ; and see also Glegg v. Edmonston, 3 Jur. N. S. 299 ; Tatam v. Williams, 3 Ha. 347. U. D D 402 THE ADMINISTRATION OF A TKUST. Akt. 71. — The Gainer ly, or Instigator of , a Breach of Trust must pro tanto indemnify Trustee. X. As between the trustees and a person who has knowingly instigated a breach of trust (e), or who has reaped the benefit of one, the latter must in- demnify the former to the extent of the property actually received by him, or by some other person at his request, in consequence of the breach (k). /3. Where he is a beneficiary, the trustees will have a lien on his share for such amount {I). y. Where the beneficiary is a married woman entitled for her separate use, the onus lies on the trustees of show- ing that she acted for herself in the matter, and was fully informed of the state of the case (m). But where she is restrained from anticipation, ()') See Sawyer v. Sawyer, 28 Cli. Div. 595 ; Ryder v. Bicherton, 3 Sw. 80, n. {h) Lew. 744; Mahy v. Midehalgh, 7 D., M. & G. 108; Trafford v. Boehm, 3 Atk. 440 ; Lord Montford v. Lord Cadogan, 19 V. 639 ; Brown v. Maunsell, 6 Ir. Oh. B. 351 ; Walsham v. Btainton, 1 H. & M. 337. (I) Prime v. Savell, W. N. 1867, p. 227 ; Lew. 746. (to) Sawyer v. Sawyer, supra. GAINER By BREACH MUST INDEMNIFY TRUSTEE. 403 the trustees will have no lien on her interest (n). Illust. — 1. Eisky investment at request of tenant for life. — Thus, personalty was bequeathed upon trust for tenants for life, with executory trusts in re- mainder, but without directions as to investment. The trustees, at the instance of the tenants for life, invested on mortgage of a precarious nature, in con- sequence of which the tenants for life received a far larger income ; but the corpus of the estate was in the result greatly depreciated. The trustees having been ordered to refund the loss to the trust property, claimed to be generally indemnified by the tenants for life who had reaped the benefit of the breach. This claim was allowed, but only to the extent of the property actually received by the trustees in con- sequence of the improper investment (o). 2. Payment of capital to tenant for life. — And so, if the trustees, by mistake, pay capital to the tenant for life, instead of income, they must of course make the loss good to the trust property ; but they will, nevertheless, be entitled to be recouped out of the life interest (p) . 3. Married woman. — In the recent case of Sawyer V. Sawyer (q), the facts were these. A trust fund was settled in trust for a married woman for life, for her (n) Stanley v. Stanley, 1 Ch. Div. 587. (o) Bahy v. Bidehalgh, supra. (p) See Barratt v. Wyatt, 30 B. 442 ; Davies v. Hodgson, 25 B. 177; Griffiths v. Porter, ibid. 236. (2) 28 Oh. Div. 595. dd2 404 THE ADMINISTRATION OF A TKUST. separate use, ■with remainders over ; and the trustees were empowered to vary and transpose the securities with the consent in writing of the husband and wife. With such consent, certain portions of the trust fund were, in breach of trust, advanced to the husband on his personal security. The husband and wife gave the trustees joint and several promissory notes for the repayment of the sums advanced. In an action by the children of the marriage against the trustees, they were ordered to refund to the trust the amounts advanced to the husband, but they claimed a right to retain the income payable to the wife in order to recoup themselves. This claim was however rejected both by Chitty, J., and the Court of Appeal ; and Fry, L. J., in delivering the judgment of the latter court, made the following remarks : — " The plaintiffs, her children, are not insisting on any right against their mother, and the question before us now is, whether the trustees are entitled to enforce this right of retainer against Mrs. Sawyer. Does the fact that she was a married woman make any, and, if so, what, difference in her liability as against the trustees. . . . The substance of the transaction is a charge created by a cestui que trust in favour of a trustee by way of indemnity against a breach of trust committed by him. The primary duty of the trustee was the pro- tection of the fund which he did not protect, and before a trustee can claim the benefit of any charge or right of retainer against the interest of a married woman in the fund, it appears to us to be reasonable that he should show that the charge, or right of retainer, was created by her with a full knowledge of GAINER BY BREACH MUST INDEMNIFY TRUSTEE. 405 all the circumstances. It is probable that, in the case of a man of full years, the court would presume him so to be acting ; but in the case of a feme covert, we do not think the presumption exists in favour of the trustee, whose primary duty was to protect the fund for her benefit All the cases in which the separate estate of a married woman has been held to be affected by a breach of trust are, so far as we are aware, cases in which she has been an actual actor in the transaction herself ; such are the cases of Crosby V. Church (r), Clive v. Carew (s), and Pemberton v. GiU{t). In no case, so far as we know, has her separate estate been charged on the mere ground of her having acquiesced in or approved of the breach of trust." 421. Art. 72. — Right to Discharge. Upon the completion of the trust, a trustee is entitled to have his accounts examined and settled by the beneficiaries, and either to have a formal discharge given to him or to have the accounts taken in court. He cannot, however, demand a release under seal (^^). Illust. — Thus, a trustee, on finally transferring (r) 3 B. 485. s) IJ. & H. 199. (t) 1 Dr. &Sm. 266. (m) Ohadwick v. Heatley, 2 Coll. 137 ; Be Wright, 3 K. & J. 406 THE ADMINISTRATION OF A TEUST. stock to a beneficiary, deman(Jed from the latter a deed of release. The beneficiary, however, refused to give him anything except a simple receipt for the amount of stock actually transferred, which, of course, left it open to him to say that that amount was not the amount to which he was entitled. The court held, that no deed was demandable, but the Judge said : " Though it may not have been the right of the trustee to require a deed, I think that it was his right to require that his account should be settled; that is to say, that he and his family should be de- livered from the anxiety and misery attending un- settled accounts, and the possible ruin, which they who are acquainted with the afEairs daily litigated in the Court of Chancery, well know to be a frequent result of neglect in such a matter. . . . He was bound to give an account if demanded, but giving the accoimts he was entitled (to use a familiar phrase) to have them wound up. It is true that the accounts, though settled, might be liable to be surcharged and falsified. That might or might not be, but still the trustee had a right to have his accounts gone through, executed, and settled If the plaiatiffi was satisfied upon the accounts as sent in, that nothing more was coming to him, he should have expressed his willingness to close the account. On the other hand, if he was dissatisfied with it, he should have asked to have the account taken" («). (k) Chadwick v. Heatley, supra. ADVICE OF A JUDGE. 407 Akt. 73. — Advice of a Judge. Trustees may, in cases of any doubt as to what course they ought to adopt, safe- guard themselves in either of the follow- ing ways, viz. : — a. They may apply, by petition (a), to a judge of the Chancery Division of the High Court of Justice, for his opinion, advice, or direction on such questions respecting the exercise of the trustees' discretion and the management of the trust property, as are of minor import- ance (5) and do not include points of detail, difficulty (c), or construction (J). /S. Trustees, or any of them, may take out an originating summons, returnable in the chambers of a judge of the Chancery Division, for the determination (without general administration by the court) {a) The act gave the alternative of summons, but the court has decided that the application ought to be made on petition, Be Dennis, 5 Jur., N. S. 1383. (b) Lew. 443 ; Re Muggeridge, Johns. 15 ; Be MocJcett, ibid. 628; Be Spiller, 8 W. E. 333; Be Jacob, 9 W. E. 474. (c) Be Barrington, 1 J. & H. 142; but see Be MocJcett, supra; Marsh v. Att.-Oen., 2 J. & H. 61. {d) Be Evans, 30 B. 232; Be Muggeridge, supra; Be Hooper, 29 B. 657 ; but see Be Peyton, 10 W. E. 515. 408 THE ADMINISTRATION OF A TRUST. of any of the following questions (e), viz. : — (1) Any question affecting the rights or interests of the cestuis que trusts. (2) The ascertainment of any class of creditors, legatees, devisees, next of kin, or others. (3) The furnishing, and, if necessary, the vouching of the trustees' accounts. (4) The payment into court of any money in the hands of the trustees. (5) The directing of the trustees to do, or abstain from doing, any parti- cular act in their character of trustees. (6) The approval of any sale, pur- chase, compromise, or other transaction. (7) The determination of any ques- tion arising in the administration of the trust. y. But neither on petition or summons, or even in an action, will the court or a judge decide future or contingent rights (/). Ili.ust. — 1. Cases in which advice will be given on (e) E. S. 0. 1883, Ord. LV. r. 3 (g). A similar summons may be taken out by any of tbe cestuis que trusts. (/) Langdale v. Briggs, 4 W. E. 703 ; Bowling v. Dowling, L. E., 1 Oh. App. 612 ; Me Box, 1 H. & M. 552. ADVICE OF A JUDGE. 409 petition. — It is not every question which the court wUl decide on petition, and partly owing to this and partly to the greater facility and economy with which questions can now (under Ord. LV. r. 3, of the E. S. C. 1883) be determined on an originating summons, these petitions have become extremely rare. It has, however, been held that the court will, upon such a petition, give advice as to investments {g) , payment of debts (/«), the propriety of the trustees consenting to a sale («'), the advancement of money for maintenance or repairs (k), as to leasing the trust property [l), and other matters of a like character. But where trustees were authorized to invest trust monies in the purchase of lands, and they presented a petition asking the court for its advice as to the application of a further portion of the trust monies to the permanent improvement of the lands, the court, not having the requisite machinery for inves- tigating the details, refused to give any advice (w). And where the case is hypothetical, and not present, as, for instance, where the question asked was as to the incidence of future calls which migkl be made on account of shares in a public company, the court refused to express any opinion (m) ; and the same (g) Re Lorentz, 1 Dr. & S. 401 ; Re Knowles, 18 L. T. 809. ih) Re Box, supra. ti) Earl Paulett v. Hood, L. E., 5 Eq. 115. [k) ReHotham, L. E., 12 Eq. 76; Culhertson v. Wood, 19 W. E. 265. il) Re Shaw, 19 W. E. 125. (m) Re Barrington, 1 J. & H. 142 ; Re Sirason, 1 J. & H. 89 ; Marsh v. AU.-Gen., supra. (n) Re Box, supra. 410 THE ADMINISTRATION OF A TRUST. course is invariably taken -with regard to contingent questions on summonses, as, for instance, whether A. wiU be entitled to a share in the corpus, if B., a living person, should die without issue (o). 2. Cases in wMcli (questions will be determined on summons. — The practice under Ord. LV. r. 3, is not so well settled as could be desired; some learned judges holding that this procedure ought to be limited to simple points, whereas others give a very wide interpretation to the rule. However, it is now recognized that the jurisdiction embraces questions of construction {p), at all events such short points of administration as the right of a trustee to be re- imbursed specific items [q), the expediency of trustees advancing part of personal estate to maintain and keep up the value of a farm going to the same beneficiaries (r), and the like. In Re Garnett, Gandi/ V. Macauleij (s), Yice- Chancellor Bacon said: — "The meaning of the rule is that litigation should be pre- vented where not absolutely necessary." And in Re Wilson, Alexander v. Colder (t), the late Mr. Justice Pearson said : — " The rule, as I understand it, is this, that if there be a simple question as to whether or not a legacy has failed; as to whether or not the proper construction gives it to the survivors as a (o) See Langdale v. Briggs, supra, and Bowling v. Bowling, supra. \p) Be Haseldine, Grange y. Sturdi/ (31 Ch. Div. 511) was a question of construction determined by the Court of Appeal on originating summons witliout demur. (q) Wagg v. Shand, 53 L. T. 136. [r) Household V. Household, 27 Oh. Div. 553. (s) 32 W. E. 474. (t) 28 Ch. Div. 457. ADVICE OF A JUDGE. 411 class or does not give it to the survivors as a class, or any question of that kind ; or even if there be a ques- tion as to whether or not some part of the property ■which has been realised ought to be treated as income or capital, or any isolated question of that kind, the decision of which ■would at once set at rest all dif- ferences between all the parties taking under the will, the court then ought not to give judgment for the general administration of the estate, but ought to decide these questions separately or apart from any administration." On the other hand, the rule has no application to questions arising between the bene- ficiaries and persons claiming adversely to the trust estate (it), nor to questions involving beneficial legal as distinguished from equitable ownership (a?) . Nor does it enable the court or a judge to order a trustee to do things not arising out of his trust : ex. gi\ to join in a sale in order to avoid a partition action («/). Art. 74. — When entitled to pay into, or seek the ad- ministrative assistance of, the Court. Trustees (s) may relieve themselves of re- (m) Me Bridge, 56 L. T. 726. {x) Be Carlyon, 35 W. E. 155. ly) Suffolk v. Lawrence, 32 W. R. 877. (z) It would seem at first sight that by the operation of . suD-sect. 6 of sect. 25 of the Judicature Act, 1873, these pro- visions are extended to all cdnstruotive trustees, such as insurance companies, &c. But although in one case {Be Hay code, 1 Oh. Div. 611) this was held to be so, that view has been twice dissented from. (Matthew v. Northern Assurance Co., 9 Ch. Div. 80, and Be Sutton, 12 Ch. Div. 175.) 412 THE ADMINISTRATION OF A TRUST. sponsibility in the following cases, and to the following extent : a. Where the trust property consists of money, or annuities, or stocks standing in their names at the Bank of England, or in the East India Company, or the South Sea Company, or in any govern- ment or parliamentary securities, the trustees, or the majority (a) of them, may (5) pay such money into the said bank to the account of her Majesty's paymaster-general, in the matter of the particular trust ; or transfer or deposit such stocks or securities into, or in, the name of such paymaster-general, to attend the orders of the court. The receipt of one of the cashiers of the said bank for money, or, in the case of stocks or securities, the certificate of the proper officer, that they have been transferred or deposited, is a sufficient discharge to the trustees (c), who are thereby released from seeing to the future application of (a) 12 & 13 Vict. c. 74. (J) As to the practice, the reader is referred to Daniell's Chancery Practice, and other works deaKng with practice, (c) Trustee EeHef Act, 10 & 11 Vict. c. 96, s. 1. ■WHEN ENTITLED TO PAY INTO COURT. 413 that particular fund, but are not released from the office of trustee (d) ; /S. Where the trust property is not of the kind aforesaid, or where the trustee wishes to be discharged from the office of trustee, he may institute an action for the administration of the trust by the court (e). But it is not obligatory on the court to make an order for administra- tion, if the questions between the par- ties can be properly determined without it(/). Provided that where the equities are per- fectly clear and unambiguous (ff), or the trustee merely craves to be released from caprice or laziness, or is otherwise not justified in the course he has pursued (h), he will have to pay all the costs ; and even {d) Barker v. Peile, 2 Dr. & S. 340; Be (Joe's Trusts, 4 E. & J. 199 ; Be Williams' Trusts, ibid. 87 ; Be Bailey's Trusts, 3W. E. 31. (e) Tallot V. Earl Badnor, 3 M. & C. 252; Goodson v. Ellison, 3 Euss. 583 ; and as to summons, E. S. 0. 1883, Ord. LV. r. 3. (/) E. S. 0. 1883, Ord. LV. r. 10; Be Blake, Jones v. Blake, 29 Oh. Div. 913. {g) Be Knight, 27 B. 145 ; Lawson v. Cnpeland, 2 B. 0. 0. 156; Be Elliott, L. E., 15 Eq. 194; Be Fuligno, 32 B. 131; Be Woodhurn, 1 D. & J. 333; Beattie v. Gurzon, L. E., 7 Bq. 194 ; Be Eoskins, 5 Oh. Div. 229. (A) Forshaw v. Higginson, 20 B. 845; Be Stokes, L. E., 13 Bq. 333. 414 THE ADMINISTRATION OF A TRUST. where he acts bon^ fide, but without any real cause, he will not be allowed his own costs (2). And where he brings an action when the same object might have been obtained by payment into the bank, or where he pays into the bank when the question of doubt might have been solved by a summons in chambers [Jc], he will not be allowed the extra costs occasioned thereby (/); and he will always appeal from an order of the court at his own risk(m). Illust. — 1. Paymeat into court where beneficiaries are under disability. — A trustee is justified in paying money into court where he cannot get a Talid dis- charge ; as, for instance, where beneficiaries abso- lutely entitled are infants [n) or lunatics (0) . 2. Dispute between beneficiaries. — So, where under a creditor's deed, money was claimed both by the settlor and the creditors, the trustee was held to have («■) Ee Leahe, 32 B. 135 ; Re Heming, 3 K. & J. 40. {h) Re aUes, 34 W. E. 712. {I) Wells V. Malbon, 31 B. 48 ; but see Smallwood v. Rutter, 9 Ha. 24. (m) Rovjland v. Morgan, 13 Jur. 23; Tucker \. Horneman, 4D.,M. &G. 39a. .(«) ^e Oawthorne, 12 B. 56; Re Beauclerh, 11 W. E. 203; Be Ooulson, 4 Jur., N. S. 6; Re Richards, L. E. 8 Eq. 119. (0) Re Upfull, 3 M. & G. 281 ; Re Irhy, 17 B. 334. WHEN ENTITLED TO PAY INTO COUKT. 415 been justified in paying the money into court (p). Whether, however, this decision could he sustained, seems questionable ; for, as has been previously ex- plained, the creditors are not beneficiaries, and it seems to be scarcely consistent with principle, to hold that a mere agent can pay into court money intrusted to him by his principal, on the ground that a third party claims an interest in it (q). 3. Where money claimed by a representative. — It has been said that a trustee may properly pay money into court where it is claimed by the representative of a beneficiary ; for non constat, but that the latter may have disposed of it (r) . 4. Payment to one who claims in default of appoint- ment. — A trustee ought not to hesitate to pay the money to a beneficiary who claims in default of ap- pointment, if he has good reason to believe that the power has never been exercised. In the case of He Cull, Jessel, M. E., said (s) : — " If there had been no such case as lie Wylly's Trusts (t), and no such opinion as that referred to, I should probably have made the trustees pay the costs of the transfer of the fund into court. They had no notice of any appointment by the [p) Be Ileadington, 6 W. E. 7 ; but see Re Moseley, 18 W. E. 126. [q) See Art. 44, supra, p. 283. [r] Be Lane, 24 L. T. 181 ; King v. King, 1 D. (fe J. 663, sed quaere. (s) Se Cull, L. E., 20 Eq. 561, wlxioli seems to be in ac- cordance witli Art. 39, supra, p. 249. («) 28 B. 458 ; Re Swan, 2 H. & M. 34 ; but see Re Roberts, 17 W. E. 639 ; Re BendysTie, 5 W. E. 816 ; Re Williams, 4 K. & J. 87. 416 THE ADMINISTRATION OF A TRUST. lady, and no ground for believing that any appoint- ment had been made. The solicitor, who had acted for Mrs. OuU from the time of her marriage, wrote to say that there was not the slightest ground for supposing that she had made any appointment. The trustees had, therefore, fully discharged their duty, and I am of opinion that they could not have been made liable if they had then paid over the fund to the petitioner, even if an appointment had been subsequently dis- covered. In the case of Re Wylly's Trusts, the late Master of the Rolls said : ' The trustees had a right to satisfactory evidence that Mrs. Wylly had made no appointment of the funds,' by which I understand him to mean such evidence as a conveyancer would require ; a letter from the solicitor would in such a case be quite sufficient." Anyhow, now, trustees in such a case, would only be allowed the costs of a summons. 5. Payment into court to enable married woman to assert equity to a settlement. — Where the beneficiary is a married woman, it has been held that the trustee may pay into court, in order that she may assert her equity to a settlement (»). 6. Reasonable doubt or claim. — Again, where the trustee has a bona fide doubt as to the law («'), or has received a bona fide claim sanctioned by respect- able solicitors («), he may properly pay the fund into (v) Ante, p. 415, note (<). [iv) King v. King, 1 D. c£ J. 663 ; Be Metcalfe, D. J. & S. 122 ; aunnell v. Whitear, 18 W. E. K83. [x) Be Maclean, L. E., 19 Eq. 282. WHEN ENtlTJ,EU TO PAY INTO COURT. 417 court, unless the question could be settled by sum- mons. 7. Undue caution. — But where a beneficiary in re- version had gone to Australia, and had not been heard of for some years, suddenly reappeared, and there was no reasonable doubt as to his identity, it was held that the trustee was not entitled to pay the trust fund into court instead of paying it over to him, Malins, V.-C, saying: "At the time when the trustees were uncertain whether he was living or dead, they might with propriety have paid the money into court, but they did not do so then ; on the con- trary, they retained it in their possession until they were informed that a letter had been wi-itten by him from Australia, stating that he should return home immediately, and then they insisted upon paying the money into court, notwithstanding the representation made to them that they should wait until the peti- tioner's arrival in England. The petitioner left Eng- land when he was twenty-six years of age, and a man does not often change so much after that age that he cannot be easily recognized, and there was every reason to suppose that his identity would be at once proved, and that would have settled the question without expense. I think these proceedings were perfectly unjustifiable ; and although it is clear that the court will incline towards the payment of the costs of trustees when they act in a bona fide way, yet, on the other hand, it is most important that trustees should not incur unnecessary expenses for the purpose of relieving themselves of all liability, and particularly so when there is no reasonable doubt TJ. E E 418 THE ADMINISTRATION OF A TRUST. in their way." His Honour, therefore, ordered the trustees to pay the costs of all parties («/). 8. When general administration will be ordered. — With regard to actions for the administration of a trust by the court, such actions are now comparatively rare. Formerly, a decree for general administration (that is to say, a decree whereby the court took upon itself to supervise the execution of the trust) was granted to a trustee or a beneficiary as a matter of course ; and the only check upon an abuse of the process of the court, was the rather remote contin- gency that the trustee might possibly be deprived of his costs, or, in very flagrant cases, have to pay the costs of all parties, upon the action coming on for further consideration. However, by the Rules of the Supreme Court, 1883, Ord. LV. r. 10, the old practice has been reversed, and now it is no longer obligatory upon the court or a judge to pronounce or make a judgment or order for the administration of any trust, if the questions between the parties can be properly determined on summons without such judgment or order, as mentioned in Article 73. The principles on which the court wUl, under this new rule, grant or refuse general administration, have been discussed in two cases, one before the late Mr. Justice Pearson (s), and the other before the Court of Appeal («), in which the learned Lords Justices were more inclined to restrict the right to a {y) Re Elliott, L. E., 15 Eq. 194; Be Foligno, 32 B. 131; Be Knight, 21 B. 45 ; Be Woodburn, 1 D. & J. 333. (z) Be Wilson, Alexander v. Calder, 28 Ch. Div. 457. (a) Be Blake, Jones v. Blake, 29 Ch. Div. 913. WHEN ENTITLED TO START ADMINISTRATION ACTION. 419 decree than was Mr. Justice Pearson. Lord Justice Cotton in the latter case said: "Formerly, if any one interested in a residuary estate instituted a suit to administer the estate, he had the right to require, and as a matter of course obtained, the fuU decree for the administration of the estate ; and the court, even if it thought that, although there were really questions which required decision, these questions might be decided upon some only of the accounts and inquiries which formed part of the decree, found itself fettered and unable to restrict the accounts and inquiries to such only as were necessary in order to work out the question. Now, however, the practice is laid down by rule 10 of Ord. LV., as follows : — " (His Lordship here read the rule and continued) " Where there are questions which cannot properly be determined without some accounts and inquiries or directions which would form part of an ordinary administration decree, then the right of the party to have the decree or order is not taken away, but the court may restrict the order simply to those points which wiK enable the question which requires to be adjudicated upon, to be settled. That is the result of Ord. LV. r. 10. Then we have Ord. LXY. r. 1, which says, 'subject to the provisions of the acts and these rules, the costs of and incident to all proceedings in the Supreme Court, including the administration of estates and trusts, shall be in the discretion of the court or judge.' These two rules must be read together, and we then find this : that if a party comes and insists that there is a question to be determined, and, for the purpose E E 2 420 THE ADMINISTRATION OF A TRUST. of determining that question, asks for an admi- nistration judgment, the court cannot refuse the judgment unless it sees that there is no question which requires its decision ; but rule 1 of Ord. LXY. puts the party who applies for the judgment and insists upon it in this position — that if it turns out that what . has been represented as the substantial question requiring adjudication is one which was not a substantial question, or that the applicant was entirely wrong in his contention as to that particular question, the court can, and, in my opinion, ought ordinarily to, make the person who gets the judgment pay the costs of all the proceedings consequent upon his unnecessary, or possibly vexatious, application to the court." 9. Deductions from Lord Justice Cotton's judgment. — It will be seen, from the above judgment, that now that almost all isolated questions of construction or administrative difficulty can be dealt with singly, very few cases can arise necessitating general ad- ministration, except where the trustees cannot puU together, or the circumstances of the estate give rise to ever recurring difficulties requiring the frequent direction of the court, or where a prima facie doubt is thrown on the bona fides, or the discretion of one or more of the trustees. Possibly, also, it would still be held that a trustee would be entitled to a general administration judgment, to relieve him of trouble and annoyance, in a case such as the following, viz., where there were divers disputes as to the proper beneficiaries, out of which disputes several actions had sprung, to all of which the trustee was a neces- WHEN ENTITLED TO START ADMINISTRATION ACTION. 421 sary defendant. In the case referred to (b),Y.-G. Malins said : — "It has been contended that it can signify nothing to a trustee whether he is discharged or not, for under the Trustee Relief Act, if he paid the money into court, he would be discharged from liability. But, in fact, the trustee is not in that way discharged from being a trustee. If he brings the money into court under the act, he still remains a trustee, and though he would be under no liability quoad the fund brought in, he would not be dis- charged from liability quoad the past income ; and, moreover, he must be served with notice of all pro- ceedings under the act in relation to the fund, and this of necessity would compel him to incur some expense in employing a solicitor ; and, morever, it is within the range of possibility that the court might, under the powers given by the act, direct a suit to be instituted to determine the rights of the parties claiming the fund at some future time, to which he would be a necessary party, not having been dis- charged from being a trustee. I am of opinion that the Trustee Eelief Act does not deprive the trustee of the right to come here and ask to be discharged, if the circumstances justify him in so doing, as they do here, and that he is, therefore, entitled to costs as 'between solicitor and client." 10. But where there is no dispute respecting the amount of a trust fund, and no justifiable ground for the trustee retiring from his office, the only doubt (6) Barker v. Peile, 2 Dr. & Sm. 340; and see Rirst v. Ilirat, L. E., 9 Oh. App. 262. 422 THE ADMINISTRATION OF A TRUST. teing as to the proper persons entitled, and the trustee, instead of paying the money into court under the Trustee Belief Act (or, now issuing an originating summons), institutes a suit for the purpose of having the rights of the beneficiaries declared, he wOl be allowed such costs only as he would have been en- titled to l£ he had paid the fund into court imder the act (c). And where a trustee now pays money into court under the Trustee Belief Act, in cases where the parties entitled could be ascertained by an inquiry directed on an originating summons, under 0. LY. r. 3 of the B. S. C, 1883, he will be deprived of his costs {d). (c) Wells V. MaTbon, 31 B. 48. \d) Be Giles, 34 W. E. 712. ( 423 ) CHAPTEE VIII. The Incidence of Outgoings in the Adminis- TEATION OF A TeUST. Aet. 75. — What Costs and Outgoings chargeable to Capital and what to Income. Where the settlement indicates the fund by which outgoings are to be borne its directions must be followed. But where it is silent, and the case does not fall within the provisions of some statute, the question is governed by the follow- ing principles : — a.. The corpus bears capital charges, and the income bears the interest on them (a). /S. The income bears current expenses in- cident to the possessory ownership of property (5) except the cost of repairs. (a) Marshall v. Orowther, 2 Oh. Div. 199 ; Whitbread v. Smith, 2 D., M. & Gr. 741 ; and see and consider Norton y. Johnstone, 30 CL.. Div. 649. (Z)) Fountain v. Pellet, 1 V. jun. 337, 342, rates and taxes ; Shore v. Shore, 4 Drew. 510, receiver's commission and ex- penses of passing accounts. 424 THE ADMINISTRATION, OF A TRUST. y. An equitable tenant for life is not bound to keep the property in repair out of the income (c). Where repairs are neces- sary application should be made by the trustees- to the court, which will give directions for the raising of money to pay for them in such a way as to dis- tribute the burden equitably between income and corpus (d). S. Fines payable for the renewal of leases are borne by tenant for life and remain- dermen in proportion to the benefit derived by them respectively. But as the proportion cannot be ascertained until the death of the former, an inquiry will be directed by the court as to what sum the latter ought to pay or secure to the trustees without prejudice to the question whether he may ultimately be liable to pay more or less (e). E. All costs incident to the protection of the trust property, including legal pro- ceedings, are borne by corpus (/) unless (c) Be Gourtier, Coles v. Courtier, 34 Ch. Div. 136. [d) Per Cotton and Lindley, L. JJ., Ee Hotchkys, Freke v. Calmady, 32 Ch. Div. 408. . (e) Seton on Decrees, 4th. ed. 1270 ; White v. White, 9 V. 556; Nightingale Y. Lawson, 1 B. 0. C. 440. (/) Be Earl De la Warr's Estates, 16 Oh. Div. 587; Stott V. Milne, 25 Ch. Div. 710 ; Lord Brougham v. Poulett, 19 B. 135 ; Sanders v. Miller, 25 B. 154. . INCIDENCE OF OUTGOINGS, 425 they relate exclusively to the tenant for life(^). Illust. — 1. Express direction. — A testator created a trust of certain leasetiold property, to which was annexed a perpetual right of renewal from time to time, on payment of a fine. The will directed the trustees to renew the leases " out of the annual rents and profits," but empowered them, in case from any cause the money required to pay the fines should not be produced " by the ways and means aforesaid," to mortgage the property for the purpose of raising the fines. On these facts it was held that, the rents being sufiicient for the purpose, the fines ought to be paid out of income {h). The Master of the Rolls, in giving judgment, said : — •" I think, on the construc- tion of this deed, that renewal fines are payable out of income. I think the words in the first part of the deed are clear, that the trustee shall pay the fines, fees, and expenses attending such renewal from time to time ' by and out of the annual rents, issues, and profits of the said hereditaments, parts, shares, and premises.' This case is distinguishable from Allan v. Backhouse (i) , where the dijection was to raise it out of rents and profits. Here it is to pay it out of the annual rents, issues, and profits. I also {g) &%e-ReMarner, L. E., 3 Eq. 432; Re Evans, L. E., 7 Ch. App. 659; Be Smith, L. E., 9 Bq. 374. ill) Selby V. Wood, 29 B. 482. (i) 2 V. & B. 65, in which, it -was held, that as a gift of rents was equivalent to a gift of corpus, so a dii'eotiou to renew out of rents was equivalent to a direction to renew out of corpus.. 426 THE ADMINISTRATION OF A TEUST. think that the subsequent provision does not give the trustee the option of raising the fines out of the rents or by mortgage, as in' Jones v. Jones (Je). Here it is impossible to say that the money has not been produced ' by the ways and means aforesaid.' The proviso gives power to raise the fines by mortgage ia three cases : — (1) If the money shall not be pro- duced ; (2) in case the trustee requires money to pay off the mortgages ; or (3) in case he requires it other- wise in connection with the trusts of these presents. That means in matters other than and besides those previously enumerated. I am of opinion, therefore, that the case of Jones v. Jones does not apply here. There the direction was to pay the fines either out of the rents or by mortgage, in which case the trus- tees had a discretion." 2. Statutory indication. — By the 32nd section of the Succession Duty Act ( I) personal property settled upon difEerent persons in succession is to be treated, for the purposes of the act, as if it were bequeathed by the predecessor to the successor. The effect of this provision is, that the duty is a charge on capital, and where a tenant for life pays the duty he is, prima facie, entitled to a charge on the capital for the amount he has thus paid {m) . On the other hand, succession duty on real estate is clearly payable out of income, by reason of the provisions of sect. 21. 3. Charges and incumbrances. — Where a capital 5 Ha. 441. ^., 16 & 17 Vict. c. 51. m) Cudden v. Gvdden, 4 Oh.. Div. 583. INCIDENCE OF OUTGOINGS. 427 sum is seoured on a property, it is payable out of corpus, but the interest on it is payable out of in- come (w) . And this rule obtains even where a debt is secured by an annuity. In such a case the annuity must be valued, and the tenant for life will then eon- tribute an amount equal to interest on the valuation at 4 per cent. (o). Arrears of interest on incum- brances accrued in the lifetime of the settlor, are a charge on corpus, the tenant for life merely paying interest on them {p) . 4. The strong inclination of the court to saddle capital charges on corpus, is well exemplified by the recent case of Norton v. Johnstone {q) . There, a testator had directed the income of certain estates to be accumulated until the amount of the accumula- tions should be sufiicient to pay o£E existing mort- gages, and that, subject thereto, the property should be held to the use of the plaintifE for life, with re- mainders over. Before the accumulations were suf- ficient to discharge the mortgages, the mortgagees sold a part of the property, and with the monies so produced, and part of the monies already accumulated, the mortgages were paid off. The tenant for life then claimed to be let into possession, and also to have the balance of the accumulations paid to him. On the (m) Marshall v. Orowther, 2 Oh. Div. 197 ; Whitbread v. Smith, 3 D. M. & G. 741 ; and see Allhusen v. Whittell, L. E., 4 Eq. 295. (o) Bulwer v. Astley, 1 Ph.. 422 ; and see also Flay/air v. Cooper, 17 B. 187. {p) Bevel V. Watkinson, IV. 93 ; Play fair v. Cooper, 17 B. 187. (2) 30 Ch. Div. 649. 428 THE ADMINISTRATION OF A TRUST. other hand, the remainderman urged that, inasmuch as the mortgage debt had been paid oS. by means of a sale of the corpus, which was not what was contem- plated by the testator, the accumulation of rents ought to continue, until such a sum was obtained as would ' be equal to the amount raised by the sale, and that the sum thus obtained ought to be employed in re- couping the inheritance, the tenant for life receiving only the interest of it. Mr. Justice Pearson, how- ever, decided in favour of the tenant for life, on the ground that the mortgage debts had been paid in a way different from that which the testator intended, and that he had not provided for that event, and that consequently the ordinary rule as to the incidence of capital charges must govern the case. 5. Calls on shares, — Calls on shares which form part of a trust estate, are outgoings attributable to capital and not to income, and are accordingly pay- able out of corpus (r). 6. Current annual charges. — All charges of an annual character, except annual charges to secure capital sums, are payable out of income, for other- wise the corpus would inevitably decrease year by year, and would eventually be swallowed up. Thus, the income must bear rates and taxes (s), the rent pay- able for leasehold hereditaments, annuities charged on income (t) , the commission or poundage payable to a receiver, and the expenses incident to the preparation ' (r) Todd V. Moorhouse, 19 Eq. 69. (s) Fountain Y. Pdlett, 1 V.,, jun. 337, 342. \t) Pine V. Cooper, 17 B. 187, 193 ; Miller v. Huddleston, 3 M. & G. S13. INCIDENCE OF OUTGOINGS. 429 and passing of his accounts (m). So where a life policy forms part of the settled property, the pre- miums are payable out of income and not capital (w). Where trustees are directed to insure the trust pro- perty against loss or damage by fire, the premiums must be borne by income. It is, however, a moot point whether, in the absence of any direction to insure, trustees are at liberty to do so and deduct the premiums from income. To settle the question. Lord Herschell's Trustee Bill, 1888, now before Par- liament, contains a clause providing that it shall be lawful for, but not obligatory on, a trustee, to insure insurable property to the extent of three-quarters of its value, and to pay the premiums out of income. 7. losses on trust business. — Where a business is vested in trustees in trust for successive tenants for life and remaindermen, the net losses on one year's trading must, under ordinary circumstances, be made good out of the profits of subsequent years, and not out of capital («). For the outgoings of a business are part of the regular current expenses, and there can be no profits until all losses are paid, whether such losses are incurred in a year in which gross profits exceed the losses, or were incurred in prior years. 8. Secus where intention can be implied that losses shall be borne by capital. — However, where, on the facts, it appears to have been the settlor's intention, (m) Shore v. Shore, 4 Drew. 510. (w) Be Waugh, 25 W. R. 555. {x) Upton V. Brown, 26 Ch. Div. 588. 430 THE ADMINISTRATION OF A TRUST. that losses on a trust business should be borne by capital, effect will be given to that intention. For instance, where partners carry on a business, each partner having the right to bequeath his share, and it has been the partnership custom to write off the losses of unprosperous years from each partner's share of capital, that custom will be continued, even as between a tenant for life and remainderman, in whose favour one of the partners has bequeathed his share (z) . As Pearson, J., put it: "As I understand the will, he [the testator] intended that the business should be carried on in the same way in which it was carried on during his lifetime, with such modifications only as the change of circumstances would render neces- sary, and which, in the discretion of the trustees, acting under the powers given to them by his will, they might agree to. Subject to that, I conclude, from the terms of the will, that the testator's intention was that the business should proceed as it had proceeded, and that the daughter should be entitled to one moiety of those profits which he himself would have received if he had lived and had continued to be a partner in the business." 9. Eepairs. — Yery generally, well-drawn settle- ments of house property provide that the trustees shall keep it in repair, and insured against loss or damage by fire, out of the rents and profits. Where, however, this is omitted, an equitable tenant for life (unlike a legal one) is not bound to repair [a) ; nor, as (z) G-ow Y. Forster, 26 Oh. Div. 672. (a) Me Oourfier, Coles v. Gourtier, 34 Oh. Div. 1^6. INCIDENCE OF OUTGOINGS. 431 between him and the parties entitled to the corpus, are repairs exclusively chargeable to income. Where, however, the trustees are in receipt of the income, it would seem that, in order to avoid the destruction of the property (either physically or by forfeiture of a lease) , they may do repairs, and retain the income for the purpose of reimbursing themselves (6), without prejudice to the ultimate rights of tenant for life and remaindermen inter se. For trustees (as has been already pointed out (c) ) have a lien both on capital and income for their expenses of protecting trust pro- perty. But as between tenant for life and remainder- men, the court will, it would seem, on the application of the former, order an equitable contribution to be made by capital to recoup the tenant for life for the loss of income (d). 10. Fencing of unfenced land. — Where the question arises as to the incidence of the cost, not of mere repairs, but of putting property into a better condition than it was originally in, it would seem that no part of the cost falls on income. Thus, the expense of fencing waste lands granted to a trustee for the benefit of the estate, must be paid out of corpus exclu- sively (e) . 11. General costs incident to administration. — Legal expenses incident to the administration of a trust (b) Be Fowler, Fowler v. Odell, 16 Ch. Div. 723. (c) Art. 68, supra ; Sfoti v. Milne, 25 Ch. Div. 710. (d) Per Cotton and Lindley, L.JJ. ; Be Hotchkys, FreJce v. Calmady, 32 Oh. Div. 408 ; Be Courtier, Ooles v. Courtier, 34 Oil. JDiv. 136. (e) Earl Cowley v. Wellesley, L. E., 1 Eq. 656. 432 THE AUMINISTRATION OF A TRUST. almost exclusively fall on capital, unless the settlor has expressly provided for them ; for they are for the benefit of all persons interested. Thus, the costs of the appointment of new trustees (/), the costs incident to the investment or change of investment of trust funds (g), the costs of obtaining legal ad- vice {h), and of taking the direction of the court (j), the costs of an administration action (k), the costs of paying money into court under the Trustee Belief Act {I), the costs of bringing or defending actions against third parties for the protection of the es- tate (;m), and the like, are all payable out of corpus. On the other hand, where money is paid into court under the Trustee Belief Act, the costs of aU neces- sary parties to a petition for obtaining an order for the payment of the income to the tenant for life have been held to be payable out of income («). But (/) Se Fellows, 2 Jur., N. S. 62; Re Fulkam, 15 ib. 69; Ex parte Davies, 16 ib. 882. {g) But seous, of petition to vary investmeiit of funds in court, see Equitable Society v. Fuller, J. & H. 3Y9. (7i) Poole v. Pass, 1 B. 600. (i) Re Elmore, 9 W. E. 66 ; Re Leslie, 2 Cb. Div. 185. \h) Re Turnley, L. E., 1 Ob. App. 152. {I) Re Whitton, L. K., 8 Eq. 353. (m) See Stott y. Milne, 25 Ob. Div. 710; and see also iJe Earl Be la Warr's Estate, 16 Cb. Div. 587, and Re Earl of Berkeley's Will, L. E., 10 Cb. App. 56. (»i) ite Marner, L. E., 3 Eq. 432 ; Re Evans, L. E., 7 Cb.- App. 609; Re Whitton, L. E., 8 Eq. 352; Re Smith, L.E., 9 Eq. 374. Tbe costs of a petition for advice as to tbe appli- cation of income bave been ordered to be borne by income : Anon., 8 W. E. 333; 2 L. T. 71 ; Re T , 15 COi. Div. 78. But seous, as to costs of petition in an administration suit for payment of income to tenant for life, wbiob are payable out of corpus : Longuet v. Hockley, 22 L. T. 198 ; Scrivener v. INCIDENCE OF OUTGOINGS. 433 ■where a testator gave a fund to trustees upon trust for investment in land, whioli was to be settled to the use of several persons successively for their lives, and the fund was paid into court in an administration mit, it was held, by Malins, Y.-O., that the costs of a petition by a tenant for life for payment of the dividends to him, were payable out of corpus (o). As the Y.-O. said : — " If the fund had been invested in land, the tenant for life would simply have en- tered into possession without incurring the expense of a petition, and I do not see why he should be in a worse position because the fund is in court. The fund remains here for the advantage of all persons interested, and it seems to me that all should bear the costs of this petition." Smith, L. E., 8 Eq. 310 ; but see Eady v. WaUon, 12 W. E. 682, contra, (o) Scrivener v. Smith, supra. r F ( 434 ) Division V. THE CONSEQUENCES OF A BREACH OF TRUST. Chapter I. — The Liability of the Trustees. Aet. 76. TJie Measure of the Trustee's Sesponsihility. ,, 77. The Liability where Joint qua. the Beneficiaries may he distributahle qua the Trustees. „ 78. No Set-off allowed of Gain on one Breach against Loss on another. „ 79. Any of the Beneficiaries may compel Performance of a neglected Duty, or prevent the Commission of a Breach. „ 80. Property acquired, either wholly or partly out of Trust Property, becomes liable to the Trust. „ 81. Fraudulent Breach of Trust is a Crime. Chaptek II. — Liability of Parties other than THE Trustees. Art. 82. Liability of Beneficiary who is a Party to a Breach. ,, 83. Liability of Third Parties Privy to a Breach. ,, 84. Following Trust Property into the Hands of Third Parties. ( 435 ) CHAPTEE I. The Liability of the Teustees. Aet. 76. The Measure of the Trustee's Responsibility. ,, 77. The Liability where Joint qua the Beneficiaries may be distributable qua the Trustees. „ 78. No Set-off allowed of Oain on one Breach against Loss on another. ',, 79. Any of the Beneficiaries may compel Performance of a neglected Duty, or prevent the Commission of a Breach. „ 80. Property acquired, either wholly or partly out of Trust Property, becomes liable to the Trust. „ 81. Fraudulent Breach of Trust is a Crime. Art. 76. — The Measure of the Tmstee's Responsibility. The general measure of a trustee's re- sponsibility for a breach of trust, is the amount by which the trust property has been depreciated without interest (a) : Provided that — a. Where he has actually received interest, (a) See Att.-Oen. v. Alford, 4 D. M. & G. 851 ; Staffordr. Fiddon, 23 B. 386; Vysev. Foster, L. E., 8 Ch. App. 333, afl. L. E., 7 H. L. 318 ; Burdick y. Garrard, L. E., 5 Ch. App. 233. F F 2 436 THE CONSEQUENCES OF A BREACH OF TRUST. or ought (if he had obeyed the trust) to have received interest, he vs^ill be liable to account for what he has received in the one case {b), and for what he ought to have received in the other (c). j3. Where he has been guilty of misconduct, having as its object his own personal advantage {d), he will be estopped from denying that he actually received in- terest, and will be liable to pay simple interest at 4 or 5 per cent., according to the circumstances. y. But where he has employed the trust property in trade or speculation, he will be liable to pay interest at 5 per cent., with yearly, or even half-yearly, rests, if he may reasonably be presumed to have made that amount, or (where he has actively employed it in trade or speculation), at the option of the bene- ficiaries, to account for all the profits made by him (e). (J) See cases supra, note (a) ; and see Jones y. Foxall, 15 B. 392. (c) Att.-Qen. v. Alford, supra ; Stafford v. Fiddon, supra; Price V. Price, 42 L. T., N. S. 636. {d) See and consider judgments, Att.-Qen. v. Alford, supra. (e) See Jones v. Foxall, supra ; Vyse v. Foster, supra ; Bur- dick V. Qarrard, supra. WHEN TRUSTEE CHARGED WITH INTEREST. 437 Illust. 1. — Not liable for increased value made by third party after breach. — The trustee of gas shares allowed the husband of one of the beneficiaries to get them into his hands. The husband surrendered them to the company, accepting allotments of new shares in their stead, on which new shares he paid calls, and finally became bankrupt. On these facts, it was held that the trustee was only liable for the value of the shares, less the calls paid by the hus- band, that being the true measure of the loss to the trust (/). 2. Cases where there must always have been a loss. — So, where there must always have been a loss on the realization of trust property, apart from any breach of trust, then if a breach of trust further de- preciates it, the measure of the trustee's responsibility is confined to the further depreciation, and he is not responsible for the difference between the nominal value and the actual amount realized {g). 3. Loss caused by unreasonable delay. — A trustee who is guilty of unreasonable delay in investing trust funds will be answerable to the beneficiaries for simple interest at 4 per cent, during the continuance of such delay (li). And in a recent case (*), where an executrix allowed trust money to remain unin- vested in the hands of her solicitor for nine years (/) Briggs v. Massey, 30 W. E. 325; and see also BeHulkea, Powell v. Hulkes, "W. N. 1886, p. 111. {g) Lord Gainsborough v. Watcombe Terra Gotta Co., 54 L. J.,. Ch. 991. (A) Stafford v. Fiddon, supra. (i) Gilroy v. Stephen, 30 W. E. 755. 438 THE CONSEQUENCES OF A BREACH OF TRUST. during the infancy of tlie beneficiary, it was held by Try, J., that she ought to he charged with com- pound interest at the rate of 3 per cent, per annum, with half-yearly rests, as it was her duty to have accumulated the income, by investing it from time to time in consols. A trustee is not, however, liable for loss caused by the rise in the value of securities in which he ought to have invested trust funds, as that is a mere accident (/c). 4. Breach of trust to accumulate. — So, where there is a trust to accumulate, compound interest will be charged, with half-yearly rests, that being what ought to have been received if the trustee had obeyed the trust. In the case of Re Emmet, Emmet v. Emmet (l), there was a trust to accumulate until a child attained twenty-one, and then to pay the fund and accumula- tions to him. The trustee invested part of the fund at 5 per cent, on unauthorized securities, and mixed the other part with his own moneys. On the child attaining twenty-one, he did not inform him of his rights, but still retained the fund. On these facts, it was held that the trustee must be taken to have continued to hold the fund, after the child attained twenty-one, on the same trusts for accumulation as before, and was consequently Hable to account with compound interest at 4 per cent, on the moneys mixed with his own, and at 5 per cent, on the moneys invested at that rate. 5. Improper calling in of good security. — A trustee (k) Rohimon v. BoUnson, 1 D. M. & G. 247. {l) 17 Ch. Div. 142. WHEN TRUSTEE CHii.RGED "WITH INTEREST. 439 who, witliout proper authority, calls In trust property invested on mortgage at 5 per cent., would be liable for that rate of interest; for although he may not actually have received that rate, he ought to have done so(m). 6. Mixing trust funds with trustee's own moneys. — A trustee retained trust funds uninvested for several years, and mixed them with his own private moneys, but did not trade or speculate with them, or get any personal benefit from them. The Yice- Chancellor held that 5 per cent, compound interest was charge- able ; but on appeal this decision was reversed, Lord Cranworth saying : — " Grenerally speaking, every executor and trustee who holds money in his hands is bound to have that money forthcoming; he is, therefore, chargeable with interest, and is almost always to be charged with interest at 4 per cent. It is presumed that he must have made interest, and 4 per cent, is that rate of interest which this court has usually treated it as right to charge .... In the present instance, I observe that one of the grounds of misconduct relied upon by the Vice- Chancellor is, that the defendant did not communicate the matter to the rector and churchwardens (the cestuis que trusts). This was extremely improper conduct, no doubt, but not in itself such conduct as enables me to make any alteration in the mode in which he is to be dealt with in point of interest. It is not mis- .eonduct that has benefited him, unless indeed it can be taken as evidence that he kept the money fraudulently (ro) See judgment in Jones v. Foxall, supra. 440 THE CONSEQUENCES OE A BREACH OF TRUST. in his hands, meaning to appropriate it. In such a case, I think the court would be justified in dealing, in point of interest, very hardly with an executor, because it might fairly infer that he used the money in specitlation, by which he either did make 5 per cent., or ought to be estopped from saying that he did not. The court would not inquire what had been the actual proceeds, but in application of the principle, in odiuna spoliatoris omnia prsesumuntur, would assume that he did make the higher rate, that is, if that were a reason- able presumption " (n) . 7. Solicitor trustee using trust funds in Ms business. — In Bur dick v. Garrard (o), a solicitor, as the agent of the plaintiff, held a power of attorney from him, under the authority of which he received divers sums of money, and paid them into the bank to the credit of his (the solicitor's) firm. On a bill being filed by the client for an account, the Vice-Ohancellor made a decree for payment of the principal with compound interest. The Court of Appeal, however, reversed this decision, Lord Hatherley saying : " The Yice- Ohancellor has directed interest to be charged at the rate of 5 per cent., which appears to me to be perfectly right, and for this reason, that the money was retained in the defendants' own hands, and was made use of by them. That being so, the court presumes the rate of interest made upon money to be the ordinary rate of interest, viz., 5 per cent. I ()i) Att.-Oen. V. Al/ord, supra; and see Jones y. Searle, 49 L. T., N. S. 91 ; and see Ee Emmet, Emmet v. Emmet, 17 Oh. Div. 142. (o) L. E., 5 Oil. App. 233. WHJiN TRUSTEE CHAKGED WITH INTEREST. 441 cannot, however, tMnk the decree correct in directing half-yearly rests, because the principle laid down in the case of TJw Attornci/- Genera I v. Alford appears to be the sound principle, namely, that the court does not proceed against an accounting party by way of punishing him for making use of the plaintiff's money, by directing rests, or payment of compound interest, but proceeds upon this principle, that either he has made, or has put himself into such a position that he is presumed to have made, 5 per cent., or compound interest, as the case may be." His Lord- ship then pointed out that no doubt where a trustee employs money in ordinary trade, he will be made liable for compound interest, because trade' capital is presumed to yield it ; but that that reason had no application to capital employed in a solicitor's business, upon which a solicitor is frequently re- ceiving no interest at all. 8. Partner trustee allowing trust fund to remain in business. — In order to charge a trustee with com- pound interest, or with actual profits for employing the trust funds in trade, there must be an active calling in of the trust moneys for the purpose of embarking them in the trade or speculation ; a mere neglect to withdraw funds already embarked by the settlor in trade, is not sufficient. In Vyse v. Foster [p) the facts were as follows : — A testator, was partner in a well-established and prosperous busi- ness, one of the terms of the partnership being that, on the death of any partner, his share was to be (p) L. E., 8 Oh. App. 309, affirmed L. E., 7 H. L. 318. 442 THE CONSEQUENCES OF A BREACH OF TRUST. taken by the surviving partners at a certain price, ■which was to be paid by instalments extending over two years, with interest at 51. per cent, per annum from his death. The testator appointed three execu- tors, one of whom was one of the partners in his busi- ness, and another some years after his death became a partner; the third never was concerned in the business. The value of the testator's share was ascertained, but not paid, the amount being allowed for some years to remain in the hands of the firm, who treated it in their books as a debt, and allowed interest on it at bl. per cent, per annum, with yearly rests. One of the testator's residuary legatees claimed, but unsuccessfully, to be entitled to a share in the profits of the business arising from the use of the testator's capital. Lord Justice James said : " If an executor or trustee makes a profit by an improper dealing with the assets or the trust fund, that profit he must give up to the trust. If that improper dealing consists in embarking or investing the trust money in business, he must account for the profits made by him by such employment in such business, or at the option of the cestuis que trusts, or if it does not appear, or cannot be made to appear, what profits are attributable to such employment, he must account ior trade interest — that is to say, interest at 5 per cent. .... It is not by way of punishment that the court ever charges a trustee vrith more than he actually received or ought to have received, and the appropriate interest thereon : it is simply on the ground that the court finds that he actually made more, constituting moneys in his hands had and received to the use of WHEN TRUSTEE CHARGED WITH INTEREST. 443 the cestuis que trusts {q) . A trustee, for instance, lending money to his firm, is answerable for such money, with full interest, to the uttermost farthing ; but to make him answerable for all the profits made of such money bi/ all the firm would be simply a punishment Is the mere fact of the union of the three characters — debtor, executor and trader — in the same person, sufficient to entitle the estate to an investigation into the trader's own business, because there has been some delay, or great delay, in paying ofE the debt ? We have found no case in which this has been laid down, even in the case of a sole executor, sole debtor, or sole trader. In no case, so far as we are aware, has it ever been held, that where there has been no active breach of trust in the getting in or selling out trust assets, but where there has been a mere balance on the account of receipts — legitimate receipts — and payments, the omission to invest the balance has made the executor liable to account for the profits of his own trade. But this ease is far stronger than the case we have suggested ; and if the rule as to profits were to apply to it, it would be difficult, if not impossible, to exclude from its application cases where it would shock the common feelings of mankind." (g) But see per the same learned judge in Ex parte Ogle, L. E., 8 Oh.. App. 717, where he ordered a trustee who had, by negUgence, permitted a loss to occur, to pay interest at 5 per cent. 444 THE CONSEQUENCES OF A BREACH OF TRUST. Art. 77. — The LiahiUty where Joint qua the Bene- ficiaries may he distributable qua, the Trulstees. «■• Each trustee is in general liable for the whole loss when caused by the joint de- fault of all the trustees {a). /3. A decree against all may be enforced against one or more only {V). 7- But, as between themselves, where all are guilty of a breach of trust not amounting to actual fraud (c), those who have had to refund the loss to the trust will be entitled to contribution from the others (c?). S- Where, however, one of several trustees has got the benefit of a breach of trust, or has been the confidential legal ad- viser of his co-trustees, he may have to indemnify his co-trustees and to bear the whole loss himself (e). {a\ Wilson v. Moore, 1 M. & K. 126; Lj/se v. Kingdom, 1 Coll.' 184; Ex parte Norris, L. E., 4 Ch. 280. (i) Att.-Gen. v. Wilson, Or. & Ph. 28; Fletchers. Green, 33 B. 426. (c) Att.-Gen. v. Wilson, supra; Bee Lingard v. Bromley, 1 V. & B. 114; Tarleton v. Hornly, 1 Y. & 0. 336. (d) Lingard v. Bromley, supra ; Birhs Y. Michlethwaite, 33 B. 409 ; Att.-Gen. v. Dangars, ibid. 624. This claim to con- tribution is now considered a specialty debt : 19 & 20 Vict. c. 97. (e) Bahin v. Hughes, 31 Ch. Div. 390; Lockhart v. Reilly, 25 L. J., Oh. 697; Thompson v. Finch, 22 B. 316; 8 D. M. ■WHEN TRUSTEE ENTITLE]! TO CONTRIBUTION. 445 Illust. — 1. Breach of trust not like common law tort. — A loss was sufEered by the creditors of a bankrupt througli the joint default of the assignees in bankruptcy. A decree was made against them, and one of them had to make the loss good. Con- tribution was, however, enforced against his co- assignees, and the objection that these latter acted only for conformity was disallowed. Sir W. Grant, M. Er., said : " Where entire damages are recovered against several defendants guilty of a tort, a court of justice wiU not interfere to enforce contribution amongst wrong-doers ; but here there is nothing but the non-performance of a civil obligation. The lia- bility is not ex delicto unless every refusal to comply with a legal obligation makes a party guUty of a deHetum"(/). 2. Lien of trustee made liable on costs awarded to co-trustee. — So where a large balance was found to be due jointly from a trustee and the representatives of a deceased co-trustee, but costs were given to both out of the trust estate, it was held (the estate of the deceased co-trustee being quite insolvent, and there- fore unable to contribute) that the surviving trustee, upon paying the whole of the loss, was entitled to a lien for half of it on the costs awarded to the repre- sentatives of his deceased co-trustee [g). & G. 560 ; Featherstone v. West, 6 Ir. Rep. Eq. 86 ; and see Butler V. Sutler, 1 Oh. Diy. 116. (/) Lingard v. Bromley, supra. As to contribution by directors of a company wbere one of them has been made responsible for a breach of trust in mi.sapplying the com- pany's assets, see Ranuhill v. Edioards, 31 Ch. Div. 100. {g) Fletcher y. Green, 33 B. 515. 446 THE CONSEQUENCES OF A BKEACH OF TKUST. 3. How far a more guilty trustee is bound to in- demnify Ms less guilty co-trustees. — In Bahin v. Hughes (h) Cotton, L. J., said : — " On going into the authorities there are very few cases in which one trustee who has been guilty with a co-trustee of breach of trust, and held responsible, has successfully sought indemnity as against his co-trustee. Lock- hart V. Reilly («'), and Thompson v. Finch {k), are the only cases which appear to be reported. Now, in Lockhart y. Reilly, it appears from the report of the case in the Law Journal, that the trustee by whom the loss was sustained had been not only trustee, but had been and was a solicitor, and acting as solicitor for himself and his co-trustee, and it was on his advice that Lockhart had relied in making the in- vestment which gave rise to the action of the cestui que trust. The Lord Chancellor [Lord Cranworth] refers to the fact that he was a solicitor, and makes this remark : ' the whole thing was trusted to him. He was the solicitor, and, independently of the con- sideration that one cannot help seeing it was done with a view of favouring his own family, yet, if that had not been so, the co-trustee leaves it with the solicitor trustee, by whose negligence (I use no harsher word) all this evil, in a great degree, has arisen.' Therefore the. Lord Chancellor in giving his decision relies upon the fact of the trustee being a soheitor. In Thompson v. Finch a right was conceded to prove (h) 31 Oh. Div. 390, 394. \i) 25 L. J., Oh. 697. [h] 22 B. 316.; 8 P. M. & G. 56p., "WHEN TRUSTEE ENTITLED TO CONTRIBUTION. 447 against the estate of the deceased trustee for the full loss sustained; but it appears that in this case also he was a solicitor, and that he really took this money to himself, for he mixed it with his own money and invested it on a mortgage; and, therefore, it was held that the trustee was entitled to indemnity from the estate of the co-trustee who was a solicitor. . . . Of course where one trustee has got the money into his own hands, and made use of it, he will be liable to his co-trustee to give him an indemnity {}) . Now I think it wrong to lay down any limitation of the circumstances under which one trustee would be held liable to the other for indemnity, both having been held liable to the cestui que trust; but so far as cases have gone at present, relief has only been granted against a trustee who has himself got the benefit of the breach of trust, or between whom and his co-trustees there has existed a relation, which will justify the court in treating him as solely liable for the breach of trust." And Lord Justice Fry added : — " In my judgment the courts ought to be very jealous of raising any such implied liability as is insisted on, because, if such existed, it would act as an opiate upon the consciences of the trustees; so that instead of the cestuis que trusts having the bene- fit of several acting trustees, each trustee would be looking to the other or others for a right of indem- nity, and so neglect the performance of his duties." 4. Secus, where one only remotely benefited.^ — However, one trustee will not have to indemnify his (Z) See Featherstone v. West, 6 Ir. Eep. Eq. 86. . .. ' 448 THE CONSEQUENCES OF A BREACH OF TRUST. co-trustees where his breach of trust is only remotely connected with the loss, unless, of course, he was guilty of actual fraud. Thus, in Butler v. Butler (z), two trustees advanced money to a builder on mort- gage. The land had belonged to the defendant, one of the trustees, and part of the money advanced was applied by the builder in payment of the price of the land, and of other money due from him to the de- fendant. The other trustee commenced this action, alleging that the security was insxzfficient, and asking that it might be realized, and that the defendant might make good any deficiency. It was, however, held, both by Mr. Justice Fry and the Court of Appeal, that the indirect benefit which a creditor gets from trust moneys being lent to his debtor upon insuffi- cient security, is too remote (unless the thing was a fraudulent scheme) to render him solely liable to make good the loss. Art. 78. — No Set-off allowed of Gain on one Breach against Loss on another. A trustee is only liable for the actual loss in eacli distinct and complete trans- action which amounts to a breach of trust, and not for the loss in each par- ticular item of it (a) ; but a loss in one (a) 7 Ch.. Div. 116; and see also, as to non-liability of a trustee for remote gain, Whitney v. Smith, L. E., 4 Oh. App. 513. (a) Vyse v. Foster, L. E., 8 Ch. App. 336, affirmea L. E., •7 H. L. 318. WHEN SET-OFF Al.LOWED. 449 transaction or fund is not compensated by a gain in another and distinct one (5). Illust. — 1. Where breach of trust causes benefit to the estate, not liable for outlay. — In Vyse \. Foster (c), a testator devised his real and personal estates upon common trusts for sale, making them a mixed fund. His trustees were advised that a few- acres of freehold land which belonged to him might be advantageously sold in lots for building purposes, and that, to develop their value, it was desirable to build a villa upon part of them. They accordingly built one at a cost of 1,600/. out of the testator's per- sonal estate. The evidence showed that the outlay had benefited the estate, but Viee-Ohancellor Bacon disallowed the 1,600/. to the trustees in passing their accounts. The Court of Appeal (and subsequently the House of Lords), however, reversed this, the Lord Justice James saying : "As the real and per- sonal estate constituted one fund, we think it neither reasonable nor just to fix the trustees with a sum, part of the estate, bona fide laid out on other part of the estate, in the exercise of their judgment as the best means of increasing the value of the whole. If they were mistaken in this, which does by no means appear, the utmost they could be fairly chargeable with would be the loss (if any) occasioned by the mistake in judgment." (Z>) Wihi V. GresJiam, 2 Drew. 258 ; Dines v. Scott, 4 Euss. 195; Ex parte Lewis, 1 Gl. & J. 69. (c) Supra. U, G G 450 THE CONSEQUENCES OF A BREACH OF TRUST. 2. Loss on one transaction cannot be set-off ag^ainst gain on another, — In Wiles v. Gresham{d), on the other hand, by the negligence of the trustees of a marriage settlement, a bond debt for 2,000/. due from the husband was not got in, and was totally lost. Certain other of the trust funds were without proper authority invested in the purchase of land upon the trusts of the settlement. The husband, out of his own money, greatly added to the value of this land ; and upon a claim being made against the trustee for the 2,000/. they endeavoured to set-off against that loss the gain which had accrued to the trust by the increased value of the land, but their contention was disallowed, the two transactions being separate and distinct. 3. Again, trustees had kept invested on unautho- rized security a sum of money which they ought to have invested in consols, and which was in con- sequence depreciated. Eventually part of the money was invested in consols, at a far lower rate than it would have been if invested according to the direc- tions in the will. The trustees claimed to set-ofE the gain against the loss, but were not allowed to do so ; because " at whatever period the unauthorised security was realized, the estate was entitled to the whole of the consols that were then bought, and if it was sold at a later period than it ought to have been, the executor was not entitled to any accidental advantage thence accruing (e). This case is at first sight difficult {d) Supra. (e) Dimes v. Scott, 4 Euss. 195. WHEN SET-OFF ALLOWED. 451 to be distinguished from Vyse v. Foster, but it will be perceived that the loss and gain resulted from two distinct transactions. The loss resulted from a breach of trust in not realizing the securities ; the gain arose from a particular kind of stock being at a lower market value than usual at the date at which the trustees bought it. 4. Where, however, trustees committed a breach of trust in lending trust moneys on mortgage, and upon a suit by them the mortgaged property was sold, and the money paid into court and invested in consols pending the suit, and the consols rose in value, the trustees were allowed to set-off the gain in the value of the consols against the loss under the mortgage, for the gain and loss arose out of one transaction (/). It is, however, very difficult to reconcile this case with the last one, but it seems to be reasonable, and in accordance with common sense. Art. 79. — Any of the Beneficiaries may compel Per- formance of a neglected Duty or prevent the Com- mission of Breach. Where the court is satisfied that trust pro- perty is in danger, either through the supineness (y) of, or a contemplated or (/) Fletcher v. Green, 33 B. 426. [g) Foley v. Burnell, 1 B. C. C. 277 ; Fletcher v. Fletcher, 4 Ha. 78. G G 2 452 THE CONSEQUENCES OF A BREACH OF TRUST. probable active breacb of duty {h) by, the trustees, or where the latter are residing out of the jurisdiction of the court (i), an injunction will be granted at the instance of any person with an existing, vested or contingent interest (/), either compelling the trustees to do their duty (/^), or restraining them from interfering with the trust property (A), as the case may require ; and, if expe- dient, a receiver will be appointed (l). Illust. — 1. Ei^ht to use name of trustee in action at law. — Thus, if one commits some trespass upon lands in the possession of the trustee, and the latter refuses to sue him, the court will oblige him to lend his name for that purpose, on receiving a proper indemnity from the beneficiaries {m) . 2. Trustee will be ordered to renew leases. — And so, if a tenant for life refuses to renew leaseholds, the court will compel him to do so, and a receiver of the income of the trust property will be appointed to collect a sufficient sum to pay the renewal fine (n). (A) Talhot Y. Scott, 4 K. & J. 139 ; Middleton v. Dodswell, 13 V. 266 ; Bance v. Goldingham, L. E., 8 Ch. App. 902. (i) Noad V. Backhouse, 2 T. 0. 0. 529. (j) Lew. 697 ; Scott v. Becker, 4 Pr. 346 ; but see as to con- tingent cestuis que trusts, Bavis v. Angel, 10 W. E. 723, and Clowes V. Hilliard, 4 Oh. Div. 413. (k) See note {g), supra. {I) See oases in note {h) ; and Bennett v. Colley, 5 Sim. 192. . (m) Foley v. Burnell, supra. (n) See Bennett v. Colley, supra ; and Lew. 696. PEEFOEMANCE OF A NEGLECTED DUTY. 453 3. Where same persons trustees under conflicting settlements. — In Earl Talbot v. Scott (o), lands were vested in trustees by act of parliament, upon trust for sale, and subject thereto, upon trusts inalienably annexing the rents to the Earldom of Shrewsbury. The Earl of Shrewsbury attempted to disentail (which of course he could not do effectually), and devised the lands to the same trustees, upon trust for a particular claimant of the title. The trustees accepted this trust, and claimed to receive the rents in that character, pending proceedings by the plain- tiff to establish his claim to the earldom. A receiver of the rents was, however, appointed on his applica- tion, upon the ground that the trusts of the will were in conflict with the prior trusts upon which they held the estate. 4. Beneficiaries may get a receiver appointed where property in danger. — So, in Evans v. Corentnj (p), a bill was filed by a plaintiff insured in a society whose funds were liable to pay the insurance money, on behalf of himself and other persons so insured, charging a loss of the funds through the negligence of the directors. The answers and affidavits showed that the secretary had absconded with part of the funds, and that some of the directors were in needy circumstances, and the court granted an injimction restraining the directors from touching the funds, and appointed a receiver of them. Lord Justice Knight Bruce said : " The application before the o) Supra. p) 5D.,M. &G. 911. 454 THE CONSEQUENCES OF A BREACH OF TKUST. court is founded on the common right of persons who are interested in property which is in danger, to apply for its protection. ... In my judgment, the objections which have heen urged against this application might be urged with as much reason, as much force, and as much effect, if this were an application to restrain the felling of timber in a case of waste, partly perpetrated and partly imminent." 5. On similar grounds, the court will appoint a receiver and grant an injunction where, from the character or condition of the trustee, he is not a fit person to have the control of the trust property ; as, for instance, where he is insolvent («), or about to become a bankrupt {t), or is a person of dissolute habits, or dishonest {li). 6. Injunction granted to restrain improper sale. — Again, the court will grant an injunction to restrain a sale by trustees at an undervalue (x) (although this was at one time doubted (y)), or where a sale has been made under depreciatory conditions (z) . (s) Mansfield v. Shaw, 3 Mad. 100 ; Oladdon v. Stoneman, 1 Mad. 143, n. (*) Be H.'s Estate, 1 Ch. Div. 276. hi) See Everett v. Prythergch, 12 Sim. 365. (k) Anon., 6 Mad. 10; and see Wehh-y. Earl of Shaftes- bury, 7 V. 488 ; MilUgan v. Mitchell, 1 M. & K. 446 ; Dance V. Goldingham, L. E., 8 Ch. App. 902. (y) Pechel v. Fowler, 2 Anst. 549. (z) Dance v. Goldingham, L. E., 8 Oh. App. 902. PROPERTY ACQUIRED OUT OF TRUST PROPERTY. 455 Art. 80. — Property acquired either wliolly or partly out of Trust Property becomes Halle to the Trust. a. If a trustee has, in breach of trust, con- verted trust property into some other form, or has invested it in some unautho- rized shape, the property into which the trust property has been so converted, or the investments in which it has been so invested, become subject to the trust. If all the beneficiaries are sui juris, they can collectively elect to adopt the breach, and take the property as it then stands; but if one of them objects to do so, he may require it to be reconverted, and in that case any gain accrues to the trust estate, and any loss falls on the trustee {a). /3. If a trustee has mixed trust moneys with his own, or has, partly with his own and partly with trust moneys, purchased other property or investments, then the beneficiaries cannot elect to take (a) See per Pearson, J. , Patten v. Ouardians of Edmonton, 31 W. E. 785 ; Be EalUt, Knatclihull v. Hallett, 13 Ch. Div. 69e ; Taylor v. Plumer, 3 M. «fe S. 562 ; Frith v. Cartland, 2 H. & M. 417 ; Hopper v. Gonyers, L. E., 2 Eq. 549 ; Lane v. Dighton, Arab. 409 ; Scales v. Baker, 28 B. 91 ; Cook v. Addi- son, L. E., 7 Eq. 466 ; Ernest v. Graysdill, 2 D., E. & J. 175 ; Ex parte Barker, 28 "W. E. 522. 456 THE CONSEQUENCES OF A BilEACH OF TKUST. the whole of the mixed, fund or the entire property or investments so pur- chased; but if the mixed fund, or the property or investments so purchased, can be traced (into whatever form they may have been converted), the bene- ficiaries will be entitled to a first charge thereon (b). Ii.LirsT. — 1. Stock bought with trust money. — Thus, where money is handed to a broker for the purpose of purchasing stock, and he invests it in unauthorized stock, and absconds, the stock which he has purchased will belong to the principal, and not to the broker's trustee in bankruptcy. For a broker is a construotivo trustee for his principal, and, as was said by Lord Ellenborough, "the property of a prin- cipal, entrusted by him to his factor for any special purpose, belongs to the principal, notwithstanding any change which that property may have undergone in form, so long as such property is capable of being identified and distinguished from all other pro- perty" (c). 2. Money produced by trust chattels. — So, if goods consigned to a factor be sold by him and reduced (b) Be Hallett, Knatchbull v. Halldt, supra ; Lupton v. White, 15 V. 432 ; Pennell v. Deffdl, 4 D., M. & a. 372 ; Worcester Banking Co. v. Slick, 31 W. E. 195 ; and see also Be Fumphrey, Worcester, &c. Banking Go. v. Blick, 22 Oh. Div. 255, cited supra, p. 384. (c) Taylor v. Plumer, supra ; Ex parte Cook, 4 Oh. Div. 123 ; Be Hallett, Knatclihull v. Hallett, supra. PROPERTY ACQUIRED OUT OF TRUST PROPERTY. 457 into money, yet if the money can be traced — as, for instance, where it has been kept separate and apart from the factor's own moneys, or kept in bags, or the like (^), or has been changed into bills or notes (e), or into any other form(/), or has been paid into the factor's account at the bank {g) — the employer, and not the creditors of the factor, will, upon his bank- ruptcy, be entitled to the property into which it has been converted. For the creditors of a defaulting trustee can have no better right to the trust property than the trustee himself ; and it makes no difference in this respect that the trustee committed a breach of trust in converting the property ; for an abuse of trust can confer no right on the person abusing it, nor on those claiming through him (h) . 3. Sale by trustees of property wrongfully accLuired out of trust moneys. — So, where the trustees of a will invested trust moneys in an unauthorized purchase of land, and afterwards contracted to sell it for a largely increased price, it was held that they were acting properly in so doing, and that the concurrence of one beneficiary was sufficient to make a good title, on the purchasers seeing that the purchase-money was invested in the names of the trustees as trus- tees («'). For, as Mr. Justice Pearson put it : "I see no reason why the trustees should not no-^v do what {d) Toohe v. Sollingworth, 5 T. E. 211. (e) Ux parte Dumas, 2 V. sen. 582. (/) Frith T. Cartland, 2 H. & M. 417; Birt v. Birt, 11 Ch. Div. 772. [a) Be Hailett, Knatchhull v. Eallett, supra. \h.) Taylor v. Plumer, supra. (i) Patten v. Ovardians of Edmonton, 31 W. E. 785. 458 THE CONSEQUENCES, OF A BKEACH OF TRUST. it was all along their duty to do, and wh.at the court would have ordered them to do. At the same time, I agree that it would he proper to take the concur- rence of one of the cestuis que trusts, because, if all of them elected to take their shares of the land after it had been purchased, they would have been entitled to do so; but "if one of them objected to take the land, but required that it should be sold, then the others could not compel him to take his share of the land as representing his share of the money." 4. Trust property mixed with other property so as to be untraceable. — The case is comparatively simple where (as in the foregoing illustrations) the trustee has spent or converted the trust property, and nothing but the trust property. It, however, becomes more difficult, when the trustee has mixed the trust moneys with his own, and either kept the mixed fund, or spent it in the purchase of other property. The case then turns entirely upon the question, whether the mixed fund, so formed, can be identified, or, if it has been spent, whether it can be traced into the property which has been purchased with it. If it has become so mixed up with the trustee's private property as to render it impossible to trace it (for instance, where it has been converted into money, which has been put in circulation (A), or has otherwise become indistinguishable), then, as the right of the bene- ficiary is only to have the actual trust property, or that which stands in its place, or to have a charge on it, and as the actual property is gone, and that which {Jc) Miller v. JRace, 1 Bar. 457. PROPERTY ACQUIRED OUT OF TRUST PROPERTY. 459 stands in its place cannot be identified, the benefi- ciary can only proceed against the trustee generally for the breach of trust, or, if he be bankrupt, can only prove as a creditor (1). 5. Trust property mixed with other property which can be traced. — But where the mixed fund can be traced (as, for instance, where the trustee has paid in the trust fund to his general banking account (m), the beneficiaries will have a charge, or lien, upon the whole mixed fund. In the recent case of Me Hallett, Knatchhull v. Hallett [m), the late Sir George Jessel, M. E.., elaborately reviewed all the authorities touch- ing on this question. His lordship said : — " The modem doctrine of equity, as regards property dis- posed of by persons in a fiduciary position, is a very clear and well-defined doctrine. You can, if the sale was rightful, take the proceeds of the sale, if you can identify them. If the sale was wrongful, you can still take the proceeds of the sale, in a sense adopting the sale for the purpose of taking the proceeds, if you can identify them. There is no dis- tinction, therefore, between a rightful and a wrongful disposition of the property, so far as regards the right of the beneficial owner to follow the proceeds. But it very often happens that you cannot identify the proceeds. The proceeds may have been invested, together with money belonging to the person in a fiduciary position, in a purchase. He may have {I) Ex parte Dumas, 1 Ab. 234 ; Ryall v. Boll, Ch. 1Y2 ; Ficott V. Surman, Willes, 404. (ro) Be Hallett, Knatclibull v. Hallett, supra, overruling tte decision of Pry, J., in Ex parte Dale, 11 Ch. Div. 772. 460 THE CONSEQL'EKCES OF A BREACH OF TRUST. bought land with it, for instance, or he may have bought chattels with it. Now what is the position of the beneficial owner as regards such purchases ? I ■will first of all take his position when the purchase is clearly made with what I will call, for shortness, the trust money, although it is not confined, as I will presently show, to express trusts. In that case, according to the now well-established doctrine of equity, the beneficial owner has a right to elect, either to take the property purchased, or to hold it as a security for the amount of the trust money laid out in the purchase ; or, as we generally express it, he is entitled, at his election, either to take the pro- perty, or to have a charge on the property for the amount of the trust money. But in the second case, where a trustee has mixed the money with his own, there is this distinction, that the cestui que trust, or beneficial owner, can no longer elect to take the property, because it is no longer bought with the trust money simply and purely, but with a mixed fund. He is, however, still entitled to a charge on the property pui-chased for the amount of the trust money laid out in the jjurchase ; and that charge is quite independent of the fact of the amoimt laid out by the trustee. The moment you get a sub- stantial portion of it furnished by the trustee, the right to the charge follows (w) I have only to advert to one other point, and that is this : — supposing, instead of being invested in the purchase (m) See also, to same effect, Re Pumplirey, Worcester, &c. Banking Co. v. Blick, 22 Chi. Div. 255, cited supra, p. 384. PROPERTY ACQUIRED OUT OF TRUST PROPERTY. 461 of land or goods, the moneys were simply mixed ■with other moneys of the trustee, does it make any difference according to the modern doctrine of equity ? I say none. It would be very remarkable if it were to do so. Supposing the trust money was 1.000 sovereigns, and the trustee put them into a bag, and by mistake, or accident, or otherwise, dropped a sovereign of his own into the bag ? I do not like to call it a charge of 1,000 sovereigns on the 1.001 sovereigns, but that is the effect of it. I have no doubt of it. It would make no difference if, instead of one sovereign, it was another 1,000 sovereigns. But if instead of putting it into his bag, or after putting it into his bag, he carries the bag to his bankers, what then? According to law, the bankers are his debtors for the total amount ; but if you lend the trust money to a third person, you can follow it. If in the case supposed the trustee had lent the 1,000/. to a man without security, you could follow the debt and take it from the debtor If instead of lending the whole amount in one sum simply, he had added a sovereign, or had added 500/, of his own to the 1,000/., the only difference is this, that instead of taking the debt, the cestuis que trusts would have a charge for the amount of the trust money on the debt." 6. As another example of the effect of mixing trust funds with the trustee's private moneys, the case of Cook v. Addison (o) may be cited. There one Addison, who was the owner of a leasehold (o) L. E., 7 Eq. 471. 462 THE CONSEQUENCES OF A BREACH OF TRUST. house, let it to S., as tenant, who covenanted to repair it. S. afterwards borrowed (legitimately) a sum of money from trustees, of whom Addison was one, and therewith purchased from Addison the furniture in the house, and executed a mortgage of his underlease, and a bill of sale of the furniture to the trustees. S. getting into difficulties, Addison put an end to the tenancy, and re-entered and took possession. He subsequently assigned the premises to Fowler at a rent of 310^., and a premium of 100^. The furniture was purchased by Fowler for 550/., and he also paid 250/. towards repairs. Addison invested a sum to make good the principal trust fund, but refused to pay the interest which had accrued due from S. It was held, however, that he had, by his conduct, mixed the trust funds with his own, and that the interest must be paid out of the sum received by him from Fowler for repairs ; the Vice-Chancellor Stuart saying : " It is a weU-estabHshed doctrine in this court, that if a trustee or agent mixes and con- fuses the property which he holds in a fiduciary cha- racter with his own property, so that they cannot be separated with perfect accuracy, he is liable for the whole. In this case, it is impossible to say how much of the 250/. received by the defendant Addison from Fowler for repairs consisted of what was due xmder the covenant to repair in the underlease. The con- sequence is, that the whole 250/. is liable to the de- mands of the eestuis que trusts, so far as necessary to make up, with the other sums admitted to be part of the trust property, the full amount of the trust fimd of 520/., with interest .at 5 per cent, per annum." PKOPERTY ACQUIRED OUT OF TRUST PROPERTY. 463 7. Again, trustees had power, with the consent of the tenant for life, to sell the trust property ; and they were directed to invest the purchase-money in the purchase of other real estate, to be settled on the Hke trusts. The trust property was sold under this power for 8,440^., and the tenant for life was allowed (wrongly) to keep the purchase-money. About the same time he purchased another estate for 17,400^., of which sum 8,124/. was part of the above-mentioned trust money. This estate was conveyed to him in fee simple. The tenant for life eventually became bankrupt, and it was held that, as against his as- signees in bankruptcy, the original trustees of the settlement had a lien on the estate which he had pur- chased, to the extent of the moneys invested in its purchase (p). 8. Once more, in Hopper v. Conyers {q), a solicitor having in his possession the title deeds of an estate mortgaged to his client, deposited them with his own banker to secure an advance, which he applied in the purchase of an estate on his own behalf. When the mortgage to his client was paid ofP, he applied the money in repaying the loan from his banker, and informed his client that he had re-invested the mort- gage money upon other good security ; and his client thereupon executed a re-assignment of the mortgaged property. In fact, the solicitor never re-invested the money, although he continued to pay interest upon {p) Price V. Blahemore, 6 B. 507. (j)_L. E., 2 Eq. 549; and see also Middlelon v. Pollock, 4 Ch. Div. 49. 464 THE CONSEQUENCES OF A BREACH OF TRUST. it until his death. Upon the true state of the trans- action being discovered, the court held, that the client was entitled to a lien upon the estate purchased by the solicitor. 9. No lien unless it can be shown that trust fund forms part of a specific fund or property. — However, wherever the trustee has mixed the trust fund with his own moneys, then, before a charge or lien can be substantiated, it must be shown that the trust fund in fact forms part of the fund or property on which the lien is claimed. Where, therefore, it appeared that the actual bank notes, of which the trust fund consisted, had not been paid by the trustee into his banking account, it was held that the cestuis que trusts had no lien on the balance lying at the trustee's bankers, because the trust fund could not be traced to the bank (r). Of course, if the trust could have been proved to have been paid into the trustee's account, then, notwithstanding that he might subse- quently have drawn out and paid in moneys, the lien would have been upheld. Art. 81. — Fraudulent Breach of Trust is a Crime. A trustee who fraudulently appropriates or disposes of the trust property, in any manner inconsistent -with the trust, is guilty of a misdemeanour, and is liable (r) Sx parte Eardcastle, 29 W. E. 615. FRAUDULENT BREACH OF TRUST IS A CRIME. 465 to be kept in penal servitude for not more than seven and not less than five years, or to be imprisoned, with or with- out hard labour, for not more than two years : Provided, that no criminal pro- ceedings can be instituted without the sanction of the Attorney-General, or of the Solicitor-General, or (if civil pro- ceedings have been commenced) of the judge of the court wherein they have been commenced (s). The fact, that a breach of trust is a crime, does not affect the validity of any civil proceeding, nor any agreement for restoration of the trust property (t). s) 24 & 25 Vict. c. 96, s. 80. t) Ibid. s. 86. U. HH 466 THE CONSEQUENCES OF A BREACH OF TRUST. CHAPTER II. Liability op Parties other than the Trustees, Art. 82. Liability of Beneficiary who is Party to a Breach of Trust. „ 83. Liability of Third Parties privy to a Breach of Trust. ,, 84. Following Trust Property into the Hands of Third Parties. Art. 82. — Liability of Beneficiary who is a Party to a Breach of Trust. Where one of several beneficiaries has joined in a breach of trust, his whole equitable interest under the settlement (a) (except where he also has the legal estate (5)) may be stopped by his co- cestuis que trusts as against him and all persons claiming under him, except pur- chasers for value without notice (c), until (a) Woodyatt v. Oresley, 8 Sim. 180; Fuller v. Knight, 6 B. 205; M'Gachen v. Detv, 15 B. 84 ; Vaughton v. Noble, 30 B. 34; Jacula t. Rylance, L. E., 17 Eq. 341. (6) Egbert v. Butter, 21 B. 560 ; Fox v. Buckley, 3 Oh. Div. 508 ; but see Woodyatt v. Qresley, supra. (c) Williams v. Allen {No. 2), 32 B. 650; Kilworth v. Mountcashel, 15 Ir. Ch. E. 565 ; Jacuhs v. Rylance, supra ; Ex parte Turpin, 1 D. & C. 120; Woodyatt v. Oresley, supra; OoU V. Muddle, 10 Ha. 186. LIABILITY OF A BENEFICIARY. 467 the whole loss has been so compensated : Provided that this article does not apply where the guilty beneficiary is a feme covert without poiver of anticipa- tion (d). Illust. — 1. Retainer of life income to make good breach instigated by tenant for life. — A trustee, in breach of trust, lent the trust fund to A. B., the tenant for life. The trustee afterwards concurred in a creditor's deed, by which A. B.'s life interest was to be applied in payment of his debts, and the trustee received thereunder a debt due to him from A. B. Before the other creditors had been paid, the trustee retained the life income to make good the breach of trust. It was held, upon a bill filed by those claiming under the creditor's deed, that the court would not restrain the trustee from making good the breach of trust out of the life income ; for although the trustee, being a creditor and party to the deed, had, qu4 himself, no right to retain the life interest, yet, as representing the cestuis que trusts, he was justified in doing so. And the Master of the Eolls said : " This bill, proposing to leave nothing but the personal liability of Knight (the trustee) for the reparation of the breach of trust, seeks to with- draw the liability of the life estate, and thus materi- ally diminish the security of the cestuis que trusts. {d ) Lew. 744 ; and see Stanley v. Stanley, 1 Oh. Div. 589. hh2 468 THE CONSEQUENCES OF A BREACH OF TRUST. . . . I oannot reconcile myself to the notion that this is a course which this court could pursue" (e). 2. In Woodyatt v. Gresley (/), the facts were as follows: — On the marriage of Sir N. and Lady Gresley two settlements were executed. By one, a sum of stock and estates in W. (the lady's property) were conveyed to trustees in trust for her for life, with remainder in trust for the children of the mar- riage ; and by the other, Sir N. granted out of his estates a rent-charge to Lady Gr. for life. She, after her husband's death, fraudulently obtained a transfer of the stock, and sold it out ; and afterwards she assigned her life interest in the estates in W. and the rent-charge to A. for valuable consideration, hut tvith notice of the fraud. It was held, that the rents of the estates in W. and the rent-charge were liable to be applied to replace the stock, and a receiver of them was appointed for that purpose. 3. Does not apply to legal beneficial interests. — But where a testator devised certain real estate for life to one of his executors and trustees, and the devisee afterwards committed a breach of trust, and filed his petition for liquidation, it was held, that as against the trustee in liquidation the other cestuis que trusts had no lien on the interest of the trustee, the Lord Justice James saying : " The estate of a legal devisee is, under no circumstances, under the control of the court" {g). And in the very recent case of Ee Broimi, (e) Fuller v. Knight, supra ; and see also Carson v. Shane, 13 L. E. Ir. 139. (/) 8 Sim. 180. (g) Fox V. BucMey, 3 Ch. Div. 511. LIABILITY OF THIRD PAETIES. 469 Bixonv. Brown {h), Kay, J., said: "It has always been a rule of the Court of Chancery that if a trustee misappropriates trust money, and has an equitable interest under the trust deed, the court will not allow him to receive any part of the trust fund in which he is equitably interested under the trust, until he has made good his default as trustee. That is a doctrine which is not in the least in question, and is very thoroughly established. But if the trustee has under the will, or other instrument which created the trust, a legal interest in land, which is not bound by the trust at all, then the Court of Equity has no power to lay hold of that legal interest or to assert anything in the nature of a lien or charge upon it in order to recoup the breach of trust." Akt. 83. — Liability of Third Parties privij to a fraudulent Breach of Trust. All persons who are parties to a fraudulent breach of trust, render themselves equally liable with the trustees, and the Statute of Limitations will not run in their favour until the fraud is known to the persons affected by it (^). [h) 32 Oh. Div. 697 ; and see also Hallett t. Hallett, 13 Oh. Div. 232. (i) Rolfe V. Gregory, 11 Jur., N. S. 98 ; Bridgeman v. Oill, 24 B. 302 ; Eaves v. Hickson, 30 B. 136 ; and see per Malins, V.-C, Morgan v. Elford, 4 Oh. Div. 352; Dixon v. Dixon, 470 THE CONSEQUENCES OF A BREACH OF TEtJST. Illtjst.---1. Third party with notice of breach is liable. — A testator bequeathed a sum of 600/., which he described as being in the hands of one Gregory (to whom he had lent the same on the security of his note of hapd), to his son-in-law Eolfe, upon trust to invest the same, and pay the dividends and interest to his daughter, the wife of Eolfe, for life, for her separate use ; and after her death upon trust for Eolfe for life, with remainder to their children. On the death of the testator, Eolfe, the trustee, became indebted to Gregory, and in order to discharge part of that debt he delivered to Gregory the note of hand for 600/. It was held that as Gregory had in- formation of the manner of the bequest he was a party to the fraudulent abstraction of the trust pro- perty, and liable to refund the amount, and that being founded on fraud, the Statute of Limitations did not apply (/)• 2. Bankers with notice of trust fund. — So, where a fund was standing to the account of two trustees in the books of some bankers, who had notice that it was a trust fund, and by the direction of the tenant for life only, they transferred it to his account, and thereby obtained payment of a debt due from him to them. It was held that the trustees might sue the bankers to have the trust fimd replaced, and that the Statute of Limitations was not applicable (/.;). 9 Oh. Div. 587. But of course this rule does not apply to persons who, without notice of a trust, deal with, trust pro- perty in a manner inconsistent with the trust. Williams t. Williams, 17 Ch. Div. 437. (/) Bolf er. Gregory, Bnpia,; J>ia;orav. Z>txon, 9Gh. Div. 587. (k) Bridgeman v. Gill, 24 B. 302. FOLLOWING TRUST PKOPEETY. 471 3. Trustees paying trust fund to wrong person on faith of forged certificate.— In Eaves v. Eickson {I), trustees had paid over trust funds bequeathed to the children of one ■William Knibb, upon the faith of a forged marriage certificate, which William Knihb produced to them, from which it appeared that certain illegitimate children of his were legitimate. It was held that William Knibb, who had produced the certificate, must be made responsible for the money as well as the trustees. Art. 84. — Following Trust Property into the Handii of Third Parties. If trust property comes into the hands of any person inconsistently with the trust, then — a. If such person has got the legal estate, he will be a mere trustee for the persons entitled under the trust; unless he, or some person through whom he claims (»«), has bon^ fide purchased the property for valuable consideration, and without receiving notice of the existence of the trust before completion of the purchase, {I) 30 B. 136. \m) Harrison v. Forth, Pr. Ch. 51 ; Martina v. Joliffe, Amb. 313; M' Queen v. Farquhar, 11 V. 478. 472 THE CONSEQUENCES OF A BKEACH OF TRUST. and before payment of the purchase- money (w). ^. If he has not got the legal estate (o), or if the property is a chose in action (jo), he will be a mere trustee, notwithstand- ing that he purchased it bonS, fide for value and without notice ; unless (being a chose in action) the property consists of a negotiable instrument (g-), or an instrument which was intended by the parties to it to be transferable free from all equities attaching to it (r). Illtjst. — 1. Relative rights of legal and equitable claimants. — The rule enunciated in this article is derived from two well known maxims, viz. : (1) where the equities are equal the law prevails ; and (2) as between mere equitable claimants qui prior in tempore potior in jure est. In fact, where one of two innocent parties must suffer, then as equity is not called upon (n) Bassett v. Nosworthy, 2 L. 0. 1 ; Boursot v. Savage, L. E., 2 Bq. 134; Mackreth v. Symmons, 15 V. 349; Pilcher V. Bawlins, L. E., 7 Cli. App. 259 ; and as to the time at ■which, the notice is effectual, Lady Bodmin v. Vanderbendy, 1 Ver. 179 ; Jones v. Thomas, 3 P. W. 243 ; Att.-Gen. v. Gower, 2 Eq. Ca. Ab. 685, pi. 11 ; More v. Mahow, 1 Oh. Ca. 34. (o) See per Lord Westbury, Phillips v. Phillips, 4 D., P. & J. 208. {p) Turton v. Benson, 1 P. W. 496 ; Ord v. White, 3 B. 357 ; Mangles v. Dixon, 3 H. L. Oas. 702. {q) Anon., Com. Eep. 43. {r) BeBlakeley Co., L. E. 3 Oh. App. 154; Be General Estates Co., ibid. 758 ; Crouch v. Cridit Fonder, L. E., 8 Q. B. 374 ; and see Judicature Act, 1873, s. 25. FOLLOWING TRUST PROPERTY. 473 to interfere on behalf of either of them, the common law must take its course, and he who has got the legal estate, or its equivalent, will take priority over him who has a mere equitable claim, notwithstanding that the title of the legal claimant may have accrued after that of the equitable one. The rule is very strikingly and completely illustrated by the case of Cave V. Cave (s) . There a trustee, who was a solicitor, fraudulently misappropriated the trust fund, and with it bought an estate which was conveyed to his brother. The brother then mortgaged the property by legal, and afterwards by equitable mortgages, the solicitor trustee acting on all such occasions as the solicitor both for mortgagor and mortgagees. The parties beneficially entitled under the trust claimed to follow their trust money into the property which had been bought with it, on the ground that as the solicitor of the mortgagees had notice of the breach of trust, that notice must be imputed to the mort- gagees themselves. It was, however, held that, as the solicitor was a party to the fraud, notice of the equity of the beneficiaries could not be constructively im- puted to the clients, the mortgagees, as the conduct of the agent raised a conclusive presumption that he would not communicate to the client the fact in controversy, and that consequently their equities and the equity of the beneficiaries were equal; whence it followed, on the maxim "where the equities are equal the law prevails," that the legal mortgagee, having the legal estate, took priority over the beneficiaries, (s) 15 Ch. Div. 639. 474 THE CONSEQUEKCES OF A BREACH OF TRUST. but that the latter took priority over the equitable mortgagees, because their equity was first in point of date. 2. Again, the trustees of a settlement advanced the trust money on the security of real property which was conveyed to them by the mortgagor, the mortgage deed noticing the trust. The surviving trustees of the settlement afterwards reconveyed part of the property to the mortgagor on payment of part of the mortgage money, which' he forthwith appropriated. The mortgagor then conveyed that part of the property to new mortgagees, concealing, with the connivance of the trustee, both the prior mortgage and the reconveyance. When the fraud was discovered, the beneficiaries under the settlement filed a bill against the new mortgagees claiming priority ; but the court refused to interfere, Lord Justice James saying : " I propose to apply myself to the case of a purchaser for valuable consideration without notice, obtaining on the occasion of his purchase, and by means of his purchase deed, some legal estate, some legal right, some legal advantage ; and, according to my view of the established law of this court, such a purchaser's plea of a purchase for valuable consideration without notice, is an absolute, unqualified, unanswerable plea to the jurisdiction of this court. ... In such a case a purchaser is entitled to hold that which, without breach of duty, he has had conveyed to him " (t). 3. Notice of doubtful equity. — It would seem that {t) Pilcher v. Rawlins, L. E., 7 Ch. App. 259. FOLLOWING TKUST PROPEUTY. 475 a bona fide purchaser for value would not be bound by notice of a very doubtful equity ; for instance, where the construction of a trust is ambiguous or equivocal (u) ; but where he is ignorant of any well- understood doctrine of equity, such, for instance, as that relating to the separate estate of married women (v), he will not be excused. 4. Notice of lien of unpaid vendor. — So, where there is a lien for unpaid purchase-money (which, as we have seen, burdens the estate with a trust pro tanto), a subsequent purchaser with notice of the lien (such, for instance, as that which was formerly (but is no longer) constructively afforded by the absence of an indorsed receipt on the convey- ance («) ), will take the estate subject to it (y). 5. Notice of prior contract for sale by subsequent purchaser. — Again, A. contracted with B. for the purchase of property in fee, in ignorance that B. was only entitled to an estate pur autre vie, and that B.'s wife was entitled to the remainder in fee. D., with full knowledge of this contract, took a con- veyance, from B. and his wife, of the fee simple. A. then sued for specific performance, and it was held that, as T). had notice of this contract, A. was (m) Hardy v. Beeves, 5 V. 426 ; Cordwell v. Machrill, Amb. 516 ; Warwick v. Warwick, 3 At. 291 ; but see and consider per Lord St. Leonards, Thompson v. Simpson, 1 Dr. & War. 491. {v) Parker v. Brooke, 9 V. 583. Ix) 2 Prest. Conv. 429. [y] Mackrefh v. Symraons, 15 V. 349 ; and see also as to dealings with property after notice of prior equities, Societe Generale v. Walker, 11 App. Cas. 20, and Bradford Bk. v. Briggs, 12 ib. 29. 476 THE CONSEQUENCES OF A BKEACH OF TRUST. entitled to a conveyance from T>. of B.'s interest, with compensation in respect of tlie interests of B.'s wife, whick B. was unable to bind without her consent (s). 6. What constitutes notice. — The subject of notice is now governed by the 3rd section of the Convey- ancing Act, 1882, which is retrospective, and there- fore the old cases may be considered obsolete, except so far as they may throw light on the construction of the new rules. Notice is usually spoken of as either actual or constructive. Actual notice, under the new law, is defined as "an instrument, fact, or thing which is in the party's own knowledge." Constructive notice is defined as "an instrumeiit, fact, or thing which would have come to the party's knowledge if such inquiries and inspections had been made as ought reasonably to have been made by him, or which (in the same transaction with respect to which the question of notice arises) has come to the knowledge of his counsel, solicitor, or agent as such, or would have come to the knowledge of his solicitor or agent if such inquiries and in- spections had been made as ought reasonably to have been made by them." 7. Actual notice. — With regard to actual notice, knowledge is absolutely necessary. Mere gossip or report is not sufficient. Whether the notice must be given by a party interested or his agent is perhaps doubtful. Lord St. Leonards seemed to think that it must. Mr. Dart, on the other hand, doubted it, and (z) Barnes v. Wood, L. E., 8 Eq. 424. FOLLOWING TRUST PROPERTY. 477 said it is one thing to say that " mere flying reports are not notice, and another to affirm that a purchaser could not be affected by a deliberate and particular statement of an adverse claim, unless made by a party interested. The credibility of the informant must surely be considered ; nor does there seem to be any reason why, where notice has been given to the purchaser prior to the commencement of the treaty, the court should not consider whether such notice must not have been present to his mind during the treaty." That passage was written by Mr. Dart before the passing of the Conveyancing Act, 1882, and that statute seems to adopt his view, as the definition of actual notice (therein differing from the definition of constructive notice) does not state that the instrument, fact, or thing must have come to the party's knowledge in the same trans- action, nor have been notified by a party interested. Indeed, it would seem that actual notice is entirely a matter of evidence, and if the court comes to the conclusion that a party had in fact at the date of the transaction, such knowledge as would operate on the mind of any rational man, or man of business, and make him act with reference to the knowledge he has so acquired, then he will be taken to have had actual notice, whether he acquired his knowledge before or at the time of the transaction, and whether he acquired it from a party interested or not {a). 8. Constructive notice. — With regard to construc- tive or imputed notice, on the other hand, it is quite (a) Zloyd y. Banks, L. E., 3 Oh. App. 448. 478 THE CONSEQUENCES OF A BREACH OF TRUST. clear that a man is not liable for notice acquired by his counsel, solicitor, or agent, unless it has come to their knowledge in the very transaction with respect to which the question of notice arises. The fact that a solicitor has been in the habit of acting for a particular person cannot reasonably constitute that solicitor the agent of the client to bind him by receiving notices or information ; for non constat that the client may not have ceased to regard him as his solicitor (6). It has also been held that constructive notice of an equity through counsel, solicitor, or agent, is not imputed to the client, where the counsel, solicitor, or agent is party to a fraud which would be exposed if he had communicated the notice to his client (c) . This case must, however, be care- fully distinguished from the earlier cases of Boursot V. Savage (d), and Bradley v. Riches (e), which seem at first sight in direct conflict with it. The point in Boursot V. Savage, however, was, that where a client has notice of tlie existence of a trust, and intends to get the equitable interests of beneficiaries from them, the fact that he gets the legal estate from a trustee who happens to be his solicitor, does not protect him if the solicitor forges the signatures of the bene- ficiaries. For he had notice of the equitable interests, and the fact that he was the innocent victim of a forgery does not give him an equal equity with the Vb) Saffron Walden v. Mayner, 14 Ola. Div. 406. (c) Cane v. Gane, 15 Oh. Div. 639, cited, as tlie 1st Illust. to this article. (d) L. E., 2 Bq. 134. (e) 9 Oh. Div. 189. FOLLOWING TRUST PROPEET-X. 479 tenefioiaries. In Bradley t. Riches the point decided was, that the presumption that a solicitor has com- municated to his client facts which he ought to have made known is not rebutted by proof that it was the solicitor's interest to conceal the facts. There the fact omitted to be communicated was the existence of a valid mortgage ; whereas in Cave v. Cave the fact omitted to be communicated was the prior com- mission of a fraud by the solicitor himself. 9. There is another species of imputed notice mentioned in the Conveyancing Act of 1882, of quite as much importance as that mentioned in the last illustration, viz., notice of " an instrument, fact, or thing which would have come to the party's knowledge, or to the knowledge of his solicitor or agent (not his counsel), if such inquiries or inspections had been made as ought reasonably to have been made by them." Thus, it has been held that whenever a purchaser, mortgagee or lessee, forgoes his strict rights to title, whether by express contract or even by not negativing iinjjlied statutory conditions, he runs the risk of having con- structive notice imputed to him of anything con- tained in any of the documents which he ought to have examined (/). It must also be borne in mind, that notice of the existence of a deed affecting the title, or which necessarily affects it, is notice of its contents if it can be got at. " Of course there may be cases where the deed cannot be got at, or for some other reason where, with the exercise of all the (/) Paimcm v. Harland, 17 Oh. Div. 355. 480 THE CONSEQUENCES OF A BREACH OF TRUST. prudence in the world, you cannot see it, and then there will he no constructive notice affecting the title. There is also a class of cases, of which I think Jbwes V. Smith (g) is the most notorious, where a purchaser is told of a settlement which may or may not affect the title, and is told at the same time that it does not affect it, and in such cases there is no constructive notice. Supposing, as in Jones v. 8mith, you are buying land of a married man, and you are told at the same time that there is a marriage settle- ment, but that it does not embrace the land in ques- tion, you have no constructive notice of its contents. Because, although you know there is a settlement, you are told it does not affe»t the land at all. If every marriage settlement necessarily affected all a man's land, then you would have constructive notice ; but as a settlement may not relate to his land at all, or only to some other portions of it, the mere fact of your having heard of a settlement does not give you constructive notice of its contents if you are told at the same time that it does not affect the land " {h). A similar instance of the same rule occurs in the case of mortgages, where the purchase-money is expressed to be advanced by several mortgagees on a joint account. No doubt in ninety-nine cases out of a hundred such mortgagees are trustees; but as there is nothing on the face of the deed to show that the money is trust money, and as the fact of persons advancing money on a joint account does not neces- Ig) 1 Ha. 43. [h) Per Jessel, M. E., Patman v. Harland, supra. FOLLOWING TRUST PROPERTY. 481 sarily imply that it is trust money, a purchaser or transferee never inquires whether there is a trust. 10. In addition to documents, constructive notice may he imputed to a purchaser from the state, ap- pearance or occupation of property. For instance, the existence of a sea-wall bounding property has been held to give constructive notice of a liability to keep it in repair (?). So notice of a tenancy is notice of its terms ; and generally, where a person purchases property where a visible state of things exists, which could not legally exist, or is very -unlikely to exist without the property being subject to some burden, he is taken to have notice of the nature and extent of the burden (/c). 11. Absence of notice will not protect a volunteer, — If an alienee of trust property is a volunteer, then the estate will remain burdened with the trust, whether he had notice of the trust (/) or not (ni) ; for a volunteer has no equity as against a true owner. 12. Transfer into court of fund equivalent to aliena- tion for value. — However, some transfers, apparently voluntary, have been held to be equivalent to aliena- tions for value. Thus, in Thorndike v. Hunt (n), a trustee of two different settlements having applied to his own use funds subject to one of the settlements, replaced them by funds which, under a power of (i) Morland v. Cook, L. E., 6 Eq. ^52. {h) Allen v. Beckham, 11 Ch. Div. 795. [l] Maneell v. Mansell, 2 P. W. 678. ■ (m) Ibid. ; Spurgeon v. Collier, 1 Ed. 55. («) 3 D. & J. 56 ; and see Case v. James, 3 D., F. & J. 256 ; and Dawson v. Prince, 2 D. & J. 41. U. I I 482 THE CONSEQUENCES OF A BREACH OF TRUST. attorney from his co-trustee under the other, he transferred into the names of himself and his co- trustee in the former. In a suit in respect of breaches of trust of the former settlement, the trustees of it transferred the fund thus replaced into court, and it was held by the Court of Appeal that the transfer into court was equivalent to an alienation for value without notice, and that the beneficiaries under the other settlement could not follow the trust fund. 13. Purchaser with notice from purchaser without. — A purchaser with notice from a purchaser without notice is safe ; for if he were not, an innocent pur- chaser for value would be incapable of ever alienating the property which he had acquired without breach of duty, and such a restraint on alienation would necessarily create that stagnation against which the law has always set its face (o). 14. Where ec[uities are equal, and no legal estate in either claimant. — Where a trustee, holding a mort- gage {p) or a lease {q), deposits the deed with another to secure an advance to himself, the lender will have no equity against the cestuis que trusts, however bona fide he may have acted, and however free he may have been of notice of the trustee's fraud ; for he has not got the legal estate, and therefore his equity, being no stronger than that of the cestuis que trusts, the maxim, " Qui prior in tempore, potior in jure est" applies. (o) See oases cited iiote(m), supra, p. 471. (p) Newton v. Newton, L. E., 4 Oh. App. 143; and Joyce y. Be Moleyns, 2 J. & L. 374. (2) Re Morgan, Pillgrem v. Pillgrem, 18 Cli. Div. 93. FOLLOWING TRUST PROPERTY. 483 15. On the same principle, where a trustee has wrongfully spent trust funds in the pui'chase of pro- perty, and then sold such last-mentioned property to a third party without notice, then, if the legal estate has not been conveyed to the third party, the cestuis que trusts will have priority over him (r). For they have a right (as has been shown in Art. 80) to follow the trust fund into the property into which it has been converted, and to take it or to have a charge upon it, at their election ; and as their right was prior in time to that of the third pg,rty, and as he has not got the legal estate, the maxim above referred to applies. 16. Choses in action are assigned subject to all equities. — It is upon this principle that choses in action are generally taken subject to all equities affecting them. Thus, in Turton v. Benson (s), a son, on his marriage, was to have from his mother, as a portion, a sum equal to that with which his intended father-in-law should endow the intended wife. The son, in order to induce the mother to give him a larger portion, entered into a collusive arrangement with the father-in-law, whereby, in consideration of the latter nominally endowing his daughter with 3,000/., the son gave him a bond to repay him 1,000/., part of it. This bond, being made upon a fraudulent consideration, was void in the hands of the father-in- law, and it was held that, being a chose in action, he could not confer a better title upon his assignee. M Frith v. Cartland, 2 H. & M. 417. ' 1 P. W. 496. Il2 484 THE CONSEQUENCES OF A BKEACH OF TRUST. 17. Negotiable instruments. — Negotiable instru- ments are, however, an exception to the rule as to ohoses in action passing subject to all prior equities. For the common law, with regard to them, adopted the custom of merchants, and recognized that such instruments were transferable. Consequently, the transferee of a negotiable instrument has a legal, as well as an equitable, interest ; and where the equities are equal he is protected against prior equities by his legal title (t). 18. Bona fide purchasers from trustees cannot after notice get legal estate from them. — The bona fide purchaser of an equitable interest, without notice of an express trust, cannot defend his position by sub- sequently, and after notice, getting in an outstanding legal estate from the trustee ; for by so doing he would be guilty of taking part in a new breach of trust (m). But if he can perfect his legal title without being a party to a new breach of trust (as, for instance, by registering a transfer of shares which have been actually transferred before notice, or by getting in the legal estate from a third party), he may legitimately do so {x). {t) It is not infrequently a task of difficulty to determine wiether debentures issued by public companies are negotiable instruments passing free from undisclosed equities or not. As , to this, the reader is referred to Re Natal Co., L. E., 3 Cb. App. 355; Be General Estates Co., ibid. 757, and iJe iJom/oj-ti Canal Co., 24 Ch. Div. 85. (m) Samiders v. Dehen, 2 Ver. 271 ; Collier v. McBean, 34 B. 426 ; Sharpies v. Adams, 32 B. 213 ; Carter v. Carter, 3 K. & J. 617. (x) Dodds V. Eills, 2 H. & M. 424. THE END. ( 485 ) INDEX. ABEOAD, trustee residing, may be removed, 363. person residing, ought not to be appointed a trustee, 361. ACCBLBEATION of a trust for sale, breacb of trust, 228. ACCEPTANCE OF A TEUST, 192 d seq. prior agreement not equivalent to, 193. express declaration, 195. permitting action to be brought, ib. permitting another to deal with property in trustee's name is equivalent to, ib. exercising any act of ownership, eqmvalent to, 196. long acquiescence equivalent to, 195, 197. taking out probate equivalent to, 196. interfering with trust property generally equivalent to, ib. ACCOUNTS, trustee should be ready with, 286. trustee entitled to have his, gone through and settled or impeached, 405. ACCEETION, to trustees' estate belongs to beneficiaries, 294. belongs to corpus, and not to income, 237. ACCUMULATE, duty of trustees of infant's property to, 437. liable for compound interest if they do not, ib. ACCUMULATION. See Peepettjities. direction for, until a given age, generally futile, 336 et seq. ACQUIESCENCE. See Concueeence and Laches. in voluntary trust after learning its true nature, 98, 106 et seq. 486 INDEX. ACTIONS, trustee tlie proper plaintiff in, regarding the trust pro- perty, 221. trustees should in general act jointly as to, 266. trustees may bring, for protection of trust property, 307. trustee is bound to bring, for protection of trust property if indemnified, 452. ADMINISTEATIOjST, summons for determination by judge of any question aris- ing in tbe administration of a trust, 407, 411. ■wben trustee is justified in commencing action for, 418 efaeq. summons for determination of specific questions, 407. order for, suspends powers of trustees, 331. under what circumstances court will make order for, 418 et seq. ADVANCEMENT, of infants, 310. of wife or child. See Ebstilting Tetjst (3). ADVANTAGE, trustee must not gain any, from trust, 287 et seq. ADVEESE TITLE. See Jus Teeth. ADVICE, trustee committing breach of trust in pursuance of legal, not indemnified, 238. of judge, trustee may get, 407. under what circumstances given on petition, ih., 408. on summons under Ord. LV. r. 3. .407, 410. not given on contingent questions, 408, 409. ADVISEE, gratuitous and non-professional, is a quasi-trustee, 293. ADVOWSON, trustees for purchase should not buy an, 231. AGENT, is a constructive trustee, 184. and sometimes an express one, 396. when trustee may employ an. See DELEGATloisr. ALIEN, may be a cestui que trust, 94. may be a trustee, 361. ALIENATION. See Anticipation. ALLOWANCE. See Salaet and Eeimbuesement. INDEX. 487 ANNUITY, person for whom, an, is directed to be purchased may claim, capital money, 338. even though anticipation be restrained on pain of for- feiture, ib. ANTICIPATION, restraint on, generally void, 341, 343. alitor, in case of pay, pensions or property inalienable by statute, 65 et seq. aliter, in case of married woman during coverture, 76, 341. married woman restrained from, cannot release a breach of trust, 391, 392. not liable for fraud, ih. may nevertheless bar estate tail, 344. trustee's lien for costs not affected by, 384. expression of settlor's wish, and request that female bene- ficiary should not sell, imports restraint on, 29, n. (s). direction to settle on a married woman, imports restraint on, 145, 147. APPEAL by trustee is at his own risk, 414. APPOINTMENT OE NEW TEUSTEE. See New Tkustees. ARTICLES, marriage, construed Uberally. See Executoet Tettsts. ATTOENET. See Solicitor. AUTHOEITY, of trustee. See Powees. of cestui que trust. See Cestui que Teust. BANK, trustee may deposit in, for a reasonable time pending in- vestment, 269, 270, 276. six months held to be the maximum, time, 269, n. {k). BANK ANNUITIES. See Investment. BANKEE, when trustee liable for failure of, 269, 270, 276. See Delegation. BANKRUPT TEUSTEE, may be removed, 366. receiver wiU be appointed in case of, 454. 488. INDEX. BANKRUPTCY. See Ptochasee foe Value. trust for personal enjoyment notwithstanding, is illegal, 74. trust until, and then over, good, 75. a settlor cannot settle upon himself until, and then over, ib.,U3. what settlements are void against the settlor's creditors in, 123 et seq. of trustee, 220. he should prove against his own estate, 240. trust property not divisible amongst his creditors, if recognizable, 220, 455 et seq. alitor, where it cannot be identified, 455, 464. of agent or factor, money of principal not divisible among creditors, 455 et seq. BAEEINGr ENTAIL, married woman restrained from antici- pation is capable of, 344. BEAEEE, trustee should not obtain stock certificates payable to, 265. BENEFICIARY, definition of, 2. And see Cestui que Trust. BILL IN PAELIAMENT, trustee may oppose, 307. BOEEOWEE, trustee cannot legally be, of trust moneys, how- ever good a security he may ofier, 266. BEEACH OF TEUST. See Concurrence ; Eelease ; Tenant POK Life ; Mabeied Woman ; Infant ; Waivee ; Laches. definition of, 2. trustee retiring to enable co-trustee to commit, is liable, 248, and see 388. gainer by, or instigator of, must, pro tanto, indemnify the trustee, 402 et seq. risky investment at request of tenant for life, 403. payment of capital to tenant for life, ii. how far married woman liable to indemnify trustee, ii. loss by, a joint debt .from the trustees, 444. but in general trustees entitled to contribution among themselves, ii. aUter, if one has benefited by an advised breach, ib. , 446. unless the benefit only remotely connected with breach, 447. measure of trustee's responsibility for, 435 et seq. only liable for actual loss, il. not liable for increased value caused by third party privy to breach, 437. . INDEX. 489 ■ BEEACH OF TSH&1— continued. wliere there must have always been some loss, trustees only- liable for additional loss caused by breach, 437. ■where interest payable by trustee, 435 et seq. where trust money actively used in trade, compound interest charged, 436, 440. aliter, where business such that compound interest cannot be gained, 440. where trust money invested by settlor in trustee's busi- ness is allowed by trustee to remain there, 441. unreasonable delay in investing trust moneys, 437. where there is an express or implied trust to accumulate, compound interest charged, ib., 438. improperly calling in investments, 438. mixing trust moneys with private moneys, 439. property acquired by trustee out of trust funds. See FOL- LOWING Pkopebty. where set-off of gain against loss allowed, 448 et seq. injunction to prevent, 451. appointment of receiver to prevent, ib. fraudulent, is a crime, 464. cestui que trust party to, is liable to extent of his interest. See CONCUEEENCE. third persons parties to, are liable for, 469. how far trust property may be followed into hands of third parties claiming under a, 471 et seq. And see Following Teust Peopeety. BEOKEE, when trustee liable for default of. See Delegation. BUSINESS. SeeTuADB. CALLS, paid by trustees on shares forming part of trust property may be recovered by them, 381. are payable out of capital, and not out of income, 428. CAPEICIOUS TEUST, to defer the enjoyment of property by any person, illegal, 80. to keep up tombs, illegal, 81. but not where it would benefit a congregation, ib. CESTTJI QUE TEUST, definition of a, 2. an apparent, is not always one in reality. See Illusoet Teust. 490 INDEX. CESTUI QUE T^VST— continued. who may be a, 94 et sej. corporation, ib. alien, ib. married woman, 96. must be a human being, 80, 81, 95. infant. See Advancement; Concueeence ; Main- tenance ; and RELEASE, authority of, 334 et seq. in simple trusts, ib. of one out of many in a special trust, 341 et seq. may freely assign his interest, ib. aUter, where married woman restrained from anti- cipation, ib. when entitled to actual possession, 342. where all concur in a special trust, ib. arg collectively the absolute owners, ib. m.ortgagee of the interests of the several beneficiaries is not absolute owner, 340. no restraint can be put upon their absolute enjoyment where they are the only people interested, ib. et seq. interests vested at twenty-one, but payment attempted to be deferred till twenty-five, 336, 337. absolute gift with direction to settle on marriage, ib. bequest to purchase life annuity, 338. trust for sale may be stopped by all beneficiaries, 339. married women may be restrained from anticipation, 335. concurrence of, in breach of trust. See OoNCiniRENCE. release by. See Release. laches of. See Laches. where none left, estate now goes to Crown, 224. CHARGE, no resulting trust of residue after payment of, 153, 158. Statute of Limitations applies to a, 395, 398. CHATTELS, trust of, may be declared by parol, 82, 86. CHEQUE, imperfect gift of a, not equivalent to declaration of trust, 56. CHILD. See Advancement; Maintenance; EESULTiNa Trust (3) ; and Illegitimate Children. INDEX. 491 CHOSE IN ACTION, now freely assignable, 64, n. (<). purchaser of, takes subject to all equities, 482 et seq. secuB, if it be a negotiable instrument, 484. CLASS, power of disposal among a, raises a trust, 21, 27. CLEEGTMAN, undue influence of, 103. COMMISSION. See Salary. COMPANY. See Intestment and Dieectoes. COMPOUND INTEEEST. See Inteeest. CONCUEEENCE, of cestui que trust in breach of trust, 390 et seq. estops him from proceeding against trustees, ih. instance where one party to a breach subsequently became beneficially entitled, 392. ahter, if not sui juris unless he use fraud, 391, 392. a married woman restrained from anticipation cannot efllectually concur, even though she use fraud, 392. ahter, if not so restrained, ib. renders him liable to the other oestuis que trusts, and his interest may be impounded, 466. his interest impounded notwithstanding assignment, 467. interest of a legal life tenant cannot be impounded, ib., 468. CONDITIONS, of sale. See Sale. trustees must fulfil all, 228. CONEIDENOE, the root of a trust, 1. CONEIEMATION. See Waivee and Eelease. CONPLICTING TEUSTS, 453. CONEOEMITT. See Eeceipts. CONSENT where required must be obtained, 228. CONSIDEEATION. See Valua.ble Consideeation. who are considered parties privy to the, 45. total failure of, m.akes trust revocable, 98, 101, 157. 492 INDEX. CONSTEUCTION. See Executed and Bxectttoey Trusts. CONSTEUOTIVE TEUSTS AND TEUSTEES, 150 et seq. And see Eesulting TfiuSTS. definition of, 12. summary of, 150. profits m.ade by persons holding fiduciary positions, 181 et seq. renewal of lease, ib. by tenants for life, 182. by joint tenants, 183. by mortgagees, ih. by partners, directors or promoters, ib. by agents and solicitors, 184. vendors and purchasers are, for each otber, 185. vendor's ben, 186. partnership liens, 189. property acquired by fraud, ih. equitable mortgagors are, 187. mortgagee's heirs were formerly, ih. mortgagee in possession is a, ih. where incumbrance paid oS by tenant for life, a construc- tive trust is created in his favour binding the fee simple, 188. CONTINGBNOT. See Trust Peopbety. court will not give opinion on question depending on, 408, 409. CONTEAOT. See Ooyenai^t. CONTEIBUTION among trustees, 444. CONVEESION. See Eollowing Teust Peopeett. where directed, to whom property results, 174, 176 et seq. directed by will, property results as unconverted, ih. even where testator says that it is to be considered as converted for all purposes, 176, n. (6). how person to whom property subject to, results, holds it, 174, 177 et seq. same rule applies to property subject to, under instrument inter vivos, 180. CONVICT, cannot create a trust, 94. COPYHOLDS, voluntary covenant to surrender, not enforceable, 48. trustee can demand admission to, 221. how far capable of being settled by way of trust, 67. INDEX. 493 COEPOEATION, cannot be cestui que trust of lands except by mortmain licence, 95. tow far able to create trusts, 93. stocks of, ■when trustees may invest in, 253. COEPUS AND INCOME. wbat incomings attributable to eacb, 233, 237. income of perishable or wasting property pending con- version, 233. new shares allotted gratis to old shareholders, 237. bonuses, ib. profits on sale of investments, ib. what outgoings are chargeable to each, 423 et seq. where settlement directs whether outgoings are to come out of capital or income, ib., 425. where settlement silent, 423 et seq. statutory direction, 426. charges and incumbrances, corpus bears capital, and income bears interest, 423, 426. even sometimes where it is evident that settlor did not intend this, 427. annuity charged on capital, how borne, 426. calls on shares, 427. rates and taxes, 428. premiums on life policies, 429. premiums on fire policies, ib. losses on trust business ordinarily faU on in- come, ib. alitor where intention collected to the con- trary, ib. repairs, 430. in absence of direction, equitable tenant for life not bound to keep in repair, ib. trustees should apply to the court for direc- tions, 431. fencing of unfenced land, ib. general costs incident to administration, ib. COSTS. See Eetieembnt ; Eemotal ; Couet ; and Eeim- BrESEMENT. direction for payment of, does not make employes cestuis que trusts, 40. out of what fund payable. See Coepus Am) Income. CO-TEUSTEE, trustee cannot relieve himself of responsibility by deputing his duties to. See Delegation. 494 INDEX. CO-TEUSTEE— coniinwetZ. may be safely permitted to receive, but not to retain, trust moneys, 280, 282. wben trustee answerable for defaults, acts, or receipts of, 388. opinion of Lord Westbury as to responsibility for, 389. effect of special protective clause as to, ih. COURT, trustee may apply to, for directions wben tiird party claims trust property, 286. ■when trustee may pay into, 411 et seq. effect of paying trust money into, 412. wbat sufficient justification for paying into, 414 et seq. wbere beneficiaries under disability, 414. wbere dispute between beneficiaries, ib. wbere money claimed by representative, 415. where money payable in default of appointment, ib. to enable married woman to assert equity to a settle- ment, 416. wbere reasonable doubt or claim, ib. undue caution, 417. originating summons for determination by, of specific ques- tions, 407, 411. trustee instituting a suit in, 418 et seq. wbat will justify a trustee in instituting a suit in, ib. appointment of new trustees by, 371. jurisdiction only exercised where it is difficult, imprac- ticable, or inexpedient to appoint a new trustee otherwise, 372 et seq. difficulty of otherwise vesting trust property, 373. donee of power out of jurisdiction, 374. power of appointment only exerciseable with consent of lunatic, ib. court rarely reduces the num.ber, ib. retirement of trustee under sanction of. See Eetieement. COVENANT, to settle, raises a trust when based on value, 60. alitor, where voluntary, 48. duty of trustee to enforce against settlor, 241. CSEATION OE TRUST. See Declared Teust. CEEDITOES, trustee personally liable to, of business carried on by him, 223. where trust is for payment of debts, are not generally cestuis que trusts, 39 et seq. settlement intended to defeat. See Valeditt (2). of settlor on bankruptcy. See Bankettptcy. INDEX. 495 CEOWN. See FArLiniE of Cestuis que Teitsts. DAMAGES recovered from tlie trustee may be recouped him out of trust estate, 380. " DEATH OF TRUSTEE, fi'ce Estate; Failuee; a»c? New Trustees. powers survive to co-trustees, 345. devolution of office on, of last surviving trustee, 347. devise of office, 350. DEBTS, trust for payment of, when illusory, 39 et seq. may be the subject of a trust, 64, 86. trustee may release or compound, 324. should exercise reasonable discretion as to realization of, 239. should prove on bankruptcy of debtor, 240. should generally realize within a year, 246. DECEASED WIFE'S SISTEE, settlement on marriage with, when valid, 76, 162. when void, ib., 164. trusts for issue by, void, 76. will in favour of future issue by, valid, ib. DECTiARATION OF TEUST, what is a prima facie valid. See LANGUAGE, when writing necessary. See Writing. DEOLAEED TEUST, definition of a, 12. analysis of, 18. creation of, 20 et seq. language, ih. And see LANGUAGE, when illusory, 39 et seq. And see ILLUSORY Trust. formalities immaterial where based on value, 44, 46, 60. covenant sufficient, 44, 60. no trustee appointed, immaterial, 44, 62. formalities material when trust voluntary. See Volun- tary Trust. object of the trust. See Illegal Trusts. necessity of writing. See Writing. validity of. See Validity. construction of. See Construction. 496 INDEX . DEFINITIONS, 1 et seq. of trust, 1. of settlor, 2. of trustee, ib. of cestui que trust, ih. of trust property, ib. of legal estate, 8. of equitable estate, ih. of simple trust, 14. of special trust, ib. of passive trustee, ib. of bare trustee, ib. of active trustee, 15. of declared or express trust, 12. of constructive trust, ib. of executed trust, 137. of executory trust, ib. of party privy to the consideration, 45, and see 127. of volunteer, ib. of breacli of trust, 2. DELAY. See Inteeest and Laches. DELEGATION, (1) of trustees' duties, not generally permitted, 267 et seq. aliter, vbere moral necessity or wbere it is univer- sally customary or authorized by settlement, ib. even where authorized to delegate particular duties, he is not justified in confiding trust funds to another, 268. cannot leave conduct of sale to co-trustee, ib. may employ a broker for sale of stocks, &c., ib. may deposit in a bank temporarily, 269. but not for an unnecessary period, ib. may appoint a steward or bailifl, 270. may (when executor) entrust money to co-executor for payment of debts, ib. may entrust title-deeds to co-trustee, ib. may remit money through a bank, ib. may employ a debt collector, 271. may not deposit money in hands of solicitor for investment, ib. may pay vendor of stock through a broker, 272. general review of law as to payments through agents, by House of Lords, ib. et seq. even where authorized to pay money to banker or agent, trustee must not leave it with them for un- necessary period, 276. INDEX. 497 DELEGATION— conimMecZ. (1) of trustees' duties, not generally permitted — continued. trustees said to be liable for solicitor's negligence, 276. criticism on tbis, 277 et seq. said to be discbarged from liability for solicitor's fraud, 279. criticism on tbis, 280. trustees joining in a sale cannot autborize co-vendors to receive tbe entire purobase-money, ih. trustee may permit co-trustee to collect moneys and not liable even tbougb be join in receipt, ib. but may not permit co-trustee to retain tbem, 282. (2) of trustees' powers, 328 et seq. not allowed wbere exercise necessitates discretion, ih. of leasing, ih. to pass legal estate by attorney, ih. to give receipts, 329. can now be exercised by new trustees, 330. DEPEEOIATOET CONDITIONS, 242, 316. " DESIEES." See Language. DEVISE, of trust estates, 218. formerly passed under a general devise, 219. no longer allowed, unless as to copyholds, ih. of tbe office of trustee, 350. DEVISEE. Bee Resulting Trusts. of trustee, wben be could formerly execute a special trust, 350. DEVOLUTION, of trustee's estate, 216. joint tenants, ih. on death of survivor personal estate devolves on his personal representative, 215. devolution of freehold estate, ih. devolution of copyhold estate, ih. et seq., and 217. of the office of trustee, 347. DIRECTION, words of, raise a trust, 21 et seq. DIRECTORS, are constructive trustees, 183. contribution among, for breach of trust, 445, n. (/). DISABILITY of cestui que trust under foreign law, 251. U. KK 498 INDEX. DISOHAEGB, trustee entitled to, on completion of trust, 405. not entitled to a, under seal, ih. DISCLAIMBE, 192 et seq. how effected, ih. by deed, 193. by conduct, ih. by refusing probate, 194. not prevented by executory promise to accept, 193. DISOEETION, powers involving, cannot be delegated, 328. trustee should exercise a reasonable, 239. of trustee, will not in general be interfered witb, 303 et seq. seous, where discretion limited, 304. or discretion illusory, 305. DOTJBT, in oases of, trustee may apply to the court, 407, 411. may pay money into court, 411. may institute a suit, 413. DOUBTFUL EQUITY, notice of, does not bind a purchaser, 4'74. DUTIES OF A TEUSTEE. See Saie; Pubchase ; and In- vestment. must exercise reasonable care, 238 et seq. not excused by acting under skilled advice, ih. should realize debts with reasonable speed, 239. may allow time where expedient, ih. may release or compound debts, ih. should not allow rents to get in arrear, 240. bankrupt trustee indebted to the trust estate must prove in his own bankruptcy, ih. should, enforce covenants against settlor, 241. where right to join in sale of trust property and con- tiguous property in one lot, ih. may join in sale vrith other parties jointly interested, 242. should not use depreciatory conditions, ih. liable for improvident sale, 244. And see Sale. liable for improvident purchase, 245. And see Pur- chase. should get marketable title, ih. should get valuation, ih. INDEX. 499 DTJTIES OF A TEUSTEE— coiiimued. must exercise reasonable care — continued. should register trust instrument where necessary, 245. should accumulate infant's propertj"-, 2-il. must see that they pay the trust property to the right person, 249. but not responsible for not knowing that by law of foreign domicile of cestui que trusts he is under dis- ability, 250. duties of trustees for investment. See Investment. not generally liable for pure error of judgment, 245. not liable if trust property stolen without their f aiilt, 246. aliter, if obtained by fraud or forgery, ib., 249. need not insure premises, 247. how far bound to see to repairs, 248, 431. duty as to reasonable care apphes to quasi trustees, ex. gr. vendors, 249. delegation of duties, 267 et seq. And see Delegation. must obey the terms of the settlement, 227. direction to call in trust moneys, ib. direction to sell at particular time, 228. direction to invest in particular securities, ib. direction to obtain consents, ib. cannot accelerate a sale, ib. must not favour particular cestuis que trust, 229 et seq. must not administer trust property so as to throw an un- due burden on tenant for hfe or remaindermen, ib. et seq. must not sell or purchase wooded property unfairly, 230 et seq. should not purchase mining estate or advowson, 231. ' must exercise choice of investments fairly, ib. residuary trust bequest of a perishable or temporary nature should be converted, 232 et seq. application of income of perishable property pending conversion, 233. aliter, if express intention by settlor to favour particu- lar cestuis que trust, 234 et seq. or if contrary intention implied, 235. rule as to perishable property does not apply to specific legacies, 236. m.ust not coerce particular cestuis que trust by using influence with third parties, 231. augmentation of trust capital, 237. whether bonuses belong to capital or iucome, ib. profits on sale of investments, ib. must not set up jus tertii, 283. And see Thikd Paeties. kk2 500 INDEX. DUTIES OP A imJSTE-E— continued. should be ready with accounts, 286. must not profit by trust, 287 et seq., 296 ef seq. cannot sport over property of infant cestui que trust, 288. must not trade with trust property, 289. must not take renewal of lease to himself, ib., 181. must not buy trust property from co-trustees, 290. same rule applies to agents and other constructive trustees, ib. aliter, if trust arises out of contract, 294. must not he lessee or mortgagee of trust property, 290. unless from the beneficiaries, 292. must not be borrower of trust fund on mortgage, 266. not liable for making a profit only incidentally and re- motely connected with trust, 289, 448. ex. gr., a trustee who is solicitor of a person bor- rowing money from trustees, 289. a mere passive trustee may purchase trust property, 290. query whether trustee of share of proceeds can purchase entirety, 291. trustee may purchase from cestuis que trusts, ib. but extreme caution and candour necessary, il. purchase by a gratuitous adviser, 293. purchase by trustee of infant may be sanctioned by court, 293. must generally act gratuitously, 296 et seq. And see Soli- citor. must not be guilty of mala fides, 248. EARMAEK, when trust property has an, it can be followed, 455 et seq., and 471 et seq. in the hands of the trustee, 455. in the hands of third parties, 471. And see Following Trust Propeety. ELECT, person may, to take money bequeathed upon trust to pur- chase an annuity for him, 338. can elect, even though forbidden to sell or alienate annuity, ib. person cannot, to take his share of real estate directed to be sold, unless the other cestuis que trust concur, 339. cestuis que trust may, to adopt breach of trust, 455, 457. INDEX. 501 EMPLOY, direction to, a particular person, and to pay him a salary out of trust fund, does not make him a cestui que trust, 41. ENJOYMENT, attempt to fetter generally futile, 338. entail, married woman debarred from anticipation may bar, 344. ' ' ENTREAT." See Language. EQUITABLE ESTATE, definition of, 8. may be made the subject of a trust, 50. postponed to legal estate where latter subsequently acquired for valuable consideration, and without notice, 472, 474. where no legal estate in either claimant they rank according to date, 474 et seq. EQUITABLE MOETGAGE, mortgagor a constructive trustee, 187. is subject to all prior equities, 472, 474. trustee should not invest on, 260. EQUITIES, where there are any, the legal owner is a constructive trustee unless he is a purchaser without notice, 185. trustee should not invest trust money on, 260. EQUITY TO A SETTLEMENT, 309, 416. EEEOE, of judgment, trustee not liable for, 245. as to person equitably entitled, trustee liable for, 249 et seq. ESTATE OP TEUSTEE, 198 et seq. (1) Cases in which trustee takes any estate, it. where property is freehold, ib. where property is copyhold, leasehold or personalty, ib. trust " to pay to " cestui que trust vests some estate in trustee, 199. trust "to permit" cestui que trust to receive income gives trustee no estate, ib. trust "to permit " cestui que trust to take "net rents" gives trustee an estate, ib. trust "to payor permit cestui que trust to receive," ib. 502 INDEX. ESTATE OF ISUSTB'E— continued. (1) Cases in wliicli trustee takes any estate — continued. trust requiring trustee to exercise control, 200. for separate use of married woman, ib. mere change of debts does not give trustees an estate unless they are directed to raise and pay them, ih. intention to vest estate in trustee deduced from sur- rounding circumstances, 201, devise of copyholds and freeholds in one giltj ih. lands limited "to the use" of trustees vests an estate in them, ib. devise to trustees in trust "to convey" to cestui que trust vests estate in them, ib. power to sell, &c. vests estate in trustees, ib. (2) The quantity of estate taken by the trustee, 202 et seq. in general takes sufficient to enable him to execute the trust and no more, 203. deeds construed strictly and wills liberally, 202, 205 et seq. but deeds not construed strictly where it would involve a contradiction, 206. devise to trustees prima facie passes the fee simple, 203. larger estate than necessary not implied in order to prevent the operation of rule in Shellej^'s case or to obviate the failure of a contingent remainder, 207 et seq. implied devise by direction to pay rents, 208. trusts requiring the fee impliedly give them the fee, )7). direction to sell, ib. direction to pay debts, ib. direction to mortgage, 209. direction to maintain infants, ih. secus before Wills Act, ih. clear intention to vest fee in trustees, ih. devise to their use, ib. devise to use of trustees in trust for A. for life, and after his death direct devise to C, gives trustees an estate only during A.'s life, ib. trust to convey to A. gives trustees the fee, 210. recurring trusts give them the fee, ih. trust for A. for life, and after his death, and payment by trustees of all debts direct devise to bis heirs, trustees took the fee even before Wills Act, 211. indefinite terms and determinable fees abolished, 214. (3) devolution of. See Devolutiok-. INDEX. 503 ESTATE OP TR-USTEB—continued. (4) devise of, 218. formerly passed under a general devise, 219. aliter, if inconsistent, ib. no longer allowed, except as to copyholds, ib. (5) incidents of, at law, 221. may bring actions, ib. curtesy and dower, ib. admitted to copyholds, ib. proving in bankruptcies, ib. liable to be rated, ib. liable to creditors of trust business, 223. entitled to custody of deeds, ib. not entitled to vote at elections, ib. (6) on failure of cestui que trust, 224. ESTATE TAIL. See Baseing. EVIDENCE, when parol, admissible to prove an express trust, 81, 8(i et seq. when parol evidence admissible to prove a resulting trust. See Eestilting Trust. EXECUTED . TRUSTS, definition of, 137. construed strictly, ib. et seq. instances of, 138. trust for A. for life, with remainder to Ms heirs, gives A. the fee, 139. enforced, even although voluntary. See Voltjntaey Trust. EXECUTOE, right of, to prefer creditors before decree, 333. EXECUTORY TEUST, definition of an, 137. only enforced if based on value. See Voluntaet Trust and Volunteer. construed liberally, 137 et seq. marriage articles, 140. "heirs," how construed in, ib. "issue," how construed in, ib. construed strictly where parties understood the terms they used, 141. wiUs, 142. "issue," how construed, ib. intention of the testator is to prevail, ib. 604 INDEX. EXBOUTOET TRUST— continited. wills — continued. direction to settle real and personal property to devolve with a peerage, 142. direction to settle on A. for life without impeaohment of waste negatives Shelley's case, 144. separate use of married woman may be implied, 145, 148. what construction will be given to a simple direction to settle property on a lady and her chRdren, 145 et seq. when ordinary form departed from, 147. distinction between construction of executory trust created by will and one created by marriage articles, 142. will be construed liberally, even where executed trust in same instrument "to same uses" must be construed strictly, 144. attempt to create a perpetuity will be construed so as to efiect as far as possible testator's intentions, 145. in favour of a married woman, separate use maybe implied, 148. EXPECTATION, mere words of, will not raise a trust, 21, 35. EXPECTATIONS, agreement to share, vaM, 64. EXPENSES, reimbursement of trustees, 379 et seq. direction to pay, does not make employes cestuis que trusts, 41. out of what fund payable. See Coepus and Income. EXPLANATION, words of. See Language. EXPEESS TEUST, definition of, 12. And see Declared Tettst. PAILUEE, of trust by lapse, &c. See Eesulting Tbust. of object (ex. gr., marriage) with reference to which the trust was created, 98, 101, 157. of cestuis que trusts, 224 et seq. trustee formerly took realty absolutely, ih. crown now takes realty, ih. and 225. crown takes personalty, ih. INDEX. 505 FAILVKE— continued. of cestuis que trusts — continued. formerly, where trustees were trustees for other trustees, the latter took, 225. mortgagee, upon failure of mortgagor's heirs, formerly took absolutely, ib. of trustee, does not affect the trust, 62. FAIRNESS, duty of trustees to observe, between cestuis que trust. See Duties op a Tetjstee and Corpus and Ixcome. FATHER. See Resulting Trust (3) ; and as to undue in- fluence of, see Validity (1). FAVOUR, trustees must not unduly, one cestui que trust. See Duties op a Trustee and Corpus and Income. FEE SIMPLE, when the trustee takes. See Estate op Trustee. FELON, trustee, unfitness of, 366. whether he maybe a settlor, 94. FEME COVERT. See Married Woman. FIDUCIARY PERSONS, are constructive trustees, 181 e< seq. gratuitous advisers are, 293. FINES, on renewal of leases, how payable, 424. FOLLOWING TRUST PROPERTY, (1) in the hands of the trustee, 455 et seq. investment in unauthorized securities, 456. trust property converted into money, ih. unauthorized purchase of land, 457. trustees may sell again if any of the cestuis que trusts join, ib. trust property mixed with trustees' private property, 455, 458. cestuis que trusts have a charge on the entire pro- perty if their portion can be traced, ib, et seq. exposition of the law by Jessel, M. R., 459 et seq. if the trust property cannot be traced into the mixed property, cestui que trust has no charge, 464. 506 INDEX. FOLLOWING TRUST VHO'PBRTY— continued. (2) into the hands of third parties, 471 et seq. ■where third party has no notice of trust, the priorities of him and beneficiaries are primarily determined by the question of who has legal estate, 472, 474. if neither party has legal estate they take in order of date, il. et seq. where third party has notice of trust he is invariably post- poned, 472, 475 et seq. notice of unpaid purchase-money, ib. notice of prior contract of sale, ib. what constitutes notice, 476. actual notice, ib. constructive notice, 477. purchaser with notice from purchaser without, 482. if third party a volunteer, or where property is merely equitable, or a chose in action, notice not necessary, 481, 482, 483. secus, if chose in action is negotiable, 484. payment by trustee out of one trust property of defalcations on another trust property, 481. notice of doubtful equity, 474. purchaser without notice, when may protect himself bj' subsequently getting in outstanding legal estate, 485. FOEEIGrN LAND, how far capable of being settled by way of trust, 68. FOREIGN LAW, trustee not liable for ignorance of, causing disability in cestui que trust, 251. FOEGED AUTHORITY, trustee liable if he pays money under, to wrong person, 250. so also if he pay on the faith of a forged marriage certificate, ib. FRAUD, of settlor. See Resulting Trust (2) ; Vaiiditt and Re- vocation. whereby a settlor is induced not to make a will or not to comply with Statute of Frauds, 82, 89, 90. converts a wrongdoer into a trustee, 189. a secret agreement to share expectant legacies is not a, 64. of trustee's solicitor, whether trustee liable for. See Dele- gation. infants and married women are liable for, 394. aliter, where married woman is restrained from anticipation, ib. INDEX. 507 FEAUDS, STATUTE OF. See Writing. FEAUDULENT breach, of trust, a crime, 464. intention of settlor does not estop him. claiming a resulting trust. See EEsuLTiNa Trust (2). GAINEE by breach of trust must pro tanto indemnify the trustee, 402 et seq. GIFT, imperfect voluntary, is not equivalent to a declaration of trust, 46 et seq. and 54 etseq. And see Imperfect Gift. voluntary, when it raises a resulting trust. See Eesitlting Trust (1) and (3). GEOTJND EENTS, freehold, are real estate, and trustees may invest in them, 252. GUAEDIAN, undue influence of. See Validity (1). ' ' HOPES." See Language. HOUSE, trust to keep a, shut up, illegal, 80. HOWE V. LORD DARTMOUTH, rule in, 232 et seq. application of income under, pending conversion, 233. HUSBAND, of woman to whom property is given for her separate use is a trustee where no trustees appointed, 60. imperfect gift by, to wife, 59. is not a proper person to be appointed a trustee, 360. IDENTITY OF CESTUI QUE TEUST, trustee is responsible for mistake in, however careful he may have been, 249. IGNOEANCE. See Validity and Eevocation. ILLEGAL TEUST, 68 et seq. And see Perpetuities ; Thel- LUSSON Act; Bankruptcy; Anticipation; Illegitimate Children ; Eesulting Trusts ; and Capricious Trust. 508 INDEX. ILLEGITIMATE CHILDREN, trusts by deed or will for another's future, are illegal, 76. trusts by deed for settlor's own future, are illegal, ib. trusts by will for settlor's own future, are valid, ib. ILLUSORY TRUSTS, 39 et seq. trust for payment of debts does not, in general, make creditors cestuis que trusts, ib. trust to pay all costs, charges and expenses, does not make solicitor and other employes cestuis que trusts, 40 et seq. a positive direction to trustees to employ a particular person and to allow him a salary, does not make him a cestui que trust, 41. a grant of prize money to a, government official for distri- bution, does not make the soldiers among whom it is dis- tributable cestuis que trusts, 42. IMMORAL TRUSTS. See Illegitimate Ohildeen. IMPERATIVE, words when sufficiently. See Language. IMPERFECT GIFT, 46 et seq., 54 et seq. See Voluntary Trust. by delivery of scrip, 56. of cheque, ib. by memorandum of intention to give a debenture bond, 58. in favour of wife, 59. IMPLIED TRUSTS, 12. IMPROVEMENTS, what, a trustee may make, 308. INCIDENCE OF EXPENSES. See Corpus anid Income. INCOME, trustee should not favour tenant for life by getting a larger income at a risk to the capital, 231, 259. And see Corpus and Income. INCONVENIENCE. See Laches. INCUMBRANCE, discharge of, by tenant for life creates a con- structive trust in his favour, 188. INDEMNITY, gainer by or instigator of breach of trust must give, to trustee, 402. risky investment at request of tenant for life, 403. payment of capital to tenant for life, ib. none against married woman unless she understood what she did, 402, 403. INDEX. 509 INFANT, cannot generally be a settlor, 91 . except by leave of court, ib. may be a trustee, 358. but cannot execute discretionary trust, ib. wbere cestui que trust is an, the trustee may pay Ms share into court, 414. where cestui que trust is an, the trustee should accumulate bis income, 247, 437. disability of, to assent to breach of trust. See Concue- EENCB ; Eelease ; and Laches. INFLUENCE, UNDUE. See Validity (1). trustees must not use, against the interests of a cestui que trust, 231. INJUNCTION to restraiu breach of trust, 452. INSURANCE, trustee not bound to efieot a fire, 247. premiums for life, payable out of income, 429. query whether trustee can deduct premiums for fire, from income, ib. proposed change of the law as to this, ib. INTENTION. See Language and Pbecatoby Trusts. to create a trust essential, 43 et seq. implied from conduct, 52. illegal, not perfected will not estop a person claiming the benefit of a resulting trust. See Eesulting Tkust (2). executory trusts construed according to the, of the settlor, 137 et seq. INTEREST, when a trustee is chargeable with, 435, 437 et seq. when guilty of unreasonable delay, 437. when there is an express or implied trust to accumulate, ib., 438. when he ought to have received more than 4 per cent. , he will be charged more, 436, 438. trustee mixing trust moneys with his own charged 5 per cent., 436, 439. soKcitor retaining trust moneys, 440. trustee using trust moneys in trade will be charged compound interest, or may have to account for profits, ib. et seq. secus, if he merely passively refrains from paying out money left in trustee's business by settlor, 441. 510 INDEX. INVESTMENT, trustees should invest on prescribed securities, 252 ef seq. even although they disapprove them, 258. should iavest money as soon as possible, 247, 437. ■when authorized to invest at discretion should not invest on personal security, 235. nor in trade, 256, 258. when aiithorized to invest in securities at his discretion should not invest in shares, 255. meaning of " real or personal security," 257. foreign securities include securities of individual states of federal republic, ih. direction to retain existing shares does not authorize increased holding, 256. when not justified in investing on mortgage, 261. cannot safely advance on mortgage more than, at most, two-thirds of the value of the security, 262. not liable for subsequent deterioration, 263. should employ a separate valuer, 262. should be on a first legal mortgage of real property, 260. no objection to sub-mortgage, 261. trustees intending to lend on mortgage should see that they get a good title, 263. must not invest on mortgage by way of covenant for surrender of copyholds, 260. trustees may deposit moneys pending, 269. on an unsafe security, in order to give life tenant a higher interest, improper, 231, 259. what securities a trustee may safely invest on, where settle- ment silent, 252 et seq. government securities, ib., 259. exchequer bills, 252 et seq. real security, ib. Bank stock, ib. Metropolitan stock, ib. India stock, ib. colonial or foreign stock guaranteed by parliament, ib. where settlement authorizes bonds or mortgages of a com- pany, trustees may invest in debentures or debenture stock, 253. where settlement authorizes railway debentures or debenture stock, trustees may invest in stock issued under Local Loans Act, and in corporation stocks, ii., 264. where trust fund is capital money arising from settled land, 264. INDEX. 511 INVESTMENT— cora«inMe(^. generally trustees should liave regard to the reasonableness and propriety of investment in any of the above, except government securities, 255, 269, 261. but not liable for bona fide mistake as to propriety, 255, 259. whether investment above par reasonable, 259. must never invest to accommodate a borrower, 261. for instance, on a stock mortgage, ib. must not in general obtain stock certificates to bearer, 265. JOINDER IN SALE. See Sale. JOINTLY, trustees should in general act, 265. not necessary for purpose of receiving dividends or rents, ib. necessary to join in receipt generally, 266. must both j oin in investments and sales, ih. must both join in actions, ib. one cannot be mortgagor and the other mortgagee, ib. JOINT PUECHASEES, resulting trust in proportion to their respective purchase-moneys, 166. JOINT TENANTS, trustees are, 214. are constructive trustees for one another, 183. JOUENETS, trustee may recover expenses of necessary. See Eeimbitesement. JUDICIAL ADVICE. See Advice. JUS TEETH, trustees must not set up, 283. LACHES, of cestui que trust, when a bar to relief, 395 et seq. Statutes of Limitation do not apply to express trusts, ib. nor to resulting trusts arising on the face of a written document, 396. apply to other resulting trusts, ib. apply to trusts apparently constructive where they are in substance express, ib. apply to simple charges, 398. but not to charges coupled with a trust, ih. 512 INDEX. LACHES — continued. great laches -will bar cestui que trust even in an express trust, 398 et seq. the doctrine proceeds on implied intention, 400. does not apply where the circumstances afford no ground for such intention notwithstanding long lapse of time, ib. long dormant grievance will not he entertained if it would cause general inconvenience, 401. ex. 'gr., a purchase by a trustee after many years, ib. LANGUAGE, declaratory of a trust, 20 et seq. trusts directly and precisely imperative in form, 21, 27. " direct him to apply," 27. " direct that real estate be sold," ib. but not where other circumstances show a contrary intention, 34, 35. See Illusory Tetjst. words empowering another to dispose of property in favour of a class, when sufficient, 20, 23, 27 et seq. " to be at her disposal among my relations," 28. " power to appoint part to any husband my daughter may marry with the trustee's con- sent," 29. precatory words, when sufficient, 20, 23 et seq., 29 et seq. " hopes," 29. " entreats," ib. " recommends," ib. " desires," ib. " requests," ib. " well knows," ib. inconsistent expressions, 25, 30 et seq. " sole use and benefit," 30 et seq. words merely expectant, 35. " of course they will leave what they have," " feehng confident she will act justly," 33. uncertainty, 29 et seq., 34, 36. " what shall be remaining," 34, 36. " when no longer required," 33. not sufficiently imperative, 30, 34, 36. " I trust 'to his liberality," 36. " as you may think best," 37. merely explanatory of donor's motive, ib. " the better to enable him," ib. INDEX. 613 LANGUAGE — continued. contract to declare a trust is a sufficient declaration, 21, 22, 27. even where no express contract by party sought to be bound, 60. even wliere language insufBcient, yet if it sbows tbat donee was not to take beneficially, tbere may be a resulting trust. See Ebstjlting Tktjst. LAPSED EQUITABLE LEGACY. See Eesulting Trust (1), LEASE, trustee may grant a reasonable, 308. trustees should generally sell, 233 et seq. trustee may not grant a, to himself, 290. renewal of, trustee cannot obtain, for his own benefit, 181, 289. tenant for life is bound to obtain, 453. fines payable on, how raised. (See Corpus Am> Income. LEGACY, agreement to share an expected, 64. may be assigned on trust by legatee, 31, LEGAL ESTATE, definition of, 8. trustees cannot interfere with, of remaindermen, 467 et seq. importance of, 10. when vested in trustee. See Estate op Tetjstee. LEGALITY of express object of the trust, 62 et seq. And see Perpetuities ; Thellussost Act ; Bankruptcy ; Aiq'tioi- PATioN and Illegitimate Children. LIABILITY. See Breach op Trust and Third Party. LIEN, raises a constructive trust, 186, 189. in case of fraud, 189. cestui que trust entitled to a, on the share of a co-cestui que trust guilty of connivance in a breach of trust, 466. trustee entitled to, on corpus and income for costs. See Ee- IMBURSEMENT. LIMITATIONS, STATUTE OE, does not apply to express trusts, 395 et seq. nor to certain resulting trusts, ii. applies to other resulting trusts, ib. applies to charges, 398. does not apply to agents where directed to perform a specific duty, 396. U. L I' 514 INDEX. LIS PENDENS, suspends trustee's powers, 331. but not until judgment given or receiver appointed or injunction granted, ih. et seq. LOSS OP TRUST PEOPEETY, trustee not liable for, by theft, 197. LUNATIC SETTLOR, bow far bound by settlement, 93. MAINTENANCE, trust to apply income for another's, gives bim tbe income absolutely, 336 et seq. of infants, 309, 326. trustee may generally grant, 309. may sometimes allow out of capital, 310. MALA FIDES, trustees Uable for, 248. MAEEIAGE, general restraint of, illegal, 78. partial restraint of, good, ii. general restraint of second, good, 79, MAEEIAGB ARTICLES. See Executory Tbttst. MARRIAGE SETTLEMENT, remainders, wben voluntary, 45, 49, 50, 127, 128, 133. on second marriage of widow trusts for issue of first, are not voluntary, 45. secus, of widower, ib. revocable if tbe marriage is broken ofl, 98, 101, 157. cannot be cancelled for misrepresentation if marriage takes place, 107. MAEEIED WOMAN. See Anxioipation". former effect of gift to, for separate use, 62. former effect of trust in favour of, 96. trust for separate use of, ih. bow far competent to be a settlor, 92. how far competent to be a trustee, 362. trustees may pay into court in order to raise her equity, 309, 416. cannot generally concur in or release a breach of trust, 392. alitor, if property settled to her separate use without restraint, ib. etseq. but mere passive concurrence will not entitle trustee to be indemnified by her, 402, 403. MEDICAL MAN, undue influence of, 98. INDEX. 515 MISTAKE. See Vaiiditt and Eevocation. trustee not liable for, of judgment, unless lie has thereby broken some specific duty, 245. trustee liable if he makes, in the person to whom trust fund is payable, 249 et seq. trustee liable for, as to construction of trust instrument, 251. trustee not liable for, in not paying to persons other than actual cestui que trust where he has no notice of their derivative title, ih. of engrossing clerk may be rectified, 97, n. (c). trustee paying by, may recover back the money, 250. MIXING, trust property with private property, 455 ef seq. charge of the cestui que trust on the entirety, 384, 455 ef seq. exposition of law as to, by Jessel, M. E., 459. MONEY. See FoLLOwnsra Tetjst Pkopeety. MOETGAGE, in form of a trust is not an express trust within the Statute of Limitations, 396. trustee should not invest on a second, nor on a mere equit- able, 262. but no objection to sub-mortgage, 261. trustee should not advance on, to a greater extent than at most two-thirds of the value, 262. but not liable for subsequent deterioration, 263. trustee shoiild not borrow trust fund on, 266. trustee may lend money to cestui que trust on, 292. MOETGAGEE, is a constructive trustee, 183, 187. in possession is constructive trustee of the rents and profits, ib. of all the beneficial interests cannot elect to stay the trust until foreclosure or sale, 340. MOETGAGOE, trustee cannot be, in relation to trust funds, 266. MOTHEE, doctrine of advancement applies to, 170 et seq. NEGLECT. See Duties of Trustee. of agent, when trustee liable for. See Delegation. NEGOTIABLE INSTEUMENT. See Chose m Action. NEW TEDSTEES. And see Testing. what powers they can exercise, 330. ll2 516 , INDEX. NEW TBJJST^'ES— continued. appointment of, by court, 371. See CoTJKT. only made on petition in case of declared trusts, 375. appointment of, under power, 355. power construed strictly, 356. power vested in continuing trustees or trustee, ib. power to appoint, in place of one " unfit," "incapable,'' or "unable to act," 357. original number may be altered, ib. fitness of, 358 et seg. infant not fit, 358. tenant for life fit but undesirable, 359. remainderman unfit, 360. solicitor to the trust not proper person, ib. busband of beneficiary generally improper, ib. person out of jurisdiction generally improper, 361. alien, ib. married woman undesirable, 362. appointment of, under statutory power, 363 et seq. severance of trusts on appointment of, 377. NEXT OP KIN, wben volunteers under a marriage settle- ment, 45, 49, 50, 127, 128, 133. NOTICE, trustees witbout, of tbe true representatives of deceased cestui que trust not liable for paying to wrong ones, 251. purchaser witb, of trust bound by it. See FoiiLOWiNG Trust Peopektt. OMISSION OP DECLARED TRUST. See EESTJXTllfa Trust (1). ONUS OP PEOOP. See Voluntary Trust. PAROL EVIDENCE. See Etidenoe. PARTIES TO THE CONSIDERATION, definition of, 45, 127. may enforce trust whether executed or executory, 45. .4?!^ see Volunteer. PARTNERS, are constructive trustees, 183. mutual liens of, 189. PAT for public services, when alienable, 65 — 67. PAYMENT, into court. See Court. to wrong person. See Mistake. INDEX. 517 PENSIONS, when alienable, 65 et seq. PERISHABLE PEOPEETY, trustees should convert, 233 et seq. PEEPETUITIES, iUegal, 69, 71. resulting trust to settlor, 161. attempt to create, by executory trust, how construed, 145. PEESONAL SEOUEITY, meaning of, 257. POSSIBILITY, a, is capable of being settled, 64. POSTPONEMENT of enjoyment until a given age, ia general nugatory, 341, 343. POWEE, where it raises a trust. See LjUsguage. POWEES OE BENEPIGIAEIBS. See Cestuis que Trust. POWEES OP TEUSTEES, 301 et seq. And see Eeceipts and Maintenai^ce. conferred by settlement, ib. discretionary powers not lightly interfered with by court, 303. unless discretion limited to time and manner, 304. or unless the power is only discretionary in form and is imperative in substance, 305. may do acts which the court would authorize, 292. what acts the court will authorize, ib., 306 et seq. giving time to a debtor where desirable, 306. incurring expense in protecting trust property, 307. suing party liable to keep trust property in repair, ib, cutting down timber arrived at maturity, 308, 311. granting agricultural lease, 308. improvements, ib. ' paying married woman's trust fund into court to enable her to enforce equity to a settlement, 309. allowing maintenance, ib., 326. allowing advancement, 310. must not interfere with or derogate from legal estates in remainder, 311. on sale of trust property, 312 et seq. must not make depreciatory conditions, 316. may now buy in the property, ib. should invite competition, 244. should have estate valued, 245. how far may join with adjoining or co-owners, 314. to give effectual receipts and discharges, 317. to compound and settle disputes, &c., 324 et seq. 518 INDEX. POWERS OP TBH8T-EE8— continued. delegation of, 328. power of leasing, ih. passing legal estate, ih. power to give receipts, 329. can now be effected by court, 330. suspension of, by suit, 331. after decree, 332. before decree, ih. of cestuis que trust. See Cestttis QUE Trust. PEECATOET TEUSTS, 13, 21, 23, 29 et seq. And see Lan- guage. rule as to, 21. origin of, 23. illustrations of, 29 et seq. inconsistent expressions, 30 et seq. uncertainty, 32 et seq. modern tendency against, 32, 33. wben merely expectant, 35. when not intended to be imperative, 36. wben merely explanatory of motive, 37. wben may import restraint on anticipation, 29, n. (s). PEBEEEBNOE. See Eavotte. PEESUMPTIONS. See Eesulting Tkust. PEIEST, undue influence of, 103, 106. PEIOEITIES between several innocent claimants. See Eollow- IjStg Tktjst Peopbety. PEIVITT. See Illtjsoey Tetjst. PEOBATE, refusal of, wben tantamount to disclaimer of trust, 195. acceptance of, generally tantamount to acceptance of trust, 196. PEOPIT, trustee must not, by the trust, 287 et seq., 296 et seq. except indirectly, 289, 298. no right to charge for time and trouble unless au- thorized, 296, 298. solicitor-trustee must not charge profit costs, 297. exception to rule, 299. PEOEITS. SeeTEADE. on realization of investments, form capital and not income, 237. PEOMOTEES OP COMPANIES are constructive trustees, 183. INDEX. 519 PEOPERTT. See Tbust Peopeety. wrongfully purohased witli trust moneys becomes itself trust property. See Eollowing Tetjst Peopeety. PEOTEOTION, trustees may refuse to execute trusts for their own, 284, 285. of trust property. See Powers op Teiistees. of trustees. See Eeimbuesement ; Co-TEtrsTEE ; Con- currence ; Indemnity ; Eelease ; Laches ; Gainer ; DiscHAEGE ; Advice, and Ootjet. PEOVISO, words of, raise a trust. See Language. PUECHASE in another's name. See Eesulting Teust (3). trustee cannot legally purchase trust property from self or co-trustees, 287, 290. how far rule applies to constructive trustees, ib. ; hut see 294. rule does not apply to passive trustees, 290. nor to purchase by the trustees of a trustee's marriage settlement, 288, n. (/). query whether it applies to purchase by trustee of a settlement of a share of the trust property, 291. trustee may purchase from cestuis que trusts, 288, 291. but extreme candour necessary, ib. sanction of court may be obtained when cestui que trust an infant, 295. a solicitor, or even a gratuitous adviser, cannot purchase from the jierson advised by him unless he exercise extreme candour, 292 ef seq. trustees for, should ascertain value of the property, 245. should employ a valuer, ib. should get a marketable legal title, ib. should not purchase a timber estate, 231. should not purchase mining property, ib. of land, imauthorized, effect of, 457. where trustee advances moneys of his own to make up required purchase-money, 384. P UECHASE-MONET, when purchaser of trust property was obliged to see to apphcation of, 318 et seq. partly advanced by trustee, 384. PUEOHASEE EOE VALUE. See Validity. under a settlement made to defeat creditors is protected if without notice, 110. query whether this is so where voluntary settlement void under Bankruptcy Act, 123. 520 INDEX, PURCHASBE FOE YAIA]:E,— continued. under a settlement made to defeat puroiasers is protected if without notice of actual fraud, 129. under a voluntary settlement is protected against subse- quent purchasers from tlie settlor, ib. trust property may be followed into tbe bands of a, with notice of tbe trust. See Following Tbust Peopeett. EATBS, borne by income, 428. EEOEIPTS OF TEUSTEES, wben given for conformity only, do not make tbem liable for defaults of co-trustee, 280 et seq., 388. given by one only is no discharge, 266, aliter, of one executor, il). alitor, for dividends or rents, ib. power of giving, cannot be delegated, 329. even to co-trustee, ib. how far they discharge purchasers and others, 317 et seq. EECEIVEE, when one will be appointed, 453 et seq. " EECOMMENDS." See Language. EEIMBUESEMENT, of trustees' expenses, 379 et seq. damages and costs recovered by third parties, 380, 387. solicitor's costs, 382. calls on shares, 381. not allowed expenses of unnecessary journeys, 387. not allowed costs of unnecessary legal documents, ib. costs of administration suit, 382. lien on trust property for, 383. overrides all beneficial interests, 384. good even where settlement void under Bankruptcy Act, ih. does not take priority of beneficial interests where trustee has advanced money to make up purchase- money for estate, ib. costs of or incidental to appointment of new trustee, 385. costs of trustees who have committed breach of trust, ib. EELBASE, by cestui que trust bars claim, unless improperly obtained, 392. aliter, if not sui juris, or if ignorant of eSect, ib. whether trustee entitled to a, under seal, 405. INDEX. 521 'R'EL'EASE— continued. by court, from the office of trustee, only obtainable by suit, 413, 421. when entitled to apply to court for a, 420 et seq. EBLIGIOUS INFLUENCE, effect of, on validity of a settle- ment, 103. EEMAINDEEMAN, is not proper person to be appointed a new trustee, 360. EEMAINDEES expectant on trusts, based on value, when con- sidered voluntary, 45, 49, 133. " EEMAINING, WHAT SHALL BE." See Language. EEMOVAL of trustee, 352 et seq. EEMUNEEATION. See Salakt. EEPAIE, duty of trustees to see that premises are kept in, 248, 307. as to how costs of, are to be borne. See Coeptjs and Income. EEPEESENTATIYES OE CESTUIS QUE TEUSTS. See Mistake. " BEQUESTS." See Language. EESULTING TEUST, (1) where donee not intended to take equitable estate, 152. where declared trust insufficient to exhaust trust property, ib. where declared trust cannot be carried out, 153 et seq. gift to " my trustees " generally rebuts all presump- tion that they were to take beneficially, 153. where realty devised upon trusts only applicable to personalty, 154. where lands conveyed to a trustee, but trusts not declared in writing, ib. where declared trust too uncertain, 155. failure of declared trust by lapse, ib. where no consideration is given for a gift, and there is no apparent intention to benefit donee, ib. but where gift is of chattels, ahter, ib. trust to pay debts or annuity, and there is a surplus, ib. et seq. settlement in view of marriage which never takes place, 157. no resulting trust where there is a mere charge, 158. nor where intention apparent that trustee should take beneficially, 157. 522 INDEX. EESULTING TmJST—contmued. (2) where declared trusts illegal, 157. doctrine of pares delicti, ib. illegal intention only, does not destroy resulting trust, ib. where allowing the Ulegal trust to take effect would effectuate a fraud, or defeat a legal prohibition , 159. trust to defeat creditors, ib. trust in view of possible forfeiture, 160. trust to avoid serving an office, 161. perpetuities, ib. charitable uses, ib. fraud on game laws, 162. settlement on marriage with deceased wife's sLster, ib. when executed is good and binding, ib. aliter, where limited to settlor until the marriage is solemnized, 164. (3) purchases in another's name, ib. et seq. presumption of resulting trust to real purchaser, ib. ahter, if purchase in name of wife or child, ib., 166, 168 et seq. presumptions pro and con rebuttable, 165. by surrounding circum- stances, ib., 168. money lent to purchase, creates no trust for the lender, 165. where there is a joint advance the purchasers takes according to the proportion of their contributions, 166. subsequent acts of the settlor, how far evidence of in- tention not to advance child, ib., 169. contemporaneous acts, 168. surrounding circumstances, 16Y, 169. augmentation of a settled fund, no resulting trust, 167. express evidence that no resulting trust intended, ib. where son is a solicitor, advancement is rebutted, 170. purchase by mother in name of child, ib. purchase by one in loco parentis in the name of the adopted child, 173. (4) to whom property results, 174 et seq. And see CoirvEE- SION. EETIEEMENT OF TEUSTEE, how accomplished, 352. under what circumstances justifiable, 354. trustee must generally pay costs occasioned by, 355. must never be effected in order to permit of the continuing trustee committing a breach of trust, 248. INDEX. 523 EEYEESION. See Perishable Peopeett. EEVOOATION, power of, not essential to validity of a volimtary settlement, 98, 102, 104. of a trust, wlietlier based on value or voluntary, not per- mitted if it be complete and executed, 97, 99. And see VOLUNTAET TeITST. aliter, if power of revocation reserved, ih. if the very object with, which trust was created has failed, ib., 101. if there was fraud or undue influence attendant on creation of trust, 97, 103, 104. if settlor created trust in ignorance or mistake as to its legal effect, 97, 104, 105. improvident provisions, how far evidence of mistake, 101. not revocable even in above cases, if acquiesced in, 106. or if parties cannot be placed in statu quo, 107. onus of proving bona fides on cestuis que trusts where they occupy a fiduciary position towards settlor, 99. aliter, where there is no fiduciary relation, ih. SALAET, when trustee entitled to a, 298. a, when capable of being alienated, 65. SALE directed, but no trustee appointed to sell, 62. SALE, TRUSTEES EOE. See Purchase. should sell at date prescribed by the settlement, 228. cannot sell before that time, ih. selling at the request of the life tenant, where sale directed to take place at his death, commits a breach of trust, ih. leaving conduct of sale to co-trustee is liable, 268. should sell to best advantage, 241. should generally not join with adjacent landowners, ih, aliter, if clearly beneficial, ih., 280. may in general join with joint owners in a sale of entire property, 242. joining with adjacent landowners, should see that his pro- portion of purchase-money is apportioned before sale, 280. should not unnecessarily limit the title, 242, 316. should invite competition, 244. should not sell improvidently, ih. should ascertain real value of the property, ih. may employ necessary agents, ih. 524 INDEX. SALE, TEUSTEES VOB.— continued. should not sell to promote the exclusive interests of tenant for life, 230. should not sell timber only, ib. surviving trustees can execute powers of, 346. cannot sell to one of themselves. See Purchase. injunction will be granted to restrain completion of sale if very improvident, or where conditions are depreciatory, 454. SEPARATE USE, in executory trusts may be implied, 148. property settled to the, of married woman makes her in equity equal to a feme sole, 96. See also Makeied Woman and Anticipation. with regard to property given for, husband was a mere trustee, 60. all property of women married since 1882, or whose title has since accrued, belongs to them for their, 96. SEPARATION, trust in relation to, between husband and wife, when legal, 78. SET-OFF of gain against loss, when allowable, 448 et seg^. SETTLE, DIRECTION TO, 145 et seq. on lady and her children, ib. on man till marriage, and then on wife and children, 146. special indications of intention, 14Y, what powers implied, 146 — 148. SETTLEMENT, trustees should strictly obey provisions of, 227. married woman's equity to a, 309, 416. of beneficial interest under a trust, original trustees with- out notice of, 251. SETTLOR, definition of a, 2. who may be a, 91 et seq. infant, ib. married woman, 92. corporation, 93. lunatic, ib, alien, 94. convict, ib. SEVERANCE, of trusts on appointment of new trustees, 377. only possible where new trustees of entirety are being ap- pointed, 378. INDEX. 525 SHAKES, new, allotted gratis to old shareholders are corpus and not income, 237. SHELLEY'S CASE, rule in, applies to executed trusts, 139 et seq. does not apply to executory trusts, ib. SHOOTING, trustee for infant ought not personally to avail himself of the, 288. SIMPLE TEUST, definition of a, 14. " SOLE USE AND BENEFIT." See Language. SOLICITOE, trust for payment of costs does not make him a cestui que trust, 40 ei seq. nor does a direction to employ him, ih. trustee liable for embezzlement by, 271, but see 279. trustee liable for negligence of, qusere, 276. may not generally purchase from client, 292. voluntary settlement in favour of a. See Vaiiditt. who is a trustee, must not charge, 297. secus, if expressly authorized, ib. but authority construed strictly, ib. not debarred from indirect gain, 298. trustee may employ a, 382. employing trust funds in his business, how far liable for interest. See Interest. where a son is a, presumption of advancement rebutted, 170. who is a trustee, liable to indemnify co-trustees for breach of trust committed by his advice, 444, 446. SPECIAL TEUST, definition of, 14. STATUS, change of, precludes cancellation of settlement, 107. STOCK CEETLPICATES to bearer, trustees should not obtain, 265. STOCK MOETGAG-E, trustees should rarely invest on a, 361. STOLEN TEUST PEOPEETT, trustee not bound to replace, 246. secus, if property obtained from him by fraud or for- gery, ib., 249. SUB-MOETGAGrE a good investment for trustees, 261. SUCCESSION DUTY, out of what fund payable, 426. SUMMONS. See Auministeation. SURPLUS, after satisfying express trusts, results, 155 et seq. aUter, where trust merely charged, 158. 526 INDEX. SUEEOUNDING OIECUMSTATSTCBS may rebut presumptions, 169. SUEVIVINa TEUSTBE can execute original powers, 346. SUSPENSION of trustee's powers by suit, 331 et sej. TAXES borne by income, 428. TENANT EOE LIFE. See Coepus and Income. a constructive trustee, 182, 183. must not avail Mmsell of bis position to profit at tbe ex- pense of remaindermen, ih. trustee must not unduly favour, 229 et seq. wben allowed possession of trust property, 342. not a desirable person to be appointed a new trustee, 359. THELLUSSON ACT, 73. THIED PAETIES, trustee must not set up adverse rigbts of, 283. ■wbere trustee believes in bona fide claims by, be may take direction of tbe court, 286. wbere trustee bas joined witb tenant for life in a breaob of trust tbe latter's life estate will be impounded notwitb- standing tbe claims of, 467. breach of trust procured by fraud of, 469 et seq. taking trust property in payment of trustee's private debt, 470. bankers paying capital to tenant for life, ib. payment of trust fund on faitb of certificate forged by, 471. jSeeaZsoPaoPEETY; Ptjechasebs ; and Following Teust Peopeett. TIMBEE, trustees sbould not buy an estate witb large proportion of, 231. sbould not sell, to pay debts, 229. may cut down, wben arrived at maturity, 308. abter, wbere legal rigbts would be interfered witb, 311. TOMBS, trust to keep in repair, is void, 81. TEADE, trustees employing trust property in tbeir own, liable to account for profits or to pay compound interest, 289, 436 et seq. trustees may not charge for managing a, 298. losses on, generally come out of income, 429. INJDBX. 527 TEUST. See Declared Tbust ; Express Trust ; Oonstruc- TivB Trust; EESULTnsrG Trust ; Simple Trust; Special Trust ; Executed Trust ; Executory Trust ; Valu- able Consideration ; Voluntary Trust ; Breach o'p Trust ; and Settlor. definition of a, 1. by other writers, 2 ef seq. ■who capable of creating a. See Settlor. in form but not in intention. See Illusory Trust. TEUSTBE. See Oonsteuctive Trust; Eesulting Trust; Acceptance; Disclaimer ; Estate of Trustee; Duties OF Trustee; Powers of Trustee ; Breach of Trust; and Protection. definition of a, 2. active, definition of an, 14. passive, definition of a, ib. bare, definition of a, ib. failure of, 62. ■wbere non-appointed, ib. who is a fit person to be a, 358 et seq. infant, 358. ' tenant for life, 359. remainderman, 360. solicitor to tbe trust, ih. husband of cestui que trust, ib. person residing abroad, 361. alien, ib. married woman, 362. bankrupt, 366. voluntary settlement upon a. See Validity (1). TEUSTEE EBLIEP act. See Court. TEUST PEOPEETT, definition of, 2. what it may legally consist of, 63 et seq. equitable property, 63. chose in action, 64. reversionary property, ib. possibility, ib. expectant legacy, ib. salary, 65. pension, 66. pay, ib. property inalienable by statute, ib. copyholds, 67. foreign lands, 68. 528 INDEX. TEUST V^O-P^B-TY— continued. following. See Following Tetjst Peopeety. does not pass to tlie creditors of bankrupt trustee, 220, 245 ef seq. trustee cannot borrow, even on mortgage, 366. trustee cannot purchase, 290 et seq. unless from tbe cestuis que trusts, 29. or by leave of court, 295. trustee cannot lease to himself, 290. vesting of, on appointment of new trustees, 366 et seq. UNCEETAINTY. See Language and Eesulting Trust (1). UNDISPOSED of equitable estate, results. See EESULTUfG Tkust (1). "UNDUE preference of one cestui que trust. See Favour, influence. See Validity. UNFIT AND INCAPABLE, meaning of, 357, 366. when trustee is, a receiver wiU be appointed, 454. VALIDITY OF A TEUST, as to object. See Illegal Teust. {1) As against the settlor, 97 et seq. And see EevocATION. total failure of consideration, 97, 101. fraud, 97, 103, 104. undue influence, ib. of clergyman, 103. of father, 104. of guardian, 98. of legal adviser, it. of doctor, ih. of trustee, ih. ignorance of the eflect of the settlement, ih., 104. illness, 104. inexperience, 105. old age and infirmity, ih. mistake, 97, 104. even where value given, 105. omission of intended provision, 97, n. (c). subsequent acquiescence validates, 97, 106. where defendant has changed his or her status in con- sideration of, it cannot be set aside, 107. onus of proving validity of a voluntary settlement, 99 et seq. power of revocation in voluntary settlements not essential to, 99. INDEX. 529 VALIDITY OF A TmjST—continued. (1) As against the settlor — oontinued. ■when against public policy or statute, 68 et seq. perpetuities, 71. accumulations, 73. against policy of Bankruptcy Act, 74. restraint on alienation, 76. trusts for future bastards, ib. separation deeds, 78. restraint of marriage, ib. in favour of no human object, 80. (2) As against creditors, 108 et seq. direct intention to defraud, ib., 110 et seq. settlement to avoid execution, 110 et seq. settlement of entire property on commencing a speculative trade, 112. settlement on self until bankruptcy, 75, 113. marriage settlement with intent to defraud creditors, ■when void, 113. other settlements based on value made with intent to defeat creditors, when void, 114. where no direct intention to defraud, but the settlor insolvent, 108, 116 et seq. fraudulent intent not presumed merely because the unforeseen but inevitable result was to defeat cre- ditors, 108, 121. not void where based on value even against volunteers, 120. immaterial that all debts existing at date of settlement have been paid, ib. no ground for setting aside voluntary settlement that debts owing at its date are not paid, 121. assignee for value, how far bound by notice of the effect of his purchase, 115. (3) As against creditors in bankruptcy, 123 et seq. (4) As against subsequent purchasers, 127 et seq. direct intention to defraud, 129. power to revoke, ib. voluntary settlements always bad in the hands of cestuis que trusts against, 130. very small consideration sufficient to protect cestuis que trusts, 131. settlement of leaseholds cannot be voluntary unless by sub-demise, 132. mutual promises prevent settlement being voluntary, 133. what remainders are voluntary, ib. tr, MM 530 INDEX. VALIDITY OF A TEUST— comimMei. (4) As against subsequent purchasers — contiiiued. power of revocation always makes settlement bad as against, 127, 129. notice to puroliaser immaterial, 135. collusion between settlor and purclLaser, ib., 136. cestuis que trusts have no equity to the purcliase-money, 128, 136. purchasers from the cestuis que trusts are protected, 129. such, settlements are only void pro tanto, 128, 136. VALUABLE OONSIDEEATION, definition of, persons privy to, 45. where there is, formalities are immaterial, 44, 60. where there is not, 43 et seq. marriage' is a, 45 et seq. children of a future marriage are not privy to, 45, (n). trust based on, when enforceable by volunteers, 49. what limitations in a marriage settlement are not based on, 45. children of a woman's former marriage are privy to, 45 et seq. seous, children of a man, ib. mutual promises constitute, 133. liability to bear incidents of leaseholds said to be, for a settlement thereof, 132. VENDOE, constructive trustee for purchaser, 185. must take reasonable care of estate before completion, 249. VEEBAL TEUST, 82, 86. intended to be testamentary is generally void, 86. secus, where fraud, 89, 90. VESTING property in new trustees, how effected, 366 et seq. VOLUNTAEY TEUST, 43 et seq. See Vaittable Considera- tion. when prima facie valid, 43 et seq. must be complete, ib. property transferred to trustees, trust wiU be enforced, 43. mere covenant to settle not enforceable, 44, 48. when settlor has done all in his power to create an exe- cuted trust it will be enforced, 43. where settlor has declared himself a trustee, trust will be enforced, ib. INDEX. 631 VOLUNTARY imjST— continued, ■when prima facie valid — continued. but imperieot gift not equivalent to declaration of trust, 44, 34. conflict of authorities as to effect of imperfect gift, 54 et seq. effect of imperfect gift by husband to wife, 59. when invalid from fraud, undue influence, or mistake. See Validity (1). when invalid as against creditors. See Validity (2). ■when invalid as against creditors in bankruptcy, 123. when invalid as against subsequent purchasers. See Va- lidity (4). VOLTINTEEE, definition of a, 45. equity gives no assistance to, 46. can only enforce trust based on value if complete and exe- cuted, 44, 49 et seq. assignee of a lease cannot be a, in what cases, 132. who is considered a, under a marriage settlement, 133 et seq. distinction between a, under a voluntary triist, and one under a trust based on value, 119, 120. trust, whether voluntary or based on value will be enforced at suit of, where completed and not resting in contract; 43 et seq. trust, whether voluntary' or based on value wiU not be en- forced at suit of, if incomplete or resting on contract, ih. examples of trusts enforced at suit of, 43, 48 et seq. covenant to surrender copyholds in favour of, cannot be enforced, 48. where property vested in trustee the trust can be enforced at suit of, 43, 48, 49. a mere contract with a third party to settle on, not enforce- able by, 50. where settlor has done all in his power to vest property in trustees the trust will be enforced at suit of, 43 et seq., 50 et seq. where settlor has declared himself a trustee the trust will be enforced at suit of, 43. where it can be gathered that settlor considered himself a trustee for, the trust will be enforced at suit of, 52. where settlor only meant a gift which he has failed to per- fect he will not be considered a trustee for, 54 et seq. donee of trust property under a breach of trust cannot retain it, 481. See also Voltjntaey Trust and Valu- able OOH"SIDEEATION. 532 INDEX, WAIVEE of breach of trust, -what amounts to, 400 et seq. " WELL KNOWS." See Language. WIDOW, cMldren of, are witliin the consideration of a second marriage, 45. WIDOWER, children of, are not within the consideration of a second marriage, 45, n. (/). WIFE, imperfect gift to, 59. advancement of. See Eesttlting Teust (3), and see also Mabeied Womau-. WILL. See Settlement and Writing. WRITING, necessity of, in declarations of trust of real estate and lease- holds, 81 etseq. aliter, in personal property, 81, 82. ■what the writing must show, 81, 84 et seq. where fraud writing unnecessary, 82, 88, 90. resulting trust, where declared trust was not reduced into, 154. necessity of, in all cases where trust is intended to be testa- mentary, 82. LONDON : 0. F. EOWOKTH, PRrNTEE, OREAT NEW STBKBT, FETTEE LAUE. -A. STn^FLElIiyCEISrT TO UNDEEHILL'S OF THE LAW RELATING TO PRIVATE TRUSTS AND TRUSTEES, CONTAININQ THE TRUSTEE ACT, 1888. WITH EXPLANATORY NOTES. BY ARTHUR UNDERBILL, M.A., LL.D., OP Lincoln's inn, and the chanceet bab, earristbr-at-law, LATE LECTURER ON EQUITY TO THE INCORPORATED LAW SOCIETY OF THE UNITED KINGD031, AND AUTHOR OF "a TREATISE ON THE SETTLED LAND ACTS," "a MANUAL OF CHANCERY PROCEDURE," '* A SUMMARY OF THE LAW OF TORTS," ETC., ETC. LONDON: BUTTEEWORTHS, 7, FLEET STREET, . %aiB ^ublisljtta to ti)e figuetn'a most txcellcnt JKlajtstp. DUBLIN: HODGES, FIGGIS & CO., GEAiTON STEEET. CALCUTTA : THACKEE, SPINK & CO. MELBOUBNE : G. EOBEETSON & CO. MANCHESTER : MEEEDITH, EAT & LITTLEB. EDINBXJEGH : T. & T. CLARK ; BELL & BEADETJTE. 1889 LONDON : PEnSTTED BY C. P. EOWOETH, OEEAT NEW BTEEET, FEITEE LANE. PREFACE. Since the publication, in 1888, of the Third Edition of my " Practical and Concise Manual of the Law relating to Private Trusts and Trustees," the Trustee Act, 1888, has been passed. As this statute makes important alterations in the law, it has been deemed desirable to issue this Supplement. For the convenience of persons who may have already bought the work above referred to, a new Title Page, together with a Table of Addenda et Corrigenda bringing it down to date, will be found at the end of this Supplement. A. U. I Old SQT7AEE, Lincoln's Inn, February, 1889. TABLE OF CONTENTS. PAGE PREFACE - - iii Table op Cases - - vii THE TRUSTEE ACT, 1888 - 9—38 Sect. 1. Short Title, Extent and Definition 9 2. Eeoeipt of Money by Solicitor as Agent 10 3. Depreciatory Conditions on Sales by Trustees 16 4. Loans by Trustees 18 5. LiabOity for Loss by reason of Improper In- vestments 2-4 6. Indemnity for Breach, of Trust 26 7. Trustee may Insure Buildings 28 8. Statute of Limitations may be pleaded by Trustees 29 9. Investments on Mortgage of Long Terms - 34 10. Trustees of renewable Leaseholds may renew 35 11. Power to Trustee to raise Money to meet Fines on Renewal of Lease - 36 12. Application of Act 38 INDEX - 39 TABLE OF CASES. PAOE AnifOU) V. 'Woodhams 27 Bailey v. Gould 29 Baimer v. Berridge 31 Beckford v. Wade 32 BeUamy ii. MetropoUtau Board of Works 12 Birks V. Mioklethwaite 27 Booth V. Booth 27 Bowles V. Stewart , 27 Boyd, Ee 35 Brioe v. Stokes 15, 27 Bright V. Legeton 32 Budge V. Gummow 20 Carson v. Sloane 27 ChenneU, Re, Jones v. Chennell 35 Chesterfield v. Jansen 27 Christ's Hospital, Ex parte Governors of 23 Consterdine v. Consterdine 15 Dance v. Goldingham 16 Drossier v. Brereton 20 Dunn V. Flood 16, 17 Edwards v. Warder 31 Egbert v. Butler 15 Feamside v. FUnt 31 Flower v. Metropolitan Board of Works 14 Fry V. Tapson 20, 25 Fryer, Ke 15 Fuller V. Knight 27 Garnett, Ee, Gandy v. Macaidey 27 Godfrey, Ke, Godfrey v. Faulkner 20, 21 Gregory v. Gregory 15 Hanbury v. Kirkland 15 Hopgood V. Parkin , 21 Hughes V. Coles 31 TUl TABLE OF CASES. PAQE Ingle V. Partridge 20 Isaacson v. Harwood 23 JacuT}S V. Rylance 27 Leigh V. Leigh 35 Lewis f . Nobbs .' 15 Life Assurance of Scotland v. Siddal 27 Lush, Re 27 McDoneU v. White 32 M'Gaehen v. Dew 27 Montford (Lord) ii. Cadogan 27 Mutlow V. Bigg 31 NaU v. Punter 27 Olive, Ee, OKve v. Westerman 20, 21 Pearson, Re, Oxley v. Scarth 21 Peter v. Peter 32 Raby V. Ridehalgh 27 Richardson v. Jenkins 33 Rodbard v. Cooke 15 Royds V. Royds 20 Salter v. Cavanagh 31 Sawyer v. Sawyer 28 Seagram v. Tick 32 Sharpe v. Foy 27 Smethurst v. Hastings 20 Speight V. G-aunt 21 Stanley v. Stanley 27 Stickney v. Sewell 20 Stretton v. Ashmall 20 Styles V. Guy 15 Thompson v. Eastwood 32 Tyler v. Tyler 28 Vaughton v. Noble 27 Vernon v. Vaudrey 33 Walcott V. Lyons 20 Walker v. Symonds 16 Waring v. Waring 20 Westmoreland v. Tunnicliffe 33 Whiteley v. Learoyd 20 Wilkinson v. Parry 27 SUPPLEMENT TO UNDERHILL'S TRUSTS AND TRUSTEES. An Act to amend the Law relating to the Duties, Powers, and Liability of Trustees. [24tli December, 1888. Be it enacted by the Queen's most excellent Majesty, by and with the advice and consent of the lords spiritual and temporal, and com- mons, in this present Parliament assembled, and by authority of the same, as follows ; that is to say, 1. Short title, extent, and definition.] — (1.) This Act may be cited as the Trustee Act, 1888. (2.) This Act shall not extend to Scotland. (3.) For the purposes of this Act the ex- pression "trustee" shall be deemed to include an executor or administrator and a trustee whose trust arises by construction or implica- tion of law as well as an express trustee, but not the official trustee of charitable funds. (4.) The provisions of this Act relating to 10 SUPPLEMENT. a trustee shall apply as well to several joint trustees as to a sole trustee. 2. Receipt of money by solicitor as agent.] — (1.) It shall be lawful for a trustee to appoint a solicitor to be his agent to re- ceive and give a discharge for any money or any valuable consideration or property re- ceivable by such trustee under the trust by permitting such solicitor to have the custody of, and to produce, a deed containing any such receipt as is referred to in the fifty-sixth section of the Conveyancing and Law of Property Act, 1881 (44 & 45 Vict. c. 41) ; and no trustee shall be chargeable with breach of trust by reason only of his having made or concurred in making any such appointment ; and the producing of any such deed by such solicitor shall have the same validity and effect, by virtue of the said fifty-sixth section, as the same would have had if the person ap- pointing such solicitor had not been a trustee : Provided that nothing herein contained shall exempt a trustee from any liability which he would have incurred if this Act had not passed in case he permits such money, valu- able consideration, or property to remain in the hands or under the control of the solicitor appointed as aforesaid for a period longer Trustee Act, 1888. 11 than is reasonably necessary to enable such solicitor to pay or transfer the same to the trustee. (2.) It shall be lawful for a trustee to ap- point a banker or solicitor to be his agent to receive and give a discharge for any money payable to such trustee under or by virtue of a policy of assurance by permitting such banker or solicitor to have the custody of and to produce such policy of assurance with a receipt signed by such trustee, and no trustee shall be chargeable with a breach of trust by reason only of his having made or concurred in making any such appointment : Provided that nothing herein contained shall exempt a trustee from any liability which he would have incurred if this Act had not passed, in case he permits such money to remain in the hands or under the control of the banker or solicitor appointed as aforesaid for a period longer than is reasonably necessary to enable such banker or solicitor to pay the same to the trustee; (3.) This section shall apply only where the money or valuable consideration or pro- perty is to be received after the passing of this Act. Sub-sect. 1. — The object of this sub-section is to 12 SUPPLBMENT. reverse, with regard to future transactions (for it is not retrospective : sub-sect. 3), the decision in Bellamy v. The Metropolitan Board of Works {a). In that case trustees of real estate with a power to sell and give receipts sold the estate. The purchasers required that the vendors should either attend in person to receive the purchase- money, or should authorize the purchasers to pay it into a bank to the joint account of the vendors. The vendors, on the other hand, insisted that the money should be paid to their solicitor on his producing the conveyance duly executed. They gave no special reason why the money should be paid to the solicitor, but relied on the 56th section of the Conveyancing and Law of Property Act, 1881, by which it was enacted that "when a solicitor produces a deed having in the body thereof, or indorsed thereon, a receipt for con- sideration money or other consideration, the deed being executed or the indorsed receipt being signed by the person entitled to give a receipt for that consideration, the deed shall be a sufficient authority to the person liable to pay or give the same for his paying or giving the same to the solicitor, without the solicitor producing any separate or other direction or authority in that be- half from the person who executed or signed the deed or receipt." The Court, however, held that that section only applied where the person who executed the deed, or signed the receipt, was capahle of giving to a solicitor a valid authority to receive the consideration, and that as trustees cannot delegate their duties (except where they are expressly authorized, or are morally obliged to do so from necessity, or are acting conformably to the common usage of mankind, and as prudently as if acting (rt) 24 Oh. Div. 387. Trustee Act, 1888. 13 for themselves) they could not validly give such an authority expressly, and therefore could not do so under the Act impliedly by signing the receipt. In the case of purchases completed after the 24th December, 1888, this decision will cease to govern the practice, and trustees will be at liberty to authorize their solicitor, hy permitting him to have the custody of and to produce a deed containing any such receipt as is referred to in the 56th section of the Conveyancing and Law of Property Act, 1881, to receive consideration money pay- able to them. The section is not, perhaps, so happily expressed as it might be. For instance, can a trustee authorize his solicitor to receive consideration money, except by permitting him to have the custody of the deed, &o. ? And where the receipt is indorsed on a deed, and not contained in the body thereof, can that deed be said to be " a deed containing any such receipt as is referred to in the 56th section of the Conveyancing and Law of Property Act, 1881 " ? The first of these queries is, it is submitted, by no means hypercritical, and in cases where any money or property is receivable by a trustee on any occasion where the execution of a deed by the trustee is not necessary (as, for example, the payment of a legacy by executors to the trustees of the legatee's marriage settle- ment), considerable doubt must exist as to whether the payment can be properly made to the trustee's solicitor under this sub-section, even although the solicitor be expressly authorized by the trustee to receive it. This view receives some support from the provisions contained in sub-section (2), which expressly authorize a trustee to appoint a solicitor his agent to receive policy moneys hy permitting him to have the custody of and to produce the policy with a receipt signed ly the trustee. For policy 14 SUPPLEMENT. money ■would certainly fall witliin the first sub-section as " money receivable by sucb trustee ;" and if , under sub-sect. (1), tbe trustee could appoint a solicitor in any other way than that indicated, there would have been no necessity for expressly authorizing (by sub-sect. 2) a trustee to appoint a solicitor to be his agent to receive and give a discharge for policy moneys, and for declaring that no trustee shall be chargeable with a breach of trust by reason only of his having made or concurred in making an appointment of a solicitor for that purpose. Anyhow, the point does not appear to be quite free from doubt. "With regard to the second query, it is probable that the Court would consider an indorsed receipt as equiva- lent to a receipt contained in the deed on which it is indorsed, within the meaning of the sub-section. It will be perceived that the sub-section does not authorize a trustee to appoint anyone to receive money, valuable consideration, or property, except a solicitor. Consequently, the decision in Flower v. Metropolitan Board of Works (6), that one of several trustees cannot in general be authorized by his co-trustees to receive and give a good receipt for trust moneys, stiU. holds good. It is apprehended, however, that where one of the trustees is a solicitor, the money may be paid to him on production of a deed containing a receipt, notwith- standing that he may not be acting as . the soHcitor to the trustees. "With regard to the proviso at the end of the sub- section, it merely continues the existing law, viz., that even where a trustee may safely permit another to re- ceive trust property, he will not be justified in allowing (6) 27 Oh. Div. 592. Trustee Act, 1888. 15 it to remain in such other person's custody for a longer period than the circumstances of the case require (c). Sub-sect. (2). — The second sub-section contains, with respect to policy moneys payable to trustees, similar pro- Tisions to those contained in sub-sect. 1 in relation to " any money or any valuable consideration, or property receivable by such trustee," except that it enables a banker as well as a solicitor to act for this purpose. Even without this enactment, it would seem that a trustee might have expressly authorized the payment of policy or any other moneys into a bank to his account as trustee {d). The section, however, enables him to im- pliedly give the authority by merely permitting the banker to have the custody of and to produce the policy with a receipt signed by the trustee. 3. Depreciatory conditions on sales by trustees.] — ^(1.) No sale made by a trustee shall be impeached by any cestui que trust upon the ground that any of the conditions, subject to which the sale was made, may have been unnecessarily depreciatory, unless it shall also appear that the consideration for the sale was thereby rendered inadequate. (c) See Underhin on Trusts, 3rd ed., 268, 282; Bricev. Stokes, 2 W. & T. Lead. Cas. 865 ; Gregory v. Gregory, 2 T. & 0. 313 ; Be Fryer, 3 K. & J. 317 ; Walker v. Symonds, 3 Sw. 1 ; Hanlury v. Kirkland, 3 Sim. 265 ; Styles v. Guy, 1 M. & G. 422 ; Egbert v. Butler, 21 B. 560 ; Consterdine v. Conster- dine, 31 B. 330 ; Rodhard v. Cooke, 25 W. E. 555 ; Lewis v. Nolls, 8 Oh. Div. 591. [d) See Flower v. Metropolitan Board of Works, 27 Oh. Div. 592. 16 SUPPLEMENT. (2.) No sale made by a trustee shall, after the execution of the conveyance, be impeached as against the purchaser upon the ground that any of the conditions subject to which the sale was made may have been unnecessarily depreciatory, unless it shall appear that such purchaser was acting in collusion vnth such trustee at the time when the contract for such sale was made. (3.) No purchaser, upon any sale made by a trustee, shall be at liberty to make any objection against the title upon the ground aforesaid. (4.) This section shall apply only to sales made after the passing of this Act. The object of tMs section is to modify the decisions of the Court of Appeal in Dance y. Goldingham (e) and Dunn V. Flood [f). In those cases, it was held that notwithstanding that trustees may be authorized to sell subject to any such conditions respecting title or evi- dence of title or other matter as they may think fit, that did not authorize them to impose unnecessarily stringent and depreciatory conditions {g). In Dance v. Golding- ham (h) it was held that the limitation (without adequate necessity) of the title to a fourteen years' title, the root (e) L. E., 8 Oh. App. 902. (/) 28 Oh. Div. 586. ((/) See Underhill on Trusts, 3rd ed., pp. 242, 316, 452, and 454. (h) Uhi sttp. Trustee Act, 1888. 17 of which was a voluntary deed, was sufficient to entitle one of the beneficiaries to an injunction to restrain the completion of the sale. And in Dunn v. Flood {i) it was held, that, inasmuch as the use of such conditions constituted a breach of trust, a purchaser under them might object to complete his contract, on the ground that an unconscientious trustee could not be entitled to the assistance of the Court in carrying out a contract which was a breach of trust. Whether after completion a beneficiary could have impeached the validity of the sale has never been the subject of express decision ; but the general view of the profession was, that it was unsafe for a purchaser to accept a title from trustees who had used unnecessarily restrictive conditions. By the Act the subject of depreciatory conditions is put upon an altogether different, and more reasonable, footing ; and whereas, formerly, the mere existence of a depreciatory condition entitled a beneficiary to obtain an injunction restraining completion of the sale, he will now have to prove that he has been injured by the use of it, which will be a matter of very considerable difficulty. Moreover, even although he may be able to prove it, he will not be able to upset the sale after completion, unless he can also prove fraud against the purchaser, although, of course, he will still be able to sue the trustee if he can prove damage ; and, as a corollary, no purchaser will be entitled to refuse to complete on the ground that the conditions were de- preciatory. The enactment is not retrospective, and, consequently, sales effected before the 24th December, 1888, wiU be governed by the old law. (i) TJbi sup. V. B 18 SUPPLEMENT. 4. Loans by trustees.] — (1.) No trustee lending money upon the security of any pro- perty shall be chargeable with breach of trust by reason only of the proportion borne by the aniotmt of the loan to the value of such property at the time when the loan was made, provided that it shall appear to the Court that in making such loan the trustee was acting upon a report as to the value of the property made by a person whom the triistee reasonably believed to be an able practical surveyor or valuer, instructed and employed independently of any owner of the property, whether such surveyor or valuer carried on business in the locality where the property is situate or elsewhere, and that the amount of the loan does not exceed two equal third parts of the value of the property as stated in such report, and that the loan was made under the advice of such surveyor or valuer expressed in such report. And this section shall apply to a loan upon any pro- perty of any tenure, whether agricultural or house or other property, on wliich the tnistee can lawfully lend. (2.) No trustee lending money upon the security of any leasehold property shall be chargeable with breach of trust only upon Te¥stee Act, 1888, 19 the ground tliat in making such loan he dis- pensed, either wholly or partially, with the production or investigation of the lessor's title. (3.) No trustee shall be chargeable with breach of trust only upon the ground that, in effecting the purchase of any property, or in lending money upon the security of any property, he shall have accepted a shorter title than the title which a purchaser is, in the absence of a special contract, entitled to require, if in the opinion of the Court the title accepted be such as a person acting with prudence and caution would have accepted. (4.) This section shall apply to transfers of existing securities as well as to new secu- rities, and to investments made as well before as after the passing of this Act, except where, some action or other proceeding shall be pending with reference thereto at the pass- ing of this Act. The former law on this subject has been stated by the present writer in the following terms (^) : — "Trustees who propose to lend trust funds on mort- gage ought to satisfy themselves of three things. In the first place, they ought to take steps to ascertain the real vakie of the property, and for that purpose it is ijc) UnderMU on Trusts, 3rd ed,, p. 262. ' b2 20 SUPPI^EMENT. their duty to employ a valuer of their own, and not trust to the valuer of the mortgagor (l) ; and they should instruct such valuer that they want a valuation for the purpose of considering the advisability of in- vesting trust funds on the security of the property (m). For a man may bona fide form his opinion, and yet look at the case in a totally different way when he knows on whose behalf he is acting. Moreover, they should exercise their own judgment in the selection of the valuer, and not leave it to their solicitor (n). In the next place, they should never advance more than two-thirds of the amount at which the property is valued (o) ; and if it be house property not more than one-half (p) ; and if it be trade property, the value of which depends on the continued prosperity of the trade, it would be hazardous to advance even so much as that {q) ; and if they do invest on the security of real property used for trade purposes, they must altogether disregard the value of the trade (r). However, these proportions are not inflexibly observed ; and if, when the advance was made, the property was approximately (l) Fry V. Tapson, 28 Oh. Div. 268 ; Walcott v. Lyons, 54: L. T. 786; Waring v. Waring, 3 Ir. Ch. Eep. 331 ; Ingle v. Partridge, 34 B. 412. (m) See per Kay, J., Be Olive, Olive v. Westerman, 34 Ch. Div. YO. (n) Fry v. Tapson, supra. (o) Stichney v. Sewell, 1 M. & 0. 8 ; Drosier v. Brereton, 15 B. 221 ; Re Godfrey, Godfrey v. Faulkner, 23 Oh. Div. 483. {p) Budge v. Oummow, L. E., 7 Ch. App. 719; StrettonY. Ashmall, 3 Dr. 12 ; Snpethurst v. Hastings, 30 Ch. Div. 490 ; Stichney v. Sewell, supra; Be Olive, Olive v. Westerman, 34 Ch. Div. 70. (g) Stretton v. Ashmall, supra ; Boyds v. Boyds, 14 B. 54 ; Walcott V. Lyons, 54 L. T. 786. [r) Whiteley v. Learoyd, 12 App. Cas. 727. Tkustek Act, 1888. 21 up to the standards above indicated, trustees wiU not be liable for subsequent deterioration (s). "In the third place, trustees who are proposing to lend the trust fund on mortgage should see that the mortgagor has a good legal title free from incumbrances (other than rent-charges created under the Drainage Acts or the Improvement of Land Act, 1864); and for this purpose they should employ a solicitor, and if the solicitor so advises should have the abstract perused by a conveyancing counsel. In Hopgood v. Parkin {t) the late Lord Eomilly held, that trustees are liable if their solicitor makes a mistake in the investigation of the title ; but it is apprehended that that decision cannot be supported, and, indeed, it has been expressly dissented from by Lindley, L. J., in Speight v. Oaunt " (ii). It "will be seen, therefore, that the Act makes a very considerable alteration in the law. Sub-sect. 1. — With regard to sub-sect. 1, it is appre- hended that in future a trustee advancing trust money on mortgage will be safe if he observes the following particulars, viz. : — (1.) He must act on the valuation and report of a siu'veyor or valuer ; not necessarily a local one ; (2.) He must have reasonable grounds for believing the surveyor or valuer to be an able practical man. For this purpose it is apprehended that the trustee must still exercise his own judg- (s) Be Qodfrey, Godfrey v. Faulhner, sujira ; Re Olive, Olive v. Westerman, supra. (t) L. E., U Eq. 70. («) 22 Oh. Div. at p. 761, and see per Pearson, J., Be Pearson, Oxley v. Scarth, 51 L. T. 692. 22 SUPPLEMENT. ment, and not trust blindly to the nomination of his solicitor without inquiry ; (3.) The surveyor must not be the surveyor of the mortgagor in the matter. (4.) The surveyor must be instructed by the trustee to make the valuation for him ; and it is apprehended that his instructions should state that the trustee requires a valuation for the purpose of considering the advisability of investing trust funds on the security of the property. (5.) The surveyor must not merely value the property, but must advise the trustee that the property is a proper investment for the money proposed to he lent. (6.) The trustee must not lend more than two-thirds of the surveyor's valuation, but he may lend that much, irrespective of the tenure of the property, or the purposes for which it is used. It must, however, be borne in mind that the Act merely says that if the above precautions are taken a trustee shall not be liable for breach of trust by reason only of the proportion borne by the amount of the loan to the value of the property ; and it may, therefore, be doubted whether a trustee would not still be liable for advancing the money on property of a speculative character (such as a manufactory) on the ground not that he advanced too large a sum, but that he ought not to have advanced trust money on such a security at all. Sub-sects, 2 & 3. — These sections are no doubt in- tended to make the law more consistent with itself than has hitherto been the case ; but whether the drafts- Trustee Act, 1888, 23 man has succeeded in this object, so far as sub-sect. 3 is ooncerned, may perhaps be respectfully questioned. It has been frequently laid down that a trustee is only bound to use such due diligence and care as men of ordinary prudence and vigUance would use in the management of their own affairs. On the other hand, the Court has taken a very elevated view of the care and diligence displayed by the abstract man of ordinary prudence, quite inconsistent with practical experience. It is well known that . men of ordinary prudence habitually dispense with the investigation of a lessor's title ; and, indeed, that practice is so common, that the legislature some years ago imported it as an implied ■condition into all contracts for sale of leaseholds (x), unless expressly negatived; but hitherto no trustee ■would have been safe in dispensing with the investiga- tion of the lessor's title. In the same way, purchasers of land rarely require a forty years' title where the abstract shows a clean root of title of, say, twenty-five or thirty years, and no doubt sub-sect. 3 is intended to give trustees liberty to take -the same course. Its form is, however, somewhat ambiguous, because, as above stated, the Courts have always held, that where a trustee acts with prudence and caution (which is still demanded of him) he will not be liable for breach of trust ; but they have also held that, in the absence of special circumstances, the acceptance of less than a forty years' title is not cautious and prudent (y). It is apprehended that the effect of the sub -section is (k) Sect. 2, Vendor and Purchaser Act, 1814, and sefct. 13, Conveyancing and Law of Property Act, 1881. {y) See Ex parte Oovernora of Christ's Hospital, 2 H. & M. 166. 24 SUPPLEMENT. that the mere fact of the acceptance of less than a forty years' title is no longer to be considered prima facie evidence of want of care and caution, provided that in other respects the trustee acts -with prudence and caution, and requires and obtains what is known among conveyancers as a good marketable title. Sub-sect. 4. — It wiU be observed that all the pro- visions of sect. 4 are retrospective, except where some action or other proceeding {e.g., a summons) was pending on the 24th December, 1888. 5. Liability for loss by reason of im- proper investments.] — (1.) Where a trustee shall have improperly advanced trust money on a mortgage security which would at the time of the investment have been a projDer investment in all respects for a less sum than was actually advanced thereon, the security shall be deemed an authorised investment for such less suni, and the trustee shall only be liable to make good the sum advanced in excess thereof with interest. (2.) This section shall apply to invest- ments made as well before as after the passing of this Act, except where some action or other proceeding shall be pending with reference thereto at the passing of this Act. This section makes a very considerable alteration in the law as to the measure of a trustee's responsibility Trustee Act, 1888. 25 for investing on insufficient security. Hitherto, the two- tHrds rule has been a test of diligence, and not a measure of liahUity. If a trustee advanced more than two-thirds of the value, that prima facie constituted the entire investment a breach of trust. It was not an investment which the trustee ought to have made at all, and consequently having, by making it, committed a breach of trust, the whole item — the entire sum so invested — was disallowed him in his accounts, and he was directed to replace the entire sum, and upon doing so the mortgage became his absolutely (s). Consequently, although a trustee might only have erred in advancing, say, one-eighth more than two-thirds of the value, he thereby be- came liable to repay to the estate the whole of the amount invested, recouping himself so far as possible out of 'the mortgage. Henceforward this will not be so ; and where a trustee has advanced more than the amount authorized by the surveyor's report (or, in the absence of that report, than he ought reasonably to have done), his liability will be limited to the difference between the amount actuallj' advanced and the ' amount autho- rized by the report, or, in its absence, the maximum amount which he ought to have advanced on the security. Where a trustee has not taken the precaution to get a report and valuation under sect. 4, nice questions may arise under this section as to whether the two-thirds rule laid down in sect. 4 applies, or whether the old rule as to the nature of the property wOI not prevail. This section is also retrospective, except where some action or other proceeding with reference to the invest- ment was pending on the 24th December, 1888. Query, (z) See Fry v. Tapson, 28 Ch. Div. 282. 26 SUPPLEMENT. whether an ordinary administration suit, not specifically asking that a trustee should make good an insufficient security, would be a pending action within the meaning of the Act. 6. Indemnity for breach of trust.] — - (1.) Where a trustee shall have committed a breach of trust at the instigation or request or with the consent in writing of a bene- ficiary, the Court may, if it shall think fit, and notwithstanding that the beneficiary may be a married woman entitled for her separate use, whether with or without a restraint upon anticipation, make such order as to the Court shall seem just for im- pounding all or any part of the interest of the beneficiary in the trust estate by way of indemnity to the trustee or person claiming through him. (2.) This section shall apply to breaches of trust committed as well before as after the passing of this Act, except where an action or other proceeding shall be pending with reference thereto at the passing of this Act. The previous law on this subject may be summarized as follows (a) : — (1.) A beneficiary who, with fuU knowledge of the (a) See ITnderhill on Trusts, 3rd] ed., pp. 390—394, and 466—469. ' Trustee Act, 1888. 27 facts and their legal efEect (J), had assented to or concurred in a breach of trust could not afterwards charge the trustees tvith it (c), unless he were under disability, or acted under duress or undue influence (d). (2.) Even an infant, or a married woman, not re- strained from anticipation (whether entitled for her separate use or not), could estop him- self or herself from charging the trustees for a breach of trust procured by fraud {e). (3.) But a married woman restrained from anticipation could not by any means, even by fraud, estop herself from afterwards making the trustees responsible (_/). (4.) "Where a beneficiary had instigated or requested a breach of trust under such circumstances as to estop him from relief against the trustees, the latter could impound his interest in the trust estate, by way of indemnifying them- selves against loss, to the extent to which he had leen benefited by the breach of trust [g). (6) Be Qarnett, Oandy v. Macauley, 31 Oh. Div. 1, and ■cases there cited. (c) Brice v. Stokes, 11 V. 319; Wilkinson v. Parry, 4 Euss. 272; Nail v. Punter, 5 Sim. 555; Life Ass. of Scotland v. Siddal, 3 De G. F. & J. 58. (d) Bowles V. Stewart, 1 Sch. & Lef. 226 ; Chesterfield v. -Janssen, 2 V. 158. (e) Ld. Montford v. Cadogan, 19 V. 9 ; Sharp v. Foy, L. E., 4 Oh. App. 35 ; Be Lush, ib. 591. (/) Arnold y. Woodhams, L. E., 19 Eq. 33; Stanley v. Stanley, 7 Ch. Div. 589. [g) Baby v. Bidehalgh, 7 De G. M. & G. 104; Booth v. Booth, 1 Bea. 125 ; Fidler v. Knight, 6 Bea. 205 ; M'Oachen V. Dew, 15 ib. 84 ; Vaughton v. Nohle, 30 ib. 34 ; Berks v. Micklethwaite, 33 ib. 409; Jacuhs v. Bylance, L. E., 17 Eq. ;341 ; Carson v. Sloane, 13 L. E., Ir. 139. 28 SUPPLEMENT. Wiietlier a mere passive consent to a breach, of trust gave ttis right to trustees was doubt- ful (A). The present section makes the following important modifications in the law, viz. : — (1.) The absolute protection hitherto given to a married woman restrained from anticipation who instigates a breach of trust is removed, and the Court is empowered (not required) to impound her interest to indemnify the trustees («'). (2.) A mere request (as distinguished from instiga- tion) will be sufficient to enable the Court to give the trustee relief, provided the request is in writing. (3.) The section does not restrict the trustee's in- demnity to the amount by which the bene- ficiary benefited by the breach of trust, but apparently the Court may extend the in- demnity to the entire interest of the bene- ficiary. 7. Trustee may insure buildings]. — (1.) It shall be lawful for, but not obli- gatory upon, a trustee to insure against loss or damage by fire any building or other insurable property to any amount (including the amount of any insurance already on (h) See Sawyer v. Sawyer, 28 Oh. Div. 595. yi) How important this is may be seen from a perusal of the observations of Lord Langdale in Tyler v. Tyler, 3 Bea.- 563, which will be found quoted on pp. 393, 394 of TJnder- hUl on Trusts, 3rd ed. Trustee Act, 1888. 29 foot) not exceeding three equal fourth parts of the full value of such building or pro- perty, and to pay the premiums for such insurance out of the income thereof or out of the income of any other property, subject to the same trusts, without obtaining the con- sent of any person who may be entitled wholly or partly to such income. (2.) This section shall not apply to any building or property which a trustee is bound forthwith to convey absolutely to any cestui que trust upon being requested so to do. It never has been obligatory on a trustee to insure (/c); but it has hitherto been doubtful whether, in the absence of any direction in that behalf, a trustee could insure and pay the premiums out of income ■without the consent of the person entitled to that income (Z). 8. Statute of Limitations may be pleaded "by trustees.] — (1.) In any action or other proceeding against a trustee or any person claiming through him, except where the claim is founded upon any fraud or fraudu- lent breach of trust to which the trustee was (7c) See UnderhiU on Trusts, 3rd ed., p. 247; Bailey v. Oould, 4 J. & C. 221. (I) See Le-WTn. on Trusts, 8th ed., p. 580. 30 SUPPLEMENT. party or privy, or is to recover trust property, or the proceeds thereof still retained by the trustee, or previously received by the trustee and converted to his use, the following pro- visions shall apply : — (a) All rights and privileges conferred by any Statute of Limitations shall be enjoyed in the like manner and to the like extent as they would have been enjoyed in such action or other proceeding if the trustee or person claiming through him had not been a trustee or person claiming through him : (b) If the action or other proceeding is brought to recover money or other property, and is one to which no existing Statute of Limitations applies, the trustee or person claiming through him shall be entitled to the benefit of and be at liberty to plead the lapse of time as a bar to such action or other proceeding in the like manner and to the like extent as if the claim had been against him in an action of debt for money had and received, but so nevertheless that the statute shall run against a married woman entitled in possession for her separate use, whether with or without a restraint upon anticipation, but shall not begin to run against any bene- ficiary unless and until the interest of such Tkustee Act, 1888. 31 beneficiaiy shall be an interest in posses- sion. (2.) No beneficiaiy, as against whom there would be a good defence by virtue of this section, shall derive any greater or other benefit from a judgment or order obtained by another beneficiary than he could have obtained if he had brought such action or other proceeding and this section had been pleaded. (3 .) This section shall apply only to actions or other proceedings commenced after the first day of January one thousand eight hun- dred and ninety, and shall not deprive any executor or administrator of any right or defence to which he is entitled under any existing Statute of Limitations. Hitherto the law on the subject was as follows (to) : — • The Statutes of Limitation did not apply to declared trusts («) (except where they were created by way of a charge on real estate (o), unconnected with a duty (jo) ), nor to trusts which, on the face of a written instrument, were resulting trusts (j), nor to trusts created by the (?7i) See Underhill on Trusts, 3rd ed., p. 395. (n) 3 & 4 Will. 4, c. 27, s. 25, and Jud. Act, 18Y3 ; and see also 37 & 38 Vict. c. 57, s. 10, and Judicature Act (Irish), s. 28, sub-s. 2; Edwards v. Warder, 1 App. Cas. 281. (o) Banner t. Berridge, 18 Ch. Div. 254 ; Fearnside T. Flint, 22 Ch. Div. 519 ; Hughes v. Goles, 27 Ch. Div. 231. (p) 3 &4 Will. 4, c. 27, s. 40. Iq) Lew. 719 ; Salter r. Oavanagh, 1 Dr. & W. 6G8 ; Muf- low V. Bigg, L. E., 18 Bq. 246. ■32 SUPPLEMENT. 'Court (r), althougli they were applicable to other con- structive trusts («). But in taking an account for the purpose of charging a trustee with personal liability, every fair allowance was made in his favour if it could be shown that he acted bona fide, and that the claim sought to be' enforced was one which arose many years ago, of the nature and particulars of which the bene- ficiary was, at the time when it arose, perfectly cogni- sant, and which he had taken no steps to enforce (<). The new section is no doubt intended to completely revolutionize the law, but it is unfortunately by no means free from ambiguity. Indeed, it is extremely difiicult to understand what paragraph (a) of sub-sect. 1 was aimed at. It could not have been aimed at claims for the recovery of land or other property, or the pro- ceeds thereof retained by the trustee personally, because such claims are expressly excluded. Nor could it have been aimed at claims against purchasers from the trustee with notice of a breach of trust, because such claims are ah-eady provided for by the 25th section of 7 "WiU. 4 & 1 Yiet. c. 28. Nor, it is conceived, could it have been intended to apply to actions for what may be called negligent breaches of trust, or breaches arising from mistake or the like, because such actions are for equitable wrongs sui generis arising neither out of tort or contract, and not falling within the provisions of any existing Statute of Limitations ; indeed, such claims are obviously intended to be provided for by para- graph (b). But it is difficult to conceive what other (r) Seagram v. Tick, 18 Ch. Div. 296. (s) Beckford v. Wade, 17 V. 97 ; Petre v. Petre, 1 Dr. 371. \t) See per Westbury, L. C, in McDonnell v. White, 11 H. L. 0. 570 ; Thompson v. Eastwood, 2 App. Ca. 215 ; Bright V. Legerton, 2 D. F. i& J. 606. Trustee Act, 1888. 33 claims than those above enumerated could be made against a trustee as such. Possibly paragraph (a) might be held to apply to the case where the heir or devisee or voluntary ahenee of a trustee had been in possession of land without notice for upwards of twelve years ; but if that was all that was intended, it is humbly suggested that the design need not have been veiled in language so mysterious and obscure. Another possible, but not very probable, explanation may be suggested as follows : It has been held by Courts of Equity that, for purposes of the administra- tion of a trustee's assets, generally speaking, a breach of trust creates an equitable simple contract debt, due from the trustee to the beneficiary (ti). But where the trust was created by an instrument under seal executed hy the trustee, and containing the expression "it is hereby agreed and declared" that the property shall be held on the trusts indicated, or its equivalent, then the Courts held that a breach of trust constituted a specialty debt {x) and not a mere simple contract debt, and under the old law as to the priority of specialty debts the bene- ficiary gained an advantage in the administration of an in- solvent trustee's assets. Possibly therefore the framers of this section considered that a breach of trust con- stituted a debt (either simple contract or specialty as the case might be) not merely for the purposes of the administration of assets, but for all purposes, and meant paragraph (a) to apply to cases where the trustee has been a party to the instrument creating the trust ; («) Vernon v. Vaudrey, 2 Atk. 119; Isaacson v. Harwood, L. E., 3 Oh. App. 225. {x) Westmoreland v. Tunnicliffe, W. N. 1869, p. 182; Richardson v. Jenkins, 1 Dr. 477. u. c 34 SUPPLEMENT. and has therefore made himself liahle as a contracting party for an equitable debt of the nature of a simple contract debt where the instrument was not imder seal, and for an equitable debt of the nature of a specialty debt where the instrument was a deed (or possibly where a judgment to recover had been obtained against a trustee) ; and that paragraph (b) is only intended to apply to cases {e.g., trusts created by will) in which the trustee has never signed or executed any instrument. If this be so, it would seem that a breach of a trust created by a deed executed by the trustee, would not be barred for twenty years. , The above suggestion, how- ever, is open to the objection that the Statutes of Limita- tion do not apply to equitable demands at all, although the Courts of Equity have ly analogy to the statutes barred claims not arising out of express trust at the end of statutory periods. Generally, the section now under consideration is extremely obscure, and no very confi- dent opinion can be expressed as to its meaning or extent. It will be noted that the section only apphes to actions commenced after the 1st of January, 1890 (y), and that coverture (where the feme is entitled for her separate use (z)) is not to prevent the statute running, even although the married woman is restrained from anti- cipation. 9. Investments on mortgage of long terms.] — A power to invest trust money in {y) Surely Parliameiit might have said " after the 31st of December, 1889." That was obviously what was meant. {z) This, of course, includes women entitled to any trust property faUing under the Married Women's Property Act, although the property may not have been expressly settled for their separate use. Trustee Act, 1888. 35 real securities shall authorise and shall be deemed to have always authorised an inyest- ment upon mortgage of property held for an unexpii-ed 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 redemption, or to any condition for re-entry except for non-payment of rent. The object of this section is to alter the law as laid down by Jessel, M. E., in Re Boyd (a), and by Stii-- Hng, J., in Leiffh v. Zeiffh (5). It will be perceived that it does not authorize investments on long terms where — ■ (a) They are held for less than 200 years unexpired; (b) They are subject to a rent exceeding one shilling ; (c) They are subject to redemj)tion; (d) They are subject to a proviso for re-entry for any cause other than non-payment of rent. 10. Trustees of renewable leaseholds may renew.] — It shall be lawful for any trustee of any leaseholds for lives or years which are renewable from time to time, either under any covenant or contract or by custom or usual practice, if he shall in his discretion think fit, and it shall be the duty of such trustee, if thereunto required by any (a) 14 Oh.. Div. 626, correcting liis former dictum in Be Chennell, Jones v. Chenndl, 8 Oh. Diy. 492. (6) 35 W. E. 121. c2 36 SUPPLEMENT. person having any beneficial interest, present or future or contingent, in such leaseholds, to use his best endeavours to obtain from time to time a renewed lease of the same hereditaments on the accustomed and reason- able terms, and for that purpose it shall be lawful for any such trustee from time to time to make or concur in making such surrender of the lease for the time being subsisting, and to do all such other acts as shall be re- quisite in that behalf ; but this section is not to apply to any case where by the terms of the settlement or wQl the person in possession for his life or other limited interest is entitled to enjoy the same without any obligation to renew the lease or to contribute to the ex- pense of renewing the same, unless the con- sent in writing of such person is obtained to such renewal on the part of the trustee. This is only a re-enactment of sect. 8 of the statute 23 & 24 Vict. 0. 145, which (apparently by inadvertence) was repealed by the Settled Land Act, 1882, s. 64. 11. Power to trustee to raise money to meet fines on renewal of lease.] — In case any money shall be required for the purpose of paying for the renewal of any lease as aforesaid, it shall be lawful for the trustee effecting such renewal to pay the same out Trustee Act, 1888. 37 of any money which may then be in his hands in trust for the persons beneficially interested in the lands to be comprised in the renewed lease, and if he shall not have in his hands as aforesaid sufficient money for the purpose, it shall be lawful for the trustee to raise the money required by mortgage of the hereditaments to be contained in tbe renewed lease, or of any other hereditaments for the time being subject to the subsisting uses or trusts to which the hereditaments comprised in the renewed lease shall be sub- ject ; and no mortgagee advancing money upon such mortgage, purporting to be made under this power, shall be bound to see that such money is wanted, or that no more is raised than is wanted for the purpose afore- said. This is substantially a re-enactment in different lan- guage of sect. 9 of tlie statute 23 & 24 Vict. c. 145, wlucli (apparently by inadvertence) was repealed by the Settled Land Act, 1882, sect. 64. The repealed section of the 23 & 24 Vict. o. 145, espressly empowered the trustee to convey the hereditaments to the mortgagee ; but it is apprehended that although that express direc- tion is omitted in the present section, the trustee is clearly authorised to grant a legal mortgage, and for that purpose to make an assignment or sub-demise of the premises. 38 SUPPLEMENT. 12. Application of Act.]— (1.) This Act shall apply as well to trusts created by in- strument executed before as to trusts created after the passing of this Act. (2.) Provided always, that save as in this Act expressly provided, nothing therein con- tained shall authorise any trustee to do any- thing which he is in express terms forbidden to do, or to omit to do anything which he is in express terms directed to do, by the in- strument or instruments creating the trust. The construction of this section is not free from doubt. In terms it only applies to express trusts, or such implied trusts as arise from an instrument; whereas the Act is to apply generally (sect. 1), not only to ex- press, hut to constructive trusts. It is therefore open to question 'whether the Act applies to trusts created he- fore the passing of the Act, in cases ■where they were not created by some instrument. The effect of sub-sect. 2 is to enable a settlor who is so minded to exclude the operation of sects. 2, 3, 4, 7, 9, 10, and 11. INDEX. ACQUIESCENCE. See Consent. ADMmiSTEATOE, is a trustee witliiii the meaning of the Act, 9. ANTICIPATION", EESTEAINT ON, does not prevent Statutes of Limitation running in favour of trustees, 30. married woman instigating or consenting in writing to breach of trust may Have to indemnify trustee notwith- standing, 26, 28. ASSUEANOE. Bee Insueance. BANKER, trustees may authorize, to receive policy moneys, 10 et seq. BREACH OF TRUST. See Limitation, Statutes or; Indemnity; Mohtgages. 40 INDEX. CONDITIONS. See Depseciatoet Oonditiojsts. CONSENT of beneficiary to breach of trust, 26. DELEGATION of trustees' powers to receive trust moneys now allowed in certain oases, 10 et seq. DEPEBCIATOEY CONDITIONS, former law as to use of, by trustees, 16 et seq. new law as to, 15 et seq. EXEOUTOE is a trustee witbin the meaning of tbe Act, 9. INDEMNITY OP TEUSTBES, former law as to, wben beneficiary instigated or consented to breacb of trust, 26. new law as to, il. modifications eileoted by new law, 28. apply to married women, altbougb restrained from anticipation, 26, 28. INSTIGATION. See Indemnity. INSUEANCE, trustees not bound to effect, 28. may now do so out of income, 29. trustees may delegate tbe rigbt to receive moneys payable under, to a banker or solicitor, 10 ef seq. INDEX. 41 INVESTMENT. See Mortgages. LEASEHOLDS, mortgage of long, now allowed, 34. trustees of renewable, may renew, 35. trustees may raise money to renew, ib. on purchase of, or loan on security of, lessor's title need not Reinvestigated, 19, 23. LIABILITT. See Moetgagbs. LIMITATION, STATUTES OF, may be pleaded by trustees after end of 1889, .29 et seq. aliter in case of fraud, ib. former law as to, 31. criticisms on new section, 32 et seq. LOAN. See Mortgages. MAEEIED WOMAN. See Anticipation. MONEY, trustees may now appoint soUoitor, and, in some cases, a. banker, to receive, 10 et seq. MOETGAGES, former law as to liability of trustees for insufficient security 19 ei seq. former law as to extent of their liability, 25. 42 INDEX. UO'R'SGAa'ES— continued. new law as to tlie proportion of loan to valuation, 18, 21. of leaseholds, 18. wliat title may be accepted, 19, 23. new measTire of liability in respect of insufficient security, 24. of long terms of years now authorized in certain cases, 34. EEAL SEOTJEITIES now include long terms, 34. EBCEIPT8, trustees empowered in certain cases to delegate power of giving, 10 et seq. RENEWABLE LEASEHOLDS. See Leaseholds. SALE. See Depeeciatoey Oosditions. SOLICITOE maybe appointed by trustees to receive trust moneys, 10 ci sej. query, whether must be solicitor to the trustees, 14. STJEVEYOE, trustees investing on advice of, protected in certain oases, 18 — -21. TITLE, what, trustees may accept, 19, 23. TEUSTEE, meaning of term, 9. may authorize solicitor to receive trust funds, 10. query, whether authority must be by deed, 13. INDEX. 43 TBUSTB'E— continued. may authorize banker or solicitor to receive polioymoneys, 1 1 . cannot authorize persons except solicitor or banker to receive trust moneys, 14. cannot authorize even solicitor or banker to retain trust moneys, 11, 14. indemnity of. See Indemnity. oflacial, of charity funds not within the Act, 9. YALTJATION of surveyor, how far a protection, 18 — 21. d. F. EOWOETH, PEINTEE, GEEAT JSSW BTEEET, FETTEE LANE, B.C.