(JortipU Slam irljionl Sibrary Cornell University Library KF 730.L67 1889 V.1 A practical treatise on the law of trust 3 1924 018 769 152 Cornell University Library The original of tiiis bool< is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018769152 PRACTICAL TREATISE THE LAW OF TRUSTS. (THE LATE) THOMAS LEWIN, ESQ. lEigfjtfj lEHitton BY FREDERICK A. LEWIN. FIRST AMERICAN, FROM THE EIGHTH ENGLISH, EDITION JAMES H. FLINT. Volume I. PHILADELPHIA: T. & J. W. JOHNSON & CO. 1889. PEEFACE TO TfiE AMERICAN EDITION. The accurate and exhaustive treatise of Mr. Lewin can receive no warmer nor more effective commenda- tion than that which voluntarily or unconsciously falls from the lips of every reader. The English cases have been brought down to date, and this part of the work has been excellently done by F. F. Heard, Esq. The text has been modified and corrected as indi- cated in the " addenda,' et corrigenda " of the eighth English edition. , ■ , In the American notes the attempt has been made tb show the . difference between English and American decisions, to cite the leading cases upon the subjects treated and to briefly indicate the substance of the decisions. To know where knowledge is, is next to having it, and, if the reader finds his attention directed to such cases as he seeks, his perusal of them renders any lengthy abstracts or quotations unnecessary. ' In so far as these annotations are found numerous, accurate and comprehensive enough to afford any assistance,' to that extent it will be felt that this labor has not been in vain, J. H. F. Boston,. May, 1888. PREFACE. Since the publication of the last Edition of this work several important Acts of Parliament have been passed, which have given rise to numerous, and in many cases fundamental, changes in the law as affect- ing the relative positions of trustees and their cestuis, que trust, and their respective rights and powers. These, together with the continual modifications in the law arisiag from the flow of cases through the Courts, have caused a considerable increase in the size of the present Edition. One new chapter and an additional section to another chapter have been introduced, pointing out the prin- cipal provisions of the Settled Land Acts as they affect the law of trusts, but a general consideration of these Acts does not seem to fall within the purview of the present work. With the above exception, I have not altered the form of the work, but while dealing with the late Conveyancing Acts, and the Married Woman's Prop- erty Act, 1882, and the other variations in the law which have arisen since the last Edition, I have en- deavoured as far as possible to weave the new matter in and make it harmonize with the previous text. An important feature in the present Edition is the VI PEEPACE. index whicli has been remodelled and much enlarged by Mr. C. C. M. Dale, of the Chancery Bar, whose skill in this work is well known, and to whom I am much indebted for the care and labor which he has bestowed upon it. As in the previous Edition the matter introduced by the present Editor is distinguished by being enclosed in square brackets [ ]. The Addenda are again considerable, but it is not possible to avoid this, without passing over importiant decisions reported while the work is in the press., August, 1885. F. A. L. CONTENTS. [The references are to the star pa^ng.] PASB INTRODUCTORY VIEW OF THE RISE AND PROGRESS OF TRUSTS 2 PART I. Definition; Classification, and Creation of Trusts. CHAPTER I. Definition of a Trust 13 CHAPTER II. Classification of Trusts . . . , 18 CHAPTER III. Of the Parties to the Creation of a Trust ... 21 Section I. — Of the Settlor 21 II.— Who May be a Trustee 29 III. — Who May be Cesfm" Que Trust . . . . iS CHAPTER IV. What Property Mat be Made the Subject of a Trust . 47 CHAPTER V. Of the Formalities Required for the Creation of Trusts 51 Section I. — Of Trusts at Common Law 51 II. — Of the Statute of Frauds . . . . . -58 III. — Of the Statutes of Wills 57 CHAPTER VI. Of Transmutation of Possession ...... 67 VIU CONTENTS. [Tbe references are to the star paging.] CHAPTER VII. FAOK Of the Object Proposed by the Trust 84 Section I. — Of Lawful Trusts . . . . . . .84 II. — Of Unlawful Trusts 94 CHAPTER VIII. In What Language a Trust Must be Declared . . . 108 Section I. — Of Direct or Express Declarations of Trust . . 108 IL — Of Implied Trusts 130 CHAPTER IX. Of Resulting Trusts 143 Section I. — Of Resulting Trusts Where There is a Disposition of the Legal and not of the Equitable Interest . 143 II. — Of Resulting Trusts upon Purchases in the Names of Third Persons 162 CHAPTER X. Of Constructive Trusts 180 PART II. The Trustee. CHAPTER XI. Of Disclaimer and Acceptance of the Trust . . . 196 CHAPTER XII. Op the Legal Estate in the Trustee 209 Section I. — Of Vesting the Legal Estate in the Trustee . . 209 II. — The Properties and Devolution of the Legal Estate in the Trustee . . . . ■ . . . 221 in. — What Persons Taking the Legal Estate will be Bound by the Trust 246 CHAPTER XIII. General Properties of the Office of Trustee . . . 251 CONTENTS. IX [The references are to the star paging.] CHAPTER XIV. The Duties of Tktjstees of Chattels Personal Section I. — Of Reduction into Possession . n. — Of the Safe Custody of Chattels . III. — Of Conversion IV. — Of Investment V. — Liability of Trustees to Payment of Interest VI Of the Distribution of the Trust Fund . PAOE 287 287 294 298 306 338' 344 CHAPTER XV. The Duties op Trustees of Renewable Leaseholds . . 363 CHAPTER XVL Duties of Trustees to Preserve Contingent Remainders. 380 CHAPTER XVIL Duties of Trustees for Raisins Portions .... 885 Section I. — Who are to be Regarded as Portionists . . . 386 II. — What Amount is Raisable Under the Head of Por- tions 408 III. — At What Period the Portions are Raisable . . 412 IV. — In What Mode the Portions are to be Raised . 418 CHAPTER XVIIL Duties of Trustees for Sale 422 Section I. -.— The General Duties of Trustees for Sale . . 422 II. — The Power of Trustees to Sign Discharges for the Purchase-money 450 m. — Disability of Trustees for Sale to Become Pur- chasers of the Trust Property .... 484 CHAPTER XIX. Duties of Trustees for Purchase 499 CHAPTER XX. Duties of Trustees for Payment of Debts .... 509 Section L — Of the Validity of the Trust 509 II. — What Creditors' Deeds are Revocable . . .515 III. — Of the Duties of Trustees for Payment of Debts . 519 X CONTENTS. [The referenceB are to the star paging.] CHAPTER XXI. PAGX The Duties op Trustees of Charities 528 CHAPTER XXn. Of Trustees Under the Settled Land Acts . • . 550 CHAPTER XXIII. The Powers of Trustees 572 Section I. — Of the General Powers of Trustees . . . 572 II. — The Special Powers of Trustees .... 598 CHAPTER XXIV. Of Allowances to Trustees 627 Section I. — Allowances for Time and Trouble .... 627 II. — Allowances to Trustees for Expenses . . . 634 CHAPTER XXV. How A Trustee May Obtain His Discharge from th& Office . . . . . . - . . . . 645 PART III. Tnii Cestui Que Trust. CHAPTER XXVI, In What the Estate of the Cestui Que Trust Primarily Consists 674 Section I. — Of the Cestui Que Trust's Estate in the Simple . Trust . ' . . 674 II. — Of the Cestui Que Trust's Estate in the Special Trust .' 689 CHAPTER XXVn. Properties op the Cestui Que Trust's Estate . . . 692 Section I. — Of Assignment ■ 692 II. — Of Testaftientary Disposition 720 CONTENTS. ' Xi [The references are to the star paging.] PASS Section III. — Of Seisin and Disseisin 723 IV. — Of Merger 726 V. — Of Dower and Curtesy 733 VI. — Of the Estate of a Feme Covert Cestui Que Trust . 738 VII. — Of Judgments Against the Cestui Que Trust . . 794 VIII. — Of Extents from the Crown . . . . .817 IX. — Of Forfeiture . . . . . . '. .818 X. — Of Escheat 822 XL — The Descent of the Trust 823 XII. — Of Assets 82.5 ,' CHAPTER XXVIII. Relief of the Cestui Que Trust Against the Failure of THE Trustee 883 CHAPTER XXIX. The Rights of a Cestui Que Trust in Prevention of Breach of Trust . . . . . . . . 846 CHAPTER XXX. The Remedies of the Cestui Que Trust in the Event of A Breach of Trust 857 Section I. — Of Following the Estate into the Hands of a Stranger 857 II. — The Right of Attaching the Property into Which the Trust Estate has Wrongfully heen Con- ■ verted 892 III. — Of the Remedy for a Breach of Trust Against the Trustee Personally 898 IV. — Of the Mode and Extent of Redress in Breaches of Trust Committed by Trustees of Charities . 927 CHAPTER XXXI. Maxims op Equity for Sustaining the True Character of THE Trust Estate Against the Laches or Tort, of THE Trustee . . 938 Section I. — What Ought to be -Done Shall be Considered as Done . .938 n. — The Act of the Trustee Shall not Alter the Nature of the Cestui Que Trust's Estate . . . 963 XU • CONTENTS. [The references nre to the star paging.] PART IV. Practice. CHAPTER XXXII. PAGE' Section I. — Of Distringas 970 II. — Of Production 975 III. — Of Compulsory Payment into Court . . . 976 IV. — Of Receivership 982 v. — Of Costs of Suit 985 APPEIiTDIX. No. I. Trustee Relief Act, 1847 996 10 & 11 Vict. Cap. 96, 1847. No. II. Trustee Relief Amendment Act, 1849 ..... 1007 12 & 13 Vict. Cap. 74, 1849. No. in. Trustee Act, 1850 1009 13 & 14 Vict. Cap. 60, 1850. No. IV. Trustee Extension Act, 1852 ■ . . 1040 15 & 16 Vict. Cap. 55, 1852. Table of English Cases Table op American" Case? Index .... TABULAR ANALYSIS. [The references are to the star paging,] PART I. Definition of a trust, p. 13. Classification of trusts, p. 18. Creation of trusts, p. 21. By act of a party, p. 21. By operation oS law, p. 143. NeceBsary What property Formalities Of tranamu- parties may be made required, tation of to a trust, subject to a p. 51. possession, p. 21. trust, p. 47. p. 67. i 1 The object pro- Of the Ian- posed by the guage de- trust, p. 84. daring the I trust,p.l08. Lawful trusts, p/84. Unlawful trusts, p. 94. r Express trusts, p. 1Q8. h Implied trusts, p. 130. Executed, p. 111. Executory, p. 111. In marriage ar- ticles, p. 112. In wills, p. 117. 1. 1 Settlor, Trustee, Cestui que At common Under Statute Under Statute p. 21. p. 29. trustf p. 43. law, p. 51. of Frauds, of Wills, p. 57. p. 53. Besultlng trusts, p. 143. Legal interest, hut not the equitable, disposed of, p. 143. Constructive trusts, as renewal of leaseholds, &c., p. 180. Upon purchases in names of third persons, p. 162. By presumption of By force of words, In name of a stranger, law, p. 144. p. 147. p. 162. In name of a child, p. 170, XIV TABULAE ANALYSIS. [The references are to the star paging.] PART II, The Trustee. Disclaimer, p. 196. Acceptaace, p. 200. The legal estate in the trustee, p. 209. How vested, p. 209. Properties and deTolutioD of estate, p. 221. At common law, p. 221. By statute, P.23C. The oflSc::; of trustee, p. 251. ■^Vhat owners of the estate bound by the trufit, p. 246. General properties, p. 251. 1. Renunciation, p. 251. 2. Delegation, p. 252. 3. Joiut nature of the office, p. 258. 4. Survivorship, p. 261. 5. Liability, p. 263. 6. Trustiee excluded from all benefit, p. 275. Duties of trustees, p. 287. In trusts of In trusts of personalty, renewable p. 287. leaseholda, p. 363. In trusts to preserve contingent remainders, p. 380. Powers, p. 572. ,1. Cteneral p. 572. 2. Special, p. 598. Allowances, p. 627. 1. For trouble, p, 627. ^ 2. For expenaeB, p. 634. Relinquishment of office, p. 645. DifiEerent kindc of powerCj p. 598. Construction of pov»"erB, ».60L Disclaimer, p. 606. Control of the Court, p. 613. Kestrictione under Settled Land Act, p. 621. By consent of cestui que trust, p. 645. By power, p. 046, By suit, p. 670. In trusts for raising por- tions, p. 385. 1. Reduction into iJossession, p. 287.- 2. Sate custody, p. 294. 3. Conversion, p. 298. 4. Investment, p. 306. 5. Liability of trustees to pay- '' ment of interest, p. 338. 6. Distribution of the trust fund, p. 344. In trusts In trusts for In trusts for In trusts for Under the for sale, purchase, payment of charities. Settled Land p. 422. p. 499. debts, p. 609. p. 628. Acts, p. 550. 1. General duties, p. 422. 2. Trustees' receipts, p. 450. 3. Purchase of the trust property by trustees. 1. Validity of trusts, p. 509. 2. What deeds revocable, p. 515. • 3. Duties of trustees, p. 519. Who are portion- ists, p. 386. Amount raisable, p. 408. When raisable, p. 412. How raisable, p. 418. In what caee^ obligation to renew, p. 363. In what manner fines tobe levied, p. 366. 1. Who are younger children, p. 386. 2. Time of vesting, p. 394. 3. Ademption and satisfaction, p. 400. TABULAR ANALYSIS. [The references are to the star paging.] XV PART III. The Cestui que Trust. Estate as between Estate ad affected by Subsidiary rights Maxims of equity in cestui que trust dealings of cestui of cestui que support of the cestui and trustee, que trust, or by trustj p. 833. que trust's estate p. 674. operation of law, against the acts of p. 192. What the trustee, p. 938. In the simple In the special trust, p. 674. trust, p. 689. done shall be con- not alter nature bf si^ered as done, cestui que trmi'a jtJ ^ p. 939. estate, p. 963. Jus habendi, Jus disponendi. 1 p. 674. p. 684. 1 . 1 Conversion, Election, p. 93 Who r 3. p. 953. tion may 1 □ay elect. How elet p. 963, be manifested, p. 961. 1 B in event Relief against Tlighta in preven- Reuitfilie failure of the tiou of a hreach of a breach of trustee, p. 833. of trust, p. 846. trust, p." 857. 1. ABsignmei t, p. 692. 2. Testamentary disposition, p. 72( . 3. Seisin and dis-seisin, p. 723. 4. Merger, p. 726. 5. Dower and curtesy, p. 733. 6. Feme covert, p. 739. 7. Judgments, p. 794. 8. Extents, p. 817. 9. Forfeiture, p. 818. 10. Escheat, p. 822. " 11. Descent, p. 823. 12. Assets, p. 825. Appointment of proper Compulsion of trustees Injunction against breach ' trustees, p. 846. to duty, p. 853. ■ of duty, p. 855. * Of following the specific trust estate, p. 857. Of attaching property into Remedy against the Remedies on breachefl which the trust estate has trustee personally, of trust by trustees for wrongfully been con- p. 898. charities, p. 927. verted, p. 892. | Into whose hands, p.857. Within what limits of time, p. 863. What account pf mesne rents and profits, p. 885. r 1 Of the mode Of the extent - of redress, ' of redress, p. 927. p. 934. PART IV. Practice in reference to the Law of Trusts. Distringas, p. 970. Production of docu- ments, p. 975. Compulsory p.^yment into Court, p. 976. Receivership, p. 982. Costs of snit, p. 985. INTRODUCTORY VIEW EISE AND PROGEESS OF TRUSTS. ' Origin of trusts. — The origin of trusts, or rather the adap. tation of them to the English law, may be traced in part at least to the ingenuity of fraud. By the interposition of a trustee the debtor thought to withdraw his property out of the reach of his creditor, the freeholder to intercept the fruits of tenure from the lord of whom the lands were held, and the body ecclesiastic to evade the restrictions directed against the growing wealth of the church by the statutes of mort- main. Another inducement to the adoption of the new de- vice was the natural anxiety of manldnd to acquire that free power of alienation and settlement of their estates, which, by the narrow policy of the common law, they had hitherto been prevented from exercising. The subpoena. — Originally the only pledge for the due ex- ecution of the trust was the faith and integrity of the trustee ; but the mere feeling of honour proving, as was likely, when opposed to self-interest, an extremely precarious security, John Waltham, Bishop of Salisbury, who was Lord Keeper in the reign of Richard the Second, originated the writ of subpoena, by which the trustee was liable to be summoned into Chancery, and compellable to answer upon oath the alle gations of his cestui que trust. No sooner was this protec- tion extended, than half the lands in the kingdom became vested in feoffees to uses, as trusts were then called. Thus, in the words of an old counsellor, the *pa- [*2] rents of the trust were Fraud and Fear, and a Court of Conscience was the Nurse (a). (a) Attorney-General v. Sands, Hard. 491. 1 *6 rNTKODXTCTION. Trusts simple or specisU. — Simple trust defined. — Of trusts there were two lands: the simpletvust, and the special trust. The simple trust was defined in legal phraseology to be, " a confidence, not issuing out of the land, but as a thing collat- eral, annexed in privity to the estate of the land, and to the person touching the land, scilicet, that cestui que use should take the profit, and that the terre-tenant should execute an estate as he should direct "(J). In order rightly to under- stand what was meant by this rather technical description, we shall briefly consider the principles that were recogmsech- by Courts of Equity (for these had the exclusive jurisdic- tion of trusts). First, with reference to the terre-tenant or feoffee to uses, and Secondly, veith reference to the beneficial proprietor, or cestui que use. Confidence in the person. — With respect to the feoffee to uses, it was first held to be absolutely indispensable that there should be confidence in the person, and privity of estate. For want of the requisite of personal confidence it was ruled that a corporation could not stand seised to a use ; for how, it was said, could a corporation be capable of confidence when it had not a soul? Nor was it competent for the king to' sustain the character of trustee ; for it was thought incon- sistent with his high prerogative that he should be made re- sponsible to his own subject for the due administration of the estate. And originally the subpoena lay against the trustee himself only, and could not have been sued against either his heir or assign; for the confidence was declared to be per- sonal, and not to accompany the devolution of the prop- erty (ff). But the doctrine of the Court in this respect was subsequently put on a more liberal footing, and it came to be held that both heir and assign should be liable to [*3] the execution of the use (cT). An exception * how- ever was still made in favour of a purchaser for valu- able consideration not affected by notice (a). Privity of estate. — The meaning of privity of estate may (i) Co. Lit. 272, b. altered by Fortescue, Ch. J. Bac. Ab. (c) 8 E. i. 6; 22 E. 4. 6. Uses and Trusts B. {d) The law as to the heir was (a) Bac. Ab. Uses and Trusts B ; and see 14 H. 8. 4, 7, 8. 2 INTEODUCTION. *4 be best illustrated by an example. Had a feoffment been made to A. for life to his own use, with remainder to B. in fee to the use of C, and then A. had enfeoffed D. in fee, in this case, though D. had the land by the feoffment which then operated as a tortious conveyanee, yet, as he did not take the indentical estate in the land to which the use in favour of C. was attached, he was not bound by O.'s equi- table claim. And, by the same rule, neither tenant by the curtesy, nor tenant in dower, nor tenant by elegit, was liable to the execution of the tise, for their interests were new ajid original estates, and could not be said to have been impressed with the use. So the lord who was in by escheat, a disseisor, abator, and intruder, were not amenable to the subpoena ; for the first claimed by title paramount to the creation of the use ; and the three last were seised of a tor-i tious estate, and held adversely to the feoffee to uses. Privity as regards the cestui que use. — With respect tO the cestui que use, the principle upon which his whole estate ^ depended was also what in legal language was denominated privity. Thus, on the death of the original cestui que use, the right to sue the subpoena was held to descend indeed to the heir on the ground of haeres eadem persona cum anteces- sore ; but the wife of the cestui que use, or the husband of a feme cestui que use, and a judgment creditor were not ad- mitted to the same privilege ; for their respective claims were founded pot on privity with the person of the cestui que use, but on the course of law. And for the like reason a use was not assets, was not subject to forfeiture, and on failure of heirs in the inheritable line did not escheat to the lord. Special trust defined. — The special trust (for hitherto we have spoken of the simple trust only) was where the con- veyance t6 the trustee was to answer some particular and specific purpose, as upon trust to reconvey in order to change the line of * descent, upon trust to sell for pay- [*4] ment of debts, &e. In the special trust the duty of the trustee was not, as in the simple trust, of a mere passive description, but imposed upon him the obligation of exerting himself in some active character for the accomplishment of 3 *5 rNTEODTTCTION. the object for which the trust was created. In case the trus» tee neglected his duty, the cestui que trust was entitled to file a bill in Chancery, and compel him to proceed in the execu- tion of his office (a). Trusts applicable to chattels. — Both the simple trust and the special trust were applicable to chattels real and personal, as well as to freeholds; but trusts of chattels were for ob- ■vious reasons much less frequently employed. The amount of the property was small ; the owner, even without the interposition of a trustee, had the fullest control and domin- ion over it ; and a chattel interest, as it followed the person, was equally subject to forfeiture whether in the custody of a trustee, or in the hands of the beneficial proprietor (5). But to the extent, whatever it was, to which trusts of chat- tels were adopted? they were administered upon the same principles, mutatis mutandis, as were trusts of freeholds ; the right to sue a subpoena turned equally on privity (c), and the interest of the cestui que trust was held not to be assignable (d). Statutes affecting trusts. — Such was the nature of trusts as they stood at common law ; but the manifold frauds and mis- chiefs to which the new system gave occasion, particularly "the great unsurety and trouble arising thereby to pur- chasers," called loudly from time to time for the enactment of remedial statutes. t)ne of the most important of these was 1 Ric. 3, c. 1, the substance of which may be well ex- pressed in the terms of the preamble, viz., that "all acts made by or against a cestui que use, should be good as against him, his heirs, and feoffees in trust," in other words, that all dealings of the cestui que use with the trust property [*5] should have precisely * the same legal operation, as if the cestui que use had himself possessed the legal ownership. To what interests the legislature intended this statute to apply has not on all hands been agreed. A feoff- ment in fee to uses was clearly the case primarily intended. Upon a- feoffment in tail, it seems no use could have been (a) See the case in the reign of (6) 5 H. 5. 3, 6. Hen. 7. Append, to Sugden on Powers, (c) Witham's case, 4 Inst. 87. No. 1. (d) Jenk. 244, c. 30. 4 IKTE.ODUCTION. *6 declared, for a tenant in tail was incapacitated by tlie statute de donis from executing estates (a). With respect to a feoffment for life to uses, there appears to be no reason upon principle (except so far as the language of the act may be thought to furnish any inference), and certainly there is no objection on the score of authority, why the cestui que use might not have passed the legal estate by virtue of the statutory power. It has been contended by Mr. Sanders, that on a feoffment for life no use grafted on the life estate could have been declared, on the ground that as the tenant for life held of the reversioner, the consideration of tenure would have conferred a title to the beneficial interest on the tenant for life himself (6). But this reasoning can have no application where the estate for life was not created, but was merely transferred., for then the assignment of the life estate was not distinguishable in this respect from a conveyance of the fee ; in each case there was no consideration of tenure as between the grantor and grantee, but in each case the ser- vices incident to tenure were due from the grantee to a third person (1). It is clear that the statute embraced uses of lands only, and did not extend either to special trusts, or to trusts of * chattels : not to special trusts, [*6] because the trustee combined in himself both the legal estate and the use, though compellable in Chancery to direct them to a particular purpose ; and not to trusts of chattels, because the preamble and the statute were addressed to cestui que use and his heirs, and to feoffees in trust. (a) Co. Lit. 19, b. (6) Sand, on Uses, c. 1, s. 6, div. 2. (1) In what case a use might have been declared upon an estate for life. — The state- of the law upon this subject appears to hare been as ioU lows: — (1). On the creation of an estate for life, had no use been mentioned on the face of the instrument, the tenant for life had held for his own benefit in compensation for his services : Perk. s. 535 ; B. N. C. 60 ; Br. SefE. al. Uses, 10 ; and no use could have been averred in contradiction to the use implied. See Gilb. on Uses, 57. (2). Had a use been expressly declared by the deed, the tenant had been bound by the terms on which he accepted the estate : Perk. s. 537 ; Br. Peff. al. Uses, 10, 40; (3), unless a rent had been reserved, or consideration paid, in which case a court of equity would not have enforced the use against the purchaser for valuable consideration: B. N. C. 60; Br. FefE. al. Uses, 40. (4). On the assignment of a life estate a use might have , been declared, as on a conveyance in fee. 5 *7 INTEODTJCTION. 27 H. 8. o. 10. — The jnischiefs of the system increasing more and more (the statute of Richard occasioning still greater evils than it remedied, from the facility it gave to the cestui que use and his feoffee, who had now each the power of passing the leg%l estate, of defrauding by collusion the bond fide purchaser), the legislature again interposed^ its authority by 27 Hen. 8. c. 10, and thereby annihilated uses as regarded their fiduciary character, by enacting, that " Where any person stood seised of any hereditaments to the use, confidence, or trust of any other person, or of any body politic, such person or body politic as had any such use, confidence, or trust, should be deemed in lawful seisin of the hereditaments in such like estates as they had in use, trust, or confidence " (1). Special trusts and trusts of chattels excepted from the stat- ute. — Uses by the operation of this statute became merged in the legal estate ; but special trusts and trusts of chattels were not within the purview of the Act: the former, because the use, as well as the legal interest, was in the trustee; the latter, because a termor is said to be possessed, and not to be seised of the property. [*7J * Introduction of the modern trust. — In the room of uses which were thus destroyed as they arose, (1) Objections to the doctrine that no use could have been de- clared upon an estate in tail or for life. — As this statute does operate on the use of a. life estate, but does not apply to a seisin in tail, the doctrine of Mr. Sanders, that prior to 27 Hen. 8. there was no use of a seisin either in tail or for life, seems open to the following objections: — 1. That the statute in executing the use of a lite estate operates on an interest which at the time of the enactment had no existence ; and, 2ndly, that in not executing a use declared on a seisin in tail, it operates differently on two estates falling, according to his view, within the same principle. To meet the former objec- tion, Mr. Sanders holds the statute of Hen. 8. to be prospectiye, and distin- guishes it from the statute of Richard, which he considers not to be prospec- tive, by observing that the latter employs the word "use" only, while the former has the additional term of " trust " ; but to this it may be answered, that, although the statute of Eichard does not contain the word trust, the preamble does, and that the distinction contended for between use and trust had no existence until a comparatively late period. See Altham v. Anglesey, ■ Gilb. Eq. Kep. 17. To obviate the latter objection, it is maintained by Mr. Sanders that tenant in tail is within the statute of Hen. 8. ; an opinion which, it is submitted, is directly opposed to the general stream of authority : Co. Lit. 19, b. ; Shep. Touch. 509; Gilb. on Uses, 11, and Lord St. Leonards' note, ibid. INTEODtrCTION. *8 the judges by their construction of the statute created a novel kind of interest, since distinguished and now known by the name of Trust. Before the statute of Hen. 8. a person, to have had the complete ownership, must have united the possession of the land and the use of the profits. ~ The possession and the use were even at common law recog- nised as distinct interests, though the cestui que use was left to Chancery for his remedy (a). On a feoffment to A. to the use of B. to theuse of C, the possession was in A., the use in B., and the limitation bver to C. was disregarded as surplusage. When^ the statute of Hen. 8. was passed, it executed the estate in B. by annexing the possession to the use ; but having thus become functus officio it did not, as the Act was construed, affect the use over to C. However, Chancery, now that uses were converted into estates, decreed C. to have a title in equity, and enforced the execution of it under the' name of a trust (6). ' Iiand, use, and trust distinguished by Lord Hard'wicke. — " In- terests in land," paid Lord Hardwicke, "thus became of three kinds : first, the estate in the land itself, the ancient common- law fee ; secondly, the use, which was originally a creature of equity, but since the statute of uses it drew the estate in the land to it, so that they were joined and made one legal estate ; and thirdly, the trust, of which the common-law takes no notice, but whie'h carries the beneficial interest and prof- its in a court of equity, and is still a creature of that court, as the use was before the statute "(c). Trusts not within statutes relating to uses. — This newly created interest was held to be so perfectly distinct from the ancient use, that the statutory provisions by which many of the mischiefs of uses had been remedied, as the 19th Hen. 7. c. 15, by which uses had been made liable to writs of execution, and the 26th Hen. 8. c. 13, by * which [*8] -they had become forfeitable to the Crown for trea- son, were decided to have no application. However, the trust (a) Lit. s. 462, 463 ; Co, Lit. 272, (i) See Hopkins v. Hopkins, 1 t.; and see Carter, 197; Porey v. Atk. 591. Juxon, Nels. 135; Megod's Case, (c) Willett «. Stanford, 1 Ves. 186 ; Godb. 64. Coryton v. Helyar, 2 Cox, 342. 7 *9 INTEODtrCTION. took the likeness of the use, conforming itself to the nature of special trusts and trusts of chattels, which had never been disturbed by any legislative enactment. Trusts' at first modeled after the pattern of uses. — To show how, the principles of uses prevailed after the statute of Hen. 8. it was held in the reign ol Elizabeth (a), that the equitable term of a, feme covert did not vest in the husband by survivors- ship, for a trust, it was said, was a thing in privity, and in the nature of an action, and there was no remedy for it but by writ of subpoena. And a few years after in the same reign it was resolved by all the Judges, that a trust was a matter of privity, and in the nature of a chose in action, and there- fore was not assignable (b~). And in the sixth year of King Charles the First it was decided by the Judges, that as a feme was dowable by act or rule of law, and a coirrt of equity had no jurisdiction where there was not fraud or covin, the widow of a trustee was not bound by the trust, but was enti- tled beneficially to her dower out of. the trust estate (c). Improvements introduced by Iiord Nottingham. — But during the reign of Charles the First and Charles the Second, and particularly during the Chancellorship of Lord Nottingham, who, from the sound and comprehensive principles upon which he administered trusts, has been styled the father of equity (c?), the Courts gradually threw off the fetters of uses and, disregarding the operation of mere technical rules, pro- ceeded to establish trusts upon the broad foundation of con- formity to the course of common law. "In my opinion," said Lord Mansfield, " trusts were not on a true foundation till Lord Nottingham held the great seal; but by steadily pursuing from plain principles trusts in all their consequen- ces, and by some assistance from the legislature, a [*9] noble, rational, and * uniform system of law has since been raised ; so that trusts are now made to answer the exigencies of families and all piirposes, without produc- (a) Witham's Case, 4 Inst. 87 ; (c) Nash v. Preston, Cro. Car. 190. S. C. Popham, 106, sub nomine John- (d) Philips v. Brydges, 3 Ves. 127 ; son's Case. Kemp v. Kemp, 5 Ves. 858. (6) Sir Moyle Finch's Case, 4 Inst. INTEODX7CTION. *10 ing one inconveiiience, fraud, or private mischief, which the statute of Hen. 8. meant to avoid " (a). Alterations made in trusts as regards the trustee. — As to the changes that were successively introduced, it was held with reference to the trustee, that actual confidence in the person was no longer to be looked upon as essential. A body corporate therefore was not exempted from the writ of subpoena on the ground of incapacity (&) : and even the king, notwithstand- ing his high prerogative, was invested with the character of a Royal Trustee (c), though the precise mode of enforcing < the trust against him was not exactly ascertained : to use the language of. Lord Northington, "the arms of equity were very short against the Prerogative " (d). The subtle' distinc- tions which had formerly attended the notion oi privity of estate were also gradually discarded. Thus it was laid down by Lord Hale, that tenant in dower should be bound by a trust as claiming in the ^er by the assignment of the heir (e) ; ' and so it was afterwards determined by Lord Nottingham (/) : and when an old case to the contrary was cited by Lord Jeff- ries, it was unaniihously declared both by the bench and the bar to be against equity and the constant practice of the Court (£'). A tenant by statute merchant was held to be bound upon the same principle, for he took, it was said, by the act of the party, and the remedy which the law gave thereupon (A). But as to the tenant by the curtesy. Lord Hale gave his opinion, that one in the post should not be lia- ble to a trust without express mention made hy the party who created it ; and therefore tenant by ** the [*10] curtesy should not be bound (a) : but his Lordsbip's authority on this point was subsequently over-ruled, and (o) Burgess v. Wheate, 1 Ed. 223. (/) Noel v. Jevon, Freem. 43. (6) See Green v. Butherford, 1 Ves. (jc) MS. note by an old hand in the 468 ; Attorney-General v. Whorwood, copy of Croke's Beports in Lincoln's 1 Ves. 536. Inn Library, Cro. Car. 191. (c) See Penn v. Lord Baltimore, 1 (K) Pawlett v. Attorney-General, Ves. 453 ; Earl of Kildare v. Eustace, Hard. 467, per Lord Hale. 1 Vern. 439. (a) Pawlett v. Attorney-General, (rf) Burgess v. "Wheate, 1 Ed. 256. Hard. 469. (e) Pawlett v. Attorney-General, Hard. 469. *11 INTEODtrCTION. curtesy as well as dower was made to follow the general prineiple. As regaras the cestuis que trust. — With respect to the cestui que trust, or the person entitled to the subpoena, the narrow doctrine contained under the technical expression of privity began equally to be waived, or rather to be applied with con- siderable latitude of construction. " The equitable interest," said Justice Rolle, " is not a thinff in action, but an inheri- tdnce or chattel, as the case may fall out " (V) ; and when once the trust, instead of passing as a chose in action, came to be treated on the footing of an actual estate, it soon drew to it all the rights and incidents that accompanied property at law : thus, the equity of the cestui que trust, though a bare contingency or possibility (e), was admitted to be assigna- ble (cT) ; and Witham's case, that a husband who survived his wife could not, for want of privity, claim her equitable chat- tel, was declared by the Court to be no longer an authority (e). So a judgment creditor, it was held by Lord Nottingham, might proseeute an equitable fieri, facias (/) ; and though Lord Keeper Bridgman refused to allow an equitable ele- git Qg'), it is probable, had the question arisen before Lord Nottingham, his Lordship would in this, as in other cases, haive acted on a more liberal principle: at all events, the creditor's right to relief in this respect has since been estab- lished by the current' of modern authority (K). Again, a trust was decided by Lord Nottingham to be assets in the hands of the heir (i) ; and though Lord Guilford [*11] afterwards held the other way(y),yet Lord* Not- tingham's view of the subject appears to have been eventually established (a). Curtesy was also permitted of a trust estate, though the widow of a cestui que trust could (6) King V. HoHand, Styl. 21 ; (e) King v. Holland, Al. 15. see Casburne v. Casburne, 2 J. & W. (/) Anon.- case, cited Balsh v. 196. Wastall, 1 P. W. 445; Pit v. Hunt, 2 (c) Warmstrey v. Tanfield, 1 Ch. Ch. Ca. 73. Ee. 29 ; Lord Cornbury v. Middleton, (jr) Pratt v. Colt, Freem. 139. 1 Ch. Ca. 208; Goring v. Bickerstaff, (A) See infra. 1 Ch. Ca. 8. (i) Grey v. Colville, 2 Ch. Re. 143. (d) Courthorpe u. Heyman, Cart. (/) Creed v. ColyiUe, 1 Vem. 172. 25, per Lord Bridgman. (a) See infra. 10 INTEODTJCTION. *12 never make good her title to dower (¥) ; " not," said Lord Mansfield, "on reason or principle, but because wrong de- terminations had misled in ,too many instances to be then set right " (c) ; or rather, as Lord Redesdale thought, because the admission of dower would have occasioned great incon- venience to purchasers — a mischief that in the case of curtesy was not to be equally apprehended (d). Lord Mansfield's doctrines. — Principles governing trusts at the present day. — Lord Mansfield was for carrying the analogy of trusts to legal estates beyond the legitimate boundary. " A use or trust," he said, " was heretofore understood to be merely as an agreement, by which the trustee and all claim- ing from him in privity were personally liable to the cestui que use, and all claiming under him in like privity ; nobody in the posf was entitled under or bound by the agreement: but now the trust in this Court is the same as the land, and the trustee is considered merely as an instrument of convey- ance " (e). And in the application of this principle his Lord- ship argued, that the estate of the cestui que trust was subject to escheat, and that on failure of heirs of the trustee, the lord who took by escheat was bound by the trust. But to these propositions the Courts of Equity have never yet assented (/). The limit to which the analogy of trusts to legal estates ought properly to be allowed was well enunciated by Lord Northington in the case of Burgess v. Wheate. " It is true," he said, "this Court has considered trusts as between the trustee, cestui que trust, and those claiming under them, as imitating the possession ; but it would be a bold stride, and, in my opinion, a dangerous conclusion, to say therefore this Court has considered the creation and instrument of trust as a mere ntillity, and the estate in all respects the same as if it still continued in the seisin of the creator of the trust, or the person entitled * to it : for my own part [*12] Ihnow no instance where this Court has permitted the creation of a trust 'to affect the right .of a third person " (a) ; (b) Colt V. Colt, 1 Ch. Ee. 254. [(/) But see now 47 & 48 V. o. (c) Burgess v. Wheate, 1 Ed. 224. 71, s. 4.] (i) See infra. (a) Burgess v. Wheate, 1 Ed. 250, (e) Burgess v. Wheate, 1 Ed. 226. 251. 11 *12 INTEODUCTION. that is, to illustrate the principle by instances, a tenant by the curtesy, or in dower, or by elegit, as claiming through the cestui que trust or trustee, though in the post, is bound by and may take advantage of the trust; but, according to the doctrine laid down by Lord Northington, the lord who comes in by escheat is not in any sense a privy to the trust, and therefore can neither reap a benefit from it on failure of heirs of the cestui que trust, nor is bound by the equity on failure of heirs of the trustee (6). (6) It is clear that [prior to 47 & See post, c. xii. s. 3. The Trustee 48 V. c. 71], the lord [could] not Act, 1850, s. 15, enables the Court to acquire an equitable interest by es- make an order on failure of heirs of cheat : Burgess v. Wheate, 1 Ed. 177 ; the trustee, but is the Crown bound Cox V. Parker, 22 Bear. 168; but by the Trustee Act? See note on whether a lord taking the legal estate second section of the Trustee Act, by escheat shall or not be bound by post. [See also 44 & 45 V. c. 41, the trust, has never been decided, s. 30.] 12 *PaET I. [*133 DEFINITION, CLASSIFICATION, AND CREATION OF TRUSTS. CHAPTER I. DEFINITION OP A TKTTST. Definition of a trust. — As the doctrines of trusts are equally- applicable to real and personal estate, and the principles that govern the one will be found mutatis mutandis, to govern the other, we cannot better describe the nature of a trust generally, than by adopting Lord Cook's deiinition of a use, the term by which, before the Statute of Uses, a trust (1) of lands was designated (a). A trust, in the words applied to the use, may be said to be " A confidence reposed in some other, (0) Burgess v. Wheate, 1 Ed. 248, SpUlet, 2 Atk. 150, per Lord Hard- ier Lord Keeper Henley; Lloyd v. wicke. (1) That a trust was anciently known as a use, appears from the Merchant of Venice. Thus, when Shylock had forfeited one half of his goods to the State to be commuted for a fine, and the other half of his goods to Antonio, the latter offered that, if the Court, as representing the State, would forego the forfeiture of the one half, he (Antonio) would be content himself to hold the other half in use, that is, in trust for Shylock for life, with remainder, after Shylock's death, for Jessica's husband : — " So please my lord tbe dake, and all the court, To quit the fine for one half of his ^oods; X am content so he will let me have The other half in use, — to render It, Upon his death, unto the gentleman That lately stole his daughter." Merchant of Venice, Act IV, Scene I. , This interpretation clears Antonio's character from the charge of selfish- ness to which it would be exposed if he were to keep the half for his own use during his life. See Heard's " Shakespeare as a Lawyer," pp. 93, 94 ; 8 Wash. Real Prop, chap. II. ; "Wallace v. Wainwright, 87 Pa. St. 263 ; Croxall v. Shererd, 5 Wall. 2.68 ; Reid v. Gordon, 35 Md. 183 ; Underbill on Trusts and Trustees, 1 ; 1 Story Eq. Jur. §§ 56, 58 ; Commissioners v. Walker, 6 How. 143 ; 38 Am. Dea 433 ; Chaffees v. Risk, 12 Harris, 432. 13 *14 MERGER. • [Ch.L not issuing out of the land, hut as a thing collateral, annexed in privity to the estate of the land, and to the person touching the land, for which cestui que trust has no remedy but hy sub- poena in Chancery " (V). 1. A confidence. — It is "a confidence " ; not neces- [*14] sarUy a confidence expressly * reposed by one party in another, for it may be raised by implication of law : and the trustee of the estate need not be actually capable of confidence for the capacity itself may be supplied by legal fiction, as where the administration of the trust is committed to a body corporate ; but a trust is a confidence, as distin- guished from jus in re and jus ad rem, for it is neither a legal property nor a legal right to property (a). 2. Reposed in some other. — It is a confidence " reposed in some other " ; not in some other than the author of the trust, for a person may convert himself into a trustee, but in some other than the cestui que trust; for as a man cannot sue a subpoena against himself, he cannot be said to hold upon trust for himself (J). If the legal and equitable interests happen to meet in the same person, the equitable is for ever absorbed in the legal. — Thus, if A. be seised of the legal inheritance ex parte paternd, and of the equitables ex parte maternd, upon the death of A. the heir of the maternal line has no equity against the heir of the paternal (e). And the same rule pre- vails as to leaselords for lives (c?) : as if the legal estate in a freehold lease be vested in a husband and his heirs, in trust for the wife and her heirs, the child who is the heir of both, and takes the legal estate ex parte paternd and the equitable (4) Co. Lit. 272, b. Law ai;id equity Philips v. Brydges, 3 Ves. 126, per are now administered in all the courts Lord Alvanley ; Finch's case, 4 Inst, alike. 85, 3d resolution; Harmood v. Og- (o) Bacon on Uses, 5. See Waine- lander, 8 Ves. 127, per Lord Eldon ; Wright V. Elwell, 1 Mad. 634. ConoUy v. Conolly, 1 Ir. Rep. Eq. 376. (i) Goodright v. Wells, Dougl. 747, These cases, except the last, were all per Lord Mansfield ; Conolly v. Con- before the Inheritance Act, 3 & 4 W. oily, 1 It. Rep. Eq. 383, per Chris- .4. c. 106 ; but which will probably be tian, L. J. held not to vary the law. So now (c) Selby v. Alston, 3 Ves. 339; decided Re Douglas, 28 Ch. D. 327. Goodright v. Wells, Dougl. 747, per (d) Creagh ». Blobd, 3 Jones & Lat. Lord Mansfield; Wade «. Paget, 1 133. B. C. C. 363; S. C. 1 Cox, 76; 14 Ch. I.] MERGER. *15 estate ex parte maternd will, by the merger ^ of the equitable in the legal, become seised both at law and at equity, ex parte paternd, a,nd the subsequent deyolution will be regu- lated accordingly. How far the equitable merges in the legal estate. — But this rule holds only where the legal and equitable estates are co- extensive and commensurate ; for if a person be seised of the legal estate in fee, and have only a partial equitable in- terest, to merge the one in the other might occasion an inju- rious disturbance of rights. Thus before the Fines and .Recoveries Act (e), if lands had been conveyed unto and to the use of A. and his heirs, in trust for B. in tail with remain- der in trust for A. in fee, had the, equitable remainder limited _ to A. been converted into a leg^l estate, it would not have been barrable by B.'s equitable recovery (/). * In 'vrhat sense mortgagee in fee is trustee for himself [^ISJ and his executors. — In the case of a mortgagee in fee it [has been] said [that] a man and his heirs are trustees for himself and his executors (a). But the meaning was, that, until a release or foreclosure of the equity of redemption, the interest of the mortgagee was of the nature of personality, aod passed on his death to his personal representative ; the heir, therefore, took the estate upon trust for the executor (J). A release or foreclosure, unless it happen in the lifetime of the mortgagee, comes too late after his decease to alter the character of the property, for, as the tree falls, so it must lie (c) (1). (e) 3 & 4 "W. 4. c. 74. (a) Kendal v. Mickfield, Barn. 50, (/) Philips V. Brydges, 3 Yes. 120 : per Lord Hardwicke. seethe judgment, pp. 125-127 ; Rob- [(i) Now, by the Conveyancing inson v. Cuming, Rep. i. Talb. 164; and Law of Property Act, 1881, s. 30, S. C. 1 Atk. 473 ; and see Boteler v. the estate of the mortgagee devolves AlUngton, 1 B. C. C. 72 ; Merest v. upon the legal personal representative James, 6 Mad. 118; Habergham v. to the exclusion of the heir or de- Vincent, 2 Ves. jun. 204; Buchanan visee.] V. Harrison, 1 Johns. & Hem. 662. (c) Canning u. Hicks, 2 Ch. Ca. (1) But if the heir foreclosed or obtained a release of the equity of re- demption, it was said he might keep the estate, and pay the executor the debt only. Clerkson u. Bowyer, 2 Vern. 67, per Cur. Sed qucere. 1 Bolles V. State Trust Co. 27 N. J. Eq. 308; Badgett u. Keating, 31 Ark. 400; Truebody v. Jacobson, 2 Cal. 82; Lockwood v. Sturtevant, 6 Conn. 373; 16 *16 PRIVITY. [Ch. I. Trust not issuing out of the land, but collateral to it. — A trust is " not issuing out of the land, hut as a thing collateral to it." A legal charge, as a rent, issues directly out of the land itself, and therefore binds every person, whether in the per or post, whether a purchaser for valuable consideration or volunteer, whether with notice or without ; but a trust is not part of the land, but an incident made to accompany it,- and that not inseparably, but during the continuance only of certain indispensable adjuncts ; for — 4. Annexed in privity to the estate. — A trust is " annexed in privity to the estate" that is, must stand or fall with the person by whom the trust is created ; as, if the trustee be disseised, the tortious fee is adverse to that impressed with the trust, and therefore the equitable owner, until the fusion of law and equity, could not have himseK sued the disseisor, but must have brought an action against him at law in the name of the trustee (^d'). Extent of the term privity to the estate. — During the system of uses, and also while trusts were in their infancy, the no- tion of privity of estate was not extended to tenant by the curtesy, or in dower, or by elegit, or in fact to any person claiming by operation of law, though through the trusteg ; but in this respect the landmarks have been carried forward, and at the present day a trust follows the estate into [*16] the hands of every one * claiming under the trustee, whether in the per or post.. It was the opinion of Sir T. Clarke and Lord Northington, that a lord taking by es- cheat, as claiming by title paramount, and not either in the per or post, was not affected by any privity, and therefore could not be compelled to execute the trust (a). But this question was never actually decided, and has in great meas- ure become immaterial (S). 187; S. C. 1 Tern. 412; Tabor v. resolution; and see Gilbert on Uses, Grover, 2 Vern. 367; S. C. 1 Eq. Ca. edited by Lord St. Leonards, p. 429, Ab. 328; Clerkson v. Bowyer, 2 Vern. note 6. See now 36 & 37 Vic. c. 66, 66 ; Gobe v. Earl of Carlisle, cited ib.; s. 24. Wood V. Nosworthy, cited Awdley v. (a) Burgess ■». Wheate, 1 Eden, Awdley, 2 Vern. 193. 203, 246. (d) Finch's case, 4 Inst. 86, 1st (6) See post, c. xii. s. 3. Earle v. "Washburn, 7 Allen, 95 ; Lewis v. Starke, 18 Miss. 120 ; Sheldon v. Edwards, 35 N. T. 279. 16 Ch. I.] COUETS OF EQUITY, *16 5. Trust annexed in privity to the person. — A trust is " annexed in privity to the p&rson." To entitle the cestui que trust to relief in eqtiity it is not only necessary that he should prove the creation of the trust and the continuance of the estate supporting it, but should also establish that the assign is not personally privy to the equity, and therefore amenable to the subpoena. If it can be shown that the assign had qatual notice, then, whether he paid a valuable consider- ation or not, he is plainly privy to the trust, and bound to give it effect ; but if actual notice cannot be proved, then, if ^he be a volunteer, the court will still affect him with notice by presumption of law ; but if he be a purchaser for value, the court must believe, until proved to the qontrary, that, having paid for the estate, he was ignorant, ait the time he purchased, of another's equitable title. A purchaser for val- uable consideration without Notice therefore is the only assign against whom privity annexed to the person cannot at the present day be charged (e). 6. No remedy of the cestui que trust but in Chancery. — The cestui que trust " has no remedy hut hy a subpoena in Chancery."^ And by chancery inust be understood, not ex- clusively the court of the Lord Chancellor, but any court invested with an equitable jurisdiction, as opposed to com- (c) See 37 & 38 Vic. c. 78, s. 7, repealed by 38 & 39 Vic. e. 87, s. 129. 1 The remedy must be in equity ; Dorsey v. Garey, 30 Md. 489 ; McCartney V. Bostwick, 32 N. Y. 53 ; and the action is to be brought in the name of the trustee ; Baptist Society v. Hazen, 100 Mass. 322 ; Ktzpatrick v. Fitzgerald, 13 Gray, 400 ; Cox v. Walker, 26 Me. 504 ; Beach v. Beach, 14 Vt. 28 ; Davis v. Charles Biver Br. E. E. Co. 11 Cush. 506 ; Moore v. Burnet, 11 Ohio, 334 ; Bog- gett ». Hart, 5 Fla. 215 ; but Steams v. Palmer, 10 Met. 35. The trustee or his grantee may protect his legal title against a suit at law by the cestui que trust; Tayl«r v. King, 6 Munf. 358; Nicoll v. Walworth, 4 Denio, 385; Reece V. Allen, 5 Gilm. 241 ; Cahoy v. Troutman, 7 Ired. 155. A bill in equity may be maintained to establish a trust, where' the jurisdiction over an alleged trustee is likely to terminate ; Price v. Minot, 107 Mass. 62 ; BayUes v. Payson, 6 Allen, 473., In Pennsylvania the cestui qm trust may maintain ejectment, even against' the trustees ; School v. Dunkleberger, 6 Barr, 29 ; Congregation V. Johnston, 1 Watts & S. 56. A suit inay be brought by a trustee, which he would be estopped to bring in his individual capacity ; Worthy v. Johnson, 10 Ga. 358; 54 Am. Dec. 393. 17 *17 COURTS OF EQUITY. [Ch. I. mon-law courts (d), and spiritual courts (e), neither of which until the fusion of law and equity had any cognizance [*17] in matters of trust. A common-law * court could never, from the defective nature of its proceedings, have specifically enforced a trust ; but at one time it affected to punish a trustee in damages for breach of the implied con- tract (a) : an exercise of authority, however, clearly extra- provincial, and afterwards abandoned (6). Had a Spiritual court attempted to meddle with a trust, the Court of Queen's Bench might have been moved to issue a prohibi- tion (c). 36 & 37 V. c. 66. — By 36 & 37 Vict., c. QQ, and 37 & 38 Vict., c. 83, it was enacted that as from 1st November, 1875 (inclusive), there should be " One Supreme Court of Judi- cature " consisting of "Her Majesty's High Court of Justice" and " Her Majesty's Court of 'Appeal," and the High Court of Justice was made to comprise five divisions, viz.: the Chancery Division, the Queen's Bench Division,' the Common Pleas Division, the Exchequer Division, and the Probate, Divorce, and Admiralty Division [but by Order in Council dated 16th December, 1880, under section 32 of the first- (d) Sturtf.Mellish,2Atk.612,;)er (e) Miller's case, 1 Freem. 283; Lord Hardwioke; Allen t>. Imlett, F. King «. Jenkins, 3 Dowl. & Eyl. 41; L. Holt's Eep. 641 ; Holland's case, Farrington v. Knightly, 1 P. W. 549, Styl. 41, per Bolle, J. ; Queen «. per Lord Parker ; Edwards v. Graves, Trustees of Orton Vicarage, 14 Q. B. Hob. 265; Witter v. Witter, 3 P. W. 139 ; Vanderstegen v. Witham, 6 M. 102, per Lord King. & W. 457; Bond v. Nurse, 10 Q. B. (a) Megod's case, Godb. 64; JeTon 244 ; Edwards v. Lowndes, 1 Ell. & Bl. «. Bush, 1 Vern. 344, per Lord JefEiies ; 81 ; Drake v. Pywall, 4 Hurlst. & Colt. Smith v. Jameson, 5 T. R. 603, per 78. In The Queen u. Abrahams, 4 Buller, J.; and see 1 Eq. Ca. Ab. 384, Q. B. 157, the Court professed to pro- D. (a). ceed upon the legal right so that the (6) Barnadiston v. Soame, 7 State principle was riot disturbed, though Trials, 443, Harg. ed. per Chief Jus- there may be a question how far the tice North ; Sturt u. Mellish, 2 Atk. facts justified the assumption upon 612, per Lord Hardwicke; Holland's which the Court acted. In Roper v. case, Styl. 41, per EoUe, J. ; Allen v. Holland, 3 Ad. & Ell. 99, a cestui que Imlett, F. L. Holt's Rep. 14. trust recovered upon an action of debt (c) Petit v. Smith, 1 P. W. 7 ; Ed- for money had and received on proof wards v. Freeman, 2 P. W. 441, per of the admission by the trustee that Sir J. Jekyll ; Barker v. May, 4 M. & he had a balance in hand for the plain- R. 886 ; Ex parte Jenkins, 1 B. & C. tiff; and see Sloper v. Cottrell, 2 Jur. 655. N. S. 1046 ; Topham v. Morecraf t, 4 Jur. N. S. 611. 18 Ch. I.] COUKTS OF EQTTITY. *17 mentioned act, the Common Pleas Division and the Ex- chequer Division have been abolished]. Equitable estates and rights are now to be noticed and acted upon in all the courts, and where there is any conflict between the rules of equity and the rules of common law, the rules of equity are to prevail. See sections 24 & 25 of the first-mentioned Act. Subject to any rules to be made in pursuance of the new enactments, all causes and matters pending in ^he Court of Chancery at the commencement of the Act of 36 & 37 Vict, are transferred to the Chancery division of the High Court of Justice, and, subject as aforesaid, aU causes and matters for ' the execution of trusts, charitable or private, are to be as- signed to the same division, and for that purpose every doc- ument by which the cause or matter is commenced is to be marked for that division, or with the name of the Judge to whom the cause or matter is to be assigned. See sections 83 & 84. 19 [*18] * CHAPTER II. CLASSIFICATION OF TKTJSTS. 1. Trusts simple or special. — The fixst and natural division of trusts is into simple and special. Simple trust. — The simple trust is where property is vested in one person upon trust for anoftier, and the nature of the trust, not being prescribed by the settlor, is left to the con- struction of law. In this case the cestui que trust has jus habendi, or the right to be put into actual possession of the property, and Jus disponendi, or the right to call upon the trus- tee to execute conveyances of the legal estate as the cestui que trust directs. Special trust. — The special trust is where the machinery of a trustee is introduced for the execution of some purpose particularly poiuted out, and the trustee is not, as before, a mere passive depositary of the estate, but is called upon to exert himself actively in the execution of the settlor's inten- tion ; as where a conveyance is to trustees upon trust to sell for payment of debts. 2. Special trusts either instrumental or discretionary. — Spe- cial trusts have agliin been subdivided into ministerial (or instrumental) and discretionary. The former, such as demand no further exercise of reason or understanding than every intelligent agent must necessarily employ ; the latter, such as cannot be duly administered without the apphcation of a certain degree of prudence and judgment. A trust to convey an estate must be regarded as ministe- rial ; for, provided the estate be vested in the cestui que trust, it is perfectly immaterial to him by what manner of person the conveyance is executed. Trust to sell held by Mr. Fearne to be instrumental. — A trust for sale was considered by Mr. Fearne as also ministe- rial; "for the price," he said, "is not arbitrary, or at the trustee's discretion, but to the best that can be gotten for the 20 Ch. n.] THE DIFFERENT KINDS OF TRUSTS. *19 estate, which is a fact to be ascertained independently of any discretion in the trustee " (a). But there is much room for judgment in the time * and mode of pro- [*19] ceeding to a sale, and the precautions that are taken will have a material influence upon the price; and Mr. Fearne's opinion cannot at the present day be main- tained (a). Examples of discretionary trusts. — A fund vested in trus- tees upon trust to distribute among such charitable objects as the trustees shall think fit (6), or an advowson conveyed to them upon trust to elect and present a proper preacher (c), is clearly a discretionary trust ; for the selection of the most deserving objects in the first instance, and the choice of the best candidate in the second, is a matter calling for serious deliberation, and not to be determined upon without due regard to the merits of the candidates, and all the particular circumstances of the case. 3. Mixture of trust and power. ^ — There is frequent men- tion made in the books of a mixture of trust and power (c?), by which is meant a trust of which the outline only is sketched by the settlor,' whUe the details are to be filled up by the good sense of the trustees. The exercise of such a power is imperative, while the mode of its execution is matter of judgment and discretionary. Distinguished from trust with power annexed. — A mixture of trust and power is not to be confounded with a common trust to which a power is annexed; for, in the former case, as in a trust "to distribute at the discretion of the trustees," they are bound at all events to distribute, and the manner only is left open ; ^ but in the latter case, the trust itself is complete, and the power, being but an accessory, may be exercised or not, as the trustee may deem it expedient ; as (a) Fearne's P. W. 313. 309; Cole v. Wade, 16 Ves. 27; Gower (a) See King v. Bellord, 1 H. & M. v. Mainwaring, 2 Ves. 87. 343; Robson «. Flight, 5 N. E. 344; (c) Attorney-General v. Scott, 1 S. C. 4 De G. J. & S. 608; Clarke v. Ves. 413; Potter v. Chapman, Amb. Royal Panopticon, 4 Drew. 29. 98. (6) Attorney-General v. Gleg, 1 (rf) Cole v. Wade, 16 Ves. 43; Atk. 356; Hibbard v- Lambe, Amb. Gower u. Mainwaring, 2 Ves. 89. 1 Steere v. Steere, 5 Johns. Ch. 1 ; 9 Am. Dec. 256. 21 *20 THE DIFFBEENT KINDS OF TETJSTS. [Ch. U. where lands are limited to trustees with an authority to grant leases, or stock is transferred to trustees with a power of varying the securities ; for in such cases the power forms no integral part of the trust, but is merely collateral and subsidiary, and the execution of it, in the absence of fraud, cannot be compelled by application to the Court. 4. Trusts lawful and unlawful. — Again, trusts may be divided, with reference to the object in view, into lawful and unlawful.^ The former, such as are directed to some honest purpose (as a trust to pay debts, &c.), which are called by Lord Bacon Intents or Confidences, and will be administered by the Court. The latter are trusts created for the attainment of some end contravening the policy of the law, and therefore not to be sanctioned in a forum [*20] professing not only justice but * equity, as a trust to defraud creditors or to defeat a statute. Such are designated by Lord Bacon as Frauds, Covins, or Collusions (jci). 5. Trusts public and private. — Another division of trusts is into public and private. By public must be understood such as are constituted for the benefit either of the public at large or of some considerable portion of it answering a par- ticular description. To this class belong all trusts for char- itable purposes, and indeed public trusts and charitable trusts may be considered in general as synonymous expressions (S). In private trusts the beneficial interest is vested absolutely in one or more individuals who are, or within a certain time may be, definitely ascertained, and to whom, therefore, col- lectively, unless under some legal disability, it is, or within (o) Bac. on Uses, 9. (in which M. R. observed "Pvblic (6) See Attorney-General v. Aspin- purposes are such as mending or repair- all, 2 M. & Cr. 622 ; Attorney-General ing roads, supplying water, making V. Heelis, 2 S. & S. 76 ; Attorney-Gen- or repairing bridges, and are distin- eral v. Corporation of Shrewsbury, 6 guished from charities in the shape Beav. 220 ; Walker v. Richardson, 2 of almsgiving, building, almshouseB, M. & W. 892; Attorney-General v. founding hospitals, and the like;" Webster, 20 L. R. Eq. 483. But see but public purposes, he added, " are Attorney-General ». Forster, 10 Ves. all in a legal sense charities "); af- 344 ; Attorney-General v. Newcombe, firmed on appeal, 8 L. R. Ch. App. 14 Tes. 1; Fearon v. Webb, ib. 19; 677. Dolan V. Macdermot, 5 L. R. £q. 60 1 Lewis V. Nelson, 1 McCarter, 94. 22 Ch. II.] THE DIFFERENT KINDS OF TKT7STS. *20 the allowed limit will be, competent to control, modify, or determine the trust. The duration of trusts of this kind cannot be extended by the will of the settlor beyond the bounds of legal limitations, viz., a, life or lives in being with an engraftment of twenty-one years. A public or charitable trust, on the other hand, has for its objects the members of an uncertain and fluctuating body, and the trust itself is of ' a permanent and indefinite character, and is not confined within the limits prescribed to a settlement upon a private trust (e). » (c) Christ's Hospital v. Grainger, 1 Mac. & Gbrd. 460; Stewart v. Green, 5 I. R. Eq. 470. 23 [*2l] * CHAPTER IIL OP THE PAETIES TO THE CREATION OP A TEUST. Now that we have defined and distributed trusts, we shall next enter upon the creation of them : First, By the act of a party, and Secondly, By operation of Law. Upon the subject of the former class we propose to treat. First, Of the neces- sary parties to the creation of a trust ; Secondly, What prop- erty may be made the subject oi a trust ; Thirdly, With what formalities a trust may be created; Fourthly, Of Transmu- tation of Possession ; Fifthly, What may be the object or scope of the trust; and Sixthly, In what language a trust may be declared. In this chapter, we shall consider the necessary parties to a trust, under the three heads of the Settlor^ the Trustee, and the Cestui que trust. section' I. OF THE SETTLOK. 1. General po-wer creating a trust. — As the creation of a trust is a modification of property in a particular form, it may be laid down as a general rrde that whoever is compe- tent to deal with the legal estate, may, if he be so disposed, vest it in a trustee for the purpose of executing the settlor's intention. 2. The Crown. — The Sovereign^ as to his priva,te property, may, by letters patent, grant it to one person upon trust for another (a). But the trust must appear upon the face of the letters patent; for if the grant be expressed to be (a) Bac. on Uses, 66. ' The settlor's intent must be carried into effect unless it contrayenes some policy of the law. Wright v. MUler, 8 N. Y. 9 ; 59 Am. Dec. 438. 2 In the United States, a state may be a settlor. Commissioners v. Walker, 6 How. (Miss.) 143 ; 38 Am. Dec. 433. 24 Ch. hi, S. 1,] WHO MAY BE A SETTLOR. *22 made to one person, a trust cannot be proved by parol in favour of another, for this would contradict the nature of the instrument which purports to be an act of bounty to *the grantee (a). However, if the grant be to A. [*22] and his heirs with the limitation of a beneficial inter- est to A. for life only, a trust. of the remainder will not pass to the grantee, but will result to the Crown, for the pre-- sumption of bounty as to the whole is rebutted by the declared intention as to the part (5). Prizes. — All prizes taken in war vest in the sovereign, ajjd are commonly by the royal warrant granted to trustees upon trust to distribute in a prescribed mode amongst the captors ; but an instrument of this kind is held not to vest an interest in the c^stuis que trust which they can enforce in equity, but it may at any time be revoked or varied at the pleasure of the sovereign before the general distribution (c). [The effect of such an instrument is merely to appoint the persons named to be the agents of the sovereign to effect the distribution (c^).] Will of the sovereign. — The Cr6wn may also by will be- queath its private personal property to one person in trust for another, but the will must be in writing and under the sign manual (e), though the Probate Court has no jurisdic- tion to admit it to probate (/). 3. Corporations. — As to the power of Corporate Bodies ^ to create a trust,~it was competent to municipal corporations, before the Municipal Corporations Act (^), to alienate their (a) Pordyce v. Willis, 3 B. C. C. [(rf) Kinlock u. Secretary of State 577. for India in Council, 15 Ch. D. 1 ; 7 (6) Bac. onUses, 66. App. Cas. 619.] (c) Alexander v. Duke of Welling- (e) 39 & 40 G. 3. c. 88, s. 10. ton, 2 R. & M.-35. As to the execu- (_/) Williams on Executors, 14, tion of the trust by the agency of 8th ed. In the goods of his late persons deputed by the principals, Majgsty Geo. 3. 3 Sw. & Tr. 199. see Tarragona, 2 Dods. Adm. Kep. (j) 5 & 6 W. 4. c. 76. 487. 1 May, subject to their -charters, and the laws under which they are organ- ized, alienate their property : Angell on Corp. § 191 ; Barings v. Dabney, 19 Wall. 1 ; Dana v. Bank, 5 Watts & S. 224 ; Catlin v. Eagle Bank, 6 Conn. 238 ; Hopkins v. Turnpike Co. 4 Humph. 403; Maryland v. Bank, 6 Gill & J. 205; Barry v. Merchant's Co. 1 Sandf . Ch. 280. 26 *23 FEME COVEET. [Ch. HI. S. 1. property, and as a consequence to vest it in a trustee (A). But now municipal corporations are themselves trustees of their property, for the public purposes prescribed by the Municipal Corporations Act, and are debarred from alienat- ■ ing their real (i) or persopal estate (y) without the consent of the Lords of the Treasury. A corporation, however, not included in the schedules to the Act still retains its power of alienation (k'). 4. Feme covert. — A Feme Covert may create a trust of real estate, but, unless it be property settled to her separate use, it must be done with the consent of her husband, and there must be all the attendant formalities required by the Fines and Recoveries Act, 3 & 4 W. 4, c. 74 [as mod- [*23] ified by the Conveyancing Act, 1882, 45 & 46 * Vict. c. 39, s. 7. But under the Married Women's Prop- erty Act, 1882 (a), a woman married since the 31st Dec. 1882, and also a woman married before that date as to prop- erty acquired by her after that date, can create a trust of real estate without the concurrence of her husband and with- out the formalities of the Fines and Recoveries Act.^] 5. 20 & 21 Vict. c. 57. — As to her choses en action, by a recent statute (6) (commonly called Malins's Act), a feme covert is enabled with the concurrence of her husband, and on being separately examined in the manner prescribed by the Fines and Recoveries Act, to dispose by deed of any future or reversionary interest created by an instrument made after the Slst December, 1857, and as to which interest her power of anticipation is not specially restricted ; and is also authorized to release or extinguish her right or equity to a settlement out of personal estate to which she is entitled in possession under such instrument as aforesaid. But any per- (A) Colchester v. Lowten, 1 V. & (k) Evan ti. The Corporation of B. 226. AVon, 29 Beav. 144. (£) 5 & 6 W. 4. c. 76, s. 94. [(a) 45 & 46 Vict. c. 75, ss. 2, 5.] (j) Attorney-General u. Aspin- (6) 20 & 21 Yict. c. 57. wall, 2 M. & Cr. 613 ; Attorney-Gen- eral V. Wilton, Cr. & Ph. 1. ^ Married women in America may convey their property to trustees. Young ». Graff, 28 111. 20; Durant v. Ritchie, 4 Mason, 45; 1 Redf. on Wills, 21-28; Perry on Trusts, § 32. 26 Ch. m. S. 1.] FEME COVBET. *24 sonal estate settled for her benefit upon the occasion of her marriage is excepted from the foregoing powers (c) ; and an appointment after the date of the Act, but in execution of a power created by a settlement of a previous date, is not within the Act (c^). And as the interest must be created by an instrument, a share of a feme covert as next of kin under an intestacy is not within the Act. [By an assignment under this statute the wife can transfer her future property discharged from her husband's right as fully and effectually as if she were a feme sole, and the nassignment does not operate as that of the husband and wife according to their respective interests (e). The concurrence of the husband will therefore be good, although there may be a right of retainer as against him (/), or although he may . have previously executed a creditor's deed or been adjudicated a bankrupt (^).] Whether the act applies to choses en action in possession. — It will be observed that the statutory power of disposition , given by Malins's Act to a feme covert extends in terms no further than to her future or reversionary interests not. lim- ited to her by her marriage settlement ; and as to choses en action in possession, the feme, covert, though enabled to waive her equity to a settlement, has no express power of absolute disposition given her. If * therefore a feme [*24] covert be entitled to a chose en action in possession, and join with her husband in assigning it to a trustee, then if it be not reduced into possession during the coverture, and the wife survives, the question arises whether, though the formalities prescribed in the Act were Complied with, she may not claim the fund by survivorship. The meaning of the framer of the Act probably was, that, as to choses en auction to which A feme covert is entitled in possession, the husband can compel a transfer of them to himself, subject only to the wife's equity to a settlement, and as the Act (c) See a case with reference to [(e) Re Batchelol', 16 L. E. Eq. this section, Clarke v. Green, 2 H. & 481.] M. 474. [(/) Re Batchelor, ubi sup.l (d) Be Butler's Trusts, 3 Ir. Eep. [(y) Re Jakeman's Trusts, 23 Ch. Eq. 138. D. 344; Cooper v. Macdonald, 7 Ch. D. 288,] 27 *24 FEME COVBKT. [Ch. III. S. 1. enables a feme covert to waive her equity to a settlement, the husband and wife together can deal with such choses en action by making it imperative on the trustees to transfer the fund to the husband or his nominee. 6. Choses en action, &c. irrespectively of the Act. — The husband alone may create a trust of the wife's choses en action sub modo ; that is, if they be reduced into possession during the coverture, the settlement will be unimpeachable, but if they remain choses en action at the death of the hus- band, the wife will be entitled to them by survivorship. Chattels real. — As to the wife's equitable chattels real, the husband may, subject to the wife's equity to a settlement (a), create a trust of them Jure mariti (li), unless the chat- tel be of such a nature that it cannot possibly fall into pos- session during the coverture (c). [7. Recent alterations. — The above observations apply only to property which was acquired before the 1st of January, 1883, by women married before that date; as in all other cases the property vests in the wife, independently of her husband, and she has power to dispose or create a trust of it without his concurrence (c?).J 8. Separate use. — As regards property settled to the sep- arate use of a feme covert, she is to all intents and purposes considered a feme sole^ as, if real estate be conveyed to a trustee and his heirs, or if personal estate be assigned to a trustee and his executors upon trust for the feme covert for her sole and separate use, and to be at her sole disposal as to the fee-simple in the one case and the absolute interest in the other, she has the entire control, and may exercise her ownership or implied power of appointment by creating a trust, extending even beyond the coverture. So if the feme covert be tenant for life to her separate use, she has full power to make a settlement of her 'whole life estate, and not (o) Hanson ii. Keating, 4 Hare, 1. (c) Duberly v. Day, 16 Beav. 33. (J) Donne v. Hart, 2 E. & My. 360. [(d) 45 & 46 Vic. c. 75.] 1 Hill on Trustees, 421 ; 2 Perry on Trusts, Chap. XXII. on Trustees for Married Women, gives an abstract of laws in the various states relating to them. May dispose of property by will ; Mory v. Michael, 18 Md. 227 ; may dispose of allowance, or savings from trust income ; Story, Eq. Jur. § 1375 ; Picquet v. Swan, 4 Mason, 455. But see Story, Eq. Jur. § 1375 a. 28 Ch. III. S. 1.] INFANTS. *25 during the coverture only. But in all cases wliere the power of anticipation is restrained, the feme covert can make no disposition of the property, except as to the * annual produce which has actually become due (a). [*25] If a settlement be fraudulently procured from the wife by a husband by virtue of her separate use, it may be set aside (J). 9. 33 & 34 Vict. c. 93. — The Married Women's Property Act, 1870 (c), enacted by sect. 1, that wages and earnings made by a married woman separately from her husband after the date of the Act (9th of Aug. 1870), were to be deemed settled to her separate use; and, by sect. 7, that where a woman married after the date of the Act was entitled to any personal property as next of kin, or to any sum not exceeding 200Z., under any deedov loill, it should belong to her for her separate use ; and, by the next section, that "rents and profits" of any real estate descending upon such married woman as heiress, should also belong to her for her separate use. [45 & 46 Vict. c. 75. — This Act has been repealed and its place supplied by the Married Women's Property Act, 1882 (tZ), which makes all property acquired after the commence- ment of the Act (1st of January, 1883), by women married before that date, and also all the property of women married after that date, their separate property.] 10. Infants. — If an Infant before the Fines a;nd Recoveries Act had levied a fine or suffered a recovery, he might also have declared the uses (e), and unless the fine or recovery had been reversed by him during his nonage he had, been bound by the declaration (/), but deeds have now been sub- stituted for fines and recoveries, and every deed of an infant, whether under the Act or independent of it, either is void or may be avoided. [(a) See now 44 & 45 Vic. c. 41. s. (c) 3.3 & S4 Vic. c. 93. 39, under which a married woman l(_d) i5 & 46 Vic. c. 75; see as to with the consent of the Court may these acts post. Chap. XXVIII. sect, bind her interest notwithstanding a 6.] restraint on alienation.] ' (c) Gilb. on Uses, 41, 245, 250. (J) Knight V. Knight, 11 Jur. N. (/) Gilb. on Uses, 246. S. 617. ' 29 *26 INFANTS. [Ch. m. S. 1. Feoffment. — An infant until recently might have made a Feoffment,, and at the same time have declared a use upon it, and both feoffment and use were voidable only and not void (.9) ; and by analogy the infant might also have engrafted a trust upon the legal estate ; but a Court of equity would never have allowed any equitable interest to be enforced against the infant himself to his prejudice, but gave him the same power of avoidance over the equitable as he had over the legal estate, and if the infant had died without hav- ing avoided the trust, the Court would still have investi- gated the transaction, and seen that no unfair advantage was taken (K). Custom of Kent. — An infant ^ may by the custom of [*26] Kent for valuable * consideration certainly, and, ac- cording to the better opinion, even without value (a), make a feoffment at the age of fifteen, and upon such feoff- ment he may declare uses (6). But a Court of equity would no doubt confine such a custom within its narrowest bounds, and as trusts have sprung into being since the statute of Hen. 8, might hold the custom to be void as of recent growth in respect of the equitable interest, and at all events would not allow the custom to be made an instrument of fraud. ■wiUa Act. — Before the late Wills Act (e) an infant of the age of fourteen years might have bequeathed his personal estate, and therefore might have created a trust of it by will; but now, as regards personal as well as real estate, every testator must be of the age of twenty-one years. (j) Bac. on Uses, 67 ; Bac. Ab. (a) Bobinson on Gavelkind. Uses, E. See now 8 & 9 Vic. i;. 106, (6) Gilb. on Uses, 250. B. 3. (c) 7 W. 4 & 1 Vic. c. 26. (K) See Cr. Dig. vol. iv. p. 130. 1 May create a trust which is voidable ; Bool v. Mix, 17 Wend. 119; Tucker V. Moreland, 10 Pet. 71 ; Zouch v. Parsons, 3 Burr. 1794 ; Eagle Pire Co. v. Lent, 6 Paige, 635; McCall v. Parker, 13 Met. 372; Irvine v. Irvine, 9 Wall. 617; but by infant only, when of age; Ingraham v. Baldwin, 12 Barb. 9; except in ease of his death ; Starr v. Wright, 20 Ohio St. 97. As to marriage settleinents, see Levering ». Levering, 3 Md. Ch. 365 ; Lee v. Stuart, 2 Leigh. 76 ; Wilson v. McCullough, 19 Pa. St. 77 ; Temple ». Hawley, 1 Sandf . Ch. 153 ; Healy v. Rowan, 5 Gratt. 414; Whichcote v. Lyle, 28 Pa. St. 73; Succession of Wilder, 22 La. Ann. 219 ; M'Cartee v. Teller, 2 Paige, 511. 80 Ch. III. S. 1.] LUNATICS. *27 11. Lunatics. — Lunatics or Idiots^ might, before the Fines and Recoveries Act, have levied a fine or suffered a recovery, and the uses declared would have been valid until the fine or recovery was reversed. The deed of a lunatic or idiot may be void or not according to circumstances (d^. The feoffment of a lunatic or idiot, while the feoffment operated tortiously, was voidable by the heir only (e). However, should a lunatic or idiot have engrafted a declaration of trust upon any legal estate passed by him, a Court of equity would have had jurisdiction to set it aside (/) ; though gen- erally it declined to interfere even in this case as against a purchaser for valuable consideration without notice of the lunacy or idiocy (^). 1»2. Bankruptcy. — If a man be declared a bankrupt,^ all the real and personal estate to which he is or may become entitled at the commencement of his bankruptcy, [or before his discharge,] vests in his trustee (A) ; but the surplus after payment of his debts still belongs to him (i), and of this interest he may create a trust. 13. Alien as to real estate. — An Alien might always liave acquired real estate, whether freeholds or chattels real, by purchase, though he could not take it by operation of law, as by descent or Jure mariti ; and if he purchased it he might have held it until oifice found, but could not give an alienee a better title than he had himself (/). An alien, * therefore, could only create a trust of real estate [*27] until the Crown stepped in. (rf) See Molton v. Camroux, 2 & Gcrd. 486 ; Greenslade v. Dare, 20 Exch. 487; 4 Exch. 17; Elliott v. Beav.'SSS. Ince, 7 De G. M. & G. 488; Campbell \_(h) 46 and 47 Vic. c. 52, ss. 44, V. Hooper, 3 Sm. & GifE. 158. ' 54.] (e) Co. Lit. 247, b. [(0 Sect. 66.] (/) See Cruise, vol. iv. p. 130, vol. (J) An alien friend residing in the v.'p. 253 ; Neil v. Morley, 9 Ves. 478. United Kingdom might by 7 & 8 Vic. (j) See Price v. Berrington, 3 Mao. c. 66, s. 5, take and hold lands or ' Conveyances voidable by them and their representatives, but good until set aside. Mitchell v. Kingman, 5 Pick. 431 ; Snowden v. Dunlavey, 11 Pa. St. 522 ; Pearl v. M'Dowell, 3 J. J. Marsh, 658 ; Allis v. Billing^, 6 Met. 415 ; L'Amoureux v. Crosby, 2 Paige, 422 ; Story, Eq. Jur. § 228. 2 Only the property of the bankrupt at time of assignment vests in assignees. Ex parte Newhall, 2 Story, 360 ; Mosby v. Steele, 7 Ala. 299. 31 *27 ALIENS. [Ch. hi. S. 1. As to personal estate. — As to personal estate an alien friend might, although an ahen enemy could not, be the lawful owner of chattels personal, and might exercise the ordinary rights of proprietorship over them, and conse- quently might create a trust. "Naturalization Act, 1870." — Now by the "Naturalization Act, 1870,"(a) which came into operation on 12th May, 1870, real and personal property of every description may be taken, acquired, held, and disposed of by an alien in the same manner in all respects as by a natural born British subject, (J) and a title to real and personal property of every description may be derived through, from, or in succession to an alien in the same manner in all respects as through, from, or in succession to a natural born subject, but this is not to " qualify an alien for any office or any municipal, parliamentary, or other franchise," and the enactment is not to affect any disposition or devolution before the date of the Act.(e) 14. Traitors, felons, and outlaws. — With regard to Traitors, Felons, and Outlaws, a distinction by the old law was taken between real and personal estate. In high treason, lands, whether held in fee simple, fee tail, (d) or for life, were upon attainder forfeited absolutely to the Crown — and in all other felonies the profits of the land were upon attainder forfeited to the Crown during the life of the offender. Subject to these superior rights of the Crown by forfeiture, and to the year, day, and waste of the Crown, (e) land, in cases of petit treason and murder, (and until the statute of 54 G. 3, c. 145, in all cases of felony,) escheated upon the death of the offender, by reason of the corruption of blood caused by houses for residence or occupation by tlie goods of Von Buseck, 6 Pr. D. him or his servants, or for the pur- 211 ; Bloxam v. Farre, 8 Pr. D. 101 ; pose of any business, trade or manu- 9 Pr. D. 130.] facture for any term not exceeding (c) See as to this Sharp u. St. 21 years. Sauveur, 7 L. K. Ch. App. 351. (a) 33 Vic. c. 14. (rf) 26 Hen. 8. c. 13. See 2 Bac. [(6) This section enables a for- Ab. 576, 580. eigner to dispose of property in Bug- (e) Attainder was also necessary land by will, but in tlie case of per- to entitle the Crown to the year, day sonalty the form of will must, if the and waste. Rex v. Bridger, 1 M. & testator be domiciled abroad, be sub- W. 145. ject to the laws of his domicile. In 32 Ch. m. S. 1.] TEAITOES AND OUTLAWS. *28 attainder, pro defectu tenentis, to tlie lord of the fee, if it was held in fee ; but if he held in tail, the land upon the death of the offender devolved upon the issue in tail. Attainder related back to the time of the offence, and consequently from that time no valid trust could be created by the offender as against the Crown or the lord in cases of treason, petit trea- son, or murder, nor in cases of other felonies, except subject to the right of the Crown during the offender's life. As respects the large * number oi felonies in which no [*28] attainder took place, the offender, though convicted, might convey (a), and therefore might create a valid trust of Ms real estate. Outlawry upon felony was equivalent to attainder, and, drew with it the same consequences (6). As to the goods and chattels of traitors, felons, and out- laws, they were forfeited absolutely, but only from the time of conviction, or the declaration of outlawry, and therefore up to that period the traitor, felon, or outlaw, might vest his goods and chattels in a trustee upon trusts; but the law would not allow this power of disposition to be exercised collusively for the purpose of defeating the just rights of the Crown (c). The traitor, felon, or outlaw might sell the goods for valuable consideration (ci) ; and so he might assign the property upon trust to secure, the bond fide debt of a creditor (e) ; but the existence of the debt must have been actually proved, and the mere recital of it in the security was not sufficient (/). An assignment upon a meritorious consideration, as a bargain and sale to a trustee for the pur- pose of making provision for a, son, would not support the deed(^). Outlawry/ in misdemeanors and civil actions (K) was a contempt of Court, and worked a forfeiture of the profits of the offender's lands for his life, and of his goods and chattels, absolutely. The person so outlawed, therefore, (a) Eex -0. Bridger, 1 M. & W. 145. (e) Perkins v. Bradley, 1 Hare, (6) See Co. Lit. 390, b; Hollo- 219; Whitaker v. Wisbey, 12 C. B. way's case, 3 Mod. 42 ; King v. AylofE, 44 ; Chownes v. Bayles, 31 Beav. 351. 3 Mod. 72. (/) Shaw v. Bran, 1 Stark. 320. (c) See Saunder's estate, 4 Giff. (j) Jones v. Ashurst, Skinn. 357. 179; and 1 N. R. 256; Barnett v. [(A) Now by 42 & 43 Vic. c. 59, Blake, 2 Dr. & Sm. 117 ; and see outlawry in civil proceedings has been Anon. 2 Sim. N. S. 71. abolished.] (<;) Hawk. PI. of Cr. book 2, c. 49. 33 *29 TEAITOKS AND OUTLAWS. [Ch. III. S. 1. could not from that time affect the pernancy of the profits of his real estate, or make any settlement of his personal estate. 15. 33 & 34 Vict. c. 23. — Now, by 33 & 34 Vict. c. 23, it is enacted by sect. 1 that " from and after the passing of the Act (4th July, 1870), no confession, verdict, inquest, convic- tion or judgment of or for any treason or felony, or felo de Se, shall cause any attainder or corruption of blood, or any forfeiture or escheat, provided that nothing in the Act shall affect the law of forfeiture consequent upon outlawry." Aitej: defining by sect. 6, a " convict " to be " any person against whom, after the passing of the Act, judgment of death or of penal servitude, shall have been pronounced upon a charge of treason or felony," the Act proceeds by sect. 8 to declare that a convict, while he is such, shall not [*29] bring any action' or suit for recovery of any * prop- erty, debt, or damage, and shall be incapable of alienation (a) and then sect. 9 empowers the Crown to appoint " an administrator " of the convict's property, in whom, upon appointment, all the real and personal estate of the convict is made by sect. 10 to vest, and such admin- istrator is enabled by sect. 12 to let, mortgage, sell, convey, and transfer any part of the convict's property, and by sub- sequent sections to pay debts and liabilities, &c., and to make allowances for the support of any wife or child or reputed child, or other relative or reputed relative of such convict dependent upon him for support, or for the benefit of the convict himself while at large upon licence. Subject as above, the property is, by sect. 18, to be held in trust for the convict, his heirs, or legal personal representa- tives, or other persons entitled; and on his ceasing to be subject to the operation of the Act (see sect. 7) is to revest in the convict or the persons claiming under him. In the absence of an administrator appointed by the Crown, an " interim curator " may, by sect. 21, be appointed by Justices of the Peace in Petty Sessions, and by sect. 24 [(a) This, however, will not prevent prevent the convict from improperly the convict from paying his debts and diverting his property either from his applying his property for tliat pur- creditors or from his family. Ex pose. The object of the section is to parte Graves, 19 Ch. D. 1.] 34 Ch. III. S. 2.] WHO A TRUSTEE. *30 such curator is to sue or defend suits, sign discharges for income or debts, and generally manage the convict's prop- erty, make allowances for the maintenance of a wife or child, &c., and by sect. 25 may seU any personal property of the convict, but not 'without the sanction of a Justice or a Court of competent jurisdiction. , SECTION II. WHO MAY BE A TRUSTEE. ' Who may be a trustee. — The qujestion who may be a trus- tee involves a variety of considerations. Thus, a person to be a trustee must be capable of taking and holding the prop- erty of which the trust is declared.^ Again, the trustee should be competent to deal with the estate as required by the trust or as directed by the beneficiaries, whereas certain classes are by nature or by the rules of law under disability. Again, the execution of the trust may call for the application or judgment * and a knowledge of busi- [*30] ness. And again, the trustee ought to be amenable to the jurisdiction of the Court which administers trusts. In general terms, therefore, a trustee should be a person capable of taking and holding the legal estate, and possessed of natural capacity and legal ability to execute the trust, and domiciled within the jurisdiction of a Court of Equity. With this outline we proceed to consider certain exceptional cases where the fitness for the trusteeship may more or less be called into question. 1. The Crown. — The Sovereign ^ may sustain the character of a trustee, so far as regards the capacity to take the estate, and to execute the trust ; but great doubts have been enter- 1 A trust will never fail for want of a trustee, and any one who can hold a legal title may be a trustee. Kerr v. Day, 14 Pa. St. 114 ; Gibbs v. Marsh, 2 Met. 243; King v. Donnelly, 5 Paige, 46 ; Treat's App. 30 Conn. 113; Malin v. Malin, 1 Wend. 625; Huntly v. Huntly, 8 Ired. Eq. 250; Adams v. Adams, 21 Wall. 186; Piatt v. Vattier, 9 Pet. 405; Livingston v. Livingston, 2 John. Ch. 537 ; Bundy v. Bundy, 38 N. Y. 410; Dunbar v. Soule, 129 Mass. 284. ^ 2 A state may be a trustee. Hill on Trustees, 50 ; Briggs v. Light-Boats, 11 Allen, 157 ; McDonogh's Ex'rs ». Murdoch, 15 How. 367. But see as to the United States, Levy v. Levy, 33 N. Y. 97 ; Shoemaker v. Commissioners, 36 Ind. 176. 36 *31 THE SOVEEEIGN. [Ch. in. S. 2, tamed whether the subject can, by any legal process, enforce the performance of the trust. The right of the cestui que trust is sufficiently clear, but the defect lies in the remedy (a). A Court of Equity has no jurisdiction over the king's con- science, for that it is a power delegated by the king to the chancellor to exercise the king's equitable authority betwixt subject and subject (6). The old Court of Exchequer ha&, in its character of a court of revenue, an especial superin- tendence over the royal property; and it has been thought that through that channel a cestui que trust might indirectly obtain the relief to which, on the general principles of equity, he was confessedly entitled. No such jurisdiction, however, appears to have been known when Lord Hale was Chief Baron (c). Lord Hardwicke once observed in Chancery " I will not decree a trust against the Crown in this Court, but it is a notion established in courts of revenue by modern decisions that the king may be a royal trustee "( 7 Met. 188 ; Burbank v. Whitney, 24 Pick. 146 ; Inglis V. Snug Harbour, 3 Pet. 114 ; State v. Rusk, 23 Wis. 636. 37 *32 CORPOKATIONS. [Ch. IH. S. 2. of any breach of trust would be an information by the Attor- ney-General at the instance of aU or some of the persons interested in the matter. If there was a particular trust in favor of particular persons and they were too numerous for all to be made parties, one or two might then sue, on behalf of themselves and the other cestuis que trust, for the perform- ance of the trust (<^)." 5 & 6 "W. 4, c. 76. — Since the Municipal Corporations Act every municipal corporation named in the schedules to the Act (e), has become a trustee, and has now no longer the power to aliene and dispose of its property, except with the sanction of the lords of the Treasury, but is bound to apply it to certain public purposes pointed out by the Act ; and if there be any misapplication, there lies a remedy in Equity by information (/). [*32] * Licence of the Crown. — Although the Court has ample jurisdiction to oblige a corporation to observe good faith, and the property already vested in a corporate body will be administered upon the trust attached to it, yet no real estate can be conveyed to a corporation upon any trust without the licence of the Crown. But there is no objection to an assignment or bequest of pure personal estate to a corporation upon trust. 3. Bank of England. — The Bank of England cannot di- rectly or indirectly be made a trustee of stock. The corpo- ration manages the accounts of' the public funds, and is charged with the care of paying the dividends, but refuses, and cannot be compelled by law, to notice any rights but those of the legal proprietors in whose name the stock is standing. Bank of England cannot be a trustee. — The Company will not enter notice of instruments inter vivos upon their books ; and though they were formerly obliged by certain Acts of (rf) Evan u. The Corporation of torney-Geiieral v. Borough of Poole, Avon, 29 Beav. 149. 4 M. & C. 17 ; Parr v. Attorney-Gren- (e) 5 & 6 W. 4 c. 76. Corpora- eral, 8 CI. & Finn. 409; Attorney- tions not named in the schedules to General v. Corporation of Liclifield, the Act may still dispose of their 11 Beav. 120; Attorney-General v. estates. Evan v. The Corporation of Mayor of Waterford, 9 I. R. Eq. 522; Avon, ubi supra. [Attorney-General o. Mayor of Bre- (/) Attorney-General v. Aspin- con, 10 Ch. D. 204 ; Attorney-General wall, 1 Keen, 513 ; 2 M. & C. 613 ; At- v. Mayor of Stafford, W. N. 1878, p.74]. 38 Ch. III. S. 2.] FEME COVERT. *83 Parliament to enter the wills, or at least extracts from the wills, of deceased proprietors of stock, the object of the leg- islature, as the Court determined, was not to make the Com- pany responsible for the due administration of the fund according to the equitable right, but to enable them to ascer- tain who under tjie will were the persons legally entitled (a). Had the construction been otherwise, the Bank of England would have been trustee for half the fa,milies in the kingdom. Now by 8 & 9 Vict. c. 97, executors and administrators of a deceased holder of stock are enabled to transfer on pro- jiucing probate or letters of administration, and the Acts requiring an entry or registration by the Bank of any will or codicil are repealed (6). ' I^National Debt Commissioners and savings banks. — By the Government Annuities Act, 1882 (c), s. 8, the National Debt Commissioners or any savings bank are not to be af- fected by notice of any trust express, implied or construc- tive affecting any savings bank annuity or insurance (except such trusts as are from time to time recognized by law in relation to deposits in savings banks and except such trusts as are provided for by the Married Women's Property Acts.)] * 4. Feme covert ought not to be appointed trustee. — [*33] A feme covert may be a trusted, but it would not be advisable to select a/ewie covert (a).^ * Has sufficient discretion. — There is here no absolute want of discretion, for a woman has no • less judgment after , mar- riage than before (S) ; nay, as was quaintly added by Sir (o) Hartga v. Bank of England, 3 [(c) 45 & 46 Vict. u. 51.] Ves. 55; Bank of England «. Par- (a) Lake v. De Lambert, 4 Ves. sons, 5 Ves. 665 ; Bank of England v. 595, -per Lord Loughborough ; and Lunn, 15 Ves. 583, ■per Lord Eldon ; see Me Kaye, 1 L. R. Ch. App. 387. Humherstone v. Chase, 2 Y. & C. 209. (6) Compton u. Collinson, 2 B. C. (6) As to the state of the law be- C. 387, per BuUer, J. ; Hearle v. fore this Act, see 3d Edit. p. 32, Greenbank, 1 Ves. 305, 'per Lord note (1). Hardwicke; Bell v. Hyde, Pr. Ch. > Bradish v. Gibbs, 3 Johns. Ch. 523 ; Dundas v. Biddle, 2 Barr. 160 ; Liv- ingston V. Livingston, 2 Johns. Ch. 541; Clarke v. Saxon, 1 Hill, Ch. 69; People V. Webster, 10 "Wend. 554 ; Graham v. Long, 65 Pa. St. 383 ; Thomp- son V. Murray, 2 Hill, Ch. 214; Springer v. Berry, 47 Me. 330; Groves' Heirs t). Fulsome, 16 Mo. 543; 57 Am. Dec. 247. 39 *33 FEME COVERT. [Ch. IH. S. 2. John Trevor, she rather improves it by her husband's teach- ing (c). The reasons upon which her disabilities are founded, are her own interest or her husband's, or both (d). Where these are not concerned, she possesses as much legal capacity as if she were perfectly sui juris. Thus, she may execute powers simply collateral (e), and (somewhat contrary to principle) even powers appendant, or in gross (/). Now at law, the trustee is considered as the sole and absolute pro- prietor, and therefore he can have no power that does not flow from the legal ownership ; but in equity, the absolute interest is vested in the cestui que trust, and, as the trustee is regarded in the light of a mere instrument, any authority communicated to a trustee must have the character of a power simply collateral (5'). It follows that if a discretion- ary trust be committed to a feme covert, there is nothing to prevent her due administration of it, so far as relates to her legal judgment and capacity. At the same time a woman's will is not always her own, and if a trust were . confided to a feme covert, the husband would, in fact, exercise no little influence ; and, indeed, as [in cases not falling within the Married Women's Property Act, 1882], the husband is liable for her breaches of trust, he must, for his own protection, look to the manner in which she discharges the office, and therefore she cannot be allowed to execute the trust without his concurrence (A). [This last remark, however, does not apply to the case of a married woman appointed a trustee, or to a feme sole trustee, marrying since the recent Act (J), in both of which cases the husband is exempted from 330, per Sir John Trevor; and see (/) See Sugden on Powers, c. 6, marginal note to Moore 1;. Hussey, sect. 1, 8th Ed. Hob. 95 ; and see Needier v. Bishop (3) See infra. of Winchester, Hob. 225. Qi) See Smith v. Smith, 21 Bear, (c) Bell V. Hyde, Pr. Ch. 330. 385 ; Drummond v. Tracy, Johns, (d) Compton V. CoUinson, 2 B. C. 608 ; Kinghara u. Lee, 15 Sim. 401 C. 387, per Buller, J. Avery v. Griffin, 6 L. R. Eq. 606 (e) Co. Lit. 112, a; ib. 187, b; Lloyd w. Pughe, 8 L. R. Ch. App. 88 Lord Antrim v. Duke of Buckingham, "Wainford v Heyl, 20 L. R. Eq. 321 2 Freem. 168, per Lord Keeper Bridg- [Be Smith's Estate, 48 L. J. N. S. Ch. man; Blithe's case, ib. 91, vid. 2d 205]. resolution ; Godolphin v. Godplphin, [(») 45 & 46 Vict. c. 75, Bs. 1, 18, 1 Ves, 23, per Lord Hardwieke. 24.] 40 Ch. III. S. 2.] FEME COVERT. *34 ' all liability in respect of her * breaches of trust com- [*34] mitted during the coverture, unless he has acted or intermeddled in the trust; but the relief afforded to the husband by the Act has, by taking away from the cestuis que trust the security of the husband's liability, made the ap- pointment of a married woman to be a trustee, at least as impolitic as it was before the Act.] Her inability to pass the legal estate. — But further the ap- pointment of a feme covert [was, prior to the recent Act,] attended with inconvenience from her inability (except with the concurrence of her husband and through expensive forms) to join in the requisite assurances. At common law, if land be vested in a feme covert upon condition to enfeoff another, she may execute the ■ feoffment by her own act, without the intervention of her husband (a) ; and hence it has been argued, that, in the case of a trust, she may, equally without her husband's concurrence, convey the estate to the parties equitably entitled (6). But between the two cases there is this clear and obvious distinction, that a condition is part and parcel of the common law, while a trust is only recognized in the forum of a court of equity ; except, therefore, the trust be so worded as to bear the constructidn of a legal con- dition, it seems impossible to contend that an instrument otherwise inoperative should, from the mere circumstance of the trust, which a court of law cannot notice, acqtiire a validity (c). 5. Feme covert a trustee for sale. — Should a feme covert, [married before the recent Act, be in respect of a trust cre- ated before the Act], a trustee for sale, it would seem, if these views be correct, that she can exercise the discretion, and with the aid of the Fines and Recoveries Act, which re- quires the concurrence of the husband, can pass the estate. But there remains the consideration to whom the purchase- money is to be paid, and who is to sign the receipt. If it (a) Daniel v. Ubley, Sir W. Jones, vations, Co. Lit. 112, a, note (6) ; and 137. Mr. Fonblanque's Treat, on Equity, (6) Daniel v. Ubley, Sir W. Jones, vol. i. p. 92 ; McNeillie v. Acton, 2 138, per Whitlock, and Dodridge, J. Eq. Re. 25. (c) See Mr. Hargrave'a Observa-" 41 *35 FEME COVEKT. [Ch. HI. S. 2. be paid to the husband it passes into the hands of a stran- ger, and if it be paid to the wife, the law immediately trans- fers it to the husband who is a stranger. If any receipt be taken it should be the joint receipt of the husband and wife {d). But the safest course would be to pay the money to the account of the wife at some responsible bank, made payable upon the joint receipt of the husband aijd wife, ahd to remain there until required for the purposes of the trust, and if the husband and wife took it out of the bank for any purpose he would be liable as for a breach of trust.^ [*35] * When the husband is a lunatic or idiot, or living apart from the wife, or otherwise incapable (as fi-om in- fancy (a), or from being abroad and not heard of for years (6) ), of. joining in the execution of a deed, the [High Court of Justice (e)] has power to dispense with the husband's con- currence, [in which case the deed need not be acknowledged by the/eme covert (c?)]. The Cour.thas frequently exercised this jurisdiction by enabling a feme covert entitled to free- holds or copyholds (e), in fee simple (/), in fee tail (^), or for life, either in possession or reversion (A), or to dower (i), or to leaseholds (y), [or to personal estate falling under 20 & 21 Vict. o. 57] (A), "by deed or surrender, to dispose of release, or surrender all her estate and interest " (the words (rf) See Drummond ». Tracy, (e) Ex parte Shuttleworth, 4 Moore Johns. 611. and Scott, 332, note. (a) Re Haigh, 2 C. B. N. S- 198. (/) Re Kelsey, 16 C. "B. 197 ; Re (S) Re Harriet Hedges, W. N. Cloud, 15 C. B. N. S. 833 ; Re Wood- 1867, p. 19 ; Re Tarboton, W. N. 1867, aU, 3 C. B. 639 ; TJe Woodcock, 1 C. p. 276 ; Ex parte Robinson, 4 L. R. C. B. 437. P. 205. (g) Ex parte Thomas, 4 Moore and [(c) This jurisdiction, originally Scott, 331. given to the Court of Common Pleas (K) Ex parte Gill, 1 Bing. N. C. by the Fines and Recoveries Act, s. 168. 91, has been transferred to the High (i) Re Turner, 3 C. B. 639. Court of Justice by the " Supreme (_;) Re Harriet Hedges, W. N. Court of Judicature Act, 1873." See 1867, p. 19. £a;parteThompson,"W.N.1884,p.28.] [(i) Re Alice Rogers, 1 L. R. C. [(rf) Goodchild v. Dougal, 3 Ch. P. 47 ; Ex parte Alice Cockerell, 4 C. D. 650.] P. B. 39.] 1 Still V. Ruby, 35 Pa. St. 373 ; Drummond v. Tracy, 1 Johns. 611 ; Griffith V. Griffith, 5 B. Mon. 113 ; Shirley v. Shirley, 9 Paige, 363 ; Picquet v. Swan, 4 Mason, 455 ; see statutes in reference to married women in the various states. 42 Ch. III. S. 2.] FEME COVERT. *36 of the order on one occasion) (Z), in the premises. The order therefore will not affect the husband's curtesy, if any (m). The Court will not direct the form of convey- ance (w), but it looks to the propriety of the order with reference to each particular estate, and it will not give the feme covert a roving power of disposition over any property which she may happen to haVe (o). In most cases the Court has made the order to enable the wife to deal with her own property for her maintenance, but in other cases the court has enabled the feme covert to execute a trust (^ } : and it would s^em therefore that where there is an incapacity of the husband to join in a deed, the */eme covert (who [*36] has no want of discretion) can execute the trust by the aid of the Court. 6. Bare Trustee. — By 37 & 38 Vict. c. 78. s. 6, it is enacted that when any freehold or copyhold hereditaments shall be vested in a married woman as a hare trustee, she may convey or surrender the same as if she were &feme sole?- [7. Married Women's Property Act. — Now by Sect. 18 of the Married Women's Property Act, 1852 (a), a married woman who is an executrix or administratrix alone, or jointly with any other person, may transfer or join in transferring any annuity or bank deposit, or any part of the public stocks or funds, or of the stocks or funds of any bank, or any share stock debenture, debenture stock, or other benefit right claim (T) Re Kelsey, 16 C. B. 197. est as she is by se^ct. 77 empowered to [ (m) By sect. 91 of the Fines and dispose of with the husband's consent. RecoTeries Act, all deeds executed See Goodchild u. Dougal, 3 Ch. D. by the wife in pursuance of the order 650; and see also iJeJakeman's Trusts, shall (but without prejudice to the 23 Ch. D. 344 ; and see Fowke v. Dray- rights of the husband as then existing cott, 33 W. R. 701 ; 29 Ch. D. 996, independently of the act) be as good where it was held that the wife's dis- and valid as they would have been if position did not deprive the husband the husband had concurred. The of the common-law rights which he words in parenthesis have occasioned had acquired by the coverture.] some difficulty, but it is conceived (n) Re Turner, 3 C. B. 166. that the only rights of' the husband (o) Re Cloud, 15 C. B; N. S. 833. reserved by them are such rights as (p) Re Mirfin, 4 M. & 6. 635 ; Re he is entitled to by virtue of an inde- Haigh, 2 C. B. N. S. 198 ; \_Rr Caine pendent interest, and that the wife's 10 Q. B. D. 284.] deed passes all such estate and inter- [(o) 45 & 46 Viet. c. 75.] ' See Re Docwra, 29 Ch. D. 693. 43 *37 FEME SOLE. [Ch. III. S. 2. or other interest of or in any corporation, company, public body or society, without her husband as if she were a feme sole ; and this seems to apply to trusts in existence at the time the Act was passed. 8. Where the feme has been married or the trust has been undertaken by her since the commencement of the Married Women's Property Act, 1882 (1 January, 1883), she can ex- ecute the trust without the concurrence of her husband, and as if she were a feme sole (h). Where therefore she is a trustee for sale she can exercise the discretion, pass the es- tate, and sign a good receipt for the purchase-money.] 9. Feme sole. — It is almost equally undesirable to appoint a feme who is single a trustee, for should she marry, [she would be liable to be influenced by her husband who, so long as he abstained ffom active interference, would be under no liability to make good any breaches of trust commit- [*37] ted by her during the coverture.] The Court at * one time refused to appoint a feme sole a trustee, as, in the event of her marriage [it might lead to inconvenience as the husband would have the power of interfering] (a). But in a more recent case the M. R., after consulting with the other judges, appointed a feme sole a trustee (6), and the Lords Justices have since made a similar order (e). [(6) 45 & 46 Vict. e. 75, ss. 1, 2, 5, of trust, so long as he does not act or 24. See Kingsman v. Kingsman, 6 intermeddle in the trust ; and it would Q. B. 1). 122, 128. It is open to argn- be a highly inconvenient construction ment whether the 1 2d and 6th sec- of the act to hold that a married tions of the act apply to trust prop- woman is not empowered to acquire, erty, more particularly as the 18th hold, and dispose of the trust property section enables a married woman who generally without the concurrence of is an executrix, administratrix, or her husband. And inasmuch as the trustee, to sue and be sued, and to language of sections 2 and 5 is wide transfer the trust property in certain enough to include trust property, it special cases without her husband, as is conceived that apy inference to be if she were a feme sole, and this sec- drawn from section 18 is not sufficient tion is to Some extent redundant to restrict the operation of sections 2 if the 2d and 5th sections apply to and 5 to property belonging to mar- trust property. It is, however, clear ried women beneficially. So now de- from the 1st and 24th sections that a cided. Re Docwra, 29 Ch. D. 693.] married woman may accept a trust, (a) Brook t>. Brook, 1 Bes.v. 531. or the office of execubbt or adminis- (6) Re Campbell's Trusts, 31 Beav. tratrix, as if she were a, feme sole; and 176. that her Imsband is exempted from all (c) In re Berkley, 9 L. R. Ch. App. liabilities in respect of her breaches 720. 44 Ch. hi. S. 2.] INFANTS. *38 10. Infant ought not to be appointed Trustee. — Has no legal discretion. — An infant labors under still greater disability than a feme covert ; for, first, as regards judgment and dis- cretion, a feme is admitted to have capacity, though she cannot in all cases freely exercise it ; but an infant is said altogether to want capacity (d'). An infant cannot be stew- ard of the court of a manor (e), or attorney for a person in a suit (/), or guardian to a minor (^), or be a bailiff or re- ceiver (A) ; but can only discharge such acts as are merely ministerial, as to be an attorney to deliver seisin (i), or as a l(yd of a manor to give effect to a custom (/), or to appoint a seneschal (Ic). So he might, until an act to the con- trary (Z), have been, as executor, the channel or conduit pipe through which the assets found their way to the hands of creditors in a due course of administration (m) ; but had he acted otherwise than ministerially, as by signing an acquit- tance without receipt of the money, such an exercise of . discretion had been actually void (w). [However, an infant may exercise a power simply collateral over both real and personal estate (o), and as to personal estate he may exercise a power in gross notwithstanding that it may involve the application of discretion (p), but as to real estate it would seem that such a power pould not be exercised unless ex- pressly authorized by the instrument creating the power (c[). And where an intention * appears that [*38] (d) Hearle o. Greenbank, 3 Atk. Qi) Co. Lit. 172, a. 712, and 1 Ves. 305, per Lord Hard- (i) Co. Lit. 52, a ; Br. Ab. " Covert. wicke ; Grange v. Tiving, O. Bridg. and Infant," pi. 55. 108, per Sir 0. Bridgman ; Compton (_/) 1 Watk. on Copyh. 24. i;. Collinson, 2 B. C. C. 887, per Bui- \k) Halliburton v. Leslie, 2 Hog. ler, J. ; and see Sockett v. Wray, A. 252. B. C. C. 486. (0 38 6. 3. ^. 87, s. 6. (e) Co. Lit. 3, b; and see Mr. Har- (m) Toller on Executors, 31. graye's note (4), ib. But acts done (n) Eussel's case, 5 Eep. 27, a; by an infant in the character of stew- Co. Lit. 172, a; ib. 264, b; 1 Roll, ard cannot be avoided by reason of Ab. 730, F. 2. his disability. Eddleston «. Collins, [(o) Sugd. on Pow. 8th ed. 177, 3 De G. M. & G. 1. 911 ; 1 Preston on Abstracts, 325 ; (/) Co. Lit. 128, a; Br. Ab. King «. Bellord, 1 H. & M. 343; Re •• Covert, and Infant," pi. 65, and see D'Angibau, 15 Ch. D. 228.] Hearle v. Greenbank, 3 Atk. 710. [(p) Be D'Angibau, M sup.'] (j) Co. Lit. 88, b ; [but see Re [(y) Hearle v. Greenbank, 3 Atk. D'Angibau, 15 Ch. D. 228, 245.] 45 f 38 INFANTS. [Ch. ni. S. 2. the power is to be exercisable notwithstanding infancy, an infant may appoint even although his interest may be affected by the appointment (a). A trust which requires the exercise of discretion cannot be executed by an infant (5)]- 11. Power of passing the estate. — Effect of feoffment, or de- livery of chattels. — Effect of delivery of a deed — Effect of his assurance without feoffment, delivery, or deed. — With respect to an infant's ability to pass the estate, it seems to be gen- erally agreed that, at common law, a feoffment of lands (c) or an actual delivery of goods and chattels ((£), is an act of so great solemnity, that it serves to carry the present pos- session, and is voidable only, and not void. Where the prop- erty, is of an incorporeal nature, as the delivery of the thing itself is impossible, the common law has substituted the kin- dred precaution of delivery of the deed. The effect of a deed delivered by an infant has been much disputed; by some it has been held to be absoltitely null and void (e), by others to be voidable only (/), and by others again to be void or voidable, as the validity of the execution is taken to be for the infant's benefit or not (^). - Another opinion still (which is that of Perkins (K), and was adopted in the case of Zoueh V. Parsons («'), and may be regarded as the doctrine of the present day) is, that an infant's deed, where the delivery of it answers to livery of seisin, and operates as the convey- 695; S. C. 1 Ves. 298; Re Cardross's Parsons, 3 Burr. 1806 & 1807 ; and Settlement, 7 Ch. D. 728.] see Humphreston's case, 2 Leon. 216. [(a) Re Cardross's Settlement, 7 (J) Norton v. Turvill, 2 P. W. 145, Ch. D. 728 ; Re D'Angibau, 15 Ch. D. per Sir J. Jekyll. 228.] (j) See Zouch v. Parsons, 3 Burr. [(6) King V. Bellord, 1 H. & M. 1804; and see Humphreston's case, 2 343.] Leon. 216; Lloyd v. Gregory, Cro. (c) Thompson v. Leach, 3 Mod. Car. 502 ; Nightingale v. Earl Ferrers, 311, per Cur.: Br. Ab. " Covert, and 3 P. W. 210; InJnan t-. Inman, 15 L. Inf." pi. 1 ; and see Co. Lit. 42, b, 51, K. Eq.,260. b; Whittingham's case, 8Eep. 42,b; (/i) Sects. 12 & 154; and see Br. Br. Ab. " Covert, and Inf." pi. 40. Ab. " Dum fuit infra aetatem," pi. 1 , ((f) Perk. 14; Br. Ab. "Covert. id. "Covert, and Inf." pi. 12; Stone and Inf." pi. 1. ». Wythipole, Cr. El. 126 ; Marlow v. (e) Br. Ab. " Covert, and Inf." pi. Pitfield, 1 P. W. 559. 1 & 10; Lloyd v. Gregory, Cro. Car. (i) 3 Burr. 1807 ; confirmed by the 502, per Our. ; Thompson v. Leach, 3 recent case of Allen v. Allen, 1 Conn. Mod. 310, per Cur. See observations & Laws. 427, 2 Drur. & War. 307. on 'the last two cases in Zouch v. 46 Ch. m. S. 2.] INFANTS. *39 ance of an interest, is merely voidable ; but where it does not take effect as an assurance by delivery of the deed, as in a power of attorney (/), then it is actually void. Lord Mansfield, however, subjoined the qualification, that if a case should arise where it would be more beneficial to the infant that the deed should be considered as void, as if he might incur a forfeiture, or be subject to damage, or a breach of trust in respect of a third person (A), unless it was * deemed void, the reason of an infant's privi- [*39] leges would in such case warrant an exception from the rule («). Where the instrument carries no solemnity with it, equivalent to feoffment or delivery, the validity of the act must then depend on the question how far the assur- ance promotes the interest of the infant (6). [12. Covenant by an infant. — A covenant by an infant, if for his benefit, is not void but only voidable ; and a covenant by an infant /e?we, in contemplation of her marriage, to settle her property to be acquired during the coverture, is binding until it is avoided ; and the feme may, after attaining twenty- one, and during her coverture, either avoid the covenant or ratify it as to any property for the time being belonging to her for her separate use, but prior to the recent Act her rati- fication would not bind property acquired by her after the time of such ratification (c). Since the Married Women's Property Act, 1882 (dl), it is conceived -that the ratification by the feme covert of the covenant would bind not only the separate property she had then acquired, but any separate property she might thereafter acquire during the coverture. 13. Appointing an attorney. — By a recent Act, a married woman, whether an infant or not, has power, as if she were unmarried and of full age, by deed to appoint an attorney on (j) See Br. Ab. " Covert, and Inf." 216 ; and see Lloyd v. Gregory, Cro. pi. 1; Whittingham's case, 8 Eep. Car. 502; Co. Lit. 51, b; Grange v. 45, a. TiTing, Sir 0. Brldg. 117. (Jc) Qumre if a Court of Iaw[ could [(c) Smith v. Lucas, 18 Ch. D. notice a breach of trust. See War- 531 ; Willoughby v. Middleton, 2 J. wick r. Eichardson, 10 M. & W. 295. & H. 344; Burnaby v. Equitable [But see now 36 & 37 Vict. 6. 66, s. Reversionary Interest Society, 28 Ch. 24.] D. 416.] (a) Zouch V. Parsons, 3 Burr. 1807. [(d) 45 & 46 "Vict. c. 75.] (i) Humphreston's case, 2 Leon. 47 *40 ALIENS. [Ch. hi. S. 2. her behalf for the purpose of executing any deed or doing any oth«r act which she might herself execute or do (e)]- 14. Infant cannot be guilty of a breach of trust. — Another objection to an infant trustee is, that he cannot be decreed tO' make satisfaction on the ground of a breach of trust (/). However, an infant has no privilege to cheat men (^), and ' therefore he will not be protected, if he be old and ciinn^g enough to contrive a fraud (K). Consequent presumption that he takes not as trustee, but beneficiaUy, — From the great inconveniences attending the appointment of an infant as trustee, there arises a [*40] strong presumption wherever * property is given to an infant, that he is intended to take it not as trustee, but henefieially (a). • 15. Alien formerly trustee of chattels personal only. — An alien until a recent act (6) could not effectually be a trustee in respect of freeholders or chattels real,, for the policy of the law would not allow an alien to sue or be sued to the prejudice of the Crown touching lands in any court of law or equity (c) ; and on inquisition found, the legal estate of the property vested by forfeiture in the Crown.^ [(e) 44 & 45 Vict. c. 41, s. 40.] 503 ; Wright v. Snowe, 2 De G. & Sm. (/) See Whitmore u. Weld, 1 321; Davies v. Hodgson, 25 Beav. Vern. 328 ; Russel's case, 5 Eep. 27, 177 ; Re Constantinople & Alexandra a; Hindmarsh u. Southgate, 3 Euss. Hotel Co., Ebbett's case, 18 W. R. 324. 202; 21 L. T. N. S. 674; [Lempriere (j) Evroy v. Nicholas, 2 Eq. Ca. v. Lange, 12 Ch. D. 675.] Ab. 489, per Lord King. (a) Lamplugh v. Lamplngb, 1 P. (A) See Cory v. Gertcken, 2 Mad. W. 112; Blinkhorne v. Feast, 2 Ves. 40 ; Evroy v. Nicholas, 2 Eq. Ca. Ab. sen. 30 ; Mumma v. Mumma, 2 Vem. 488; Earl of Buckingham v. Drury, 19; Taylor v. Taylor, 1 Atk. 386; 2 Ed. 71, 72; Clare v. Earl of Bed- Smith v. King, 16 East, 283 ; and see ford, 13 Tin. 536; Watts v. Cresswell, King i:. Denison, 1 V. & B. 278. 9 Vin. 415; Beckett v. Cordley, 1 B. (6) 33 Vict. c. 14. C. C. 358; Savage v. Foster, 9 Mod. (c) Gilb. on Uses, 43; and see Fish 37 ; Overton r. Banister, 3 Hare, 503; o. Klein, 2 Mer. 431. Stikeman v. Dawson, 1 De G. & Sm. 1 Foss V. Crisp, 20 Pick. 121 ; Trimbles v. Harrison, 1 B. Mon. 140; Smith V. Zaner,,4 Ala. 99; Waugh :.•. Riley, 8 Mel. 290; Dunlop v. Hepburn, 3 Wheat. 231 ; Montgomery i;. Dorion, 7 N. H. 475 ; Hughes c. Edwards, Wheat. 489 ; Ferguson v. Franklins, 6 Munf. 305. A devise to an alien vests title. Stephen v. Swann, 9 Leigh. 40-i ; Vaux v. Nesbit, 1 McC. Ch. 352. Will not vest title. Atkins v. Kron, 2 Ired. Ch. 58 ; Craig v. Radford, 3 Wheat. 594. Even an alien enemy may be a trustee. Buford v. Speed, 11 Bush. 338, 48 Ch. m. S. 2.] BANKETJPTS. — CESTUIS QUE TRUST. *40 Real estate devised to British subject and alien upon trust. — In a case where a testator devised real estate to his wife and an alien upon trust to sell, and they sold accordingly, and executed a conveyance ; a question afterwards arose whether the purchaser had a good title, and with the view of curing the defect an Act of Naturalization was obtained ; but it was held, that the common form of the Act of Naturalization did not confirm the purchaser's title retrospectively, but that the objection remained. The parties had endeavored to intro- duce into the bill special "words to meet the ease, but a de- pajfture from the usual course was found impracticable (d). Chattels personal. — In respect of chattels personal there was never any objection to an alien friend as trustee as regards his- ability either to take or to hold the estate. 33 V. c. 14. — Now by 33 Vict. c. 14, sect. 1, an alien may take, acquire, hold, and dispose of real and personal property of every description, in the same manner as if he were a natural born subject. The objection, therefore, to an alien being- a trustee of freeholds or chattels real has been re- moved. Person domiciled abroad not a fit trustee. — If, however, the alien be domiciled abroad, it is an objection to his fitness for the office of trustee, as he is not amenable to the juris- diction of the Court (e). 16. Bankrupts not absolutely disqualified. — Bankrupts may be appointed trustees, should any one be [disposed to commit the administration of his property to those who have not been sufficiently careful in the management of their own. The past or any subsequent act of bankruptcy will have no operation upon the trust estate.^ 17. Cestuis que trust should not, as a general rule, be ap- pointed trustees. — Cestuis que trust are not, as such, inca- pacitated from being trustees for themselves and others ; {d) Kah V. Klein, 2 Mer. 431. Re Harrison's Trust, 22 L. J. N. S. Ch. (e) See Meinertzhagen v. Davis, 1 69; Curtis' Trusts, 5 I. E. Eg. 429. Coll. 335 ; Re Guibert, 16 Jur. 852 ; 1 Blin V. Pierce, 20 Vt. 25 ; Lpunsbury v. Purdy, 11 Barb. 490 ; Hogan v. Wyman, 2 Ore. 302; Ludwig v. kighley, 5 Barr. 132; Bank v. Mumford, 2 Barb. Ch. 596. 49- *41 RELATIVES. [Ch HI. S. 2. [*41] but, as a general rule, they are * not altogether fit persons for the office, in consequence of the proba- bility of a conflict between their interest and their duty (a).^ 18. Relatives. — Sir John Romilly, M.R., considered it also objectionable to appoint any relative a trustee, from the frequency of breaches of trust committed by trustees at the instance of cestuis que trust nearly connected with them (5). However, there is no positive legal objection to appointing either a cestui que trust or a relative, and indeed it is not always easy to find a trustee who is neither a cestui que trust nor a relative, and this the Court itself has experienced; for, notwithstanding its repugnance to such a course, it has been obliged occasionally, to appoint a relative, who is also a cestui que trust, to be a trustee (c). In one case the Court, in ap- pointing two new trustees, allowed the husband of a cestui que trust to be one of them upon his undertaking, that, if he became sole trustee, he would immediately take steps for the appointment of a co-trustee ((5'); but as the same * mischiefs would follow from an alien's enjoyment of the eqiu- (c) Burgess v. Wheate, 1 Eden, Godb. 275; Br. FefE. al. Uses, 389, a, 188. See now 33 & 34 Vict. c. 23. pi. 29. [(d) 47 & 48 Vict. c. 71, s. 5.] (j) See Barrow k. Watkin, 24 Bear. (e) See Shep. Touch. 509 ; Sand. 1 ; Godfrey and Dixon's case, Godb. on Uses, 339, note E. ; 15 Ric. II. c. 5. 275, but see Gilb. on Uses, 43; King (/) Dumoncel v. Dumoncel, 13 Ir. v. Holland, Al. 16 ; S. C. Slyl. 21 ; Eq. Eep. 92 ; and see Vin. Ab. Alien, Bumey v. Macdonald, 15 Sim. 6; A. 8; Godfrey and Dixon's case, Rittson m. Stordy, 3 Sm. & Gif. 230. ' HiU on Trustees, 52 ; Coleman «. Railroad Co. 49 Cal. 518. 64 Ch. ni. S. 3.] ALIENS. *45 table, as of the legal interest in lands (a), the equitable inter- est might at any time have been claimed by the Crown. The legal estate was not affected (6), but the Crown had the right of suing a subpoena against the trustee in equity (e). An alien could not, however, take an equitable interest by act of law as by descent or cui^tesy (c^). Executory trust for alien. — A distinction was taken, that although where a trust was perfected in favour of an alieii the Crown might be entitled, yet where a trust in favour of an ahen was not in esse, but only in fieri and executory, ^e court would do no act to give it to the Crown in the right of the alien (e). Alien might be cestui que trust of proceeds of sale of land. — Where a testator directed an estate to be sold, and the pro- ceeds divided amongst certain persons, some of whom Were aliens ; there, as according to the intention, which was sup- posed to be executed at the time of the death, the interest devised was money, the Crown was not entitled, for the mere purpose of working a forfeiture, to exercise an election by retaining the property as land ; and therefore, aliens were not debarred from enjoying their legacies in the pecuniary character which the testator had stamped upon them (/).■' 33 Vict. c. 14. — Now by 33 Vict. c. 14, an alien may take, acquire, hold, and dispose of real and personal property of (a) Attorney-General v. Sands, Dumonoel v. Dumoncel, 13 If. Eq. R. Hard. 495, per Lord Hale; Fourdrin 92. As to doyer, see Co. Lit. 31 b, V. Gowdey, 3 M. & K. 383. See Burne note (9) by Harg. V. Macdonald, 15 Sim. 6. (e) See Burney v. Maodonald, 15 (6) King 0. Holland, Al. 14; Sir Sim. 14; Eittson v. Stordy, 3 Sm.~^& John Dack's case, cited ib. 16 ; At- Gif. 240, but see Barrow v. Wadkin, torney-General v. Sands, Hard. 495, 24 Beav. 1 ; Sharp u. St. SauTeur, 7 per Lord Hale. L. R. Ch. App. 351. (c) Sharp v. St. Sauveur, 7 L. R. (/) Du Hourmelin v. Sheldon, 1 Ch. App. 351 ; King v. Holland, Al. Beav. 79, 4 Myl. & Cr. 525 ; Sharp v. 16, per RoUe, J. ; Roll. Ab. 194, pi 8. St. Sauveur, 17 W. K. 1002, 20 L. T. See Burney v. Macdonald, 15 Sim. 6; N.S.799, overruled on another ground. Burgess v. Wheate, 1 Eden, 188. 7 L. R. Ch. App. 343, and see Master (^d) See Calvin's case, 7 Eep. 49; v. De Croismar, 11 Beav. 184. 1 Anstice v. Brown, 6 Paige, 448; Hubbard v. Goodwin, 3 Leigh, 492; Tre- zevant v. Howard, 5 Del. 87 ; Craig v. Leslie, 3 Wheat. 563 ; Leggett v. Du- bois, 5 Paige, Ch. 114; Bradwell v. Weeks, 1 Johns. Ch. 206; Hamersley v. Lambert, 2 Johns. Ch. 608; Taylor v. Benham, 5 How. 270. 55 *46 LEGAL AND EQUITABLE INTERESTS. [Ch. HI. S. 3. every description in the same manner as if he were a natural born subject. But the Act is not retrospeetiTe (e^). 5. Distiiictions in reference to equitable and legal interests. It may be remarked that in certain cases persons are capable of taking an equitable interest, to whom the legal estate could not have been similarly limited.^ Thus, at common law [until the recent Married Women's Property Acts] no pro^ erty, real or personal, could be so limited to a married woman, as to exclude the legal rights of the husband during cover- ture: but, by way of trust, the beneficial interest [*46] could be placed entirely at the disposal of a * married woman, so that she should be regarded as a. feme sole, and the husband should not participate in the enjoyment. 6. So the legal estate cannot be limited to the objects of a charity, as to the poor of a parish, in perpetual succession ; but in a court of equity, where the feudal rules do not apply, the intention of the donor wUl be carried into effect (a), provided the requisitions of 9 G. 2. c. 36, be complied with. The act last referred to does not produce any incapacity in the cestuis que trust to take, but only prohibits the alienation of land, or property savouring of land, in any other mode than that prescribed by the act, for objects falling within the legpl definition of charitable purposes.^ (y) Sharp v. St. Sauveur, 7 L. R. Ch. App. 350; [De Geer v. Stone, 22 Ch. D. 243.] (o) GUh. on Uses. 204. 1 A cestui que trust must have a capacity to take. Trotter v. Blocker, 6 Port. 269. It may be a trust for self and others. Cocks v. Barlow, 5 Bep. 406. K an infant is a cestui que trust, the principle of the fund may not be diminished except by order of court, but the infant is entitled to maintenance out of the fund, when his father is insolvent. Bethea v. McCall, 5 Ala. 308. The cestui que trust need not be in being at the time the trust is declared, if he is in existence at the death of his trustee for lite. Ashurst ». Given, 5 Watts & S. 323. To determine who are cestuis que trust, see Carson v. Carson, 1 Wins. 24 ; Noble v. Andrews, 37 Conn. 346. The maxim " nemo est haeres viventis " applied. Johnson v. Whiton, 118 Mass. 340. ^ In charitable trusts it is not necessary for the cestui que trust to be capable of holding a legal title; Perry on Trusts, Chap. XXIII. Trusts may be created for persons yet unborn ; Collins v. Hoxie, 9 Paige, 81 ; Ashurst v. Given, 5 W. & S. 329 ; Gardner v. Heyer, 2 Paige, 11 ; Carson v. Carson, 2 Wins. (N. C.) 24 ; but not if immoral, or contrary to public policy ; Battin- ger V. Budenbecker, 63 Barb. 404 ; Ownes v. Ownes, 8 C. E. Green, 60 ; Flint I/. Steadman, 36 Vt. 210 ; religious societies as cestui que trusts ; Bridgewater V. Waring, 24 Pick. 304; Eainier v. Howell, 9 N. J. Eq. 121 ; Lutheran Church V. Maschop, 10 N. J. Eq. 57 ; Presbyterian Cong. v. Johnston, 1 Watts & S. 9 ; Swedesborough Church v. Shivers, 16 N. J. Eq. 453. 56 •CHAPTER IV. [*47] WHAT PEOPEETY MAY BE MADE THE SUBJECT OF A TETJST. As a general rule, all property, whether real or personal, and whether legal or equitable (a), may be made the subject of a trust, provided the policy of the law, or any statutory enactment, does not prevent the settlor from parting with the beneficial interest in favor of the intended cestui que trusO 1. Copyholds may be subject of trust, and. equitable interest descends as legal. — A trust may be created of lands regu- lated by local custom, as copyholds. Thus, A., tenant of a manor, may surrender to the use of B. and his heirs, upon trust for C. and his heirs. And as equity follows the law, the trust in C. will devolve in the same manner as the legal estate. 2. Power to entail equitable interest depends on custom to entail legal estate. — If the ciistom of the manor permit an entail of the legal estate, an entail may in like manner be created of the equitable (J) ; but if there be no such custom as to the legal estate, there can be no entail of the equita- ble (c). Where, therefore, the equitable interest in lands held (a) Knight v. Bowyer, 23 Beav. (6) Pullen v. Middleton, 9 Mod. 609, see p. 635; 2 De G. & Jon. 421. 484; 1 Preston Conv. 152. [But there can be no trust of a peerage (c) The opinion of Watkins, Treat, which is by its very nature a perso- on Cop. p. 153, and following pages, nal possession. Buckhurst Peerage, that there may be an entail of copy- 2 App. Cas. 1.] holds without a special custom, can- not be maintained. 1 M'Carty v. Blevins, 5 Terg. 195; Bobinson v. Mauldin, 11 Ala. 977; Clemson v. Davidson, 5 Binn. 392 ; Morton v. Naylor, 1 Hill, 439. Property not in existence as well as property not o?raed by the settlor may be the sub- ject of a trust. Calkins o. Lockwood, 17 Conn. 154 ; Stewart v. Kirkland, 19 Ala. 162; Pennock v. Coe, 23 How. 117; Brooks v. Hatch, 6 Leigh, 534; Hol- royd V. MarshaU, 2 GifE. 382; Hinkle v. Wanzer, 17 How. 353; Bank v. Has- tings, 15 Wis. 75. But see Garrow v. Davis, 15 How. 277 ; Gardner v. Adams, 12 Wend, 297; McKee v. Judd, 2 Ker. 622; Dunklin v. Wilkins, 5 Ala. 199; Story, Eq. Jur. §§ 1040-1055. 57 *48 FOEEiaN PEOPBETY. [Ch. IV. of a manor not permitting an entail is limited to A., and the heirs of his body, the estate is not construed as an entail but as a fee conditional ; — that is, on issue born the condition is fulfilled, and A. may alienate in fee. But until alienation, the equitable interest descends in the line of the issue like an entail ; and if A. die without issue, an pquitable right of entry reverts to the settlor or his heir. This doctrine is attended with important consequences, which are often overlooked. Thus copyholds are devised to trustees upon trusts corre- sponding with the limitations of freeholds in strict settle- ment, and A., the first tenant for life, has a son [*48] born, but who hves only a few weeks. If * the manor do not permit an entaU, the son takes a fee simple conditional, and all the subsequent limitations are void. In such a case, the copyholds shoidd be settled like leaseholds, so as not to vest absolutely unless a child attain twenty-one, and on his death under that age to devolve on the next taker under the entail of the freeholds. 3. Equitable interests in foreign personal property. — How far equitable interests may be engrafted on foreign property requires consideration. As regards movable estate there is no difficulty, for it follows the person, and if the settlor him- self be domiciled within the jurisdiction of the Court, all his movable estate, whether in the East or West Indies, or else- where, is deemed to be at home, and governed by the law of this country. A trust, therefore, may freely be" created of such interests, and would be enforced in equity. In certain cases, however, there might be practical obstructions in the way of executing the trust, from the circumstance of the property lying in fact beyond the reach of the Court. 4. Equitable interests in foreign real property. — As to lands lying in a foreign country, the Court will enforce natural equities, and compel the specific performance of contracts, provided the parties be within the jurisdiction, and there be no insuperable obstacle to the execution of the decree.^ 1 Massie v. Watts, 6 Cranch, 160; Watkinsw. Holman, 16 Pet. 25; De Klyn V. Watkins, 3 Sandf. Ch. 185; Guild v. Guild, 16 Ala. 121; Sutphenu. Fowler, 9 Paige, 280 ; Vaughan v. Barclay, 6 Whart. 392 ; Church v. Wiley, 2 Hill, Ch. 684. Where property in jurisdiction, but person not, see Spurr v. Scoville, 3 Cush. 678 ; Meux o. Maltby, 2 Swans. 277. . 58 Ch. IV.] FOREIGN PKOPEKTY. #49 Thus Lord Eldon allowed a consignee to have a Uen upon the application of general principles for proper advances upon estates in the West Indies (a). So the Court has en- forced specific performance of articles between parties for ascertaining the boundaries of their estates abroad (6), has compelled a person entitled to an estate in Scotland to give ■ effect to an equitable mortgage by deposit of deeds of the Scotch estate, though by the law of Scotland a deposit of deeds created no lien (c), has directed an account of the rents * and profits of lands abroad (a), has [*49] ondered an absolute sale (6), and foreclosure of a mortgage (c), and has relieved against a fraudulent convey- ance of an estate abroad (cZ), and prevented a defendant by injunction from taking possession (e). In such cases, how- ever, the Court, according to the modern doctrine, requires as a substratum for its jurisdiction that there should exist a personal privity between the plaintiff and defendant, and in the absence of such privity, no remedy lies by way of lien (a) Scott V. Nesbitt, 14 Ves. 438. (6) Penn v. Lord Baltimore, 1 Ves. 444, and Belt's Suppt. ; aiiB see Rob- erdean v. Boas, 1 Atk. 543; Angus v. Angus, "West's Ee. 23; TuUock ■;. Hartley, 1 Y. & C. Ch. Ca. 144 ; Cood V. Cood, 83 Beav. 314 ; Drummond v. Drummond,37L.J.N.S.Ch.811; 17 W. R. 6. (c) Ex parte Pollard, 3 Mont. & Ayr. 340 ; reversed Mont. & Chit. 289. But see Norris v. Chambres, 29 Beav. 246. Martin v. Martin, 2 R & M. 507, may be supported on the ground that the mortgagee had a lien for advances and supplies. Had the lien not exist- ed, Sir J. Leach thought the plaintifE might have compelled a sale as against the husband, but that such equity at- tached not to the estate, but to the^jer- son only : that after the institution of a suit, the equity would have bound the estate, but until bill filed the hus- band could make a good title even to a purchaser with notice ; and the court instanced the case of a husband, the apparant owner of two estates of equal value, and that he made a settle- ment of estate A. under the direction of the court, and that the trustees were afterwards evicted by defect of the husband's title : in that case the court would oblige the husband to make a settlement of estate B., but that un- til the bill was on the file the husband remained the owner of the estate B., and could effectually sell or charge it. As to personal equities, see further, Morse K. Faulkner, 1 Anst. 11, 3 Sw. 429, note (a) ; Averall v. Wade, LI. & Go. temp. Sugden, 261 ; Johnson v. Holdsworth, 1 Sim. N. S. 108 ; Hastie «. Hastie,2 Ch. D. 804. (a) Roberdean v. Rous, 1 Atk. 543. (i) lb. 544. (c) Toller v. Carteret, 2 Vern. 494 ; Paget V. Ede, 18 L. R. Eq. 118 ; [and see Re Longdendale Cotton Spinning Company, 8 Ch. D. 150.] (d) Arglasse v. Muscha,mp, 1 Vern. 75. (e) Cranstown v. Johnston, 5 Ves. 278; and see Bunbury v. Eunbury, 1 Beav. 318 ; Hope v Carnegie, 1 L. R. Ch. App. 320. 59 *49 FOEEIGN PKOPERTY. [Ch. TV. against the land itself (/). Parties out of the jurisdiction may now be served abroad, but this does not extend the juris- diction of the Court in respect of relief (^). 5. While the Court will, to this extent, administer equities, and enforce contracts as to lands abroad, so far as the Court, by acting upon the parties, can give effect to the decree, there are cases where the foreign law presents an insuperable obsta- cle to the execution of the decree, and then the Court will not make a decree which would be nugatory (A). 6. Trusts of lands abroad. — The better opinion is that trusts,^ not constructively such, like natural equities or equi- (/) Noma V. Chambres, 29 Bear. 2 J. & H. 718; Edwards v. Warden, 246 ; 3 De G. F. & J. 583 ; [and see 9 L. R. Ch. App. 495; [and see the Re Hawthorne, 23 Ch. D. 743.] rules of the Supreme Court, 1883, Or- (y) Cookney v. Anderson, 31 Bear. der xi. R. 1.] 452. In this case the court said that (h) "Waterhouse v. Stansfield, 9 to found the jurisdiction either the Hare, 234 ; 10 Hare, 254 ; Carteret v. persons' against whom the relief was Petty, 2 Swans. 323, note (a), and 2 sought must be within the jurisdiction, Ch. Ca. 214, the case not of a contract or the subject matter in dispute must as in Fenn v. Lord Baltimore, but of be within those limits, or the contract a partition which the court had no must have been entered into or intend- means of carrying into effect ; and ed to be performed within the same see Norris v. Chambres, 29 Beav. 246. limits ; ib. And see Maunder v. Lloyd, 1 Where a trust is created by will, the residence of the trustee and cestui que trust out of the state will not remove the control of it from the court ; Chase v. Chase, 2 Allen, 101; Curtis v. Smith, 60 Barb. 9 ; a trustee appointed by a court can sue only within its jurisdiction, but a trustee named by a settlor may sue in any court haying jurisdiction over the parties or property ; Curtis V. Smith, 6 Blatch. 537 ; a court may make a decree in personam if the parties are present ; Mead v. Merritt, 2 Paige, 404 ; White v. White, 7 Gill & J. 208 ; and it is enough if the person against whom the decree is made is found and served within the jurisdiction ; Woodward v. Schatzell, 3 Johns. Ch. 412 ; Mitchell v. Bunch, 2 Paige, 606 ; Chalmers v. Hack, 19 Me. 124 ; if neither person or property is within the jurisdiction of the court, no action will be taken ; Booth v. Clark, 17 How. 322 ; Bank v. Adams, 1 Pars. Eq. 547 ; Hawley v. James, 7 Paige, 213 ; Walker v. Ogden, 1 Dana, 252 ; courts hav- ing jurisdiction over the parties may by injunction prevent their proceeding elsewhere, and hold them for contempt if they ignore it ; Dehon v. Foster, 4 Allen, 545 ; Beal v. Burchstead, 10 Cush. 523 ; Moody v. Gay, 16 Gray, 457 ; Bank v. Rutland, 28 Vt. 470 ; Cage v. Cassidy, 23 How. 109 ; Great FaUs Mf'g. Co. V. Worster, 23 N. H. 470 ; Pearce v. Olney, 20 Conn. 544 ; Story, Eq. Jur. §§ 899, 900 ; Briggs v. French, 1 Sumn. 504 ; but where courts of different states have concurrent jurisdiction, the parties may exercise their choice ; M'Kim V. Voorhies, 7 Cranch, 279 ; English v. Miller, 2 Rich. Eq. 320 ; Coster «. Griswold, 4 Edw. Ch. 377 ; Craft v. Lathrop, 2 WaU. Jr. 103 ; BickneU v. Field, 8 Paige, 440; VaU v. Knapp, 49 Barb. 299. 60 Ch. rV.] XETJSTS OF FOKEIGN EEAL ESTATE. *50 ties arising from contract, but properly sucli, and formerly- known as uses, cannot be engrafted upon foreign real estate. The law regulating lands in England has a local character. How then can a system adapted exclusively to lands in Eng- land be transplanted and attached to lands abroad? Could entails, for instance, be created where none are allowed, and if created, by what machinery could they be barred ? It has been seen that in the case of copyholds, when the custom * of the manor does not allow entails of the [*50] legal estate, none can be created of the equitable, and th^ same principle will apply to trusts of foreign lands. The few authorities upon the subject tend to confirm this view, but there is little light to be obtained from them, and the law must be regarded as stiU somewhat unsettled (a). (o) Glover v. Strothoff, 2 B. C. C. legal estate could be held upon the 33 ; Nelson v. Bridport, 8 Beav. 547 ; trusts of the settlement without the see 570 ; Martin v. Martin, 2 R. & M. intervention of a sale ;) Godfray v. 507 ; (in which- case it did not occur Godfray, 12 Jur. N. S. 397. either to the bar or the beach that the 61 [*51] * CHAPTER V. OF THE FOEMALETIBS EEQTJIBBD FOR THE CREATION OP TRUSTS. Upon this subject we propose to treat — First, Of Declara- tions of Trust at common law. Secondly, Of the Statute of Frauds. Thirdly, Of the Statutes of Wills. SECTION I. OP TRUSTS AT COMMON LAW. 1. Trusts averrabie. — Trusts, like uses, are of their own nature averrabie, i.e., may be declared by word of mouth with- out writing (a) ; as, if before the Statute of Frauds an estate had been conveyed unto and to the use of A. and his heirs, a trust might have been raised by parol in favour of B. (6), and since the statute, though a trust of lands cannot be declared by parol without proof of it in writing, no other proof is requisite than a simple note in writing duly signed, but not under seal (c).^ 2. Averment must not contradict the instrument. — But the Court, following the analogy of uses, never permitted the averment of a trust in contradiction to any expression of intention on the face of the instrument itself (d). (a) See Fordyce v. Willis, 3 B. C. (c) Adlington w. Cann, 3 Atk. 151, C. 587; Benbow v. Townsend, 1 M. & per Lord Hardwicke; Boson v. Stat- K. 506 ; Bayley v. Boulcott, 4 Russ. ham, 1 Eden. 513, per Lord Keeper 347 ; Crabb v. Crabb, 1 M. & K. 511 ; Henley. Kilpin V. Kilpln, Id. 520. (d) Lewis ». Lewis, 2 Ch. Rep. 77 ; (6) See Bellasis v. Compton, 2 Finch's case, 4 Inst. 86 ; Fordyce u. Vern. 294; Fordyce v. Willis, 3 B. C. WUUs, 3 B. C. C. 587 ; see Childers w. C. 587 ; Thruxton ». Attomey-6en- Childers, 3 K. & J. 310 ; 1 De G. & J. eral, 1 Vern. 341. 482. 1 This question has only a theoretical value in America, as the Statute of Frauds has been very generally adopted ; see the statutes of the various states. 62 Ch. V. S. 1.] TEtrSTS AT COMMON LA"W. *52 3. Nor be repugnant to the scope of the instrument. — And averment is excluded, if from the nature of the instrument or an^ circvmstance of evidence oppearing on the face of it, an intention of making the legal holder the beneficiary also, can be clearly impUed. Thus a trust cannot be averred, where a valuable * consideration is paid (a) ; and if a [*52] pension from the Crown be granted to A., a, trust can- not be raised by parol in favour of B.; for a pension is con- ferred upon inotives of honour, and the inducements to the bounty are the personal merits of the annuitant (J). , 4. Trusts not averrable -where deed required to pass the legal estate. — It was a principle of uses that, on a, feoffment, which. could be made by parol, a use might be declared by parol, but where a deed was necessary for passing the legal estate, there the use which was engrafted could not be raised by averment (c).^ As trusts have been modelled after the likeness of the use (c?), the distinction at the present day may deserve attention. It is laid down by Duke expressly, that, where the things given may pass without deed there a charitable use may be averred by witnesses ; but, where the things cannot pass without deed, there charitable uses cannot be averred without a deed proving the use (e). And Lord Thurlow, it is probable, alluded to the same distinction when he observed, "I have been accustomed to consider uses as averrable, but perhaps, when looked into, the cases may relate to feoffment, not to conveyances by bargain and sale, or lease and release " (/). And in Adlington v. Cann (5^), where a testator devised the legal estate in lands to A. and (a) See Gilb. on Uses, 51, 57 ; Pilk- Attorney-General v. Scott, Gas. t. ington V. Bayley, 7 B. P. C. 526. Talb. 139 ; Burgess v. Wheate, 1 (6) Fordyce U.Willis, 3 B.C.C. 587. Eden. 195, 217, 248; Geary v. Bear- (c) Gilb. on Uses, 270. croft, Sir 0. Bridg. 488. (rf) See Fordyce v. WilUs, 3 B. C. C. " (e) Duke, 141. 587 ; Lloyd v. Spillet, 2 Atk. 150 ; (/) Fordyce v. WilUs, 3 B. C. C. Attorney-General v. Lockley, Append. 587. to Vend. & Purch. No. 16, 11th ed.; (g) 3 Atk. 141. Chaplin v. ChapUn, 3 P. W. 234; 1 Simms v. Smith, 11 Ga. 198 ; Lloyd v. Inglis, 1 Des. 333 ; Steere v. Steere, 5 Johns. Ch. 1 ; 9 Am. Dec. 256 ; Dean v. Dean, 6 Conn. 285 ; Philbrook v. Delano, 29 Me. 410; Squires's App. 70 Pa. St. 266; Hutchinson v. Tindall, 2 Green. Ch. 257 ; Strong v. Glasgow, 2 Murph. 289; Leman v. Whitley, 4 Buss. 423 ; Harris v. Barnett, 3 Gratt. 339. 63 *53 TRUSTS AT COMMON LAW. [Ch. V. S. 2. B. and their heirs by a will duly executed, and left an unat- tested paper referring to trusts for a charity, Mr. Wilbrahain in the argument observed, "If this were a voluntary deed, would a paper, even declaring a trust, be sufficient to take it from the grantee ? no, certainly " (Ji) ; and it is very observable that Lord Hardwicke, in referring to this obser- vation, excludes the case of a deed, and lays it down that "if the testator had made a feoffment to himself and his heirs, and left such a paper, this would have been a good declaration of trust" (i). 5. Declaration of trust by the king. — The declaration of a use by the kinff must have been by letters patent (^) ; and it seems that the same doctrine is now applicable to trusts (l"). [*53] * SECTION II. or THE STATUTE OF FKAUDS. By the seventh section of the Statute of Frauds (a) it is enacted, that " all declarations or creations of trusts or confi- dences of any lands, tenements, or hereditaments, shall be manifested and proved by some writing, signed by the party who is by law enabled to declare such trust, or by his last will in writing, or else they shall be utterly void and of none effect." Upon the subject of this enactment we shall first briefly point out what interests are within the Act ; and, secondly, what formalities are required by it. I. Of the interests within the Act. 1. Copyholds. — Copyholds are to be deemed within the operation of the clause, for as a trust is engrafted on the estate of the copyhold tenant, the rights of the lord, who claims by title paramount, cannot in any way be injuriously affected, and therefore the ordinary ground for exempting copyholds from statutory enactments does not exist (6). A (A) lb. 145. (6) See Withers v. Withers, Amb. (0 lb. 151. 151 ; Goodright o. Hodges, . 1 Watk. (fe) Bacon on Uses, 66. on Cop. 227; S. C. Lofft. 230; Ach- (/) Fordyce v. Willis, 3 B. C. C. 577. erley v. Acherley, 7 B. P. C. 273 ; but (a) 29 Car. 2. c. 3. see Devenish v. Baines, Pr. Ch. 5. Ch. V. S. 2.] STATUTE OP FRAUDS. — CKOWN. *54 trust, therefore, of a copyhold cannot be declared by parol so as to make the copyholder a trustee for another (c). 2. ChattelB real within the Act. — Chattels real are within the purview of the Act, and a trust of them must therefore be evidenced by writing, as in the case of freeholds (^ct). 3. Chattels personal not within the Act. — But chattels personal are not within the Act, and a trust by averment will be supported (e).^ It has even been held that a * sum of money secured upon a mortgage of real es- [*54] tate is not an interest within the Act, and that a parol declaration is good (a). And if a trust be once created by (c) Mr. Hargrave seems to have thought, that even the uses of a sur- render were trusts within the intention of the Act ; for, in a note to Coke on Littleton, he observes, "A nuncupa- tive will of copyholds was a valid declaration of the uses, where the surrender was silent as to the form, till the 29 Car. 2. required all declara- tions of trust to be in writing." But the surrender of a copyhold to uses is merely a direction to the lord in what manner to regrant the estate, and the surrenderee is a cestui que use by misnomer only, and not in fact; andindeed the Court of Queen's Bench has expressly decided that uses of copyholds are not within the Statute of Frauds, on the ground that a sur- render to uses is not the creation of a trust or confidence apart from the legal estate, but a mode established by custom of transferring the legal estate itself. Doe v. Danvers, 7 East, 299. (d) Sketta.'Whitmore,Preem.280; Forster v. Hale, 3 Ves. 696; Eiddle V. Emerson, 1 Vern. 108 ; and see Hutchins v. Lee, 1 Atk. 447 ; Bellasis V. Compton, 2 Vern. 294. (e) Bayley v. Boulcott, 4 Russ. 347, per Sir J. Leach ; M'Fadden v. Jen- kyns, 1 Hare, 461, per Sir J. Wigram ; S. C. 1 Ph. 157, per Lord Lyndhurst ; Grant v. Grant, 34 Beav. 623; Thorpe V. Owen, 5 Beav. 224; George v. Bank of England, 7 Price, 646 ; Hawkins v. Gardiner, 2 Sm. & G. 451, per V. C. Stuart ; Peckhani v. Taylor, 31 Beav. 250; Fordyce v. Willis, 3 B. C. C. 587, per Lord Thurlow ; Benbow v. Townsend, 1 M. & K. 510, per Sir J. Leach; Fane v. Fane, 1 Vern. 31, per Lord Nottingham; Nab v. Nab, 10 Mod. 404. (But this case, as reported 1 Eq. Ca. Ab. 404, appears an author- ity the other way.) The dictum of Lord Cranworth in Scales v. Maude, 6 De G. M. & G. 43, that a trust could not be declared by parol in favor of a volunteer was afterwards disclaimed by him. Jones u. Lock, 1 L. E. Ch. App. 28. (a) Benbow v. Townsend, 1 M. & K. 506 ; and see Bellasis v. Compton, 2 Vern. 294. 1 Thacher v. Churchill, 118 Mass. 108 ; Davis v. Coburn, 128 Mass. 377 ; Chace v. Chapin, 130 Mass. 128; Maffitt v. Rynd, 69 Pa. St. 380; Porter v. Bank, 19 Vt. 410; Crissman v. Crissman, 23 Mich. 218; Eobson v. Harwell, 6 Ga. 589; Kimball u. Morton, 1 Halst. Ch. 26; 43 Am. Dee. 621. A parol declaration' is sufficient to raise a trust in a mortgage secured by real estate. Childs V. Jordan, 106 Mass. 322 ; Patterson v. Mills, 69 la. 755 ; Hackney v. Vrooman, 62 Barb. 650. Likewise in money received from the sale of real estate. Maffltt v. Rynd, 69 Pa. St. 380 ; Coburn v. Anderson, 131 Mass. 513. 65 *54 STATUTE OP PEAUDS. — CROWN. [Ch. V. S. 2. parol declaration, it cannot be affected by any subsequent parol declaration of the settlor to the contrary (S). But the approval of a draft declaration of trust, subject to further consideration as to one of the provisions of it, will not amount to a parol declaration (c). If a settlor direct a sum to be invested in the names of the trustees of her marriage settlement, the Court considers this as tantamount to a parol declaration, or rather the presumption is, that the sum so invested should be held upon the same trusts as the settled funds ((Z). 4. Case of fraud. — The Statute of Frauds cannot be pleaded by a defendant to wtom the estate has been con- veyed without consideration, and who claims to retain it under circumstances which the Court desTos fraudulent (^e^.^ (b) Kilpin v. KUpin, 1 M. & K. 520, (e) Davies e. Otty (No. 2), 35 see 529 ; Crabb v. Crabb, 1 M. & K. Beav. 208 ; Haigh v. Kaye, 7 L. K. 511. Ch. App. 469; Childers v. Childers, (c) Re Syke's Trusts, 2 J. &' H. 1 De G. & J. 482; Lincoln v. Wright, 415. 4 De G. & J. 16; [Bopth v. Turle, 16 (d) Be Curteis' Trust, 14 L. R. L. B. Eq. 182.] Eq. 217. ' The statute is intended to prevent, and not to facilitate fraud. Maddox v. Rowe, 23 Ga. 431; 68 Am. Dec. 535; Morrill «. Cooper, 65 Barb. S19; Levy V. Brush, 45 N. T. 689; Bitter v. Jones, 28 Hun, 494. Where a party attempted to hold property taken as collateral, the court said it was " too gross a fraud to be permitted." Carr v. Carr, 52 N. Y. 259. Equity "will vaid in defeating fraud, regardless of the statute. Robbins v. Robbins, 89 N. Y. 257; Wood v. Rabe, 96 N. Y. 427. "The rule in equity always has been that the statute is not allowed as a protection of fraud, or as a means of seducing the unwary into false confidence, whereby their intentions are thwarted or their interests betrayed," is the language of the court in Jenkins V. Eldredge, 3 Story, 290 ; but no invariable rule has been, or can be estab- lished. Hill on Trustees, 224; Perry on Trusts, § 169; Harding v. Wheaton, 2 Mass. 389. For a further discussion of the question, see Bonham v. Craig, 80 N. C. 224 ; Newton v. Taylor, 32 Ohio St. 399; Rasdall v. Rasdall, 9 Wis. 379 ; Fouty c. Fouty, 34 Ind. 433. An unconscientious refusal to perform an alleged promise to recovery is not such fraud as will displace the statute. Johnston v. La Motte, 6 Rich. Eq. 347. Only clear and simple trusts for the benefit of a debtor are liable to execution of the statute. Rice v. Burett, 1 Spear's Eq. 579 ; 42 Am. Dec. 836. Statute of Frauds does not apply to trusts of personalty. Kimball v. Morton, 1 Halst. Ch. 26 ; 43 Am. Dec. 621 ; Hoge V. Hoge, 1 Watts, 163; 26 Am. Dec. 54; Towles v. Burton, Rich. Eq. Cas. 146; 24 Am. Dee. 409; Robson v. Harwell, 6 Ga. 589. If a deed is abso- lute in form, its purpose cannot be shown by parol. Lawson v. Lawson, 117 111. 98. An express trust must be manifested or proved in writing. Donlin V. Bradley, 119 HI. 412. Neither does the statute apply where the subject of the trust is a debt, and not the land mortgaged to secure it. Patterson v. 66 Ch. V. S. 2.] STATUTE OF FRAUDS. — FOKMALITIES. *65 5. Charitable uses within the Act. — An attempt was formerly made to have a charitable use excepted from the statute, but Lord Talbot decreed (/), and Lord Hardwicke affirmed the decision (tc), and Lord Northington said every man of sense must subscribe to it (A), that a gift to a charity must be treated on the same footing with any other disposi- tion. 6. 'Whether the Crown is bound by the statute. — It was held by the Court of Queen's Bench (i), that the Grown was bound by the Statute of Frauds, and therefore was not at liberty to prove a superstitious use by parol ; but in the Court of Exchequer it was ruled, on the contrary, that the Statute of Frauds did not bind the Crown, but took place only between subject and * subject. Lord Hardwicke [*55] expressed his doubts upon the latter doctrine, that the Crown was not bound by a statute unless specially named ; but at the same time mentioned a case in which that doctrine had been followed (a). 7. Colonial lands. — It Seems the statute will not apply to lands situate in a bolony planted before the Statute of Frauds was passed (5). Planters carry out with them their country's laws as they subsist at the time ; but subsequent enactments at home do not follow them across the seas unless it be so specially provided. [8. The statute to be a Tpax must be pleaded. — If an action be brought to have the beneiit of a parol trust of lands, a defendant, who would rely on the Statute of Frauds as a bar, must under the present practice insist upon it by his pleading (c)].* (/) Lloyd V. Spillet, 3 P. W. 344. and see Adlington ^. Cann, 3 Atk. (g) S. C. 2 Atk. 148 ; S. C. Barn. 146. 384 ; and see Adlington v. Cann, 3 (a) Adlington v. Cann, 3 Atk. 154. Atk. 150. (6) See 2 P. W. 75; Gardiner v. (A) Boson V. Statham, 1 Eden. 518. Fell, 1 J. & W. 22. (i) King V. Portington, 1 Salk. 162; [(c) Rules of the Supreme Court Mills. 69 la. 755. Trusts may be declared by letter. Moore u. Pickett, 62 HI. 158. Parol admissions require, also, evidence of an agreement before the sale. Barnes v. Taylor, 27 N. J. Eq. 259. Absolute deed with instructions to sell after grantor's death, and pay legacies, is void. Adams w. Adams, 79 111. 517. See, also, notes relating to parol evidencfe. 1 The Statute of Frauds is waived if not pleaded ; Carpenter v. Davis, 72 67 *65 STATUTE OF FKAUDS. — FOEMAIITIES. [Ch.V. S. 2. II. What formalities are required hy the statute. 1. Trusts to be proved by, not declared in, -writing. — The principal point to be noticed is, tliat trusts, as already ob- served, are not necessarily to be declared in -writing, but only to be manifested and proved hy writing ; for if there be written evidence of the existence of such a trust, the danger of parol declarations, against which the statute was directed, is effectually removed (d). It may be questioned whether Order XIX, E. 15. As to the for- (d) Forsterw. Hale,3 Ves. 707,;)«r mer practice see the 7th Edition of Lord Alvanley ; S. C. 5 Ves. 316, per this Treatise, p. 51.] . Lord Loughborough ; Smith u. Mat- thews, 3 De G. F. & J. 139. 111. 14. A bill may be open to demurrer, i£ it shows on the face of it that the Statute of Limitations, the Statute of Frauds, or any other Statute, either bars the right or the remedy of the plaintiff in equity. If the allegations of a bill to enforce an express trust concerning lands clearly imply that the declaration of trust was not in writing, the objection may be taken by demurrer. Camp- bell V. Brown, 129 Mass. 23 ; Ahrend v. Odiorne, 118 Mass. 261, 268 ; Slack v. Black, 109 Mass. 496 ; Walker v. Locke, 5 Gush. 90 ; Randall v. Howard, 2 Black, 585 ; Famham v. Clements, 51 Me. 426 ; 1 Dan. Ch. Pr. 5th .Eng. ed. 480, note. It appears to hare been at times doubted whether the Statute of limitations could be set up by way of demurrer, or whether the objection must not be taken by plea. But it is now clearly and conclnsirely settled, that an objection arising out of any statute is as much matter of demurrer as any other matter of law. So that, if on the facts alleged by the bill it appears that an existing statute bars the plaintiff either of his right or of his remedy, the objection may be taken by demurrer as well as by plea. But it the bill does not show affirmatively that the case is not within the statute, such ofience must be specially pleaded, and cannot be taken by demurrer. Beckwith u. Toung, 4 Drew. 1, 3 ; Wood v. Midgley, 5 De G. M. & G. 41 ; Heys «. Astley, 4 De G. J. & S. 34 ; see Catling v. King, 5 Ch. Div. 660 ; Futcher v. Futcher, 50 L. J. Ch. 735, per Fry, J ; PuUen i-. Snelus, 48 L. J. C. P. 394. "Before the passing of the Judicature Acts there was a difference between the practice at law and the practice in equity, in cases like the present. At law, if the contract was denied, it was a matter of evidence whether the con- tract were one which could be sued upon, or whether the remedy was barred by the statute. But in equity, if the defendant intended to rely upon the Statute of Frauds or any other special statute, he was compelled to make a specific averment of his intention." Mellish, L. J. in Clarke u. Callow, 46 L. J. Q. B. at p. 54, C. A., and in Catling v. King, 6 Ch. Div. at p. 662. In a recent case in the House of Lords it was declared that there is a dis- tinction between the Statute of Limitations and the Statute of Frauds. The latter must be pleaded. The t'tle to the estate, not the mere right to proceed for its recovery, is affected by the former. K the plaintiff's statement of claim shows, on the face of it, that the time within which a title to land must be asserted has gone by, the defence of the Statute of Limitations may be raised on demurrer. And a defence so used is sufficient without any distinct refer- ence to the statute. Dawkins v. Penrhyn, 4 App. Cas. 51. On this case Lord 68 Ch. V. S. 2.] STATUTE OV FEAUDS. — FORMALITIES. *55 ttie Act did not intend that the declaration itself should be in writing ; for the ninth section enacts, that " all grants and assignments of any trust or confidence shall likewise be in writing, signed by the party granting or assigning the same, or by such last will or devise (e) ; " but whatever may have been the actual intention of the legislature, the construction put upon the clause in practice is now firmly established.^ (e) i.e. A will executed in con- Crooke v. Brooking, 2 Vem. 50, 106, forraity with section 5. Note that was before the Statute of Frauds. Cairns observed that " the law always has been, and the law continues to be, thJt in addition to a specified ground of demurrer you may, at the bar, allege any other ground of demurrer which appears upon the face of the bill." 1 Proof: If trusts are manifested and proved in writing, it is sufBcient. Black V. Black, 4 Pick. 236 ; Gibson v. Foote, 40 Miss. 788 ; Gerry v. Stimson, 60 Me. 186 ; Pinney v. Fellows, 15 Vt. 525. In many of the states the trust must be created or declared by an instrument in writing signed by the party, but these words apparently are construed as synonymous with those of the English statute. Jenkins v. Eldredge, 3 Story, 294 ; Cook u. Barr, 44 N. Y. 158; Corse v. Leggett, 25 Barb. 394; Pinnock v. Clough, 16 Vt. 500; White V. Douglass, 8 Seld. 568; Pratt v. Ayer, 3 Chand. 265; Sheet's Est. 62 Pa. St. 257; Blodgett w. Hildreth, 103 Mass. 486; Browne, St. Frauds, § 104. Parol : Trusts may be created, but not proved by parol. Steere v. Steere, 5 Johns. Ch. 1 ; 9 Am. Dec. 256 ; Groves' Heirs v. Fulsome, 16 Mo. 543 ; ,57 Am. Dec. 247 ; Cornell v. Utica R. R. Co. 61 How. Pr. 192. Trusts are not within the statute. Johnson v. Habbell, 2 Stock. Ch. 332 ; Rice ». Burnett, 1 Spear's Eq. 579; 42 Am. Dec. 336. The grantor is estopped from denying that a con- sideration was paid, by the ordinary clause in a deed acknowledging the receipt of the consideration, and parol evidence on the point is inadmissible, but it may be allowed to vary, explain, or contradict the amount of consideration. 2 Dev. Deeds, § 836; Twomey v. Crowley, 137 Mass. 184; Aull ii. Aull, 80 Mo. 199 ; Rhine v. Ellen, 36 Cal. 362 ; Belden v. Seymour, 8 Conn. 304 ; 21 Am. Dec. 661 ; Goodspeed v. Fuller, 46 Me. 141 ; M'Crea v. Purmort, 16 Wend. 460. In absentee of fraud, accident, or mistake, the grantor in an absolute deed, with valuable consideration, and that acknowledged, is precluded from showing that the grantee was to hold in trust for him. Trafton v. Hawes, 102 Mass. 533 ; Russ v. Mebius, 16 Cal. 350 ; Beers v. Beers, 22 Mich. 42 ; Far- rington v. Barr, 36 N. H. 86 ; Stackpole ti. Robbins, 47 Barb. 212 ; McConnell V. Brayner, 63 Mo. 461; Lawson v. Lawson, 117 111. 98. Parol is admissible to show that an apparently absolute deed is a mortgage ; Johnson v. Sher- man, 15 Cal. 287; 76 Am. Dec. 481 ; Fowler v. Stoneum, 11 Tex. 478; 62 Am. Dec. 490 ; Hall v. Sevill, 3 G. Greene, 37 ; 54 Am. Dec. 485 ; but it must be aiear and conclusive ; Corbit v. Smith, 7 la. 60 ; 71 Am. Dec. 431 ; as must parol evidence of a trust always. Snelling v. Utterback, 1 Bibb. 609 ; Hunter V. Bilyeu, 30 111. 246 ; Brady v. Parker, 4 Ired. Eq. 430 ; Philpot v. Ellicott, 4 Md. Ch. 273 ; Harper v. Patterson, 14 C. P. 538; McNabb v. NichoU, 3 L. J. N. S. 21 ; Fleming ». Duncan, 17 Chy. 76; Shaw v. Shaw, 17 Chy. 282; Wilde V. Wilde, 20 Chy. 521 ; MoManus v. McManus, 24 Chy. 118 ; Gamble v. Lee. 25 Chy. 326 ; Hutchinson v. Hutchinson, 6 Chy. 117 ; Curry v. Curry, 26 Chy. 1 ; Parsons v. Kendall, 6 Chy. 408 ; Denny v. Lithgow, 16 Chy. 619 ; Ross v. Ross, 69 *66 STATUTE OF FEATJDS. — FORMALITIES. [Ch.V. S.2. 2. As by a letter, recital, &o. — The statute will be satis- fied, if the trust can be manifested and provfed by any sub- sequent acknowledgment by the trustee, as by an express declaration by him.(/), or any memorandum to that ef- fect (5^), or by a letter under his hand (K), by his [*56] answer in * Chancery (a), or by an .affidavit (5), or by a recital in a bond (c), or deed (d), &c. ; and the (/) Ambrose v. Ambrose, 1 P. W. (o) Hampton v. Spencer, 2 Vem. 321 ; Crop v. Norton, 9 Mod. 233. 288; Nab v. Nab, 10 Mod. 404; Cot- (j) Bellamy v. 3urrow, Cas. t. tington v. Fletcher, 2 Atk. 155 ; Ryall Talb. 98; and see Ee Bennett's Set- v. Eyall, 1 Atk. 59, per Lord Hard- tlement Trusts, 17 L. T. N. S. 438; 16 wicke; Wilson v. Dent, 3 Sim. 386. W. R. 331. A bill differed from an answer, as it (A) Forster v. Hale, 3 Ves. 696; was not signed by the party. See, S. C. 5 Ves. 308; Morton •». Tewart, however, Butler v. Portarlington, 1 2 Y. & C. Ch. Ca. 67 ; Bentley ». Conn. & Laws. 1. Mackay, 15 Beav. 12 ; Childers v. (6) Barkworth v. Young, 4 Drew. Childers, 1 De G. & J. 482; Smith ». 1. / Wilkinson, cited 3 Ves. 705 ; O'Hara (c) Moorcroft c Dowding, 2 P. V. O'Neill, 7 B. P. C. 227 ; and see W. 314. Gardner v. Kowe, 2 S. &. S. 354. (d) Deg v. Deg, 2 P. W. 412. 16 Chy. 642 ; Brown v. Copron, 24 Chy. 91. The testimony of a single wit- ness has been held insufficient. Miller v. Thatcher, 9 Tex. 482 ; 60 Am. Dec. 172; Johnson v. Deloney, 35 Tex. 48. For the distinction between an uncon- ditional deed of trust and one in the nature of a mortgage, see Koch v. Briggs, 14 Cal. 256; 73 Am. Dee. 651; Hoffman u. Mackall, 5 Ohio St. 124; 64 Am. Dec. 637 ; determined by the intention of the parties, Reece v. Allen, 5 Gilm. 236 ; 48 Am. Dec. 336. Parol is admissible to show the purpose of an instru- ment. Morris v. Bndlong, 78 N. Y. 553. One holding security for debt is only a mortgagee. Beatty v. Brummett, 94 Ind. 79. It may be shown that a deed of trust is fraudulent. Ashley u. Robinson, 29 Ala. 112 ; 65 Am. Dec. 387. In Minnesota trusts by parol are very strictly barred by statute, but if partly executed the court will decree specific performance. Wentworth v. Went- worth, 2 Minn. 277 ; 72 Am. Dec. 97 ; Catlin v. Fletcher, 9 Minn. 88. In the province of Ontario any subsequent acknowledgment in writing, declaring the trust, will be sufficient, and it will relate back to the creation of the trust. Harper v. Patterson, 14 C. P. 538. Bill did not allege any writing evidencing the trust, but was taken pro confesso ; as the facts were not denied, the de- fendant was declared a trustee. McNabb v. NichoU, 3 L. J. N. S. 21. An attorney took a conveyance in trust for a client, but did not sign any writing as to it; afterwards he made an oral agreement to accept the property in payment of two notes, which was binding on hira. Fleming v. Duncan, W Chy. 76. Trust might be shown by parol where the Statute of Frauds was not set up in the answer. Shaw v. Shaw, 17 Chy. 282. Trust 'agreement may be shown by parol. Williams v. Jenkins, 18 Chy. 536. Statute may set up, though not specially pleaded. Wilde v. Wilde, 20 Chy. 521. Notwithstand- ing the statute, the plaintiff could enforce an agreement to attend a sale, and as an agent, buy for him. Ross v. Scott, 22 Chy. 29; see McManus v. Mc- Manus, 24 Chy. 118. 70 Ch.V. S. 2.] STATUTE OP FRAUDS. — POKMALITIES. *66 trust, however late the proof, operates retrospectively from the time of its creation. Even where a lease was granted to A., who afterwards became bankrupt, and then executed a declaration of trust in favour of B., a jury having found upon an issue directed from Chancery that A.'s name was land fide used in the lease in trust for B., it was held that the assignees of A. had no title to the property (e).^ (e) Gardner v. Eowe, 2 S. & S. see Plymouth v. Hickman, 2 Vern. 346 ; S. C. aflBrmed, 6 Kuss. 258 ; and 167. 1 Creation of trusts : No particular formality is required to establish an express trust. Seymore i;. Freer, 8 Wall. 202; Price u. Minot, 107 Mass. 61 ; Price V. Reeves, 38 Cal. 457; Pownal v. Taylor, 10 Leigh. 183; Currie v. White, 45 N. Y. 822 ; Reed v. Lukens, 44 Pa. St. 200 ; Paul v. Fulton, 25 Mo. 156; Jones v. Wilson, 60 Ala. 332; Conway i-. Cutting, 51 N. H. 408; Ogden V. Larrabee, 57 111. 389 ; McClellan v. McClellan, 65 Me. 500 ; Norman V. Burnett, 25. Miss. 183; Brown w. Combs, 29 N. J. (Law) 36; Chamberlain V. Thompson, 10 Conn. 243. A memorandum is sufficient. Urann v. Coates, 109 Mass. 581 ; but see Homer v. Homer, 107 Mass. 82. A letter affidavit deposition or answer to a bill in equity is sufficient. Phillips v. So. Park Comm'ss, 119 111. 626; Moore v. Pickett, 62 111. 158; Montague v. Hayes, 10 Gray, 609 ; Barkworth v. Young, 4 Drew. 1 ; Phelps v. Seely, 22 Gratt. 573 ; >Iaccubbin v. Cromwell, 7 Gill. & J. 175 ; McLaurie v. Partlow, 53 111. 340. Acknowledgments in letters may be sufficient. Dyer's App. 107 Pa. St. 446 ; see Preston v. Casner, 104 111. 262, Mere words of suggestion are sufficient. Wood V. Seward, 4 Redf. 271; Foose v. Whitmore, 82 N. Y. 405; 37 Am. Rep. 572. " In trust for B., wife of C, and her heirs and assigns forever " is a trust for her during . coverture, and a legal estate only afterwards. Moore v. Stinson, 144 Mass. 594 ; Richardson v. Stodder, 100 Mass. 528 ; Ayer v. Aver, 16 Pick. 327. To give property to one for the support of another is sufficient to show that a trust was intended. Loring v. Loring, 100 Mass. 340 ; Andrews i^. Cape Ann Bank, 3 Allen, 313 ; Whiting v. Whiting, 4 Gray, 236. Facts must be disclosed showing a fiduciary relation between the parties, as well as the terms of the trust. Tatge v. Tatge, 34 Minn. 272. The owner of land, hav- ing mortgaged it, conveyed to the mortgagee in consideration of a promise to pay him any surplus received, at the end of three years, and a trust was created when the mortgagee sold at an increase. Freer v. Lake, 115 111. 662. A. conveyed to B., who executed a writing that he purchased for C, thereby raising a trust through C, gave no consideration and made a fraudulent sale to D. Titchenell v. Jackson, 26 W. Va. 460. A declaration in buying tliat grantee was securing a one-half interest for A., sufficient. McCandless v. "Warner, 26 W. Va. 754. If is not enough to say that " he was going to buy the land for his son." Lloyd v. Lynch, 28 Pa* St. 419 ; 70 Am. Rep. 137. Neither is a written acknowledgment by one party that another is entitled to certain property, without consideration for such acknowledgment. Thompson w. Branch, Meigs, 390; 33 Am. Dec. 153. A. paid for land which, by fraud, he conveyed to another, and he could claim a trust for himself, but his heirs could not. Cooper v. Cookrum, 87 Ind. 443. A voluntary agreement, without consideration, will not be enforced if the settlor intended, some other act. Lloyd ». Brooks, 34 Md. 27 ; Swan v. Frick, 34 Md. 139. There must be an 71 *56 STATUTE OF PEAUDS. — FORMALITIES. [Ch. V. S. 2. 3. Relation to subject-matter, and nature of trust must be clear. — But witli regard to letters and loose acknowledg- equitable interest which the court will recognize. Lawson v. Lawson, 117 111. 98 ; Jones v. Lloyd, 117 111. 597. Defendant purchasing property with money of plaintiff held it in trust for him. Arnold v. Bobins, 40 N. J. Eq. 723. A party getting title to land wrongfully, whether in good faith or not, is a trustee for the equitable owner. Lakin v. Mining Co. 25 Fed. Bep. 337. A trust is created when it " is fully expressed and clearly defined upon the face of the instrument creating it." Loring v. Palmer, 118 U. S. 321 ; Mich. Sts. . § 5573. A. buys land in his own name, and B. afterwards pays for it, but no trust results. Williams v. San Saba Co. 59 Tex. 442. A trust is frequently inferred from the facts in the case. Chadwick v. Chadwick, 59 Mich. 87. There is no trust relation between an insurance company or its officers and its policy holders to support an equitable action. Hencken v. U. S. Life Ins. Co. 11 Daly (N. Y.) 282. An agreement without consideration to execute a trust in future is not binding, but where such a trust has been actually under- taken equity wUl enforce it. Switzer v. Skiles, 3 Gilm. 529; 44 Am. Dec. 723. Husband and wife making a conveyance, the proceeds to pay his debts, raises a trust. Barnes v. Trafton, 80 Va. 524. A. held shares of stock in trust for B. A. sold them to C, who held them subject to the trust. Perkins V. Perkins, 134 Mass. 441. Where personal is absolutely conveyed, the declarations of the transferer and assent of transferee may create a trust. Chace v. Chapin, 130 Mass. 128. Wife, giving in trust for her insolvent hus- band, remainder over, created a trust, barring his creditors. Cummings v. Corey, 58 Mich. 494. It is held that a voluntary trust without consideration is good. Van Cott v. Prentice, 104 N. Y. 45 ; but see Lane v. Ewing, 31 Mo. 75. Conveyance to wife, requiring her to divide property equally among the daughters, creates no trust. Hopkins v. Gllmt, 111 Pa. St. 287. A'trust was declared and an assignment ordered where property, claimed as his own by the trustee, was received in trusts, and so acknowledged before and since. Hance v. Frome, 39 N. J. Eq. 324. No trust arises where trust funds have been used in the improvement of land by the owner. Cross's App. 97 Pa. St. 471. To A. to permit B. to receive support " in such manner, however, that the same shall not be liable to his debts " raises a trust. Hooberry v. Harding, 10 Lea (Tenn.) 392; Waddingham v. Loker, 44 Mo. 132. A trust is not created by a death-bed declaration, or an oral agreement, that grantee shall hold land, conveyed by an absolute deed, in trust. Titcomb v. Morrill, 10 Allen, 15; Bartlett v. Bartlett, 14 Gray, 277. The creation of a trust depends on the settlor's intention, and a grant clearly expressing that the grantee is not to have the benefit, but holds for use of another, will make him a trustee holding title for the beneficial owner. Mory v. Michael, 18 Md. 227. Where the intention does not appear, no form of words will create a trust. Richardson v. Inglesby, 13 Rich. Eq. 59. The mere calling a deed, mentioned in the recitals of other deeds, a deed of trust does not make it so. Hurst V. M'Neil, 1 Wash. 70. Slxpress terms not necessary and may be proved by any proper written evidence disclosing facts creating a fiduciary relation. Pratt v. Ayer, 3 Chand. (Wis.) 265; Starr v. Starr, 1 Ohio, 321; Pinney v. Fellows, 15 Vt. 525. The owner of land gave a bond to secure the same to another, who entered thereon and received the rents, thereby making sufficient declaration that obligor held the estate in trust for the obligee. Orleans v. Chatham, 2 Pick. 29. A trust in the executor where a convey- ance was made to A. by mortgage, conditioned to become void on payment 72 Ch.V. S. 2.] STATUTE OP FRAUDS. — FOR>IAX,ITIES. *56 ments of that kind, the Court expects demonstratioii that they relate to the subject-matter (/) ; nor will the trust be executed if the precise , nature of the trust cannot be ascer- tained (^) ; and if the trust be established on the answer of (/) Forster v. Hale, 3 Ves. 708, per Lord Alvanley; Morton a. Tew- per Lord Alvanley ; Smith v. Mat- art, 2 Y. & C. Ch. Ca. 80, per Sir J. thews, 3 De G. F. & J. 139. L. K. Bruce; Smith v. Matthews, 3 (jr) Forater v. Hale, 3 Ves. 707, De G. F. & J. 139. to A., as executor of B., of debt due from mortgagor to estate of B. Williams V. FuUerton, 20 Vt. 346. A stipulation in a deed that the grantee shall not aljpn without the consent of his wife, and that if not sold, it shall descend to the heirs of their bodies, does not raise a trust for her. Huff v. Thomas, 1 T. B. Mon. 158. Trust may be created by an agreement in a bond ; Barber V. Thompson, 49 Vt. 213 ; by directions to continue a business ; Ferry v. Laible, 31 N. J. Eq. 566 ; by an agreement to reconvey, though the liability is not changed by a sale and reconveyance by the vendee to the trustee ; Frost v. Frost, 63 Me. 399 ; by delivery of notes to secure a balance due to be col- lected and accounted for ; Ogdeu v. Larrabee, 57 111. 389 ; by receipt for pur- chase money ; Roberts's App. 92 Pa. St. 407 ; Morris v. Webb, 45 N. Y. Sup'r Ct. 305. Grantee is not aSected by the contents of a separate paper of which he is ignorant. Rogers v. Rogers, 53 Wis. 36 ; 40 Am. Rep. 755. A mere intention expressed in letters, that one shall succeed through supposed rule of inheritance, is insufficient. Russell v. Switzer, 63 Ga. 711. A trust is created where B. pays for- land, taking a conveyance in his own name for the benefit of A. and B., the latter giving a bond to A., to convey one-half to him upon his payment of one-half the^ purchase money. Bragg v. Paulk, 42 Me. 502. A purchaser is bound by trusts inserted in a deed by his directions. Reilly v. Whipple, 2 S. C. 277. Creation of a trust by deed was presumed where the attorney for a corporation, bidding in land, took the title in his own name for the sole purpose of conveying it to the corporation. Wright v. Douglass, 7 N. Y. 564. A stipulation in a deed absolute on its face,' that a part of the conveyed property should be sold and the proceeds accounted for by the grantee, is demonstrative evidence of a trust. Simpson v. Mitchell, 8 Yerg. 417. A deed to an administrator, reciting that the grantor had sold, or agreed to sell, and had received a consideration from the intestate, appears on its face to raise a trust for the heirs. Blythe v. Easterling, 20 Tex. 565. A. gave B. an acknowledgment that he had received certain property from B. and invested it, a trust being created by implication. Menude v. Delaire, 2 Desau. 564. Livery of seisin is not necessary tb create a trust in chattels. Rd,bun V. Rabun, 15 La. Ann. 471. A trust may b^ created by an oral direc- tion to hold in trust for a third person; Eaton v. Cook, 25 N. J. Eq. 55; by a wife signing a deed of trust on condition that, when amount is paid, the grantee shall convey to a third person ; Barber v. Milner, 43 Mich. 248 ; by delivery of a note to collect and hand the proceeds to a third person ; Walden V. Karr, 88 111. 49. A. conveyed to B., receiving in return- an unsealed writ- ing from B., reciting that he had paid A. a certain sum of money and taken a deed, but that on repayment by A., within three y^ars A. should have the im- provement or sell a declaration trust from B. to A. Scituate v. Hanover, 16 Pick. 222 ; Arms v. Ashley, 4 Pick. 71. In creation of deed of bargain and sale a valuable consideration must be stated, but the amount need not be. Sprague 73 *66 STATUTE OF FRAUDS. — FORMALITIES. [Ch. V. S. 2. the trustee, the terms of it must be regulated by the whole answer as it stands, and not be taken from one part of the V. Woods, 4 Watts & S. 192 ; Okison v. Patterson, 1 Watts & S. 395. See, also, Morrison v. Beirer, 2 Watts & S. 81. The signature of the person declaring a trust need not be by actual subscription of his name ; it is enough if his initials are inserted in the instrument, if its terms and intent are clear, and the party acknowledges his writing. Smith V. Howell, 11 N. J. Eq. 349. The deed must show a cestui que trust and an interest in, or some right or profit growing out of, the conveyed property. Eldridge v. See Yup Co. 17 Cal. 44. A trust may be declared by bill in equity. Martin v. Tenison, 26 Ala. 738; Baylies v. Payson, 5 Allen, 473 Price V. Minot, 107 Mass. 62. See, also. Freeholders v. Henry, 41 K. J. Eq, 388; Page v. Summers, 70 Cal. 121; Hobson v. Whitlow, 80 Va. 784 Cooper V. Cooper, 36 N. J. Eq. 121; Paxton v. Stuart, 80 Va. 873; South-Side Co. V. Ehodes, 38 Kan. 229 ; Phelps v. Phelps, 143 Mass. 570 ; Westlake Wheat, 43 Hun (N. Y.) 77 ; Chamberlain v. Taylor, 105 N. Y. 185; Weeks v. Comwell, 104 N. Y. 325; Lawrence v. Cooke, 104 N. Y. 632 ; Picard v. Central Bank, Sail. (N. B.) 472 ; Att'y Gen. v. Grasett, 6 Chy. 485 ; 8 Chy. (Ont.) 130 ; Smith V. Stuart, 12 Chy. (Ont.) 246; Oxford v. Oxford, 6 O. R. 6; Whiteside V. Miller, 14 Chy. 393; Charteris .v. Charteris, 100 R. 738; Kerr v. Read, 23 Chy. 525 ; Doug3,ll v. Dougall, 26 Chy. 401. Trust deeds. — Unless there is some reference to, or description of, property <;onveyed, either in the body of the deed or in the schedules, so that it can be ascertained and identified, the title will not ordinarily pass ; the absence of schedules, unless satisfactorily explained, is a suspicious circumstance. Linn v. Wright, 18 Tex. 317 ; 70 Am. Dec. 282. In a trust deed equity will limit its relief to the contract made and cause a sale only to enforce the trust. Koch V. Briggs, 14 Cal. 256; 73 Am. Dec. 651. That a party remains in possession after sale cannot affect the validity of the deed, as it is a matter subsequent. Hempstead v. Johnston, 18 Ark. 123 ; 65 Am. Dec. 458. There is a distinction between an unconditional deed of trust and a trust like a mortgage. Hoffman u. Mackall, 5 Ohio St. 124; 64 Am. Dec. 637. A trust deed, however, is but a species of mortgage in many respects. Wolfe v. DoweU, 13 Swedes & M. 103 ; 51 Am. Dec. 147 ; Leavitt v. Palmer, 3 N. Y. 19; 51 Am. Dec. 333; Brannock v. Brannock, 10 Ind. Law. 428; 51 Am. Dec. 398. Grantee is not affected by a separate^declaration of trust not re- ferred to in the deed or known to the grantee. Rogers v. Rogers, 53 Wis. 36 ; 40 Am. Rep. 756. There must be a grantee willing to accept it. Jackson v. Bodle, 20 Johns. 184. In deeds of personalty " heirs " means personal repre- sentatives. Sweet V. Dutton, 109 Mass. 589 ; 12 Am. Rep. 744. Where a trust deed gave power to trustee " or his legal representatives " to spU and convey, the power could not be exercised by his administrator, but only by his suc- cessor in the trust. Warnecke v. Lembca, 71 111. 91 ; 22 Am. Rep. 85. It may include future advances. Summers & Brannin a. Roos & Co. 42 Miss. 749 ; 2 Am. Rep. 053. A voluntary deed purporting to be for the beneficial use of the grantee^ and made deliberately without mistake or contrivance, is binding. Jackson c;. Cleveland, 15 Mich. 94; 90 Am. Dee. 266. If a trust deed recites indebtedness, the presumption is that it remains unpaid. Graham !;. Anderson, 42 HI. 514; Chapin v. Billings, 91 lU. 643; Frederick's App. 52 Pa. St. 338 ; 91 Am. Dec. 159. A deed may be reformed which fails to have the proper trusts declared in it. Walden v. Skinner, 101 U. S. 577. Recitals in trustee's deed not prima facie evidence of their truth. Vail v. Jacobs, 62 T4 Ch.V. S. 2.] STATUTE OP PBAtTDS. — POEMALITIES. *56 answer to the rejection of another (Ji) ; and the plaintiff, if he read the answer in proof of the trust, must at the same (4) Hampton v. Spencer, 2 Vern. 288; Nab v. Nab, 10 Mod. 404. Mo. 130. A. conveyed to father without consideration by absolute deed, and then with latter's knowledge but without his consent agreed that the property should be held in trust by a creditor, no trust against the father or his heirs. Bartlett v. Bartlett, 14 Gray, 277. For benefit of A. for a homestead for his life, and for B. after said A.'s death, valid. O'Donnell v. Smith, 142 Mass. 505. Executors gave deed to trustees, Who reconveyed to executors, who again conveyed, title good. Chesman v. Cummings, 142 Mass. 65; Loring v. Eliot, 16 Gray, 568; Smith v. Harrington, 4 Allen, 566. That interpretation will be adopted which seems most nearly to carry out the manifest intention. Dexter v. Episcopal City Mission, 134 Mass. 394. To hold for the sole and Separate use of a married woman as if a feme sole, and to the use of her issue, her husband can In no way control it without trustee's consent. Pannill v. Coles, 81 Va. 380. Construction of trust deeds. North American Land Co.'s Est. 83 Pa( St. 493 ; Thomas v. Crawford, 57 Ga. 211 ; Badgett v. Keating, 31 Ark. 400. Delivery of deed. — If once delivered, it is not impaired by evidence of oral reservation. Wallace v. Berdell, 97 N. Y. 13. Deed never delivered to trustee, but deposited for safe keeping "with him, with linderstanding that it should be returned and cancelled on demand and with the gonsent of the beneficiary, which was done, held a good defence. Burroughs v. De Gouts, 70 Cal. 361. B. executed deed to K., and B.'s agent had it recorded. There was no pecuni- ary consideration, and K. knew nothing about it. B. afterwards told K., who orally assented to it, and it began to operate from that time. Kingsbury v. Burnside, 58 III. 310 ; 11 Am. Eep. 67. A voluntary deed was delivered to the trustee named, who spoke to cestui que trust about it and promised to have it recorded ; the trustee afterwards returned it, and it was destroyed ; held a good delivery. Stone t>. King, 7 E. I. 358 ; 84 Am. Dec. 557. It is. a sufficient delivery if draughtsman informs the bargainee of its existence and he consents . to act as trustee under it. Green u. Kornegay, 4 Jones Law, 66 ; 67 Am. Deo. 261. Enforcing trusts. — Must first exhaust remedies at law. Moffatt v. Tuttle, 35 Minn. 301. May enforce trust to pay debt created by deed from debtor to surety. Jennings v. National Bank of Athens, 74 Ga. 782. State trusts are not enforced except where fraudulently concealed by the trustee. Badger v. Badger, 2 Wall. 87. If a trust is created by the owner of property, trustee may enforce it anywhere, if by law, within its jurisdiction. Curtis v. Smith, 601 Barb. 9. A trust arising from an illegal transaction may be enforced in favor of an innocent party. Miller v. Davidson, 3 Gilm. 518 ; 44 Am. Dec. 715. A trust will be enforced if created and declared, though there be no valuable consideration ; but a mere executory trust will not. Lane v. Ewing, 31:Mo. 75; 77 Am. Dee. 633. Unless perfectly created, will not be enforced without inquiring into its origin and consideration. Badgley v. Votrain, 68 111. 25; 19 Am. Rep. 541. If one come into possession of the trust property with notice, the trust will be enforced against him, just as if he were the ' original trustee. By whom enforced. — JVIay be by the cestui que trust ; Howard v. Gilbert, 39 Ala. 726; one trustee against another; Eaulkner v. Thompson, 14 Ark. 478; by attorney-general against eleemosynajry institution ; Chambers u. Baptist Ed. Soc. 1 B. Mon. 215 ; by any beneficiary having an interest in the use ; 75 *57 STATUTE OF PEAUDS. — FOEMALITIBS. [Ch. V. S. 2. time read from it the particular terms of the trust (i). When the trust is manifested and proved by letters, parol evidence may be admitted to show the position in which the writer then stood, the circumstances by. which he was sur- rounded, and the degree of weight and credit to be attached to the letters, independently of any question of construc- tion (/). 4. The writing must be signed. — It will be observed, that the words of the statute require the writing to be signed (le) ; and not only the fact of the trust, but also the terms of it, must be supported by evidence under signature (T) ; but, as in the analogous case of agreements under the fourth section of the Act (m), the terms of the trust may be col- [*57] lected from a paper * not signed, provided such paper can be clearly connected with, and is referred to by, the writing that is signed (a). 5. Who is the party " enabled to declare the trust." — The signature must be by the party " who is by law enabled to declare such trust." It has been occasionally contended, that by this description was meant the person seised or possessed of' the legal estate; but it has been decided that whether the property be real (J), or personal (c), the party (0 Freeman v. Tatham, 5 Hare, (m) See Sug. Vend. & Purch. 14th 329. ed. ch. 4, s. 3. 0') Morton v. Tewart, 2 Y. & C. (a) Forster v. Hale, 8 Vfis. 696. Ch. Ca. 67, see 77. (6) Tierney v. Wood, 19 Bear. (i) See Denton v. Davies, 18 VeB. 330 ; [Kronheim v. Johnson, 7 Ch. D. 503. 60; Dye v. Dye, 18 Q. B. D. 147.] (0 Forster v. Hale, 3 Vea. 707, see Donohoe v. Conrahy, 2 Jones & per Lord Alvahley ; Smith v. Mat- Lat. 688. thews, 3 De G. F. & J. 189. (c) Bridge v. Bridge, 16 Beav. 315 ; Ex parte Pye, 18 Ves. 140, &c. Baptist Church u. Presb. Church, 18 B. Mon. 635 ; Gilbert v. Sutliff, 30 Ohio St. 129; by Indorser of draft against consignee of goods; Bank v. Gardner, 15 Gray, 362 ; by a new administrator against the old ; Scott v. Searles, 7 Sm. & M. 498 ; by cestui que trust against trustee after death of grantor ; Tritt V. Crotzer, 18 Pa. St. 451; by a cestui que trust with a Tested interest, but not an immediate right of enjoyment; Cooper v. Day, 1 Rich. Eq. 26; against all. persons in possession with notice of the trust ; Lathrop v. Bampton, 81 Col. 17 ; Shibla v. Ely, 6 N. J. Eq. 181. Trusts will not be enforced by one having mere possibility of becoming a beneficiary; Female Asso. v. Beekman, 21 Barb. 565; or by one tainted with fraud in acts from which trust arose ; Tipton o. Powell, 2 Cold. Tenn. 76 Ch.V. S. 3.] STATtTTES OF WILLS. *5T enabled to declare the trust is the owner of the beneficial interest, and who has therefore the absolute control over the property, the holder of the legal estate being a mere instru- ment or conduit pipe. [Where, therefore, an antenuptial agreement that the intended wife's realty should belong to her for her separate -use was signed only by the hnsband, the fee was not affected by the agreement so as to enable the wife to devise it as separate property (cZ). It was held in a recent case by Cave, J., that a parol agreement, entered into in contemplation of a marriage, that property consisting of a sum of money standing to the credit of the wife in her maiden name at her banker's should belong to her for her separate use, but not followed by any transfer to trustees, did not con- stitute a good antenuptia,l settlement; but the Court of Appeal, while reversing the decision upon other grounds, withheld their opinion upon the point.^] SECTION III. OF THE STATUTES OF WILLS. 1. Statute of frauds. — By the fifth section of the Statute of Frauds (e), all devises of lands are required to be in writ- ing and signed by the testator, or by some person in his pres- ence and by hi? direction, and to be attested or subscribed in his presence by three witnesses ; and by the nineteenth sec- tion, all bequests of personal estate are required to be in writing, with the exception of certain specified cases in which nuncupative wills were allowed (/).^ And by the 1 Vict. [(d) Dye v. Dye, 13 Q. B. D. 147.] (/) See AdUngton v. Cann, 3 Atk. (e) 29 Car. 2. c. 3. 151. 19 ; nor a voluntary trust against a grantor or his representatives ; Borum v. King, 1 Ad. 37 Ala. 606; nor against a third person without notice ; McCaskill V. Lathrop, 63 Ga. 96. 1 JSx parte Whitehead, 14 Q. B. D. 419. 2 The statute relating to the execution of wills has heen very generally enacted in the United States. See the statutes of the various states. The same formalities are required in the case of personal property as in devising real estate. 1 Jarm on Wills, 113-144. A will, to establish a trust expressed in it, must be valid as a will. Anding v. Davis, 38 Miss. 574 j 77 Am. Dec. 658 ; Campbell v. Wallace, 10 Gray, 162 ; Ives v. AUyn, 12 Vt. 589 ; Thayer V. Wellington, 9 Allen, 283; Johnson v. Clarkson, 3 Eich. Eq. 305; Brown v. 77 *58 STATUTES OF WILLS. [Ch. V. S. 3. c. 26, s. 9, wills made on or after January 1, 1838, whether of real or personal estate, must be executed and attested with the special solemnities there mentioned. 2. Principle of rejecting declarations not testamentary in respect of wills. — To trace the operations of these enactments we must bear in mind that the absolute owner of property combines in himself both the legal and equitable interest, and when the legislature enacts that no devise or bequest of prop- erty shall be valid without certain ceremonies, a testator can- not by an informal instrument affect the equitable, [*58] any more than the legal, estate, for the one is a * con- Brown, 12 Md. 87; Lomax v. Ripley, 3 Sm. & Gif. 48; Bailey u. Bailey, 8 Ohio, 239. An executor is prima facie a trustee for the next of kin. Hays V. Jackson, 6 Mass. 153; Paup v. Mingo, 4 Leigh, 163; Carson v. Carson, 6 Allen, 397; Tinnin v. Womach, 1 Jones Eq. 135. A trust may be established in an absolute bequest by showing that the legatee received it on promise to testator to provide for a third person out of it. Towles v. Burton, Bich. Eq. Cas. 146 ; 24 Am. Dec. 409; Owing's case, 1 Bland's Ch. 370 ; 17 Am. Dec. 311; Thomson v. White, 1 Dall. 424; 1 Am. Dec. 252; Barrell o. Hanrick, 42 Ala. 60; De Laurencel v. De'Boom, 48 Cal. 581 ; but see Lantry v. Lantry, 51 ni. 458 ; 2 Am. Eep. 310 ; Hoge v. Hoge, 1 Watts, 163 ; 26 Am. Dec. 52. Or if words elsewhere in will showed it. Major v. Herndon, 78 Ky. 123. A trustee cannot continue a trust by his will. Fonda v. Penfield, 56 Barb. 503. From will and codicil together may establish trust, and executors may be con- sidered the trustees. Ward v. Ward, 105 N. Y. 68. No fixed or certain form of wbrds necessary. Blake v. Dexter, 12 Cush. 559 ; Cockrill n. Armstrong, 31 Ark. 580. Trust, though in ambiguous terms, will be sustained. Shepard V. Gassner, 41 Hun, 326. Evident intention is sufficient , Hoxie u. Hoxie, 7 Paige, 187; so if object, property,, and disposition shown; Inglis v. Snug Harbor, 3 Pet. 119; and even if no trustee is named; Varner's App. 80 Pa. St. 140; Maus v. Mans, 80 Pa. St. 194; but not it donee is uncertain; Society v. Bowen, 21 Hun, 389. Trust may be opened to take in a child yet unborn. Gaboury v. McGovem, 74 Ga. 133. An executor appointed by sur- viving executor in place of one deceased, under a provision of the will, is also clothed with the trust estate like his predecessor. Mulford v. Mulford, 42 N. J. Eq. 68. Direction to pay net income, with power to sell, a trust. Marx V. McGlynn, 88 N. Y. 357. Devise of two equal shares to son, intend- ing one for daughter, creates a trust. Cook u. Redman, 2 Ired. Eq. 623. To A. for life, remainder to heirs, a dry trust, executed by Statute of Uses. Phila. Trust & Safe Dep. Co.'s App. 93 Pa. St. 209. So where to wife, for '■' benefit of herself and children." Clarke v. Leupp, 88 N. Y. 228. Devise to trustee, with no power of control or disposition, is ineffectual, and the estate vests immediately in the beneficiary. Allen v. Craft, 109 Ind. 476. Nuncu- pative wills, under certain circumstances, are allowed in most of the states. A legacy to A., with "request" that on his death he leave it to B., C, and D., creates a trust in their favor. Eddy v. Hartshorne, 34 N. J. Eq. 419. A part to E. I wish placed in trust, and if she leaves no children, to be paid to her sister M. Hooper v. Bradbury, 133 Mass. 303. 78 Ch. V. S. 3.] STATUTES OF WILLS. *58 stituent part of the ownership as much as the other. Thus, if a testator by will duly signed and attested give lands to A. and his heirs "ttpow trust" but without specifying the particular trust intended, and then by a paper, not duly signed and attested as a will or codicil, declare a trust in favour of B., the beneficialinterest under the will is a part of the origi- nal ownership and cannot be passed by the informal paper^ but will descend to the heir-at-law, or if the will be made since 1837, and contain a residuary devise, will pass to the residuary devisee. So if a legacy be bequeathed by a will, duly executed, to A. '■'■upon trust" and the testator, by parol, express an intention that it shall be held by A. upon trust for B., such a direction is in fact a testamentary disposition of the equitable interest in the chattel, and therefore void by the statute, which requires a will duly executed. If it be said that such expression of intention, though void as a devise or bequest, may yet be good as a declaration of trust, and therefore that where the legal estate of a freehold is well devised, a trust may be engrafted upon it by a simple note in writing ; and where a chattel personal is well bequeathed, a trust of it, as excepted from the seventh section of the Statute of Frauds, may be raised by a mere parol declaration; the answer is, that a wide distiitetion exists between testamentary dispositions and declarations -of trust. The former are ambu- latory until the death of the testator, but the latter take effect, if at all, at the time of the execution. " A deed," observed Mr. Justice BuUer, in a similar case, "must take place upon its execution, or not at all ; it is not necessary for a deed to convey an immediate interest in possession, but it must take place as passing' the interest to be conveyed at the execution ; but a will is quite the reverse, and can only operate after death "(a). [It seems therefore on principle], that if the intended disposition be of a testamentary character, and not to take effect in the testator's lifetime, but to be ambulatory until his death, such disposition is inoperative unless it be declared in writing in conformity with the statutory enact- ments regulating devises and bequests (J). , (a) Habergham v. Vincent, 2 Ves. (6) [See, however, Re Fleetwood, jun. 230. 15 Ch. t). 594; Be Boyes, 26 Ch. D. 79 *59 STATUTES OF WILLS. [Ch. V. S. 3. r*59] * 3. Where no trust appears on the -will and no fraud: — If a testator, by his will, devise an estate, and tlie devisee, so far as appears on tlie face of the will, is intended to take the beneficial interest, and the testator leaves a decla- ration of trust not duly attested, and not communicated to the devisee and assented to by him in the testator's lifetime, the devisee is the party entitled both to the legal and beneficial interest: for the estate was well devised by the wiU, and the informal declaration of trust is not admissible in evidence (a). 531.] The law laid down by Jenkins, 3 Cent. Cas. 26, is founded on mistake, as from the report of the case in Kitz- herb. Ab. Devise, 22, it appears that the beneficial interest was decreed to the heir, not, as Jenkins supposed, of the devisee, but of the testator. In Metham v. Devon, 1 P. W. 529, a testator by his will directed his exe- cutors to pay 3000/. as he should by deed appoint, and subsequently by deed appointed the 3000/. to certain children, and the Court established the gift to the children on the ground that the deed referred to the will, and was part thereof, and in the nature of a codicil. It does not appear whether the deed had been proved with the will, but it might have been, as, though a deed in form, it was of a testamen- tary character. If the deed was not proved, or assumed to have been proved, it is difficult to find any prin- ciple upon which the case can be sup- ported from the brief statement of it in the report. In Inchiquin v. French, 1 Cox, 1, a testator devised all his real estate, charged with debts and legacies, in strict settlement, and gave a legacy of 20,000/. to Sir Wm. Wyndham ; by a deed poll of even date with his will, the testator declared that the 20,000/. was given to Sir Wm. Wyndham upon trust for Lord Clare. " The deed poll," adds Mr. Cox, the reporter, " does not appear to have been proved as a tes- tamentary paper ; " and according to the same report, Lord Hardwicke decreed that the legacy of 20,000/. given to Sir Wm. Wjndham, and by the codicil declared to be in trust for Lord Clare, was a subsisting legacy. It might be uif erred from this state- ment, that Lord Hardwicke admitted the deed poll as a declaration of trust; but it will be observed that he calls it a codicil, and from the report of the same case in Ambler, p. 33, we learn the facts, viz., that Lord Clare was out of the jurisdiction, and Lord Hardwicke declined to entertain the question as to Lord Clare's right in his absence ; but the counsel, for all parties, desiring his Lordship to de- termine whether, assuming, the legacy to be valid, it was to be paid out of the real or personal estate, his Lord- ship held, that as the will contained a general charge of legacies and the gift by the codicil, though not at- tested according to the Statute of Frauds, was a legacy, it was raisable primarily out of the personal estate, and then out of the real estate. This was the only point determined by him. The dictum of Lord Northington, in Boson i^. Statham, 1 Eden. 514, is clearly not law; see Adlington v. Cann, 3 Atk. 151 ; Muckleston v. Brown, 6 Ves. 67; Stickland v. Al- dridge, 9 Ves. 519 ; and see Puleston c. Puleston, Finch, 312. (a) Adlington v. Cann, 3 Atfc. 141; Juniper ;;. Batchelor, 19 L. T. N. S. 200; and see Stickland v. Aldridge, 9 Ves. 519 ; and the observations of Sir J. Ij. K. Bruce in Briggs v. Penny, 3 De G, & Sm. 547. 80 Ch.V. S. 3.] STATUTES OF WILLS. *60 This doctrine, of course, does not interfere with the well- known rule, that a testator may, hy his will, refer to and incorporate therein, any document which at the date of the will has an actual existence, and is thus made part of the wiU. 4. Where the devisee is made by the will a trustee, and the testator leaves an informal declaration of trust. — ^ Should the testator devise the estate in such language that the will passes the legal estate only to the devisee, and manifests an intention of not conferring the equitable, in short, stamps the devisee with the character of trustee, and yet does not define the particular trusts upon which he is to hold ; in this case, no paper not duly attested (except of course papers exist- ing at the date of the will, and incorporated by reference) will be admissible to prove what were the trusts intended (J). Nor will the devisee be allowed* to [*60] retain the beneficial interest himself; but while the legal estate passes to him, the equitable will, according to the date and terms of the will, result to the testator's heir-at- law or general residuary devisee (a). 5. Personal estate. — So if by will, personal estate be given upon trusts to be afterwards declared, the testator cannot by any instrument not duly executed as a will, and a for- tiori he cannot by parol, declare a valid trust, but the equita- ble interest wUl result to the next of kin, or pass the residu- ary legatee (J). [And the same rule will be applied if the bequest be on the face of the will a beneficial one, but the legatee undertakes to hold upon trusts to be afterwards de- clared (c). 6. But where personal estate was by codicil giyen to a legatee " to be applied as I have requested him to do," and [(6) See, however, Be Fleetwood, Eden. 508, the devisees were described 15 Ch. D. 594.] as trustees, but this circumstance was (a) Muekleston u. Brown, 6 Ves. not adverted to by the counsel or the 52 ; [Scott V. Brownrigg, 9 L. R. Ir. Court. 246 ;] Bishop v. Talbot, as cited 6 (6) Johnson v. Ball, 5 De G. & Ves. 60, was a devise to trustees in Sm. 85 ; [Scott v. Brownrigg, 9 L. E. trust, but on consulting the Eeg. Lib. Ir. 246 ; see Eiorden v. 'Banon, 10 I. it appears there was no notice of the E. Eq. 469 ; Ee Boyes, 26 Ch. D. 531; trust upon the will, Eeg. Lib. 1772', Re Fleetwood, 15 Ch. I). 594.] A. Fol. 137. In Boson v. Statham, 1 [(c) Re Boyes, 26 Ch. D. 531.] 81 *61 STATUTES OF WILLS. [Ch.V. S. o. an unsigned memorandum was written out by the legatee at the time of executing the codicil containing the wishes of the testator, it was held by V. C. Hall that the Court would execute the trust (^).j 7. Admission and rejection of parol evidence as against the title of executors. — So if a person before the Act of 11 G. 4. & 1 W. 4, c. 40, had been simply appointed executor, whicTi conferred upon him a title to the surplus beneficially, aver- ment was not admissible to make him a trustee for the next of kin (e). Btit apparently, the authorities established that if from any circumstance appearing on the face of the will, as the gift of a legacy to the executor, the law presumed only that he was not intended to take the surplus beneficially, the executor might rebut that presumption by the production of parol evidence (/), when of course the ngxt of kin might fortify the presumption by opposing parol evidence in con- tradiction. , Where, however, the will itself invested the executor with the character of trustee, as by giving him a legacy "for his trouble," or by styling him a "trustee" expressly, the pHmd facie title to the surplus was then in the next of kin, and parol evidence was not admissible [*61] *to disprove the express intention (a). By the act referred to, an executor is made primd facie a trustee for the next of kin (J). But where there are no next of kin the title of the executor, as against the Crown, is not afEected by the statute, and the old law applies (c). But if the exec- utor be stamped by the will with the character of trustee, and there are no next of kin, the Crown will take (<^). And of course, whether there be next of kin or not, if it appear from [(rf) iJe Fleetwood, 15 Ch.D. 594; 158; Langham v. Sandford, 17 Ves. and see Re Boyes, 26 Ch. D. 531.] 453; S. C. 19 Ves. 641 ; Golding v. (e) Langham v. Sandford, 19 Ves. Yapp, 6 Mad. 59 ; White v. Evans, 4 664, per JjotA Eldon; White v. Wil- Ves. 21; Walton a. Walton, 14 Ves. Hams, 3 V. & B. 72 ; S. C. Coop. 58 ; 322, per Sir W. Grant ; and see Read [see Stewart v. Stewart, 15 Ch. D. a. Stedman, 26 Beav. 495. 539.] (6) Love u. Gaze, 8 Beav. 472; (/) Walton u. Walton, 14 Ves. Juler ». Juler, 29 Beav. 34; Travers 322, per Sir W. Grant ; Clennell v. v. Travers, 14 L. E. Eq. 275 ; [Stew- Lewthwaite, 2 Ves. Jun. 474 ; Lang- art v. Stewart, 15 Ch. D. 539.] ham V. Sandford, 17 Ves. 442, 443; [(c) So now decided, iie Knowles, Lynn v. Beaver, 1 T. & R. 66. 49 L. J. N. S. Ch. 625.] (a) Bacbfield v. Careless, 2 P. W. (d) Read v. Stedman, 26 Bear. 82 Ch. V. S. 3.] STATUTES OF WILLS. *62 the whole ■will thalt the executors were intended to take beneficially, the statute is excluded (e). 8. Fraud. — An exception to the rule, that parol trusts can- not be declared upon an estate devised by a will, exists in the case of fraud. The Court will never allow a man to take advantage of his own wrong, and therefore if an heir, or devisee, or legatee, or next of kin, contrive to secure to himself the succession of the property through fraud, the Court affects the conscience of the legal holder, and converts him into a trustee, and compels him to execute the dis- appointed intention. Case of fraud in heir. — Thus if the owner of an estate hold a conversation with the heir, and be led by him to believe that if the estate be suffered to descend, the heir will make a certain provision for the mother, wife, or child of the testator, a Court of Equity, notwithstanding the Statute of Wills, will oblige the heir to make a provision in conformity with the express or implied engagement ; for the heir ought to have informed the testator that he, the heir, would not hold him- self bound to give effect to the intention, and then the testa- tor would have had the opportunity of intercepting the right of the heir by making a will (/). In devisee. — So if a father devise to his youngest son, who promises that if the estate be given to him he will pay 10,000^. to the eldest son, the Court, at the instance of the eldest son, will compel the youngest son to disclose what passed between him and the testator, and if he ac- knowledge the engagement, though he pray the bene- fit * of the statute in bar, he will be a trustee for the [*62] eldest son to the extent of 10,000?. (a). In legatee. — And SO, generally, if a testator devise real estate or bequeath personal estate to A., the beneficial owner upon the face of the will, but upon the understanding between 495 ; [Dillon v. Eeilly, 9 L. R. Ir. 57 ; 52l ; Stickland v. Aldridge, 9 Ves. Re Mary Hudson's Trusts, 52 L. J. 219, per Lord Eldon; Harris v. Hor- N. S. Ch. 789.] well, Gilb. Bq. Eep. 11 ; McCormick (e) Harrison v. Harrison, 2 H. & o. Grogan, 4 L. R. H. L. 88, per L. C. M. 237 ; and see Williams v. Arkle, (a) Stickland v. Aldridge, 9 Ves. 7 L. R. H. L. 606. 519. (/) Sellack v. Harris, 5 Vin. Ab. 83 *62 STATUTES OF "WILLS. [Ch. V. S. 3. the testator and A. that the devisee or legatee will as to a part or even the entirety of the beneficial interest hold upon any trust which is lawful in itself, in favour of B., the Court, at the instance of B., will affect the conscience of A., and decree him to execute 1|ie testator's intention (V). But in this, as in other cases, if it appear that A. was not meant to be a trustee, but to have a mere discretion, the Court cannot convert the arbitrary power into a trust (c). [9. Intention not communicated. — But where the bequest was on the face of the will a beneficial one, and the under- standing between the testator and the legatee was, that he should take the property as trustee upon trust to deal with it according to further .directions which the testator was to give by letter, and the testator subsequently wrote letters containing the directions, but never sent them or commimi- cated their contents to the legatee, it was held that the lega- tee was a trustee for the next of kin ; and it was considered to be essential for the validity of the trust that it should be communicated to the legatee in the testator's lifetime, and that he should accept the particular trust (d~). 10. Admission by one joint tenant. — Where property was devised to four persons as joint tenants, and one of them in his will made certain statements which pointed to a secret trust, it was held that these statements could not affect the (6) Kingsmanw.Klngsman,2Vem. v. Nab, 10 Mod. Rep. 404; Strode v. 559 ; Drakef ord v. Wilks, 3 Atk. 639 ; Winchester, 1 Dick. 397 ; S. C. stated Attorney-General v. Dillon, 13 Ir. from Beg. Lib. App. No. 1 to 3d edi- Ch. Rep. 127 ; Gray u. Gray, 11 Ir. tion of the present work ; and see Ch. Rep. 218 ; Barrow ». Green, 3 Alison's case, 9 Mod. Rep. 62 ; Dixon Ves. 152; Harriot v. Harriot, 1 v. Olmius, 1 Cox, 414. But in the Strange, 672, per Cur. ; Segrave v. case put, B. takes by the rules of Kirwan, 1 Beatt. 164, per Sir A. Hart; equity, and not by testamentary dis- Leister v. Foxcroft, cited ib.; Cham- position, and, therefore, where A. had berlaine v. Chamberlaine, 2 Eq. Ca. undertaken, at the request of a testa- Ab. 43 ; ib. 465 ; Irvine v. Sullivan, 8 trix in Ireland to hold for a charity, L. R. Eq. 673; Norris v. Prazer, 15 he paid legacy duty as beneficial L. R. Eq. 318; Thynn v. Thynn, 1 owner, though by the Irish Stamp Vern. 296 ; Devenish v. Baines, Prec. Acts a legacy to a charity was ex- in Ch. p. 3; Oldham v. Litchford, 2 empted; CuUen u. Attorney-General, Vern. 506 ; S. C. Freem. 284 ; Reech 1 L. R. H. L. 190. V. Kennigate, Amb. 67 ; S. C. 1 Ves. (c) McCormick v. Grogan, 1 I. R. 123; Newburgh«.Newburgh,5Madd. Eq. 313; 4 L. R. H. L. 82; Creagh 366, per Sir John Leach ; Chamber- v. Murphy, 7 I. R. Eq. 182. lain V. Agar, 2 Ves. & B. 259; Nab [(rf) Re Boyes, 26 Ch. D. 531.] 84 Ch. V. S. 3.] STATUTES OF "WTLLS. *63 rights of the survivor of the joint tenants, and in the absence * of other evidence his representatives were [*63] held to be entitled to the property (a). J 11. Engagement to execute an unlavrful trust. — It often happens that a proposed devisee enters into an engagement with the testator in his Ufetime to execute a secret trust of an unlawful character, one which the policy of the law does not allow to be created by will.^ In this case the Court will not suffer the devisee to proiit by his fraud, but on proof of the fact raises a resulting trust in favour of the testator's heir- at-law. If, therefore, a testator devise an estate in words carrying upon the face of the will the beneficial interest, and obtain a promise from the devisee either expressed or tacitly implied that he will hold the estate upon trust for a chari- table purpose, the heir-at-law, as entitled to a resulting trust, [(a) Turner v. Attorney-General, 10 I. R. Eq. 386.] 1 Secret trusts. — If a fraudulent trust appear in an answer, a trust will be created in favor of those iipterested in the estate ; Robinson v. King, 6 Ga. 539 ; a Court of Equity will compel discovery, .enforce the trust if lawful, declare it void if unlawful — where done by fraud, circumvention, accident, mistake, or design; Brown o. Clegg, 6 Ired. Eq. 90; 51 Am. Dec. 413; if it is claimed that a person purchased with notice of a secret trust, clear proof of actual facts must be shown, sufficient to put a party on inquiry, and with ordinary diligence lead to knowledge of it ; Wilson v. McCullough, 23 Pa. St. 440 ; 62 Am. Dec. 347 ; a bill of sale privately understood to be a mort- gage creates a secret trust as to surplus in favor of vendor, and is void as to creditors; Chenery v. Palmer, 6 Cal. 119; 65 Am. Dec. 493; Hodgkins «. Hook, 23 Cal. 584 ; a bona fide purchaser of corporate stock, without notice, will be protected against a secret trust in favor of a third person, where such person by his voluntary act has conferred an apparent right of property in stock on the vendor ; Crocker v. Crocker, 31 N. Y. 507 ; 88 Am. Dec. 291 ; a secret trust inconsistent with the terms of the sale of property, though evi- dence of fraud, if not satisfactorily accounted for, is not fraud per se, nor conclusive evidence of it, and it is immaterial whether the property is real or personal; Oriental Bank v. Haskins, 3 Met. 332; 37 Am. Dec. 140; see, also. Murphy v. Mariland, 8 Cush. 577 ; I-ynde v. McGregor, 13 Allen, 181 ; Crowninshield v. Kittridge, 7 Met. 524; Harvey v. Varney, 98 Mass. 120; to enforce a secret trust an honest purpose must be shown ; Patton v. Beecher, 62 Ala. 579; a trustee purchased land in his own name with liis wife's money ; trust results to the wife, in conveyance of which she joins, good if purchaser has no knowledge of her incapacity; Gray v. Turley, 110 Ind. 254 ; A., holding stock, dealt with it as his own, transferring it to B., and B. to C, neither B. nor C. having any knowledge of the trust ; Borland u. Clark, 26 Kan. 349 ; an express trust by secret agreement may be enforced ; Thomp- son V. Newlin, 6 Ired. Eq. 380 ; but a secret trust was not sustained in Conover V. Beckett, 38 N. J. Eq. 384. 85 *64 STATUTES OF WILLS. [Ch. V. S. 3. may bring an action against the devisee, and compel him to answer whether there existed any such understanding be- tween him and the testator ; and if the defendant acknow- ledge it, he will be decreed a trustee for the plaintiff, and to cpnvey the estate to him accordingly (S). 12. Devise may be good as to one and void as to another. — Where a devise is to several persons as tenants in common, it may be void as to one to whom the testator's unlawful intention was pommunicated in "his lifetime, and good as to the others who were not privies to his intention (e).« But if there be a' joint devise to two, one of whom^ has by active fraud procured the devise, the other cannot claim under the fraud, but the devise will be void as to both (^d). 13. Devise not void because devisee means to execute the unlawful trust. — Where no trust is imposed by the will, and no communication was made in the testator's lifetime, the devise will be good, although the devisee may, notwithstand- ing the absence of legal obligation, be disposed from the bent and impulse of his own mind, to carry out what he believes to have been the testator's wishes (e). [*64] * 14. Aa engagement to hold an indefinite part of the estate upon an unlawful trust. — A devise may be a beneficial one upon the face of a will, but there may have existed an understanding between the testator in his lifetime and the devisee, that, without any particular part of the estate being specified, such portions of it as the devisee, in (5) Adlington v. Cann, Barn. 130 ; (c) Tee v. Ferris, 2 K. & J. 357 ; Springett v. Jenings, 10 L. R. Eq. [Rowbotham v. Dunnett, 8 Ch. D. 488 ; Burr o. Miller, W. N. 1872, p. 430] ; and see Burney v. Macdonald, 63; King v. Lady Portington, 1 Salk. 15 Sim. 6 ; Moss v. Cooper, 1 J. & H. 162; Muckleston o. Brown, 6 Ves. 352. 52 ; Stickland v. Aldridge, 9 Ves. (rf) Russell t. Jackson, 10 Hare, 516 ; McCormick v. Grogan, 1 I. R. 204 ; and see Carter v. Green, 3 K. & Eq. 313; 4 L. R. H. L. 82; and see J. 603; Burney v. Macdonald, 15 Attorney-General v. Duplessis, Park. Sim. 6. 144; Russell v. Jackson, 10 Hare, (c) Wallgrave v. Tebhs, 2 K. & 204; Tee v. Ferris, 2 K. & J. 357 Lomax v. Ripley, 3 Sm. & G. 48 Carter v. Green, 3 K. & J. 591 ; Bur- J. 313 ; Lomax v. Ripley, 8 Sm. & G. 48; Jones v. Badley, 3 L. R. Eq. 635, reversed, 3 L. R. Ch. App. 362 ; and ney v. Macdonald, 15 Sim. 6 ; Moss see Carter v. Green, 3 K. & J. 591 ; V. Cooper, 1 J. & H. 352; Baker v. [Rowbotham v. Dunnett, 8 Ch. D. Story, "W. N. 1874, p. 211. 430.] 86 Ch. V. S. 3.] STATUTES OP WILLS. *64 the exercise of his discretion, might think proper, should be applied to a charitable purpose. Under such circumstances the heir of the testator would have a right to interrogate the devisee whether he has exercised that discretion, and to call for a conveyance of so much as the devisee may have made subject to the unlawful purpose (a). 15. Defendant must discover what the secret trust was. — In the above cases it is not a sufficient answer to an action by the heir for the defendant to say that the, secret trust is not for the plaintiff, for thus the devisee makes himself the judge of the title. The trust may be for a charity, and if so, the beneficial interest would result for want of a lawfiil inten- tion, or the equitable interest might, on some other ground, enure to the heir as undisposed of (5). ' If the defendant deny the trust by his answer, the fact in this, as in other cases of fraud, may be established against him by parol evidence (c). 16. Engagement to execute a trust and no trust declared. — It is clear that if the devisee enters into an engagement with the testator to execute an unlawful trust, the heir may bring an action, and claim the beneficial interest ; but suppose the devise is a beneficial one upon the face of it, and the testator communicates his will to the devisee, and requests him to be a trustee for such purposes as the testator shall declare, which the devisee undertakes to' do, but the testator afterwards dies without having expressed any trust, it seems that in this case also the devisee will not be allowed to take the beneficial interest, but the heir-at-law wiU be entitled (c?). 17. Case of devisee made a trustee on face of the vrill, and parol declaration of trust for a stranger. — Another case, dis- tinct from all the preceding, is where a testator devises an estate to persons as trustees, but no trusts are declared by the will, so that the equitable interest would, upon the face of (a) Muckleston v. Brown, 6 Ves. [Eiordan v. Banon, 10 I. R. Eq. 69. 469.] (6) Newton v. Pelham, cited Boson (d) Muckleston v. Brown, 6 Ves. V. Statham, 1 Eden, 514; [ije Boyes, 52; [_Re Boyes', 26 Ch. I). 531.] See 26 Ch. D. 531.] also the observations of V. C. (a-fter- (c) Kingsmanw.Kingsman,2Vern. wards L. J.) Turner, in Russell'?;. 699 ; Pring v. Pring, 2 Vern. 99 ; Jackson, 10 Hare, p. 214. \ 87 *65 STATUTES OF WILLS. [Ch. V. S. 3. the instrument, result to the heir-at-law, and the testator inform the devisees that his intention in making the devise is, that they shall hold the estate in trust for certain persons, which the devisees undertake to do. Will the Court, under such circumstances, compel the devisees to execute the [*65] parol intention, ox will *the equitable interest result to the heir ? In favour of the parol trust, it will be argued that the testator left his will in the form in which it appears, under the impression that his object, verbally communicated, would be carried out, and that the trust can therefore be supported, on the ground of mistake in himself, or fraud in the devisees in not apprising the testator that the trust could not be executed. To this the answer is, that, upon the face of the will, the equitable interest results to the heir-at-law, and that, if the testator has not disposed of the equitable interest, as required by the statute, the Court can- not make a will for him, on the "plea of mistake or fraud (a) : that the Court has interfered in the case of fraud in those instances only where the devisee taking the beneficial inter- est under the will, was the contriver of the fraud, and, as no man may take advantage of his own wrong, the Court com- pels the devisee to execute the intention fraudulently inter- cepted : but in the case supposed, the legal estate only is in the devisees, while the beneficial interest is in the heir-at-law, who is wholly disconnected from the fraud. What jurisdic- tion, therefore, has the Court to act upon the conscience of the heir, to deprive him of that estate, which has not been devised away according to the Statute of Wills ? and how can the trustees for the heir be held to be trustees for another in the absence of all fraud on the part of the heir? It would seem, upon principle, that where a trust results upon the face of the will, the circumstance of an ex- press or implied promise on the part of the devisee to execute a certain trust is not a sufficient ground for authorising the Court to execute the trust as against the heir-at-law (6). (a) Newburg v. Newburg, 5 Madd. t. Brooking, 2 Vern. 50, 107 ; Smith 364. V. AttersoU, 1 Euss. 266 ; Podmore v. (6) The cases upon the subject are Gunning, 7 Sim. 644. Other cases are Pring V. Pring, 2 Vern. 99; Crooke not uncommonly referred to, but 88 Ch.V. S. 3.] STATUTES OF WILLS. *66 [18. Case of parol declaration of trust of a legacy for a stranger. — However, in a recent case in Ireland where a pecuniary legacy was given " to be disposed of by the legatee in a manner of which he alone .should be cognizant, and as contained in a memorandum which the testator should leave with him," and the testator before the execution of the will verbally informed the legatee of the manner in which he was to dispose of the legacy, to which the legatee assented, it was held that there was a valid trust, and that the legacy was to be applied according to the * testator's [*66] diuections, to the exclusion of the claims of the residuary legatees (a).] 19. Effect of the Statute of Mortmain. — We have stated the rule that if \ a testator make a devisfe carrying the benefi- cial interest on the face of the will, but it appears from the admission of the devisee or by evidence thtit the devisee was pledged to the testator to execute a charitable trust, the Court. will not allow the execution of such a trust, but will give the estate to the heir-at-law. The question here sug- gests itself, whether the Statute of Mortmain (5), which declares a devise "in trust or for the benefit of" a charity to be absolutely void, applies to such a case, so as not only to defeat the equitable interest admitted or proved to have been intended for a charity, but also to make void the devise of the legal estate itself, so that by the effect of the statute, when the fact has been established, the devisee takes no interest either at law or in equity. After some coiiflict of authority (e), it has now been decided that the devise of the legal estate is good, but that equity will set it aside on the ground of fraud, upon public policy (<£). which really have no application, — (6) 9 G. 2. c. 36. as Jones v. Nabbe, Gilb. Eq. Rep. 146 (c) See Adlington v. Cann, 3 Atk. (but there the money passed, and the 141, 150, & 153 ; Edwards «. Pike, 1 parol trust was declared in the life- Eden, 267 ; Boson v. Statam, 1 Eden, time of the testator) ; Inchiquin v. 508 ; Bishop v. Talbot, cited Muckle- Prench, 1 Cox, 1 ; Metham v. Devon, ston v. Brown, 6 Ves. 60, 67, Reg. Lib. 1 P. W. 529 ; as to which last two A. 1772, f ol. 137, A. 1773, f ol. 686. cases, see the observations at page (rf) Sweeting o. Sweeting, 3 N. Rep. 59, supra. 240. 1(a) Riordan v. Banon, 10 1. R. Eq. 469; Re Fleetwood, 15 Ch. D. 594.] 89 *66 STATUTES OF WILLS. [Ch. V. S. 3, The provisions of the Statute of Frauds relating to wills have now been repealed, but the principles established by the foregoing cases with reference to the Statute of Frauds will apply, mutatis mutandis, ia the enactments of the Statute of Wills at present in force. 90 ' * CHAPTER VI. [*67] OF TEAKSMTJTATIOK OB" POSSESSION. Where there is valuable consideration^ and a trust is intended to be created, formalities are of minor importance, since if the transaction cannot take effect by way of trust Executed, it may be enforced by a Court of Equity as a con- tract. But where there is no valuable consideration, and a trust is intended, it has been not unfrequently supposed that, in order to give the Court jurisdiction, there must be Trans- mutation of possession — i.e., the legal interest must be divested from the settlor, and transferred to some third person. But upon a careful examination of the authorities the principle will be found to be, that whether there was transmutation of possession or not, the trust will be supported — provided it was in the first instance perfectly created (jci). The cases upon this subject may be marshalled under the following heads : — 1. Where some further act is intended. — It is evident that a trust is not perfectly created where there is a mere intention of creating & trust, or a voluntary agreement to do so, and the (a) See Ellison «. Ellison, 6 Ves. 647 ; Meek v. Kettlewell, 1 Hare, 469 ; 662 ; Pulvertoft u. PulTertoft, 18 Ves. Fletcher v. Fletcher, 4 Hare, 74; 99 ; Sloane v. Cadogan, Sug. Vend. & Price v. Price, 14 Beav. 598 ; Bridge P. Append.; Edwards k. Jones, 1 M. v. Bridge, 16 Beav. 315; Beech v. &Cr.226; Wheatley w. Purr, 1 Keen, Keep, 18 Beav. 285; Donaldson v. 661 ; Garrard v. Lauderdale,' 2 R. & Donaldson, 1 Kay, 711 ; Scales v. M. 453 ; Collins'on v. Patrick, 2 Keen, Maude, 6 De G. M. & 6. 43 ; Airey «. 123; Dillon v, Coppin, 4 M. & Cr. Hall, 3 Sm. & G. 315. 1 Valuable consideration. — Pownal v. Taylor, 10 Leigh, 183 ; Baldwin v. Humphrey, 44 N. Y. 609; Haskill v. Freeman, 1 "Wms. Eq. 34; Wadsworth V. Wendell, 5 Johns. Ch. 224 ; Even where a husband conveyed directly to his wife, it was held a trust ; Garner v. Garner, 1 Busb. Eq. 1 ; Livingston u. Livingston, 2 Johns. Ch. 637 ; Fellows v. Heermans, 4 Lans. 280 ; Huntly v. Huntly, 8 Ired. Eq. 250 ; if the cestui que trust cannot be identified, the truSt cannot be executed; Ownes v. Ownes, 8 C. E. Green, 60; DlUaye v. Green- ough, 45 N. Y. 438 ; if no trustee is named in the deed, the instrument will be reformed ; Burnside v. "Wayman, 49 Mo. 356. 91 *68 WHEN A TBTTST IS PERFECTLY CREATED. [Ch. VL settlor liiinself contemplates some further act for the purpose of giving it completion (J). 2. 'Where the settlor declares himself a trustee. — If the settlor proposes to convert himself into a trustee, then the trust is perfectly created, and will be enforced so soon as the settlor has executed an express declaration of [^68] trust, intended to * be final and binding upon him, and in this case it is immaterial whether the nature of the property be legal or equitable, whether it be capable or incapable of transfer (ji)} (6) Cotteen v. Missing, 1 Mad. 176 ; has been reversed on appeal, W. N. Bayley v. Boulcott, 4 Russ. 345; Dip- 1885, p. 83.] In the case of McFad- ple V. Corles, 11 Hare, 183 ; Jones v. den i;. Jenkyns, 1 Hare, 471 ; Sir J. Lock, 1 L. E. Ch. App. 25 ; Lister v. Wigram expressed himself more cau- Hodgson, 4 L. E. Eq. 30 ; Heartley v. tiously than was necessary, as to the Nicholson, 19 L. E. Eq. 238. jurisdiction of the Court in enforcing (a) Gee v. Liddell, 35 Bear. 621 ; a trust against the settlor himself, and Morgan v. Malleson, 10 L. R. Eq. suggested several accompanying cir- 475 ; Armstrong u. Timperon, W. N. cumstances as material to the estab- 1871, p. 4; Ex parte Pye, or Ex parte lishment of such a trust. "If," he Duhost, 18 Ves. 140 ; Thorpe i'. Owen, said, " the owner of property having 5 Beav. 224 ; Stapleton u. Stapleion, the legal interest in himself, were to 14 Sim. 186 ; Vandenherg v. Palmer, execute an instrument by which he 4 Kay & J. 204 ; Searle v. Law, 15 declared himself a trustee for another, Sim. 99; Steele v. Waller, 28 Beav. and had disclosed that instrument to 466 ; Paterson v. Murphy, 11 Hare, the cestui que trust, and afterwards 88 ; Drosier v. Brereton, 15 Beav. 221 ; acted upon it, that might perhaps be Bentley v. Mackay, 15 Beav. 12 ; sufficient ; or a Court of equity, ad- Bridge V. Bridge, 16 Beav. 315; Gray verting to what Lord Eldon said in V. Gray, 2 Sim. N. S. 273 ; Wilcocks Ex parte Dubost, might not be bound V. Hannyngton, 5 Ir. Ch. Eep. 38; to inquire further into an equitable. [Kelly V. Walsh, 1 L. E. Ir. 275 ; Be title so established in evidence." Shield, W. N. 1884, p. 127. Re Shield. ^ VoLUNTABT Agkeements. — Trust not perfectly created. — Where there is an intention merely to create a trust, and the settlor must take further action, it cannot be enforced ; Evans v. Battle, id Ala. 398 ;" Swan t'. Frick, 34 Md. 139; Lanterman v. Abernathy, 47 111. 437; Minturn v. Seymour, 4 Johns. Ch. 498; Banks v. May, 3 A. K. Marsh, 435. Trust perfectly created. — If nothing further remains for the settlor to do, the trust will be executed, except as against creditors and honafide purchasers without notice, though there has been no change of possession ; Stone v. Hackett, 12 Gray, 227; Lane v. Ewing, 31 Mo. 76; Howard v. Bank, 40 Vt. 597; Padfield i-. Padfield, 68 111. 210; Graham v. Lambert, 5 Humph. 595; the transfer of certificates of stock is sufficient to pass the title ; Sherwood v. Andrews, 2 AllM, 79; Blasdel v. Locke, 52 N. H. 238; Millspaugh v. Putnam, 16 Abb. Pr. 380 ; without any change upon the corporation books ; Eames v. Wheeler, 19 Pick. 444; Sargent v. Ins. Co. 8 Pick. 96; Quiner v. Marblehead 92 Ch. VI.] -WHEN A TEUST IS PBEFECTLY CEEATED. *68 [3. Gift of husband to his -wife. — Prior to the Married Women's Property Act, 1882] a husband was incapable of making a gift of chattels at law to his wife, and, therefore, if he purported to majce such a gift, a Court of Equity con- siders it tantamount to a declaration that the husband would hold in trust for the wife for her separate use. 'The words Ins. Co. 10 Mass. 476 ; unless a stranger is to be the trustee, and the corpo- rate laws require it ; Lonsdale's Est. 29 Pa. St. 407 ; Kiddill v. Farnell, 3 Sm. & Gif. 428; Jones v. Obenchain, 10 Grat. 259; Gilchrist v. Stevenson, 9 Barb. 9. It is not necessary that the beneficiary have knowledge of the set- tlement if he afterwards accepts and ratifies it; Cumberland v. Codrington, » Johns. Ch. 261; Weston v. Baker, 12 Johns. 276; Shepherd v. M'Evers, 4 Johns. Ch. 136; 8 Am. Dec. 561, and see cases referring to bank deposits. Savings-Bank Deposits. — The decisions are somewhat in conflict, owing largely to the difficulty in applying the rules to the facts of each case ; where S. deposited money in trust for M. & K., distant relatives, who were igno- rant of it, S. retaining the bank-book and drawing a year's interest, it was held that a valid trust was created for M. & K. ; Martin v. Funk, 75 N. Y. 134 ; 31 Am. Rep. 446; Farrelly v. Ladd, 10 Allen, 127; Witzela. Chapin, 3 Bradf. 386; Millspaugh v. Putnam, 16 Abb. Pr. 380; whether a trust has been per- fectly created, or whether it is an incomplete gift, is a question of fact in all these cases, and the result reached hinges largely upon the object of the set- tlor, the situation of the parties, and the character of the subject-matter. In Brabrook v. Bank, 104 Mass. 228, a father handed his infant child a check, with a strong indication of his intention to give the check to the child, after- wards locking it up to keep it for the child. The father died the same day, and it was held there was no trust, though it appears that the decision turned rather upon the particular facts of the case than upon any variation of the principles involved ; Clark v. Clark, 108 Mass. 522, a similar case, referred to Brabrook v. Bank, and was decided on the strength of that without giving iany reasons ; and though the facts in these cases may be thought to show that the trusts were not perfectly created, still it is submitted that they are not in accord with current of recent decisions. In view of death A. delivered to B. a package containing money, a bank-book; and a memorandum stating where he wished to be buried, and how the balance of his property was to be distributed; held a valid trust; Pierce v. Savings Bank, 129 Mass. 425; 37 Am. Eep. 371 ; also where one took the book at direction of an aunt, who said, " Keep this, and if anything happens to me, bury me decently, put a headstone over me, pay my debts, and anything that is left is yours " ; Curtis V. Bank, 77 Me. 151 ; 52 Am. Rep. 750; 2 Schouler, Pers. Prop. § 195; Clough V. Clough, 117 Mass. 85 ; D. deposited in bank in own name all that the law permitted, and also in names of son and grandchildren as trustee, he keeping the books and taking the dividends ; evidence was admitted that D. had told them he intended the deposits for them after his death, but he wanted the interest while he lived ; Gerrish v. Inst, for Savings, 128 Mass. 159 ; 36 Am. Rep. 365 ; Bartlett v. Remington, 59 N. H. 864 ; Pierson v. Drexel, 11 Abb. (N. Y.) N. Cas. 150; Weaver v. Emigrant Bank, 17 Abb. (N. Y.) N. Cas. 82; Willis V. Smyth, 91 N. Y. 397 ; it must appear that the fiduciary relations are fully established ; Urann v. Coates, 1,09 Mass. 581; a testator transferred certain bank shares to himself as trustee for his daughter, she being ignorant 93 *68 WHEN A TEUST IS PBEFECTLY CREATED. [Ch. VL of' gift need not be in writing, or of a technical description, but must be clear, irrevocable, and complete ; the unsup- ported testimony of the wife on her own behalf will not be sufficient, but the gift may be proved not only by witnesses at the time, but also by the husband's subsequent declaration. " If," observed Sir J. RomiUy, M. R., " A. (who has £1000 of tbe transaction and he taking the dividend ; Cummings v. Bramhall, 120 Mass. 552 ; Powers u. Inst, for Savings, 124 Mass. 377 ; also a valid trust where A. delivered a bank-book with an assignment of the deposits to E. on oral agreement that E. should pay such sums as she wanted during her life, and at death balance to son ; Davis v. Ney, 125 Mass. 590; 28 Am. Rep. 272; Foss V. Savings Bank, 111 Mass. 285; Kingman v. Perkins, 105 Mass. Ill; Kimball b. Leland, 110 Mass. 325; Newton v. Fay, 10 Allen, 505; parol is admissible to show assignment was made on certain trusts or agreements which equity will enforce ; Campbell v. Dearborn, 109 Mass. 130 ; Hunnewell V. Lane, 11 Met. 163; a deposit was made in name of nephew N., with a memorandum that it could be paid to E., the depositor keeping the book and taking the dividends ; Northrop v. Hale, 72 Me. 275 ; bank in account with A., trustee for B. ; Bay v. Simmons, 11 R. I. 266; 23 Am. Kep. 447; Minor v. Rogers, 40 Conn. 512 ; Ip Am. Rep. 69 ; donor, holding book, deposited f o^ niece ; Blasdel v. Locke, 52 N. H. 238 ; Howard v. Bank, 40 Vt. 597 ; " in trust for C. F^ M." raised a sufficiently clear presumption of a gift; Mills- paugh V. Putnam, 16 Abb. Pr. 380; Geary v. Page, 9 Bosw. 290 ; Nutt v. Morse, 142 Mass. 1 ; Sherman v. Bank, 138 Mass. 581 ; but where money was placed to credit of children, it is necessary that donor should part with the control of it; Geary v. Page, 9 Bosw. 290; a deposit for "E. K., M. K. guardian," depositor keeping book, but inf ormitig M. K. of it ; Kerrigan v. Rautigan, 43 Conn. 17; Mabie l-. Bailey, 95 N. Y. 206; there should be some evidence of delivery ; Minchin v. Merrill, 2 Edw. Ch. 333 ; Chase v. Breed, 5 Gray, 440 ; sufficient delivery to pass title is inferred from slight evidence; Moore v. Hazelton, 9 Allen, 102 ; intention has much to do with delivery ; Grangiac v. Arden, 10 Johns. 293; Goodrich v. Walker, 1 Johns. Cas. 251; a check is not a sufficient assignment ; Carr v. Nat'l Security Bank, 107 Mass. 45 ; Exchange Bank v. Rice, 107 Mass. 37 ; Harris v. Clark, 3 N. Y. 93 ; a delivery of check payable six months after death of maker does not establish a trust ; App. Waynesburg Coll. Ill Pa. St. 130; 56 Am. Rep. 252; Saylor w. Bushong, 100 Pa. St. 23 ; Bank v. Millard, 10 Wall. 152 ; a mere declaration of intention to make a future gift or trust is insufficient ; Gray «. Barton, 55 N. Y. 68 ; Little V. Willets, 55 Barb. 125; Brink v. Gould, 43 How. Pr. 289; intestate placed two bonds in separate envelopes, and signed a memorandum that they were for sons W. and J., but he retained the income, neither son exercising any control over them ; no trust created ; Young v. Young, 80 N. Y. 422 ; 36 Am. Rep. 634; payment by bank to administrator of depositor whose account was " in trust for C. B." on production of letter of administration and pass-book, and in absence of any notice to the bank, is valid ; Boone v. Citi- zens' Sav. Bank, 84 N. Y. 83; 38 Am. Rep. 498; no trust where A. deposited money in name of B. without any declaration of trust and not in view of death, A. retaining the book; Robinson v. Ring, 72 Me. 140; 39 Am. Rep. 308; Case v. Dennison, 9 R. I. 88; 11 Am. Rep. 222; there must be a de-, Uvery to the donee ; Hill v. Stevenson, 63 Me. 367; 18 Am. Rep. 231; Tilling- 94 Ch. VI.] WHEN A TRUST IS PEEFECTLY CBBATED. *69 Consols standing in his name) says to B., 'I give you the iElOOO (^onsols standing in my name,' that in my opinion would make A. a trustee for B. It would be a valid declara- tion of trust for B., though the stock remained in the name of A." (6). [So where a husband by a deed poll, after reciting that he was beneficially possessed of the ground-rents thereby agreed to be settled, "settled, assigned, transferred and set over unto his wife as though she were a single woman," certain leasehold houses and the ground-rents thereof, it was held that the deed was not void as being an intended assignment, but operated as a declaration of trust (c). So where a hus- band by deed assigned leaseholds to his " wife, her executors, administrators, and assigns, as her separate estate," it was held that the deed operated as a valid declaration *of trust (a). But these cases have since been disap- [*69] proved of by V. C. Hall, who held that the principle laid down in Milroy v. Lord (5) applies equally to an imper- fect gift from husband to wife as to a gift to a stranger, and that such a gift cannot be supported as a declaration of trust (c) ; and this view has since been adopted in Ire- land (d). (6) Grant v. Grant, 34 Bear. 623. [(a) Fox v. Hawks, 13 Ch. D. 822.] As to the general dictum of M. E. see [(6) See post, p. 74.] also Morgan v. Malleson, 10 L. R. [(c) Re Breton's Estate, 17 Ch. D. Eq. 475 ; hut see contra Warriner v. 416 ; and see Re Whittaker, 21 Ch. D. Eogers, 16 L. E. Eq. 349. 657, 666.] [(c) Baddeley v. Baddeley, 9 Ch. [(d) Hayes v. Alliance Assurance D. 113.] Company, 8 L. E. Ir. 149.] / hast V. Wheaton, 8 E. I. 536; 5 Am. Eep. 621 ; if one receives a gift causa mortis in trust, and neither the beneficiaries nor the proportions to each are clearly expressed, the trust fails; Sheedy v. Eoach, 124 Mass. 472; 26 Am. Eep. 680; Warner v. Bates, 98 Mass. 274; Hess v. Singler, 114 Mass. 56; for other cases on the subject of deposits, see Stone v. Bishop, 4 Cliff. 593 ; Shaw V. Hayward, 7 Cush. 170; Taylor v. Henry, 48 Md. 550; Maynard v. Maynard, 10 Mass. 456; Wilcox v. Matteson, 53 Wis. 23; Meriwether v. Morrison, 78 Ky. 572; Ellis w. Secor, 31 Mich. 185; 18 Am. Eep. 178; Pope v. Bank, 56 Vt. 284; 48 Am. Eep. 781. Deed under Voluntary Settlement. — If executed in due form it will be bind- ing on the settlor, though he retain it in his possession ; Urann v. Coates, 109 Mass. 581 ; Bunn v. Winthrop, 1 Johns. Ch. 329 ; unless it appears that such was not his intention ; Otis v. Beckwith, 49 111. 121. If the trust has been perfectly created, 4t matters not if the deed is lost, or revoked, or the property 95 *70 WHEN A TRUST IS PERFECTLY CREATED. [Ch. VI. 4. Now by tlie recent act (e), sect. 1, a married woman is capable of acquiring and holding property as her separate property, as if she were a feme sole, without the intervention of any trustee, and a gift by a husband to his wife will now be valid, as well at law as in equity. But by sect. 10 it is provided, that nothing in the act contained shall give vaUdity as against creditors of the husband to any gift by a husbstnd to his wife of any property which, after such gift, shall con- tinue to be in the order and disposition or reputed ownership of the husband, or to any deposit or other investment of moneys of the husband, made by or in the name of his wife in fraud of his creditors, but any moneys so deposited or invested may be followed as if the act had not been passed. And since the act has put a gift by a husband to his wife on a similar footing to a gift to a stranger, the principles governing imperfect gifts to strangers (/) must be equally applied to gifts from husband to wife.j 5. Where the property is a legal interest. — If it be proposed to make a stranger the trustee, and the subject of the trust is a legal interest, and one capable of legal transmutation, as land or chattels which pass by conveyance, assignment, or delivery, or stock which passes by transfer, in this case the trust is not perfectly created unless the legal interest be actually vested in the trustee. It is not enough that the settlor executed a deed affecting to pass it, and that he believed nothing to be wanting to give effect to the trans- action : the intention of divesting himself of the legal prop- erty must in fact have been executed, or the Court [*70] will not recognize the trust (^). "I take * the .dis- tinction," said Lord Eldon, " to be, that if you want [(c) 45 & 46 Vict. c. 75; see Re [(/) See/)os<, p. 74.] March, 24 Ch. D. 222 ; 27 Ch. D. 166.] (j) See Garrard v. Lauderdale, 2 revested; Hitter's App. 59 Pa. St. 9; Talk v. Turner, 101 Mass. 494; Viney V. Abbott, 109 Mass. 302; Sewall v. Roberts, 115 Mass. 272; Meiggs ». Meiggs, 15 Hun, 453; Dennison v. Goehring, 7 Barr, 175; Aylsworth v. Whitcomb, 12 B. I. 298 ; Gilchrist v. Stevenson, 9 Barb. 9 ; as to revocation, see also Isham V. Delaware R. R. Co. 3 Stock, 229. The tendency in America is to favor trusts for a wife and children, but wider range of relationship would not be so favored ; Bright i\ Bright, 8 B. Mon. 194; M'lntire ». Hughes, 4 Bibb, 186; Buford v. McKee, 1 Dana, 107. 96 Ch. VI.] WHEN A TRUST IS PERFECTLY CREATED. *70 the assistance of the Court to constitute a oestiii que trust, and the instrument is voluntary, you shall not have that assistance for the purpose of constituting a cestui que trust, as upon a covenant to transfer stock, &c.; but if the party has completely transferred stock, &c., though it is voluntary, yet the legal conveyance being effectually made, the equitable interest will be enforced by this Court (a)." If, however, the settlor purport to transfer the legal estate to a trustee, but the trustee afterwards disclaims, the accident of the dis^ claimer has been held not to vitiate the deed, but the Court will appoint a new trustee (5). 6. Where the property is a legal interest incapable of legal transfer. — If the subject of the trust be a legal interest, but one not capable of legal transfer, then whether we look to principle or authority, there is considerable difficulty. On the one hand, it may be urged that in equity the universal rule is that the Court will not enforce a voluntary agreement in favour of a volunteer ; and as by the supposition the legal interest remains in the settlor (who therefore at law retains the full benefit), a Court of equity will .not in the absence of any consideration deprive him of that interest which he has not actually parted Mdth. On the other hand, as the settlor cannot divest himself of the legal interest, to say that he shall not constitute another a trustee without passing the legal interest, would be to debar him from the creation of a trust in the hands of another at all, and the rule therefore should be that if the settlor make all the assignment of the. property in his power and perfect the transaction as far as Russ. & M. 452 ; Meek v. Kettlewell, 233 ; Eatstone v. Salter, 19 L. K. Eq. 1 Hare, 469; Dillon v. Coppin, 4 M. 250 ; 10 L. E. Ch. App. 431 ; [Bulbeck & Or. 647 ; Coningham v. Plunkett, 2 v. Silvester, 45 L. J. N. S. Ch. 280 ; Y. & C. Ch. Ca. 245 ; Searle v. Law, West v. West, 9 L. R. Ir. 121.] 15 Sim. 95 ; Price v. Price. 14 Beav. (a) Ellison v. Ellison, 6 Ves. 662 ; 598 ; Bridge v. Bridge, 16 Beav. 315 ; Antrobus „■. Smith, 12 Ves.' 39 ; Col- Weale v. Ollive, 17 Beav. 252 ; Beech man v. Sarrel, 1 Ves. jun. 50 ; S. C. 3 V. Keep, 18 Beav. 285 ; Tatham v. B. C. C. 12 ; Dening i>. Ware, 22 Vernon, 29 Beav. 604; Dillon t>. Bone, Beav. 184; hut see Airey v. Hall, 3 3 Giff. 238; MUroy v. Lord, 8 Jur. Sm. & Gif. 315; Kiddill u. Farnell, 3 N. S. 806 ; 4 De G. r. & J. 264 ; Sm. & Gif. 428 ; and see Pulvertoft v. Warriner v. Rogers, 16 L. R. Eq. 340 ; Pulvertoft, 18 Ves. 89. Richards v. Delbridge, 18 L. R. Eq. 11 ; (6) Jones v. Jones, W. N. 1874, p. Heartley v. Nicholson, 19 L. E. Eq. 190. 97 *71 WHEN A TEUST IS PERFECTLY CEEATED. [Ch. VX the law permits, the Court in such a case should recognize the act, and support, the validity, of the trust. Some Judges have adopted the one view of the question, and some the other (c). But in the leading case of [*71] Kekewich v. * IVfanning (a), Lord Justice K. Bruce observed, "It is upon legal and equitable principle, we apprehend, clear that a person sui Juris acting freely, fairly, and with sufficient knowledge,' ought to have and has it in his power to make in a binding and effectual manner a voluntary gift of any part of his property, whether capable or incapable of manual delivery, whether in possession or rever- sionary or howsoever circumstanced." And it is conceived that this principle will for the future prevail (6), [but since debts and legal ehoses in action have been made transferable at law, questions under this head will be of less frequent occurrence (c).J Where the subject was incapable of transfer as a debt, and a parol declaration of trust was made to the debtor, who undertook to hold it upon those trusts, it was held to be a valid settlement without any transfer or attempt at trans- fer (cZ). [7. Where a person wrote a letter to one of the two trustees of the settlement made on his first marriage, stating that he was desiroTis of making a settlement of six policies on the children of that marriage, and undertaking to make to the trustee and another trustee, to be named- by the settlor,, an assignment by way of settlement of the policies, and until the settlement was executed he was to be bound by the agreement, as if the settlement were actually executed, and afterwards he (c) The authorities for the validity Scales v. Maude, 6 De G. M. & G. 43 ; of the trust are, Fortescue v. Barnett, Sewell v. Moxsy, 2 Sim. N. S. 189. 3 M. & K. 36; Roberts v. Lloyd, 2 (a) 1 De G. M. & G. 187, 188. Beav. 376; Blakely v. Brady, 2 Drur. (6) See Wilcocks u. Hannyngton, & Walsh, 311 ; Airey v. Hall, 3 Sm. & 5 Ir. Ch. Rep. 45 ; Penfold v. Mould, Gif. 315 ; ParneU v. Hingston, 3 Sm. 4 L. R. Eq. 564 ; [Lee v. Magrath, 10 & Gif. 337 ; Pearson u. Amicable As- L. R. Ir. 45, 313.] surance Office, 27 Beav. 229. In favour [(c) Lee v. Magrath, 10 L. R. Ir. of the opposite view, see Edwards v. 313.] Jones, 1 M. & Cr. 226 ; Ward v. Aud- (rf) Roberts v. Roberts, 11 Jur. N. land, 8 Sim. 571; C. P. Cooper's S. 992; reversed 12 Jur. N. S. 97L As Cases, 1837-1838, 146 ; 8 Beav. 201 ; to the legal transfer, see now 36 & 37 Meek v. Kettlewell, 1 Hare, 464 ; Vict. c. 66, s. 25, rule 6. 98 Ch. VI.] -WHEN A TKTTST IS PERFECTLY CREATED. *72 sent to the trustee another letter enclosing the former letter and three of the policies (the other three being in the posses- sion of a mortgagee), and stating that "the enclosed was the formal letter of assignment previous to a deed, and as bind- ing," but no notice of the letters was ever given to the offices, no formal settlement was ever executed, and no second trustee was named ; n; was held by V. C. Hall, that a complete assignment of the policies had been made, and that the settlement of the policies was binding and effectual (e). It may be doubted whether this case was rightly decided, irtasiduch as the execution by the settlor of a further instru- ment was contemplated, and in fact necessary, in ordeir to carry out his intention ; but no new principle was intended to be introduced, and the Vice-Chancellor treated the case as falling within Fortescue v. Burnett and Pearson v. Amicable Assurance Office.] *If a settlor assign all his personal estate with a [*72i power of attorney, the deed, being perfect and all that was inte'nded, will pass a promissory note, notwithstand- ing the want of indorsement, which is required for giving it currency (a). 8. If the subject of the settlement be partly incapable of legal transfer, and partly capable, and that part which is capable of trarisfer is not transferred. In this case all has not been done that might have been done, and no trust is created. Thus where there was a mortgage in fee and the mortgagee assigned the debt with a power of attorney, but did not convey the mortgaged lands, though they were legally transferable, it was held that the settlement was incomplete (6). 9. 36 & 37 Viot. c. 66. — By a recent Act, 36 & 37 Vict, c. 66, s. 25, sub-sect. 6, " any absolute assignment by writing under the hand of the assignor (not purporting to ]be by way of charge only) (c), of any debt or other legal chose, in ac- [(e) Es King, 14 Ch. D. 179.] [(c) As to what amounts to such (a) Richardson v. Richardson, 3 an assignment, see National Provin- L. B. Eq. 686. But see Richards v. eial Bank v. Harle, 6 Q. B. D. 626; Delbridge, 18 L. R. Eq. 11. Burlinson v. Hall, 12 Q. B. D. 347.] (i) Woodford y.Charnley, 28 Beav. 96. 99 *72 WHEN A TETJST IS PEEFBCTLY CEEATED. [Ch. VI. tion^ of wMcli express notice in writing shall have been given to the debtor, trustee, or other person, from whom the assignor would have been entitled to receive or claim such debt or chose in action, shall be and be deemed to have been effectual in law (subject to all equities which would have been en- titled to priority over the right of the assignee if that Act had not passed) to pass, and transfer the legal right to such debt or chose in action from the date of such notice ((^)." [The notice may be given at any time, even after the death of the assignor ; but the effect of delaying to give notice will be to let in any equities arising in the interval before the notice is given (e).] 10. Where the property is an equitable interest. — If the subject of the trust be an equitable interest, then on the [(d) Under the corresponding sec- within the Act. Lee «. Magrath, 10 tion in the Irish Act, 40 & 41 Vict. c. L. E. Ir.45; reversed on other grounds, 57, s. 28, suh-s. 6, it was held that the 10 L. R. Ir. 313.] volunteer assignee of a promissory [(e) Walker B.Bradford Old Bank, note, not negotiable, and not payable 12 Q. B. D. 511.] at the time of the indorsement, was 1 In a very recent case, Lord Justice Cotton considered what was the origin of the term chose in action : " I shall not go very far back in considering what was the origin of the term chose in action. It is sufficient in my opinion to go as far back as Blackstone. After having dealt with personal property in pos- session, l)e goes on thus: 'Having thus considered the several divisions of property in possession, which subsists there only where a man hath both the right and also the occupation of the thing, we will proceed next to take a short view of the nature of property in action, or such where a man hath not the occupation, but merely a bare right to occupy the thing in question ; the possession whereof may however be recovered by a suit or action at law : from whence the thing so recoverable is called a thing or chose in action.' Comm. vol. XI, p. 39. I may also refer to what was said, to my mind in rather plainer terms, by Mr. Joshua Williams in his book on Personal Property, 12th ed., p. 4, wliere he says : ' Although there was formerly no such thing as an incorporeal chattel personal, there existed not unfrequently a right of action, or the liberty of proceeding in the Courts of law either to recover pecuniary damages for the infliction of a wrong, or the non-performance of a contract, or else to procure the payment of money due. Such a right was called, in the Norman-Prench of our early lawyers, a chose or thing in action, whilst mov- able goods were denominated choses in action. Originally those choses in action, except in the case of choses in action of the Crown, could not be assigned, and they were not considered really to be property.' " Colonial Bank v. Whinney, 30 Ch. Div. at pp. 275, 276. In this case it was decided that shares in a com- pany incorporated under a statute with power to transfer, so as to vest the shares at law in the person standing on the register, are not choses in action. Cotton and Lindley, L. JJ., dissentiente Fry, L. J. . 100 Ch. VI.] WHEN A TRUST IS PBBFECTLY CREATED. *73 \ authority of Sloane v. Cadogan (/) a valid trust is created when the settlor has executed an assignment of it to a new trustee ; for an equitable interest is capable of transmission from one to another; and here the Court finds the relation of trustee and cestui que trust * established [*73] without the necessity of calling on the settlor to join in any act for giving it completion. The late Vice-Chancellor of England questioned the case of Sloane v. Cadogan upon this point (a) ; but in Kekewich V. Manning (J), Lord Justice K. Bruce observed, " Suppose stpck or money be legally vested in A. as a trustee for B. for life, and subject to B.'s life interest for C. absolutely; surely it must be competent to C. in B.'s lifetime, with or without the consent of A., to make an effectual gift of C.'s interest to D. by way of pure bounty, leaving the legal interest and legal title untouched. If so, can C. do this better or more effectually than by executing an assignment toD.?" These principles have since been acted upon (c), and Sloane v. Cadogan may be regarded as law. It had been before contended that the assignment operated by way of contract, and as there was no consideration the Court could 'not enforce it; but the rule now is, that the assignment passes the equitable estate (ci). 11. Where new trust is created without new trustees. — In other cases a person entitled to an equitable interest, instead of assigning it to new trustees, has directed the old trustees (/) Appendix to Sug. Vend. & 18; Lambe u. Orton, 1 Dr. & Sm. 125; Purch. Quaere, also, if the same Gilbert v. Overton, 2 H. & M. 110; point was not ruled in Ellison v. Elli- Woodford o. Charnley, 28 Beav. 99, son, 6 Ves. 656 ; for though the facts per M. E. ; Be Way's Trust, 2 De Gr. are very imperfectly stated, it would J. & S. 365 ; reversing same case, 4 seem from some expressions that at New Eep. 453. the date of the settlement the legal (ci) Donaldson v. Donaldson, 1 estate was not in the settlor ; and see Kay, 711. " If," Sir J. Wigram on Eeed v. O'Brien, 7 Beav. 32 ; Bridge one occasion observed, " the equitable V. Bridge, 16 Beav. 315 ; Gannon «. owner of property, the legal interest White, 2 Ir. Eq. Eep. 207 . of which is in a trustee, should execute (a) Beatson v. Beatson, 12 Sim. a voluntary assignment, and authorise 281. the assignee to sue for and recover (i) 1 De G. M. & G. p." 188. the property from' that trustee, and (c) Voyle V. Hughes, 2 Sm. & Git. the assignee should give notice thereof 101 *74 WHEN A TETTST IS PERFECTLY CEBATED. [Ch. VL to stand possessed of it upon the new trusts (e), and, of course, it has been considered quite immaterial whether the settlor selected new trustees or was content with the origi- nal trustees. 12. Assignment to a stranger for his o'wn benefit. — In other cases the owner of an equitable interest has simply assigned it to a stranger for the stranger's own benefit (/), wWch also in principle is the same as Sloane y. Cadogan, for there can be no difference between the gift of an equitable interest to A. himself and the gift of it to B. in trust for A. [*74] * 13. Case of particular mode intended, but not ef- fectual. — If the settlor intend to make the settle- ment in one particular mode, but which fails, th^ Court will not go out of its way to give effect to it by applying another mode ; as if the settlement be intended to be made by trans- fer of the legal estate, the Court will not hold such intended but effectual transfer to operate as a declaration of trust, for then every imperfect instrument would be made effect- ual by being converted into a perfect trust (a). 14. Meek V. Kettieweil. — In a case (6) heard before Sir J. Wigram, and affirmed by Lord Lyndhurst (c), it was held that a voluntary assignment of a mere expectancy (as of an heir or next of kin) in an equitable interest, and not commu- to the trustee, and the trustee should (/) Cotteen v. Missing, 1 Mad. accept the notice and act upon it, by 176 ; CoUinson v. Patrick, 2 Keen, 123 ; paying the interest and dividends of Wilcoclcs v. Hannyngton, 5 Ir. Ch. the trust property to the assignee Rep. 38 ; and see Godsall v. Webb, 2 dijring tlie life of the assignor, and Keen, 99. with his consent, it might be difficult (a) Milroy v. Lord, 8 Jur. N. S. for the executor or administrator of 809 ; i De G. F. & J. 274, per L. J. the assignor afterwards to contend Turner ; Richards v. Delbridge, 18 L. that the gift of the property was not R. Eq. 11 ; Heartley v. Nicholson, 19 perfect in equity," 1 Hare, 471. The L. R. Eq. 233 ; [Bottle v. Knocker, 46 Vice-Chancellor here enumerates all L. J. N. S. Ch. 159 ; Cross v. Cross, the safeguards and confirmatory acts 1 L. R. Ir. 389 ; 3 L. R. Ir. 342 ; of which the transaction was capable, Hayes v. Alliance Assurance Co. 8 L. but it must not be inferred that if R. Ir. 149 ; West v. West, 9 L. R. Ir. some of these were wanting, the trust 121 ; Lee v. Magrath, 10 L. R. Ir. would not be supported. 313.] (e) Rycroft P.Christy, 3 Beav. 238; (6) Meek v. Kettieweil, 1 Hare, M'Fadden v. Jenkyns, 1 Hare, 458 ; 464. See observations upon this case 1 Phill. 153 ; Lamb v. Orton, 1 Dr. & in Penfold v. Mould, 4 L. R. Eq. 564. Sm. 125. - (c) 1 Ph. 342. 102 Ch. VI.] WHEN A TRtrST IS PEEFBCTLY CREATED. *75 nieated to the trustees, did not amount to the creation of a trust. This was the only point decided, and perhaps a dis- tinction may be said to exist between the settlement of an actual interest and an expectancy, for a trust to be enforced liiust be perfectly created, whereas any dealing with what a person has not, but only expects to have, must necessarily in some sense be in fieri. However, Sir J. Wigram, in the course of his judgment, denied that aliy distinction existed between settlements of a legal interest, as in Edwards v. Jones, and of an equitable interest, as in Sloane v. Cadogan, t^o cases which, both on principle and authority, ought not to be confounded. 15. Notice unnecessary. — Great importance was also at- tached by his Honour to the circumstance that notice of the assignment was not given to the trustees. But notice in these cases is not indispensable. As against the settlor, an equitable interest is perfectly transferred without notice. It is only as between purchasers that the service of notice on the trustee, or the want of it, has a material effect upon the transfer (i). 16. Settlement retained in settlor's possession. — If a perSon execute a voluntary settlement, which is duly sealed and de- livered at the time, but the settlor keeps it in his possession and never parts with it, the settlement is neverthe- less * as binding as if it had been handed over to the [*75] parties entitled (a). But in the case of a conveyance upon a sale, though the deed be duly sealed and delivered, and the word " escrow " be not used, yet if it be retained in the hands of the vendor's solicitor it has no operation until handed over to the purchaser on payment of the purchase- money (6). The distinction is that in the former case noth- (cO "See Burn v. Carvalho, 4 M. & ruled, see Re Way's Trust, 2 De G. Cr. 690 ; Donaldson v. Donaldson, J. & S. 365. Kay, 711 ; Sloper v. Cottrell, 6 EU. & (a) Re Way's Trust, 2 De G. J. Bl. 504 ; Gilbert v. Overton, 2 H. & & S. 365 ; Fletcher v. Fletcher, 4 M. 110. Lord Romilly had attached Hare, 67; Hope i. Harman, 11 Jur. importance to notii^e, even as against 1097 ; Armstrong v. Timperon, 19 W. the settlor. See Bridge v. Bridge, 16 R. 558 ;' 24 L. T. N. S. 275 ; and see Beav. 315 ; Re Way's Trust, 4 New Jones v. Jones, 23 W. E. 1. Bep. 453, but this view has been over- (6) Hudson u. Temple, 29 Beav. 103 *75 VOLUNTAKY SETTLEMENTS. [Ch. VI. ing remains to be done, but in the latter case the substance of the agreement on one side, viz. the payment of the pur- chase-money, is still to be performed. 17. "Where donee incurs ezpense in respect of the property. — Though a settlement be voluntary at the tiine, and the legal estate do not pass, yet if the donee with the knowledge and sanction of the donor incur expense in respect of the property upon the faith of the gift, the donee is no longer regarded as a volunteer, but, in the character of purchaser, may call for a conveyance of the legal estate (e). 18. Voluntary settlement by iway of trust not revocable by settlor. — If a complete voluntary settlement, whether with or without transmutation of possession, be once executed, it cannot be revoked by a subsequent voluntary settlement (d), and the circumstance that the legal estate which was vested in the trustee becomes afterwards by some accident revested in the settlor is immaterial, as he will take it as a trus- tee (e). But if the voluntary settlement be in trust for the settlor for life, and then in trust for others, but subject to such debts as the settlor may leave, the settlor may in effect nullify the settlement by creating new debts (/). 19. Fraud. — ■ A voluntary settlement, though complete on the face of it, may be set aside in equity, where obtained by undue influence (^), or where it was not intended to take effect in the events which have actually happened, and was therefore executed under a mistake (A). 20. But in case of lands may be defeated by a sale. — A. vol- untary settlement of land by way of trust, perfectly created, is liable, under 27 Eliz. cap. 4, like a settlement of the legal estate, to be defeated by a subsequent sale to a purchaser, even with notice (i). And the cestui que trust can neither 545, per M. E. ; Murray v. Stair, 2 (/) Markwell t. Markwell, 34 Barn. & Cr. 82 ; Nash ... Myn, 1 Jon. Beav. 12. & Lat. 162. (jf) Huguenin v. Baseley, 14 Ves. (c) Dillwyn v. Llewelyn, 4 De G. 273. r. & J. 517. (A) See Forshaw v. Welsby, 30 ((£) Newton v. Askew, 11 Beav. Beav. 243; Nanney v. "Williams, 22 145 ; Eycrof t v. Christy, 3 Beav. 238. Beav. 452 ; Bindley v. Mulloney, 7 L. (c) Ellison V. Ellison, 6 Ves. 656 ; R. Eq. 343. Smith V. Lyne, 2 Y. & C. 345 ; Pater- [(t) In Price v. Jenkins, 5 Ch. Div. son V. Murphy, 11 Hare, 88. 619, it was held that a settlement of 104 Ch.VI.] VOLUKTAEY SETTLEMENTS. *76 obtain *aii injunction against the sale, thougli the [*76] settlement was founded on meritorious considera^ tion, as a provision for a wife or child (a), nor follow the estate into the hands of the purchaser (6), nor charge him with misapplication of the purchase-money, if, with notice of the voluntary settlement, he paid it to the vendor (c), nor can come upon the settlor himself to compensate the cestui que trust for the loss (d). However, the settlement must be purely voluntary, and not founded on valuable consider- ation at all (for the Court does not look at the quantum oi consideration) (e) ; and where the settlement is purely voluntary the trust will be executed by the Court until the estate is actually sold (/) ; and the author of the settlement, leaseholds by assignment was not voluntary, although the deed con- tained no covenant by the trustees to pay the rent or perform the covenants of the lease under which the premises were held, on the ground that the trustees came under a responsibility for payment of rent and performance of the covenants, which might be such a responsibility, thdt a lessee might be actually willing to pay money to get rid of. This case arose under 27 Eliz. cap. 5 ; but the doctrine laid down in it has no application to cases arising under 13 Eliz. cap. 5 ; He Eid- ler, 22 Ch. D. 74 ; and see Ex parte Hillman, 10 Ch. D. 622; Re Marsh and Earl Granville, 24 Ch. D. 11. The Irish case of Gardiner v. Gardiner, 12 Ir. C. L. R. 565, in which it was held that even a covenant by the assignee of a leasehold interest to indemnify the lessee against the rent and covenants in the lease was not necessarily such a valuable consideration as to take the case out of the ^Statute of Fraudulent Conveyances, 10 Car. 1, S. 2, c. 3, was not noted in Price !•. Jenkins, and the question whether the principle of Gar- diner V. Gardiner or Price v. Jenkins was to prevail, was treated as an open one in Ireland in Hamilton v. MoUoy, 5 L. R. Ir. 339 ; and in a subsequent case in the Irish Court of Appeal, Price V. Jenkins has been dissented from, and Gardiner v. Gardiner fol- lowed ; see Lee v. Mathews, 6 L. B. Ir. 530, overruling S. C. 6 L. R. Ir. 167 ; and see Re Lulham, 53 L. J. 1S. S. Ch. 928 ; 32 W. E. 1013, in which case Kay, J. followed Price v. Jenkins against his own opinion.] (a) Pulvertoft v. Pulvertoft, 18 Ves. 84. (6) Williamson v. Codrington, 1 Ves. 516, per Lord Hardwioke. (c) Evelyn v. Templar, 2 B. C. C. 148 ; and see Pulvertoft v. Pulvertoft, 18 Ves. 91, 93 ; Buckle v. Mitchell, 18 Ves. 112 ; but compare Leach v. Dean, 1 Ch. Rep. 146, with Pulvertoft v. Pul- vertoft, 18 Ves. 91 ; and see 18 Ves. 92, note (b), and Townend v. Toker, 1 L. E. Ch. App. 447. (a[) Williamson v. Codrington, 1 Ves. 516, per Lord Hardwioke ; but see Leach v. Dean, 1 Ch. Eep. 146 ; S. C. cited Pulvertoft v; Pulvertoft, 18 Ves. 91. (e) Townend v. Toker, 1 L. E. Ch. App. 447 ; Bagspoole u. Collins, 6 L. R. Ch. App. 228 ; [Shurmur v. Sedg- wick, 24 Ch. Div. 597 ; see Paget v. Paget, 9 L. E. Ir. 128 ; Eeversed, 11 L. E. Ir. 26.] (/) Pulvertoft V. Pulvertoft, 18 Ves. 94. 105 *77 TOLTJNTAEY SBTTLEMEBITS. [Ch. VL if he contract for the sale, cannot himself take proceedings to enforce specific performance (jg) though the purchaser may do so (A), and though the settlor himself may defeat the trust by a subsequent sale, the heir or devisee of the set- tlor has no such power (i) ; [and where a voluntary [*77] settlement is made of land * subject to an existing mortgage, and the property is sold by the mortgagee under his power of sale, the settlement is not thereby de- feated as to the surplus proceeds of sale after satisfying the mortgage (a).] But chattels personal (in which respect they differ from chattels real) (6) are not within the statute 27 Ehz. c. 4, relating to purchasers, and therefore a volun- tary settlement of chattels personal cannot be defeated by a subsequent sale (c). But voluntary deeds may acquire a validity by matter ex post facto, as by a sale or mortgage by the volunteer on the footing of the voluntary deed, and this doctrine has been extended to the disposition for valu- able consideration of an equitable interest (jT). 21. 13 Eliz. c. S. — A voluntary settlement, whether of real or personal estate, may be defeated by the operation of 13 Eliz. c. 5, which makes void all instruments by which creditors "are or shall be in ahy way disturbed, hindered, delayed, or defrauded," but such instruments as are made on " good consideration and bond fide " are excepted. Deeds invalid as against creditors. — Upon the construction of this statute it has been held, that where the settlor was ((;) Johnson v. Legard, Turn. & (6) Saunders v. Dehew, 2 Vem. Russ. 294 ; Smith v. Garland, 2 Mer. 272, second note. 123; but see Hogarth v. Phillips, 4 (c) Bill v. Cureton, 2 M. & K. Drew. .360 ; Peter v. NicoUs, 11 L. R. 503 ; M'Donell v. HesUrige, 16 Beav. Eq. 391. 346 ; Jones v. Croucher, 1 Sim. & (A) Willats V. Busby, 5 Beav. 193 ; Stu. 315 (this case cites also the Daking v. Whimper, 26 Bear. 568 ; authority of Sir W. Grant in Sloane Townend v. Toker, 1 L. R. Ch. App. v. Cadogan, Append, to Sugd. "Vend. 447. But he cannot file a bill to have & Purch., but the dictum does not ap- the voluntary deed delivered up, pear) ; Meek v. Kettlewell, 1 Hare, Hoghton V. Money, 35 Beav. 98 ; S. C. 473, per Sir J. Wigram. 1 L. R. Eq. 154. [d) George v. Milbanke, 9 Ves. (0 Doeu.Rusham, 17 Q. B. 723; 190; and see 1 Mer. 638; 7 CI. & Lewis V. Rees, 3 K. & J. 132. Fin. 463. [(a) Re Walhampton Estate, 26 Ch. D. 391.] 106 Ch. VI.] VOLUNTARY SETTLEMENTS. *78 insolvent at the time (e), or substantially indebted (/), or the object of defeating creditors may be inferred from a person settling his whole property, real and personal, and so depriving himself of the means of paying an existing debt (^), a voluntary deed, though supported by the meri- torious consideration of providing for a wife or child (A), and though made in pursuance of a verbal ante-nuptial promise (t), and though it was a settlement of the ptirchase-money, or of an annuity in lieu of * purchase- [*78] money upon a sale (a), is fraudulent as against cred- itors, (though only general creditors without any lien (6), or creditors under a voluntary post obit bond (c)). But a deed is not impeachable merely because it comprises the whole of a person|s property (cZ), or merely because it is voluntary (e), and although it be upon the face of it volun- tary, it may be shewn by extrinsic evidence to have been founded on valuable consideration (/), or to have been otherwise bond fide (^). And on the other hand, a deed, though it was founded on valuable consideration, even in consideration of marriage (A), may, if it was executed for the purpose of defrauding creditors, be declared to be void (i). (e) Barrack v. McCuUoch, 3 K. & (a) French v. ITrench, 6 De G. M. J. ,110; Lush V. "VVilkinson, 5 Ves. & G. 95; Neale v. Day, 4. Jur. N. S. 384; Whittington y. Jennings, 6 Sim. 1225. 493; French «. French, 6 DeG.M.&G. f*) Reese River Company v. At- 95 ; Acraman v. Corbett, IJ. & H. 410 ; well, 7 L. K. Eq. 347. Crossley v. Elworthy, 12 L. K. Eq. 158 ; Cc) Adames v. Hallett, 6 L. R. Eq. Taylor v. Coenen, 1 Ch. Div. 636. 468. (/) Townsend v. Westaoott, . 2 (.d) Alton v. Harrison, 4 L. R. Ch. Beav. 340; 4 Beav. 58; Martyn v. App. 622; Allen v. Bonnett, 5 L. R. . Macnamara, 2 Conn. & Laws. 554, Ch. App. 577 ; IMx parte Games, 12 per Gar.; Holmes v. Penney, 3 K. & Ch. D. 314.] J. 99; Cornish v. Clark, 14 L. R. Eq. («) HoUoway v. Millard, 1 Mad. 184; and see Richardson v. Small- 414; Thompson v. Webster, 4 Drew, wood, Jac. 557; Skarf i;. Soiilby, 1 632; Holmes v. Penney, 3 K. & J. 90. Mac. & G. 375. (/) Gale v. Williamson, 8 M. & (S) Smith V. CherriU, 4 L. R. Eq. "W. 540. 390; and see Spirett u. Willows, 3 ((?) Thompson w. Webster, 4 Drew. De G. J. & S. 303. 628; 4 De G. & J. 600. (A) Barrack v. McCulloch, 3 Kay (^) Bulmer v. Hunter, 8 L. R. Eq. & J. 110 ; and see Lush v. Wilkinson, 46 ; Colorabine v. Penhall, 1 Sm. & 6 Ves. .384. G. 228. (i) Crossley v. Elworthy, 12 L. R. (i) Twyne's case, 3 Rep. 80, a ; Eq. 158. Bott v. Smith, 21 Bear. 511; Acra- 107 *79 VOLUNTARY SETTLEIVIENTS. [Ch. VX 22. Valid deeds. — If the settlor was solvent at the time (/), or was indebted only in the ordinary course as for current expenses which he had the means of paying (^), or not sub- stantially indebted (I'), or in a sum of considerable amount but adequately secured by mortgage (m), or which the set- tlor's other property was amply sufficient to meet (w), and the settlement was bond fide, the deed cannot be impeached. The indebtedness of the party at the time is only one cir- cumstance of evidence upon the question oi fraud, and under all the circumstances the Court may see that no fraud was intended or can be presumed (o)." On the other" hand though the settlor was perfectly solvent at the time, yet if he exe- cuted the settlement with a view of withdrawing the bulk of his property from the reach of his creditors in the event of insolvency, which is in his contemplation, as when a person about to embark in a hazardous business [*79] * makes a settlement on his wife and family to guard against the. consequences, the settlement is void (a). 23. What creditors can set aside the deed. — If it can be, proved that the settlor contemplated, in fact, a fraud upon subsequent creditors, the deed can no doubt be set aside at their instance, though the settlor was not indebted at the date of the deed, or the debts which did exist have since been paid (5). But where fraud is merely presumed from man v. Corbett, 1 J. & H. 410; Hoi- (m) Stephens v. OUve, 2 B. C. C. lamby v. Oldriere, W. N. 1866, p. 94; 90; and see Skarf v. Soulby, 1 Mac. and see Harman v. Richards, 10 Hare, & G. 375. 81 ; Holmes v. Penney, 3 K. & J. 90. (n) Kento. EUey, 14 L. R. Eq. 190. (j ) Lush V. Wilkinson, 4 Vet. 384 Battersby v. Farrington, 1 Swans. 106 Kent V. Riley, 14 L. R. Eq. 190 Middlecome v. Marlow, 2 Atk. 519 (o) Richardson v. Smallwood, Ja- cob, 556; [iJe Johnson, 20 Oh. D. 389 ; aflfcmed nom. Golden v. Gillanj, 51 L. J. N. S. Ch. 503.] Townshend v. Windham, 2 Ves. 11, (o) Mackay v. Douglass, 14 L. R. per Lord Hardwicke ; Russel v. Ham- Eq. 106 ; [£x parte Russell, 19 Ch. D. mond, 1 Atk. 15 ; Walker v. Burrows, 588 ; fie Ridler, 22 Ch. D. 74.] 1 Atk. 94; and see Martyn v. Macna- (6) Barling v. Bishopp, 29 Bear, mara, 2 Conn. & Laws. 554. 417 ; Jenkyn v. Vaughan, 3 Drew. (k) Skarf v. Sonlby, 1 Mac. & G. 426 ; Richardson ». Smallwood, Jac. 375, per Cur.; Lush, k. Wilkinson, 5 556; Tarbuck v. Maxbury, 2 Vern. Ves. 387, per Cur. 510 ; Hungerford v. Earle, lb. 261 ; (0 Graham v. O'Keefe, 16 Ir. Ch. Spu-ett v. WiUows, 3 De G. J. & S. Eep. 1. 303; Ware v. Gardner, 7 L. R. Eq. 108 Ch. VI.] VOLUNTARY SETTLEMENTS. *80 the want of consideration and the indebtedness of the party, the settlement is deemed fraudulent only as against those creditors who were such at the date of the settlement (c) ; and if those creditors have since been satisfied, the intention of defrauding them is rebutted (c?). But when the deed has once been set aside as fraudulent against a creditor who was such at the time, other subsequent creditors are allowed to come in pro raid (e) : and as subsequent creditors have this equity, they may themselves, though this was formerly doubted (/), institute proceedings to set aside the deed, so long as any debt incurred at the date of the deed remains unsatisfied (g') ; and where the subsequent creditor proves such a debt to be still in existence, but does not show the insolvency or substantial indebtedness of the settlor at the date of the deed, the Court in its discretion may direct an inquiry (A). [The mere abstaining from suing for a period less than that required to raise a bar under the Statute of Limitations, as for ten years, will not prevent the creditors from setting aside the deed (i). J 24. VThether settlements of stock, &c., 'within 13 Eliz. c. 5. — It was formerly held that settlements of stock, policies of insurance, &c., which were not liable to be taken in execu- tion at the suit of a creditor, were exempt from the operation of the Act, *and therefore that settle- [*80] 317; Freeman v. Pope, 9 L. E. Eq. (/) See Ede v. Knowle3,2 Y. & C. 206; 5 L. R. Ch. App. 538. C. C. 178. (c) Kidney v. Ceussmaker, 12 Ves. (^) Jenkyn v. Vaughan, 3 Drew. 136; Montague a. Sandwich, cited ib.; 419; Freeman w. Pope, 9 L. E. Eq. White V. Sanson, 3 Atk. 410; Lush 206; 5 L. E. Ch. App. 538; and see V. Wilkinson, 5 Ves. 384 ; Townsend Lush v. Wilkinson, 5 Ves. 387 ; Eich- V. Westacott, 2 Beav. 340 ; 4 Beav. ardson v. Smallwood, Jac. 652. 58 ; and see Whittington v. Jennings, (ti) Eichardson v. Smallwood, Jac. 6 Sim. 493; Spirett w. Willows, 3 De S57; Jenkyn v. Vaughan, 3 Drew. G. J. & S. 293. 427; Townsend v. Westacott, 2 Beav. (cZ) See Jenkins v. Vaughan, 3 345; Skarf v. Soulby, 1 Mac. & G. Drew. 425; Eichardson u. Smallwood, 364; Christy v. Courtenay, 13 Beav. Jac. 557. " 101. (e) Richardson v. Smallwood, Jac. [(t) The Three Towns Banking 558; Montague v. Sandwich, cited Company v. Maddever, 52 L. J. 12 Ves. 156, note (a) ; Jenkyn v. N. S. Ch. 733 ; afllrmed W. N. Vaughan, 3 Drew. 424; Taylor v. 1884, p. 178.] Jones, 2 Atk. 200. 109 *80 AGEEEMENTS UNDER SEAL. [Ca. VL ments of tliem could not be defeated (a). But now that by 1 & 2 Vict. 0. 110, such interests are liable to execution, or to be charged by a judge's order, the distinction must be con- sidered as obsolete (5). [25. Baakruptoy. — Under the Bankruptcy Act, 1883 (. Earl BuUas, 1 P. W. 60 ; Bolton v. Bolton, of Winchelsea, 1 P. W. 277 ; and see Serjt. Hill's MSS. 77; S. C. 3 Sw. Garrard w. Lauderdale, 2 K. & M. 453, 414, note; Goring v. Nash, 3 Atk. 454. 186 ; Darley v. Darley, 3 Atk. 399 ; (a) Bolton v. Bolton, ubi supra. Hale V. Lamb, 2 Eden. 292 ; Evelyn (6) lb. V. Templar, 2 B. C. C. 148; Coleman (c) Watts v. BuUas, 1 P. W. 60; ?;. Sarrell, 1 Ves. jun. 50; S. C. 3 B. Goring v. Nash, 3 Atk. 186; Rodgers C. C. 12 ; Antrobus v. Smith, 12 Ves. v. Marshall, 17 Ves. 294. 39; Eodgers J). Marshall, 17 Ves. 294 ; {d) See Goring v. Nash, Bodgers Ellis V. Nimmo, LI. & G. t. Sugd. 333. v. Marshall, ubi supra. The subject will be found discussed at length in 8d edit. p. 95. 112 Ch. VI.] INTENTION. — SPECIAL CKEDIT. *83 under seal or not, cannot be enforced on tlie mere ground of meritorious consideration (e). 31. No trust unless there be an intention to create one. — It is obviously essential to the creation of a trust, that there should be the intention of creating a trust, and therefore if upon a consideration of all the circumstances the Court is of opinion that the settlor did not mean to create a trust, the Court will not impute a trust where none in fact was con- templated (/). Field V. Lonsdale. — Thus, where a person, having deposited in a savings bank as much money in his own name as the rules allowed, deposited a further gum in his name as trustee for his sister, but without making any communication to her ; and it appeared that he made such deposit with a view of evading the rules of the bank, and not to benefit his sister ; and by the act of parliament he retained the control of the fund; the Court held that no trust was created (^). So, if a person indorse and hand over promissory notes with the in- tention of making a testamentary disposition, the transaction does not create a trust inter vivos (Ji). 32. Money scrivener. — As the business of a money scrive- ner is now almost obsolete, and the looking for and procur- ing investments for the money of clients on landed security is now commonly transacted by solicitors, if a sum of money be placed by a client in the hands of * a solid- [*83] tor for investment, the mere deposit will not per se create the relation of trustee and cestui que trust between the solicitor and the client (a). 33. [Special credit. — A letter of advice that a special credit for a particular sum has been opened with the person writing the letter in favour of the person to whom the letter (e) Jefferys v. JefferyS, 1 Cr. & Ph. J. 502 ; Hughes v. Stubhs, 1 Hare, 1.38; Aniiobus v. Smith, 12 Ves. 39; 476 ; Smith v. Warde, 15 Sim. 56. Evelyn v. Templar, 2 B. C. C. 148 ; {g) Field v. Lonsdale, 13 Beav. 78 ; HoUoway v. Headington, 8 Sim. 324 ; and see Davies v. Otty, 33 Beav. 540. Joyce V. Hutton, 11 Ir. Ch. Rep. 123. (A) Re Patterson's Estate, 4 De G. Ellis V. Nimmo, Lloyd & Goold, t. J. & S. 422 ; and see Kennard v. Ifeh- Sugd. 333, must be considered as nard, 8 L. K. Ch. App. 2.30. overruled. (o) Mare v. Lewis, 4 I. R. Eq. 219. (/) See Craskell v. Gaskell, 2 Y. & 113 *83 SPECIAL CREDIT. [Ch, VI. is sent, and that it will be paid ratably as certain goods are deliyered, upon jeceipt of certificates of reception of the' goods, will not of itself constitute an equitable assignment or specific appropriation of that sum so as to create a trust (J).J . [(6) Morgan v. Larivifere, 7 L. R. Larivifere v. Morgan, 7 L. B. Ch. App. H. li. 423, OTemiling S. C. sub. nam. 650.] 114 ♦CHAPTER VII. [*84] OF THE OBJECT PKOPOSED BY THE TRUST. Tbxjsts, with reference to their object, are Lawful or Un- lawful : the former, such as are directed to some legitimate purpose ; the latter, such as are in contravention of the pol- icy of the law. SECTION I. OF LAWFUL TRUSTS. 1. Intention. — The general and primd facie rule is, that the intention of the settlor is to be carried into effect (a).^ 2. ITo objection to a trust because the legal estate cannot be so dealt with. — If the object of the trust do not contra- vene the policy of the law, the mere circumstance that the same end cannot be effectuated by moulding the legal estate is no argument that it cannot be accomplished through the medium of the equitable. The common law has interwoven with it many technical rules, the reason of whjich- does not appear, or at the present day does not apply ; but a trust is a thing sui generis, and, where public policy is not disturbed, will be executed by the Court. S. Fee upon a fee. — In legal estates, for example, a fee cannot, except by executory devise, be limited upon a fee — that is, cannot be shifted from one person to another ; but this modification of property was allowable in uses, and by the statute of Hen. 8. has gained admittance into legal es- tates, and the shifting of the fee from one person to another (o) Attorney-General v. Sands, 195, per Sir T. Clarke ; and see At- Hard. 494, per Lord Hale ; Pawlett v. tomey-General v. Dedham School, 23 Attorney-General, ib. 469 ; Bacon on Beav. 355. Uses, 79; Burgess v. Wheate, 1 Eden, 1 Wright V. Miller, 8 N. Y. 9; 59 Am. Dec. 438. 116 *85 LAWFUL TRUSTS. [Ch.VU. S. 1. is now matter of daily occurrence in settlements by way of trust (6). 4. Contingent remainders. — At law, except in executory devises, a freehold contingent limitation must be sup- [*85] ported by a freehold particular estate, and * if the contingent limitation do not vest at the determina- tion of the particular estate, it is extinguished (a), but to trusts the rule is held not to be applicable, or, as the doctrine is expressed, the legal estate in the trustees is sufficient to support all the equitable interests (J). • 5. Limitations of chattels. — At law a chattel real can by executory devise only, and not by deed, and a chattel personal can neither by will nor by deed, be limited to one person for life, with a limitation over to another; but in trusts a chattel interest, whether real or personal, can be Stubjected to any number of limitations, provided there be no perpetuity (c). 6. Trusts for a church or chapeL — If a testator before the Statute of 'Mortmain (9 G. 2. c. 36) had devised to one that served the cure of a church, and to all that shoidd serve the cure after him, all the tithes, profits, &c. ; here, as the suc- cessive curates were not a body corporate, they were incapa- ble of taking the legal estate, but equity carried the intention into effect by way of trust, and decreed the devisee or heir to hold in trust for the persons intended to be benefited (d^. So on the erection of a chapel, the endowment cannot, with- out an act of parliament, be transmitted at law to the succes- sive preachers and their congregations, but the ordinary mode of accomphshing the object is by vesting the legal estate of the property in trustees (with a power of renewing their number on vacancies by death, &c.), upon trust to per- (6) See Duke of Norfolk's case, 3 the lord, there is no reason why the Ch. Ca. 35. limitations in remainder of the equi- [(o) But see now 40 & 41 Vict. c. table interest should not take efiect 33.] according to the intention of the tes- (6) Chapman v. Blissett, Cas. t. tator." Per M. R. Abhiss v. Burney, Talb. 145 ; Hopkms v. Hopkins, ib. 17 Ch. D. 211, 229.] 43. ["The principle is, that as the '(<=) See Lord Nottingham's obser- legal estate in the trustees fulfils all vations in Duke of Norfolk's case, 3 feudal necessities, there being always Ch. Ca. 32. an estate of freehold in existing per- (d) Anon, case, 2 Vent. 349. sons who can render the services to 116 Ch. Vll. S. 1.] TKUSTS FOE PAEISHIONEES. *86 mit the preacher and congregation for the time being to have the use and enjoyment of the chapel. 7. Trust for the poor of a parish. — The limitation of an estate to the poor of a parish would at law, be void (e), be- cause the rules of pleading require the claimants to bring themselves under the gift, and no indefinite multitude, without public allowance, can take by a general name ; but by way of trust they are capable of purchasing, for they assert no title in themselves, but only require the trustees to keep good faith (/) . 8. Trust of an advovrson for the parishioners. — Again, an ad- vowson cannot at law be given to a parish which is not a cor- porate body, but it may be vested in trustees, upon * trust for the '■'■parishioners and inhabitants," that is, [*86] the parishioners, being inhabitants (a) of a parish. A trust of this kind is not considered a charity, but is .admin- istered on the footing of an ordinary trust, and application must be made to the Court, not by way of information, but by action (6). The case of an advowson held in trust for a parish has been called an anomalous one. A valid trust, for the benefit of a parish or the parishioners for ever, cannot be made, except on the ground that it is a charity; and the reasoning by which it is sought to bring it under this head is, that the parishioners who elect get no personal benefit, but it is a mode of selecting the charity trustee, for the in- cumbent who performs divine service and ministers to the spiritual wants of the parish is in a large sense a trustee for the parish (c). 9. "Who shall elect the clerk. — From the infinite mischiefs 'arising from popular election (c?), the Court, where the settle- ment does not expressly give the election to the parishioners, (c) Co. Lit. 3, a. (c) Attorney-General v. Webster, (/) Glib, on Uses, 44. 20 L. R. Eq. 483, see 491. (a) Fearon v. Webb, 14 Ves. 24, ((i) See, in addition to the cases per Chief Baron M'Dunald; ib. 26, cited in the next note, the obser- per Baron Graham; Wainwright v. vations of Vice-Chancellor Knight Bagshaw, Kep. t, Hardwicke, by Bidg. Bruce, Attorney-General v. Cuming, 56, per Lord Hardwicke. 2 Y. & C. Ch. Ca. 158; and 19 & 20 (6) Attorney-General v. Forster, 10 Vict. c. 50, authorizing the sale of "Ves. 344; Attorney-General v. New- advowsons held upon trust for par- combe, 14 "Ves. 1 ; Fearon v. Webb, ishioners. ib. 19. 117 *87 TRUSTS OF ADVOWSONS. [Ch. VII. S. 1. or usage has not put such a construction upon the instru- ment, will infer the donor's intention to have been that the trustees should themselves exercise their discretion in the election of a clerk for the benefit of the parish (e) ; but if the language of the instrument, or the evidence of common usage, prevent such a construction, then the parishioners, as the eestuis que trust and beneficial owners of the advowson, will be entitled to elect, and the trustees will be bound to present the person upon whom the choice of the electors shall fall (/). Had the point been unprejudiced by decision, Lord Eldon doubted whether the Court could execute such a trust, at least otherwise than ey pris Qg), but, as authority has now clearly settled that the Court must undertake the trust, notwithstanding the difficulties attending it, the only subject for inquiry is, in what manner a trust of this kind will be executed. 10. Meaning of " parishioners and inhabitants." — The ex- pression " parishioners and inhabitants " is, in itself, [*87] * extremely vague, and has never acquired any very exact and definite meaning (a); but, this doubt re- moved, another question to be asked is, are women, children, and servants, who are parishioners and inhabitants, to be allowed to vote ? It seems the extent of the terms must be taken secundum subjectam materiam, with reference to the nature of the privilege which the eestuis que trust are to exercise (V), and, if so, none should be admitted to vote, who, from poverty, infancy, or coverture, are presumed not to have a will of their own (c). (c) See Edenborough v. Arch- ker, 3 Atk. 577 ; Attorney-General v. bishop of Canterbury, 2 Euss. 106, Forst«r, 10 Ves. 339, 342. See further 109; Attorney-General v, Scott, ^ 1 as to the Clerkenwell case, Carter v. Ves. 413 ; Attorney-General v. Foley, Cropley, 8 De G. M. & G. 680. By cited lb. 418. parishioners and inhabitants in vestry (/) Attorney-General v. Parker, 3 assembled are meant the persons who Atk. 577, per Lord Hardwicke ; Attor- by the existing law constitute the ney-General v. Forster, 10 Ves. 338, vestry. In re Hayle's estate, 31 Beav. 341, jo^r Lord Eldon ; Attorney-Gen- 139 ; and see Etherington v. Wilson, eral v. Newcombe, 14 Ves. 6, 7, per 20 L. B. Eq. 606, 1 Ch. D. 160. eundem. (J) See Attorney-General v. Fors- (,9) Attorney-General v. Forster, 10 ter, 10 Ves. 339. Ves. 340, 342. (c) See Fearon v. Webb, 14 Ves. (a) See Attorney-General v. Par- 27. 118 Ch. Vn. S. 1.] TRUSTS OP ADVOWSONS. *88 " Chiefest and discreetest." — In a case, where the election was given to " the inhabitants and parishioners, or the major part of the chiefest and discreetest of them," it was held, that by chiefest, was to be understood those who paid the church and poor rates, and by discreetest, those who had attained the age of twenty-one (c?) ; but Lord Hardwicke said, that, even where "parishioners and inhabitants" stood without any restriction at all, it was a reasonable limitation to confine the meaning to those who paid scot and lot, that is, who paid to church and poor (e) ; and so, in a previous case, it seems his Lordship had actually determined (/). The Court of Exchequer adopted a similar construction in the Olerhenwell Case (5^), though it does not appear how far the Court was guided in its judgment by the evidence of the common usage (K) ; and Lord Eldon, in a subsequent case, restricted the election to the same class (i), but his Lordship's decree was possibly founded on the circumstance, that those only who paid scot and lot were admitted to the vestry (Je) ; not that, for the purposes of election, the vestry is the representative of the parish (V), but in one of the oldest documents the trust was said to be for "the parish- ioners of the said parish at a vestry or vestries to be from time to time holdenfor the said parish " (rri). But where the instru- ment creating the trust contains merely the words " parishioners and * inhabitants," the Court will not [*88] confine the privilege of voting to those paying scot and lot, if it appears from constant usage that the terms are to be taken in a wider and more extensive signification, to include, for instance, all housekeepers, whether paying to the church and poor or not (a). (rf) Fearon v. Webb, 14 Ves. 13; (A) See ib. 110. (e) Attorney-General v. Parker, 3 (/) Attorney-General v. Parker, 3 Atk. 557; S. C. 1 Ves. 43. Atk. 578, per Lord Hardwicke; At- (/) Attorney-General a. Davy, torney-General v. Forster, 10 Ves. cited ib.; S. C. 2 Atk. 213. 340, 344, per Lord Eldon. (ji) Attorney-General v. Rntter, (m) See Edenborouglnj. Archbish- 'stated 2 Russ. 101, note. op of Canterbury, 2 Euss. 94. (A) See Attorney-General v. Fors- (a) Attorney-General v. Parker, 3 ter, 10 Ves. 345. Atk. 576; S. C. 1 Ves. 43. [Now (i) Edenborough v. Archbishop of that the compulsory payment of Canterbury, 2 Kuss. 93. church rates has been abolished by 119 *88 TRirSTS OF ADVOWSONS. [Ch. VII. S. 1. "Rate-payers." — By persons paying to the church and poor must be understood persons liable to pay, though they may not hare actually paid (V) ; but it seems to be a necessary qualification that they should have been rated (c), unless, perhaps, the name has been omitted by mistake (c?), or there is the taint of fraud (e). , 11. Mode of electing. — With respect to the mode in whiph the votes are to be taken, it is clear that the election cannot be conducted by ballot, not only on the general principle that the ballot is a form of proceeding unknown to the com- mon law of England (/), but also on the ground, that the right of voting in ,the election of a clerk is a privileg'e coupled with a pvilic duty, and the trustees have a right to be satisfied that the voters, in the exercise of their right, have fairly and honestly discharged their duty ; whereas in election by ballot there are no means of ascertaining for whom each particular elector voted (^). The choice of the candidate must therefore be determined by one of the modes known to the common law, viz. either by poll or a show of hands (A). However, the cestuis que trust may expressly agree among themselves that they will abide by the declaration of the result of the ballot, and will ask no questions how the in- dividual votes were given ; or such a contract may be inferred from long and clear antecedent usage (i). But it is said an agreement of this kind can apply only to each particular electidn as it occurs, for any one parishioner has a right 31 & 32 Vict. e. 109, paying such (A) See ib. 106, 110. [Some doubt rates cannot, it is conceived, be re- has, howerer, been thrown upon this garded as necessary in any case for a in the recent case of Shaw v. Thomp- qualification to vote.] son, 3 Ch. D. 233, in which V. C. (6) See Attorney-General v. Fors- Bacon intimated an opinion that as ter, 10 Ves. 839, 346. voting by ballot had become com- (c) Edenborough u. Archbishop mon, and no objection could now be of Canterbury, 2 Euss. 110. taken as in the case of Faulkner v. (d) Edenborough i>. Archbishop Elger, ubi sup. to a ballot on the of Canterbury, 2 Russ. 110. ground that it afforded no oppor- (c) S. C. ib. 111. tunity for a, scrutiny, an election by (/) Faulkner v. Elger, 4 Barn. & that means would be valid.] ' Cress. 449. (s) See Edenborough v. Arch- es') Edenborough v. Archbishop of bishop of Canterbury, 2 Russ. 105, Canterbury, 2 Russ. 105, 108, 109, per 106, 108, lOa Lord Eldon. 120 Ch. Vn. S. 1.] TRUSTS I*OK AOCXIMULATION. *89 to insist that the coming election shall be conducted on a different principle; it would be a bold thing to say, * that the parish of to-day could bind the parish [*89] of to-morrow to deviate from the original and legiti- mate mode (a). [Where an election had taken place, the Court, although of opinion that the proceedings in vestry determining the mode of election had been illegal and irregular, refused to set the election aside, on the ground that there was no evi- dence that the election itself had been improperly conducted, or that any voter had been prevented from recording his vote (6).] 12. Trusts for accumulation. — Again, upon principles founded on the Law of Tenure, the freehold in proesenti must be vested in some person in esse ; but under the sys- tem of trusts, which are wholly independent of feudal rules, a settlor may give directions for an accumulation of rents arid profits, and it does not vitiate the trust that there is no ascertained owner of the equitable freehold in possession (c). Trusts for accumulation must not lead to a perpetuity. — But trusts for accumulation must be confined within the limits established against perpetuities.^ A settlor is permitted (by (a) See 2 Euss. 106; [Shaw i^. (c) See Feame's C. E. by Butler, Thompson, 3 Ch. D. 233.] 537, note (a-) ; [Abbiss v. Bul-ney, 17 [(6) Shaw V. Thompson, 3 Ch. D. Ch. D. 211.] 233.] 1 Accumulations. — Trusts for accumulations must be kept within the requirements of the rule regarding perpetuities, but aside from those, the settlor may direct the disposition, or the accumulation of rents, profits and all income, so as to cut off the beneficial enjoyment of the trust property, for the same length of time that he can control the legal estate ; Killam v. Allen, 52 Barb. 605; Hillyard v. Miller, 10 Barr, 326; Hooper „. Hooper, 9 Cash. 122 ; Fosdick v. Fosdick, 6 Allen, 43 ; Thorndike v. Loring, 15 Gray, 391 ; if a party, even though not in existence at the time, have a vested right of pos- session, then the length of time of accumulation is immaterial, the direction to accumulate results rather in a restraint upon alienation, than a too lengthy period of accumulation ; Gray on Perpetuities, 401 ; Otis v. Coffin, 7 Gray, 611 ; if the accumulation is a condition precedent, or for too long a time, the provision is altogether void, as it cannot be varied ; Gray on Perpetuities, 402 ; Thorndike v. Loring, 15 Gray, 391 ; if a bequest is properly made, with an illegal direction to accumulate, the former may be held good, and the latter declared void ; Philadelphia v. Girard, 45 Pa. St. 1 ; Phelps v. Pond, 23 N. Y. 69 ; Craig v. Craig, 3 Barb. Ch. 76 ; Hawley v. James, 5 Paige, 318; but if the gift takes effect only after the accumulation, they must stand or fall together; 121 *90 TKtrSTS FOE ACCTTMITLATION. [Ch. VH. S. 1. analogy to the duration of a regular entail under a common law conveyance) to fetter the alienation of property for a life or lives in being and twenty-one years ; and the power of preventing the enjoyment of ■ property, by directing an accumulation of the annual proceeds, is restricted to the same period. If the trust exceed this boundaryit is void in toto, and cannot be cut down to the legitimate extent (-law (a) ; and if Qi) Bryan v. Collins, 16 Beav. 14 ; titled to the excess of the accumula- Tench v. Cheese, 19 Beav. 3. tions, but semble not as tenant for life, (i) Tench v. Cheese, 6 De G. M. & but as the testator's heiress-at-law. G. 453. In Shaw v. Rhodes, 1 M. & Cr. 135 ; (a) Eyre v. Marsden, 2 Keen, 564 ; S. C. by the title of Evans v. Hellier, Nettleton v. Stephenson, 3 De Gex & 5 CI. & Fin. 114, Thomas, the devisee Sm. 366 ; Edwards v. Tuck, 3 De G. subject to the accumulations, took M. & G. 40; Re Drakeley's Trust, 19 the excess beyond the limits of the Beav. 395 ; Green v. Gascoigne, 11 Jur. statute ; but James Shaw was proba- N. S. 145 ; S. C. 4 De G. Jon. & Sm. bly the testator's heir, and as James- 565 ; Smith v. Lomas, 10 Jur. N. S. had died before the institution of the 743; Talbot i>.Jevers, 20 L.R.Eq. 255; suit, Thomas, it is likely, thereupon and see GriflSths v. Vere, 9 Ves. 127. became the heir of the testator, and In Triekey v. Trickey, 3 M. & K. 560, took in that character. But see Re the testator's daughter was held en- Clulow's Trust, 1 J. & H. 648. *93 TBTTSTS FOE ACCUMULATIOK. [Ch. VII. S. 1. the resulting trust be a chattel interest, carved out of real estate, it will devolve, on the death of the heir, on the per- sonal representative of the heir (6) ; and if the resulting interest be an estate pur autre vie, it is the better opinion that it also goes to the heir's personal representative (c). But under the late Wills Act, 1 Vict. c. 26, s. 25, if the will contain a residuary devise, and there is no evidence of a contrary intention on the face of the will, the void accumu- lations will go to the residuary devisee. 15. In personal estate. — In personal estate, if there be a residuary legatee, the excess beyond the allowed period of accumulation will fall into the residue (ti), and where thfe residue is settled on A. for life, remainder to B., will form part of the capital (e). 16. Residue. — If the subject of the accumulation be the income of the residue itself, the void accumulation will, according to the nature of the residue, i.e., real or personal, result to the heir-at-law or to the next of kin (/). 17. Charge. — If an estate be devised subject to a void direction to accumulate in such terms that the void [*93] accumulation, if valid, would have *been construed a mere charge, it will, like any other charge which fails (a), sink for the benefit of the devisee (6). 18. Exceptions from the Act. — Lastly, the statute pro- vides, that "nothing in the Act contained shall extend to any provision for payment of debts (e) of any grantor, settlor, (6) Sewell v. Denny, 10 Beav. v. Goode, 14 Sim. 165; Bourne v. 315. Buckton, 2 Sim. N. S. 91 ; Edwards v. (c) Barrett v. Buck, 12 Jur. 771 ; Tuck, 3 De G. M. & G. 40 ; Mathews see Halford v. Stains, 16 Sim. 488, v. Keble, 4 L. R. Eq. 467 ; 3 L. R. Ch. contra. App. 691 ; Simmons v. Pitt, 8 L. R. (d) Haley v. Bannister, 4 Mad. Ch. App. 978 ; Talbot v. Jevers, 20 275 ; O'Neill v. Lucas, 2 Keen, 313 ; L. R. Eq. 255. [Weatherall v. Thorn- Webb V. Webb, 2 Beav. 493 ; At- burgh, 8 Ch. D. 261.] torney-General v. Poulden, 3 Hare, (a) See Tucker v. Kayess, 4 K. & 555; Jones v. Maggs, 9 Hare, 605; J. 339. Re Drakeley's Trust, 19 Beav. 395. (i) He Clulow's Trust, 1 J. & H. (e) Crawley v. Crawley, 7 Sim. 639 ; Combe v. Hughes, 34 Beav. 121 ; 427. 2 De G. J. & S. 657. (/) JI'Donald e. Bryce, 2 Keen, (c) Bateman w. Hotchkin, 10 Beav. 276 ; Eyre e. Marsden, 2 Keen, 564 ; 426. Pride v. Fooks, 2 Beav. 430; Elbome ; 126 Ch. Vn. S. 1.] TRUSTS FOR ACCUMULATION. *93 or devisor, or other person or persons, or for raising portions for any child of the settlor or devisorj or any person talcing an interest under the settlement or devise, or to any direc- tion touching the produce of timber or wood." The words " any other person or persons " authorize a grantor, settlor, or devisor to provide for the debts of any stranger whom- soever (d) ; and the exception in the statute extends to liabilities of a testator though no debt had actually accrued at the time of his death (e). By children must, of course, be understood exclusively legitimate children (/). And the accumulation to be protected by the clause must be a provision for raising portions out of the corpus, not an accumulation of the corpus itself, for the purpose of making a gift of the aggregate fund (^), and must be a provision for children certain, and not a chance limitation in favour of any child that may happen to survive certain persons not necessarily standing in the relation of parent and child, but uncles or aunts, &c. (A). By "taking an interest under the devise " is meant a substantial interest. A small annuity, for instance, to the parent, would not justify an accumula- tion of the residue of the rents beyond the limits of the Act for raising portions for the children (i) ; and it was once considered that it was necessary that an interest should be taken not merely under the will generally, but under the particular gift, devise or bequest, which contained the pro- vision for accumulation (^) ; but this view has been since overruled, so that now, if the person take a substantial interest in any property, under the will, it is sufficient (0- (rf) See Barrington v. Liddell, 2 427, this was said to be " a shadowy De G. U. & G. 497 ; 10 Hare, 415. distinction." (e) Varlo v. Faden, 27 Beav. 255. (A) Burt v. Sturt, 10 Hare, 418. (/) Shaw V. Rhodes, 1 M. & Cr. (t) Shaw , . Rhodes, 1 M. & Cr. 135, see 159. 159; and see Bourne v. Buckton, 2 (g) Eyre v. Marsden, 2 Keen, 564 Bourne v. Buckton, 2 Sim. N. S. 91 Edwards v. Tuck, 3 Be G. M. & G. 40 ; Jones ' v. Maggs, 9 Hare, 605 Wildes V. Davies, 1 Sm. & Gif. 475 Sim. N. S. 91 ; but see Evans v. Hel- lier, 5 CI. & Fin. 127 ; Barrington v. Liddell, 2 De G. M. & G. 500 ; Edwards ... Tuck, 3 De G. M. & G. 63. (t) Bourne v. Buckton, 2 Sim. N. Watt V. Wood, 2 Drew & Sm. 56 ; and S. 91, see 101 ; Morgan v. Morgan, 4 see Beach v. St. Vincent, 3 De Gex & De Gex & Smale, 164. Smale, 678. In Burt v. Sturt, 10 Hare, (/) Barrington v. Liddell, 10 Hare, 127 *94 XTNLAWFTTL TRUSTS. [Ch. VU. S. 2. The portions intended by the Act are not necessarily [*94] * portions created by the deed or will directing the accumulation, but may be portions pre-existing (a). [19. Direotion to keep up a policy. — A direction by will to pay out of the income of the testator's property the premiums on a policy of assurance effected on the life of another per- son by the testator in his lifetime, or to be effected after his death on the life of a person in esse at his death is not an accumulation within the Act, and may be continued after the expiration- of 21 years from the testator's death (&).] 20. Scotland and Ireland. — Scotland was expressly excepted from the Act ; but it has since been extended to it by 11 & 12 Vict. c. 36, s. 41. As the statute was passed a short time before the union with Ireland, Irish estates are not affected by it (c). But where the rents of Irish property belonging to a domiciled Englishman were directed to be accumulated and become part of the personal estate, it was held that although the rents theinselves might be invested for more than twenty- one years, the income arising from their iuTestment could not be accumulated (. Blake, 30 N. J. Eq. 689. An express trust was created by deed " upon trust and confidence and for sole use and benefit of " wife for life, remainder to children ; McCarthy u. McCarthy, 74 Ala. 546 ; a written agreement by officers of a mining company to give a party a certain share in mining land for services is good ; Compo v. Jackson Iron Co. 49 Mich. 39 ; likewise a conveyance of land in trust to rent and sell and pay the proceeds to grantor for life, and then to those named ; Heermars v. Schmaltz, 10 Biss. C. C. 323; Effect of Jtabendum clause in deed; McElroy v. McElroy, 113 Mass. 509 ; trust created by nota bene after deed ; Ivory v. Bums, 56 Pa. St. 300 ; by deed on condition ; Baldwin «. Atwood, 23 Conn. 367 ; by a deposit in trust for L; Weber v. Weber, 9 Daly (N. Y.) 211 ; Smith v. Speer, 34 N. J. Eq. 336 ; widow set apart >i portion of money received from husband's life insurance for her daughter, orally, and then purchased land. A trust arose for the daughter; Cobb v. Knight, 74 Me. 253; an instrument gave, granted and conveyed to grantee to hold to her use and benefit, reserving the light to manage and collect, thereby creating an irrevocable trust ; Walker v. Crews, 73 Ala. 412. For cases where trust was created, see Schlessinger v. Mallard, 70 Cal. 326 ; Corse V. Leggett, 25 Barb. 389; Pratt v. Thorton, 28 Me. 355; Fletcher v. Derrickson, 3 Bosw. 181 ; Conway v. Kinsworthy, 21 Ark. 9 ; Noble v. Morris, 24 Ind. 478 ; contra, Bacon v. Ransom, 139 Mass. 117 ; Bibb v. Hunter, 79 Ala. 351 ; Fussell v. Hennessy, 14 R. I. 550 ; YSTiite v. Farley, 81 Ala. 563. As to establishing an express trust by parol, see Hellman v. Mc Williams, 70 Cal. 449 ; Taylor v. Sayles, 57 N. H. 465 ; Columbus &c. R. W. Co. v. Braden, 110 Ind. 558; Green v. Gates, 73 Mo. 115; Belknap v. Caldwell, 82 Ind. 270; Cade V. Davis, 96 N. C. 139 ; Kane v. O'Conners, 78 Va. 76 ; Preston v. Casner, 104 111. 262; HoUinshead's App. 103 Pa. St. 158; Link v. Link, 90 N. C. 286; Cain w.Cox, 23 W. Va. 594; Gilman v. McArdle, 99 N. Y. 451; Crouse .;. Frothingham, 97 N. Y. 105 ; Grace v. Hanks, 57 Tex. 14. Executed and executory trusts. — If a will or deed set forth a trust so defi- nitely that it only remains for the trustee to execute it as directed, it is termed an executed trust, and is subject to the rules controlling legal estates ; but it a trustee receive a trust which is subject to future events or contingencies, and the directions regarding it are informal an^ incomplete, it is c^led an 148 Ch. VTII. S. 1.] EXPEESS TRUSTS. *109 2. Equitable fee may be devised -without the -word heirs ap- plied to it. — Case of a deed. — If an estate be devised unto and to the use of A. and his heirs, upon trust for B,, without executory trust, because it must be shaped or adapted to the intentions of the testator or settlor; City Phila. o. Girard, 45 Pa. St. 9; 84 Am. Dec. 470; Gushing o. Blake, 30 N. J. Eq. 689; Edmundson v. Dyson, 2 Kelly, 307; Schley v. Lyon, 6 Ga. 530 ; MuUany v. MuUany, 40 N. J. Eq. 16. It is to be noticed of executory contracts that the intention of the settlor governs ; Wood V. Burnham, 6 Paige, 513 ; and there must be some opportunity for an exercise of judgment in determining his intention ; McElroy v. McElroy, 113 Mass. 509; the beneficiary is not yet clothed with an equitable title, but has a right to have some act done which will vest in him such title ; Nicoll «. Ogden, 29 111. 323; 81 Am. Dec. 311. nA trust is executed when no act is necessary to give it effect, and the trust is fully and finally declared in the instrument, in which case the consideration is not material; Massey v. Huntington, 118 lU. 80; Buchanan i^. Howard, 3 Tenn. Ch. 206 ; where an active duty is imposed on the trustee, the trust Is not executed until the duty has been, or may have been, performed ; Sprague V. Sprague,^ 13 E. I. 701 ; or until the full beneficial enjoyment rests; Kay v. Scates, 37 Pa. St. 31. A trust is executory where something remains to be done by the trustee ; Schley v. Lyon, 6 Ga. 530 ; such a trust will not be executed at the suit of a volunteer ; Clark v. Durand, 12 Wis. 223 ; executory or imperfect trusts are only directory, and, if necessary, a Court of Equity will determine the inten- tion of the settlor from an examination of the whole instrument ; MuUany v. MuUany, 4 N. J. Eq. 16 ; an executory agreement to create a trust will not be enforced ; Est. of Webb, 49 Cal. 542 ; or an unexecuted trust if without consideration ; Badgley c. Votrain, 68 111. 25. See, also, Padfield v. Pad- fleld, 68 III. 210 ; Boyd o. England, 56 Ga. 598 ; Eaton v. Eaton, 35 N. J. Eq. 290; Tanner v. Skinner, 11 Bush, 120. Marriage articles and settlements. — A settlement will be made according to the intention of the parties, if possible ; Allen v. Eumph, 2 Hill. Eq. 1 ; Gause v. Hale, 2 Ired. Eq. 241. If it be of personal property, which is con- veyed before marriage, it will be regarded as executed ; Tillinghast v. Cog- geshall, 7 K. I. 383. Primogeniture and preferences to the eldest son ara abolished in America, and so is joint tenancy in most of the states. If a set- tlement does not conform to the decree in the case, the court will insist upon having it made to do so ; Temple v. Hawley, 1 Sandf . Ch. 154 ; Grout v. Van Schoonhoven, 1 Sandf. Ch. 342 ; generally speaking, mere volunteers cannot seek specific performance of the articles ; Clark v. Durand, 12 Wis. 223 ; Tan- ner V. Skinner, 11 Bush, 120 ; Gevers v. Wright, 3 Green. Ch. 330 ; Bunn v. Win- throp, 1 Johns. Ch. 336 ; Bleeker v. Bingham, 3 Paige, 246 ; but if it appears from the articles that collateral relatives may take the property, they will not be regarded as volunteers; Dennison ?'. Goehring, 7 Barr. 175; King v. Whitely, 10 Paige, 465 ; Neves v. Scott, 9 How. 210; overruled in 13 How. 268. Executory trusts created by will. — In these there is no presumption as to the intention of the testator ; Robertson v. Johnston, 36 Ala. 197 '; MoPherson V. Snowden, 19 Md. 197 ; Allen v. Henderson, 49 Pa. St. 333. An executory agreement to create a trust cannot be enforced ; Est. of Webb, 49 Cal. 542 ; an executed express trust not manifested by writing is incapable of legal recognition; Eaton v. Eaton, 35 N. J. L. 290. An unexe- cuted trust, without consideration or delivery, will not be enforced ; Badgeley 149 *109 EXPRESS TETISTS. [Ch. VIII. S. 1. any words of limitation, B. takes the equitable fee ; for tHe whole estate passed to the trustees, and whatever interest they took was given in trust for B. (a). But if an estate be con- veyed by deed unto and to the use of a trustee and his heirs, in trust for the settlor for life, and after his death upon trust for his children simply, without the word heirs, [or, in deeds executed since the 31st December, 1881, the words " in fee simple " or "in tail" (5)], the children by analogy to legal limitations take an estate for life only (c). Should renewable leaseholds for lives be conveyed by deed to trustees and their heirs upon trust for A., it has been held that from the nature of an estate pur autre vie, A. takes the absolute interest (cT). 3. Force of technical terms. — But though technical terms be not absolutely necessary, yet where technical terms are employed they shall be taken in their legal and technical sense (e). Lord Hardwicke indeed once added the qualifi- cation, '■'■unless the intention of the testator or author of the trust plainly appeared to the contrary (/)." But this posi- tion has since been repeatedly and expressly overruled, and at the present day it must be considered a clear and settled canon that a limitation in a trust, perfected and declared by (a) Moore v. Cleghom, 10 Beav. (d) McCIlntock v. Irvine, 10 Ir. Ch. 423 ; affirmed on appeal, 12 Jurist, 591 ; Rep. 481 ; Brenan v. Boyne, 16 tr. Ch. Knight V. Selby, 3 Man. & Gr. 92; Rep. 87;. Betty v. ElHott, ib. 110, Challenger v. Sheppand, 8 T. R. 597 ; note ; Re Bayley, 16 Ir. Ch. Rep. 215 ; Tarrowt). Knightly, 8 Ch.D. 736; and [Currin u. Doyle, 3 L. R. Ir. 265;] see Doe v. Cafe, 7 Exch. Rep. 675 ; and see post, chap, xxvii. s. 1. Watkjns v. Weston, 32 Beav. 238 ; (e) Wright v. Pearson, 1 Eden, 125, Ryan v. Keogh, 4 I. R. Eq. 357 ; Hod- per Lord Henley ; Austen v. Taylor, son V. Ball, 14 Sim. 558. 1 Ed. 367, per eundem ; Synge v. Hales, [(6) 44 & 45 Vict. c. 41, s. 51.] 2 B. & B. 507, per Lord Manners; (c) Holliday v. Overton, 14 Beav. Jervoise v. Duke of Northumberland, 467 ; 15 Bear. 480 ; 16 Jur. 751 ; IJ. & W. 571, per Lord Eldon ; Lord Lucas V. Brandreth (No. 2), 28 Beav. Glenorchy v. BosviUe, Cas. t. Talb. 19, 274 ; Tatham v. Vernon, 29 Beav. 604 ; per Lord Talbot ; Bale v. Coleman, 8 [Lysaght v. M'Grath, 11 L. R. Ir. 142 ; Vin. 268, per Lord Harcourt ; [Meyler Meyler v. Meyler, 11 L. R. Ir. 522 ;] v. Meyler, 11 L. R. Ir. 522.] Middleton v. Barker, 29 L. T. N. S. (/) Garth v. Baldwin, 2 Ves. 655. 643. V. Volrain, 68 Bl. 25; see Padfield «. Padfield, 68 111. 210. Trust is not exe- , cuted until the full beneficial enjoyment vests ; Kay v. Scates, 37 Pa. St. 31 ; Harley v. Platts, 6 Rich. 310 ; Carradine v. Carradine, 33 Miss. 698 ; the legal title does not vest in the cestui que trust until the termination of the trust ; Boyd V. England, 56 6a. 598. 150 CH.VIII. S. 1.] EXECUTORY TRUSTS. *110 the settlor, must have the same construction as in the case of a legal estate executed (c/). 4. Rule in Shelley's case applicable to trusts. — As the rule in Shelli/'s case is not one of construction, that is, of inten- tion, but of law, and was established to remedy certain mis- chiefs, which, if heirs were allowed to take as pur- chasers, * would be introduced into feudal tenures ; [*110] it might be thought, that, as. trusts are wholly inde- pendent of tenure, they ought not to be affected by the operation of the rule ; and the cases of Withers v. AU- ggod (a), and Bagshaw v. Spencer (J), seem to lend some countenance to the doctrine. But not to mention that Lord Hardwicke himself appears in Garth v. Baldwin (c) to have doubted the position advanced by him in Bagshaw v. Spen- cer, other subsequent authorities have now established the principle, that although the rule may not be equally appli- cable to trusts, it shall be equally applied (cZ). But in order to Vest the fee in the ancestor under this rule, the word "heir" must be used, not in thesense persona (j) Wright V, Pearson, 1 Eden, 125 ; Austen v. Taylor, ib. Ji67 ; and see Brydges v. Brydges, 3 Ves. jun. 125 ; Jeryoise v. Duke of Northum- berland, IJ. & W. 571. (a) Cited in Bagshaw v. Spencer, 1 Ves. sen. 150; 1 Coll. Jur. 403. ((>) 1 Ves. sen. 142; 1 Coll. Jur.378 (c) 2 Ves. 646. (d) Wright K. Pearson, 1 Eden, 128, Brydges v. Brydges, 3 Ves. 120 ; Jones V. Morgan, 1 B. C. C. 206; Webb v. Earl of Shaftesbury, 3 M. & K. 599 ; Roberts v. Dixwell, 1 Atk. 610; West, 536 ; Britton v. Twining, 3 Mer. 176 ; Spence v. Spenoe, 12 C. B. N. S. 199^; Cooper V. Kynock, 7 L. R. Ch. App. 398 ; Collier v. Walters, 17 L. R. Eq. 252; Hervey v. Hervey, W. N. 1874, p. 41 ; Drew v. Maslen, W. N. 1874, p. 65; Batteste v. Maunsell, 10 I. R. Eq. 97, on App. 314 ; [fle White and Hindle's Contract, 7 Ch. J). 201.] Coape V. Arnold, 2 Sm. & Gif. 311, may appear to militate against the general rule, but the true ground of the decision was this : The codicil was made for a particular purpose, viz., for securing the jointure, and as it con- firmed the will in all other respects, the testator's intention evidently was, that after securing the jointure, the trustees of the codicil should convey the estate to the uses declared by the will. It was, therefore, an executory trust, and the question was not wheth- er in mere equitable estates a life interest resulting to the heir-at-law would unite with a limitation to the heirs of his body, but whether accord- ing to the true construction of the will the settlement was not meant to be executed in such a form as to make the heirs of his body purchasers. In this light the question was one of intention, and not of legal operation. The case was subsequently aflSrmed on appeal by Lord Cranworth, and it is conceived substantially, though not in terms, upon the ground above in- dicated as the true principle : see 4 De G. M. & G. 574. 151 *111 EXECUTORY TRUSTS. [Ch. VHI. S. 1. designata, i. e. a particular individual, but as a term of suc- cession, so as to transmit the estate to the heir for the time being forever. If, therefore, land be devised to a trustee in trust for A. for life, and after his decease in trust for the person who shall then be his heir or heiress and his or her heirs, in this case A. takes a life estate only, and the heir or heiress takes the fee simple by purchase (e) ; and of course the rule does not apply, if the legal estate be vested in trus- tees for the life of A. in trust for him, and the legal remain- der after the death of A. be limited to the heirs of A.'s body, for here, as the life estate and the remainder are of different qualities (viz., one equitable and the other legal), they can- not unite (/)). [*111] * 5. Trusts executed and trusts executory distin- guished. — We have said, that if technical words be employed, they must be taken in their legal and technical sense ; but as to this a distinction must be drawn between trusts executed, and trusts that are only executory ; for to trusts executed the position is strictly applicable, but in th^ case of trusts that are executory it must be received with considerable allowance. A trust executed is where the limitations of the equitable interest are complete and final ; in the executory trust, the limitations of the equitable - interest are intended to serve merely as minutes or instructions for perfecting the settle- ment at some future period (a). The tw-Q confounded by Lord Hard'wicke in Bagsha-w v. Spencer. — The distinction we are considering was very early established, and was recognized successively by Lord Cowper (5), Lord King (e). Lord Talbot (d), and by no one more frequently than by Lord Hardwibke himself (e) : (e) Greaves v. Simpson, 10 Jur. (c) Papillon v. Voice, 2 P. W. 471. N. S. 609. Id) Lord Gleuorchy v. Bosville, (/) Collier v. MoBean, 34 Beav. Cas. (. Talb. 3. 426. (e) Gower v. Grosvenor, Barnard, (a) See Egerton v. Earl Brown- 62; Roberts o. Dixwell, 1 Atk. 607 ; low, 4 H. L. Cases, 210; Tatham v. BaskervilleK.BaskervlUe,2 Atk.279; . Vernon, 29 Beav. 604. Marryat v. Townley, 1 Ves. 102 ; Read (i) Bale P. Coleman, 8 Vin. 267 ; v. Snell, 2 Atk. 648 ; Woodhouse v. Earl of Stamford v. Sir John Hobart, Hoskins, 3 Atk. 24. 3 B. P. C. 33. 162 Ch. Vm. S. 1.] EXECUTORY TETTSTS. *H2 yet in Bagshaw v. Spencer (/) Lord Hardwicke almost denied that any such distinction existed. But in a subse- quent case (^) his Lordship felt himself called upon to offer some explanation. "He did not mean," he said, "in Bag- shaw V. Spencer, that no weight was to be laid on the dis- tinction, but 'that, if it had come recently before him, he should then have thought there was little weight in it, al- though he should have had that deference for his .predeces- sors, as not to lay it out of the case, not intending to say that all which his predecessors did was wrong founded, which he desired raight be remembered." The distinction now established. — But whatever doubts may formerly have existed upon the subject, they have long since been dispelled by the authority of succeeding judges. " The words executory trust," said Lord Northington, " seem to me to have no fixed signification. Lord King de- scribes an executory trust to be, where the party must come ^o this Court to have the benefit of the will. But that is the case of every trust. The true criterion is this. Wher- ever, the assistance of this Court is necessary to complete a limitation, in that case, .the limitation in the will not being complete, that is sufficient evidence of the testator's inten- tion that the Court should model the limitations ; but where the trusts and limitations are * already ex- [*112] pressly declared, the Court has no authority to inter- fere, and make them different from what they would be at law " (a). And Lord Eldon observed, " Where there is an executory trust, that is, where the testator has directed something to be done, and has not himself completed the de- vise, the Court has been in the habit of looking to see what was his intention ; and if what he has done amounts to an imperfection with respect to the execution of that intention, the Court inquires what it is itseK to do, and it will mould what remains to be done, so as to carry that intention into (/) 1 ^^8- 152 ; and see Hopkins renounced his opinion, Barnard v. V. Hopkins, 1 Atk. 694. Proby, 2 Cox, 8. (g) Exeli). Wallace, 2 Ves. 323. (o) Austen ». Taylor, 1 Eden, 366, And Lord Henley once said, he he- 368 ; and see Stanley v. Lennard, ib. lieved Lord Hardwicke had at last 95 ; Wright v. Pearson, ib. 125. 153 *112 EXECUTORY TETJSTS. [CH.Vm. S. 1. execution" (5). [And in a recent case the late M. R. ob- served " It is called an executory trust, where the testator instead of expressing exactly what he means, that is, filling up the terms of the trust, tells the trustees to do their best to carry out his intention. In that way it is executory, that if he has not put into words the precise nature of the limita- tions, he has said in effect, ^ Now there are my intentions^, do your best to carry them out ' " (c).J 6. Szecutory trusts, in marriage articles distinguished from the like trusts in wills. — We proceed to the inquiry to what extent in executory trusts a latitude of construction is ad- /missible ; and to draw the line correctly, we must again dis- tinguish between executory trusts in marriage articles, where the Court has a clue to the intention from the very nature of the contract, and executory trusts' in will&, where the Court knows nothing of the object in view a: priori, but in collect- ing the intention must be guided solely by the language of the instrument. Occasionally confounded. -^ This distinction was at first but very imperfectly understood. Because executory trusts un- der wills admitted a degree of latitude, it was held by some, they were to be treated precisely on the same footing as executory trusts in marriage articles ; while, because trusts under wills did not admit an equal latitude of construction, it was held by others that they were not to be distinguished from trusts executed (cZ). Even Lord Eldon once observed, "There is no difference in the execution of an executory trust created by will, and of a covenant in marriage articles ; such a distinction would shake to their foundation the rules of equity " (/). But Lord Manners said he could not assent to this doctrine (/) ; and Lord Eldon some time after took an opportunity of correcting himself {(f). (6) JeiToise v. Duke of Northum- (e) Countess of Lincoln v. Duke berland, 1 J. & W. 570 ; and see of Newcastle, 12 Ves. 227, 230 ; and Coape a. Arnold, 4 De 6. M. & G. see Turner v. Sargent, 17 Beav. 585. 519. [(c) Miles .;. Harford, 12 Ch. D. (/) Stratford v. Powell, 1 B. & B. 691, 099.] 25 ; Synge w. Hales, 2 B. & B. 508. (d) See Bale v. Coleman, 8 Vin. (j) Jervoise v. Duke of Northum- 267. berland, 1 J. & W. 574. 154 Ch. Vm. S. 1.] EXBCUTOEY TRUSTS. *113 * Distinction drawn by Sir W. Grant. — The distinc- [*113] tion we are considering has been put in a very clear light by Sir W. Grant. " I know of no difference," he said, " between an executory trust in marriage articles and in a will, except that the object and purpose of the former furnish an indication of intention which must be wanting in the lat- ter. Where the object is to make a provision by the settle- ment for the issue of a marriage, it is not to be presumed that the parties meant to put it in the power of the father to defeat that purpose, and appropriate the' estate to himself. If, therefore, the agreement be to limit an estate for life, with remainder to the heirs of the body, the Court decrees a strict settlement in conformity to the presumable intention. But if a will directs a limitation for hfe; with remainder to the heirs of the body, the Court has no such ground for decree- ing a strict settlement" (a). 7. " Heirs of jthe body " in articles construed first and other sons. — To apply the foregoing distinction to the cases that have occurred : if in marriage articles the real estate of the husband or wife be limited to the heirs of the body, or the issue (6) of the contracting parties, or either of them, or to the heirs of the body, or issue and their heirs (c), so that heirs of the body, or issue, if taken in their ordinary legal sense, would enable one or other of the parents to defeat the provision intended for the children, these words will then be construed in equity to mean first and other sons ; and the settlement will be made upon them suceessivelj' in tail, as purchasers (d). Distinction 'where the settlement was after the marriage, and where before It. — If the settlement has been already made, (o) Blackburn v. Stables, 2 V. & B. (c) Phillips v. James, 2 Drew. & 369; and see Maguire v. Scully, 2 Sm. 404. Hog. 113 ; Rochford u. Mtzmaurice, (d) Handick v. Wilkes, 1 Eq. Ca. 1 Conn. & Laws. 173 ; 2 Drur. & War. Ab. 393 ; Trevor v. Trevor, 1 P. W. 18; 4 Ir. Eq. Rep. 375; Sackville- 622; Jones w. Langton, 1 Eq. Ca. Ab. West V. Viscount Holmesdale, 4 L. R. 392 ; Cusack v. Cusack, 5 B. P. C. H. L. 943; Scarisbrick v. Lord Skel- 116; Griffitlj ,.. Buckle, 2 Vem. 13; mersdale, 4 T. & C. 117. Stoner v. Curwen, 5 Sim. 269, per Sir (6) Dod fc. Eod, Arab. 274; Grier L. Shadwell; Davies v. Davies, 4 t). Grier, 5 L. R. H. L. 688. Beay. 54 ; Rochford v. Fitzmaurice, ubi supra. 155 *114 EXECTJTOKY TRUSTS. [Ch. VIII. S. 1. then, provided tlie execution of it was after the marriage, it will be rectified by the articles (e) ; but if the execution of it was prior to the marriage, the Court will presume the par- ties to have entered into a different agreement (/), unless the agreement expressly state itself to be made in pur- suance of the articles, when that presumption will [*114] be * rebutted, and the settlement will be rectified (a), or unless it can be otherwise shown that the set- tlement was intended to be in conformity with the articles, and there is clear and satisfactory evidence that the dis- crepancy has arisen from mistake (J). Iiimitation of the husband's property to the heirs of the body of the wife. — Under the law as it stood prior to the Fines and Recoveries Act (c), a strict settlement was not decreed, where the property of the husband was limited to the heirs of the body of the wife; for this created an entail which neither husband nor wife could bar without the concurrence of the other, and the intent might have been, that the hus- band and the wife jointly should have the power of destroy- ing the entail (d') ; but it is conceived, that as to articles executed subsequently to the Act referred to, the case ^ould be otherwise (e). | "Where the settlement also contains a limitation to the parent for life, -with remainder to first and other sons in tail — Nor will the Court read heirs of the body as first and other sons, where such a construction is negatived by anything in the articles themselves : as if one part of an estate be limited to (e) Streatfield v. Streatfleld, Cas. (6) Bold v. Hutchinson, 5 De G. t. Talb. 176 ; Warrick v. Warrick, 3 M. & G. 565. Atk. 293, per Lord Hardwicke ; Legg (c) See 3 & 4 W. 4. c. 74, ss. 16, 17. V. Goldwire, Cas. t. Talb. 20, per Lord (d) Howel v. Howel, 2 Ves. 358; Talbot ; Burton v. Hastings, Gilb. Eq. Whateley v. Kemp, cited ib. ; Honor Eep. 113 ; S. C. 1 Eq. Ca. Ab. 393, v. Honor, 1 P. W. 123 ; Green v. Ekins, overruled. 2 Atk. 477, per Lord Hardwicke; (/) Legg V. Goldwire, Cas. t. Tal- Highway v. Banner, 1 B. C. C. 587, bot, 20 ; and see Warrick v. Warrick, per Sir L. Kenyon ; Sackvillc-West v. 3 Atk. 291. Viscount Holmesdale, 4 L. R. H. L. (a) Honor v. Honor, 1 P. W. 123; 555, per Lord Hatherley. Roberts «. Kingsley, 1 Ves. 238 ; West (e) Eocbfort v. Fitzmaurice, 2 0. Errissey, 2 P. W. 349 ; but not it Drur. & War. 19. seems against a purchaser, Warrick D.Warrick, 2 Atk. 291. 156 CB.VIII. S. 1.] EXECUTORY TRUSTS. *115 the husband for life, remainder to the ■ftrife for life, remainder to the first and other sons in tail, and another part be given to the husband for life, remainder to the heirs male of his body ; for, as it appears the parties knew how a strict settle- ment should be framed, the limitation of part of the estate in a different mode could only have proceeded from a dif- ferent intention (/). 8. Heirs female. — It was formerly argued, that daughters in marriage articles were not entitled to the same considera- tion as sons, on the ground that they do not, like sons, con- tinue the name of the family, and are generally provided for, not by the estate itself, but by portions out of the estate; but it is now clearly settled, that, as they are purchasers under the marriage, and are entitled to some provision, the Court will in their favour construe heirs female to mean daughters (^r) ; and unless the articles themselves make an express provision for them by way of portion, &c. (A), will hold dalughters, as well as sons, to be included under the general term of heirs of * the body (a), or [*115] issue (5). And the settlement will be executed on the daughters, in default of sons, as tenants in common in tail general, with cross remainders between them (c). 9. Iiimitation of chattels to heirs of the body. — If chattels be articled to be settled on the parents for life, and then on the heirs of the body of either, or both, it seems the chattels will not vest absolutely in the parents, but in the eldest son as the heir, though taking by purchase, and if there be no son, in the daughters as co-heiresses (cZ) ; and for the son or daughters to take, it is not necessary that they should survive the parents and become the actual heir (e), unless there be (/) Howel V. Howel, 2 Ves. 359; (6) Hart ». Middlehurst, 3 Atk. and see Powell ». Price, 2 P. W. 585; 371; and see Maguire v. Scully, 2 Chambers i-. Chambers, Fitzgib. Rep. Hog. 113 ; S. C. 1 Beat. 370. 127; S. C. 2 Eq. Ca. Ab. 35 ; Rochf ord (c) See Marryat v. Townley, 1 Ves. V. Fitzmauriee, 1 Conn. & Laws. 174. 106; Phillips ». James, 4 Drew. & Sm. (<7) West V. Errissey, 2 P. W. 349. 404. (A), Powell V. Price, 2 P. W. 535 ; (i) Hodgeson t7. Bussey, 2 Atk. 89; and see Mr. Feame's obserTations, S. C. Barm. 195. See Bartlett u. Conting. Rem. 103. Green, 13 Sim. 218. (a) Burton v. Hastings, Gilb. Eq. (e) Theebridge v. Eilbume, 2 Ves. Rep. 113 ; S. C. 1 Eq. Ca. Ab. 393, per 233. Lord Cowper. 157 *116 EXECUTORY TETJSTS. [Ch. Vm. S. 1. words in the articles to give it to the heirs of the body living at thfe death of the surviving parent, as " if the parent die without leaving heirs of the body" (/)• 10. Articles to settle chattels on same trusts as resd estate. — ' Again, if in marriage articles, a party covenant to settle per- sonal estate upon the trusts, and for the. intents and purposes, upon and for which the freeholds are settled, the Court will not apply the limitations to the personal estate literally, the effect of which would be to vest the absolute interest in remainder in the first son on his birth, but will insert a pro- viso that will have the effect, at least to a certain extent, of making the personal estate follow the course of the real. Iiimitations over on dying under 21, or under 21 without issue. — Sir Joseph Jekyll said, the practice of conveyancers was to insert a limitation over on " dying under 21 " {g) : but Lord Hardwicke conceived the common limitation over to be on "dying under 21 without issue "(A). In The Duke of' Newcastle v. The Countess of Lincoln (i), the chattels were articled to be settled to the same uses as the realty, viz. to A. for life, remainder to A.'s first and other sons in tail male, remainder to B. for life, remainder to B.'s first and other sons in tail male, remainders over. A. died, having had a son who lived only nine months. Lord Loughborough held that the leaseholds had not vested absolutely in the deceased son of A., and ordered a proviso to be inserted in the settlement, that they should not vest absolutely in any son of B. who should not attain 21 or die under that age leaving [*116] issue male. From this decision an * appeal was carried to the House of Lords (a) ; but, before the cause could be heard, a son of B. having attained 21, the decree was, that the son of B. had become absolutely en- titled. Thus the House of Lords decided that the absolute interest had not vested in the first tenant in tail on his birth ; but what proviso ought to have been inserted, whether a limitation over "on dying under 21," or "on dying under 21 without issue male," the House in the event was not called (/) Read v. Snell, 2 Atk. 642. (i) 3 Ves. 387, see the observations Ig) Stanley v. Leigh, 2 P. W. 690. pp. 394, 397 ; and see Scarsdale v. (A) Gower v. Grosvenor, Barn. 63; Curzon, 1 J. & H. 51, 54. S. C. 6 Mad. 348. (a) 12 Ves. 218. 158 Ch. Vin. S. 1.] BXBCXJTOEY TEUSTS. *117 upon to determine. The order of the House of Lords in this case was made with the approbation of Lord Ellen- borough and Lord Erskine (who took part in the debate), and also of Lord Thurlow (J). But Lord Eldon denied before the House that there was any distinction between articles and wills, and therefore relying upon Foley v. Bur- nell and Vaughan v. Burslem, two cases upon wills decided by Lord Thurlow, he said, had the cause come originally before him, he should have decreed the absolute interest to have vested in the eldest child upon birth; that assignments had been made of leasehold property under a notion that a son when born would take an absolute interest ; and, were the House to sanction the decree of Lord Loughborough, it would shake a very large property (c). However, his Lord- ship conceived that Lord Hardwicke's doctrine was originally the best, and therefore, recollecting the opinion of that great Judge, the opinion of Sir Joseph Jekyll, and the decision of the Court below, and knowing the concurrent opinions of Lord Ellenborough and Lord Erskine, and also the opinion of Lord Thurlow (whose present sentiments, however, he could not reconcile with the cases of Foley v. Burnell and Vaughan v. Burslem, formerly decided by his Lordship) (<£), he bowed to all these authorities; and, though he was in some degree dissatisfied with the determination, he neverthe- less would not move an amendment (e). Personalty caunot be knit to realty entirely. — It must be observed that a settlement of the personalty cannot be made exactly analogous to a settlement of the realty, whether the limitation adopted be "on dying under 21," or "on dying under 21 without issue." For if the former be supposed, then, the object of the articles being to knit the personal estate to the freehold, if the son die under age leaving issue who will succeed to the freehold, the two estates will go in different directions. But if the *hmitation [*117] • (6) 12 Ves. 237. to admit the distinction between arti- (c) 12 Ves. 236, 237. cles and wills. (^d) Lord Eldon could not reconcile (e) Tlie Countess of Lincoln v. Lord Thurlow's opinion with these The Duke of Newcastle, 12 Ves. 237, cases, because his Lordship refused and see Sackville-West v. Viscount Holmesdale, 4 L. R. H. L. 543. 159 *117 BXECTJTOEY TETTSTS [Ch. VIII. S. 1. over be " on dying under 21 without issue," then, if the son die leaving issue, the grandchild may die under age and unmarried, when the, personalty wiU go to the son's personal representative, while the freeholds will devolve on the second son (a). 11. Joint tenancy in articles construed tenancy in common. — Again, in marriage articles, as joint tenancy is an inconven- ient mode of settlement on the children of the marriage (for, during their minorities no use can be made of their portions, as the joint tenancy cannot be severed) (J), the Court wiU rectify the articles by the presumed intent of the contract, and will permit words that would be construed a joint ten- ancy at law to create in equity a tenancy 'in common (e). 12. ■Words supplied in articles. — In other cases the Court has varied the literal construction by supplying words, as where the agreement was to lay out 200Z. in the purchase of 30Z. a year, to be settled on the husband and wife for their lives, remainder to the heirs of their bodies, remainder to the husband in fee, and, until the settlement should be made, the 200Z. was to be applied to the separate use of the wife ; and, if no settlement were executed during their joint lives, the 200Z. was to go to the wife, if living, but, if she died before her husband, then to her brother and sister ; and the wife died before her husband, but left issue ; it was held the brother and sister had no claim to the fund, the words " if she died before her husband " intending plainly if she so died " with- out leaving issue " (d). [The Court has also in a modern settlement supplied a hotchpot clause (e).J (a) Countess of Lincoln v. Duke 416; Whittingham's case, 8 Rep. 42i, of Newcastle, 12 Ves. 228, 229. b ; Coke on Litt. 337 a, 337 b ; but see (6) Taggart v. Taggart, 1 Sell. & May v. Hook, Coke on Litt. 246 a, Lef. 88, per Lord Redesdale; and see note (1). Eigden v. Vallier, 3 Atk. 734, and (c) Taggart v. Taggart, 1 Sch. & Marryat v. Townley, 1 Ves. 10.3. Lef . 84 ; Mayn v. Mayn, 5 L. E. Eq. But it would seem that an instru- 150. ment executed by an infant, thoHgh {d) Kentish v. Newman, 1 P. W. voidable, severs the joint tenancy nn- 234 ; and see Targus v. Paget, 2 Ves. til it is avoided ; but that if the in- 194 ; Master v. De Croismar, 11 Beav. fant when of age avoids the instru- 184; Martin u. Martin, 2 E. & M. ment the joint tenancy will arise 507. again. Burnaby v. Equitable Rever- [(e) Miller v. Gulson, 13 L. R. Ir. sionary Interest Society, 28 Ch. D. 408.] 160 Ch. VIII. S. 1.] IN WILLS. *118 13. Vague provision. — It has been held in marriage arti- cles that a trust to provide suitably for the settlor's younger children is not too vague to be executed, but the Court will direct an enquiry what the provision should be (/). 14. HoTv " heirs of the body " construed in executory trusts in wills. — Next as to wills ; and here, as no presumption arises d priori, that " heirs of the body " were intended as words of purchase, if the executory trust of real estate be to " A. and tbe heirs of his body " (jg^, or to "A. and the heirs of his body and their * heirs" (a), or to f A. for [*118] li:^, and after his decease to the heirs of his body" (6), the legal and ordinary construction will be adopted, and A. will be tenant in tail. So, where the estate was directed to be settled on the testator's " d^iUghter and her children, and, if she died without issue," the remainder over, the Court said, that, by an immediate devise of the land in the words of the will, the daughter would have been tenant in tail, and in the case 'of a voluntary devise the Court must take it as they found it, though upon the like words in marriage arti- cles it might have been otherwise (c). "A. for life, and heirs male of his body, and their heirs male successively." — And where a testator directed lands to be settled on his " nephew for life, remainder to the heirs male of his body, and the heirs male of the body of every such heir male, severally and successively one after another as they should be in seniority of age and priority of birth, every elder and the heirs male of his body to be preferred before every younger," Lord Cowper said, the nephew took by a voluntary devise, and, although executory, it was to be taken in the .very words of the will as a devise, and was not to be supported or carried further in a Court of Equity than the same words would operate at law in a voluntary convey- (/) Brenan v. Brenan, 2 I. E. Eq. (b) Blackburn v. Stables, 2 V. & 266. B. 370, per Sir W. Grant; Seale u. (j) Harrison v. Naylor, 2 Cox, 274 ; Seale, 1 P. W. 290 ; Meure v. Meure, Bagshaw v. Spencer, 1 Ves. 151, per 2 Atk. 266, per Sir J. Jekyll. Lord riardwicke ; Marshall v. Bous- (c) Sweetapple v. Bindon, 2 Vem. field, 2 Mad. 166. , 536. (a) Marryaf v. Townley, 1 Ves. 104, per Lord Hardwicke. 161 *119 EXECUTOKY TBTJSTS [Ch. VIII. S. 1. ance ((i). The decision that the nephew was tenant in tail went apparently upon the ground that the words " and the heirs male of the body of every such heir male, severally and successively, &c." were all included in the notion of an entail, and expressio eorum, quce tacite insunt, nihil operatur. " Proper entail on the heir male." — And in. a more recent case, where the executory trust was for A. generally, with a direction that the trustees should not give up their trust till " a proper entail was made to the heir male by him," it was determined that A. took an estate tail (e). However, in another case, where the devise was extremely similar, viz., to A. with a direction that the estate should be entailed on his heir male. Lord Eldon, on the assumption that it was an executory trust, and not a legal devise, considered the entail so doubtful that he would not compel a purchaser to accept a title under it (/). [*119] * Heirs of the body construed to mean sons, even in -wills, -where any expression of intention to that ef- fect. — But " heirs of the body " will in the case of execu- tory trusts in wills as well as in articles be read first and other sons, provided the testator expressly manifest such an intention, as if he direct a settlement on A. for life " without impeachment of waste " (a), or with a limitation to preserve contingent remainders (J), or if he desire that " care be taken in the settlement that the tenant for life shall not bar the entail " (c), or otherwise show that the direction to settle on A. and the heirs of his body, was not meant to give him a power of disposition over the estate (d) ; (d) Legatt v. Sewell, 2 Vern. 551. (c) Leonard v. Lord Sussex, 2 Vem. (c) Blackburn d. Stables, 2 V. & 626. B. 367; recognized in Marshall v. (d) Thompson w. Fisherj' 10 L. R. Bousfield, 2 Mad. 166 ; and see Dod- Eq. 207. It is presumed that the son I'. Hay, 3 B. C. C. 405. Court attributed an intention to this (/) Jervoise v. Duke of Northum- effect, for if the Court directed a strict berland, IJ. & W. 559 ; and see Wool- settlement, merely on the ground that more v. Burrows, 1 Sim. 512 ; Sealey the trust was executory, it would con- V. Stawell, 9 I. E. Eq. 499. flict with the authorities, and with the (a) Lord Glenorohy v. Bosirille, canon laid down in the House of Cas. (. Talbot, 3. Lords, that in the fcase of a will or a (6) Papillon v. Voice, 2 P. W. 471 ; deed of gift the intention that the very and see Rochford u. Eitzmaurice, 1 words mentioned in the instrument as Coim. & Laws. 158. proper for the more complete convey- 162 CH.Vm.S.l.] IN WILLS. *120 and in one case "heirs of tKe body" was so construed, where a testator had devised to the separate use of a /erne covert for life, so as she alone should receive the rent, and the husband should not intermeddle therewith, and after her decease in trust for the heirs of her body ; for, from the limitation to the heirs immediately after the wife's decease, coupled with the direction that the husband should not intermeddle with the estate, the Court collected the intention of excluding the husband's curtesy, an object which could only be accomplished by giving to " heirs of the body " the construction of words of purchase (e). " A. aud the beirs of his body, as counsel shall advise," &c. — And a direction to settle on A. and the heirs of his body " as counsel shall advise " (/), or " as the executors shall think fit " (^), is strong collateral evidence, that something more was intended than a simple estate tail. Rule in Shelley^s case not applicable -where the life estate is to the separate use. — Sir L. Shadwell thought that if a testa- tor directed an estate to be settled on a feme covert for Hfe, for her separate use, and at her death on her issue, the feme would not be tenant in tail, for the' separate use requiring the life estate to be vested in trustees (Ji), the equitable es- tate in the feme could not unite with the legal estate in the issue, and therefore the rule .in Shelley's case would not ap- piy (0- * Trevor V. Trevor. — Where the trust was to settle [*120] on A. for life, without impeachment of waste, with re- mainder to his issue in tail male in strict settlement, the Court directed the estates to be settled on A. for life, without im- peachment of waste, with remainder to his sons successively in tail male, with remainder to the daughters, as tenants in common in tail male, with cross remainders in tail male, and ance are not to be used, must be S. C. West's Rep. (. Lord Hardwicke, plainly manifested by the first in- 536. stniment, and will ncit be assumed (/) White v. Carter, 2 Eden, 366; merely because the trust is executory: reheard, Amb. 670. Sackville-West v. Viscount Holmes- (j') Read v. Snell, 2 Atk. 642. dale, 4 L. R. H. L. 555, per L. C; [(A) See n(5w 45 & 46 Vict. c. and see Duncan v. Bluett, 4 I.i R. Eg. 75, s. 1.] 469. (t) See Stonor v. Curwen, 5 Sim. (e) Roberts v. Dixwell, 1 Atk. 607 ; 268 ; Earl of Verulam v. Bathurst, 13 163 *120 EXECTJTOKY TRUSTS [Ch. VIII. S. 1. proper limitations to trustees were inserted to preserve con- tingent remainders (a). But where a testator devised an estate to C. for life, and on her death to be " strictly entailed on her eldest son J." the Court directed a settlement on C. for life, with remainder to J. for life, with remainder to his first and other sons successively in tail general, with re- mainder to his daughters as tenants in common in' tail g'en- eral, &c. (6). 16. " Heirs of the body " and " issue " not of the same import. — We may here remark that " heirs of the hody " and " issue " are far from being synonymous expressions. The former are properly words of limitation, whereas the latter term is in its primary sense a word of purchase. In several cases the Court appears to have ordered a strict settlement from the use of the term "issue," where, had the expression been "heirs of the body," the estate would probably have been construed an estate tail (c). 17. Daughters included in " heirs of the body " and " issue." — Of course, daughters as well as sons will be included under "heirs of the body" (d'), or "issue" (e) ; for they equally answer the description, and are equally objects of bounty; and where these words are construed as words of purchase the settlement will be made upon the daughters in defaidt of soils, as tenants in common in tail, with cross remainders be- tween or amongst them (/). 18. 'Waste. — In executing a strict settlement the Court, unless there be some special words which point to the con- trary, will not make the tenant for life dispunishable for Sim. 386 ; Coape v. Arnold, 2 Sm. & zier, 2 Conn. & Laws. 311 ; Eochford Gif. 311; 4 De G. M. & G. 574. v. Fitzmaurice, 1 Conn. & Laws. 158; (a) Trevor v. Trevor, 13 Sim. 108; Bastard v. Proby, 2 Cox, 6; Haddel- affirmed on this point, 1 H. of L. Ca. sey v. Adams, 22 Beav. 276. 239; and see Coape v. Arnold, 2 Sm. (rf) Bastard v. Proby, 2 Cox, 6. & Gif. 311 ; 4 De G. M. & G. 574. (e) Meure f. Meure, 2 Atk. 265 ; (6) Sealey v. Stawell, 9 I. R. Eq. Ashton v. Ashton, cited in Bagshaw 499. V. Spencer, 1 Coll. Jur. 402; Trevor (c) Ashton V. Asliton, cited in Bag- v. Trevor, 13 Sim. 108. shaw V. Spencer, 1 Coll. Jur. 402; (/) Meure v. Meure, Ashton .,. Meure v. Meure, 2 Atk. 265 ; and see Ashton, Bastard v. Proby, and Tre- Horne v. Barton, G. Coop. 257 ; Dod- vor v. Trevor, M supra ; Marryat v. son V. Hay, 3 B. C. C. 405 ; Stonor v. Townley, 1 Ves. sen. 105. Curwen, 5 Sim. 264 ; Crozier v. Cro- 164 Ch. Vm. S. 1.] IN WILLS. *121 waste (^), and a direction to settle to the separate use with- out power of anticipation is inconsistent with a life estate without impeachment of waste Qi). * Limitation to preserve contingent remainders. — Be- [*121] fore 8 & 9 Vict. c. 106, the Court took care that proper limitations to trustees should h& inserted after the life estates for the preservation of contingent remainders (a) ; and al- though, by the effect of the Act referred to, contingent re- mainders are no longer destructible by \he forfeiture, merger, or surrender of the previous life estate, the limitations to trus- tees to preserve may still, it is conceived, be properly inter- posed, with the view of affording a Convenient means of pro- tecting the interests of contingent rem,aindermen in the event of wilful waste or destruction being committed by the tenant for life before any remainderman comes in esse (b~). 19. First freehold in trustees. -— In a case occurring before the Fines and Recoveries Act, (3 & 4 W. 4. c. 74), where the testator had shown an anxious wish that the power of defeating the entail should be as much restricted as possible, the Court, instead of giving the first freehold to the tenant for life, which would have enabled him to make a tenant to the praecipe, ordered the freehold during his life to be vested in trustees in trust for him (c). Protector. — However, in a case occurring after the Fines and Recoveries Act, where an estate Vas vested in a trustee upon trust to execute a strict settlement on Lady Le De- spencer and her family, and the Master, to whom a reference was directed, approved of a settlement on Lady Le Despen- cer for life, &c., but refused to appoint a protector under the 32nd section of the Act, the Court' held that, though in certain cases it might be advisable to appoint a protector, there should be special circumstances to warrant it; that (j) Stanley v. Coulthurst, 10 L. R. v. Baskerville, 2 Atk. 279 ; Trevor v. Eq. 259; Davenport v. Davenport, 1 Trevor, 13 Sim. 108; Stamford t. H. & M. 779. - Hobart, 3 B. P. C. 31 ; and see Hop- (A) Clive V. Clive, 7 L. R. Ch. kins v. Hopkins, 1 Atk. 593. App. 433. (6) Garth v. Cotton, 1 Ves. 554. (a) Harrison v. Kaylor, 2 Cox, (c) Woolmore v. Burrows, 1 Sim. 247 , S. C. 3 B. C. C. 108 ; Woolmore 512, see 527. V. Burrows, 1 Sim. 512; Baskerville 166 *122 EXECUTOKY TRUSTS [Ch. VIIL S. 1. the trustee was the "settlor" wit^iin the meaning of the 32nd section, and had the power to appoint a protector ; and as he did not desire it, the Court, ;inless there were good reasons to the contrary, would not control his discretion; that a protector under the Act was an irresponsible person, and was at liberty to act from caprice, ill-will, or any bad motive, and might even take a bribe for consenting to bar the entail, without being amenable to the Court, and there- fore, on the whole, it was better not to clog the settlement with a protector (d). 20. Gravelkma lands. — Where ffravelkind lands are the subject of the executory trust, the circumstance of the cus- tom will not prevent the settlement being made upon [*122] the first and other sons successively, for * the heirs take not by custom, but under the construction of a Court of Eqiiity, which must be guided by the rules of the Common Law (a). 21. 'Where tbe testator directs a settlement, but formally declares the limitations. — Where the Court enlarges and rec- tifies the will it does so on the ground of the limitations having been imperfectly declared ; but if a testator direct a settlement, and be his own conveyancer, that is, declare the limitations Mmself, intending them to be final, the hands of the Court are bound, and the words must be taken in their natural sense (&). Thus where a testator devised to A. for life without impeachment of waste, remainder to trustees to preserve contingent remainders, remainder to the heirs of the body of A., remainders over, and then directed the resi- " due of his personal estate to be laid out in the purchase of lands, and declared that the lands when purchased " should remain and continue to, for, and upon such and the like estate or estates, uses, trusts, intents, and purposes, and under and subject to the like charges, restrictions, and limi- tations, as were by him before hmited, and declared of and concerning his lands and premises thereinbefore devised, or (d) Banks v. Le Despencer, 11 and see Eochford v. Fitzmaurice, 1 Sim. 508. Conn. & Laws. 173; 2 Drur. & War. (o) Roberts zi. Dixwell, 1 Atk. 607. 21; Doncaster a. Boncaster, 3 Kay (6) Franks v. Price, 3 Bear. 182 ; & J. 26. 166 Ch. Vni. S. 1.] OF CHATTELS IN WILLS. *123 as near thereto as might be, and the deaths of parties -would admit," Lord Northington said that the testator had referred no settlement to his trustees to complete, but had declared his own uses and trusts, which being declared, there was no instance where the Court had proceeded so far as to alter or change them (e). However, the decision to which his Lord- ship came seems not to have met with the entire approbation of Lord Eldon (ci). 22. Executory trusts of chattels in wills. — In the cases rC' lating to executory trusts of chattels in wills, the bequest, iastead of being direct, has generally been by way of refer- ence to a previous strict settlement of realty. The law upon this subject was for a long time in a very un- satisfactory state, but the result of the cases (e) at the present day appears to be that where a testator devises lands in strict settlement, and then bequeaths heir-looms to be held by or in trust for the parties entitled under the limitations of the real estate, or without making any bequest, directs or expresses a desire that the * heir-looms shall be [*123] held upon the like trusts, even though the testator should add the words " as far as the' rules of law and equity will permit," the use of the heir-looms will belong to the tenant for life of the real estate for his life, and the property of the heir-looms will vest absolutely in the first tenant in tail immediately on his birth, though he afterwards die an iniant. The Court, in these cases, either regards the trust as exe- cuted, and not of a directory character, or if the trusts be executory, the Court considers it has no authority in making a settlement to insert a limitation over on the tenant in tail dying under 21. However, there is no unlawfulness in such a limitation, so that if a bequest of heir-looms in a will be clearly executory, and the testator manifests a distinct in- tention that a settlement shall be made of the heir-looms, and that such clauses shall be inserted as will render them (c) Austen v. Taylor, 1 Eden. 368. and commented upon ; and see Strat- (d) See Green v. Stevens, 17 Ves. ford v. Powell, 1 B. & B. 1 ; Doncasler 76 ; Jervoise v. Duke of Northumber- v. Doncaster, 3 K. & J. 26 ; phristie land, IJ. & W. 572. ' v. Gosling, 1 L. K. H. L. 279 ; Har- (e) Scarsdale v. Curzon, 1 Johns. rington v. Harrington, 3 L. E. Clu & Hem. 40, and the cases there cited App. 564 ; 6 L. B. H. L. 87. 167 •*124 EXECUTORY TKtJSTS [Ch. VHI. S. 1. inalienable for as long a period as the law will permit, the Court would no doubt execute the intention by settling the heir-looms, and inserting a limitation, by which the absolute interest in the first tenant in tail should by his death under 21, or by his death under 21 without issue, be carried over to the person next entitled in remainder (a). But if heir-looms be assigned or bequeathed to trustees, not upon trust simply for the persons entitled under the limitations of the real estates, which, notwithstanding the words "so far as the rules of law and equity will permit," would vest them abso- lutely in the first tenant in tail who came into, being, but upon trust, " as far as the rules of law and equity will per- mit," for the persons successively entitled to the actual free- hold (in the sense of the freehold in possession), with a pro- viso that no child of a person made tenant for life shall take absolutely unless he attained 21, here, though the trust be executed, and not executory, the absolute vesting is coupled with the possession, and is therefore suspended until the death of the tenant for life, and will then vest in the child who, after his death, shall first fulfiJ. the requisite of being tenant in tail in possession and attaining the age of 21 years (6). In one case a testator gave certain jewels to his nephew John, "to be held as heir-looms by him, and by his eldest son on his decease, arid to descend to the eldest son of such eldest son, and so on to the eldest son of his descendants, as far as the rules of law and equity will permit." John [*124] died in 1866, leaving *an eldest son, the plaintiff (born in testator's lifetime), and the Court declared that the jewels were in trust for John for life, and on his death for plaintiff for his life, and on his death for his eldest son, to be vested at 21, and if he died in the lifetime of plaintiff, or after his death but under 21, leaving an eldest son born before the death of plaintiff, then in trust for such (a) See the obserrations of Lord West ». Viscount Holmesdale, 4 L. Loughborough in Foley v. Bumell, R. H. L. 543. 1 B. C. C. 284, and of Lord Thurlow (6) Soarsdale v. Curzon, 1 J. & H. in Vaughan v. Burslem, 3 B. C. C. p. 40 ; Christie v. Gosling, 1 L. R. H. L. 106 ; and of V. C. Wood in Scarsdale 279 ; Harrington v. Harrington, 3 L. 0. Curzon, 1 J. & H. 40; Sackville- R. Ch. App. 564; 5 L. R. H. L. 87. 168 CH.Vin. S. 1.] OF CHATTELS IN WILLS. *124 eldest son, to be vested at 21 (a), with an ultimate trust in favour of John (V). In another case (c) a testatrix devised real and piersonal estate to trustees in trust for A. for life, with remainders over in tail. A peerage was afterwards granted to A. for life with remainder to B., her second son, in tail male ; and then the testatrix, by a. codicil directed the trustees to settle . the real and personal estate " in a course of entail to corre- spond as nearly as might be with the limitations of the barony, in such manner and form and with such powers as the trus- tees should consider proper or their counsel should advise," and it was held that the object of making provision for the holders of a peerage, and the object of making provision for the children of a marriage, appeared so analogous, that it was the duty of the Court, in the former as well as the latter case, to prevent, as far as possible, the defeat of the object ; and accordingly the real estate was directed to be settled on A.'s second son for life, without impeachment of waste, with remainders to his first and other sons in tail male, &c., with power to the tenant for life of jointuring, and charging portions ; and the personal estate was directed to be settled so as to go along with the real estate in the nature of heir- looms, so far as the rules of law and equity would allow, but so as not to vest in any tenant in tail by purchase who died under 21 without leaving issue inheritable under the entail. [A bequest of chattels to a peer and his successors, or to a peer and his successors to be enjoyed with and to go with the title, is not sufficient to create an executory trust or any binding obligation affecting the legatee (d}. So under a be- quest of chattels to trustees " upon trust to permit and suffer the property to go, and be held and enjoyed with the title and honours of Exmouth, so far as the rules of law and equity will admit, by the person for the time being actually' possessed of the title in the nature of heir-looms," the first person who succeeds to the honours takes the chattels (a) Shelly ■». Shelly, 6 L. R. Eq. Holmesdale, 4 L. R. H. L. 543; re- 540. versing West v. Viscount Holmesdale, (6) S. C. 6 L. R. Eq. 550. ^ 3 L. R. Eq. 474. (c) Sackville-West v. Viscount [(. 7. TVliether trust or power, is a question of intention, not of grammatical import. — Where both objects and property are certain, yet no trust will arise, if the testator expressly de- clare that the language is not to be deemed imperative, or the construing it a trust woidd be a contradiction to lite terms in which tie preceding bequest is given (A) ; or if, all circumstances considered, it is more probable that the testa- tor meant to communicate a mere discretion (e) ; or if a tes- tator give an estate to a feme covert to be her sole and separate property, -with power to appoint to her husband or chil- dren " (d) ; or the testator at tie same time declare that the (/) White r. Briggs, 15 Sim. 33. 267; Hnskisson r. Bridge. 4 De G. & (t) Cowman v. Harrison, 10 Hare. Sm. 245. 234. (e) Bull r. Vardy, 1 Ves. jon. 270 ; (0 Palmer <. Simmonds, 2 Drew. Knott r. Cottee, 2 Phill. 192; Knight 2:21. r. Knight, 3 Bear. 148; Meggison («) 3iIaUm«7. Keighley.2 Ves. jnn. r. Moore, 2 Tes. jnn. 630; Hill e. d31, per Lord Looghborongh ; and Bishop of London, 1 Atk. 618 ; House see Knight r. Knight, 3 Bear. 174; r. Honse, W. N. 1874, p. 189; and 11 CI. & Hn. 513; Hnskisson r. see Flinl r. Compton, 8 Ves. 380; Bridge, 4 De G. & Sm. 245. Knight c. Knight, 3 Bear. 174 : 11 [(■) PameU r. PameU, 9 Ch. D. CI. & Fin. 513 ; Lefiroy r. Flood, 4 Ir. 96.] Ch. Rep. 1; Shepherd r. Xonidge. 2 (a) Horwood r. West, 1 S. & S. J. & H. 766; Eaton f. Watts, 2 W. B. 3ST. 106. (6) Webb „. Wools, 2 Sim. N. S. (<0 Brook f. Brook, 3 Sm. & Gif . 184 Ch. VIII. S. 2.] IMPLIED TRUSTS. *136 estate shall be " unfettered and unlimited " (e) ; or, " in the legatee's entire power " (/) ; or be " left to his entire judg- ment " (jf) ; or if he " recommend but do not absolutely en- join " (K) ; or if a testator give the property to his wife, " well knowing her gense of justice and love to her family, and feel- ing perfect confidence that she will manage the same to the best advantage for the benefit of her children " (i) ; [or " to . be used by her in such ways and means as she may consider best for her own benefit and that of my three children " (/) ; or " feeling confident that she will act justly to our children in ^dividing the same when no longer required by her " (Jc) ; or " in full confidence that she will do what is right as to the disposal thereof between my children, either in her lifetime, or by will after her decease " (Z) ;] or " to be at her disposal in any way she may think best for the benefit of herself and family " (m) ; [or "to his wife absolutely, with full power for her to dispose of the same as she may think fit for the benefit of his family, having * full confidence that [*136] she will do so " (a) ; or if he give the residue of his property to legatees, "his desire being that they shall dis- tribute such residue as they think will be most agreeable to his wishes " (&)•] The construction of the words we are considering never turns on their grammatical import : they may be imperative, but are not necessarily so (c). In Shaw v. Lawless (d), the trustees were recommended to employ a receiver, and Lord 280 ; and see Paul v. Compton, 8 Ves, 380 ; Howorth v. Deiyell, 29 Beav. 18 [Ahearne v. Ahearne, 9 L. K. Jr. 144.] (e) Meredith ti. Heneage, 1 Sim, 542 ; S. C. 10 Price, 230 ; Hoy v. Mas ter, 6 Sim. 568. (/) Eaton V. Watts, 4 L. R. Eq. 151. ((/) McCormick v. Grogan, 1 I. K Eq. 313. (A) Young V. Martin, 2 Y. & C. Ch. Ca. 582. (0 Greene v. Greene, 3 I. R. Eq. [(A:) Mnssoorie Bank n. Raynor, 7 App. Cas. 321 ; 9 L. R. Ind. App. 70.] ^, [ (/) Re Adams and the Kensington Vestry, 24 Ch. D. 199 ; 27 Ch. D. 394.] (m) Lambe v. Barnes, 10 L. R. Eq. 267 ; 6 L. R. Ch. App. 597. [(a) Re Hutchinson and ^enant, 8Cli. D. 540.] [(6) Stead v. Mellor, 5 Ch. D. 225.] (c) Meggison v. Moore, 2 Ves. jun. 632, per Lord Loughborough ; and see Johnston v. Rowland^, 2 De G. & Sm. 90,629. - 385. [(/) M'Alinden u. M'Alinden, 11 (d) LI. & G. t. Sugden, 154; 5 CI. L R. Eq. 219.] & Fin. 129; LI. & G. t. Plunket, 559. 185 *137 DdPLLED TRUSTS. [Ch. VUI. S. 2. Cottenham, aUuding to that case, observed, "It was there laid down as a rtile which I have since acted upon, that though ' recommendation ' may in some cases amount to a direction and create a trust, yet, that being a flexible term, if such a construction of it be inconsistent with any positive provision in the will, it is to be considered as a recommenda- tion and nothing more. In that case the interest suppdsed to be given to the party recommended was inconsistent with the other powers which the trustees were to exercise, and those powers being given in unambiguous terms, it was held that as the two provisions could not stand together, the flex- ible term was to give way to the inflexible term " (e). 8. Trustees of this kind not al'virays so strictly bound as in a common trust. — If a trust be created, it does not follow that it shall be equally restrictive, as in the case of a clear ordi- nary trust. Thus, an estate was devised to A. and her heirs, " in the fullest confidence " that after her d6cease she would devise the property to the family of the testator ; and Lord Eldon asked, if there were any case in which the doctrine had been carried so far, that the tenant in fee was not at lib- , erly, with respect to timber and mineh, to treat the estate in the same husbandlike manner as another tenant in fee ? and his Lordsliip said he should hesitate a long time before he held that the person bound by the trust was not entitled to cut timber in the ordinary management of the property (/). And so it was afterwards decided by the House of Lords on appeal (. Usher, 11 Ves. V. & B. 294. 87. (c) Berry v. Usher, 11 Ves. 87. (g) Kidney v. Coussmaker, 1 Ves. {d) See Maugham v. Mason, 1 V. & jun. 436 ; and see Field v. Peckett, B. 416. (No. 1), 29 Beav. 568, and Lowes v. (e) Mallabar v. Mallabar, Cas. t. Haokward, 18 Ves. 171. In Collins 220 Ch. IX. S. 1.] EESULTING TRUSTS. *160 Whether a gift of residuary personal estate will pass lapsed legacies from proceeds of sale of real estate. — The question was much discussed before the late Wills Act, and may stilL be material, what expressions of a testator will amount to such an absolute conversion of real estate into personal, that a void or lapsed legacy given out of the proceeds of the sale shall, as if the property had beqn personal, fall into the residuary bequest, instead of resulting to the heir. "I agree," said Lord Brougham, " a testator may provide that lapsed and void legacies * shall go in this man- [*160] ncB, as if the testator say in express words, ' I give • all lapsed and void legacies as parcel of my residue to the residuary legatee,' and if he can do it by express words, he can do it by plain and obvious intention to be gathered from the whole instrument " (a). But what will amount to such an implication is a point that can with difficulty be brought under any very definite rule. , Results of the authorities. — Apparently the only principle to be extracted from the authorities is, that a lapsed or void legacy will pass to the residuary legatee, if the testator ex- pressly declare that the proceeds of the sale shall be considered as '■'■ personal estate" or if the intention of an absolute conver- sion into personal estate for all the purposes of the will can, without the aid of any such express declaration, be gathered from the general structure of the will (U). Next of kin and residuary lega^tee distinguished. — It was stated in a former page, that if a testator direct the proceeds of the sale to be taken as '■^personal estate," a pai't of the pro- ceeds undisposed of by him will nevertheless not result to the next of kin. , The distinction between the next of kin and the residuary legatee is this : the former claim dehors the will, while the latter is a claimant under the will, and when the «. Wakeman, 2 Ves. jun. 683, the (6) Durour v. Motteux, 1 Ves. 321 sum undisposed of did not fall into (see the will stated from Keg. Lib. the residue on the principles adopted in Jones v. Mitchell, 1 S. & S. 292, in Davers v. Dewes, 3 P. W. 40, and note (d)) ; Kennell v. Abbott, 4 Ves. Attorney-General v. Johnstone, Amb. 802; Amphlett v. Parke, 1 Sim. 275; 577. S. C. 2 R. & M. 221 ; Green v. Jack- Co) Amphlett v. Parke, 2 R. & M. son, 5 Euss. 35; S. C. 2 E. & M. 238; 232;-and see M'Cleland B. Shaw, 2 Salt w. Chattaway, 3 Beav. 576. [And Sch. & Lef . 545. see Singleton v. Tomlinson, 3 App, 221 *161 KESULTING TEtTSTS. [Ch. IX. S. 1. proceeds of the sale are directed to be taken as personalty, the testator must be understood to mean for the purposes of the will only, and not for any object beyond it. Resulting trust of personal estate. — With respect to result- ing trusts of personal estate, the general residuary bequest was always held to sweep every interest, whether undisposed of by the wOl, or undisposed of in event, and therefore it is only where the will contains no residuary clause that the next of kin can assert a claim to the benefit of the resulting interest (c). But if any part of the personal estate be ex- pressly excepted from the residue, as if a testator reserve a sum to be disposed of by a codicil, and give the residue not disposed of or reserved to be disposed of to A., and no codicil is executed, the sum so specially excepted will then result to the next of kin (c^). |[*161] * Sixthly. Case of settlor or devisor dying ivitliout heir or next of kin. — ■ [In the case of the death of a settlor intestate, without heir or next of kin, the undisposed of beneficial interest in real estate, if the death occurred before the 14th August, 1884, sank into the land for the benefit of the trustee or legal tenant (a) ; and where the death occurs since that date, it escheats to the lord as if the interest were a legal estate in corporeal hereditaments (6) ;] but in the case of personalty the resulting interest, as bonum vacans, will fall to the Crown by the prerogative (e). Of resulting trusts in gifts to charities. — Lastly, it may be noticed that settlements to charitable purposes are an excep- tion from the law of resulting trusts : for, upon the con- struction of instruments of this kind, the Court has adopted the following rules : — Cas. 404.] As to Mallabar v. Malla- Attorney-General v. Johnstone, Amb. bar, Cas. t. Talb. 78, see Phillips v. 577. Phillips, 1 M. & K. 660. (a) Burgess v. Wheate, 1 Eden,177; (c) See Dawson v. Clarke, 15 Ves. Henchman v. Attorney-General, 3 M. 41"; Brown v. Higgs, 4 Ves. 708; & K. 485; Taylor v. Hay garth, 14 S. C. 8 Ves. 570 ; Shanley v. Baker, Sim. 8 ; Davall v. New River Com- 4 Ves. 732; Jackson v. Kelly, 2 Ves. pany, 3 De G. & Sm. 394; Cox c/. 285; Oke v. Heath, 1 Ves. 141; Cam- Parker, 22 Beav. 168. bridge v. Eous, 8 Ves. 25 ; Cooke v. [ (6) 47 & 48 Vict. c. 71, s. 4.] Stationers' Company, 3 M. & K. 264. (c) Middleton v. Spicer, 1 B. C. C. (rf) Davers v. Dewes, 3 P. W. 40; 201 ; Barclay v. Russell, 3 Ves. 424 j 222 ^Ch. IX. S. 1.] RESULTING TKXTSTS. *161 (l.) Where no object expressed, the Court will direct the application of the estate to some charity.: — Wtere a person makes a valid gift, whether by deed or will, and expresses a general intention of charity, but either particularises no objects ((£), or such as do not exhaust the proceeds (e), the Court will not suffer the property in the , first case, or the surplus in the second, to result to the settlor or his rep- resentative, but will take upon itself to execute the general intention, by declaring the particular purposes to which the fund shall be applied. (jl.^ Where the rents increase, the surplus will be applied to like charitable purposes. — Where a person settles lands, or the rents and profits of lands to purposes which at the time exhaust the whole proceeds, but, in consequence of an in- crease in the value of the estate, an excess of income subse- quently arises, the Court will order the surplus, instead of resulting, to be applied in the same or a similar manner with the original amount (/). Taylor p.Haygarth, 14 Sim. 8; Powell second resolution, Id. 68 ; Hyushaw v. V. Merrett, 1 Sm. & G. 381 ; Cradock v. Owen, 2 Sm. & G. 241 ; see ante, p. 61. {d) Attorney-General v. Herriok, Amb. 712. (c) Attorney-General v. Haber- dashers' Company, 4 B. C. C. 102; S. C. 2 Ves. jun. 1 ; Attorney-General V. Minshull, 4 Ves. 11; Attorney- General V. Arnold, Shower's P. C. 22 ; and see Attorney-General u. Sparks, Amb. 201; and Lord Eldon's obsfer- vations, in Attorney -General v. Mayor of Bristol, 2 J. & W. 319. But where it gift is to a particular charity which exists at' the date of the will, but is dissolved in the testator's lifetime,' it is as much a lapse as a gift to a man who has ceased to exist, Pisk v. At- torney-General, 4 L. R. Eq. 521. And where a fund was given to trustees for education in the United States, and the United States repudiated the gift, the fund was not applied to other char- itable objects, but fell into the residue, New V. Bonaker, 4 L. R. Eq. 655. (/) Inhabitant of Eltham v. War- reyn, Duke 67 ; Sutton Colefield case, Morpeth Corporation, Id. 69; Thet- ford School case, 8 Rep. 130 6; At- torneyrGeneral v. Johnson, Amb. 190 ; Kennington Hfistings case, Duke 71; Attorney-General v. Mayor of Coven- try, 2 Vern. 397, reversed in D. P. 7 B. P.O. 236; (see the foregoing cases commented upon by Lord Eldon in AttomeyGeneral v. Mayor of Bristol, 2 J. & W. 316 ;) Attorney-General v. Coopers' Company, 19 Ves. 189, per Lord Eldon; Attorney-General v. Wilson, 3 M. & K. 362 ; Lad v. Lon- don City, Mos. 99 ; Attorney-General ,«. Coopers' Company, 3 Beav. 29; Attorney-General v. Master of Cathe- rine HaU, Cambridge, Jac. 381 ; Attor- ney-General V. Beverley, 6 H. L. Cas. 310 ; Attorney-General v. Drapers' Company, 2 Beav. 508 ; 4 Beav. 67 ; Attorney-General v. Christ's Hospi- tal, lb. 73 ; Attorney-General v. Mer- chants Venturers' Society, 5 Beav. 338 ; Attorney-Generitl v. Corporation of South molton, 14 Beav. 357 ; Attor- ney-General V. Caius College, 2 Keen, 150 ; Attorney-General v. Wax Chan- 223 *162 PUECHASES IN NAMES OP STKANGERS. [Ch. IX. S. 2. r*162'| * (ni.) Iizceptions from the foregoing rules. -^ But even in the casfe of charity, if the settlor do not give the land, or the whole rents of the land, but, noticing the property to be of a certain value, appropriates part only to the charity, the residue will then, according to the circum- stances of the case, either result to the heir-at-law (a), or will belong to the donee of the property subject to* the charge, if the donee be (as in the case of a charitable corpo- ration) itself an object, of charity j(J). The doctrine in favour of charities established before trusts were settled. — The exceptions we have noticed were estab- lished at an early period, when the doctrine of resulting trusts was imperfectly understood (c). The interest of the heir was shut entirely out of sight, and the question was viewed as between the charity and the trustee (cZ). Were the subject still unprejudiced by authority, there is little doubt but the Court would, at the present day, follow the general principle, and hold a trust to result (e). SECTION II. OF RESULTING TRUSTS UPON PURCHASES IN THE NAMES OP THIRD PERSONS. Purchases of this kind are governed by different rules, according to' the relation which subsists at the time between dlers' Company, 6 L. E. H. L. 1 ; and in D. P. 8 H. L. Cas. 369 ; Attorney- see Attorney-General v. Smythies, 2 General v. Sidney Sussex College, 4 E. & M. 717j Attorney-General v. L. E. Ch. App. 722; Attorney-Gen- Drapers' Company, 6 Beav. 382 ; eral v. Wax Chandlers' Company, 8 Attorney-General v. Jesus College, L. E. Eq. 452; 5 L. E. Ch. App. 503; 29 Beav. 163. The additional benefit 6 L. E. H. L. 1 ; and see Attorney- is not always distributed amongst the General «. Mercers' Company^ 22 L. different objects of the charity rata- T.-N. S. 222, 18 W. E. 448 ; Merchant bly, but the Court exercises a discre- Taylors' Company v. Attomey-Gen- tion as to the proportions, Attorney- eral, 11 L. E. Eq. 35 ; affirmed, 6 General v. Marchant, 3 L. E. Eq. 424. L. E. Ch. App. 512. (a) See Attorney-General v. May- (c) Attorney-General v. Johnson, or of Bristol, 2 J. & W. 308. Amb. 190, ptr Lord Hardwicke ; At- (6) Attorney-General ti. Beverley, 6 torney-General v. Mayor of Bristol, H. L. Cas. 310 ; Attorney-General ,,. 2 J. & W. 307, -per Lord Eldon. Southmolton, 5 H. L. Cas. 1 ; Attor- (rf) See Thetford School case, 8 ney-General u. Trinity College, 24 Eep. 130. Beav. 383 ; Attorney-General v. Dean (e) See Attornex-General v. May- of Windsor, 24 Beav. 679 ; affirmed or of Bristol, 2 J. & W. 807. 224 Ch. IX. S. 2.3 PUBCHASES IN NAMES OF STEANGEES. *163 the person w'i\o pays the money, and the person in whose name the conveyance *is taken. We must, [*163] therefore, distribute the subject under two heads: First, Purchases in the name of a stranger; and Secondly, Purchases in the name of a child, or wife, or near relatives. First. Where the purchase is in the name of a stranger. 1. General rule. —"The clear result," said Lord Chief Baron Eyre, " of all the cases, without a single exception, is that the trust of a legal estate, whether freehold, copy- hold, or leasehold; whether taken in the names of the pur- chaser and others jointly, or in the name of others without that of the purchaser ; whether in one name or several, whether jointly (a), or successive (V), results to the man who advances the purchase-money (e) ; and it goes on a strict analogy to the rule of the common law, that where a feoffment is made without consideration, the use results to the feoffor " (cZ). 2. Who in particular cases is the real purchaser. — But no trust wUl result unless the person advance the money in the character of a purchaser; for if A. discharge the purchjise- money by way of loan to B., in whose name the conveyance is taken, no trust will result in favour of A., who is merely a creditor of B. (e). And, on the other hand, should B. advance the purchase-money, but only on a,ccount of A., (a) See £xj3art^ Houghton, 17 Ves. Steele, 2 V. & B. 390, per Sir T. 251 ; Rider v. Kidder, 10 Ves. 367. Plumer; Smith v. Camelford, 2 Ves. (6) Withers v. "Withers, Arab. 151 ; jun. 712, per Lord Loughborough ; Howe V. Howe, 1 Vern. 415; Good- Anon. 2 Vent. 361; Pelly v. Maddin, Eight V. Hodges, 1 Watk. Cop. 227 ; 21 Vin. Ab. 498 ; Lever v. Andrews, S. C. LofEt, 230; Smith v. Baker, 1 7 B. P. C.288; Lade v. Lade, 1 Wlls. Atk. 385 ; Clark v. Danrers, 1 Ch. 21 ; Groves ^. Groves, 3 Y. & J. 170, Ca. 310; Prankerd v. Prankerd,^! S. per Ch. Bar. Alexs,nder; Murless v. & S. 1. Pranklin, . 1 Sw. 17, 18, per Lord (c) Redingtont). Bedington,3liidg. Eldon; Crop v. Norton, 9 Mod. 235 ; 177, per Lord Loughborough ; Hun- S. C. Barn. 184 ; S. C. 2 Atk. 75, pa- gate V. Hungate, Tothill, 120; Ex Lord Hardwicke; Trench v. Harri- parte Vernon, 2 P. W. 549; Ambrose son, 17 Sim. Ill; James v. Holmes, V. Ambrose, 1 P. W. 321 ; Willis v. 4 De G. P. & J. 470. Willis, 2 Atk. 71 ; Woodman v. Morrel, (d) Dyer v. Dyer, 2 Cox, 93 ; S. C. 2 Freem.'33, per Our. ; ib. 123 ; Finch 1 Watk. Cop. 218. V. Pinch, 15 Ves. 50, per Lord Eldon ; (e) See Bartlett v. Picjcersgill, 1 Grey v. Grey, 2 Sw. 597; S. C. Finch, Eden, 516; Crop u. Norton, 9 Mod. 340, per Lord Nottingham ; Wray v. 235. 225 *164 PTJBCHASBS IN NAMES OF STBANGEES. [Ch. IX. S. 2. then A. is the owner in equity, and B., who takes the con- veyance, stands in the light of a creditor (/). 3. Principle applicable to personalty. — Not only real estate but personalty also is governed by these principles, as if a man take a bond (^), or purchase an annuity (A), stock (i), or other chattel interest (y), in the name of a stran- [*164] ger, *the equitable ownership results to the perSbn from whom the consideration moved. 4. Joint advance and purchase in name of third person. — In Crop V. Norton (a) Lord Hai;dwicke doubted whether the rule was not confined to an individual purchaser. But in Wray v. Steele (J) the point was expressly decided in con- formity with the general principle ; for what was there applicable to an advance by a single individual which was not equally applicable to a joint advance under similar cir- cumstances ? 5. Joint advance and purchase as joint-tenants. — If two persons, joiniQg in a purchase, take the conveyance not in the name of a stranger, or of one of themselves, but. in the names of both of themselves as joint-tenants, then a distinc- tion must be observed between an equq,l and an unequal con- .tribution. Equal contribution. — In the former case there is nothing on which to ground the presumption of a resulting trust, for persons making equal advances might very consistently take an estate in joint-tenancy, as each has it in his power to compel a partition, or by executing a conveyance to pass a .moiety of the estate, and in the meantime each runs his own life against that of the other (e). And so, if two persons (/) See Aveling v. Knipe, 19 Ves. Ve3..25.3 ; Garrick v. Taylor, 29 Beav. 441. > ,79. (j) Ebrand u. Dancer, 2 Ch. Ca. (a) Barn. 179; S. C. 9 Mod. 233; 26. S. C. 2 Atk. 74. (A) Mortimer v. Davies, cited Kider (6) 2 V. & B. 388. V. Kidder, 10 Ves. 868, 366. (c) Robinson v. Preston, 4 K. & J. (0 Kider v. Kidder, 10 Ves. 360 ; 505 ; Bea v. Williams, Append, to Loyd „. Read, 1 P. W. 607; and see Sugd. Vend, and Purch. 11th Ed.; Sidmouth v. Sidmouth, 2 Beav. 447 ; Moyse v. Gyles, 2 Vern. 385 ; York Garrick v. Taylor, 29 Beav. 79; v. Eaton, 2 Freem. 23; Rigden v. Beeclier v. Major, 2 Dr. & Sra. 431. Vallier, 3 Atk. 736, per Lord Hard- en) See lEx parte Houghton, 17 wicke; Hayes c;. Kingdome, 1 Vern. 226 Ch. ES. 8. Z.J PTTBCHASES IN KAMES OF STEANGEES. *165 contract for a purchase in favour of them and their heirs, and one of them dies, the Court, if they paid equal propor- tions, will specifically perform the agreement, hy ordering a conveyance, not to the heir of the deceased person and the survivor as tenants in common, hut to the survivor alone (cZ). But even where equal contributors take a conveyance in joint-tenancy, collateral circumstances may induce a Court of Equity to construe it a tenancy in common (e). Mortgage. — Thus where two tenants in common, of a mortgage term, purchased the equity of redemption to them and their heirs, it was held that the nature of the inheritance should follow that of the term (/) ; for if two persons join in lending money upon mortgage, equity says it could not have been the intention that the interest in that should sur- vive, but though they took a joint security, each meant to lend his own, and take back his own (^). Trading. — And- in all cases of *a joint undertaking [*165] or partnership, by way of trade, or upon the hazard of profit and loss, the jus aecresoendi is excluded, and the survivors are trustees, in due proportions, for the represen- tatives of those who are dead (a). Subsequent improvement by one. — And where the purchas- ers pay equally, and take a joint estate, and one afterwards improves the property at his own cost, he has a lien upon the land pro tanto for the money he has expended (5). Unequal contribution. — Should the contribution of the 33; Aveling v. Knipe, 19 Ves. 444, 1 Atk. 467; Petty v. Sty ward, 1 Ch. per Sir W. Grant ; Lake v. Gibson, 1 E^p. 57 ; Tickers v. Cowell, 1 Bear. Eq. Ca. Ab. 291, per Sir Jos. Jekyll; 529; and see Robinson v. Preston, 4 Anon. Garth. 15; Bone v. Pollard, 24 K. & J. 511. Beav. 288 ; and see Thicknesse v, (a) Lake v. Gibson, Eq. Ca. Ab. Vernon,, 2 Freem. 84. 290; S. C. (by name of Lake v. Crad- (d) Aveling v. Knipe, 19 Ves. 441. dock) afSrmed 3 P. W. 158; Jefliereys (e) Robinson v. Preston, 4 K. & J. o. Small, 1 Vern. 217 ; Elliot v. Brown, 505. cited Jackson v. Jackson, 9 Ves. 597 ; (/) Edwards a. Fashion, Pr. Ch. Lyster v. DoUand, 1 Ves. jun. 434, 332 ; and see Aveling v. Knipe, 19 435, per Lord Thurlow ; and see York Ves. 444. V. Eaton, 2 Freem. 23; Bone i-. Pol- (j) Morley v. Bird, 3 Ves. QZ\,per lard, 24 Beav. 288. Lord Alvanley; Eigden v. Vallier, 3 (6) Lake v. Gibson, 1 Eq. Ca. Ab. Atk. 734, per Lord Hardwicke; Anon. 291, per Sir J. Jekyll. case CarA. 16; Partridge v. Pawlet, 227 *166 PXTRCHASES IK NAMES OP STB.AKGEES. [Ch. IX. S. 2. parties be unequal tiien in all cases a trust results to each of them in proportion to the amount originally subscribed (c). 6. Copyhold grant to A. for life, and fine paid >by B., 'who on B.'s death shall have it ? — If A. discharge the fine on a grant of copyholds to B., C, and D. successively for their lives, the equitable interest wUl result to A. ; but should A. die intes- tate, on whom will the remaining equity devolve ? Estates pur autre vie in copyholds were not within the Statute of Frauds (cZ), nor the 14 G. 2, c. 20, s. 9. (e), nor is there a general occupancy of a trust (/), and before the late Wills Act the questions were asked. Can the heir take an estate which has no descendible property? or can the executor claim as assets what is not of the nature of personalty? or shall the tenants of the legal estate become the beneficial proprie- tors in the absence of any one to advance a better title ? (^) In Clark v. Danvers (Ji) the plaintiff was both heir and exec- utor of the equitable owner, and was decreed the benefit of the trust. In Howe v. Howe (i) the administratrix was held entitled, and so it was allowed in Rundle v. Bundle (/), and Withers v. Withers (fc), and was subsequently sanctioned by the high authority of Lord Mansfield (l). Now by the late Wills Act (7 W. 4, and 1 Vict. c. 26, s. 6.) it is declared, that, where there is no special occupant, an estate pur autre vie whether in freehold or in copyhold shall, if not disposed of by the will of the grantee, go to his personal representa- tive (jn). [*166] * 7. Purchase of a ship in stranger's name. — The Court cannot imply a resulting trust in evasion of (c) Lake v. Gibson, 1 Bq. Ca. Ab. (j) 2 Vem. 252, 264 ; S. C. Amb. 291, per Sir J. Jekyll ; Eigden v. Val- 152. lier, 3 Atk. 735, per Lord Hardwicke; (k) Amb. 151. Hill V. HUl, 8 I. R. Eq. 140 ; affirmed (T) Goodwright v. Hodgea, 1 Watk. lb. 622. Cop. 228; and see Rumboll v. Eum- (d) 29 Car. 2, c. 3, s. 12. boll, 2 Eden, 15. (e) Bundle v. Eundle, Amb. 152. (m) Reynolds v. Wright, 25 Beav. (/) Penny v. Allen; 7 De G. M. & 100 ; 2 De G. F. & J. 590. [Where G. 422 ; and see Castle u. Dod, Cro. leaseholds for lives were conveyed to Jac. 200. trustees, their executors, administra- (j) See Jones v. Goo^chUd, 3 P. tors, and assigns in trust (in the events Vf. 33, note B. which happened) for certain persons (A) 1 Ch. Ca. 310. absolutely but without words of limi- 0) 1 Vern. 415. tation it was held in a case in Ireland, 228 Ch. IX. S. 2.] PUKCHASES IN NAMES OP STEANGBES. *166 an act of parliament, and therefore [under the old Registry Acts,] if A., on purchasing a ship, took the transfer in the name of B., the complete ownership, both legal and equita- ble, was in B. (a). In order to enforce the navigation 'laws, and secure to British subjects the exclusive enjoyment of British privileges, the Registry Acts required an exact his- tory to be kept of every ship, how far throughput , her exis- tence she had been British built and British owned, and if implied trusts were permitted the whole intent of the legis- lature might have been- indirectly defeated (5). * Exceptions to the rule. — However, in certain cases [even under the old law a person might have been] the registered owner and still have been a trustee. "When, for instance, one of the members of a firm had a ship registered in his name, it was held by him in trust ibi the firm including the other partners (c). And when a ship was registered by mis- take in the name of a person who was not the owner of it, and where the person who transferred it to him had no interest in it, the transferee did not acquire such a title to the ship as to deprive the rightful owner of it (ci). [And in delivering judgment in the case of Holderness/u. Lamport, Sir J. Romilly, M.R., observed,] " If letters of administration were obtained to the estate of a ship-owner, and the adminis- trator transferred the ship into his own name, and afterwards a will was discovered and probate granted to the executor, could it be contended that the executor was precluded from obtaining the ship, because another person had, iond fide but by mistake, been registered as the owner?" (e). [ReciBnt statutes. — The law has, however, been lately modified so as to allow of a beneficial interest in a ship in persons not appearing on the register, and under the Acts that the personal representatives of Ex parte Houghton, 17 Ves. 251; the cestuis que trust, became entitled Camden v. Anderson, 5 T. K. 709. on their deaths to the property, either (6) See Ex parte Yallop, 15 Ves. as special occupants, as indicated in 66, 69. the grant, or under the statute in (c) Holderness v. Lamport, 29 default of a special occupant ; Croker Bear. 129, per M. R. V. Brady, 4 L. R. Ir. 653 ; orerruling (rf) Holderness v. Lamport, 29 ^. C. 4 L. E. Ir. 61.] Beav. 129. (o) Ex parte 'S'allop, 15 Ves. 60 ; (e) lb. 229 *167 PUECHASBS IN NAMES OF STEANGBKS. [Ch. IX. S. 2. now in force, although no notice of a trust is allowed on the register, equities may be enforced against the registered owners of ships or shares of ships in the same manner as they may be enforced in respect of any other per- [*167] gonal property (/), * and it follows that if a ship be purchased by A. in the name of a stranger, there will be a resulting trust in favour of A.J 8. Resulting trusts under papistry acts. — ^While the papistry laws were in force, if A., a papist, had purchased an estate in the name of B., the Court could not have presumed a result- ing trust to A., which as soon as raised, would have become forfeitable to the State (a). 9. In purchases for giving votes. — And SO if a purchaser take a conveyance in the name of another, ■^ith a view of giving him a vote for a- member of parliament, he cannot afterwards claim the beneficial ownership, for the operation of such a right would render the original purchase fraudu- lent (5). [10. Patents, designs and trade marks. — Under the Pa- tents, Designs and Trade Marks Act, 1883, no notice of any trust is allowed on the register, and the registered proprietor of a patent, copyright in a design, or trade mark, as the case may be, is empowered (subject to any rights appearing from the register to be vested in any other person) absolutely to assign, grant licences as to, or otherwise deal with, the same, and to give effectual receipts for any consideration for such assignment, licence, or dealing. But any equities in respect of such patent, design, or trade mark may be enforced in like manner as in respect of any other personal property (c).j 11. Parol evidence as regards Statute of Frauds. — As the Statute of Frauds (c?) extends to creations or declarations of trusts by parties only, and does not affect, indeed expressly excepts, trusts arising by operation or construction of law, it is competent for the real purchaser to prove his payment of [(/) See 17 & 18 Vict. c. 104, ss. (5) Groves v. Groves, 3 Y. & J. 37, et seq.; 25 & 26 Vict. c. 63, s. 3; 163, see 172, 173. and see Chasteauneuf v. Capeyron, 7 [(c) 46 & 47 Vict. c. 57, ss. 85, 87.] App. Gas. 127.] (rf) 29 Car. 2, c. 3. (a) See Bedington v. Bedington, 3 Ridge. 184. 230 Ch. IX. S. 2.] PtTKCHASES IN NAMES OF STEANGEKS. *168 the purchase-money by parol, even though it be otherwise expressed in the deed. In Kirk v. Webb (e) the Court refused to admit evidence, and the decision was followed in subsequent cases (/) ; how- ever, the doctrine, though supported by numerous prece- dents, has since been clearly overthrown by the concurrent authority of the most distinguished judges (£'). * Purchase by an agent. — The rule as at present [*168] established will not warrant the admission of parol evidence, where an estate is purchased by an agent, and no part of the consideration is paid by the employer ; for though an agent is a trustee in equity, yet the trust is one arising ex contractu, and not resulting by operation of law (a). The agent may be indicted for perjury in denying his character, and may be convicted, yet the Court has no power to decree the trust (6). The employer, therefore, as he could not profit by the conviction, was never prevented by interest from being a witness against the agent (c). Parol evidence must be clear. — And parol evidence, where admitted, must prove the fact very clearly (d) ; ^though no objection lies against the reception of circumstantial evi- dence, as that the means of the pretended purchaser were so slender as 1;o make it impossible he should have paid the pur- chase-money himself (e). (e) Free. Ch. 84. ♦ Groves v. Groves, 3 Y. & J. 163 ; (/) Heron v. Heron, Pr. Ch. 163; Lench v. Lench, 10 Ves. 517; Gray S. C. Freem. 246 ; Skett ;■. Whitmore, v. Lucas, W. N. 1874, p. 223.- Freem. 280; Kinder v. Miller, Pr. Ch. (a) Bartlett v. Pickersgill, 1 Eden, 172; and see Halcott w. Markant, Pr. 515; Rastel v. Hutchinson, 1 Dick. Ch. 168; Hooper v. Eyles, 2 Vern. 44; Lamas v. Bayly, 2 Vern. 627; 480; Newton v. Preston, Pr. Ch. 103; Atkins v. Eowe, Mose. 39; S. C. Cas. Cox V. Bateman, 2 Ves. 19; Ambrose Dom. Proc. 1730. V. Ambrose, 1 P. W. 321 ; Deg v. Deg, (6) Bartlett v. Pickersgill, 1 Eden, 2 P. W. 414. The earlier case of 517. Gascoigne v. Thwing, 1 Vern. 366, (c) King v. Boston, 4 East, 572. was in harmony with the modern (d) Gascoigne v. Thwing, 1 Vern. doctrine. 366; Halcott ». Markant, Pr. Ch. 168; (g) Ryall v. Ryall, 1 Atk. 59 ; S. C. Willis v. WilUs, 2 Atk. 71 ; Goodright Amb. 413; Willis v. WilUs, 2 Atk. v. Hodgps, 1 Watk. Cop. 229, per 71; Bartlett . Read, 1 P. W. (j) See 2 Sw. 599. 607; Kedington b. Rediugton, 3 Ridg. (o) Dyer v. Dyer, 2 Cox, 95 ; S. C. 190 ; Murless t. Franklin, 1 Sw. 17 ; 1 Walk. Cop. 220. Scawin v. Scawin, 1 Y. & C. 0. C. 65. (6) Woodman u. Morrell, 2 Preem. [(c) fle Richardson, 47 L. T. N. S/ 32, reversed on the re-hearing (see 514.] note by Hovenden) ; Shales v. Shales, (rf) See Williams t.-. Williams, 32 lb. 252 ; Sidmouth u. Sidmouth, 2 Bear. 370 ; Tucker v. Burrow, 2 H. & Bea¥. 447 ; Williams v. Williams, 32 M. 524 ; Colllnson v. CoUinson, 3 De Beav. 870; Batstone v. Salter, 19 L. G. M. & G. 409; Murless v. Franklin, R. Eq. 250; 10 L. R. Ch. App. 431; 1 Sw. 17, 19; Sidmouth v. Sidmouth, and see Elliot v. Elliot, 2 Ch. Ca. % Beav. 447 ; Lloyd v. Read, 1 P. W. 240 Ch. IX. S. 2.] PUKCHASE IN NAME (Jf A CHILD, *176 of the same transaction (e), may properly be put in evidence for the purpose of rebutting the presumption. Thus it will not be held an advancement, if, oh a grant of copyholds to a father and his son for their lives suoeessivi, the father at the same Court surrenders the copyholds to the use of his will (/), or obtains a license from the lord to lease for years (^), or takes possession by some overt act immediately consequent upon the purchase (A), or serves a notice with a view of taking possession, and then waives it and receives the rents, .&c. (i). Evidence from parol declaration. — So the father may prove a parol declaration of trust by himself, * either [*176] before or at the time of the purchase, not that it oper- ates by way of declaration of trust (for the Statute of Frauds would interfere to prevent it) ; but as the trust would result to the father, were it not rebutted by the sonship as a cir- cumstance of evidence, the father may counteract that cir- cumstance by the evidence arising from his parol declaration. Of course the father cannot defeat the advancement by any subsequent declaration of intention (a). But his evidence is admissible for the purpose of proving what was the inten- tion at the time (5). 607 ; Taylor v. Alston, cited 2 Cox, 96, ' (i) Stock v. McAvoy, 15 L. E. Eq. 1 Watk. Cop. 223 ; Redington v. Red- 65. In this case evidence was given ington, 3 Ridg. 177 ; Grey v. Grey, 2 that the father said it should be his S w. 594 ; Eawleigh's case, cited Hard. son's after his own death, but V. C. 497; Baylis v. Newton, 2 Vern. 28 Shales v. Shales, 2 Freem. 252 Scawin v. Scawin, 1 Y. & C. C. C. 65 Wickens observed, " If the son is a trustee at all, he is wholly a trustee," ib. 58. Christy v. Courtenay, 13 Beav. 96. (a) See Williams v. Williams, 32 (e) Redington v. Redington, 3 Beav. 370 ; Elliot v. Elliot, 2 Ch. Ca. Ridg. 196, per Lord Loughborough,; 231 ; Finch v. Finch, 16 Ves. ^ 51 ; Jeans v. Cooke, 24 Beav. 521, per M. Woodman v. Morrel, 2 Freem. 33 ; R. Birch v. Blagrave, Amb. 266; Gilb. (/) Prankerd v. Prankerd, 1 S. & Lex Praet. 271 ; Sidmouth v. Sid- S. 1. mouth, 2 Beav. 466 ; Skeats v. Skeats, (g) Swift v. Davis, 8 East, 354. 2 Y. & C. C. C. 9 ; Christy v. Courte- note (a). ' nay, 13 Beav. 96; O'Brien v. Shiel, 7 (A) Lord Eldon could scarcely I. 11. Eq. 255. have meant more than this, when he (6) Devoy v. Devoy, 8 Sm. & G. observed, " Possfession taken by the 403. father at the time would amount to such evidence." Murless v. Franklin, 1 Sw. 17. 241 *177 PUECHASE IN NAME OF A CHILD. [Ch. IX. S. 2. Evidence on the part of a child. — On the other hand, the son may produce parol evidence to prove the intention of advancement (c), and d fortiori such evidence is admissible on his side, as it tends to support both the legal operation and equitable presumption of the instrument (d). And it seems the subsequent acts and declarations of the father maj^be used against him by the son, though they cannot be used in his favour (e), and so the subsequent acts or declarations of the son may be used against him by the father, provided he was a party to the purchase, and his construction of the transaction may be taken as an index to the intention of the father (/) ; but not otherwise, for the question is, not what did the son, but what did the father mean by the purchase ? [Where the parties to the transaction are alive and give evidence, there is no occasion to resort to any presump- tion (5^).] 9. Rule not to be eluded by nice refinements. — From the manner in which the Court has disposed of the several dis- tinctions we have been considering, one general principle is to be extracted applicable to every case. " We think," said Chief Baron Eyre, " that reasons which partake of too great a degree of refinement should not prevail against a rule of property, which is so well established as to become a land mark, and which, whether right or wrong, should be [*177] carried throughout " (A) ; and Lord Eldon *to the same effect observed, "that the Court in Dyer v. Dyer meant to establish this principle, that the purchase is , an advancement primd facie, and in this sense, that this principle of law and presumption is not to be frittered away by mere refinements " (a). (c) Taylor v. Alston, cited 2 Cox, (/) See Murless v. Franklin, 1 Sw. 96, 1 Watk. Cop. 223; Beckford v. 20; Pole w. Pole, 1 Ves. 76 ; Sidmouth Beckford, Lofft, 490. v. Sidmouth, 2 Beav. 455; Scawin i. (d) See Taylor v. Taylor, 1 Atk. Scawin, 1 Y. & C. C. C. 65; Jeans v. 386 ; Lamplugh v. Lamplugh, 1 P. W. Coolse, 24 Beav. 521. 113 ; Redington v. Eedington, 3 Ridg. [(jr) Per Lindley, L. J., Ex parte 182, 195. Cooper, W. Si. 1882, p. 96.] (e) See Eedington v. Redington, 3 (A) 2 Cox, 98 ; 1 Watk. Cop. 226. Ridg. 195, 197 ; Sidmouth v. Sid- (o) Finch v. Finch, 15 Ves. 50. mouth, 2 Beav. 455; Stock c. Mc- Avoy, 15 L. R. Eq. 55. 242 Ch. IX. S. 2.] PTJECHASE IN NAME OF A CHILD. *177 10. Rule applies to an illegitimate child. — The doctrine of ' ' advancement has been applied to the case of even an illegiti- mate son (6) ; for it is said the principle is, that a father is under a moral duty to provide for his child, and as the obliga- tion extends to the case of an illegitimate child, he is equally entitled to the benefit of the presumption (c). But the doc- trine will not be 'applied to the illegitimate son of a legiti- mate child of the real purchaser, the person who paid the pur- chase-money, though such purchaser may have placed himself loco parentis to the illegitimate grandchild (cZ). • 11 . Rule applies to daughters as -well as sons. — It has been said that the presumption of advancement is not so strong in favour of a daughter as of a son, because daughters are not generally provided for by a settlement of real estate (e) ; bu,t the distinction has been contradicted by more than oi^e decision, and does not now exist (/). 12. Rule applies to a -wife, and grandchild or nephe'v?, toiirards whom the purchaser stands in loco parentis. — Advancement will be presumed in the case of a wife Qg^, and this pre- sumption may, as in that of a child, be rebutted by the special circu:pstances under which the transfer was made (A). But no presumption will arise in favour of a, reputed wife, being the sister of a former wife, and therefore not legally married («') ; and the presumption will be made where the purchase is taken in the name of a grandchild, where (b) Beckford rf. Beckford, Lofft, ter v. Hew^, 8 Ves. 199, per Sir W. 490 ; Fearne's P. W. 327 ; and see Grant ; Rider v. Kidder, 10 Ves. 367, Soar V. Foster, 4 K. & J. 160 ; Kilpin per Lord Eldon ; Gilb. Lex. Prset. 272 ; V. Kilpin, 1 My. & K. 520 ; Tucker v. Dummer v. Pitcher; 2 M. & K. 262 ; Burrow, 2 H. & if . 525. and see Lloyd v. Puglie, 14 L. E. Eq. (c) See Fonb. Eq. Tr. 123, note 241 ; 8 L. E. Ch. App. 88. (0, 4th ed. (A) Marshal v. Crutwell, 20 L. E. (d) Tijcker v. Burrow, 2 H. & M. Eq. 328 ; and M. R. further obserred : 515. " Now in all the cases in which a gift (e) Gilb. Lex. Preet. 272. to the wife has been held to have (/) Lady Gorge's case, cited Cro. been intended, the husband has re- Car. 550j 2 Sw. 600; Jennings v. Sel- tained the dominion over the fund in leek, 1 Vern. 467 ; and see Woodman this sense^ that the wife during the V. Morrel, 2 Freera. 33 ; Clark v. Dan- lifetime of the husband has had no vers, 1 Ch. Ca. 310. power independently of him, and the (j) Kingdome v. Bridges, 2 Vern. husband has retained the power of 67 ; Christ's Hospital v. Budgin, id. revoking the gift." lb. 330, sed qu. 683 ; Back v. Andrews, id. 120 ; Glais- (i) Soar v. Foster, 4 K. & J. 152. 243 *178 PUBCHASE IN XAMB OF A CHILD. [Ch. IX. S. 2. [*178] tlie father is dead (y), or of a nephew * who had been adopted as a son (a) ; but it seems that the advance- ment will not be presumed in favour of a more remote rela^ tion, and d fortiori not of a stranger, though the real pur- chaser may have placed himself loco parentis (b'). [13. Case of investment in joint names of purchaser, his -wife, and strangers. — The doctrine of advancement has been ap- plied to the case of an investment by a husband in the joint names of himself, his wife,, and strangers (c).J 14. Case of a mother. — ^The cases of advancement are generally those of a father, but [the question has arisen on several occasions whether the principle is applicable as be- tween mother and child, and has given rise to some differ- ence of opinion, but, on the balance of the authorities as well as on principle, it would seem that the true rule is, that, as a Court of Equity recognizes no such obligation according to the rules of equity in a mother to provide for her child as exists in the case of a father, the mere purchase or investment in the name of the child is not (sufficient per se to raise a presumption of advancement, but there must be some evidence of intention on the part of the mother, either to place herself in loeo parentis or to advance the child, to entitle the child to the property. However, very slight evidence of intention is sufficient, there being very little additional motive required beyond the relationship to induce a mother to inake a gift to her child (c?) ; and the principle] does not apply to a step-mother (e). 16. Purchase-money not paid, a debt from parent. — Where the purchase is held to be an advancement, and the purehase- (j) Ebrand v. Dancer, 2 Ch. Ca. [(c) Re Eykyn's Trusts, 6 Ch. D. 26; and see Loyd v. Read, 1 P. W. 115.] 607; Currant v. Jago, 1 CoU. 265, [(d) Be De Visme, 2 De G. J. & note (c) ; Tucker v. Burrow, 2 H. & Sm. 17 ; Bennet v. Bennet, 10 Ch. D. M. 525 ; Fowkes v. Pascoe, 10 L. R. 474 ; Be Orme, 50 L. T. N. S. 51 ; Ch. App. 343. but see Sayre v. Hughes, 5 L. R. Eq. (a) Currant v. Jago, 1 Coll. 261. 376; Batstone v. Salter, 10 L. R. Ch. (6) See Tucker v. Burrow, 2 H. App. 431.] & M. 515; but see the analogcftis (e) Todd :>. Moorhouse, 19 L. E. class of cases in reference to double Eq. 69. portions, Fowys a. Mansfield, 3 My. & Cr. 359, &c. 244 Ch. IX. S. 2.] PUECHASE IN NAME OF A CHILD. *179 money has not been paid, it will be a charge on the father's assets as an ordinary debt (/)-; and the conveyance, where the contract in favour of the wife or child remains to be executed, will be made to the wife or child, though the real purchaser's executor pays the purchase-money, for it is not the case of a volunteer (viz., the wife or child), calling for specific performance, but the vendor on his side has a right to enforce the contract and compel payment of the price, and then the Court settles the conveyance in the form in which, according to the contract, it was meant to be taken, viz., in favour of the wife or child (^). * 16. Advancement applies to personalty. — Of [*179] course, the doctrine of advancement applies to per- sonal as well as real estate; as where a father purchases stock in the name of his son (a), or daughter (6), [or trans- fers stock into the joint names of a married daughter and her husband (. WilUams, Arab. 734. 241 ; \B.e Morgto, 18 Ch. D. 93.] But (a) See Eeatherstonhaugji v. Fen- the lease of the additional lands will wick, 17 Ves. 298 ; Mulvany v. Dillon, not be a graft, Acheson v. Fair, 2 1 B. & B. 409 ; Eyrff v. Dolphin, 2 B. Conn. & Laws. 208. & B. 290 ; Killick,!;. EleSney, 4 B. 0. (/) Keech v. Sandford, Sel. Ch. Ca. 0. 161. 61 ; Griffin v. Griffin, 1 Sch. & Lef . 353. (6) Edwards"!!. Lewis, 3 Atk. 538, (gr) BlewettK.Millett,7B.P.C.367. /)er Lord Hard wicke. ' (Ji) Giddings v. Giddings, 3 Russ. (c) Mulvany v. Dillon, 1 B. & B. 241. 409; James w. Dean, 7 Ves. 383 ; S. C. 15 Ves. 236, &o. • 254 Ch. X.] CONSTEUCTIVE TRUSTS. *184 out tendering the rent, fines and costs, and Nesbitt (who as mortgagee, had three months longer to redeem under the statute), sent notice to the lessee that he would not redeem, but that if the' lessee himself did not proceed, he should make the best bargain he could with the landlord, and then offered to ■ take a new lease, to commence from the expiration of three months, with a proviso, that if any other of the parties interested should make a lodgment before that time, the agreement should be void. Lord Manners said that in all the previous cases the party had obtained the renewaj. by being in possession, or it was done behind the back, or by some contrivance in fraud of those who were interested in the old lease, and there was either a remnant of the old lease, or a tenant-right of renewal, on which the new lease could be in- grafted ; but that here no part of Nesbitt's conduct showed a contrivance, nor was he in possession, and all that Nesbitt treated for was a new lease, giving, however, full opportu- nity to the lessee to dispose of his interest, or to renew, if he was enabled to do so. And under these circumstances his Lordship held that the lease granted to the mortgagee was not bound by any trust for the mortgagor (i). ^ * 10. Trustee's lien for' expenses of renew^al. — A [*184] trustee or executor who has renewed a lease has a lien upon the estate for the costs and expenses of the renewal, with interest (a) ; and where lands are taken under the new lease that were not comprised in the original lease, the Court will apportion the expenses according to the value of the respective lands (6). The trustee will also be allowed for money subsequently laid out in lasting improvements (c), though made during the suit for recovering the lease (dT). 11. Expenses incurred by tenant for life. — In the case of ^a renewal by tenant, for life, if he put in his own life, he of (i) Nesbitt v. Tredennick, 1 B. & B. Kempton v. Packman, cited 7 Ves. 29. 176. (a) Holt V. Holt, 1 Ch. Ca. 190; (6) Giddings v. Giddings, 3 EuSs. Rawe ij. Chicliester, Ainb. 715, see 241. 720; Coppin v. Fernyhough, 2 B. C. (c) Holt u. Holt, 1 Ch. Ca. 190; C. 291 ; Lawrence v. Maggs, 1 Eden, Lawrence v. Maggs, 1 Eden, 453 ; 453 ; Pickering v. Vowles, 1 B. C. C. Stratton v. Murphy, 1 Ir. Rep. Eq. 361. 197; James v. Dean. 11 Ves. 383; {ft) Walley t).Walley,lVern.l84. 255 *185 CONSTKUCTIVE TKTJSTS. [Ch. X. course can have no claim to reimbursement (e), but if he put in the life of another, the expenses will be apportioned at the death of the tenant for life, according to the time of his actual enjoyment of the renewed interest (/) ; and his estate will be a creditor on the premises for the apportionment though the ren;iaindermen be his own children, who resist the claim on the ground of advancement (^). 12. Contribution to fine by annuitants. In the case of a testator devising all his interest in leaseholds subject to an aw- nuity, the question of the annuitant's contribution has been differently regarded by different judges, In Maxwell v. Ashe (K), the case of a will, Sir John Strange decided that the annuitant was not bound to contribute ; and in Moody v. Matthews (€), where a feme sold an annuity to A. for his life, out of tithes held by her upon lease, and covenanted to pay the annuity, and that the tithes should continue subject to it during the life of A., and the feme married and died, and the husband, who took the term by survivorship, re- newed at his own expense. Sir W. Grant determined that the annuitant was not to be called upon to contribute, for that would be to make him pay the consideration twice, and he said the case of Maxwell v. Ashe was decisive. On the other hand, it was ruled by Lord Manners, in the case of a will, that the annuitant must contribute in proportion to his . interest in the property : for though the testator had given no direction upon this point, it was incident to this sort of tenure (/). At the time of this decision, his Lordship [*185] was not aware of the * cases before Sir J. Strange and Sir W. Grant; but on a subsequent occasion, when the same point again arose before him, he adhered to the same opinion, notwithstanding those authorities, for "all the legatees," he said, " appear to have been equally the ob- jects of the testator's favour. Could it have been 'his inten- tion that one of them alone should bear the expense of the (e) Lawrence v. Maggs,l Eden, 453. (t) 7 Ves. 174 ; and see Jones v. . (/) See infra. Kearney, 1 Conn. & Laws. 47 ; Thomas (j) Lawrence v. Maggs, 1 Eden, v. Burne, 1 Dru. & Walsh, 657. 453. 0) Winslowu.Tighe, 2 B. &B. 195. (A) Cited 7 Ves. 184. 256 Ch. X.J • CONSTRUCTIVE TKTISTS. *185 renewal, and that the others should receive the fuU amount of their annuities without any deduction ? " (a) 13. Terms of assignment by the trustee. — In making the assignment to the cestui que trust the trustee will also be in- demnified against the personal covenants which he entered into with the lessor (J) ; and on his own part must clear the lease of all incumbrances created by himself, except under- leases at rack-rent (c). 14. Accounting for mesne rents and profits. — The trustee must also account to the cestui que trust for the mesne rents amd profits which he has received from the estate (i), and also for any sub-fines that may have been paid to him by un- derlessees (e). And the cestui que trust, though the lease which was the ground of his equity has since actually expired, may still call for an account of the rents and profits (/). In the case of a renewal by tenant for life, the account will of course be restricted to the period since the tenant for life's decease (^g'). 15. Remedy against purchasers and others claiming under the lessee. — The cestui que trust may pursue his remedy not only against the original trustee, executor, or tenant for life, and volunteera».claiming through them' (K) ; but also against a purchaser, with notice express or implied of the plaintiff's title (%) ; and a purchaser will be deemed to have had notice if the lease assigned .to him recited the surrender of a former lease, which recited the surrender of a previous lease, in which mention was made of the settlement under which the cestui que trust claims (/) ; and the volunteer or purchaser with notice (a) Stubbs V. Roth, 2 B. & B. 548. (/) Eyre v. Dolphin,2 B. &B.290. (6) Giddings v. Giddings, 3 Riiss. (j) James v. Dean, 11 Ves. .383, see 241 ; Keech v. Sandford, Sel. Ch. Ca. 396 ; Giddings v. Giddings, 3 Russ. 61. 241. (c) Bowles V. Stewart, 1 Sch. & (h) Bowles v. Stewart, 1 Sch. & Lef . Lef. 209, see 230. 209; Eyre v. Dolphin, 2 B. & B. 290; {d) Giddings v. Giddings, Keech v. Blewett v. MiUett, 7 B. P. C. 367. Sanford, uK supra ; Mulvany v. Bil- (J) Coppin v. Fernyhough, 2 B. C. lon.l B. &B. 409; Walley d. Walley, C. 291; Walley v. Walley, 1 Vern. 1 Vern. 484; Luckin «. Rushworth, 484; Eyre v. Dolphin, 2 B. & B. 290; Eineh. 392; Blewett v. MiUett, 7 B. Stratton «. Murphy, 1 Ir. Rep. Eq. 345., P. 0. 367. (./) Coppin v. Femyhough, 2 B. C. (e) Rawe v. Chichester, Amb. 715, C. 291 ; Hodgkinson v. Cooper, 9 see 720. Bear. 304. 257 *186 COKSTKtrCTIVE TKTJSTS. " [Ch. X. ' will not be helped by a fine levied (k), or even by a [*186] release from tbe cestui que trust, if executed * by him while in ignorance of the facts of the case (a). How- ever, a purchaser will stand in the place of his assignor in respect of any allowances for expenses incurred in the renewal (6). 16. Iiimitatioa of time. — A cestui que trust will be barred of his remedy if he be guilty of , long acquiescence, as, in one case, for a period of fifteen years (c) ; and in another case concerning a lease of mines (which stand on a peculiar foot- ing,) relief was refused after a period of nine years (^), and continual claim by the cestui que trust, if without any effec- tive step to enforce the right, will be of no avail (e). 17. Case of trustee of a lease purchasing the reversion. — If the trustee of a lease become the purchaser of the reversion Sir W. Grant said, that, as he thereby intercepts and cuts off the chance of future renewals, and consequently makes use of his situation to prejudice the interests of those who stand behind him, there might be some sort of equity in a claim to have the reversion considered as a substitution for those interests, but his Honour was not aware of any determina- tion to that effect (/)■ [However it has recently been held in a case in Ireland that a trustee of leaseholds custom- arily renewable, who purchased the reversion at a sale by auction was a constructive trustee for the persons benefi- cially interested in the leaseholds (^) ; and in another re- cent case where the assignee of the tfenant for life of lease- holds which had been customarily renewable, but which the Ecclesiastical Commissioners had refused to renew any more, purchased the reversion, it was held that he had be- come a trustee of the reversion for the benefit of the persons (k) Bowles V. Stewart, 1 Sch. & (d) Clegg v. Edmondson, 8 De G. Lef . 209. M. & G. 787; (a) Bowles v. Stewart, 1 Sch. & (e) Clegg v. Edmondson, 8 De G. Xef. 209. M. & G. 787. (6) Coppin V. Femyhough, 2 B. C. (/) Randall v. Russell, 3 Mer. 197 ; C. 291. ^ and see Hardman v. Johnson, ib. 347 ; (e) Isald V. Fitzgerald, cited Owen Norris v. Le Neve, 3 Atk. 37 and 38; V. Williams, Amb. 735, 787 ; and see Lesley's case, 2 Ereem. 62 ; Fosbroke Norris v. Le Neve, 3 Atk. 38 ; Jack- v. Balguy, 1 M. &, K. 226 ; Giddings v. son V. Welsh, LI. & G. Rep. t. Plun- Giddings, 3 Russ. 241. ket, 346. [(j) Gabbett v. Lawder, 11 L. R. 258 Ch. X.] CONSTEUCTIVE TRUSTS. *187 interested in the lease subject to his right to be recoupec^ the purchase-money paid by him (h). So where one of the trustees of a lucrative agency agree- ment procured the agency to be renewed to a firm, in which he was a partner, upon terms less lucrative but still benefi- cial, it was held that the trustee's iaterest in the renewed agreement formed part of the trust estate (i). ] * No tenant-right -where a corporation has sold to an [*187] individual. — But where a lease had been held by a trustee of a college, and the corporation having disposed of the reversion to a stranger, the trustee purchased of the alienee, Sir W. Grant decided that the parties interested in the original lease had no equity against the trustee, for the tenant-right of renewal with a public body was gone, and the lease at a rack-rent was all that could be expected from a private proprietor (a). But if the trustee of a lease with a covenant for perpetual renewal, or if any person standing in a fiduciary position in respect of such a lease acquires the legal possession of and dominion over the fee which is subject to the covenant, and so deals with the property as to make the renewal impossible by his own act and for his own benefit, he is bound to give fuU effect to the charges on the trust estate, and to satisfy those charges out of the acquired estate (J). 18. Factor, agent, &c., constructive trustees. — The principle upon which a Court of equity elicits constructive trusts might be pursued into numerous other instances ; as if a factor (c), agent {d'), partner (e), inspector under a creditor's deed (/), or other confidential person, acquire any pecuniary advantage It. 295; but see the observations of (c) East India Company ti. Hench- L. J. James in, Trumper v. Trumper, man, 1 Ves. jun. 287 ; S. C. 8 B. P. C. 8 L. E. Ch. App, 879.] 85. 1(h) Re Lord Eanelagh's Will, 26 (d) Fawcett ». Whitehouse, 1 R. & Ch. D. 590; Phillips v. Phillips, 29 M. 132; Hichens v. Congreve, lb. Ch. D. 673; and see Leigh w. Burnett, 150; Carter u. Home, 1 Eq. Ca. Ab. 29 Ch. D. 231.] 7 ; Brookman v. Rothschild, 3 Sim. [(i) Bennett v. The Gaslight and 153; Gillett v. Peppercorn, 3 Beav. Coke Company, 52 L. J. N. S. Ch. 98.] 78. (o) Randall v. Russell, 3 Mer. 190. (e) Bentley v. Craven, 18 Beav. (h) Trumper v. Trumper, 14 L. R. 75 ; Burton v. Wookey, 6 Mad. 368. Eq. 295, see p. 310 ; affirmed 8 L. R. (/) Coppard v. Allen, 4 Gift. 497 ; Ch. App. 870. 2 De G. J. & S. 173. 259 *188 CONSTRUCTIVE TRUSTS. [Ch. X. to himself through the medium of his fiduciary character, he is accountable as a Constructive trustee for those profits to his em- ployer or other person whose interest he was bound to advance. 19. Unauthorized fall of timber. ^ — -Again,' a constructive trust may arise under special instances in respect of waste. If a tenant for life commit legal waste by felling timber, the tenant of the first estate of inheritance at the time (though there be an intermediate life estate [and though there be a possibility of intermediate estates of inheritance coming into esBe (5')]) can recover the trees or damagles (A), for even an intermediate tenant for life, though he be unimpeach- [*188] able of wast6, * cannot claim the timber against the owner of the inheritance, (a) ; and if the tenant for life commit equitable waste, the rule is the same, and the timber belongs to the owner of the first estate of inheritance, notwithsta,nding intermediate estates for life (J) ; and the wrongdoer is accountable for the proceeds, with interest at 4 per cent (c), without being allowed for repairs (cT) ; but subject to the bar of the statute of limitations which begins to run from the time of the waste (e). It may happen, how- ever, that the wrongdoer is himself, at the time, the owner of the first estate of inheritance, while intermediate estates of inheritance may arise in future ; as in a limitation to A. for life, remainder to his first and other sons in tail, remainder to B. for life, remaijider to his first and other sons in tail, 1(g) Cavendish u. Mirndy, W. N. (a) See Gent v. Harrison, Johns. 1877, p. 198 ; Simpson v. Simpson, 3 517. L. R. Ir. 308.] (6) Eolt v. Somerrille, 3 Eq. C. Ab. 1(h) Formerly a court of law was 759; Ormonde v. Kynersley, 5 Mad. the proper tribunal in which to sue 369 ; 2 S. & S. 15 ; Butler v. Kynners- for a recovery of the trees or for ley, 2 Bligh, N. S. 385 ; 7 L. J. 0. S. damages, and relief was given in 150 ; Lushington v. Boldero, 15 Beav. equity only when the plaintiff asked 1 ; Duke of Leeds v. Amherst, 2 Ph. for an account or injunction, Gent v. 117 ; Honywood v. Honywood, 18 L. Harrison, Johns. 517 ; Higginbotham E. Eq. 306. V. Hawkins, 7 L. E. Ch. App. 676 ; (c) Garth v. Cotton, 3 Atk. 751. Whitfield V. Brewit, 2 P. Wms. 240; (d) Whitfield v. Bewit, 2 P. Wms. L-ee V. AUston, 1 B. C. C. 194; 3 B. C. 240. C. 38 ; and see Seagram v. Knight, 3 (e) Seagram ». Knight, 3 L. E. L. S. Eq. 398 ; 2 L. K.' Ch. App. 628. Eq. 398; 2 L. R. Ch. App. 628; But now by 36 & 37 Vict. i;. 66, s. 24, [Simpson v. Simpson, 3 L. E. Ir. 308;] the jurisdictions of Courts of Law and see Higginbotham v. Hawkins, 7 and Equity have been assimilated.] L. R. Ch. App. 676. 260 Ch. X.] CONSTRUCTIVE TRUSTS. *189 remainder to A. in fee, and no issue of A. or B. are born at tlie time of commission of the waste. In this case, as no man shall take advantage of his own wroqg, and there is no estate of inheritance in esse except that of A. himself, he is co7igtruetively a trustee in equity of the proceeds of the tim- ber for the benefit of all the persons interested under the settlement, except himself, according to their respectiye estates, that is, he is made to account for the proceeds which are invested and deemed part of the settlement, and the income of Such investment is payable to the tenant in prce- seMi, not being the wrongdoer, whether such tenant be for life or otherwise, and if there be no such tenant it accumu- lates. But if in the case put there be no issue afterwards born of A. or B., aind therefore there is no inheritance but that of A., the fund subject to B.'s life estate wiU belong to A. (/). In the above case, * A. himaelf [*189] had the first vested estate of inheritance ; but it may (/) Williams v. Bolton, 1 Cox, 72 ; Powlett V. Bolton, 3 Ves. 374; see further statement of this case in 2 New Rep. 305. But in Garth v. Cot- ton, 3 Atk. 751 ; 1 Ves. sen. 523, 646, interest at 4 per cent was given only from the filing of the bill; and in Duke of Leeds v. Amherst, 12 Sim. 476; 2 Ph. 117, interest at 4 per cent was given only from the death of the wrongdoer. In the later case of Bagot V. Bagot, 32 Beav. 509, M. E. refused interest further back than from the death of the wrongdoer. The decision was appealed from to L. C. (Lord Westbury), and the case was compromised, but in the course of the argument L. C. intimated his concurrence with the view of M. E. as to the time whence interest was to be computed. The L. C. seemed also to think that, as to such timber felled by the tenant for life as the Court upon application to it would have ordered to be cut, the tenant for life would bcprotected as having done a proper act, but that the onus would lie upon him to establish such a case. " As regards the question of interest on the money arising from timber properly cut, the plaintifE," he said, "could hardly ask for interest. Of course the obligation of making out the case lies upon the tenant for life." — M.S. However this may be as to the timber properly cut, the remark suggests itself as to the timber im- properly cut, that if the tenant for life is not to pay interest from the time of felling, he takes advantage of his own wrong, for if the timber had been left standing the increase of growth would have enured to the ben- efit of the remainderman, but by cut- ting the timber the tenant for life intercepts this accretion and enjoys the usufruct himself. True he loses the mast and shade, but that is the result of his own wilful act, and he cannot therefore complain. As re- gards mines, the case is difEerent, for here there is no continuing growth for the benefit of the remainderman. But in one respect the offence of waste is greater, for if timber be cut other timber may grow in Its place, but when minerals are abstracted the vacuum remains for ever. On the 261 ^90 CONSTEUCTIVB TRUSTS. [Ch.X happen tliat the first vested estate of inheritance is in B., and that A. and B. collude together in cutting the timber, and then a court of equity equally interferes and makes A. and B. accountable as constructive trustees of the proceeds for the benefit of the other persons interested in the estate, iacluding tenants for life (a). Where there is coHjision between the tenant for life and the owner of the first estate of inheritance, or where the tenant for life is also owner of the first estate of inheritance, and the timber is improperly cut, the remedy of the next tenant for life in remainder, is said to be barred by the statute after six years from the d^th of the prior tenant for life (6). Mines. — 36 & 37 Vict. c. 66, a. 25. — These princi- [*190] pies which have been laid down as * to timber apply also mutatis mutandis to waste in opening mines (a). subject of timber generally, see the work of the late Mr. Craig, Q. C. (a) Garth v. Cotton, 3 Atk. 751. (6) Birch-Wolfe v. Birch, 9 L. K. Eq. 683. Where the timber is prop- erly cut, either by order of the Court or by a wise exercise of the discretion of the trustees, the proceeds are treated as part of the settlement, and are invested for the benefit of all per- sons interested, whether tenants for life or otherwise, and whether im- peachable for waste or not, according to their respective estates. Waldo v. Waldo, 12 Sim. 107; Wickham v. Wickham, 19 Ves. 419; Gent v. Har- rison, Johns. 517 ; Mildmay v. Mild- may, 4 B. C. C. 76 ; Delapole ». Dela- pole, 17 Ves. 150 ; Tooker v. Annesley, 5 Sim. 235 ; Consett v. fiell, 1 Y. & C. C. C. 569; Honywood v. Hony- wood; 18 L. E. Eq. 306. And if there be a tenant for life unimpeachable of waste, whose estate comes into pos- session, as he might have cut the timber, he is held to be entitled abso- lutely to the fund ; Waldo v. Waldo, 12 Sim. 107; Phillips v. Barlow, 14 Sim. 262; Gent v. Harrison, Johns. 517; [Lowndes v. Norton, 6 Ch. D. 139. And an equitable tenant for life unimpeachable for waste is enti- tled to the proceeds of ornamental timber cut by him where the timber so cut is such as the Court would it- self direct to be cut for the preserva- tion and improvement of the remain- ing ornamental timber; but it does not follow that the Court will not at the instance of the remainderman grant an injunction restraining the tenant for life from cutting any orna- mental timber which it has become necessary to cut, and direct that the cutting be done under its supervi^ ion; Baker v. Sebright, 13 Ch. D. 179.] Windfalls belong to the owner of the first estate of inheritance, ex- cept such trees as the tenant for life would have been entitled to cut as thinnings, etc., and these belong to the tenant for life, Bateman v. Hotch- kin (No. 2), 31 Beav. 486; [and see Re Ainslie, 28 Ch. D. 89; Re Har- rison, 54 L. J. N. S. Ch. 26, where the proceeds of larch plantations which had been blown down were applied in renewing the plantations and the balance was invested and the income directed to be paid to the ten- ant for life ; varied on appeal, 28 Ch. D. 220.] (a) See Bagot v. Bagot, 32 Beay 509. 262 Cm. X.] CONSTRUCTIVE TRUSTS. *190 By a recent Act 36 & 37 Vict. c. 66, s. 25, subs. 3, " an estate for life without impeachment of waste shall not confer or be deemed to have conferred upon the tenant for life, any legal right to commit waste of the description known as equitable waste, unless an intention to confer such right shall expressly appear by the instrument creating such estate." [20. By the Settled Land Act, 1882, a tenant for life though impeachable for waste may with the consent of the trustees of the settlement or an order of the Court cut tim- ber ripe and fit for cutting, and is entitled to one fourth of the net proceeds (5), and the same Act gives the tenant for life power to lease unopened mines, setting aside a portion of the profits for the benefit of the remaindermen (c).] 21. Bonus for not opposing a bill in Parliament. — As an- other instance of a constructive trust, where money is paid to a tenant for life in consideration of his not opposing a bill in parliament for sanctioning a rg,ilway, he is constructively a trustee of the money for all the persons interested under the settlement (ti). [22. Salmon fishings. — Again, where a grant had been made by the Crown to the Aberdeen Town Council of salmon-fish- ings in the sea opposite certain lands which in the view of the Court were held by the Town Council in trust for the Aberdeen University and its professors, it was held that the grant of the fishings having been made to the Town Coun- cil as the proprietors of the lands, they were constructive trustees of the fishings for the University and its pro- fessors (e). 23. Mortgagee. — A mortgagee is not a constructive trus- tee for the mortgagor of his power of sale, which is a' power given to him for his own benefit, to enable him the better to realize his debt (/).] 24. Mortgagee in possession. — A mortgagee in possession is constructively a trustee of the rents and profits, and bound [(6) 45 & 46 Vict. c. 38, a. 35.] [(e) Aberdeen Town Council v. [(c) Sects. 6, 11.] Aberdeen University, 2 App. Cas. Id) Pole V. Pole, 2 Dr. & Sm. 420 ; 544.] [Earl of Shrewsbury v. North Staf- [(/) Warner v. Jacob, 20 Ch. D. fordshire Railway Company, 1 L. E. 220.] Eq. 608.] 263 *191 CONSTKUCTIVE TBTTSTS. [Ch. X. to apply them in a due course of administration (^), and it has been held (K) that a mortgagee in possession is so [*191] strictly a trustee, that he is liable even after a * trans- fer for the rents and profits subsequently accrued, but the case was probably decided . upon its own special circum- stances, for a mortgagee has surely a right to transfer his mortgage without notice to the mortgagor, though in tlie latter case he may not be allowed the costs of the trans- fer (a), and, if he be entitled to transfer, how can he be held responsible as fqr a breach of trust (6) ? 25. Fraud in attorney. — Again, where A. contracted for the sale of part of his estate, and the purchaser requiring a fine to be levied, B., who was A.'s attorney, and also his heir- apparent, advised a fine to be levied of the whole estate, whereby the will of the vendor was revoked, and the part not included in the sale descended to B. as his heir-at-law, it was held that the devisee under the will could call upon B. as a constructive trustee (c). "You," said Lord Eldon, "who have been wanting in what I conceive to be the duty of an attorney, if it happens that you get an advantage by that neglect, you shall not hold that advantage, but you shall be a trustee of the property for the benefit of that person who would have been entitled to it if you had known what as an attorney you ought to have known, and, not knowing it, you shall not take advantage 'of your own igno- rance " (d). (y) Coppring o. Cooke, 1 Vern. of the mortgagor merely constitutes 270; Bentham v. Haincourt, Pr. Ch. the transferee to be the agent of the 30 ; Parker v. Calcroft, 6 Mad. 11 ; mortgagee for the receipt of the rents Hughes V. Williams, 12 Ves. 493; and profits, and leaves the mortgagee Haddocks v. Wren, 2 Ch. Rep. 109. liable for the acts of his agent; and (A) Venables w. Foyle, 1 Ch. Ca. 3. see Coote on Mortgages, 5th ed., 720, (a) Re KadclifEe, 22 Beav. 201. 809 ; Fisher on Mortgages, 4th ed., (6) See Kingham y. Lee, 15 Sim. 854.] 400. [It is singular that there is no (c) Bulkley v. Wilford, 2 CI. & modern case upon this point, but the Fin. 177 ; S. C. 8 Bligh, N. S. Ill ; liability of the mortgagee may per- and see Segfave v. Kirwan, Beat. 157 ; haps be supported on the ground that Nanney v. Williams, 22 Beav. 452 ; by entering into possession he has [Keongh ii. M'Grath, 5 L. R. Ir. made himself a trustee for the mort- 478 ; Lysaght v. M'Grath, 11 L. R. Ir. gagor of the rents and profits, and 142 ; Re Birchall, 44 L. T. N. S. 243.] that the transfer without the consent (rf) 2 CI. & Fin. 177. 264 Ch. X.] CONSTRtrCTIVE TRUSTS. *192 26. Agent not constructive trustee. — An (igent employed by a trustee is accountable in general to his principal only, and cannot as a constructive trustee be made responsible to the cestuis que trust (e) ; [and the directors of a company bound by a trust will not be personally liable for breaches of trust committed by the company (/).] But of course the rule does * not apply where the agent has taken an [*192] axitivelj fraudulent part, and so made himself a princi- pal (a). ^ 27. Title-deeds. — Under the head of constructive trusts m&y be mentioned the case of a settlement left in the hands of a person taking only a partial benefit under it as a tenant for life, in which case the other persons interested and claim- ing under the same title have a right to the fair use of the document, and the holder is deemed a trustee for them, and is bound to produce it at their request (J). And in one case it was ruled that if a person sell part of his estate and retain the title-deeds, though he may not have given a covenant for production, he is compellable to produce them as common property to the purchaser (e). But in Barclay v. Raine (cZ), Sir J. Leach seems to have doubted whether, if part be sold and the title-deeds delivered to the purchaser, a future purchaser from him could be ordered, where there was no («) Keane v. Eobarts, 4 Mad. 332 ; (a) Hardy v. Caley, 33 Beav. 365 ; see 356, 359 ; Davis v. Spurling, 1 R. Fyler v. Fyler, 3 Beav. 550 ; Portlock & M. 54; S. C. Taml. 199; Crisp v. v. Gardner, 1 Hare, 606; Ex parte Spranger, Nels. 109; Saville u. Tan- Woodin, 3 Mont. D. & De G. 399; cred, 3 Sw. 141, note; Niekolson u. Attorney-General v. Corporation of Knowles, S Mad. 47 ; Myler v. Fitz- Leicester, 7 Bear. 176 ; Bodenham v. Patrick, 6 Mad. 360 ; Fyler v. Fyler, Hoskyns, 2 De G. M. & G. 903 ; Pannell 3 Beav. 550; Maw v. Pearson, 28 v. Hurley, 2 Coll. 241; Alleyne v. Beav. 196; Lockwood v. Abdy, 14 Darcy, 4 Ir. Ch. Rep. 199; and see Sim. 437 ; Archer v. Lavender, 9 I. R. S. C. 5 Ir. Ch. Rep. 56 ; Bridgman v. Eq. 225, per cur. ; [Wilson v. Lord Gill, 24 Beav. 382 ; Archer v. Laven- Bury, 5 Q. B. D. 518; Re Spencer, 51 der, 9 I. R. Eq. 220. L. J. N. S. Ch. 271 ;] and see Ux parte (6) Banbury v. Briscoe, 2 Ch. Ca. Burton, 3 Mont. D. & De G. 364 ; Re 42 ; Harrison v. Coppard, 2 Cox, 318 ; Banting, 2 Ad. & Ell. 467 ; Williams Shore v. CoUett, Coop. 234 ; Davis ». V. Williams, 17 Ch. D. 437, where Dysart, 20 Beav. 405; Curnick v. attention is drawn to the distinction Tucker, 17 L. R. Eq. 320. between notice to raise a constructive (c) Fain v. Ayers, 2 S. & S. 533. trust, and notice to an actual trustee. (d) 1 S. & S. 449; see 7 Byth. by [(/) Wilson V. Lord Bury, 5 Q. B. Jarm. 375. D.518.] 265 *193 CONSTRUCTIVE TRUSTS. [Cb. X. covenant for that purpose, to produce them to the owners of the other parts. The real property commissioners, however, observe, that previously to this' case it had been supposed, either that an original independent equity existed entitling any party interested in a deed to call for its production by any other person having the custody of it, or at least that such an equity existed wherever the parties requiring the production claimed under a person who had taken the pre- caution to procure a covenant for that purpose, and the person hfiving the actual custody of it derived that custody from or through a person who had entered into such covenant (e) ; upon which Lord St.' Leonards observes, that the rule in equity was never so universal as it is quoted in the first part of the above statement, but that the second branch, stating what at least the doctrine was, appears to be correct (/). It is submitted that even where a vendor has taken no such covenant from the purchaser, the vendor, and those claiming imder him, would have a right to production of the deeds as common property. 28. Constructive trustees from notice of the trust. — Con- structive trusts are said also to arise where the trust estate is converted by the trustee from one species of [*193] property into * another ; and again, where the trust estate passes from the trustee into the hands of a volunteer whether with or without notice, or of a purchaser for valuable consideration with notice; but as these are cases rather of an existing trust continued and kept on foot than of a new trust created, the consideration of these top- ics will be reserved to a subsequent part of the treatise. In concluding the subject of trusts by operation of law, it may be proper to offer a few remarks on the wording of the Statute of Frauds (a). Statute of Frauds as affecting trusts by operation of law. — By the eighth section it is enacted, that " where any convey- (e) 3d Kep. (/) Vend. & Purch. 14th ed. 454, note (1). (a) 29 Car. 2, c. 3. 266 Ch. X.] CONSTRUCTIVE TETTSTS. *194 ance shall be made of any lands or tenements by which a trust or confidence shall or may arise or result by the implication or construction of law, or be transferred or extinguished by an act or operation of law, then and in every such case such trust or confidence shall be of the like force and effect as the same would have been if that statute had not been made ; anything thereinbefore contained to the contrary notwith- standing." Lord Hardwicke's opinion. — Lord Hardwicke upon this clause observed, "I am now bound down by the Statute of * Frauds to construe nothing a resulting trust but' what are there called trusts by operation of law ; and what are those ? "Why, First, when an estatfe is purchased in the name of one person but the money or consideration is given by another ; or. Secondly, where a trust is declared only as to part, and nothing said as to the rest, in which case what remains un- disposed of will result to the heir-at-law. I do not know any other instance besides these two, where the Court has declared resulting trusts by operation of law, unless in cases of fraud, and where transactions have been carried on maid Me " (6). Mr. Fonblanque'B opinion. — Upon this Opinion of Lord Hardwicke, Mr. Fonblanque has made the following, just remarks : — " This construction of the clause of the Statute of Frauds restrains it to such trusts as arise by operation of law, whereas it clearly extends to such as are raised by con- struction of Courts of equity ; as, in the case of an executor or guardian renewing a lease, though with his own money, such renewal shall be deemed to be in trust for the person beneficially interested in the old lease. It is also observable, that the first instance stated by his Lordship of a resulting trust is not so qualified as to let in the exceptions to which the general rule is subject, and the second instance is only applicable to a will, whereas the doctrine of result- ing trusts is also applicable to * conveyances " (a). As [*194] to the latter part of this criticism it may be observed that while Atkyns makes Lord Hardwicke speak of a will (6) Lloyd V. SpUlet, 2 Atk. 150. (a) 2 Tr. Eq. 116, note (a). 267 *194 CONSTBUCTIVE TRUSTS. [Ch. X. only, Barnardiston, the other reporter, applies his Lordship's observation to a conveyance (6). It would thus appear that Lord Hardwicke ia fact extended his remark to a will and a conveyance indifferently. Both Lord Hardwicke and Mr. Fonblanque assume that the seventh or enacting clause embraces all trusts indiscrimi- nately, and that such as arise by operation of law are only saved from the act by virtue of the subsequent exception contained in the eighth section ; but the language of the lat- ter clause, that " where any conveyance shall be ma^e of any lands or tenements by which a trust or confidence shall or may arise or result," &c., seems to have escaped observation ; for, unless conveyance be taken with great Adolence to the meaning of the words to include a devise, it is clear that trusts resulting under a will are not reached by the terms of saving. Nor is it easy to suppose that the legislature could mean to include a devise; for the fifth and sixth sections relate exclusively to devices, and, had it fallen within the scope of the Act to extend the eighth section to wills, it can scarcely be conceived> that the proper and technical word should not necessarily have suggested itself. The question then ariseSj If resulting trusts upon a will are not saved by the exception, how are they not affected by force of the previous enactment ? As the statute was directed against frauds and perjuries, it is obvious that resulting trusts were not within the mischief intended to be remedied. The aim of the legislature was, not to disturb such trusts as were raised by maxims of equity, and so could not open a door to fraud or perjury, but, by requiring the creation of trusts hy parties to be manifested in writing, to prevent that fraud and perjury to which the admission of parol testimony had hitherto given occasion. And the enactment itself is appli- cable only to this view of the subject; for the legislature could scarcely direct that " all declarations or creations of trusts should be manifested and proved," &c., unless the trusts were in their nature capable of manifestation and proof ; but, as resulting trusts are the effect of a rule of law, (i) See Lloyd v. Spillet, Barn. 388. 268 Ch. X.] CONSTKUCTIVE TETJSTS. *195 to prove them would be to instruct the Court in its own principles, to certify to the judge how equity itself operates. The exception could only have been inserted ex majori cauteld that the extent of the enactment might not be left to implica-' tion. But why, it will be asked, are resulting trusts upon conveyances excepted, and not resulting * trusts [*195] upon vnlU ? The only explanation that suggests itself is this : — The statute had spoken only of declarations or crea- tions of trusts, and by a will no resulting trust is or can be de- clared or created. If lands be devised to A. and his heirs upon •trust to pay the testator's debts, the resulting trust of the surplus is no new declaration or creation; the right con- struction is, that the testator has disposed of the legal estate to the devisee, and of part of the equitable in favour of cred- itors ; but the residue of the equitable, though said to result, has in fact never been parted with, but, descends upon the heir-at-law as part of the original inheritance. In convey- ances, however, this is not equally the case ; for if a purchase be taken in the name of a third person, a trust which had no previous existence arises upon the property in favour of the real purchaser ; and so if a lease be renewed by a trustee, the equity which was annexed to the old term immediately fastens upon the new. Here, then, it is evident there is an actual creation of trust ; and, to obviate all doubts as to the operation of the enactment, resulting trusts arising out of conveyances are expressly excepted. 269 [*196] *PaKT II. THE TRUSTEE'. CHAPTER XI. OF PISCLAIMEE AITO ACCEPTANCE OF THE TRUST. Having treated ot the creation of trusts,' whether by the act of a party or by operation of law, we shall next direct our attention to the estate and office of the trustee, and, as a preliminary inquiry, we propose in the present chapter to offer a few remarks upon the subject of the trustee's dis- claimer or acceptance of the trust. , First. Of Disclaimer?- 1. No person compellable to be a trustee. — It may be laid down as a clear and undisputed rule, that no one is compel- lahle to undertake a trust (a). " Though a person," said (a) Eobinson v. Pett, 3 P. W. 251, Lowry v. Fulton, 9 Sim. 123, per Sir per Lord Talbot ; Moyle u. Moyle, L. Shadwell. 2 R. & M. 715, per Lord Brougham ; 1 Disclaimer. — The trustee named may refuse to act even though it should prevent the beneficiary from receiving any of the benefit which the trustee in- tended for him ; Beekman v. Bonsor, 23 N. Y. 298 ; such a refusal will not destroy the trust, as the court will appoint another trustee ; NicoU v. Ogden, 29 111. 323 ; 81 Am. Dec. 311 ; Thatcher v. Church, 37 Mich. 264 ; Johnson V. Roland, 58 Tenn. 203 ; NicoU v. Miller, 37 111. 387 ; declining to act as an executor is not a disclaimer of a trust declared in a will; Tainter v. Clark, 13 Met. 224 ; William v. Gushing, 34 Me. 370 ; Garner v. Dowling, 11 Heisk. 48; Anderson v. Earle, 9 S. C. 460; this refusal may be in writing, or such a tacit refusal as would make plain the intention to disclaim; Read r. Robin- son, 6 Watts. & S. 331 ; for there is a presumption of acceptance until the contrary appears; Furman v. Fisher, 4 Cold. 626; Penny v. Davis, 3 B. Mon. 313 ; especially if there is a lonp; lapse of time ; Eyrick t'. Hctrick, 13 Pa. St. 493 ; a parol disclaimer is sufiicient, even of a trust of real estate. Roseboom v. Mosher, 2 Denio, 61 ; Hamilton v. Love, 2 Kerr. (N. B.) 243 ; Thompsons v. Meek, 7 Leigh. 419; but it must be certain and complete; 270 Ch. XL] DISCLAIMER. *196 Lord Redesdale, "may have agreed in the lifetime of a testa- tor to accept the executorship, he is still at liberty to recede, except so far as his feelings may forbid it; and it will be proper for him to do so, if he finds that his charge as ex- ecutor is different from what he conceived it to be when he entered into the engagement" (6). 2. Heir of a trustee. — But there does not appear to be any instance in which, after acceptance by the trustee, his heir has been allowed to disclaim the estate; and if the law permitted it, many instances would no doubt have oc- curred (e). The inconveniences of such a right of dis- claimer would [before the recent Act (cT) have been] great, (6) Doyle v. Blake, 2 Sch. & Lef . under which the legal estate in realty 239. devolves to the personal representa- (c) See Humphrey v. Morse, 2 tive of the trustee as if it were a Atk. 408. chattel real.] i{d) a & 45 Vict. c. 41, s. 30, Judson V. Gibbons, 5 Wend. 224; it may be a sufficient disclaimer if the trustees named fail to perform any of the duties required in the management of the trust estate, or to qualify as such trustees; Williams v. King, 43 Conn. 572; Wardwell v. McDowell, 31 111. 364; Thornton v. Winston, 4 Leigh. 152; Marr v. Peay, 2 Murph. 85; or they may disclaim in court or by pleadings; Clemens v. Clemens, 60 Barb. 366. If the trustee has accepted the trust, he cannot afterwards free himself from it by putting in a disclaimer ; Shepherd v. M'Evers, 4 Johns. Ch. 136 ; 8 Am. Dec. 561 ; Armstrong v. Morrill, 14 Wall. 138 ; Sears v. Dillingham,, 12 Mass. .358; Strong v. WUlis, 3 Fla. 124; Jones i-. Stockett, 2 Bland. 409; Cruger v. Halliday, 11 Paige, 314; Drane v. Gunter, 19 Ala. 731; Chaplin v. Givens, 1 Bice, Eq. 133; but see Robertson v. McGeoeh, 11 Paige, 640; he can be discharged only by a decree of court, by the consent of all interested parties, or in accordance with provision made in the instrument declaring the trust; Sugden o. Crossland, 3 Sm. & Gif. 192; Webster v. Vandeventer, 6 Gray, 428 ; Perkins v. McGavoek, 3 Hayn. 265 ; Ridgeley v. Johnson, 11 Ba^b. 527; Diefendorf u. Spraker, 10 N. Y. 246; Re Bernstein, 3 Redf. 20 ; mere abandonment will not relieve the trustee of his responsibility ; Thatcher V. Candee, 3 Keyes, 157; Cruger v. Halliday, 11 Paige, 314; if a person dies without accepting or disclaiming, whether his heirs or representatives can disclaim is an unsettled question ; Goodson v. Ellison, 3 Russ. 583 ; Hill on Trustees, 222 ; King v. Phillips 16 Jur. 1080. Effect of disclaimer. — If a trustee disclaim he loses any gifts or benefits attaching to the position ; Kirkland v. Narramore, 105 Mass. 31 ; Newcomb v. Williams, 9 Met. 525 ; Hall v. Cushing, 9 Pick. 395 ; Barrus v. Kirkland, 8 Gray, 512; Billingslea v. Moore, 14 Ga. 370; King v. WoodhuU, 3 Edw. Ch. 79; Thayer v. Wellington, 9 Allen, 283. If there is a complete disclaimer, the result is the same as if the appointment of the trustee had not been made; Leggett V. Hunter, 19 N. Y. 445 ; Clemens v. Clemens, 60 Barb. 366 ; if one of several disclaim, the whole estate is held by the others, Ellis v. Boston, H. & 271 *19T DISCLAIMER. [Ch. XL [*197] as the * legal estate would then [have] become vested in the Crown. However, where the heir took not strictly in that character, but as special occupant, he might haVe exercised his discretion in refusing or accepting the estate (a). 3. Disclaimer should be without delay.— ^ If the party named as trustee intend to decline the administration of the trust, he ought to execute a disclaimer without delay. There is no rule, however, that a trustee must execute a disclaimer within any particular time. Thus it will operate after an interval of sixteen years, if the interval can be so explained as to rebut the presumption of his having accepted ' the trust (5). If a person know of the trust and lie by for a long period, it is for a jury, or the Court sitting as a jury, to say whether such acquiesence was not because he had assented to the office (c). 4. Form of the disclaimer. — The disclaimer should be by deed, for a deed is clear evidence and admits of no ambi- guity (cT) ; and the instrument should be a disclaimer and not a conveyance, for the latter, as it transmits the estate, has been held to imply a previous acceptance of the office (e) ; for a person cannot be allowed to disclaim the office and accept the estate (/). However Lord Eldon expressed his T)pinion, which seems the common sense view, that where the intention is disclaimer, the instrument ought to receive that construction, though it be a conveyance in form (^). (a) Creagh v. Blood, 3 Jones • & and see Urch ». Walker, 3 M. & G. Lat. 170. 702. (6) Doe V. Harris, 16 M. & W. (/) J?e Martinez' Trusts ; 22 L. T. 517 ; and see Noble v. Meymott, 14 N. S. 403. Beav. 471. (g) Nicloson v. Wordsworth, 2 Sw. (c) See Doe v. Harris, 16 M. & W. 372. In Attorney-General v. Doyley, 522 ; Paddon v. Kichardson, 7 De G. 2 Eq. Ca. Ab. 194, the trustee who M. & G. 563 ; James v. Frearson, 1 Y. declined to act was directed to convey, & C C. C. 370. and the same decree was made in (rf) Stacey v. Elph, 1 M. & K. 199, Hussey v. Markham, Rep. t. Finch, per Sir J. Leach. 258. In Sharp v. Sharp, 2 B. & A. (c) Crewe v. Dicken, 4 Ves. 97 ; 405, it was held the trustees had not E. K. R. Co. 107 Mass. 1 ; if all renounce, the estate rests in the heirs or representatives ; Dunning v. Ocean Bank, 6 Lans. 296 ; but if a part disclaim, it must be known so as to determine upon the validity of the acts of the others ; Moir v. Brown, 14 Barb. 39. 272 Ch. XI.] DISCLAIMER. *198 I 5. Can a person accept a bounty and repudiate a trust under the same will 7- — If a person be nominated a trustee in a will and also take a benefit under it, lie can claim the testator's bounty, and yet disclaim the onus of the trust (A) ; for an executor, who is also a legatee, may renounce probate and yet claim the legacy, and it is difficult to point out a distinc- tion between the two cases. But if the benefit be annexed to tJhe office of trustee or executor, and he does not act, he can- not claim the benefit (i). * 6. Opinion of counsel as to disclaimer. — If one be [*198] named as trustee without any authority from himself, he is justified (as between himself and the parties interested in the trust who require a disclaimer from him and thereby undertake to pay all proper costs,) in taking the opinion of counsel upon the propriety of executing a deed of dis- claimer (a). 7. Disclaimer of trust by statement of defence. — A trust may be disclaimed at the bar of the Court (6), or by [a state- ment of defence,] and the person named as trustee will, like any other person made a party to. the suit unnecessarily, be entitled to his costs (c),* (but only as between party and party (ti) ;) though the action which might have been dis- missed against him at an earlier stage be brought to a hear- ing (e) ; and if his [statement] be needlessly long, he will only be allowed what would have been the reasonable costs of a simple disclaimer (/). > 8. May be shown by acts. — A trust may also be repudiated on the evidence of conduct without a'hy express declaration acted, though they had conveyed the (6) Ladbrook v. Bleaden, M. E. 16 estate instead of disclaiming. See Jur. 630; Foster v. Dawber, 8 W. R. Urch V. Walker, 3 M. & C. 702 ; Rich- 646 ; and see Re Ellison's Trust, 2 Jur. ardson v. Hulbert, 1 Anst. 65. N. S. 62. (k) See Talbot v. Radnor, 3 M. & (c)Hickson a. Fitzgerald,! Moll. 14. K. 254; PoUexfen v. Moore, 3 Atk. (d) Norway v. Norway, 2 M. & K. 272 ; Andrew v. Trinity Hall, Camb. 278, overruling Sherratt v. Bentley, 1 9 Ves. 525 ; Warren v. Rudall, 1 J. r! & M. 655 ; see Legg v. Mackrell, 1 & H. 1. GifE. 166 ; Bulkeley v. Earl of Eglin- (0 Slany v. Witney, 2 L. R. Eq. ton, 1 Jur. N. S. 994. 418; and see Lewis v. Mathews, 8 L. (e) Bray v. West, 9 Sim. 429. R. Eq. 277. (/) Martin v. Persse, 1 Moll. 146 ; (o) In re Tryon, 7 Beav. 496. Parsons v. Potter, 2 Hog. 281. 273 *199 DISCLAIMER. [Ch. XI. of disclaimer (^) ; but a person would act very imprudently, who allowed so important a question as whettier lie is a trus- tee or not to remain matter of construction. 9. After disclaimer, the trustee may act as agent to the trust. — After renunciation of the trust, whether by express dis- claimer, or by conduct which is tantamount to it, a trustee may assist as agent, or act under a letter of attorney, in the management of the estate without incurring responsibil- ity (A) ; but the caution need scarcely be suggested, that all such interference cannot be too scrupulously avoided before the fact of the renunciation of the trust has been most un- questionably established; and where the person named as trustee is to receive a profit from his agency, this naturally excites a suspicion in the mind of the Court (i). 10. HoTw estate devested from the trustee. — On a grant or other conveyance to a trustee, though upon onerous trusts, the estate passes to him without any express assent but sub- ject to the right of dissenting (/), and what will amount to a disclaimer at law, so as to devest the estate, is a distinct question from the disclaimer of the office in equity. Freeholds may be disclaimed by* deed. — It was formerly held (at least such was the clear opinion of Lord [*199] * Coke), that a freehold, whether vested in a person by feoffment, grant (a), or devise (J), could not be disclaimed but by matter of record; and the reason upon which this maxim was founded, was that the suitor might be more certainly apprised who was the tenant to the prcecipe (c). But the doctrine of modern times is, that disclaimer by mat- (y) Stacey v. Elph, 1 M. & K 195; White v. M'Dermott, 7 I. R C. L. 1. (A) Dove V. Everard, 1 R. & M 231 ; Harrison v. Graham, 3 Hill's MSS. 239, cited 1 P. W. 241, 6th ed, note (_!/) ; Staeey v. Elph, 1 M. & K, 195; Lowry v. Fulton, 9 Sim. 104 Montgomery v. Johnson, 11 Ir. Eq. Rep. 480. (i) Montgomery v. Johnson, 11 Ir. Eq. Rep. 481. 0') Siggers v. Evans, 5 Ell. & Bl. 380. (a) Butler and Baker's case, 3 Eep. 26 a, 27 a ; Anon, case, 4 Leon. 207 ; Shepp. Touch. 285. (6) Bonifant v. Greenfield, Godh. 19, per Lord Coke ; but at the re-hear- ing (Cr. Eliz. 80) it was adjudged that three could pass the whole estate, the fourth having disclaimed by act in pais ; and see Shepp. Touch. 452'. (c) Butler and Baker's case, 3 Rep. 26, b. 274 Ch. XI.] DISCLAIMEE. *199 ter of record is unnecessary (d') ; for, as Lord Tenterden observed, there can be no disclaimer by a person in a court of record, unless some other person think fit to cite him there to receive his disclaimer, and if the estate be damnosa hcereditas, that is not very likely to happen (e). It has been lately held that the estate may be devested by the disclaimer of the trustee in chancery, though appearing only as a respondent upon a petition (/); and Mr. Justice Holroyd laid it down generally that a party might disclaim a freehold not only by deed but by parol (^) ; and the doctrine has siflce been sanctioned by actual decision (A). 11. Disclaimer of uses. — It was laid down in Butler and Baker's case, that estates limited under the statute of uses were to be disclaimed with the same formalities as estates at common law (i) ; but Lord Eldon doubted whether a party could disclaim in the case of a conveyance to uses, except by release with intent of disclaimer: however, his Lordship added, he was aware that such a doctrine would shake titles innumerable (/). 12. Disclaimer of chattels. — It seems to be clearly estab- lished, that a disclaimer by parol declaration, will suffice to devest the legal estate, where the trust property is a mere chattel interest (Jc). 13. Disclaimer by feme covert. — Whether a feme covert could, under the Fines and Recoveries Act, disclaim an in- terest in real estate, was, by the terms of the statute, left doubtful ; the act enabling her only to " dispose of, release, surrender, or extinguish," any estate or power as if she (d) Townson v. Tickell, 3 B. & A. (A) Bingham ». Clanmorris, 2 Moll. 31 ; Begbie v. Crook, 2 Bing. N. C. 253. And see Shepp. Touch. 452 ; 70; S. C. 2 Scott, 128. ' Doe v. Smyth, 6 B. & C. 112; Doe (e) Townson v. Tickell, 3 B. & A. v. Harris, 16 M. & W. 517 ; but see 36. Me Ellison's Trust, 2 Jur. N. S. 62. (/) Foster v. Dawber, 8 W. R. 646 ; (i) 3 Eep. 27, a. the trust estate comprised mortgages : (7) Njcloson v. Wordsworth, 2 Sw. but see Re Ellison's Trust, 2 Jur. N. 372. S. 62. (k) Shepp. Touch. 285 ; Butler and (jr) Townson v. Tickell, 3 B. & A. Baker's case, 3 Rep. 26, b, 27, a ; 38, citing Bonifant v. Greenfield, Cro. Smith v. Wheeler, 1 Vent. 180; S. C. Eliz. 80 ; and see Doe v. Smyth, 6 B. 2 Keb. 774 ; Doe v. Harris, 16 Hf. & & C. 112. W. 620, 521, per Parke, B. 275 *200 DISCLAIMER. [Ch. XI. [*200] * were a feme sole (a). In the Irish Act, 4 & 5 W. 4, c. 92, s. 68, the word "disclaim" was expressly introduced. And now, by 8 & 9 Vict. c. 106, s. 7, a married woman is enabled, in like manner, to " disclaim " any estate or interest in lands in England. But the disclaimer must be by deed, and the husband must concur, and the feme covert must make the statutory acknowledgement. [Whether un- der the Married Women's Property Act, 1882 (6), a married woman can disclaim, is also doubtful ; and it will be prudent, in all cases coming within 8 & 9 Vict. C. 106, s. 7, to comply with the formalities required by that act.J 14. Effect of disclaimer. — The effect of disclaimer by a ■ trustee, where there is a co-trustee, is to vest the whole legal estate in the co-trustee (c) : and, as regards the exercise of the office, even if the trust be accompanied with a power, the continuing trustee may administer the trust without the con- currence of the trustee who has chosen to disclaim, and with- out the appointment of a new trustee QI). The settlor, it is said, must be presumed to know what the legal- consequence of the death or disclaimer of one of the trustees would be (e). And when the disclaimer has been executed, it oper- ates retrospectively, and makes the other trustee the sole trustee ah initio (/). 15. Disclaimer of personal contracts. — But in personal contracts the rule is different, for where A. covenants with B., C, and D. as trustees, and B. disclaims, C. and D. do not take the joint covenant, and cannot sue with- out B. {g-). 16. Disclaimer of protectorship. — If trustees are appointed protectors of the settlement, and they intend to disclaim the (a) 3 & 4 W. 4, 0. 74, s. 77. (d) Adams v. Taunton, 5 Mad. 435 ; [(6) 45 & 46 Vict. c. 75.] Cooke v. Crawford, 13 Sim. 96; Bayly (c) Bonifant v. Greenfield, Crow. v. Gumming, 10 Ir. Eq. Rep. 410 ; Eliz. 80 ; Crewe v. Dicken, 4 Ves. 100, Hawkins «. Kemp, 3 East, 410 ; White per Lord Loughborough ; Small v. v. M'Derraott, 7 I. R. C. L. 1, Marwood, 9 B. & C. 299 ; Preem. 13, (c) Browell v. Reed, 1 Hare, 435, case 111 ; Hawkins v. Kemp, 3 East, per Sir J. Wigram. 410; Townson v. Tickle, 3 B. & Aid. (/) Peppercorn v. "Wayman, 5 De 3y Browell v. Reed, 1 Hare, 435, per G. & Sm. 230. Sir J. Wigram; and see Nicloson ». (g) Wetherell ». Langston, 1 Exch. Wordsworth, 2 Sw. 369. 634. 276 Ch. XI.] DISCLAIMER. *200 protectorship, the deed of disclaimer must, by the Fines and Recoveries Act, be enrolled in Chancery (A). Secondly. Of Acceptance.'^ 1. How trust accepted. — A trustee may accept the oifice either by signing the trust deed (i), or by an express declara- tion of his assent (y), or by proceeding to act in the execu- tion of the duties of the trust. (A) 3 & 4 W. 4, c. 74, s. 32. (7) See Doe ». Harris, 16 M. & W. (¥) See Buckeridge v. Glasse, 1 Cr. 517. & Ph. 131, 134. ^ Acceptance. — A common mode of acceptance is that of signing the trust; Field V. Arrowsmith, 3 Humph. 442; Roberts v. Mbseley, 51 Mo. 284; Bixler V. Taylor, 3 B. Mon. 362 ; Flint v. Clinton Co. 12 N. H. 432 ; acting as trustee . is a, sufficient acceptance ; Eedenour v. Wherritt, 30 Ind. 485. No particular formality is required, but acts fairly implying a consent are sufficient and taking possession of the property is an act of this kind ; Scull v. Reeves, 2 Green Ch. 84; 29 Am. Dec. 694. Parol evidence is admissible to prove the acceptance of the trust; Pond v. Hine, 21 Conn. 519; Penny v. Davis, 3 B. Mon. 314; Crocker v. Lowenthal, 83 III. 579; Roberts 'r. Moseley, 64 Mo. 607 ; Hanson v. Worthington, 12 Md. 418 ; liedenour v. Wherritt, 30 Ind. 485 ; every voluntary act relating to the trust indicates acceptance ; Lewis v. Baird, 3 McLean, '56 ; imless some otiier reason for it appear ; Judson v. Gibbons, 5 Wend. 224 ; Carter v. Carter, 10 B. Mon. 327 ; the bringing a suit as trustee is evidence of acceptance; Taylor v. Atwood, 47 Conn. 498; O'Neill v. Hen- derson, 15 Ark. 235; 60 Am. Dec. 568. At common law a trust under a will might be accepted and the trustee enter upon his duties before the will was allowed, but in most of the states there are statutes requiring the proof of the will in the proper Probate Court. If a person named as trustee in a will neglect to give bonds and qualify it has the effect of a disclaimer ; Deering v. Adams, 37 Me. 265 ; Luscomb ». Ballard, 5 Gray, 403 ; Sawyer's App. 16 N. H. 459; Gaskill v. Gaskill, 7 R. I. 478; Mitchell v. Rice, 6 J. J. Marsh, 625 ; Johnson's App. 9 Barr. 416 ; but failure to give a bond may not take away the legal title ; Gardner v. Brown, 21 Wall. 36. Where there are no control- ling statutes, if the same one is named as executor and trustee, a proving of the will by him will be a sufficient acceptance ; Baldwin ;;. Porter, 12 Conn. 473 ; Hanson o. Worthington, 12 Md. 418 ; that is where, in consequence of being an executor, he is to act as a trustee ; Knight v. Loomis, 30 Me. 204 ; De Peyster v. Clendining, 8 Paige, 295; Wilson's Est. 2 Pa. St. 325; Wil- liams V. Conrad, 30 Barb. 524; yet if the offices are intended to be independent and distinct the same acceptance is required of the trustee ; Deering v. Adams, 37 Me. 265 ; Wheatley v. Badger, 7 Pa. St. 459 ; Worth v. M'A^cn, 1 Dev. & B. Eq. 209 ; Judsofi v. Gibbons, 5 Wend. 226. It may be necessary for the court to decide whether the executor is to be the trustee ; Carson v. Carson, 6 Allen, 397; Sawyer's App. 16 N. H. 459; Howard v. Peace Soc. 49 Me. 286; Wheeler t. Perry, 18 N. H. 307 ; where no one is named as trustee, the executor is to act as such ; Pettingell v. Pettingell, 60 Me. 412 ; Richardson v. Knight, 69 Me. 285. The bond of executor having other duties, as such executor will 277 *201 ACCEPTANCE OF THE TETTST. [Ch. XL [*201] *2. Presumption of acceptance. — Where a trustee, with, notice of his appointment as trustee, has done nothing, but has not disclaimed, it will be presumed after a long lapse of time, as twenty years (a), and d fortiori, after thirty-four years (6), that he accepted the trust (c). And even where the deed was only four years old, Lomi St. Leonards observed, "that where an estate was vested in trustees who knew of their appointment and did not object at the time, they would not be allowed afterwards to say they did not assent to the conveyance, and it would require some strong act to induce the Court to hold that in sijich a case the estate was devested. He spoke with respect to the {a) In re TJniacke, 1 Jones & Lat. 1. (c) But see infra as to renunciation (b) In re Needham, 1 Jones & Lat. of Probate. 34. cover all his dealings with the estate ; Sheets' Est. 52 Fa. St. 257 ; Lansing v, Lansing, 45 Barb. 182 ; Towne v. Ammidown, 20 Pick. 535 ; State ». Nicols, 10 Gill & J. 27 ; but not so, if the other duties are not performed because he is such executor; Parsons v. Lyman, 5 Blatchf. C. C. 170; Mastin v. Barnard, 33 Ga. 520; Perkins v. Lewis, 41 Ala. 649. After a lapse of twenty years it will be presumed that funds are held as trustee and not as executor ; Jennings v, Davis, 5 Dana, 127 ; likewise where the executor has had his final account allowed; State v. Hearst, 12 Mo. 365. A person acting in both capacities does not hold as trustee until his account as executor has been filed and approved ; Eliott v. Sparrell, 114 Mass. 404 ; Prior V. Talbot, 10 Cush. 1; Hall v. Gushing, 9 Pick. 395 ; but in some cases it has been held that acts showing a change in the manner of holding are sufficient; State V. Brown, 68 N. C. 554 ; Perkins v. Moore, 16 Ala. 9 ; Conkey v. Dickin- son, 13 Met. 53; Hubbard v. Lloyd, 6 Cush. 522; Euffin v. Harrison, 81 N. C. 208 ; it is insufficient for the executor merely to decide to hold certain prop- erty as trustee; Miller v. Congdon, 14 Gray, 114; if there is any loss the courts incline to make it a loss as trustee, rather than as executor ; Dorr v. Wainwright, 13 Pick. 332 ; Brown v. Kelsey", 2 Cush. 248 ; a refusal to qualify as executor is not a refusal to act as trustee ; Pomroy v. Lewis, 14 E. I. 349 ; Hitchcock V. V. S. Bank, 7 Ala. 386. The executor is to administer the trusts which his testator held at his decease ; Nichols v. Campbell, 10 Gratt. 561 ; Schenck v. Schenck, 16 N. J. Eq. 174 ; Maudlin v. Armistead, 14 Ala. 70? ; he cannot accept those created by his tfestator and disclaim those with which the testator was charged ; King v. Law- rence, 14 Wis. 238; Mitchell v. Adams, 1 Ired. Law. 298. A trustee must accept the whole trust or none; Van Horn w. Fonda, 5 Johns. Ch. 403 ; Latimer v. Hanson, 1 Bland, 51 ; Flint v. Clinton Co. 12 N. H. 432 ; Judice v. Provost, 18 La. Ann. 601. A trustee is responsible for what he does or neglects to do from the time of his acceptance, but not before; Stevens v. Gaylord, 11 Mass. 269; Lelaiid v. Eelton, 1 Allen, 531; Ipswich Co. v. Story, 5 Met. 310; Prmdle v. Holcomb, 45 Conn. 111. £78 Ch. XI.] ACCEPTANCE OF THE TRUST. *202 effect upon third parties , every Court and every jury would presume an assent" ((i). 3. Recitals. — If the trustee execute the deed, he should see that the recitals are correct ; or the Court may hold him liable for the consequences. However, in a late case (e), where it was recited in a marriage settlement that the lady was possessed of a sum of stock, which subsequently was not forthcomiug. Lord Langdale said, there were so many in- stances of parties representing that they were entitled to par- ticular property, which reipresentation afterwards turned out to be wholly untrue, that it would be unjust and dangerous to bind third parties by such representations ; and that he did not therefore accede to the argument, that the recital alone bound the trustees. And in another case where a release frogi the cestuis que trust to the trustees stated that the legacy duty amounted only to .£19. 8s., whereas it was much more. Lord RomiUy said it was a mistake of all parties, and that the trustees were not estopped by it in equity (/). 4. Of acceptance by acting in the trust. — What acts of a person nominated as trustee will amount to a constructive acceptance of the office, is a question constantly arising, and not easily to be determined by any general rule. 5. Effect of probate. — : If a person named as executor takes out probate of/ thfe will, he thereby constitutes himself ex- ecutor, and incurs all the liabilities annexed to the ex- ecutorship (^). The renunciation of probate by a * person named as executor and trustee is not in [*202] (d) Wise V. Wise, 2 Jones & Lat. 706; "Westmoreland v. Holland, 23 L. 403; see 412; and see "White v. M'Der- T. N. S. 797 ; 19 W. R. 302, affirmed mott, 7 I. R. C. L. 1. W. N. 1871, p. 124. (e) Fenwick v. Greenwell, 10 Bear. (/) Brooke v. Haynes, 6 L. R. Eq. 418. I have been informed by one of 25. the counsel in the cause that in Bliss (g) Booth v. Booth, 1 Beav. 125 ; V. Bridgewater, at the Rolls, many "Ward v. Butler, 2 Moll. 633, per Lord years ago, Sir J. Leach held that Manners; Styles «. Guy, 1 Mac. & 6. trustees were bound by a recital that 431, per Lord Cottenham ; Scully v. stock had been transferred into their Delany, 2 Ir. Eq. Rep. 165. The names ; and see Gore v. Bowser, 3 Sm. case of Balchen v. Scott, 2 Ves. jun. & G. 6; Chaigneau v. Bryan, 8 Ir. Ch. 678, cannot be considered as law. Rep. 251 ; Story v. Gape, 2 Jur. N. S. 279 *202 ACCEPTANCE OF THE TETJST. [Ch. XL itself a disclaimer of the trust, but it is one circumstance of evidence, and^ if there be no proof of his ever hav- ing acted, the Court after a long lapse of time, as sixty- years, will presume a disclaimer (a) ; [and where the trusts of the real and personal estate were ccJmbined, being trusts for sale and conversion, and application of the proceeds as a mixed fund in (inter alia) paying debts, legacies, and funeral expenses, and the same persons were appointed ex- ecutors and trustees, and the only executor and trustee who survived the testator renounced probate, the late M.E.. held that there was conclusive evidence of a disclaimer, as the trustee, after renouncing execution of the will as to the per- sonal estate, could not carry out the trusts as to the pay- ment of the debts and funeral and testamentary expenses, and could not get rid of a part of his trust in that way, but must have intended to disclaim all the trusts (6). J 6. Executor of an executor. — If an executor of an execu- tor take upon himself the administration of the goods of the first testator, he thereby accepts the administration of the goods of the latter; for it is only through the medium of the latter testator that he can reach the executorship of the former. It was at one time thought that an executor might renounce probate of the will of the original testator, and at the same time or subsequently prove the will of the immedi- ate testator (c), but the practice has now been settled to the contrary (c?). But if the first executor never proved the wHl, the chain of representation is not continued («). 7. Voluntary interference with assets is acceptance of the executorship. — Any voluntary interference with the assets, whether with or without probate, will stamp a person as acting 'executor. Thus, where of four executors only one (a) M'Kenna .;. Eager, 9 I. R. C. Hayton v. Wolfe, Cro. Jae. 614 ; S. C. L. 79 ; and see Earl GraaviUe v. Pa.lnier, 166 ; Hutton, 30. McNeile, 7 Hare, 156, cited post with (d) In the Goods of Perry, 2 Curt, remarks. 655 ; Brooke v. Haynes, 6 L. R. Eq. [(5) Roberts v. Goraon, 6 Ch. D. 25; In the Goods of Delaconr, 9 I. R. 531.] Eq. 86,' In the Goods of Griffin, 2 (c) Shepp. Touch, by Preston, 464; 1. R. Eq. 320; and see In the Goods Wankford v. Wankford, Preem. 520; of Beer, 15 Jur. 160. (e) 21 & 22 Vict. c. 95, s, 16. 280 Ch. XL] ACCEPTANCE OF THE TRUST. *203 proved, and the other three, describing themselves as execu- tors, gave a letter of attorney to the fourth, describing him as acting executor, to receive a quantity of stock, Lord Hard- wicke ruled that the whole number, by this conduct, had drawn upon themselves the burden of the executorship (/) ; and so generally, if an executor sign a power of attor- ney * to get in part of the testator's estate (a), he [*203] brings down the whole burden upon himself, though at the time of acting he disclaim the intention of assuming the office (6). ''Acts of acceptance. — The joining in an assignment of the testator's lease (. Fields, 10 Johns. 495; Richardson v. Stodder, 100 Mass. 528 ; Newman s. Dotson, 57 Tex. 117. " Wherever a trust is created, a, legal estate, sufficient for the purposes of the trust, shall, if pos- sible, be implied in the trustee, whatever may be the limitation in the instru- ment, whether to him and his h§irs or not"; Neilson v. Lagow, 12 How. 98; Packard b. Marshall, 138 Mass. 301 ; West v. Fitz, 109 111. 425 ; Barkley v. Dosser, 15 Lea (Tenn.) 529; Warner r. Sprigg, 62 Md. 14; Chamberlain ;■. Thompson, 10 Conn. 244; Powell v. Glen, 21 Ala. 468; Gill v. Logan, 11 B. Mon. 233 ; Webster v. Cooper, 14 How. 499. " Although a legal estate may be limited to a trustee to the fullest extent, as to him and his heirs, yet it shall not be carried farther than the complete execution of the trust necessarily requires." Norton v. Norton, 2 Sandf. 296 ; Slevin v. Brown, 32 Mo. 176; Wilcox v. Wheeler, 47 N. H. 488; Williman v. 293 *213 ESTATE TAKEN BY THE TETJSTEE. [Ch. XII. S. 1. The following rules of construction haye been adopted by the Courts in reference to this branch of our subject -in the case of wills, and, except so far as they are controlled [*213] by the positive * enactments of the late Wills Act (a), must still be resorted to for guidance. First, Wherever a trust is created, a- legal estate sufficient for the execution of the trust shall, if possible, he implied : Secondly, The legal estate limited to the trustee shall not be carried farther than the complete execution of the trust necessor rily requires. First. As to the former rule. 1. Legal estate supplied in toto on account of the trust. — The Court has in some instances supplied the estate in toto ; as where a 4iestator devised to a feme covert the issues and profits of certain lands to he paid by his executors, and it was held that the land itself was devised to the executors in trust to receive the rents and profits and apply them to the use of the wife (6). (a) 1 Vict. c. 26, ss. 30, 31. 4 T. K. 89; Murphy v. Donnelly, 4 I. Qi) Bush V. Allen, 5 Mod. 63; Doe R. Eq. Ill; Stevenson v. Mayor of ». Homfray, 6 Ad. & Ell. 206; and Liverpool, 10 L. K. Q. B. 81; [Davies see Gates v. Cooke, -3 Burr. 1684; Sir to Jones, 24 Ch. D. 190.] W. Black, 543; Doe v. Woodhouse, Holmes, 4 Kich. Eq. 475 ; McBride v. Smyth, 59 Pa. St. 245 ; but see McElroy V. McElroy, 113 Mass. 509; Watkins v. Specht, 7 Cold. 585. An executor sometimes receives the legal title as trustee, though there are no words to that effect, it heing necessary in order to carry out the directions of the testator ; Freedley's App. 60 Pa. St. 349 ; as power to repair and rent ; Kellim v. Allen, 52 Barb. 605. If the word " heirs " is omitted, the court will, if necessary, extend tlie estate so that the donor's intentions may not be defeated; Cleveland v. Hal- lett, 6 Cush. 407; Hawkins v. Chapman, 36 Md. 94; Webster ». Cooper, 14 How. 499 ; Jackson v. Robins, 16 Johns. 537 ; Kirkland v. Cox, 94 111. 402 ; North V. Philbrook, 34 Me. 537 ; a power of appointment will neither increase nor diminish the estate; Burleigh v. Clough, 52 N. H. 267; YarnaU's App., 70 Pa. St. 342 ; the quantum of the estate is the same whether created by deed or will ; Watkins v. Specht, 7 Cold^ 585 ; Attorney-Gen. v. Meeting House, 3 Gray, 1 ; King v. Parker, 9 Cush. 71 ; Welch v. Allen, 21 Wend. 147 ; Wright o. Delafleld, 23 Barb. 498. As soon as an active trust ceases to be active, the statute wil^ execute it in the cestui que trust, and this is not diminishing the estate, but simply follow- ing the provisions of the statute ; Parker v. Converse, 5 Gray, 336 ; Vallette V. Bennett, 69 111. 632; Greenwood v. Coleman, 34 Ala. 150; Churchill f. Corker, 25 Ga. 479; Stokes' App. 80 Pa. St. 337; Lynch ». Swayne, 83 III. 336 ; but see Bead v. Power, 12 E. I. 16 ; Kirkland v. Cox, 94 III. 402. 294 Ch. XII. S. 1.] ESTATE TAKEN BY THE TKUSTBE. *214 2. Iiegal estates enlarged. — In other cases the Court has extended the estate, as where, before the late Wills Act, the devise was to thi^ee trustees, and the survivor of them, and the executors and administrators of such survivor, upon trust to pay certain annuities for lives, and it was ruled that the trustees took an estate for the several lives of the annui- tants (js). 3. Trust to sell confers a fee. — If land, said Lord Hard- wicke, be devised io a man without the word heirs, and a trust be declared which can be satisfied in no other way but by the trustees taking an inheritance, it has been construed that a fee passes (d'). Thus a trust to sell (e), even on a contingency (/), confers a fee simple as indispensable to the execution of the trust; and the construction is the same in a sale implied, as where the devise is upon trust out of the rents and profits of an estate to discharge certain legacies, made payable at a day inconsistent with the application of the annual profits only (^). 4. Charges not implying a po-wer of sale. — But a^power of selling will not be implied by a limitation to a trustee, or to a trustee his executors and administrators for and * until payment of debts and legacies gener- [*214] ally (a), or for raising a sum of money out of the rents and profits (J) ; and therefore, in such cases, before the (c) Doe V. Simpson, 5 East, 162; see remarks, pp. 217, 218, note (J') and see Atcherley v. Vernon, 10 Mod. infra. 523; Gates v. Cooke, 3 Burr. 1684; (/) Gibson v. Lord Montfort, 1 Shaw V. Weigh, 2 Str. 798; Jenkins Ves. 485, see p. 491. V. Jenkins, Willes, 656. In Doe v. ' (jr) Gibson v. Lord Montfort, uhi Simpson, a life estate only was im- supra. plied, as the trustee was merely such; (a) Co. Lit. 42, a; Cordal's case, buf in Jenkins v. Jenkins, the trustee Cr. Eliz. 315; Carters. Barnardiston, being also interested beneflcially, the 1 P. W. 505 ; Kitchens v. Kitchens, construction was more liberal, and it 2 Vern. 408 ; Doe v. Simpson, 5 was thought the fee simple passed. East, 171, per Lord EUenborough, {d) VilUers v. Villiers, 2 Atk. 72. C. J. ; Eoberts v. Dixwell, 1 Atk. 609, (e) Shaw v. Weigh, 2 Str. 798 ; per Lord Hardwicke. Bagshaw v. Spencer, 1 Ves. 144, per (6) Doe v. Simpson, 5 East, 162 ; Lord Kardwicke ; and see Glover v. and see Bosworth v. Forard, 0. Bridg. Monckton, 3 Bing. 113 ; 10 Moore, Rep. 167 ; Thomason v. Mackworth, 453. As to Hawker v. Hawker, 3 B. id. 507 ; Co. Lit. 42, a, note (7), & Aid. 537, and Warter v. Hutchin- Butler's ed.; Collier ». Walters, 17 son, 5 Moore, 143, S. C. 1 B. & C. 721, L. E. Eq. 252. 295 *214 ESTATE TAKEN BY THE TRUSTEE. [Ch. XII. S. 1. late Wills Act, where nothing in the context implied a limitation of the fee, a chattel interest only would haye passed. But, if a greater estate be limited expressly, as by a deTise to A. and his heirs upon trust to pay debts, the Court has no jurisdiction to cut down the expression and reduce the estate to- a chattel (c) ; though if a chattel interest be carved out of the fee and be so limited, the word " heirs " may be rejected as inconsistent with the estate, as where lands are devised to trustees and their heirs, until an infant attains twenty-one, and then to the infant in fee (d'). 5. Grant to two and the heirs of the survivor. — If an estate be granted to two, and the survivor of them, and the heirs of such survivor, they are not joint tenants in fee, but take a freehold for their joint Uves, with a contingent remainder to the one that may happen to survive. The same construction will be put upon a devise expressed simply in the same terms without any trust annexed, or even if there be a trust, pro- vided the nature of it do not require the fee simple to be vested in the trustees (e). But if such a devise, even to bedeficiaries, be coupled with words pointing to a joint ten- ancy, the construction will be a joint fee, as if the gift be to two and the survivor of them and their heirs (/), or to them as joint tenants, and the survivors and survivor of them, and the heirs and assigns of such survivor (£). And if the devise be to two and the survivor of them, and the heirs of such survivor upon trusts that require the fee simple to be vested in the trustees, or upon trust for sale, the prevailing opinion is, that notwithstanding the old case of Vick v. Edwards (A) to the contrary, the Courts would compel a purchaser to accept a title on the assumption that the trus- tees took the fee simple (i). " Whatever doubts," observes (e) Wright v. Pearson, 1 Eden; (/) Doe v. Sotheron, 2 B. & Ad. 119, see p. 123. 628; Oakley v. Young, 2 Eq. Ca. Ab. (d) Goodtitle v. Whitby, 1 Burr. '537. ' 228 ; Doe v. Lea, 3 T. R. 41 ; Warter {g) Goodtitle v. Layman, Fearne's V. Hutchinson, 1 B. & C. 721 ; and C. R. 858. see Ackland v. Lutley, 9 Ad. & Ell. (A) 3 P. W. 372. 879 ; but see LethieulKer v. Tracy, 3 (t) See Doe v. Ewart, 7 Ad. & Atk. 780, Fearne's C. R. 226, Butler's Ell. 636 ; Doe v. Sotheron, 2 B. & note. Ad. 628. (e) Re Harrison, 3 Anst. 836. 296 Ch. XII. S. 1.] ESTATE TAKEK BY THE TRUSTEE. *215 Butler, " were formerly entertained, it now appears to be the * settled opinion of the profession that a [*215] devise to two and the survivor of them, and the heirs and assigns of such survivor, enables the trustees to vest the fee in the purchaser, and that titles under such a devise are accepted with a conveyance from the trustees and without the concurrence of the heir " (a). 6. Implied devise in the word "trustee." — If a testator sim- ply appoint a person his executor and trustee, it seems the latter word is not so exclusively applied to real estate, as to carry by implication to the executor a devise of the testator's freeholds, but if the .testator direct certain acts to be done by the trustee, [or by the executor,] which .belong to the owner of the freeholds, [or which require that the trustee or executor should have dominion over the real estate,] such a devise will be implied (V) ; [but the implication will only arise when it is necessary to make the words used by the testator sensible (c)-J And so if a testator appoint, a person his " trustee of inheritance," which is equivalent to making him the trustee of his inheritable property (d) ; or if a testar tor appoint " A. and B. trustees as also their heirs or assigns, not making them accountable for any losses except by their own neglect, and the one not to suffer for the other's negli- gence" (e). And if a testator constitute a trustee by will, and devise the legal estate to him, and then by a codicil " nominates and appoints another person to be trustee " in his place, the codicil not only confers the office of the trustee- ship, but also carries the legal estate with it (/). (n) Co. Lit. 191 a, note 1 ; and see not an execwtor, according to the tenor Fearne's C. U. 358. of the will. Re Goods of Lowry, 3 (6) Gates v. Cooke, 3 Burr. 1684 ; L. R. P. & D. 1^7. Bush V. Allen, 6 Mod. 63 ; Anthony [(c) Be Cameron, 26 Ch. D. 19.] V. Rees, 2 Cr. & Jer. 75; Doe v. {d) Trent v. Hanning, 1 B. & P. Shotter, 8 Ad. & Ell. 905; [Da vies New Rep. 116; 10 Vea. 495; 7 East, to Jones, 24 Ch. D. 190; Be Fislier 95; 1 Dow, 102; Doe v. Pratt, 6 Ad. and Haalett, 13 L. R. Jr. 546.] If a & Ell. 180. testator appoint his solicitor sole (e) Bennett a. Bennett, 2 Dr. & trustee of his will, with a direction Sm. 266. that the solicitor is to be paid as a (/) Re Hough's Will, 4 De G. & solicitor as if he were not a trustee, Sm. 371 ; JSe Turner, 2 De G. F. & J. it constitutes him a tnntee only and 627. 297 *216 ESTATE TAKEN BY THE TRUSTEE. [Ch. XII. S. 1. If a testator by will deTises to several persons upon trust, , and nominates them Ms trustees and executors, and then by codicil revokes the appointment of one of them as executor, and substitutes another person as executor in his place, such revocation and new appointment extends only to the executor- ship, and does not by implication affect the trusteeship (^). Legal estate curtailed from the nature of the trust. — Secondly, we proceed to illustrate the rule, that the legal estate limited to the trustee shall not be greater than is required by the trust. [*216] * 1. If a freehold estate be devised to A. and his heirs upon trust to permit B. to receive the rents dur- ing his life, anA on his death to convey to C. in fee ; here, as during the life of B. the trustees are to be merely passive, but after his death are to do an act, the legal estate for the life of B. is vested in B., and the remainder only in the trus- tee (a). On the other hand, if an estate be devised to A. and his heirs in trust, to pay the rents to B. for his life, and on his death, the testator devises the estate to C. in feej here the legal estate for the life of B. is in the trustee, and the legal estate of the remainder is vested in C. (6). So where a copyhold was devised to A. and his heirs, upon trust for the separate use of B. a, feme covert during her life, and after her decease the testatrix devised the same to such use as B. should appoint, and in default of appointment to the right heirs of B., it was thought by Judge Heath that the trustee took a base fee determinable by an executory devise over on the death of the feme covert, and by Judge Chambre that the (y) Worley v. Worley, 18 Beav. 143; S. C. 1 B. & C. 721; and see 58; Graham v. Graham, 16 Beav. Nash w. Coates, 3 B. & Ad. 839 ; Ward 550; Cartwright v. Shepheard, 17 v. Burbury, 18 Beav. 190; Doe v. Beav. 301 j Barrett v. .Wilkins, 5 Jur. Cafe, 7 Exch. 675. Note, Harton «. N. S. 687. Harton, 7 T. K. 652, can scarcely be (o) Doe V. Bolton, 11 Ad. & EU. reconciled with principle, and seems 188 ; Adams v. Adams, 6 Q. B. 860. to have been disapproved by Lord (6) Adams v. Adams, 6 Q. B. 860; Eldou in Hawkins v. Luscome, 2 Sw. Cooke V. Blake, 1 Exch. 220 ; Jones v. 391 ; but Sir J. Wigram considered Lord Say & Sele, 8 Vin. Ab. 262; himself bound by it in Brown w. White- Doe V. Simpson, 5 East, 171, per Lord way, 8 Hare, 145, and the Court of EUenborough ; Bobinson e. Grey, 9 Q. B. recognised its authority, at East, 1 ; Doe v. Ironmonger, 3 "East, least to a partial extent, in Toller v. 533; Warter v. Hutchison, 5 Moore, Attwood, 15 Q. B. 951. 298 Ch. XII. S. 1.] ESTATE TAKEN BY THE TRUSTEE. *217 devise amounted only to an estate fur autre vie (c). So where a testator devised leaseholds for years to trustees upon trust for A. for life, and after the death of A. the testator bequeathed them to B., it was held that the trustees had the legal estate during the life of A. only (cZ). Thus in freeholds, copyholds, and leaseholds, where there is an indefinite devise to trustees and their heks, executors, or administrators, upon certain trusts confined to the life of one person, followed by a simple devise to another for the absolute interest, in each , case the estate of the trustees is limited by imphcation to the life of the person who takes the life interest (e). It has sometimes been argued that where freeholds are coupled with copyholds or leaseholds upon certain trusts, if the legal estate of the copyholds or leaseholds be vested in the trustees, there is a *kind of attraction [*217] which will cause the legal estate of the freeholds also to be vested in the trustees; but whatever attraction may arise from the presumption that the different kinds of prop- erty were meant to be held together during the continuance of the trusts effecting them, there is no such attraction as will keep the legal estate of any species of property vested in the trustees beyond the period limited for the trusts of that property (a). It seems, however, that in a deed, where the construction adheres more strictly to the letter, a limita- tion to trustees and their heirs upon trust to pay an annuity for life only, with remainders over, would have conferred the fee simple (J). 2. Limitation to trustees and their heirs to preserve contin- gent remainders, the words " during the life of," &c. being omitted. — In a devise to A. for life, remainder to trustees and their heirs to preserve contingent remainders (the words " during the life of A." being omitted), with remainders over, the (e) Doe V. Barthrop, 5 Taunt. 382 ; (e) Baker v. White, 20 L. R. Eq. Baker v. White, 20 L. R. Eq. 166 ; 177, per cur. and see Ward v. Burbury, 18 Beav. (a) Baker v. White, 20 L. R. Eq. 190; Doe d. Players v. NiohoUs, 1 166. B. & C. 342; Doe v. Cafe, 7 Exch. (6) Wykham ». Wykham, 11 East. 675. 458; see S. C. 18 Ves. 419, and fol- (rf) Stevenson v. Mayor of Liver- lowing pages; 3 Taunt. 316. pool, 10 L. R. Q. B. 81. 299 *218 ESTATE TAKEN BY THE TRUSTEE. [Ch. XII. S. 1. trustees are construed to take not a fee simple, but an estate for the life of A. (c). And Sir W. Grant expressed himself in favor of a similar construction where the instrument was a deed (c?) ; but it has since been decided that in the latter case a fee simple passes (e), unless it be quite clear upon the face of the deed itself that the words " during the life of A." were meant to be in the deed, and were wanting through inadvertence (/). 6f course there can be no such restric- tion of the estate by implication where the natural sense of the words admits of a fair and reasonable construction; as if before the late Act (^) the fee simple in the trustees would have supported contingent limitations that would otherwise have been left at the mercy of the tenant for Hfe (^). 3. Trust to lease, &c. confers fee-simple. — But if a devise be to trustees and their heirs upon a trust that cannot be exe- cuted without an absolute control over the property, as in trust to lease for an indefinite number of years (z), or to raise a sum of money by sale (/), and subject thereto [*218] to uses in strict * settlement, the trustees will not (c) Doe V. Hicks, 7 T. E. 433 ; Had- delsley v. Adams, 22 Bear. 267 ; as to Boteler v. Allington, 1 B. C. C. 72, see Doe v. Hicks, 7 T. R. 435, and Wykham v. Wykham, 18 Ves. 418; and see Nash v. Coates, 3 B. & Ad. 839. (d) Curtis V. Price, 12 Ves. 89 ; but see Wykham v. Wykham, 18 Ves. 419, and following pages. (e) Colmore v. Tyndall, 2 Y. & J. 605; Lewis v. Bees, 3 K. & J. 132; Cooper V. Kynock, 7 L. E. Ch. App. 398. (/) Beaumont v. Marquis of Salis- bury, 19 Beav. 198. (y) 8 & 9 Vict. c. 106, 8. 8. (A) Venables v. Morris, 7 T. R. 342, 438 ; and see Curtis i: Price, 12 Ves. 100 ; Doe v. Hicks, 7 T. R. 437 ; Rochford v. Fitzraaurice, 1 Conn. & Laws. 169; 2 Dr. & War. 16. (0 Doe V. Willan, 2 B. & Aid. 84; but see Heardson v. Williamson, .1 Keen, 33; Ackland v. Lutley, 9 Ad. & Ell. 879. (_;') Wright v. Pearson, 1 Eden, 123; Bagshaw v. Spencer, 1 Ves. 142; Glover v. Monckton, 3 Bing. 13; Bale V. Coleman, 2 Eq. Ca. Ab. 309 ; note (e) ; Sanford ». Irby, 3 B. & Aid. 654; Jones v. Morgan, 1 B. C. C. 206 ; for a correct report of the will, see Peame's C. R. Appendix, No. 3. It has been observed in the " Treatise of Powers " (Sug. Pow. Ill, 8th edit.), that this rule was not attended to in the case of Hawker v. Hawker, 3 B. & Aid. 537. The devise was probably considered to be of a double aspect, viz. to the trustees and their heirs upon trust to sell, &c., if one event happened, and upon trust for the daughter, &c., if another event hap- pened, and as the latter series of limitations took effect, and therefore no power of sale was to be exercised by the trustees, it was not necessary under the circumstances to arm them with the inheritance. The case of Warter i'. Hutchinson, 5 Moore, 143, 1 B. & C. 721, is more difficult to be 300 Ch. Xn. S. 1.] ESTATE TAKEN BY THE TEUSTEE. *219 be held to take a mere power so as to let in the statute to execute the uses in strict settlement, but will be construed to take the legal estate in fee, and the uses that are limited will stand as equitable interest. Charge of debts. — So if Copyholds be devised to trustees (who are also appointed executors of the testator) and the survivor of them, and the heirs of such survivor, charged with debts, and subject thereto upon trust to pay the rents to the testator's daughter for life, and after her death, the copyholds are devised by the testator directly to the heirs of •the body of such tenant for life, here, as the charge of debts may require the fee simple to be in the trustees, they take the legal estate not only for the life of the tenant for the life but absolutely, and the issue in tail take only equitable estates (a). [So where a testator directs his debts to be paid, or directs them to be paid by his executors, and devises real estate to trustees and their heirs upon trusts which do not exhaust the fee, and then devises the real estate after the determination of the preceding trusts directly to a third person, and appoints the trustees his executors, the trustees take the legal fee by virtue of the charge of debts (i).J 4. Present rule regulating devises to trustees. — Recent cases have established the following important qualification of the rule now under consMeration, viz., that where an estate is in the first instance given to trustees and their heirs upon trusts which do not exhaust the equitable fee simple, and for which a particular estate short of the legal fee in the trustees would be sufficient, but discretionary powers are superadded which cannot be exercised by the trus- tees without arming them with the * means of pass- [*219] ing the fee simple, there the trustees do not take a reconciled with the rule we are dis- chattel interest, or out of the inheri- cus8ing. The construction appears to tance by virtue of an implied power, hare been, that, as the limitation to (a) Creator^ v. Creaton, 3 Sm. & the trustees and their heirs was ex- G. 386. pressly limited to the period until A. [(6) Creaton v. Creaton, 3 Sm. & attained twenty-one, the estate was in- G. 386 ; Be Tanqueray-WlUaume & tended to be a chattel interest only, Landau, 20 Ch. D. 465 ; Marshall v. and the charges were to be raised Gingell, 21 Ch. D. 790; Spence v. either by sale or mortgage of that Spence, 12 C. B. N. S. 199.] 301 *219 ESTATE TAICBN BY THE TEUSTEB. [Ch. XII. S. 1. particular estate by way of vested interest with the power under the Statute of Uses or by a common law authority of passing the fee, but they retain the legal fee simple given to them in the first instance, on the footing that they were meant to exercise the discretion given to them by virtue of their ownership and not by the mere operation of a, poiver (jx). Baron Parke observed, in the leading case (6), " When an estate is given to trustees, all the trusts must primd facie at least be performed by them by virtue and in respect of the estate vested in them. — The fee is in terms devised to them, and it would be a very strained and artificial construction to hold first that the natural meaning of the words is to be cut down, because they, -^ould give an estate more exten- sive than the trust required, and then when the trust does require the whole fee simple, to hold that that must be supplied by way of power defeating the estate to the subsequent devisees, and not out of the interest of the trustees." 5. Devise to uses. — The rule of construction laid down in this case has since been followed, even where the langilage of the subsequent limitations has been peculiarly applicable to a devise of the legal estate, as where after the primary devise to the trustees and their heirs upon limited trusts with discretionary powers the estate was expressed to be limited in strict settlement, by a declaration of uses to that effect (e). 6. 'Where the powers do not effect the fee. — But where the devise, before the late Wills Act, was to trustees and their heirs upon trust for a person for life, and after her death upon certain trusts during the minority of her children, followed by a direct devise to the children on the youngest attaining 21, without words of limitation (and therefore (a) Watson v. Pearson, 2 Exch, 581 ; Blagrave v. 'Blagrave, 4 Exch, 550 ; Davies v. Davies, 1 Q. B. 430 Doe V. Cadogan, 7 Ad. & Ell, (6) Watson v. Pearson, 2 Exch. 593. (c) Blagrave v. Blagrave, 4 Exch. 550; Rackham v. Siddall, 1 Mac. & Rackham v. Siddall, 1 Mac. & G. 607 ; G. 607 ; [and see Berry v. Berry, 7 Poad V. Watson, 6 Ell. & Bl. 606 ; and Ch. D. 667.] see Watklns v. Frederick, 11 H. L. Cas. 358. 302 Ch. XII. S. 1.] ESTATE TAKEN BY THE TRUSTEE. *220 construed to give life estates only) with a mere power of leasing for 21 years, to be exercised during the continuance of the trust without any purpose affecting the fee simple, and which power of leasing extended to other estates also, which were clearly devised to the beneficiaries directly, it was held that the mere power of leasing was not sufBciept to countervail the rule that the legal estate was not to be extended beyond the necessity of the trust, and that under all the circumstances the trustees took an estate for the * life of the mother and the minority of the chil- [*220] ■dren with a power of leasing (a). 7. Late 'Wills Act. — The law upon the subject has now undergone some alteration from the provisions of the late Act (7 W. 4. and 1 Vict. c. 26) for the amendment of the law of wills. By the 30th section it is declared, " that where any real estate (other than or not being a presentation to a church) shall be devised to any trustee or executor, such devisee shall be construed to pass the fee simple, or other the whole estate or interest which the testator had power to dispose of by will in such real estate, unless a definite term of years, absolute or determinable, or an estate of freehold shall thereby be given to him, expressly or by im,plication." And by the following section it is enacted, " that where any real estate shall be devised to a trustee without any ex- press limitation of the estate to be taken by such trustee, and the beneficial interest in such real estate or in the surplus rents and profits thereof shall not be given to any person for life, or shall be given for life, but the purposes of the trust may continue beyond the life of such person, such devise shall be construed to vest in such trustee the fee sim- ple or other the whole legal estate which the testator had power to dispose of by will, and not an estate determinable when the purposes of the trust shall be satisfied." Effect of the Act. — The effect of these provisions is by no means clear, but it is conceived that a definite chattel inter- est, as a term of 99 years, or a simple freehold, as an estate (a) Doe V. Cafe, 7 Exch. 675 ; and see Adams v. Adams, 6 Q. B. 860 ; Lam- bert V. Browne, 6 I. B. C. L. 218. 303 *221 PKOPERTIES or THE LEGAL ESTATE. [Ch. XIL S. 2. for the life of A., may still either be limited expressly to trustees or be raised by implication , and that in cases where before the Act an indefinite chattel interest would have passed, as in a devise to trustees (without the word "heirs") to pay debts, or a freehold with an indefinite interest super- added, as in Doe v. Simpson (V), there the words of the will are for the future made to pass the fee simple (c). [*221] * SECTION II. THE PROPERTIES AKD DEVOLUTION OP THE LEGAL ESTATE IN THE TRUSTEE. This branch of our subject we propose to consider, First, with reference to the common law; and, Secondly, with reference to the construction of particular statutes. First. Of the legal estate at common law.^ 1. Legal estate at common law. — It may be stated as a general rule, that the legal estate in the hands of the trustee has at common law precisely the same properties and inci- dents as if the trustee were the usufructuary owner. Of dower, curtesy, &c. — If real estate be put in trust it is subject at law in the hands of the trustee to curtesy (a), and (5) 5 East, 162. p. 119 ; 2 Janu. on Wills, 4th Ed. p. (c) See the observations on the 320. aboVe clauses, H. Sugdeu on Wills, (o) Bennet v. Davis, 2 P. W. 319. 1 Properties of the legal estate. — At common law the legal title vests in the trustee, with all the properties incident to it, which would be present if he were the absolute owner; Devin v. Hendevsliott, 32 la. 192; Campbell v. Prestons, 22 Gratt. 396; Croxall v. Shererd, 5 Wall. 268; but now there is no dower or curtesy in the legal title to the trust estate ; White i. Drew, 42 Mo. 561 ; Buffalo &e. R. K. Co. v. Lampson, 47 Barb. 533 ; McClellan r. McClellan, 65 Me. 500 ; Dean v. Mitchell, 4 J. J. Marsh. 451 ; Gomez v. Bank, 4 Sandf . 102; Bartlett v. Gouge, 5 B. Men. 152; but see Dubs v. Dubs, 31 Pa. St. 154; but they will attach to the equitable estate ; Hopkinson v. Dumas, 42 N. H. 303 ; Prescott v. Walker, 16 N. H. 343 ; and this is generally true in the United States ; Hawley «. James, 5 Paige, 318 ; Lewis v. James, 8 Humph. 537 ; Peay V. Peay, 2 Rich. Eq. 409; Tillinghast v. Coggeshall, 7 R. I. 383; Cushing v. Blake, 30 N. J. Eq. 689; Houghton v. Hopgood, 13 Pick. 154; but see Reed ». Whitney, 7 Gray. 583; Lobdell v. Hayes, 4 Allen, 187; Hamlin v. Hamlin, 19 Me. 141 ; if the cestui que trust have no next of kin, the trustee holds personalty, and probably realty, subject to the state; Crane v. Reeder, 21 Mich. 26. 304 Ch. XII. S. 2.] PEOPEETTES OF THK LEGAL ESTATE. *222 dower (J), and in the case of copyhold to freebench (c) ; and until a late Act the trust estate was liable to forfeiture (d'), and op the decease of the trustee, if there was no heir, it fell by escheat to the lord (e) ; but by 13 & 14 Vict. c. 60, ss. 15, 46, (substituted for 4 & 5 W. 4, c. 23,) the legal estate of trust property was protected from forfeiture and escheat (/). And by another Act (^), it was enacted that, " Upon the death of a bare * trustee, intestate as to any cor- [*222] poreal or incorporeal hereditament, of which such trustee was seised in fee simple, such hereditament should vest, like a chattel real, in the legal personal representative from time to time of such trustee." But the Act was not to apply to lands registered under the same Act. (6) Noel V. Jevon, Freem. 43 ; Nash V. Preston, Cro. Car. 190. (c) Hinton w. Hinton, 2 Ves. sen, 631, 638 ; Bevant v. Pope, Freem. 71; and see Brown v. Baindle, 3 Ves. 256. (d) Pawlett V. Attorney-General, Hard. 466, per Lord Hale ; Geaj-y v. Bearcroft, Cart. 67, per Cur.; King V. Mildmay, 5 B. & Ad. 264. (e) Jenk. 190, c. 92. (/) See infra. (j) 38 & 39 Viet. c. 87, s. 48 (re- pealing 37 & 38 Vict. c. 78, s. 5). In a recent case a discussion arose as to the meaning of the expression a bare trustee. V. C. Hall observed, " Where there is a trustee whose trust is to convey and the time has arrived for a conveyance by him, he is, I think, a bare trustee," and then adverting to Dart's " Vendors and Purchasers," in which it is laid down, that "a bare trustee would probably be held to mean a trustee to whose office no duties were originally attached, or who, although such duties were origi- nally attached to his office, would on the requisition of his cestuis que trust, be compellable in equity to convey the estate to them or by their direc- tion, and has been requested by them so to convey it," the V. C. approved of the statement, save only that the words, "and has been requested by them so to convey it," should be left out, inasmuch as they were not an important or necessary ingredient. But it may well be doubted whether this is so. For if an estate be vested in trustees in trust to sell and divide the proceeds amongst a class, the trustees are bound to convey by the direction of the class if jms juris, but certainly are not bare trustees until the joint request to convey has coun- termanded the trust for sale. Christie V. Gvington, 1 Ch. D. 279. [However in a subsequent case M. B. withheld his approval of the above definition of a "bare trustee," and while ex- pressly abstaining from deciding the point intimated an opinion that a " bare trustee," meant a trustee with- out any beneficial interest, whether' he had active duties to perform or not. See Morgan v. Swansea Urban Sanitary Authority, 9 Ch. D. 582. But in a still later case V. C. Bacon held that trustees of real estate de- vised upon trust for sale, the sale of which had been ordered in an action to administer the testator's estate, were bare trustees, although they took beneficial interests in the proceeds of sale ; Re Docwra, 29 Ch. D. 693.] 305 *222 PROPERTIES OF THE LEGAL ESTATE. [Ch. XII. S. 2. [Under 44 & 45 Vict. o. 41, legal estate devolves to personed representative. — This enactment is, however, in the case of deaths occurring after the 31st December, 1881, repealed and its place supplied by a provision that "where an estate or interest of inheritabce, or limited to the heir as special occupant, in any tenements or hereditaments, corppreal or incorporeal, is vested on any trust, or by way of mort- gage (a), in any person solely, the same shall on Ms death, notwithstanding any testamentary disposition, devolve to and become vested in his personal representatives or repre- sentative from time to time, in like manner as if the same were a chattel real vesting in them or him ; and accordingly all the like powers, for one only of several joint personal representatives, as well as for a single personal representar tive, and for all the personal representatives together, to dis- pose of and otherwise deal with the same, shall belong to the deceased's personal representatives or representative from time to time, with all the like incidents, but subject to all the like rights, equities, and obligations, as if the same were a chattel real vesting in them or him ; and .for the purposes of this section the personal representatives for the time being of the deceased shall be deemed in law his heirs and assigns vrithin the meaning of all trusts and powers " (J).J £(«) By 37 & 38 Vict. c. 78, s. 4, Hughes W. N. 1884, p. 53. If upon the legal personal representatiye of the death, intestate, of a sole surviv- a mortgagee of a freehold estate, or ing trustee new trustees are appointed of a copyhold estate to which the under the Trustee Acts, the vesting mortgaigee was admitted, was em- order should vest the trust estates in powered on payment of all sums them "for the estate therein which secured by the mortgage to convey would now be vested in (the intestate) or surrender the mortgaged estate. if now living," Set. on Dec, 4th Ed. This section was held not to apply to p. 639 ; or " for all the estate and a transfer of a mortgage of a freehold interest which the deceased trustee estate, Ee Spradbery's Mortgage, 14 had in him immediately before (or at Ch. D. 514 ; or to a sale by the exec- the time of) his death," Re Back- utors, under a power in the mortgage straw's Trusts, 62 L. T. N. S. 612 ; deed, Ee White's Mortgage, 61 L. J. 33 W. R. 669. Where the order was N. S. Ch. 856 ; and has in the case of made vesting the property in the new a death occurring after the 31st De- trustees " for the estate therein now cember, 1881, been repealed by 44 & vested in the heir-at-law of the de- 45 Vict. c. 41, s. 30.] ceased trustee," and letters of admin- [(5)44 & 45 Vict. c. 41, s. 30; istration were subsequently taken out this section applies to copyholds, Re to the estate of the deceased trustee, 306 Ch. XII. S. 2.] PROPERTIES OF THE LEGAL ESTATE. *223 2. Trust chattels subject to forfeiture, &c. — So chattels real and personal held upon trust were forfeitable until the late Act (which extends to personal as well as real estate), * for the offence of the trustee (a) ; but in the case [*223] of two joint trustees, a moiety only was forfeited, and the King and the other trustee were tenants in common (6). Devolve on executor. — On the decease of the trustee the chattel, as part of his personal estate at law, devolves on his executor or administrator. And if the executor die after prqjpate, having appointed an executor, the chattel becomes vested in that executor. 3. Renunciation by one executor. — Until a late Act, if an executor had renounced probate, the renunciation, though ^n'mc? /aci'e absolute .(c), might have been retracted at any time before a new administration was granted. Hence where two executors were named and one renounced, and the acting executor died having appointed executors, but pre-deceased his co-executor, it was necessary to take out letters of administration to the original testator, for the act- ing executor not being the survivor did not transmit the interest, and the renouncing executor declined to act (c?). But now by 20 & 21 Vict. c. 77, s. 79, where an executor re- nounces probate, the rights of such executor are made to cease ; and the representation to the testator and the admin- istration of his effects, without further renunciation, go, de- volve an(i are committed as if such person had not been appointed executor (e). But the Act does not apply to the case of a person who renounced before the Act came into oper- ation, and if he renounced before the Act, any second renun- ciation after the Act for the purpose of bringing himself the question arose whether the vest- Hard. 466, per Lord Hale ; Wike's ing order had any effect, having re- case, Lane, 54; Scounden v. Hawley, garJ to the 30th sect, of the late act. Comb. 172, per Dolben, J.; Jenk. and the Court, upon motion, directed 219, c. 66 ; ib. 245, c. 30. that " notwithstanding the previous (5) Wike's case, Lane, 54. order, the land should vest in the new (c) Venables v. East India Com- trustees for all the estate therein then pany, 2 Exch. 633. vested in the legal personal repre- (d) Arnold v. Blencowe, 1 Cox, sentative," lie Filling's Trusts, 26 Ch. 426. D. 432.] . (e) In re Goods of C. Lorimer, 10 (a) Pawlett v. Attorney-General, W. E. 809, & 2 S. & T. 471. 307 *224 PEOPERTIES OF THE LEGAL ESTATE. [Ch. XII. S. 2. Tvithin it is ultra vires and nugatory (/), and a disclaimer, or renunciation by answer in chancery was held not to oper- ate as a renunciation within the Act (^), and a renunciation is not complete until jt has been entered and recorded in the proper office Qi). But it has not been settled that an exec- utor after renunciation may not on proper grounds retract his renunciation (J). ' By 21 & 22 Vict. c. 95, s. 22, when- ever an executor survives the testator, but dies without hav- ing taken probate, or is ci,ted to take probate and does not appear, the right of such person in respect of the executor- ship shall wholly cease, and representation to the [*224] testator and the administration of * his effects shaU and may, without any further renunciation, go, de- volve and be committed in like manner jis if such person had not been appointed executor. 4. 'Whether term in a trustee requires a prerogative probate. — If the lands comprised in a trust term were situate in a different diocese from that in which the trustee was domi- ciled, it seems that previously to 20 & 21 Vict. c. 77, which created the Court of Probate, a prerogative probate or lim- ited administration was necessary before the term could have been legally transferred (a). Administration limited to trust property. — If there be a difficulty in the way of probate or grant of general letters of administration, special letters of administration limited to the trust property may be taken out (6). 5. Whether a chattel may be taken in execution for the debt of the trustee. — A chattel found by the sheriff in the pos- session of a debtor is primd fade the debtor's own property, and as such is liable to be taken in execution for his debt, but if the sheriff knowing the chattel to be bound by a clear trust for another were to sell it for the debt of the trustee, it would be a tortious act in him (c), and the creditor who (/) Re "Whitham, 1 L. R. P. & D. (t) In the Goods of GUI, 3 L. E. 303 ; In the Goods of Delacour, 91. P. & D. 113. E. Eq. 86. (a) See Crosley v. Archdeacon of (J) Chalon v. Webster, W. N. Sudbury, 3 Hagg. 201. 1873, p. 189. (6) In the Goods of Prothero, 3 L. (A) In the Goods of Morant, 3 L. E. P. & D. 209. E. P. & D. 151. (c) Farr o. Newman, 4 T. E. 621, 308 Ch. Xn. S. 2.] PEOPBETIES OF THE LfiGAL ESTATE. *225 received the proceeds would be accouutable as a trustee (c?), and the cestui- que trust may, upon seizure by the sheriff, es- tablish his equitable title at law upon an interpleader sum- mons (e). On the other hand, if a person be the cestui que trust of an equitable chattel, the sheriff may take it in execution for the debt of the .cestui que trust ; and this is so even when the cestui que trust claims under an agreement for valuable con- sideration for the settlement of after-acquired property (/). But such an agreement is a roving one and executory, and does not give the cestui que trust the privileges' of the specific purchaser until actual possession of the chattel under the agreement, and the interest of the cestui que trust may there- fore be defeated by a judgment creditor of the settlor, who takes out execution before actual possession by the cestui que trust (^). 6. The common la's? recognizes assets in the hands of an ex- ecutor to be trust property. — Assets in the hands of an execu- tor are regarded as a species of trust property, even by the common law, which in respect of them has engrafted upon itself a quasi equitable jurisdiction: as, if an executrix marry, she may by will, without the consent of her husband, appoint an executor in whom the assets will vest, and * who wiU thus become the executor of the orig- [*225] inal testator (a) ; and though the husband during the coverture has power to dispose of the assets in the course of administration (J), he will not be entitled to them in his marital right by survivorship (e) ; and if the wife sur- vive she is liable for the devastavit committed by her hus- per Ashxirst, J., and see Blake v. (a) Soammel v. Wilkinson, 2 East, Done, 7 H. and N. 465, and p. 245, 552 ; Hodsden v. Lloyd, 2 B. C. C. post, as to judgments. See now 36 & 543, per Lord Thurlow. 37 Vict. c. 66, 6. 24. (6) Thruatout v. Coppin, 2 W. (rf) Foley V. Burnell, 1 B. C. C. Black. Rep. 801 ; [this will not be the 278 case where the marriage has taken (e) Duncan v. Cashin, 10 L. R. C. place or the, executorship has arisen P. 554. since 1st January, 1883, 45 & 46 Vict. (/) Interpleader Summons, W. N. c. 75.] 1875, p. 203; W. N. 1876, p. 64. (c) Co. Lit. 351 a, 351 b: Stow a (S') Holroyd v. Marshall, 2 De G. Drinkwater, Loflt, 83. F. & J. 596. 309 *225 DBVISB OP TRUST. ESTATES. [Ch. XII. S. 2. band (cZ) ; nor can the assets be taken in execution for the debt of the executor (e), [unless under such special circum- .stances as give the creditors of the executor a better equity than the creditors of the testator, as where the executor has been allowed to retain the assets for a considerable time and deal with them as his absolute property (/) ; but possession by the executor of the assets for a long time if in accordance with the trusts will not raise such an equity (^) ; and if, under the old law as to forfeiture, the executor] committed felony or treason, the assets were exempted from forfeiture to the crown (A) ; and if the executor die intestate instead of vesting in his administrator, they vest in the adminis- trator de bonis non of the testator (i). 7. Attachment. — Attachment by the custom of the City of London does not apply to debts [where the beneficial interest is vested in a person other than the defendant sued in the Lord Mayor's Court and the garnishee has notice of the trust 0').] , 8. Trustee may deal with the trust estate by Act inter vivos. — A trust estate, whether real or personal, may, at law, be conveyed, assigned, or encumbered by the trustee, Uke a beneficial estate ; and, if there be co-trustees, each may exer- cise the like powers of ownership over his own proportion. Thus if lands be vested in trustees as joint-tenants, each may at law receive the rents (A;), and each may at law sever the joint-tenancy by a conveyance of his share (T) ; and if the trust estate be stock each may receive the dividends without any authority from the co-trustee. General words. — But, in dealings with the trust estate, (rf) Soady «. TumbuU, 1 L. R. Ch. (A) Fan- v. Newman, 4 T. R. 628, App. 494. per Grose, J. ; [see now 33 & 34 Vict. (e) Fan- v. Newman, 4 T. R. 621 ; c. 23.] [fie Morgan, 18 Ch. D. 93.] ' ({) lb. per eundem ; Rachfield ». [(/) Kay V. Ray, G. Coop, 264; Careless, 2 P. W. 161, pei- Powis, J. Kitchen v. Ibbetson, 17 L. R. Eq. 46 ; (/) Westoby v. Day, 2 EU. & Bl. and see In re Fells, 4 Ch. D. 509; Re 605; Lewis v. Wallis, Sir T. Jones, Morgan, 18 Ch. D. 93.] 222. [(g) Fenwick v. Laycock, 2 Q. B. (jfc) Townley v. Sherborne, Bridge. 108; Re Morgan, 18 Ch. D. 93; and 35. see Ex parte Barber, 42 L. T. N. S. 411, (0 Boursot v. Savage, 2 L. R. Eq. 28 W. R. 522.] 134. 310 Ch. XII. S. 2.] DEVISE or TRUST ESTATES. *226 the Court has regard to the trust, and will not con- strue general words to pass the trust * estate where [f 226] the assurance, if so construed, would amount to a breach of trust (a). 9. May devise or bequeath it. — As the trustee may at law dispose of the property in his lifetime, so he may devise or bequeath it at his death; [but in the case of a trustee or mortgagee dying after the 31st December, 1881, " any estate or interest of inheritance, or limited to the heir as special occupant, in any tenements or hereditaments, corporeal or incorporeal," will, notwithftanlding any testamentary disposi- tion devolve on the personal representative of the trustee or mortgagee, in the same manner as if it were a chattel real (6). It is therefore useless for a trustee or mortgagee to devise property of the above description, and the title to such prop- erty must be made through the legal personal representative.] But a trust estate will not in all cases pass by the same words in a will as a beneficial ownership would, for wherever the estate does not pass by operation of law solely, but through the medium of the intention, it becomes necessary, in order to ascertain the effect of the instrument, to take into consid- eration the particular circumstances of the trust. 10. In Tnrhat cases the trust Estate 'will pass by a general devise. -^ Whether a trust estate shall pass inclusively in a general devise, is a question that has been frequently under discussion,^ [and notwithstanding the change in the law introduced by the Conveyancing and Law of Property Act, 1881 (c), is still a question of importance where the death (a) Fausset v. Carpenter, 2 Dow. [(6) 44 & 45 Vict. c. 41, s. 30, and & CI. 232 ; 5 Bligh, N. S. 75 ; and see ante, p. 222.] see St. Leonards' H. L. Cases, 76; [(c) 44 & 45 Vict. c. 41, s. 30.] Re Waley's Trust, 3 Eq. R. 380. 1 Devise of trust estates. — "A general devise of real estate will pass estates Tested in the testator as trustee or mortgagee, unless a contrary intention can be collected from the expressions of the will, or from tl^e purposes or limita- tions to which the devised lands are subjected " ; Hill on Trustees, 283 ; and this is the general rule in America; Ballard v. Carter, 5 Pick. 112; Richard- son V. Woodbury, 43 Me. 206 ; Taylor v. Benham, 5 How. 270 ; Hughes v. Cald- well, 11 Leigh, 342 ; .Jackson i>. Delancy, 13 Johns. 537 ; a devise of all one's estate passes trust property ; Bangs v. Smith, 98 Mass. 273 ; Willard v. Ware, 10 Allen, 263 ; Stone v. Hackett, 12 Gray, 227 ; so a devise to one, his heirs 311 *227 DEVISE OF TRUST ESTATES. [Ch. XII. S. 2. of the trustee occurred prior to tlie coinmencemeiit of that act.] The rule as originally established was, that a general expression would carry a dry trust estate (d), but afterwards there were some misgivings upon the subject (e) (1) ; and the Court at last acceded to the proposition, that general words would not pass trust estates, unless there' ap- [*227] peared a positive * intention that they should so pass (a). The question was reconsidered before Lord Eldon, when the result of the cases, after a careful examination of them, was declared to be, that, where the will (rf) Marlow v. Smith, 2 P. W. 198. (a) Attorney-General t>. BuUer, 5 (e) See Braybroke v. Insklp, 8 Ves. 340. Ves. 437. (1) Ho-w the opinion arose that a general devise 'would not pass a trust estate. — The doubt appears to hav.e originated in part from an expres- sion of Lord Hardwicke in Casborne v. Scarf e, 1 Atk. 605, that by a devise of all lands, tenements and hereditaments, a mortgage in fee would not pass, unless the equity of redemption were foreclosed. But Lord Hardwicke was not speaking here of the legal estate, but of the beneficial interest in the mortgage. The same thing was said in the same sense in Strode v. Kussel, 2 Vern. 625. Lord Hardwicke's authority has been cited on both sides of the question (compare Duke of Leeds v. Munday, 3 Ves. 348, with Ex parte Sergi- son, 4 Ves. 147 ;) but that he approved of the old rule is evident from Ex parte Bowes, cited in Mr. Sanders's note to Casborne v. Scarfe, 1 Atk. 605. Lord Northington and Lord Thurlow are said to have entertained the same opinion, (See Ex parte Sergison, 4 Ves. 147 ; but, as to Lord Thurlow, see an obiter dictum, Pickering v. Vowles, 1 B. C. C. 198.) and assigns, to and for his and their use and benefit; Abbott, Petr. 55 Me. 580 ; mortgage estates may pass by devise, though charged with debts and leg- acies; Ballard v. Carter, 5 Pick. 112; Richardson v. Woodbury, 43 Me. 206; whether the devisee or an heir can execute a trust depends upon the instru- ment as showing the settlor's intention ; Abbott, Petr. 55 Me. 580 ; in some states the court appoints new trustees, if the original trustees die ; Hawley v. Eoss, 7 Paige, 103; Clark v. Crego, 47 Barb. 599; Hook o. Dyer, 47 Mo. 241; McDougald v. Carey, 38 Ala. 320 ; contra in New Jersey; Schenck v. Schenck, 16 N. J. Eq. 174 ; a trust estate cannot be divided; Baldwin v. Humphrey, 44 N. Y. 609 ; Saunders ». Schmaelzle, 49 Cal. 59 ; the survivor of the trustees, then the heir or representative, receives the trust estate ; Whiting v. Whiting, 4 Gray, 236 ; Webster v. Vandeventer, 6 Gray, 429 ; Powell ». Knox, 16 Ala. 364; De Peyster v. Ferrers, 11 Paige, 13; Gray v. Lynch, 8 Gill. 404; Keister V. Howe, 3 Ind. 268 ; the surviving trustee cannot be disturbed by the repre- sentatives of his cotrustees ; Shook v. Shook, 19 Barb. 653 ; he may sue by himself; Eicheson v. Eyan, 15 111. 13; and his executors or administrators may continue the proceedings; Maudlin v. Armistead, 14 Ala. 702; Nichols v. Campbell, 10 Gratt. 561 ; but actions must be in the names qf the parties to the contract; Childs v. Jordan, 106 Mass. 323 ; Farrelly v. Ladd, 10 Allen, 127. 312 Ch. XII. S. 2.] DEVISE OF TRUST ESTATES. *227 contained words large enough, and there was no expression authorising a narrower construction, or any such disposition of the estate as it was unlikely a testator would make of prop- erty not his own (as complicated limitations, or any purpose inconsistent with as proiable intention to devise as to let it descend'), in such a case the trust estate would pass (I). [A residuary devise to trustees upon trust to sell will pass the legal estate in a property which the testator has in his lifetime contracted to sell (e)0 11. Charge of debts, &c., ■vriJl exclude the trust estate. — A chdrge of debts, legacies, annuities, &c., and d fortiori, a direc- tion to sell, is considered a sufficient indication of an inten- tion not to include a mere trust estate (dT) ; as where a testator having a trust estate and also estates of his own, gave and devised " all his real estate, whatsoever and where- soever, to G. T., her heirs and assigns, for ever, charged with 50Z. to his friend W.," it was held that the trust estate did not pass (e). And so where a testator gave, devised, and bequeathed to trustees all such real estates as were then vested in him by way of mortgage, the better to enable his said trustees to recover, get in, and receive the principal monies and interest which might be due thereon, it was ruled that the devise extended only to mortgages vested in the testator beneficially, and did not pass the legal estate in fee vested in the testator upon trust for another (/). (6) Braybroke u. Inskip, 8 Ves. Ch. D. 156, where V. C. Malins was 436; see Roe v, Eeade, 8 T. K. 118; of opinion^ thai where there was a Ex parte Morgan, 10 Ves. 101 ; Lang- general devise of real estate charged ford V. Auger, 4 Hare, 313. with debts and legacies, the legal [(c) Surrey Commercial Dock estate in trust property would pass, Company v. Kerr, W. N. 1878, p. notwithstanding tlie charge, which 168.] attached only on property which the (d) Eoe V. Reade, 8 T. R. 118; testator was competent to charge Duke of Leeds t>. Munday, 3 Yes. with debts and legacies ; and see as 348; Attorney-General v. BuUer, 5 to this case Re Bellis's Trusts, vbi Ves. 339 ; Ex parte Marshall, 9 Sim. !u/>.] 555 ; Ex parte Morgan, 10 Ves. 101 ; (e) Rackham o. Siddall, 16 Sim. Sylvester v. Jarman, 10 Price, 78 ; Re 297, 1 Mac. & G. 607 ; Hope v. Lld- Morle/s Trust, 10 Hare, 293 ; [Re dell, 21 Beav. 183 ; Life Association Smith's Estate, 4 Ch. D. 70 ; Re Bel- of Scotland v. Siddall, 3 De G. F. & lis's Trusts, 5 Ch. D. 504 ;] see Wall J. 58. V. Bright, 1 J. & W. 494; [see, how- (/) Ex parte Morgan, 10 Ves. 101; ever, Re Brown & Sibly's contract, 3 and see Sylvester v. Jarman, 10 313 *228 DEVISE OF TEUST ESTATES. [Ch. XII. S. 2. 12. What expressions 'will or -will not exclude the trust estate. — The expression " my real estates " will not restrict the meaning to those vested in the testator benefi- [*228] cially {g), nor will a * devise to A., his heirs and assigns, " to and for his and their own use and bene- fit " (a), nor a devise to A. and her heirs, to be disponed of by her by will or otherwise, as she may think fit (6) : though under a devise to a woman for her separate use, as the words import a beneficial enjoyment, a dry legal estate wUl not pass (c) ; but a devise to a woman, " her heirs and assigns, for her and their own sole and absolute use," expresses only the absolute interest, and does not create a separate estate (d). Whether a residuary devise of lands to persons as tenants in common in equal shares, will pass a trust estate, has never been expressly decided, but a judicial opinion has been ex- pressed that such a devise would not pass a dry trust estate (e). A devise to the testator's nephews and nieces share and share alike as tenants in common, and not as joint-tenants, as the class is unascertained at the date of the wUl, does not pass a trust estate (/). And if the devise be for A. for life or in tail, with remainders over, in strict settlement, the trust estate will not pass (^). "Where there is a limitation of real estate," said Lord Eldon, " in strict settlement, with a vast number of limitations, contingent remainders, executory devises, powers of jointuring, leasing, arid raising sums of money, it is impossible to say the intention could be to give a dry trust estate " (K). Price, 78 ; Ex parte Brettel, 6 Ves. (e) Martin ». Laverton, 9 L. E. Eq. 577. 568, per V. C. Malins ; and see cases (y) Braybrokei-. Inskip, 8 Ves.425. there referred to; [iie Morley's (a) Ex parte Shaw, 8 Sim. 159 ; Trust, 10 Hare, 293.] Bainbridge v. Lord Ashburton, 2 Y. (/) Be I'inney's Estate, 3 GifE. & C. 347 ; Sharpe v. Sharpe, 12 Jur. 465. 598 ; and compare Ex parte Brettel, 6 (y) Thompson v.- Grant, 4 Madd. Ves. 577, with Braybroke v. Inskip, 8 438; Be Horsfall, 1 Maclel. & Younge, Ves. 4.34. 292; Galllers v. Moss, 9 B. & C. 267; (6) Ex parte Shaw, 8 Sim. 159. Ex parte Bowes, cited in Mr. Sand- (c) Lindsell v. Thacker, 12 Sim. ers's note to Casbome v. Scarf e, 1 178. The marginal note of the Re- Atk. 603. port is quite contrary to the decision. (A) Braybroke v. Inskip, 8 Ves, (d) Lewis V. Mathews, 2 L. B. Eq. 434. 177. 314 Ch. XII. S. 2.] DEVISE OF TRUST ESTATES. *229 13. Distiaction as to legal estate in mortgages. — The' ques- tion whetlier the legal estate in a mortgage' in fee passes by a general devise in the will of the mortgagee, stands on a differ- ent footing. The mortgagee has a beneficial interest in the property as a security, a distinction not always sufficiently adverted to, but which is strongly in favour of the legal estate passing to the person who is to receive the mortgage money («). It is clear that the legal estate passes by a gen- eral devise of securities for money (/), and neither a general trust to sell and convert (A), nor a * charge [*229] »i debts (a), will prevent it from so passing. And it is conceived, notwithstanding a former decision of the Court of Exchequer (J), that the case of a general devise and bequest of real and personal estate charged with debts or legacies admits of no substantial distinction (c). But the legal estate will not pass by a general devise of real estate, if there be special trusts for sale or other limitation, &c.j which would be inapplicable to an estate in mortgage,(«i). [Distinction now not material. — The distinction between mortgaged estates and trust estates has ceased, in the case of the mortgagee or trustee dying after the 31st December, 1881, to be material; as in either case the power of disposing of the legal estate is now vested in the personal representa- tives of the mortgagee or trustee so dying (e).J 14. Power of a trustee in equity to devise the trust estate. — The rule that trust estates passed under a general devise assumed that a testator by making such a devise did not (i) Doe V. Bennett, 6 Exch. 892 ; overruling Eenvoize v. Cooper, 10 and comments of Vice Chancellor Price, 78. Kindersley on this case. Re Cantley, (6) Doe v. Lightfoot, 8 M. & W. 17 Jur. 124 ; [and see Heath v. Pugh, 553. 6 Q. B. D. 345, 360.] (c) Now so decided. Re Stevens' 0') King's Mortgage, 5 De G. & Trusts, 6 L. E. Eq. 597 ; [In re Brown Sm. 644, and cases there reviewed ; and Sibly's Contract, 3 Ch. D. 163.] Knight V. Robinson, 2 K. & J. 503 ; But see In re Packman and Moss, 1 Eippeu V. Priest, 13 C. B. N. S. 308; Ch. D. 214. Ex parte Whitacre, cited 1 Sand. (d) Re Cantley, l7 Jur. 124 ; Mar- Uses and Trusts, 359, 4th edition. tin v. Laverton, 9 L. E. Eq. 563 ; (k) Ex parte BaTheT,6 Sim. 451; Thirtle v. Vaughan, 24 L. T. 5; Re Mather v. Thomas, 6 Sim. 115. Finney's Estate, 3 Giff. 465 ; [Re (o) Field's Mortgage, 9 Hare, 414 ; Smith's Estate, 4 Ch. D. 70.] [(e) 44 & 45 Vict. c. 41, s. 30.] 315 *230 DEVISE OF TETJST ESTATES. [Ch. XII. S. 2. commit a breach of trust, otherwise general words would not have been construed to carry the trust estate ,(/). How- ever, it was observed in one case by the late Vice-Chancellor of England that in his opinion it was not lawful for a trustee to dispose of the estate, but that he ought to permit it to de- scend; and that there was no material difference between a con- veyance infer vivos and a devise, for the latter was nothing but a, postmortem conveyance {g). But Lord Langdale considered that there was a wide distinction between a conveyance in the trustee's lifetime and a devise by his will ; for during his life he had, a personal discretion confided to him, which he could not delegate, but the settlor could not have reposed any per- sonal confidence in the trustee's heir, for it could not be known beforehand who such heir would be ; and thab if the estate were allowed to descend, it might become vested in married women, infants, or bankrupts, or persons out of the jurisdiction ; and he could not therefore hold it to be a breach of trust to transmit the estate by will to trustworthy de- visees (Ji). [But this question has since the recent [*230] alteration in the law under which the trust * estate devolves as a chattel real ceased to be one of practi- cal interest.] 15. Whether a devisee can execute the trust. — How far a devisee of the trust estate can execute the trust, will depend on the intention of the settlor, to be collected from the terms in which the instrument is expressed. Thus, real or personal estate may be so vested in A. that A. alone shaU personally execute the trust ; and in such a case, the heir or executor of A. though he took the legal estate, could not act as trustee (a) ; and d fortiori in such a case the devisee, though made the depositary of the legal estate, would have no authority to execute the trust (&). [It was laid down in former editions of this work that] if a settlor vested an (/) See ante, p. 226, and the au- 14 Bear. 556 ; Wilson v. Bennett, 5 thoritieB cited in note (a) lb. De G. & Sm. 479. (j) Cooke w. Crawford, 13 Sim. 98; (a) See Mortimer v. Ireland, 11 and see Beasley v. Wilkinson, 13 Jur. Jur. 721. 649. (i) Mortimer ». Ireland, 11 Jur. (A) Titley».Wol8tenholme,7BeaT. 721; S. C. before Vice-Chancellor 435 ; and see Macdonald v. Walker, Wigram, 6 Hare, 196. 316 Ch. XII. S. 2.] DEVISE OF TRUST ESTATES. *231 estate in A. upon trust, that A. and his heirs should sell, and A. devised the estate, neither the heir nor devisee could sell ; not the heir, for as regards this lestate the descent had been intercepted and there was no heir, and not the devisee, for he was not the person to whom the exfecution of the trust was com- mitted (e). [This proposition was founded upon Cooke v. Crawford, and subsequent cases, but in the recent case of Osborne to Rowlett (cT), the late M. R. after an elaborate dis- cussion of the cases came to the conclusion that Cooke v. Craw- ford was wrongly decided, and he held that where real estate was devised to trustees and their heirs, in trust for sale, the trust was annexed to the estate, and that as the surviviig trustee might have lawfully devised the trust estate the devisee might execute the trust, and he expressly overruled Cooke V. Crawford. In a subsequent case, however, before the Court of Appeal (e), in which the precise point did not arise, L.JJ. James, and Baggallay, expressed a doubt whether Osborne to Rowlett, was rightly decided, and the question must in the present state of the authorities be considered as an open one. It may be observed that M. R. justified his decision on the ground that the decision in Cooke v. Craw- ford, was, in his opinion, based on the assumed principle that a trustee unless authorized so to do, could not lawfully de- vise the trust estate, and that as that principle has been over- ruled by subsequent cases, Cooke v. Crawford, has ceased to be a binding authority, but it is submitted that the real ground for the decision in Cooke v. Crawford, was that the authority to execute the trust *must be [*231] directly given by the original settlor or testator, and that the surviving trustee by devising the Estate to a person not so authorized did not enable the devisee to execute the trust (a). It is submitted that this principle has not been called in question, whatever exceptions have been taken to the observations in Cooke v. Crawford, as to the duty of a (c) Cooke V. Crawford, 13 Sim. 91 ; Ch. D. 143 ; and see Re Ingleby and "Wilson V. Bennett, 5 De G. & Sm. Boak &c. Insurance Company, 18 L. 475 ; Stevens v. Austen, 7 Jur. N. S. R. Jr. 326.] 873 ; 3 E. & E. 685. [(a) See Sugd. V. & P. 14th Ed. i(d) 13 Ch. D. 774.] p. 665.] "■ [(e) Re Morton and Hallett, 15 317 *231 DEVISE OF TRUST ESTATES. [Ch. XII. S. 2. trustee to let trust estates descend, and tliat however strong the argument might be (if the jnatter were one of first im- pression) in favour of holding that the trust may be executed by any person to whom the estate comes consistently with the provision of the original settlement or will, it is too late now to overrule Cooke v. Crawford, and the subsequent cases, and to introduce a new principle. And in a subsequent case in Ireland where a testator appointed A. and B. executors and trustees of her will, and devised real estate to them upon trust, that they or the survivor should pay the rents to A. for his life, and after his death sell the estate, it was held that the executors of B., who survived A., could not make a title, notwithstanding the 30th section of the Con- veyancing and Law of Property Act, 1881 (6).J 16. Re Burtt's estate. — In another case (c), where lease- holds were assigned to two trustees, their executors and administrators, upon trust; and the surviving trustee devised the leaseholds to A. and B. upon the same trusts, and ap- pointed A. B. and C. executors ; on a petition by A. and B. to the Court to have the trust fund, the proceeds of the leaseholds, paid out to them, Vice-Chancellor Kindersley refused, observing, that the surviving trustee had no author- ity to bequeath the execution of the trust, but could only pass the legal estate. The petition was then amended by joining C. as a co-petitioner, so that the petition was now that of the legatees, and also of the executors ; but the Vice- ChanceUor still refused, on the ground that the testator had himself declared, that his executors as such should not be trustees, and, therefore, since, by the bequest, he had taken the legal estate from those who ought to have been trustees, there must be an appointment of new trustees. 17. 'Where the trust is confided to the trustee and his assigns. — But it most frequently happens that an estate is vested in A. upon trust, that A., his heirs, executors, administrators, and assigns, shall hold upon the trust ; and the question then is, whether a devisee of A. may, as falling under the descrip- tion of assigns, not only take the estate, but also execute the [(6) Be Ingleby and Boak, &c. In- (c) Re Burtt'a Estate, 1 Drew. 319. surance Company, 13 L. B. Ir. 326.] 318 Ch. SII. S. 2.] DEVISE OF TKTJST ESTATES. *282 trust ? In Titley v. Wolstenlioliiie (ti), where the settlement contained no power of * appointment of [*232] new trustees, it was held, that as a conveyance in the lifetime of the trustee to a stranger would have been a breach of trust, the word assign could mean only a devisee taking under a post mortem conveyance, when the personal confidence in the trustee necessarily ceased; and conse- quently that the devisees had not only the legal estate, but were properly trustees within the scope of the settlor's intention. 18. Titley v. 'Wolstenholme, doubted. — This case seems to have raised some scruple in the mind of V. C. afterwards L. J. Knight Bruce, for he observed that " What he should have done if Titley v. Wolstenholme had come before him he need not say, nor was he sure " (a). And the reasoning upon which Lord Langdale proceeded is not quite con- clusive, for the word " assigns " does not necessarily imply a devise, as it would be satisfied by holding it to refer to a tenant by the curtesy or dowress, who would be assigns in law. However, the case was referred to, without disappro- bation, by Lord Cottenham (6), and was approved by V. C. Stuart (c). 19. Hall V. May. — In Hall V. May («?), V. C. Wood went further, and held that under a trust containing the word assigns, and also a power to appoint new trustees, the devisee could make a title. It was conceded that the word " assigns " would not have enabled a trustee to transfer the trust by act inter vivos, and it could not be disputed that, as the instru- ment contained a power of appointment of new trustees, the assigns introduced by virtue of the power would give a meaning to the word " assigns " without having recourse to a devise. It was therefore necessary to lay down a broader principle than that acted upon in Titley v. Wolstenholme, and the doctrines upon which the Vice-Chancellor proceeded (d) 7 Beav. 425. See Saloway v. (i) Mortimer v. Ireland, 11 Jur. Strawbridge, 1 K. & J. 371 ; 7 De G. 721. M. & G. 69.4, which however was the (c) Ashton v. Wood, 3 Sm. & G. caae of a mortgage. 436. (o) Ockelston v. Heap, 1 De G. & (rf) 3 K. & J. 585. Sm. 642. 319 *233 . DEVISE OF TETJST ESTATES. [Ch. XII. S. Is. appear to have been substantially these — "That a settlor must have intended to provide a permanent machinery for the execution of the trust; that he could not have reposed any personal confidence in the trustee's heir, who was unknown, and could not be ascertained beforehand; that the settlor must have contemplated the possibility thjit on, the death of the trustee the heir might be an infant, or luna- tic, or bankrupt, or insolvent, and so either incapable or unfit to discharge the office ; that it might therefore be reasonably inferred that the settlor meant by confiding the trust to the trustee, his heirs and assigns, to give the trustee, a discre- tionary power of preventing these inconveniences by [*233] vesting the estate in a devisee; *and that the cir- cumstance that the settlor had given to the surviv- ing trustee a power of appointing new trustees by deed, rather favoured the view that he also intended, when using the word ' assigns,' to confer on the trustee a right to devise the trust estate." The Court was also actuated by the feel- ing that many titles must have been accepted upon the foot- ing of this enlarged construction. The decision was perhaps a bold one, but having been made it is not likely to be dis- turbed. [20. Sale by heir. — Where a testator devised freehold and copyhold estates to trustees and their heirs upon trust that they "his said trustees or the trustees or trustee for the time being of that his will " should sell the estates, it was held that the copyhold heir of the surviving trustee to whom the estates had descended could execute th6 trust (a). 21. 44 & 45 Viot. o. 41. — Where under the 30th sect, of the Conveyancing and Law of Property Act, 1881, trust or mortgage estates become vested in the personal represen- tatives of a trustee or mortgagee, they are for the purposes of the section to "be deemed in law his heirs and assigns within the meaning of all trusts and powers." The wording of this section is not clear, but it is conceived that it enables the personal representatives to execute the trusts and powers which were originally reposed in the trustee, his heirs and [(a) Ra Morton and Hallett, 15 Ch. D. 143.] 820 Ch. XII. S. 2.] , DEVISE OF TRUST ESTATES. *234 assigns, and they may therefore sell in any case where there was a trust for sale or power of sale in the heirs and assigns of the last surviving trustee.] 22. An estate contracted to be sold will be included in a general devise. — A vendor, after the contract for sale, but before the completion of it, is a trustee for the purchaser sub modo only, and the estate will pass by a general devise in his will, where it would not have been included had the testator been a mere and express trustee (J). [Personal representative can convey. — But by the Convey- ancing and Law of Property Act, 1881, s. 4, it is enacted that where at the death of any person there is subsisting a contract enforceable against his heir or devisee for the sale of the fee simple or other freehold interest descendible to his heirs general in any land, his personal' representatives shall, by virtue of the Act, have power to convey the land for all the estate and interest vested in him at his death in any manner proper for giving effect to the contract. But a conveyance made under this section is not to affect the ben- eficial rights of any person claiming under any testamentary disposition or as heir or next of kin of a testator or intes- tate, and the section applies only in cases ,of death after the 31st December, 1881" (c).J * 23. Trustee has the privileges apd burdens of [*234] the legal estate. — As the dry legal estate in the hands of the trustee is [subject to the statutory modifications above referred to] affected by the operation of law, and may be disposed of by the act of the trustee, precisely in the same manner as if it were vested in him beneficially, so it confers upon him all the leffal privileges, and subjects him to all the legal burdens, that are incident to the usufructuary posses- sion (a). Trustee must bring actions, &c. — Thus the trustee can bring any action respecting the trust estate in a court of law, the cestui que trust, though the absolute owner in (6) Wallti. Bright, IJ. & W. 494; [(c) Cf. Sect. 30 of the same Act but see now Lysaght v. Edwards, 2 44 & 45 Vict. c. 41.] Ch. D. 499. (a) Burgess v. Wheate, 1 Eden, 251, per Lord Northington. 321 *234 tetjstee's right to vote. [Ch. XII. S.2. equity, being at law regarded in tlie light of a stranger (6). So the trustee of a manor is the person to appoint the stew- ard of it (c), and the trustees of an advowson to present to the church (ti), but in either case he has the mere legal right, and is bound in equity to observe the directions of his cestui que trust (e). 24. Trustee must prove in bankruptcy. — So where a debtor to the trust estate becomes bankrupt, the trustee may prove for the debt, and that without the concurrence of the cestui que trust (/), unless it be such a simple trust as where A. is trustee for B. absolutely, and then it rests in the discretion of the judge to require the concurrence of the cestui qu£ trust, for who knows but that B. may have already received the money (^). Case of trustee a bankrupt. — If the trustee himself become bankrupt a cestui que trust may obtaiu an order to prove for the whole sum and will be entitled to vote at the choice of the creditors' trustee (A). A mere trustee of a debt for a person absolutely entitled and under no disability, cannot present a bankruptcy petition against the debtor without the concurrence of his cestui que trust ; for as the cestui qu^e trust who was competent to do so might have released the debt, " it might well happen that there was no real debt at all, although in legal parlance there might be a debt; " ^ and it makes no difference that the trustee has obtained final judg- ment against the debtor for the amoxint, and has served a (6) See Allen v. Imlett, Holt, 641 ; eundem ; Kensey v. Langham, Cas. t. ^Gibson v. Winter, 4 B. & Ad. 96 ; May Talb. 144, per Lord Talbot ; Amhm-st V. Taylor, 6 M. & Gr. 261. But see v. Dawling, 2 Vern. 401 ; Barret v. now 36 & 37 Vict. c. 66. Glubb, Sir W. Black. Rep. 1053, per (c) Mott u. Buxton, 7 Ves. 201 ; De Grey, J. ; and see post. and see Gary, 14. (/) Ex parte Green, 2 D. & Ch. (rf) See Be Shrewsbury School, 1 116, per Cur. M. & Or. 647; Hill v. Bishop of Lon- (j) Ex parte Dubois, 1 Cox, 310; don, 1 Atk. 618. and see Ex parte Battier, Buck, 426 ; (e) Attorney-General v. Parker, 3 Ex parte Gray, 4 D. & Ch. 778; lEx Atk. 577, per Lord Hardwicke ; At- parte CuUey, 9 Ch. D. 307.] torney-General v. Forster, 10 Ves. (A) Ex parte Cadwallader, 4 De 338, per Lord Eldon ; Attorney-Gen- G. F. & J. 499. eral v. Newcombe, 14 Ves. 7, per » Ex parte CuUey, 9 Ch. D. 307 ; Ex parte Dearie, 14 Q. B. D. 184, 191. 322 Ch. XII. S. 2.] TKUSTBE's EIGHT TO VOTE. *235 bankruptcy notice on the debtor under sect. 4, subsect. (^) of the Bankruptcy Act, 1883.^ But the trustee can serve a good bankruptcy notice without the concurrence of the ces- tui que trust? 25. Trustee if in possession votes for coroners. — The trus- tee as the legal proprietor had originally the right of voting for coroners (i) (1) ; but by 58 G. 3, c. 95, sect. 2, it was transferred to the cestui que trust in possession. - This act, however, * has since been repealed (a), arid the [*235] matter now stands as it did before any legislative in- terference (V). 26. Trustee's right to vote for a member of parliament.' — So the trustee was the person entitled at common law to vote for members of parliament (c). But by the 74th section of 6 & 7 Vict. c. 18 (c?), it is enacted, that " no trustee of any lands or tenements shall in any case have a right to vote in any such election for or by reason of any trust estate therein, but that the cestui que trust in actual possession or in the receipt of the rents and profits thereof, though he may receive the same through the hands of the trustee, shall and may vote for the same notwithstanding such trust," and by the 5th section of 30 & 31 Vict. c. 102, the right of voting is conferred upon persons who are seised at law or in equity, of lands or tene- ments of the yearly value of five pounds. [But a person entitled to a share of the proceeds of the sale of real estate held on a trust for conversion has not such an estate as will entitle him to vote (e).] (i) Burgess v. Wheate, 1 Eden, 251. (rf) As to the effect of certain in- (a) 7 & 8 Vict. 0. 92. termediate statutes see 8d Ed. p. (6) Regina v. Day, 2 Ell. & Bl. 270. 859; see post, Ch. xxvi, s. 1. [(e) Spencer v. Harrison, 5 C. P. (c) Burgess v. Wheate, 1 Eden, D. 97.] 251, per Lord Northington. (1) And Lord Northington added for " sheriffs " (Burgess u.Wheate, 1 Eden, 251) but the election of sheriffs had been transferred from the people to the Chancellor, Treasurer, and Judges, by 9 E. 2, st. 2, before the establishment of trusts. I 1 Ex parte Dearie, 14 Q.B. D. 184. 2 Ibid. 328 *236 TRUSTEE LIABLE TO COPYHOLD FINES. [Ch. XII. S. 2. 27. Trustees liable to rates. — Again, trustees are liable to be rated for the property vested in them (/), unless they are trustees exclusively for public purposes without any profit to themselyes or a particular class, as trustees of court houses, prisons, or the like (^g"). 28. Trustee pays the fine on admission to copyholds. -^ The trustee of a copyhold must pay a ftae on his admission (K), but as the iine follows the admission the lord cannot refuse admission until the fine is paid (i) ; and on the decease of a trustee a heriot becomes due to the lord (/) ; and where the trustee died intestate, and the customary heir before admis- sion devised the estate, the lord was held to be entitled to a double fine on the admission of the devisee, as it carried with it also the admission of the devisor (Jc'). But where a trus- tee died intestate, and the Court under the Trustee Acts appointed a new trustee in the place of the deceased trustee, and the lord demanded two fines, one for the admission of the customary heir of the old trustee, and another for the ad- mission of the new trustee, it was held that he could claim but one fine, viz., for the admission of the new trus- [*236] tee (Z) ; * and where two or more trustees have been admitted jointly, on the decease of one neither fine nor heriot is due ; not a fine for admission, because, joint tenants being seised per my et per tout, the estate is vested in the survivors or survivor by the original grant, and not a heriot, because, however many in number the trustees may be, they all form but one tenant to the lord, and therefore no heriot is demandable until the death of the longest livey (a). [Now on the death of a trustee of copyholds they vest in his legal personal representatives (6), who must pay the ordinary (/) Regina a. Sterry, 12 Ad. & EU. (/) Trinity College v. Browne, 1 84 ; Queen v. Stapleton, 4 B. & S. 629. Vern. 441 ; see Car v. Ellison, 3 Atk. ( by the brewers, for they were the product of or substitute for the original trust property, and as such subject to the trust ; and (3) that the bankrupt or his representative could dot be allowed to set up the bankrupt's fraud and abuse of trust to defeat the title of his cestui que trust ((^).J 6. Factor selling and taking notes. — So, if the factor sell the goods and take notes in payment the value of the notes, ^notwithstanding the bankruptcy, may be recovered by action from the creditor's trustee (e) ; for, though negotiable secu- rities are said, like money, to have no ear-mark, the *expression does not iatend that such securities in [*241] the hands of a bankrupt have run iMo the general mass of his property, and pass to his creditors, but only that negotiable securities, as a circulating medium in lieu of mqney, cannot be recovered from a person to whom they have been legally negotiated (a). 7. Factor selling for money payable at a future day. — So, if a factor sell the goods of his employer for money payable at a future day, and become bankrupt, and the creditors' trustee receives the money, he will be answerable for it to the merchant by whom the factor was employed (J). 8. Tortious conversion of the trust property. — In another case the conversion had been in breach of the factor's duty (e) ; and it was argued that, as the principal would jiot have been bound to accept the property which the agent had wrongfully purchased, the Court ought not to [(. Johnson, 11 Barb. 627 ; Wood ». Wood, 5 Paige, 596; Scruggs V. Driver, 31 Ala. 274 ; Smith v. Wildman, 37 Conn. 384 ; one trustee cannot convey or pledge without the assent of the others, and one taking with notice gets no title ; Ham v. Ham, 58 N. H. 70 ; Learned u. Welton, 40 Cal. 349 ; a compromise by one co-trustee only is void ; Boston v. Robbins, 126 Mass. 384. The rules as to joint action are less strict in America than in England; the payment of a mortgage to one co-trustee is a good payment; Bowes I'. Seeger, 8 Watts & S. 222 ; all trustees must join in conveyance of land, and if they do not there is no conveyance, even pro tanto ; Sinclair v. Jackson, 8 Cow. 543 ; if a deed is not sigmd by all the trustees, the grantee must show that the others are dead; Burngarner v. Coggswell, 49 Mo. 259; Learned v. Welton, 40 Cal. 349 ; though it has been held that the assent of all the trustees may in some cases be presumed ; Vandever's App. 8 Watts & S. 405. Whether checks must be signed by all the trustees depends upon the manner in which the deposits are made and the arrangement with the bank ; though a conveyance by one co-trustee is defective, yet if there is an entry thereunder, it is sufficient to cause the Statute of Limitations to run against the trustees and cestui que trust; Smilie v. Biffle, 2 Pa. St. 52; 44 Am. Dec. 156. In all private trusts, unless modified by statutes, all the trustees must concur; Moore t*. Ewing, Coxe, 144; 1 Am. Dec. 195; Blin v. Hay, 2 Tyler, 304; 4 Am. Dec. 738 ; Towne v. Jaquith, 6 Mass. 46 ; 4 Am. Dec. 84 ; Green v. Miller, 6 Johns. 39 ; 5 Am. Dec. 184 ; Patterson v. Leavitt, 4 Conn. 50 ; 10 Am. Dec. 355 *259 TKTJST A JOINT OFFICE. [Ch. XIH. hear one of several trustees spoken of as tlie acting trustee, but the Court knows no such distinction ; all who accept the office are in the eyes of the law acting trustees. If any one refuse or be incapable to join, it is not competent for the others to proceed without him, but the administration of the trust must in that case devolve upon the Court (e). How- ever, the act of one trustee done with the sanction and approval of a co-trustee may be regarded as the act of both (/). But such sanction or approval must be strictly proved (^). [*259] * [2. Notice of renewal. — Notice of an intention to exercise a right of renewal of a lease of property vested in several trustees is good if served upon one only of the trustees (a).] 3. Receipts. — A receipt for money must, in the absence of a receipt clause specially wordeii, receive the joint authen- tication of the whole body of trustees, and not of the ma- jority merely, or it will not be valid (5). And therefore where the trustees are numerous, it is common in orders of (e) Doyly v. Sherrart, 2 Eq. Ca. (j) See Lee v. Sankey, 15L.E.Eq. Ab. 742, marginal note to (D). Re 204. Congregational Church, Smethwick, [(a) Nicholson v. Smith, 22 Ch. D. W. N. 1866, p. 196; [Luke v. South 640.^ Kensington Hotel Company, 7 Ch. D. (6) Walker v. Syraonds, 3 Sw. 63; 789 ; n Ch. D. 121.] Hall v. Franck, 11 Beav. 519 ; Lee v. (/) Messeena v. Carr, 9 L. E. Eq. Sankey, 15 L. E. Eq. 204. 260. 98 ; but ,the majority may act when it is expressly authorized by will ; Crane u. Decker, 22 Hun, 452. Public trusts. — The majority of the trustees of a public trust control, and may act for thf whole, but all must meet or have an opportunity to meet and deliberate ; Commissioners v. Lecky, 6 Serg. & E. 170 ; 9 Am. Dec. 418 ; State Eoad in Lehigh & Bucks Cos. 60 Fa. St. 330; and all must have been ap- pointed and sworn before any can act ; M'Cready v. Guardians of the Poor, 9 Serg. & E. 94 ; 11 Am. Dec. 667. The acts of the majority must be within the scope of their powers ; SIoo v. Law, 3 Blatch. 459 ; Ward v. Hipwell, 3 Gif . 547. If the instrument creating the trust authorizes the majority, or any specific number, to act, they may do so, and their acts will have the same effect and validity as if the action was unanimous; Taylor v. Dickinson, 15 la. 483. Trustee will not be allowed to avoid the performance of purely ministerial acts reasonably required, but in matters of discretion the courts will give them much greater latitude ; Burrill a. Shell, 2 Barb. 467 ; In re Mechanics' Bank, 2 Barb. 446. 856 Ch. XIII.] TRUST A JOINT OFFICE. *259 the Court to insert a special direction that the moneys may be paid to any two or more of them (. Bury, direction to the contrary, be exercised 2 P. W. 628 ; Mansell v. Vaughan, or performed by the survivor or sur- 'Wilm.49; Eyre w. Countess of Shaftes- vivors for the time being.] 1 A naked authority ceases at the death of the one having it, but if coupled with an interest, as in the case of co-trustees, it survives ; Gregg v. Currier, 36 N. H. 200; De Peyster v. Ferrers, 11 Paige, 13; Parsons v. Boyd, 20 Ala. 112; Aubuchon v. Lory, 23 Mo. 99; Moses v. Murgatroyd, 1 Johns. Ch. 119; on the death of one co-trustee, the whole authority and power devolves upon the survivor ; Golder v. Bressler, 105 111. 419 ; Nichols v. Campbell, 10 Gratt. 560. 359 *262 STJBVIVOESHIP OF THE TRUST. QCh. XIIL without a spark of interest, and if one of them die, the office is immediately extinguished (6). [And where under an order for maintenance two trustees were directed to pay the income of a trust fund to the mother of an infant for the maintenance of the infant during her minority, and one of the trustees died and the survivor continued the paygients, it was held by the late M. R. that the trust for maintenance arose only under the order and did not survive (c). But this view was not acquiesced in by the Court of Appeal, where a distinction was drawn between a power and a posi- tive direction involving no discretion (<^).] But an execu- torship or administratorship survives (e) ; icfr " if," says Lord Talbot, " a joint estate at law will survive, why shall not a joint administration, when they both have a joint estate in it?" (/). So a testamentary guardianship vests in the survi- vors, for, as guardians may bring actions and avow in their own names, may grant leases during the minority of the ward, and . demise copyholds even in reversion as [*262] lords pro tempore, it is evident they have an * inter- est (a). It follows that as co-trxistees have an au- thority coupled with an estate or interest, their office also must be impressed with the quality of survivorship (J): as ■if land be vested in two trustees upon trust to sell and one of them dies, the other may sell (e) ; and if an advowson be conveyed to trustees upon trust to present a proper clerk, the survivors or survivor may present (cT). Otherwise, ' (6) Ex parte Lyne, Cas. t. Talbot,, (6) Hudson o. Hudson, Cas. t. Talb. 143. 129, per Lord Talbot ; Co. Lit. 113 a; [(c) Brown v. Smith, 10 Ch., D. Attorney-General ». Glegg, Amb. 585, 377 ; 46 L. J. N. S. Ch, 866.] per Lord Hardwicke ; GwiUiams o. , [(rf) S. C. 10 Ch. D. 377, 382.] Rowel, Hard. 204 ; BiUingsley v. (e) Adams u. Uuckland, 2 Vem. Mathew, Toth. 168. 514; Hudson v. Hudson, Cas. t. Talb. (c) See Co. Lit. 113 a; Warburton 127. V. Sandys, 14 Sim. 622; Watson v. (/) Hudson V. Hudson, Cas. (. Pearson, 2 Exch. 594. Talb. 129. ' (rf) See Attorney-General u. Bishop (o) Eyre v. Countess of Shaftes- of Litchfield, 5 Ves. 825; Attorney- bury, 2 P. W. 102. But if joint General v. Cuming, 2 Y. & C. C. C. guardians be appointed by the Court, 139. If two trustees employ a solici- the office, on the death of one, is at tor, the surviving trustee may obtain an end ; Bradshaw v. Bradshaw, 1 a decree for an account against the Buss. 528; Hall v. Jones, 2 Sim. 41; solicitor without making the repre- 360 Ch. XIII.] SXJEVIVORSHIP OP THE TEUST. *263 indeed, the more precaution a person took by increasing the number of the trustees, the greater would be the chance of the abrupt determination of the trust by the death of any one. Even where the trust was to raise the sum of 2000Z. out of the testator's estate " by sale or otherwise, at the discretion of his trustees, who should invest the pame in the names of the said trustees upon trust," &c., and one of the two trus- tees died, and the survivor sold; Vice Chancellor Wood decided that the survivor could make a good title. " I find," he said, "a clear estate in the vendor, and' a clear duty to perform. Is it to be said that the sale is a breach of trust because the co-trustee is dead ? If I were to lay down such a rule, it would come to this, that wherever an estate was vested in two or more trustees to raise a sum by sale or mortgage, you must come to the Court on the death of one of the trustees" (e). 2. Trust survives, though there be a po'oirer of appointment of new trustees. — The survivorship of the trust will not be defeated because the settlement contains a power for restor- ing the original number of trustees by new appointments (/) : unless there be something in the' instrument that specially manifests such an intention (^). Even in an Act of Parlia- ment, which declared in very strong terms that the survivors should (A), and they were thereby required to appoint new trustees, the Court said the proviso was analogous to the * common one in settlements, and expressed an [*263] opinion (for the decision was upon another point), that the clause was not imperative, but merely of a directory character (a). sentative of the deceased trustee a Lucas, 1 Bear. 436 ; Attorney-General party; Slater v. Wheeler, 9 Sim. 156. v. Cuming, 2 Y. & C. C. C. 139. ^ (e) Lane v. Debenham, 11 Hare, (j) Foley v. Wontner, 2 J. & W. 188 ; and see Hind o. Poole, 1 K. & 245 ; and see Jacob v. Lucas, 1 Beav. J. 383. 4.36. (/) See Doe v. Godwin, 1 D. & R. (h) As to the force of the words 259 ; Warburton v. Sandys, 14 Sim. " shall and may " in an Act of Parlia- 622; compare Townsend v. Wilson, ment, see Attorney-General v. Lock, 1 B. & Aid. 608, with Hall v. Dewes, 3 Atk. 166 ; Stamper v. Millar, Id. Jac. 193 ; and see Attorney-General 212 ; Rex v. Flockwood, 2 Chit. Rep. V. Floyer, 2 Vern. 748; Jacob v. 252. (a) Doe V. Godwin, 1 D. & E. 259. 361 *263 LIABILITY OF CO-TRUSTEES. [Ch. XHI. Fifthly. Trustee not liable for his co-trustee. — One trustee shall not be liable for the acts or defaults of his co-trusteed 1 Liability of co-trustees. — The same rule prevails in America as laid down in the text, that a co-trustee |s not liable for the acts of his associates ; Peter V. Beverly, 10 Pet. 532; Taylor v. Beiihara, 5 How. 233; Vandever's App., 8 Watts & S. 405; Banks «, Wilkes, 3 Sandf. Ch. 99; Boyd v. Boyd, 3|Jratt. 114 ; Kay v. Doughty, 4 Blackf. 115 ; Royall v. McKenzie, 25 Ala. 363 ; State V. Guilford, 18 Ohio, 509 ; these same cases hold that if the trustees join in signing receipts, they are each responsible ; but if any sign simply because that formality is required of them„ and the others take all the money, those who do not receive the money are not liable for its misapplication ; Stowe v. Bowen, 99 Mass. 194; Monell v. Monell, 5 Johns. Ch. 283; GrifSn v. Macau- lay, 7. Gratt. 476; Gray v. Reamer, 11 Bush. 113; Irwin's App. 35 Pa. St. 294; Kip v. Deniston, 4 Johns. 22; the burden of proving the facts is on the trustee seeking to avoid responsibility ; Manahan v. Gibbons, 19 Johns. 427 ; Hall V. Carter, 8 Ga. 388 ; it is not always expected that all the trustees are to engage actively in the management of the trust, and the management may be left to one of them ; Jones' App. 8 Watts & S. 143 ; "Ray v. Doughty, 4 Blackf. 115; Ochiltree v. Wright, 1 Dev. & B. Eq. 336; or they may divide their duties, and each become liable for his acts only. And if it is necessary that money should be handled by one, the others may not be liable for his misdeeds. If the trustees agree to be mutually responsible, they will be bound by their agreement ; Towne v. Ammidown, 20 Pick. 535 ; Brazer v. Clark, 5 Pick. 96. Every trustee should have some knowledge of the administration of the trust, and must not knowingly allow injudicious management; Clark V. Clark, 8 Paige, 163, and if the trust deed excuses them from liability in such cases, they will nevertheless continue to be liable, as in an apparent joint accounting which is incorrect; Clark's App. |6 Harris, 175; Hengst's App. 12 Harris, 413 ; if a will makes them jointly liable under all circum- stances, they can only avoid liability by refusing to accept the trust, or by getting relieved from the trusteeship by one of methods previously men- tioned ; Wood V. Wood, 5 4'aige, 596 ; Contee v. Dawson, 2 Bland, 264. If a trustee knowing him to be unfit allows his co-trustee to attend solely to the active management of the trust, or to receive all the funds, he may be held liable because of his own negligence; Wayman v. Jones, 4 Md. Ch. 500; Pim K. Downing, 11 Serg. & K. 71; Elmendorf v. Lansing, 4 Johns. Ch. 562; the test being, the knowledge of such facts as ought to put a. man on his guard; Jones' App. 8 Watts & S. 147. Every trustee ought to know the condition of the trust fund ; Bates v. Underbill, 3 Redf . 365 ; and himself see to the application of the trust funds coming into his hands; Edmonds v. Crenshaw, 14 Pet. 166; Deaderick v. Cantrell, 10 Yerg. 263; Sparhawk o. Buell, 9 Vt. 41 ; Mumford r. Murray, 6 Johns. Ch. 1 ; Hughlett v. Hughlett, 5 Humph. 45.3 ; a trustee will be responsible if he knowingly allows a misappli- cation of the trust funds ; Hilles's Est. 13 Phila. 402 ; Bates v. Underbill, 3 Redf. 365 ; Schenck v. Schenck, 1 Green, Ch. 174 ; a trustee knowing of any breach of trust, or misconduct of his co-trustee must either remedy the diffi- culty himself or apply to the court for relief ; Crane v. Ream, 26 N. J. Eq. 378 ; if he pays over money to his co-trustee he will be liable for it ; Glfenn v. McKim, 3 Gill, 366 ; Graham v. Davidson, 2 Dev. & B. Eq. 155 ; Graham v. Austin, 2 Gratt. 273. Some authorities hold that if all the trustees join in a sale, and one receives the money, all will be responsible, on the ground that a 362 Ch. XIII.] LIABILITY OF CO-TEUSTEBS. *263 1. Townley v. Sherborne. — This canon appears to have been first established by the ca^e of Townley v. Sherborne (J) in the reign of Charles the First. A., B., C. and D. were trustees of some leasehold premises. A. and B. collected the rents during the first year and a half, and signed acquittances ; but from that period the rents were uniformly receiTcd by an assign of C. The liability of A. and B. during the first year and a half was undisputed, but the question was raised whether they were not also charge- able with the rents which had accrued subsequently, but had never come to their hanAs ? " The Lord Keeper Coventry " (says the reporter) " considered the case to be of great con- sequence, and thought not to determine the same suddenly, but to advise thereof, and desired the Lords the Judges Assis- tant to take the same into their serious consideration, whereby some course might be settled that parties trustees might not be too much punished, lest it should dishearten men to tak6 any trust, which would be inconvenient on the one side, nor that too much liberty should be given to parties trustees, lest they should be emboldened to break the trust imposed on them, and. so be as much prejudicial on the other side. And the Lord Keeper and the Lords the Judges Assistant after- wards conferring together, and upon mature deliberation conceiving' the case to be of great importance, his Lordship was pleased to call unto him also Mr. Justice Orook, Mr. Justice Bareley, and Mr. Justice Orawley, for their assistance (i) Bridg. 35; and see Leigh v. Barry, 3 Atk. 584; Anon, case, 12 Mod. 560. trustee is always responsible for any act in which he takes part ; Maccubbin v. Cromwell, 7 G. & J. 157 ; Spencer v. Spencer, 11 Paige, 299 ; Hauser v. Leh- man, 2 Ired. Eq. 594; but the bulk of authorities make no distinction between these and the receipts for trust funds ; Atcheson «. Robertson, 3 Rich. Eq. 132 ; Kep v. Deniston, 14 Johns. 23 ; Griffin v. Macauley, 7 Gratt. 476 ; see Ringgold V. Ringgold, 1 H. & G. 11 ; if a proper investment is once made, the joint liability terminates; Glenn v. McKim, 3 Gill, 366; there is no liability on the part of one who has renounced the trust ; Claggett v. Hail, 9 G. & J. 80 ; nor is the estate of a deceased trustee liable ; Towne v. Ammidown, 20 Pick. 535. See also as to liability of co-truatees; McCarter u. McCarter, 7 O. R. 243 ; Growler v. Hinman, 10 0. R. 159 ; Burritt v. Burritt, 29 Ohy. 321 ; Ratz V. Tylee, 11 Chy. 342; Mitchell v. Rltchey, 12 Chy. 88; Mickleburgli v. Parker, 17 Chy. 503 ; McKelrey «. Rourke, 15 Chy. 380 ; Henderson v. Woods, 9 Chy. 5§9. 363 *264 LIABILITY OF CO-TEUSTEES. [Ch. XIII. also in the same, and appointed precedents to he looked over as well in the Court of Chancery as in other courts, if any could be found touching the point in question; whereupon several precedents were produced before them, some in Court of Chancery and some in the Court of Wards, where parties trustees were chargeable only according to their several and respective receipts, and not one to answer for the other, but no precedent to the contrary was produced to them. "Where- upon his Lordship, after long and mature deliberation on the case, and serious advice with all the said Judges, did this day in open Court declare the resolution of his Lordship [*264] and the said Judges — That where lands * or leases were conveyed to two or more upon trust, and one of them receives all or the most part of the profits, and after dyeth or decayed in his estate, his co-trustee shall not be charged or be compelled in the Court of Chancery to answer for the receipts of him so dying or decayed, unless some prac- tice, fraud, or evil dealing appear to have been in them to prejudice the trust ; for they being by law joint tenants or tenants in common, every one by law m,ay receive either all or as much of the profits as he can come by. It is no breach of trust to permit one of the trustees to receive all or the most part of the profits, it falling out many times that some of the trustees live far from the lands and are put in trust out of other respects than to be troubled with the receipt of the profits. But his Lordship and the said Judges did. resolve, that if upon the proofs or circumstances the Court should be satisfied that there had been any dolus malus, or any evil practice, fraud; or ill intent in him that permitted his com- panion to receive the whole profits, he should be charged though he received nothing." 2. Trustee not liable for joining pro forma in receipts. — Co- trustees (a), (as was determined in Townley v, Sherborne,) were formerly considered responsible for money if they joined in signing the receipt for it ; but in later times the rule has (a) Townley v. Sherborne, Bridg. "Walker v. Symonds, 3 Sw. 78, note 35; Spaldingu. Shalmer, 1 Vern. 303; (o); but said by Lord Cowper, Fel- Sadler <7. Hobbs, 2 B. C. C. 114; and lows v. Mitchell, 2 Vern. 516, to be see Bradwell v. Catchpole, cited contrary to natural justice, i 364 Ch. XIII.] LIABILITY OF CO-TRUSTEES. *265 been established, that a trustee who joins in a receipt for conformity, but without receiving, shall not be answerable for a misapplication by the trustee who receives (J). Where the admiaistration of the trust is vested in co-trustees, a receipt for money paid to the account of the trust must be authenticated by the signatixre of all the trustees in their joint capacity, and it would be tyranny to punish a trustee for an act which the very nature of his office will not permit him to decline. 3. But he must prove that he did not actually receive. — But it lies upon a trustee who joins in a receipt to show that the money acknowledged to have been received by all was * in fact received by the other or others, and that [*265] he himself joined only for conformity (a). In the ab- sence of all evidence, the effect of a joint receipt is to charge each of the trustees in solido ; as if a mortgage be devised to three trustees, and the mortgagor with his witness meets them to pay it off, and the money is laid on the table, and the mortgagor ha-nng obtained a reconveyance and receipt for his money, withdraws, each of the trustees in this case will be answerable for the whole (V). A joint receipt at law is conclusive evidence that the money came to the hands of both, but a Court of equity, which rejects estoppels and pur- sues truth, will decree according to the justice and verity of the fact (c). "Where," said Lord Cowper, "it cannot (6) In re Fryer, 3 K. & J. 317 ; W. 241, 6th ed. note (y) ; Carsey ». Brice v. Stokes, 11 Ves. .324, per Lord Barshatn, cited Joy v. Campbell, 1 Eldon; Harden v. Parsons, 1 Eden, Sch. & Lef; 344, per eundem; Anon. 147, per Lord Northington ; Westley case, Mosely, 35 ; Ex parte Wacker- V. Clarke, 1 Eden, 359, per eundem; bath, 2 Gl. & J. 151. [But see Re Heaton v. Marribt, cited, Aplyn v. Flower and the Metropolitan Board Brewer, Pr. Ch. 173; Ex parte Bel- .of Works, 27 Ch.D. 592, where Kay, chier, Arab. 219, per Lord Hardwicke ; J., seems to have entertained the oppo- Leighu. Barry, 3 Atk. 584, per eunrfem; site opinion; and see post, p. 292.] Fellows V. Mitchell, 1 P. W. 81 ; (a) Brice v. Stokes, 11 Ves. 234, Gregory v. Gregory, 2 Y. & C. 316, per Lord Eldon ; and see Scurfield v. /ler Baron Alderson ; Sadler u. Hobbs, Howes, 3 B. C. C. 95, Belt's Edition, 2 B. C. C. 117, per Lord Thurlow; note (8). Chambers v. Minchin, 7 Ves. 198, per (h) Westley «. Clarke, 1 Eden, 359, Lord Eldon ; Lord Shipbrook v. Lord per Lord Henley. Hinchinbrook, 16 Ves. 479, per eundem; (c) Harden v. Parsons, 1 Eden, 147, Harrison v. Graham, 3 Hill's MSS. per eundem ; Wilson v. Keating, 4 De 239, per Lord Hardwicke, cited IP. G. & J. 593, per Cm. 365 *266 LIABILITY OP CO-TRUSTEES. ' [Ch. XIIL be distinguished how much was received by one trustee and how much by the other, it is Uke throwing corn or money into another man's heap, where there is no reason that he who made this difficulty should have the whole ; on the con- trary, because it cannot be distinguished he shall have no part"((Z). 4. Trustee joining in a receipt must not permit the money to lie in the hands of the co-trustee. — And though a trustee joining in a receipt 'inay be safe in merely permitting his co-trustee to receive in the first instance, yet he will not be justified in allowing the money to remain in his hands for a longer period than the circumstances of the case reasona- bly require (e). And it is the duty of a trustee not to rely on a mere statement by his co-trustee, that the money has been duly invested, but to ascertain that such is the fact (/). Two trustees authorized a co-trustee to remove from their bankers a box containing active Spanish stock, for the pur- pose of converting it into deferred Spanish stock, and the co-trustee after the conversion returned the box with only a part of the converted stock, in it, and the trustees, who relied on the assurance of the co-trustee to their solicitor that all was right, and did not ascertain the fact, were held liable for the deferred stock which had been misappropri- ated (^). [*266] * 5. Walker v. Symonds. -^ Walker v. Symonds {jx) involved an unusual particularity of circumstances ; but as Lord Eldon described it as a case of great importance to" trustees in general (6), it may be useful to present a summary of it so far as it bears upon the present subject. A sum of money secured by mortgage had been assigned (rf) Fellows V. Mitchell, 1 P. W. garded in the time of Lord Talhot. 83. For the ordinary and more nat- See Attorney-General v. liandall, 21 ural application of this illustration, Yin. Ab. 534. see infra, Ch. XXX. s. 2. (/) Thompson v. Finch, 22 Bear. (e) Brice v. Stokes, 11 Tes. 319; 316; 8 De G. M. & G. 560; and see Bone u. Cook, M'Clel. 168 ; Gregory Hanbury v. Kirkland, 3 Sim. 265. V. Gregory, 2 Y. & C. 313; Thompson (,g) Mendes u. Guedella, 2 J. & H. V. Finch, 22 Beav. 316; Lincoln v. 259. Wright, 4 Beav. 427 ; and see Re (a) 3 Sw. 1. Fryer, 3 K. & J. 317. This doctrine (6) 3 Sw. 74. appears to have been very little re-- ' 366 Ch. Xlir.] LIABILITY OF CO-TRUSTEES. *266 to Donnitliorne, Griffith, and Symonds, upon certain trusts. On 12th January, 1791, the mortgage was paid off and the estate re-conveyed, and a joint receipt signed, and the money, with the approbation of the co-trustees, was put into the hands of Donnithorne. The money was shortly afterwards invested by Donnithorne, with the sanction of his cp-trustees, in bills or notes of the East India Company payable at the end of two years. In 1793 the bills were paid off by the Company, and the money received by Donnithorne. In- telhgfence to that effect having been transmitted to the cfl-trustees, Symonds the same year wrote to Donnithorne requesting him to invest it in the public funds in the joint names of the trustees. Donnithorne begged that the money might remain in his hands, and proposed to secure the repay- ment of it by a mortgage from himself and his son of their settled estates in Cornwall, and, until the mortgage could be prepared, to secure it by their joint bond. The co- trustees, conceiving the security to be ample, expressed their consent, and the joint bond was accordingly executed. Donnithorne not having sent the mortgage as he promised, Symonds made several applications, to him upon the subject, earnestly desiring him either to invest the money in the funds, or to give them landed security. In September, 1796, Donnithorne died insolvent, and without having executed the mortgage. Sir W. Grant observed, "The money in 1791 was paid in without any act of the trustees: they were obliged to receive it : so far they were blameless. It came to Donnithorne's hands, and the trustees were not to ■ hlame in letting it come to his hands ; but they might have afterwards made themselves responsible by merely not doing what was incumbent on them; by permitting the money to remain a considerable time in the hands of their co-trustee they might, without any positive act on their part, have made themselves liable. That will depend on the degree and extent of their laches in suffering the money to remain in the hands of Donnithorne. The trustees being author- ised to put the money out on mortgage, it would be rather hard to say that they were guilty of laches by giving Donnithorne a little time to find a mortgage, taking his 367 *267 LIABILITY OF CO-TKUSTEES. [Ch. XIH. [*267] bond in iJie mean time. * What passed in the inter- val between to the death of Donnithorne does not appear. If it were necessary to decide the point, an inquiry before the Master must be directed" (a). Sir W. Grant dismissed the bill, which was to set aside (as having been fraudulently obtained) a compromise of the alleged breach of trust, but did so on grounds foreign to the subject under discussion ; Lord Eldon, however, before whom the case was brought upon appeal, reversed Sir W. Grant's decree, and directed an inquiry by the Master as to the conduct of the trustees from January, 1791, when the mortgage was paid off, to 1796, the time of Donnithorne's death. It then appeared by the Master's report, made in pursuance of the order, that the money had been invested by Donnithorne, soon after he had received it, in East India bills payable to MmBelf; that the money due on the bills had been discharged in 1793, and the money paid to Donnithorne ; that the co- trustees had made no inquiry about the trust fund from January, 1791, till May, 1795, which was the time when Symonds wrote the letter and made the applications already stated. On the hearing of the cause upon further directions, Lord Eldon said, " The cause comes back with a report stat- ing a clear breach of trust in leaving the trust-fund in the situation represented from 1791 to 1793, and from 1793 to 1796. The money was laid out in 1791, with the consent of the trustees, on India bills payable to Donnithorne, a pal- pable breach of trust by placing the fund under his control, secured by little more than a promissory note payable to himself. It was probable that in 1793 Donnithorne would be paid the money due on the bills, and it would be lodged in his hands; and although the Court wiU proceed as favourably as it can to trustees who have laid out the money on a security from which they cannot with activity recover it, yet no Judge can say they are not guilty of a breach of trust, if they suffer it to lie out on such a security during so long a time (S). The trustees were guilty of a breach of trust, in permitting the money to remain on bills (a) 3 Sw. 41. (6) 3 Sw. 65. 368 f CH.-Xin.]"WSI^ LIABILITY OF CO-EXECUTOES. *268 payable to Donnithorne alone, and in leaving the state of the funds unascertained for five years (c). I agree with the Master of the Rolls that inquiry might, on the principles of this Court, have discharged the trustees in given circum- stances from a breach of trust. If, without previous parti- cipation, they in June, 1795, had found that, being themselves implicated in no breach of trust, they had a co-trustee who had been guilty of a shameful violation of his duty, and imme- diately exerted themselves to obtain from him a * mort- [*268] gage, which was their object at that time, and used their utmost efforts instead of filing a bill in this Court which perhaps might have destroyed his means of giving security, I should have hesitated long before I charged them, if inquiry had satisfied me that for a sirpple contract debt due to them they had taken a bond and a mortgage instead of instituting a suit, with the rational hope that by means of the bond and the mortgage they should obtain payment from their co- trustee " (a). The result of his Lordship's judgment was, that under the circumstances disclosed by the Master's re- port, the trustees were to be held responsible for the loss of the money. 6. Ea:ecutor answerable for joining in receipts pro forma. — Co-executors also, like co-trustees, are generally answerable each for his own acts only, and not for the acts of any co-ex- ecutor (6).^ But in respect of receipts, the case of co-executors (c) 3 Sw. 67. Eliz. 318 ; Anon. Dyer, 210 a ; Wentw. (a) 8 Sw. 71 ; see Thompson v. Off. Ex. 306, 14 edit. ; Williams v. Finch, 22 Beav. 326. Nixon, 2 Bear. 472. (6) Hargthorpe v. Milforth, Cro. 1 Co-executors. — Executors, like trustees, are as a rule liable for their own acts only; McKim v. Aulbach, 130 Mass. 481; Sutherland, «. Brusli, 7 Johns. Ch. 17; Kerr v. Kirkpatrick, 8 Ired. Eq. 137; Kerr v. Water, 19 Ga. 136; White V. Bullock, 20 Barb. 91 ; Clarke v. Jenkins, 3 Kich. Eq. 318. If, however, an executor joins in giving a receipt he is liable, for he is not obliged to join for coliformity, and has an individual authority in reference to the estate ; Monell v. Monell, 5 Johns. Ch. 283 ; Johnson v. Johnson, 2 Hill, Eq. 290 ; Sterrett's App. 2 Pa. 219 ; Monahan ;;. Gibbons, 19 Johns. 427 ; like- wise if he join in power of sale, though he receives none of the money ; Hau- ser V. Lehman, 2 Ired. 594 ; Deaderiek v. Cantrell, 10 Yerg. 263 ; Ochiltree v. Wright, 1 Dev. & B. Eq. 336; yet some cases try to put trustees and execu- tors on the same footing in this respect ; McKim v. Aulbach, 130 Mass. 481 ; M'Nair's App. 4 Rawle, 145; Stell's App. 10 Barr, 162. If an executor 369 *268 LIABILITY OP CO-EXECUTOES. [Ch. XIII. is materially different from that of co-trnstees. An executor has, independently of his co-executor, a full and absolute control over the personal assets of the testator. If an execu- tor join with a co-executor ia a receipt, he does a wanton and unnecessary act ; he interferes when the nature of the office lays upon him no such obligation, and therefore it was a rule very early established, that if executors joined in receipts, they should be answerable, each in solido, for the amount of the money received (c). 7. Westley v. Clarke. — In Westley v. Clarke (c^), Lord l^orthington expressed an opinion that aimed at breaking down the rule ; and by his decision of that case he Succeeded ia establishing a qualification of it. (c) Aplyu V. Brewer, Pr. Ch. 173 ; 148. Tet in Churchill v. Hohson, 1 "Murrell v. Cox, 2 Vern. 560; Ex parte P. W. 241, note (1) \>j Mr. Cox, hie Belchier, Amb. 219, per Lord Hard- Lordship is reported to have said, •wieke^ Leigh v. Barry, 3 Atk. 584, according to a note of the case by Sir per eundem; Harrison v. Graham, 3 L. Kenyon, that in Westley ti. Clarke Hill's M.SS. 239, per eundem ; cited 1 he should have thought the co-excc- P. "W. 241, 6th ed. note (j) ; Darwell utors liable if they had been present •u. Darfeell, 2 Eq. Ca. Ab. 456 ; Gregory at the time the money was paid ; and V. Gregory, 2 Y. & C. 316, per Baron Lord Redesdale, in Doyle v. Blake, 2 Alderson. Sch. & Lef. 242, 243, seemed to think (rf)lKden,357; S.C.I Dick. 329; tliat Lord Northington had no inten- and see Candler v. Tillett, 22 Beav. tion of breaking down, but only of 257 ; Harden v. Parsons, 1 Eden, 147, qualifijing the rule. make it easy for a co-e?:ecutor to misapply the funds of the estate he will be liable; Adair v. Brimmer, 74 N. Y. 539; Edmonds . Aulbach, 130 Mass. 481. 370 Ch. XIII.] LIABILITY OF CO-BXEOUTOES. *269 Thompson, one of three co-executors, had called in a sum of money secured by a mortgage for a term of years, and received the amount, and afterwards, but the same day, sent round his clerk to his co-executors with a particular request that they would execute the assignment and sign the receipt, which they accordingly did. Thompson afterwards became bankrupt, and the money *was lost, and [*269] thereupon a bill was filed to charge the co-executors. Lord Nortlungton said, " The rule that executors joining in a receipt are all liable amounts to no more than this, that a joini^ receipt given by executors is a stronger proof that they actually joined in a receipt, because generally they have no occasion to join for conformity. But, if it appears plainly that one executor only received, and discharged the estate indebted, and, assigned the security, and the others joined afterwards without any reason, and without being in a capa- city to control the act of their co-executor either before or after the act was done, what grounds has any Court in con- science to charge him ? The only act that affected the assets was the first that discharged the debt, and, according to the sense of the Bar, transferred the legal estate of the lands. Then that the co-executors are not to answer for, and the second is nugatory." His Lordship was therefore of opinion that the co-executors were not liable for the misapplication by the co-executor. Executors joining pro formt not ansvrerable where the joining was a nugatory act. — The doctrine' propounded in this case, that the joint receipt of co-executors is merely a stronger proof of the actual receipt than in the instance of co-trustees, and that an executor as well as a trustee may rebut the pre- sumption by positive evidence, has since been repeatedly controverted (a). The simple point determined, viz. that an executor who signs shall not be answerable when the act of signature is nugatory, may be considered as now settled. (a) Sadler v. Hobbs, 2 B. C. C. & Lef. 341; Chambers v. Minchin, 7 114; Scurfield v. Howes, 3 B. C. C. Ves. 198; Brice «. Stokes, 11 Ves. 90; Langford v. Gasooyne, 11 Ves. 325; Shipbrook v. Hinchinbrook, 16 333; and see Doyle v. Blake, 2 Sch. Ves. 479; Walker v. Symonds, 3 Sw. & Lef. 243; Joy v. Campbell, 1 Sch. 64; Re Fryer, 3 Jur. N. S. 485. 371 *270 LIABILITY OF CO-EXECUTOES. [Ch. XIIL Lord Thurlow, indeed, is reported to have questioned the decision in Westley v. Clarke (5) ; but Lord Alvanley said, " he must enter his disseht against the rule, that executors joining in a receipt were both liable, for he did not hold that an executor could not in any case be discharged from a receipt given for conformity: he did iiot find fauljt, for instance, with the case of Westley v. Clarke " (c). And, again, he said, " he perfectly concurred in the decision of that case ; and the joining in a receipt, though not perhaps absolutely necessary, he would not consider conclusive " (c?). Lord Eldon, in evident allusion to the case of Westley v. Clarke, admitted that the old rule had been pared down, at the same time expressing his opinion that the notion upon which the later cases had proceeded, viz. that the old [*270] "rule had a tendency * to discourage executors from acting, was very ill founded. A plain general rule, he thought, which once laid down was easUy understood and might be generally known, was much more inviting to exec- utors than a rule referring everything to the particular cir- cumstances (a). Present doctrine on the subject. — The later doctrine of the Court was thus enunciated by Lord Eldon : — " Though one executor has joined in a receipt, yet whether he is liable shall depend up6n his acting. The former was a simple rule that joining should be considered as acting, but now joining alone does not impose responsibility " (5) ; and in another case he observed that the old rule had been " broken down, leaving every case to be determined by its own circumstances " (c). Lord Redesdale laid down the rule thus: "the distinction with respect to mere signing appears to be this ; that if a receipt be given for the purpose of form, then the signing will not charge the person not receiving ; but if it be given under circumstances purporting that the money, though not actually received by both executors, was under the control (6) Sadler w. Hobbs, 2 B. C. C. 117. Ves. 198; Brice v. Stokes, 11 Ves. (c) Scurfleld v. Howes, 3 B. C. C. 326 ; Walker v. Symonds, 3 Sw. 64. 94. (5) Walker v. Symonds, 3 Sw. 64. (d) Hovey v. Blakeman, 4 Ves. (c) Shipbrook v. Hinchinbrook, 16 608. Ves. 479. (a) See Chambers v. Minchin, 7 372 Ch. XIII.] lilABILITT OF CO-EXECUTOKS. *271 of both, such receipt shall charge ; and the true question in all these cases seems to have been, whether the money was under the control of both executors : if it was so considered by the person paying the money, then the joining in the receipt by the person who did not actually receive amounted to a direction to pay to his co-executor (for it could have no other meaning), and he became responsible for the money, just as if he had actually received it " (c?). And in another case he said, "where two executors join in a receipt to a debtor, though the receipt of one would have been a dis- charge to the debtor, yet, they joining in the discharge, the debtorMs taken to have paid to them both. His requiring the discha,rge of the e2;ecutor who has not received the money amounts to saying, ' I make this payment to you both, and not to him only who actually receives the money ' " (e). 8. ChurchiU v. Hobson. — In Churchill v. Hobson (/), Lord Harcourt took a distinction between creditors and legatees (^) ; that in the case of creditors who were entitled to the utmost benefit of the law, the joining of the executors in the receipt might make each liable for the whole ; but when the legatees were concerned, who had no rem- edy for their * demand except in equity, it was alto- [*271] gether ineqmtable that one executor should answer for the receipt of the other. This doctrine was thus com- mented upon by Lo/d Northington. " At law," he said, " a joint receipt is conclusive evidence that the money came to them both, and is not to be contradicted ; but a Court of equity, which rejects estoppels and pursues truth, will decree aiccording to the justice and verity of the fact (a) ; and what is said by Lord Harcourt as to the distinctioji between a receipt of this kind as to a legatee and a creditor seems to have this meaning — that a creditor may at law charge both executors on a joint receipt, but that in a Court of equity, where alone legacies are received, such receipt shall not be (d) Joy V. Campbell, 1 Sch. & Lef . (J) 1 P. "W. 241. 341. (jf) See Gibbs u. Herring, Pr. Ch. (e) Doyle v. Blake, 2 Sch. & Lef. 49. 242. (a; See ante, p. 201. 373 *272 LIABILITY OP CO-BXBCTTTOES. [Ch. XIII conclusive, but the Court will see who actually received, and charge that person accordingly " (6). The distinction taken by Lord Harcourt has by subsequent authorities been clearly overruled (e). I!:secutor may be ans-werable to creditors -when not to lega- tees. — Lord Redesdale, however, has rightly oTbserve^ that " there may be a case, where executors would be charged as against creditor^, tHough not as against legatees ; for legatees are bound by the terms of the will, creditors are not, and therefore, if the testator direct the executors to collect the assets, and pay the proceeds into the hands of A., which is done acco:^dingly, and A. fails, if a creditor remain unpaid, he may charge the executors ; but, as regards a legatee, the executors may justify themselves by the directions of the wiU" (d). 9. Executor responsible for any act 'which puts assets into the hands of a co-executor. — On the same principle that an executor is liable for joining in a receipt, he is responsible for any act by which he reduces any part of the testator's prop- erty into the sole possession of his co-executor (e), as if an executor join in drawing (/), or indorsing (^), a bill, or be otherwise instrumental in giving to his co-executor posses- sion of any part of the property (A). So it is laid down in an old case, that "if by agreement between the executors one be to receive and intermeddle with such a part of the estate, and the other with such a part, each of them will be chargeable for the whole, because the receipts of each are pursuant to the agreement made betwixt both " (i). [*272] So an executor is answerable, if he give *a power of attorney, or other authority, to his co-executor (6) Hardens. Parsons;! Eden, 147. (/) Sadler ti. Hobbs, 2 B. C. C. (c) See Sadler v. Hobbs, 2 B. C. C. 114. 117 ; and see Doyle u. Blake, 2 Sch. (3) Hovey v. Blakeman, 4 Ves. & Lef . 239. 608, per Lord Alvanley. (rf) Doyle V. Blake, 2 Sch. & Lef. (K) Clough v. Dixon, 3 M. & Cr. 239, 245. 497, per Lord Cottenham ; and see (e) Townsend v. Barber, 1 Dick. Dines v. Scott, T. & R. 361. 356; Moses v. Levi, 8 Y. & C. 359; (j) Gill ». Attorney-General, Hard. Candler v. Tillett, 22 Bear. 2QZ,per 314; [Lewis v. Nobbs, 8 Ch. D. 591;] M. E. see Moses 11. Levi, 3 Y. & C. 359. 374 Ch. XIII.] LIABILITY OF CO-EXECUTORS. *2T2 to collect the assets (a), or deliver to him securities for money which enable him to receive the amount due (6). 10. Executor not answerable for joining where the act is aeoessary. — But under particular circumstances the joining of an executor is as absolutely necessary as the joining of a ■trustee, and of course in such cases executors and trustees ■ire put upon the same footing in respect of liability. As in bills of exchange held jointly. — Thus, if a bill of exchange be remitted to two agents payable to them person- ally, who on the death of their principal are made his exec- utors, the mere indorsement of one, after they are executors, in order to enable the other to receive the money, will not operate to charge him who does not actually receive (c). And in transfer of stock. — And SO where the joining of both executors is necessary to the transfer of stock ((Z). 11. Unless the act be -with improper vie'w. — Blit where the joining of an executor is. absolutely indispensable, it is still incumbent on the executor to see that the act in which he joins is perfectly consistent with the due execution of the trust~(e). , 12. Executor must not depend on mere representation of his co-executor. — And the executor will not be excused if he rely on the mere representation of his co-executor as to the necessity or propriety of the act, for the executor has im- posed upon him at least ordinary and reasonable , diligence to inquire whether the representation is true (/). 13. Greater caution required where the testator has been long dead. — And if, at a period when in the ordinary course (a) Doyle v. Blake, 2 Sch. & Lef. pare-Scurfleld v. Howes, 3 B. C. C. 231 ; Lees v. Sanderson, 4 Sim. 28 ; 94 ; (Note, the doctrine at tlie period Kilbee v. Sneyd, 2 Moll. 200, per Sir of the last case had not been settled) ; A. Hart. and see Moses ». Levi, 3 Y. & C. 359. (6) Candler v. Tillett, 22 Beav. (e) Chambers v. Minchin, 7 Ves. 236, per M. K. 186 ; Shipbrook v. Hinchinbrook, 11 (c) Hovey i>. Blakeman, 4 Ves. Ves. 252; Underwood v. Stevens, 1 608, per Lord Alvanley. Mer. 712; Bick v. Motley, 2 M. & K. (d) Chambers v. Minehin, 7 Ves. 312 ; Williams v. Nixon, 2 Beav. 472 ; 197, per Lord Eldon ; Shipbrook v. Hewett v. Foster, 6 Beav. 259. Hinchinbrook, 11 Ves. 254; S. C. 16 (/) Shipbrook w. Hinchinbrook, 11 Ves. 479, per eundem ; Terrell v. Mat- Ves. 252, see 254 ; Underwood v. thews, 1 Mac. & Gt. 434, note ; see Stevens, 1 Mer. 712 ; Hewett v. Fos- Murrell v. Cox, 2 Vern. 670, and com- ter, 6 Beav. 259. 375 *273 LIABILITY OF CO-EXECUTOES. [Ch. XIU. of administration the debts should long since have been dis- charged, an executor is applied to by his co-executor to join in a transfer of stock for the purpose of payment of debts, and the executor does inquire, and ascertains there are such debts, but afterwards it turns out that the co-executor had in his hands a fund sufficient for the payment of the -debts, in such a case the executor who joins in the receipt is Hable to the imputation of negligence for not having acquainted himself how the co-executor had ddalt with the assets [*273] during the * preceding period, and is liable for the application of the money he enables the co-executor to receive (a). 14. Executor must not leave the money in the hands of the co-executor. — And the executor will be answerable if he leave the money, as for two years, in the hands of the co- executor, when by the terms of the trust it ought to have been invested on proper securities (6). But an executor will not be called upon to replace so much of the fund as it can be proved the co-executor bond fide expended towards the purposes of the trust (c). 15. Liability of executor for not getting in money owing from a co-executor. — And the executor will be equally answerable, whether the money left in the hands of the defaulting co- executor consists of a debt due from him to the testator, or of property received by him after the testator's death. Thus, in Styles v. Guy (c^), a testator appointed three executors, all of whom approved the will ; but one of them, viz., Guy, was the acting co-executor. Guy, at the death of the testa- tor, had large assets in his hands, with which he eventually absconded. The two co-executors were held responsible for (a) Shipbrook v. Hinchlnbrook, liams v. Nixon, 2 Beav. 472 ; Kilbee 11 Ves. 254, per Lord Eldou ; Bick v. v. Sneyd, 2 Moll. 213, per Sir A. Hart ; Motley, 2 M. & K. 312. Underwood v. Stevens, 1 Mer. 712; (6) Scurfield v. Howes, 3 B. C. C. and see Brice v. Stokes, 11 Ves. 328; 91 ; Styles v. Guy, 1 Mac. & 6. 422 ; Hewett v. Foster, 6 Beav. 259. I Hall & Tw. 523; Egbert v. Butter, (d) 1 Mac. & G. 422; 1 Hall & 21 Beav. 560 ; Williams u. Higgins, 'tw. 523 ; Egbert v. Butter, 21 Beav. W. 1« . 1868, p. 49 ; and see Lincoln v. 560 ; and see Scully », Delany, 2 Jr. "Wright, 4 Beav. 427. Eq. Eep. 165; Candler v. Tillett, 22 (c) Shipbrook v. Hinchinbrook, Beav. 257. II Ves. 252; S. C. 16 Ves. 477 ; Wil- 376 Ch. XIII.] LIABILITY OF CO-EXECXJTOES. *274 the loss ; and though free from blame morally, had to pay- upwards of 20,000Z. out of their own pockets. They knew, or ought to have known, that Guy was a debtor to the estate; and having by probate accepted the executorship, it was their duty to have recovered the debt from Guy as from any other debtor to the estate, and this they neglected to do for a period of six years. 16. Co-administrators on same footing as co-ezeoutors. = — The rules respecting co-executors are equally applicable to co- ad|ninistrators. Lord Hardwicke once expressed an opinion that joint administrators resembled rather co-trustees, and that any one of them could not exercise the office without the concurrence of the rest (e) ; but it was afterwards deter- mined in the Court of King's Bench, that joint administrar tors and co-executors stood in this respect precisely on the same footing (/). 17. Ho-w trustee ought to act where a breach of trust is com- mitted by a co-trustee. — To return to the liabilities of co- trustees: if one trustee be cognizant of a breach of trust committed by another, and either industriously con- ceal it (5^), or do not take active measures for the * pro- [*274] tection of the cestui que trust's interest (a), he will himself become responsible for the mischievous consequences of the act. A trustee is called upon, if a breach of trust be threatened, to prevent it by obtaining an injunction (J), and, if a breach of trust has been already committed, to bring an action for the restoration of the trust fund to its proper condition (e), or, at least, to take such other active measures as, with a due regard to biU. the circumstances of the case may be considered the most prudential (t^). (e) Hudson v. Hudson, 1 Atk. 460. Williams v. Nixon, 2 Beav. 472 ; (/) Willand D.Fenn, cited Jacomb Blackwood v. Burrowea, 2 Conn. & V. Harwood, 2 Ves. 267. Laws. 477 ; Gough v. Smith, W. N. (g) Boardman v. Mosman, 1 B. C. 1872, p. 18. C. 68. (b) In re Chertsey Market, 6 Price, (a) Brice u. Stokes, 11 Ves. 319 ; 279. and see Walker v. Symonds, 3 Sw. 41 ; (c') Franco v. Franco, 3 Yes. 75; Oliver v. Court, 8 Price, 166; In re Earl Powlet v. Herbert, 1 "Ves. jun. Chertsey Market, 6 Price, 279; At- 297. ' torney-General v. Holland, 2 Y. & C. (rf) See Walker v. Symonds, 3 Sw. 699; Booth t>. Booth, 1 Beav. 125; 71. 377 *275 LIABILITY OF CO-EXECUTOES. [Ch. XUI. 18. Effect of the indemnity clauses. — [Formerly an express clause was] inserted in trust-deeds, that one trustee should not be answerable for the receipts, acts, or defaults of his co-trustee. But the proyiso, while it informed the trustee of the general doctrine of the Court, added nothing to his security against the liabilities of the office. In Westiey v. Clarke (e) Lord Northington was inclined to attach some importance to the clause. But eqxiity infuses such a proviso into every trust-deed (/), and a person can have no better right from the expression of that which, if not expressed, had been virtually implied (^). It is clear that, in later cases, the Court has considered it an iipmaterial circumstance whether the instrument creating the trust contained such a proviso or not (Ji). And now, by Lord St. Leonards' Act, every instrument creating a trust shall be deemed to contain the usual indemnity and re-imbiirsement clauses, and there- fore in future the express introduction of them in deeds and wills may be safely dispensed with (i). 19. Special indemnity clause. — A settlor, however, has full power to abridge the ordinary duties of trustees, and a special indemnity clause may be so worded as to exempt trustees from responsibility in respect of acts, which would otherwise be breaches of trust. Thus, if a testator declare " that any trustee who shall pay over to his co-trustee, or shall do or concui? in any act enabling his co-trustee to receive [*276] any moneys, * shall not be obliged to see to the appli- cation thereof ; nor shall such trustee be subsequently rendered responsible by an express notice or intimation of the actual misapplication of the same moneys," here the testator has not only appointed joinl^j trustees, but has also authorized each of them to delegate his duties to a co-trustee ; (e) 1 Eden, 360. Mucklow v. Fuller, Jac. 198 ; Pride ». (/) See Dawson d. Clarke, 18 Fooks, 2 Beav. 430; Williams v. Ves. 254. Nixon, 2 Beav. 472 ; Fenwick v. (g) Worrall v. Harford, 8 Ves. 8. Greenwell, 10 Beav. 418 ; Droaier v. (h) Brice V. Stokes, 11 Ves. 319 ; Brereton, 15 Beav. 221 ; Dix v. Bur- Bone V. Cook, M'Clel. 168 ; S. C. 13 ford, 19 Beav. 409 ; Brumridge v. Price, 332 ; Hanbury v. Kirkland, 3 Brumridge, 27 Beav. 5 ; Eehden u. Sim. 265 ; Moyle v. Moyle, 2 R. & M. Wesley, 29 Beav. 213. 710; Sadler i;. Hobbs, 2 B. C. C. 114; (i) 22 & 23 Vict. o. 35, s. 31. 378 Ch. Xm.] TRUSTEES NOT TO PROFIT BY THE TRUST. *275 and therefore where two trustees, tinder such a power, en- abled a third to receive moneys, who misapplied them, and the fraud was concealed for two years, the two were held not to be responsible, though but for the special power they would have been declared liable on the ground of crassa negligentia (a) ; [and this case has since been followed (J).] Sixthly. A Trustee shall not make a profit of his office.^ 1. Trustee shall derive no advantage from the trust. — It is a general rule established to keep trustees in the straight line of their duty, that they shall not derive any personal advan- tage from the administration of the trust property (c). (o) Wilkins o. Hogg, 3 Gift. 116; 664, /ler' Lord Brougham; Gubbins i'. 10 W. E. 47. Creed, 2 Sch. & Let 218, per Lord [(6) Pass w. Dundas, 43 L. T. N. S. Redesdale ; and see Hamilton v. 665 ; 29 W. R. 332.] Wright, 9 CI. & Fin. Ill ; Bentley v. (c) Burgess v. Wheate, 1 Eden, Crayen, 18 Bear. 75; [Bennett v. 226, per Lord Mansfield ; lb. 251, per Gaslight and Coke Company, 52 L. J. Lord Henley ; O'Herlihy v. Hedges, N. S. Ch. 98.] A legacy therefore to 1 Sch. & Lef. 126, per Lord Redes- a person as a mere trustee for others, dale ; Ex parte Andrews, 2 Rose, 412, is not invalidated by the fact of such per Sir T. Plumer ; Middleton v. trustee or his wife being an attesting Spicer, 1 B. C. C. 205, per Lord Thur- witness to the will. Cresswellu. Cress- low ; Docker v. Somes, 2 M. & K. well, 6 L. R. Eq. 69. 1 Frofils of the trust. — Trustees are appointed for the purpose of managing" the trust property, and trusts are created for the benefit of children, women, persons for some reason incapacitated, or for those whom a testator may think unsuited to take proper care of property. It naturally follows that a trustee should take no advantage of liis position to receive personal gain from the trust property, his duty being to protect it, and that, too, without having an adverse interest. Parshall's App. 65 Pa. St. 233 ; Sloo v. Law, 3 Blatchf. C. C. 459. A person holding any fiduciary relation to an estate cannot buy up debts against, or incumbrances upon it, at a discount without accounting for the full benefit derived to the estate or the party, having the beneficial interest therein ; King v. Cushman, 41 III. 31 ; Slade v. Van Vechten, 11 Paige, 21; Schoonaker w. Van Wyck, 31 Barb. 457; Barksdale w. Finney, 14 Gratt. 338. And it has been held that the trustee may not receive a gift nor make a purchase from his cestui que trust ; Green v. Winter, 1 Johns. Ch. 26 ; Andrews ». Hobson, 23 Ala. 219 ; Mason v. Martin, 4 Md. 124 ; Baxter v. Costin, 1 Busb. Eq. 262; but if the trustee, who has the burden of proof, shows that such gift or purchase was entirely fair and above suspicion, it may stand; Harrington v. Brown, 5 Pick. 519; Lyon ». Lyon, 8 Ired. Eq. 201 ; Smith v. Isaac, 12 Mo. 106 ; Stuart «. Kissam, 2 Barb. 493 ; yet the cestui trust may have such a sale set aside ; Smith v. Lansing, 22 N. Y. 530 ; Evcrtson V. Tappen, 5 Johns. Ch. 497 ; Wiswall v. Stewart, 32 Ala. 433 ; Iddings v. Bruen, 4 Sandf. Oh. 222 ; Patton v. Thompson, 2 Jones Eq. 285 ; Bellamy v. Bellamy, 6 Fla. 62. See notes ante on resulting and constructive trust and 379 *276 TEUSTEES NOT TO PEOPIT BY THE TRUST. [Ch. XIII. Not entitled to the game on the trust estate where it can be let. — It was upon this principle that Lord Eldon once directed an inquiry, whether the liberty of sporting over the trust estate could be let for the benefit of the eestuis que trust, and, if not, he thcftight the "game should belong to the heir; the trustee might appoint a gamekeeper, if neces^ry, for the preservation of the game, but not to keep up a mere establishment of pleasure (c?). 2. Nor to a right "of presentation. — So, if an advowson be devised to trustees, and the next presentation cannot be made productive to the trust estate, the right of presentation does not belong to the trustee, but must be exercised by him for the benefit of the heir-at-law, or of the eestuis que trust, according to circumstances. Thus, where an advowson was devised to trustees upon trust during the life of A., to apply the rents and profits in the purchase of an estate to be set- tled to certain uses upon the death of A., it was decided that the right of presentation (should any vacancy occur) during A.'s life, would, as undisposed of, belong to the heir- [*276] at-law (e) ; and, in a later case, * where there was a devise to trustees during the life of A. to apply the rents and profits in payment of debts, it was held that the right of next presentation during the life of A. was a profit, and ought to be sold for the benefit of the creditors (a). If a testator devise an advowson to trustees for sale, the pro- ceeds to be divided amongst certain persons, and a presenta- tion falls, though the heir is absolutely disinherited, the trustees have not the nomination, but it belongs to the eestuis (d) Webb V. Earl of Shaftesbury, Sim. 579; Gubbins a. Creed, 2 Seb. 7 Ves. 480, see 488 ; and see Hutch- & Lef . 218 ; Be Shrewsbury School, inson v. Morritt, 3 Y. & C. 547. 1 M. & Cr. 647. (c) Sherrard v. Harborough, Amb. (a) Cooke v. Cholmondeley, 3 165; and see Martin v. Martin, 12 Drew. 1. post as to trustee purchasing. The trustee Is liable for the losses, and can receive none of the profits if he uses the trust fund in trade or speculation, so that his temptation to risk trust funds is reduced to a minimum ; Pen- man V. Sloeum, 41 N. Y. 53 ; Durling v. Hammar, 5 C. E. Green, 220 ; Brown V. Eieketa, 4 Johns. Ch. 303 ; and he must render a true account of all gains ; Van Epps v. Van Epps, 9 Paige, 237; Richardson v. Spencer, 18 B. Mnn. 450; the same rule holds true as between parties ; Jones v. Dexter, 130 Mass. 380. 380 Ch. XIIJ.] TKXTSTEES not to PKOFIT by the TKT7ST. *277 que trust (6), and where the cestuis que trust are tenants in common, they must cast lots for the presentation (c). 3. Trustee may not buy up debts for himself. — If trustees or executors buy up any debt or incumbrance to which the trust estate is liable for a less sum than is actually due thereon, they will not be allowed to take the benefit to themselves, but the creditors or legatees, or other cestuis que trust, shall have the advantage of it (jT). [And if a trustee takes advantage of his position to buy up fixtures on the trust property, which he afterwards sells at a profit, he can- ribt personally retain the benefit so acquired (e) ; and the same principle applies to all persons in a fiduciary position, as in the case of a sdUcitor buying up incumbrances created by his client, for the purpose of relieving the cKent from em- barrassment (/).] But if a trustee buy up a debt intending it for the cestuis que trust, and they refuse to take it or pay the purchase-monejr, they cannot, after lying by for a length of time, step forward when the speculation turns out profit- ably and claim the debt for themselves {g). 4. Trustee trading -with the trust estate must account for the profits. — Again, if a trustee or executor use the fund com- mitted to his care in buying and selling land, or in stock speculations, or lay out the trust money in a commercial ad- venture, as in fitting out a vessel for a voyage; or put it into the trade of another person from which he is to derive certain stipulated gains Qi), or employ * it [*277] himself for the purposes of his own business or (6) Hawkins v. Chappel, 1 Atk. Pooley v. Quilter, 4 Drew. 184; 2 De 621 ; Johnstone ». Baber, 22 Beav. G. & J. 327. 662; Briggs v. Sharp, 20 L. E. Eq. [(c) Armetrong w. Armstrong, 7 L. 317. ^ E. Ir. 207.] (c) Johnstone v. Baber, 22 Beav. [(/) Macleod v. Jones, 24 Ch. D. 562 ; reversed on this point on appeal, 289 ; but in such a case the solicitor 6 De G. M. & G. 439. will be allowed interest at the rate of (d) Robinsbn v. Pett, 3 P. W. 251, U. per cent, on the money employed note (A); Darcy «. Hall, 1 Vern. 49; by him in buying up the incum- Ex parte Lacey, 6 Ves. 628, per Lord brances. S. C. 50 L. T. N. S. 358; 32 Eldoh; Morret v. Paske, 2 Atk. 54, "W. E. 660.] per Lord Hardwicke ; Anon. 1 Salk. (j) Barwell v. Barwell, 34 Beav. 155 ; Carter v. Home, 1 Ect. Ca. Ab. 371. 7 ; Dunch v. Kent, 1 Vern. 260 ; Fos- (A) Docker v. Sqmes, 2 M. & K. brooke v. Balguy, 1 M. & K. 226; 664, ;)er Lord Brougham. ' 381 *277 TRUSTEES NOT TO PROFIT BY THE TEXTST. [_Ch. XIII. trade (a), in all these cases, while the executor or trustee is liable for all losses, he must account to the cestui que, trust for all clear profits. And where a trustee retired from his trust in consideration of his successor paying him a sum of money, it was held that the money so paid must be treated as forming part of the trust estate, and be accounted for by the retiring trustee (S). 5. Giving to a trustee. — Neither can a trustee bargain with his cestui que trust for a benefit, and it is even said that a cestui que trust cannot give a benefit to his trustees (c). 6. Mortgagee regarded as a trustee to some intents; — Mort- gagees are to some, though not to all, intents and purposes trustees, and in one case (the authority of which, however, has been doubted), where a mortgagor in fee died, and the mortgagee bought in the mortgagor's wife's right of dower, it was decreed that the heir of the mortgagor, on bringing his bill to redeem, might take the purchase at the price paid (c?). 7. Partners. — Partners also stand in a fiduciary relation to each other (e), and if on the termination of the partner- ship by effluxion of time (/), or bankruptcy (^), or death Qi), a partner instead of winding up the partnership affairs, retains the whole assets in the trade, so that in effect the (a) Docker v. Somes, 2 M. & K. and see comments thereon, Bobson 655; Willett y. Blanford, 1 Hare, 253 Cummins «. Cummins, 8 Ir. Eq. Rep, 723 ; Parker v. Bloxam, 20 Beav. 295 Wedderburn v. Wedderburn, 2 Keen, 722; 4 M. & Cr. 41; 22 Beav. 84 Townend «. Townend, 1 GifE. 201 0. Land, 8 Hare, 220; and compare Arnold v. Garner, 2 Ph. 231 ; Matthi- son V. Clarke, 3 Drew. 3. (e) Bentley «. Craven, 18 Beav. 75; Parsons u. Hayward, 31 Beav. 199. [Flockton V. Bunning, 8 L. R. Ch. (/) See Lord Eldon's observa- App. 323, n.] If the trustee or exec- tions, Crawshay u. Collins, 15 Ves. utor be one only of a firm, he must 226. account for his share of the profits. (j) Crawshay v. Collins, 15 Ves. Vyse V. Foster, 8 L. E. Ch. App. 309; 218. aflarmed 7 L. R. H. L. 318; Jones v. (A) Brown v. De Tastet, Jac. 284; Eoxall, 15 Beav. 388. Wedderburn v. Wedderburn, 2 Keen, (6) Sugden o. Crossland, 3 Sm. & 722; 4 M. & Cr. 41; 22 Beav. 84; G. 192. [The Lord Provost, &c., of Edinburgh (c) Vaughton «. Noble, 30 Beav. v. The Lord Advocate, 4 App. Cas. 34; see 39. 823;] and see Flockton o. Bunning, (d) Baldwin v. Banister, cited Rob- 8 L. R. Ch. App. 323, n. inson v. Pett, 3 P. W. 251, note (A) ; 382 Ch. XIII.] TRUSTEES NOT TO PROFIT BY THE TRUST. *278 partnership continues, he must account for a share of the profits (i). But as profits arise not only from capi- tal, but £ilso from * the application of skill andindus- [*278] try( and other ingredients (a), while in former times the Court, from the difficulty of taking the account, often gave interest only (6) ; yet, at the present day, the Court will direct an account of profits, having regard to the various ingredients of capital, skill, industry, &c., or will comprise them under the head of "Just allowances " (c). 8. Traders not partners. — Where the trader stands in no fidiiciary situation, as where, he is neither trustee nor execu- tor, nor was the partner of the testator, but trust monies come to his hands bond fide, though with a knowledge of the trust, that is, of the breach of trust (as where a trustee or executor lends money without authority to a trader), here the trader, though answerable for principal and interest, is not made to account for the extra profits (cZ). And if a person was in fact a partner with the testator but without knowing it,(e), or has bond fide settled the partnership ac- counts (/), he will be equally protected as if he had not been such partner. And if the terms of the partnership be that on the death of any partner his share shall be taken by (i) In Knox v. Gye, 5 L. E. H. L. years from the death of his co- 656, Lord Westbury denied that any partner. fiduciary relation existed between the (a) See Vyse v. Foster, 8 L. R. Ch. surviving partner, and the represen- App. 331 ; afiSrmed, 7 L. R. H. L, 318. tative of the deceased partner, but (6) See the observations in Docker Lord Hatherley was clearly of opin- v. Somes, 2 M. & K. 662. ion to the contrary. See the argu- (c) Brown v. De Tastet, Jac. 284 ; ments of these judges pro and con in Willett «. Blanford, 1 Bare, 253. the report. The surviving partner (rf) Stroud v. Gwyer, 28 Beav. has, no doubt, larger powers than an 130; Townend v. I'ownend, 1 GifE. ordinary trustee, for as between him 210; Simpson v. Chapman, 4 De G. M. and tliird persons he can sign a valid & G. 154; Macdonald v. Richardson, receipt for an outstanding asset, and 1 Giff. 81. See Flockton v. Bunning, being personally liable for the debts, 8 L. R. Ch. App. 323, note (6). he may be able to give a good title («) Brown v. De Tastet, Jac. 284. on sale of the partnership property, (/) Chambers v. Howell, 11 Beav. the presumption being that such real- 6. And in Ex parte Watson, 2 Ves. ization is wanted for payment of & B. 414, Lord Eldon seems to speak debts ; but it seems a strong measure of partners taking with notice, as to lay down, that the surviving part- debtors for the money, as if it had ner is not to account for what he been placed with them by way of receives after the expiration of six direct loan. 383 *279 TRUSTEES NOT TO PEOFIT BY THE TRUST. [Cn. XIII. the survivor, at the value estimated at the last stocktaking, and a partner dies having appointed three executors, one of whom is a copartner, and another afterwards becomes a co- partner, and the testator's share is left in the business and traded with, the two executors who are in the firm are not answerable for profits, but only for the capital of the testa- tor's share with interest. The surviving partners ate in this case regarded as purchasers of the share of the deceased, at the price expressed by the articles, and the two executors are answerable on the footing only of having left outstand- ing a debt, which they ought in a reasonable time to have got in {g). [*279] * 9. Agents, &o. — The foregoing principle that trustees are not to profit by the trust applies to agents («), guardians (6), (who are trustees to the extent of the property come to their hands (e)), directors of a com- pany ((?), secretary of a company (e), [promoters of a com- pany (/),] inspectors under creditor deeds (5^), the mayor of (9) Vyse V. Foster, 8 L. R. Ch. App. 309; affirmed, 7 L. R. H. L. 318. The judgment of L. J. James should be read, to see the principles upon which the Court now acts. The Court in this case' viewed the claim against the surviving parties, though one of them was also executor, as a debt only, and, as such, not giving a right to an account of profits, and the Court observed that, although there had been hundreds, probably thousands, of cases in which traders had been executors, and in which, on taking the accounts, balances, and large balances, had been found due from them, yet where there had been no active breach of trust, in the getting in or selling out trust assets, but there had been a mere balance on the account of receipts and payments, the omission to invest the balance had nevei^ made the executor liable to account for the profits of his own trade. lb. p. 835. (a) Morret v. Paske, 2 ^-ti:- 6*) per Lord Hardwicke. (5) Powell V. Glover, 3 P. W. 251, note. (c) Sleeman v. Wilson, 13 L. R. Eq. 41, per Cur. (rf) Great Luxembourg Railway Company v. Magnay, 25 Beav. 586; Imperial Mercantile Credit Associa- tion V. Coleman, 6 L. R. Ch. App. 558; 6 L. R. H. L. 189; Parker v. McKenna, 10 L. R. Ch. App. 96 ; In re Imperial Land Company of Mar- seilles Ex parte Larking, 4 Ch. S. 566; [Nant-y-glo -and Blaina Iron- works Company v. GraVe, 12 Ch. D. 738.] (e) In re McKay's case, 2 Ch. D. 1. [(/) NfiW Sombrero Phosphate Company v. Erlanger, 5 Ch. D. 73; Bagnall v. Carleton, 6 Ch. D. 371; Emma Silver Mining Company v. Grant, 11 Ch. D. 918 ; Emma Silver Mining Company v. Lewis, 4 C. P. D. 396.] (g) Chaplin v. Young, (No. 2), 33 Beav. 414. 384 Ch. XIII.] TEUSTBES NOT TO PROFIT BY THE TRUST. *280 9, corporation (^), and generally to all persons clothed with a iiduciary character (i). 10. Heir or devisee purchasing incumbrance. — Even an heir has been so far regarded as a trustee for creditors of the ances- tor, that he cannot hold an incumbrance as against them for more than he gave for it (y), and it is presumed, though there is no decision upon it, that the rule apphes equally to a devisee as between him and the creditors of the tes- tator (It). But either an heir or a devisee who was himself an incum- brancer at the death of the ancestor or testator, may buy up a prior (but not a subsequent) incumbrance, and hold it for the whole amount due ; for his own incumbrance is by title paramount and not affected by any trust for creditors, and the Court considers him to that extent as a stranger, and allows him to buy up the prior incumbrance not as heir or devisee, but for the protection of his own incumbrance (J). And if the heir or devisee acquire the prior incumbrance not hy his own act or procurement but by the bounty of another, as either by gift inter vivos, or by will, there sefems no reason on principle why the heir or devisee should not hold the prior incumbrance for the whole amount due ; and semble it can make no difference whether the donor was the prior incumbrancer himself, or was a stranger who had purchased from the incumbrancer at an under- value (m). * And an heir or devisee may, it seems, hold an [*280] incumbrance which he has bought up himself at an under-value for the whole amount as against a subsequent incumbrancer, though not as against the general creditors of the ancestor or testator ; as if A. be the first incumbrancer, B. the second, and C. the heir or devisee, and C. buys up A.'s incumbrance, here if B. have a charge merely and is not a creditor, or his debt is barred by the statute, there is no (A) Bowes V. City of Toronto, 11 Clopton, 1 Vern. 464 ; Darcy v. Hall, 1 Moore, P. C. C. 463. ' "Vern. 49 ; Morret v. Paske, 2 Atk. 54. (i) Docker v. Somes, 2 M. & K. (i) See Long v. Clopton, 1 Vern. 665. 464 ; Davis v. Barrett, 14 Beav. 542. ( j) Lancaster v. Evors, 10 Beav. (J) Davis v. Barrett, 14 Beav. 542 ; 154 ; and see 1 Ph. 354 ; Brathwaite Darcy v. Hall, 1 Vern. 49. V. Brathwaite, 1 Vern. 334 ; Long v. (m) See Anon. 1 Salk. 155. 385 *280 TEUSTEES NOT TO PROFIT BY THE TRUST. [Ch. XIII. thread of trust or confidencp running betw§en B. and C, and therefore C. is regarded as a stranger (a). 11. Joint purchasers. — One of two joint purchasers of an estate has been declared a trustee for the other of a propor- tionate part of the benefit derived by the former from an incumbrance bought up by him at a less value (V). , 12. Tenant for life. — An opinion has also been expressed by a high authority, that even a tenant for life stands in such a confidential relation towards the remainderman that he cannot as against him hold an incumbrance which he has bought up for more than he gave for it (a). 13. Trustee may not charge for services. — As regards trus- tees, in the strict' sense of the word, the general rule deprives them of any right to receive remuneration for their personal l9,bour and services.^ (a) Davis v. Barrett, 14 Beav. (6) Carter v. Home, 1 Eq. Ca. Ab. 542. The observations of M. R. are 7. general, but he probably meant no (c) Hill v. Browne, Drur. 433. more than this. 1 Compensation of trustees. — In most of the TTnited States trustees are ■ entitled to a reasonable compensation, but not to any collateral profit, as by an appointment as a receiver, or services as broker, agent, banker, attorney, or auctioneer, although they may liire such services, if needed, at the expense of the estate. Binsse v. Paige, 1 Keyes, 87 ; Morgan v. Hannas, 49 N. Y. 667 ; Jenkins v. Fickling, 4 Des. 369 ; Mayer v. Galluchat, 6 Rich. Eq. 2. If ' the trust states the compensation it cannot be increased ; College v. WiUing- bam, 13 Rich. Eq. 195; Biscoe v. State, 23 Ark. 592; likewise if amount has been agreed on; Jackson v. Jackson, 3 N. J. Eq. 113. In case of the death of the cestui que trust, see Parker v. Ames, 121 Mass. 220; of trustee, see Widener v. Fay, 51 Md. 273; Savage v. Sherman, 24 Hun, 307. Compensation to an ■unfaithful and negligent trustee may be properly refused ; . Gordon o. Mat- thews, 30 Md. 235 ; Hermstead's App. 60 Pa. St. 423 ; McKnight v. Walsh, 24 N. J. Eq. 498; Norris's App. 71 Pa. ^t. 106; Warbass v. Armstrong, 10 N. J. Eq. 263 ; Stearly's App. 38 Pa. St. 525 ; Lathrop v. Smalley, 23 N. J. Eq. 192; Cook V. Lowry, 95 N. Y. 103; Nagle's Est. 12 Phila. 25; Blauvelt v. Ackerraan, 23 N. J. Eq. 495. Compensation may be received for services both as executor and as trustee ; Laytin v. Davidson, 95 N. Y. 263 ; Plioenix V. Livingston, 101 N. Y. 451 ; Pitney v. Eversoif, 42 N. J. Eq. 361 ; Hall v. Campbell, 1 Dema. (N. Y.) 415 ; unless the compensation is fixed by will ; Brownson v. Roberts, 5 Redf. 576. In New York where the statute of 1863 made special provision where the value of the estate exceeds , $100,000 the income cannot be added to increase the amount ; Meeker v. Crawford, 5 Redf. 450 ; Slosson v. Naylor, 2 Dema. 257. In addition to the commission on the principal, the trustee is entitled to a yearly commission on the income in accordance with his accounting ; Hancox v. Meeker, 95 N. Y. 628 ; Re Meser- ole, 36 Hun, 298; Frame v. Willets, 4 Dema. 368; but see Brush v. Smith, 1 386 Ch. XIII.] TRUSTEES NOT TO PKOFIT BY THE TEUST. *280 14. Trustee may not be receiver of the trust estate at a sed- ary. — Thus, the trustee of an estate cannot be appointed Dema. 477. After estate is settled and balance remains in his hands, an annual account being rendered, the trustee may retain a commission on the income; Re Mason, 98 N. Y. 527. The compensation is based on the real Talue of the estate, not on the value of the life interest; Phoenix v. Phoenix, 28 Hun, 629; trustee is not estopped by delay from claiming his commission; Wister's App. 86 Pa. St. 160. No commission will be allowed on fund re- ceived from predecessor unless litigation was necessary to obtain it, then legitimate expenses will be allowed ; Jenkins v. Why te, 62 Md. 427 ; where goods were consigned to a house of which one of the trustees was a member, a commission was allowed, and the rule allowing the trustee no profit from the Estate was held inapplicable ; TumbuU v. Pomeroy, 140 Mass. 117. Surro- gate may allow commissions, one-Tialf for receipts and one-half for payments ; Re Eoosevelt, 5 Eedf. 601. Payments by the trustee to the cestui que trust are not " disbursements " within the meaning of a decree of court allowing com- missions on disbursements; Whyte v. Bimmock, 55 Md. 452; the services and expenditures of the trustee must be within the line of the duties required of him by the declaration of trust; Tracy v. Gravois E. E. Co. 84 Mo. 210. Compensation and expenses allowed on compromise settlement of suit ; Lanier V. Bruuson, 21 S. C. 41 ; but not if it is a suit which the trustee should have avoided ; Page v. Boynton, 63 N. H. 190 ; also allowed during the pendency of a bill of interpleader; Daniel v. Fain, 5 Lea (Tenn.) 258. A lawyer, who is a trustee, may be allowed compensation for his professional services ; Per- kins's App. 108 Fa. St. 314 ; 56 Am. Eep. 208 ; and an attorney engaged by a trustee to defend an illegal suit is entitled to compensation though the trustee is a defaulter and absconds without paying him; Manderson's App. 113 Pa. St. 631. A trustee 'will not be discharged for receiving small sums as pres- ents ; Jacobus v. Munn, 37 N. J. Eq. 48. If a trustee is allowed a double or triple commission on the principal, he will receive the 'same on the income ; Waters v. Faber, 2 Dema. 290; where a certain sum was allowed in lieu of commissions it covered everything; Brownson v. Eoberts, 5 Eedf. 576.' An administrator with the will annexed and trustee, whose letters were revoked, entitled to no compensation ; Ee Baker, 35 Hun, 272. If a trustee resigns for his own convenience, he is entitled to a commission on income only. Re Allen, 29 Hun, 7. Trustee waives commissions to a certain date, but that does not prejudice his claim to them since that time ; Denmead v. Denmead, 62 Md. 321 ; -if trustee makes gift of services he can have no compensation ; Vestry o. Barksdale,' 1 Strob. Eq. 197 ; Haglar v. McCombs, 66 N. C. 345 ; ■nor does he necessarily forfeit his commissions by his irregularities provided they have worked no harm; Morgan v. Morgan, 4 Dema. 358. Commissions may be fixed by agreement with the cestui qile trust ; Bowker v. Pierce, 130 Mass. 262. For time of payment of commissions, see Myers v. Fenn, 5 Wall. 205 ; Burckmyer v. Beach, 7 Eich. Eq. 487. If a trustee fails to keep proper accounts and make proper returns, no compensation will be given him; Marcy's Acc't, 24 N. J. Eq. 451 ; Kenan v. Hall, 8 6a. 417 ; but this is far from universal; Wistar's App. 54 Pa. St. 60; Gee v. Hicks, Eich. Eq. Cas. 5; Kee V. Kee, 2 Gratt. 116; Myers' App. 62 Pa. St. 104; Parker's, Est. 64 Pa. St. .307. ■ ' For the amount of compensation, and the method of determining it, see the statutes of the various states. Delaware, Ohio, and Illinois appear to be quite exceptional, in disallowing compensation to the trustee. 387 *280 a/nusTBES not to profit by the trust., [Ch. XIII. receiver of it at a salary (d) ; and even should he offer his services gratuitously, he would not be appointed except (d) Sutton «. Jones, 16 Ves. 584; 515; and see Morison v. Morison, 4 Sykes v. Hastings, 11 Ves. 36.3 ; M. & Cr. 215. V. JoUand, 8 Ves. 72 ; Anon. 3 Ves. In New York , the compensation fixed by statute is five per cent on f 1000, two and a half per cent on the next |9000, and one per cent on the balance, to executors, &c., and the same amount is . allowed trustees ; Livingston's Case, 9 Paige, 442; Re Schmidt, 3 Dema. 245; Be Schell, 53 N. Y. 263; Greer v. Greer, 5 Eedf. 214; also their reaspnable expenses; Dakin v. Dem- ming, 6 Paige, 95 ; compensation is reckoned on all the estate ; De Peyster's Case, 4 Sandf . 514. If a trust deed grants an extra compensation it will not be allowed ; Griflin v. Barney, 2 Comst. 372 ; Nichols v. McEwen, 21 Barb. 66. A gross sum or a charge by the day will not be allowed ; Valentine ». Valentine, 2 Barb. Ch. 430, but see Jewett v. Woodward, 1 Edw. Ch. 199; the compensation is not a matter of discretion ; Morgan v. Hannas, 49 N. Y. 667 ; Meacham v. Stemes, 9 Paige, 405 ; double commissions will not be allowed in case of a change of trustees; Hosack v. Rogers, 9 Paige, 468; White v. Bullock, 20 Barb. 99 ; Jones's Case, 4 Sandf. Ch. 616. In Massachusetts, trustees are allowed such compensation as the court orders and their expenses. Five per cent on the whole amount has been allowed; Barrell v. Joy, 16 Mass. 229; Longley v. Hall, 11 Pick. 124; Ellis v. Ellis, 12 Pick. 183; Urann ». Coates, 117 Mass. 41 ; they will vary with the circumstances of the case ; Blake v. Pegram, 101 Mass. 592 ; Dixon v. Homer, 2 Met. 422 ; Scudder v. Crocker, 1 Cush. 382 ; and an agreement with the cestui que trust may be ratified ; Bowker v. Pierce, 130 Mass. 262 ; commissions for change of investments must be paid out of the income ; Heard v. Eldredge, 109 Mass. 258. In Maine there is an allowance of a dollar a day, a dollar for each ten miles of travel and a commission to be fixed by the court not to exceed five per cent, according to services rendered. In New Hampshire the commission varies from two to five per cent, which the court allows in addition to travel and attendance; Tuttle v. Robinson, 33 N. H. 118; Wendell V. French, 19 N. H. 205. In Connecticut the court exercises its discretion ; Clark v. Piatt, 30 Conn. 282; Cantfield v. Bostwick, 21 Conn. 555. In Vermont there is » statute provision, and an additional allowance is sometimes made ; Hubbard «. Fisher, 25 Vt. 542 ; Evarts <.. Nason, 11 Vt.- 122. In Pennsylvania it is in the* discretion of court ; Carrier's App. 79 Pa. St. 230 ; Norris's App. 71 Pa. St. 107 ; Hermstead's App. 60 Pa. St. 423 ; a mis- take of judgment wiU not' forfeit commissions; Meyers's App. 62 Pa. St. 109. Five per cent is the usual allowance ; Wood's App. 86 Pa. St. 346 ; Pennell's App. 2 Barr, 216. Double commission are never allowed; Aston's Est. 5 J Whart. 228. Nor any on reinvestments ; Hemphill's App. 6 Harris, 303 ; extral and legal services may be paid for; Lowrie's App. 1 Grant. Cas. 373; but not if made necessary through trustee's fault ; Stearly's App. 38 Pa. St. 525 ; a commission on the income only of investments is allowed ; McCause- land's App. 38 Pa. St. 466 ; the amount allowed is for services rendered and not by way of a percentage; Montgomery's App. 86 Pa. St. 230; Wood's 388 Ch. XIII.] TRUSTEES NOT TO PROFIT BY THE TRUST. *280 under particular circumstances, for it is tlie duty of the trustee to superintend the receiver and check the accounts App. 86 Pa. St. 346; Harper's App. Ill Pa. St. 243; two and one-half per cent has been allowed for selling land, and three per cent for extra services ; Carrier's App. 79 Pa. St. 230 ; Snyder's App. 54 Pa. St. 69. In New Jersey, by statute in addition to expenses the commission shall not exceed seven per cent on first $1000, four per cent on next $4000, three per cent on next $5000, and two per cent on all above |10,000. The trustee may forfeit the whole or a part of his compensation by improper conduct in the management of his trust; Blauvelt v. Ackerman, 28 N. J. Eq. 495; Lathrop V. Smalley, 23 N. J. Eq. 192 ; Moore v. Zabriskie, 3 Green, 51. In Alabama the compensation depends on the size of the estate and the labof involved ; Gould v. Hays, 25 Ala. 432 ; though five per cent is com- mon; Woodruff w. Snedecor, 68 Ala. 437 ; Bendallw. Bendall, 24 Ala. 306; but an allowance by the day may be given ; Magee v. Cowperthwaite, 10 Ala. 968 ; or a gross sum given ; O'Neill v. Donuell, 9 Ala. 738 ; expenses are allowed; Hearrir v. Savage, 16 Ala. 291 ; misconduct may forfeit the compensation ; Lyon V. Foscue, 60 Ala. 468 ; Gould v. Hays, 25 Ala. 432. In North Carolina trustees may receive five per cent and necessary ex- penses ; Walton v. Avery, 2 Dev. & B. Eq. 405 ; Turnage v. Greene, 2 Jones Eq. 63 ; trustees may be charged compound interest, if they are at fault ; iThomp- son V. McDonald, 2 Dev. & B. Eq. 471 ; a trustee de son tort will not be allowed compensation ; Hagler v. McCombs, 66 N. C. 345. In South Carolina the statutes allow two and a half per cent comthission, but if the compensation is named in the declaration of tmst that will control ; College V. Willingham, 13 Rich. Eq. 195 ; ten per cent is allowed on income of sums invested, but this includes all travel and expenses ; Norton v. Gillison, 4 Rich. Eq. 219 ; Snow v. Callum, 1 Des. 642. If trustees agree to serve with- out compensation, they can recover for their services; M'Caw v. Blewit, 2 McCord, Eq. 90; see as to additional compensation, SoUee v. Croft, 9 Rich. Eq. 474. In Virginia the court allows five per cenff of the receipts ; Kee v. Kee, 2 Gratt. 132 ; Triplett v. Jameson, 2 Munf. 242 ; Waddy v. Hawkins, 4 Leigh, 458 ; this allowed for selling land ; Deanes v. Scriba, 2 Call. 416 ; in specially difficult cases more is allowed ; Hipkins v. Bernard, 4 Munf. 93 ; M'Call v. Peachy, 3 Munf. 306. In Maryland from- five to ten per cent is allowed ; Abbott v. Packet Co. 4 Md. Ch. 315 ; from seven to three per cent is allowed for sale of land, as the amount increases; Gibson's Case, 1 Bland, 147; a daily allowance is not approved, but liberal expenses are allowed; Northern C. E. Co. v. Keighler, 29 Md. 572 ; Dorsey v. Dorsey, 10 Md. 471 ; provisions in trust deed will be disregarded ; Widener v. Fay, 51 Md. 273. In Tennessee five per cent is the usual allowance ; Stretch v. Gowdey, 3 Tenn. Ch. 565. In Georgia the trustee receives a commission ; Lowe v. Morris, 13 Ga. 169 ; but he must not draw on the body of the estate ; Burney v. Spear, 17 Ga. 225. In Mississippi from five to ten per cent is allowed ; Cherry v. Jarratt, 3 Cush. (Miss.) 221; Merrill v. Moore, 7 How. (Miss.) 292; this includes expenses ; Satterwhite v. Littlefleld, 13 Sm. & M. 306 ; sometimes an extra allowance is given ; Shirley v. Shattuck, 6 Cush. (Miss.) 26. 389 *281 TRUSTEES NOT TO PROFIT BY THE TRUST. [Ch. XIII. ■witli an adverse eye (e) ; but if a person be merely a trustee to preserve contingent remainders, the reasons for excluding biTifi are beld not to be applicable (/). 15. Factors, &o. — In tbe absence of any special authority contained in the instrument of trust (^), a trustee or execu- tor who happens to be a factor (A), broker (i), commission agent (/), or auctioneer (M), can make no profit in the way of his business from the estate committed to his charge. So trustees who are bankers cannot in their character of trustees borrow money of themselves, as bankers, at [*281] * compound interest, though it be the usage of the bank with ordinary customers (a). (e) Sykes ». Hastings, 11 Ves. (A) Scattergood v. Harrison, Mos. 364, per Lord Eldon. 128. (/) Sutton V. Jones, 15 Ves. 587, (0 Arnold v. Garner, 2 Ph. 231. per Lord Eldon. (j) Sheriff v. Axe, 4 Russ. 33. (j) Douglas V. Archbutt, 2 De (fc) Matthison v. Clarke, 3 Drew. G. & J. 148 ; Be Sherwood, 3 Beav. 3 ; Kirkman v. Booth, 11 Beav. 273. 338. (a) Crosskillt;. Bower, 32 Bear. 86. In Kentucky no ^m is fixed, but a reasonable amount is allowed ; Lane B. Coleman, 8 B. Men. 571 ; Greening v. Fox, 12 B. Mon. 190, from five to ten per cent has been allowed ; M'Cracken v. M'Cracken, 6 Mon. 842 ; Floyd v. Floyd, 7 B. Men. 290; Bowling v. Cobb, 6 B. Mon. 358. In Missouri executors receive not more than six per cent, but a gross sum may be allowed ; Smart v. Fisher, 7 Mo. 581. In California the trustee must be paid from the income ; ElUg i;. Naglee, 9 Cal. 683. ' • In Ohio executors are allowed a compensation, but trustees get only their expenses ; Gilbert v. Sutliff, 3 Ohio St. 149. In Illinois executors receive a compensation, but trustees do not ; Constant V. Matteson, 22 III. '546 ; see Hough v. Harvey, 71 111. 72. For further consideration of compensation, see Perry on Trusts, § 918, n. ; and note to Gibson's case, 17 Am. Dee. 266. ! In the provinces a commission is allowed. It may be a lump sum ; Stinson V. Stinson, 8 R. R. 560 ; or a reasonable amount ; Re Toronto Harbor Com'rs, 28 Chy. 195; Ee Berkeley's Trusts, 8 R. R. 193; McDonald v. Davidson, 60 R. 320; Deedes v. Graham, 20 Chy. 258; In re Town Trust, 22 Chy. 377; Heron u. Moffatt, 7 P. E. 438; the trustee shall receive payment for all expenses incurred by him ; Life Association v. Walker, 24 Chy. 293 ; Bevis v. Boulton, 7 Chy. 89; Meighen v. Buell, 24 Chy. 503; Colonial Trust Co. v. Cameron, 24 Chy. 548; including maintenance and education; Stewart v. Fletcher, 16 Chy. 235 ; where compensation is provided for in trust deed, it will be adhered to ; Heron v. Moffatt, 7 P. E. 438 ; Loveless v. Clarke, 24 Chy. 14; City Bank v. Mulson, 3 Chy. Chamb. 334; when- compensation will or will not be allowed, see Wilson v. Proudfoot, 16 Chy. 103; Bald v. Thomp- son, 17 Chy. 154. 390 Ch. XIII.] TRUSTEES KOT TO PROFIT BY THE TETJST. *281 16. Solicitor. — A trustee, whether expressly or construc- tively such (J), who is a solicitor, cannot charge for his pro- fessional labours, but will be allowed merely his costs out of pocket (c), unless there be a special contract or direction to that effect (c^) ; and even then he cannot charge for matters not strictly belonging to the professional character, such as attendances for paying premiums on policies, for transfers of stock, attendances on proctors or auctioneers, attendances on paying legacies or debts (e), [unless such non-professional charges are expressly authorized. Where, the will author- ized a solicitor trustee to make the usual professional or other proper and reasonable charges fdr all business done and time expended in relation/ to the trusts of the will, whether such business was usually within the business of a soKcitor or not, charges for business not strictly of a professional character were allowed (/). But where the solicitor trustee was authorized to make the usual professional charges, and was to be entitled " to make the same professional charges and to receive the same pecuniary emoluments and remuner- ation for all business done by him, and all attendances, time and trouble given and bestowed by him, in or about the exe- cution of the trusts and powers of the will, or the manage- ment and administration of the trust estate, as if he, not being himself a trustee or executor, were employed by the trustee or executor," npn-professional charges were disal- lowed (^f). And] a trustee who in that character invests the trust fund upon mortgage, and acts also for the mortga- gor, is not accountable to the trust for the professional profits made by the mortgage and which are paid by the mortga- gor (A). Partners. — As the solicitor-trustee himself cannot charge, (6) Pellard v. Doyle, 1 Dr. & Sm and see Douglas v. Archbutt, 2 De G. 319. & J. 148. (c) New V. Jones, Exch. Aug. 9, (e) Harbin v. Darby, 28 Beav. 325 1833. 9 Byth. by Jarm. 338 ; Moore [(/) Ee Ames, 25 Oh. D. 72.] V. Frowd, 3 M. & Cr. 46; Fraser v. [(?) Re Chappie, 27 Ch. D. 584: Palmer, 4 Y. & C. 515; York v. see the observations of Kay, J. in this Brown, 1 Coll. 260 ; Broughton v. case as to inserting a power authoriz- Broughton, 5 De G. M. & G. 160. ing non-Jirofessional charges.] (d) In re Sherwood, 3 Beav. 338 ; (h) Whitney v. Smith, 4 L. R. Oh, App. 613. 391 *282 TRUSTEES JS^OT TO PROFIT BY THE TRUST. [Ch. XIII. SO neither can the charge be made by a firm of which he is a partner (i), even though the business be done by one of the partners who is not a trustee (/) ; but a country solicitor defending a suit in Chancery as executor, through a [*282] town agent, will be allowed such * proportion of the agent's bill in respect of the defence, as such agent is entitled to receive (a) ; and a trustee may employ his part- ner as the solicitor to the trust, a,nd pay the usual profes- sional charges, if by the articles of partnership the trustee is not to participate in the profits or have any benefit from such charges (6). 17. Cradook v. Piper. — In Cradock V. Piper (c), the princi- ple of the rule was held not to apply where several co-trustees were made defendants to a suit, this being a matter thrust upon them and beyond their own control, so that one of the trustees, who was a solicitor, was allowed to act for himself and the others, and to receive the full costs, it not appearing that they had been increased through his conduct. But this decision is open to comment. If the distinction be made between costs out of court and costs in court, because as regards the latter, the conduct of the trustee is under the cognizance of the Court, and the costs are to be taxed, the rule would equally apply to the case of a single trustee de- fending himself (cT). The exception appears to be anomalous, and is not likely to be extended. . Indeed where a single trustee defended himself by his partner, the professional profits were disallowed (e). 18. Trustee may accidentally be advantaged, as by failure of heirs of the cestui que trust. — [Prior to the Intestates Estates Act, 1884, a trustee might hj possibility have derived] a bene- fit from the trust estate, not from any positive right in him- self, but from the want of right in any other; as if lands (z) Collins V. Carey, 2 Bear. 128; & Tw. 617; overruling Bainbrigge v. Lincoln v. Windsor, 9 Hare, 158. Blaire, 8 Beav. 588. Q) Christophers v. White, 10 (d) See Broughton v. Broughton, Beav. 523. 2 Sm. & G. 422; 5 De G. M. & G. (o) Burge V. Burton, 2 Hare, 373. 160. (6) Clack V. Carlon, 7 Jur. N. S. (e) Lyon v. Baker, 3 De G. & Sm. 441. 622. And see Hanson v. Baillie, 2 (c) 1 Mac. & G. 664; S. C. 1 Hall Macq. H. L. Ca. 80. 392 Ch. XIII.] TRUSTEES NOT TO PROFIT BY THE TRUST. *283 were vested in A. and his heirs upon trust for B. and his heirs, and B.died without an heir, the equitable interest in this case could neither escheat to the lord (/) ; nor, if the trust were created by conveyance from B., whose seisin or title was ex parte paternd, could the lands, upon failure of heirs in that line, descend to the heir of B. ex parte ma- ternd Q/') : but the trustee, no person remaining to sue a subpoena, retained, as the^ legal proprietor, the beneficial en- joyment (A). [But now where the death occurs since the 14th August, 1884, the law of escheat applies in the same mamner as if the interest had been a legal estate in corporeal hereditaments (i).J * 19. Onslow V. Waiiis. — If an estate be held by [*283] A. upon trust for B., and B. dies without leaving an heir, but having devised the estate to C. and D. upon trusts which fail or do not exhaust the beneficial interests, A. can- not insist on retaining the estate upon offering to satisfy the charges, if any, but will be bound to convey the estate to C. and D. as the nominees in the will and so entitled as against A., the bare trustee, and the Court as between those pgirties will not inquire into the nature of the trust* or how far it can be executed (a). 20. Purchaser dying without heir after payment of purchase- money, and before conveyance. — In Burgess V. Wheate, Sir Thomas Clarke, M. R., put the case of a purchaser paying the consideration money, and then dying without an heir before the execution of the conveyance. Whether under such circumstances the vendor should keep both the estate and thfe money ? The M. R. thought that the vendor would keep the estate, but that the purchaser's personal representa- tive would have a lien upon it for the purchase-money (6). (/) Burgess v. Wheate, 1 Eden, Beav. 168 ; Barrow v. Wadkin, 24 177. But as to a surplus dividend in Beav. 9; and see Attorney-General v. the hands of trustees for creditors. Sands, Hard. 496 ; Gary, 14 ; Burgess see Wild v. Banning, 12 Jur. N. S. v. Wheate, 1 Eden, 212, 213, 253. 464. [(0 47 & 48 Vict, c.,71, s. 4.] (g) See 1 Eden, 186, 216, 256. (a) Onslow i: Wallis, 1 Mac. & G. Ih) Taylor v. Haygarth, 14 Sim. 8 ; 506 ; and see Jones v. Goodchild, 3 P. Davall V. New River Company, 3 De W. 33. , G. & Sm. 394; Cox v. Parker, 22 (6) 1 Eden, 211, per Sir T. Clarke. 393 *284 TRUSTEES NOT TO PROFIT BY THE TRUST. [Ch. XIII. Mortgagor dying -without an heir. — In the same case the questions were asked, whether in the event of a mortgagor in fee dying intestate as to real estate and leaving no heir, the mortgagee should hold the estate absolutely? and whether, if the mortgagee demanded his debt of the personal repre- sentative, he should take to himself both the land and the debt ? Sir Thomas Clarke thought that the mortgagee might hold the estate absolutely ; but that if the mortgagee took his remedy against the personal representative, the Court would compel him to re-convey, not to the lord by escheat, but to the personal representative, and would consider the , estate reconveyed as coming in lieu of the personalty, and as assets to answer even simple contract creditors (e). Lord Mansfield said, "He could not state on any ground estab- lished what would be the determination in that case " (rf). Lord Henley observed, "The lord has his tenant and ser- vices in the mortgagee, and he has no right to anything more. Perhaps it would not be difficult to answer what wotild be the justice of the case, but it is not to the business in hand " (e). In the opinion of Sir John RomiUy, M. R., the mortgagee held absolutely, subject to the payment of the mortgagor's debts out of, the equity of redemption (/). [But since the late Act (^) the interest of the mortgagor will escheat to the lord. j 21. Cestui que trust attainted for felony. — But a f ail- [*284] ure of inheritable blood might before 4th July, * 1870, have happened (a), not only for want of an heir, (as in the case of an illegitimate person dying without issue), but through the corruption of blood caused by attainder, for petit treason or murder; and in the case of such attainder, the question arose whether the trustee should hold against the^ heir of the person alttainted. Under the system of uses the heir could not sue his subpoena by reason of the corrup- tion of blood (J) ; but trusts have since been administered on (c) Id. 210. (/) Beale v. Symonds, 16 Beav. (d) 1 Eden, 236. 406. (b) Id. 256 ; and see Viscount Kg) 47 & 48 Viet. c. 71, s. 4.] Bowne v. Morris, 3 Hare, 394. (a) See 33 & 34 Vict. c. 23. (6) Br. Feffi. al. Us. 34; Gary, 14. 394 - Ch. XIII.] TRUSTEES KOT TO PROFIT BY THE TRUST. *284 more liberal principles than uses formerly were. In refer- ence to this point, and also to the question, whether the trustee could hold against the person attainted himself if subsequently pardoned, Sir Thomas Clarke said, " The de- taining the estate against the Crown where the cestui que trust dies without leaving a relation was different fronii de- taining it against the cestui que trust himself. The Court would go as far as it could, and he thought the trustee would be estopped from setting up such a claim" (c). Lord Mans- field said, " He could not resolve the case upon principle, for he could find no clear and certain rule to go by" (. Cutting, 51 N. H. 408; Garland v. 398 Ch. XIV. S. 1.] GETTING IN THE TEUST ESTATE. *288 2. Chose en action.^ — If the trust fund be a choSB en action, as a debt, which may be reduced into possession, it is the trustee's duty to be active in getting it in; and any un- necessary delay in this respect will be at his own personal risk (h'). A marriage settlement often contains a * covenant by one of the parties for payment of [*288] a certain sum to the trustees within a limited period, and if the Statute of Limitations be allowed to run so that the claim is barred, the trustees are answerable (a) ; and d fortiori the trustees will be responsible if they execute the settlement and sign a receipt for the money but do not actually receive it (V). Prepayment. — Though trustees may be answerable for de- laying after the proper time to get in a cJiose en action, there can be no objection to 'their receiving it before the time, if the person liable be willing to pay it (c). [And trustees of a reversionary chose en action may concur with the person entitled to the prior interest in calling for an immediate transfer to themselves of the chose en action (^).] 3. Executors. — There is no inflexible rule as to the time within which executors are bound to get in the assets ; but in every case the particular circumstances must govern, and the Court allows the executors a large discretion (e). Thus (6) Caffrey ». Darby, 6 Ves. 488 ; (a) Stone v. Stone, 5 L. E. Ch. Platel V. Craddock, C. P. Cooper's '• App. 74. Cases, 1837-8, 481 ; Jones v. Higgins, (5) Westmoreland v. Holland, 23 2L. R. Eq. 538; JEx parte Ogle, 8 L. L. T. N. S. 797; 19 i W. R. 302; R. Ch. App. 711; McGachen v. Dew, affirmed W. N. 1871, p. 124. 15 Beav. 84 ; Wiles v. Gresham, 2 (c) Mills v. Osborne, 7 Sim. 30 ; Drew. 258 ; Waring v. Waring, 3 Ir. Maskelyne v. Russell, W. N. 1869, p. Ch. Rep. 835; Tebbs v. Carpenter, 184. * I Mad. 298 ; Grove v. Price, 26 Beav. [(d) Anson v. Potter, 13 Ch. D. 103; and see Rowley v. Adams, 2 H. 141.] L. Cas. 725 ; Macken v. Hogan, 14 Ir. (e) Hughes v. Empson, 22 Beav. Ch. R. 220. 183,j3erM. R. Harrington, 51 N. H. 409 ; Warren v. Copelin, 4 Met. 594 ; Wood v. Partridge, II Mass. 488; Littlefleld v. Smith, 17 Me. 327; Maybin v. Kirby, 4 Rich. Eq. 105. It has been held, however, that a payment by the debtor without notice will terminate his liability; Reed v. Marble, 10 Paige, 409; but not so if payment is made after notice ; Judson v. Corcoran, 17 How. 614 ; Brashear v. West, 7 Pet. 608. The trustee must collect promptly the bills receivable, or become liable for the delay ; NefC's App. 57 Pa. St. 91 ; Cross v. Petree, 10 B. Mon. 413 ; Hester v. Wilkinson, 6 Humph. 215. 399 *289 GBTTrSTG IN THE TRUST ESTATE. [Ch. XIV. S. 1. if a testator die possessed of live stock which cannot be kept but at a great expense, the executors ought to sell forth- with (/). So executors would not be justified in continuing the testator's housekeeping expenses for an unreasonable time, but when they have acquainted themselves with the facts, should discharge the servants and break up the estab- lishment; and an interval, of two months was in one case, but under rather special circumstances, held to be justifia- ble (^r). A testator died possessed of Crystal Palace shares, and it was contended that the executors were to be respon- sible for the value at the end of two months, but the Court held that they had a discretion whether to sell or not until the end of twelve months (A). Buzrton v. Buxton. — Where a great part of the assets was outstanding on Mexican bonds, and thfe executors sold in the course of the second year from the testator's decease, Lord Cottenham held that, if the executors were bound at once to convert the assets without considering how far it was for the interest of the persons beneficially entitled, there would of necessity be always an immediate sale, and often at a great sacrifice of property; that executors were entitled [*289] to exercise * a reasonable discretion according to the circumstances of the particular case. The will had directed the trustees to convert " with all convenient speed," but this, observed his Lordship, was the ordinary duty im- plied in the office of every executor (a). [So where a testa- tor bequeathed his personal estate to his executors upon trust to divide the same equally among four persons, all of whom were of age, and the estate comprised foreign railway bonds which the executors retained beyond the end of the first year from the testator's death, it was held by the Court of Appeals afBrming the decision of V. C. Hall, that as the executors acted with a view to what they thought beneficial to everybody interested, and in the exercise of their discre- tion thought it more prudent to wait, they ought not to suf- (/) lb. (h) Hughes v. Empson, 22 Beav. (sr) Field v. Peckett (No. 2), 29 181. Bear. 576. (a) Buxton v. Buxton, 1 M. & Cr. 80. 400 W" |Ch. XIV S. 1.] GETTING IN THE TEDST ESTATE. *290 ;*' I'fer because they had committed an error of judgment, and L. J. James observed, " It would be very hard upon execu- tors who have been saddled with property of this speculative kind, and have endeavoured to do their duty honestly, if they were to be fixed with a loss arising from their not having taken what, as it was proved by the result, would have been the best course " (5).J But in Grayburn v. Clarkson, where the testator died possessed of shares in the Leeds Banking Company which involved a hability without limit, and the shares remained unsold for many years, L. J. Wood said that there was no fixed rule that conversion must take place by the end of one year, but that such was the primd fade rule, and that executors who did not convert by that time, must show some reason why they did not (c) ; and the Court directed an inquiry whether any loss had accrued by the neglect to sell by the end of one year from the death of the testator, and declared the executor responsible for any such loss (rf). And again in Sculthorpe v. Tipper (e), where a testator died possessed of shares in an unlimited Bankuig Company, and directed his executors to realize his personal estate " immediately after his decease, or so soon thereafter as his trustees might see fit so to do" the trustees acting, as they beheved, for the best interests of the parties, neglected for two years and a quarter to sell the shares, and they were made liable for the consequences, the Vice-Chancellor ob- serving that although a discretion was vested in the trustees, they were bound to exercise it within a reasonable time, that is within a year. This has been considered a somewhat harsh decision. Had the testator simply directed the executors to realize immediately after his decease, * they would still have had the year, and the Vice- [*290] Chancellor therefore gave no effect to the words of the power, "or so soon thereafter as they might see fit." The question should rather have been. Was th6 discretion vested in them bond fide exercised ? In another case where [(i) Marsden v. Kent, 5 Ch. D. (d) Grayburn v. Clarkson, 3 L. E. 698.] Ch. App. 605 ; and see Sculthorpe v. (c) Grayburn v. Clarkson, 3 L. R. Tipper, 13 L. R. Eq. 232. Ch. App. 606. (e) 13 L. R. Eq. 232. 401 *290 GETTING IN THE TEUST ESTATE. [Ch. XIV. S. 1. the trustees had an absolute discretion to sell and convert the testator's shares in a Banking Company " at such time or times as they might think proper" they were held not to be liable for retaining the testator's shares beyond a year from his decease, but were made liable for other new shares in the bank which they had purchased themselves (a). [Absolute discretion. — And where an absolute discretion is given to the trustees to postpone the sale and conversion of the estate, they are not bound by the ordinary rule to convert the property within a yeSir, even although it consists of shares in companies with unHmited liability, and in the absence of mala fides they will not be responsible for losses arising to the estate from the non-conversion (J). 4. Retaining investments for Infants in specie. — Where it is :for the benefit of infants to retain investments which are not authorized by the terms of the trust, the Court has a discre- tion to allow such retainer. The Court, however, will not exercise this discretion unless special circumstances are shown to exist, and the mere fact that the unauthorized securities are such as are authorized by § 21 of the Settled Land Act, 1882, and that a loss of income would be caused by a conversion, will not induce the Court to allow the .securities to be retained (c).] 6. Personal security. — An executor is not to allow the -assets of the testator to remain outstanding upon personal security (cZ), though the debt was a loan by the testator himself on what he considered an eligible investment (e). And it will not justify the executor, if he merely apply for payment through his attorney, but do not follow it up by (a) Edwards v. Edmunds, 34 L. T. a cestui que trust may take active N. S. 522. steps for getting it in, and as to the [(6) Re Norrington, 13 Ch. D. effect of cestui que trust's laches in 654.]' this respect see Paddon v. Bichard- [(c) Fox V. Dolby, W. N. 1883, p. son, 7 De G. M. & G. 563 ; Horton 29.] V. Brocklehurst (No. 2), 29 Bear. (d) Lowson V. Copeland, 2 B. 511. C. C. 156 ; Caney v. Bond, 6 Bear. (e) Powell v. Evans, 5 Ves. 839 ; 486 ; Bailey v. Gould, 4 Y. & C. 221; Bullock v. Wheatley, 1 Coll. 130; and and see Attorney-General v. Higham, see Tebbs v. Carpenter, 1 Mad. 298; 2 Y. & C. C. C. 634; where the cAose Clough v. Bond, 3 M. & Cr. 496. en action is recoverable only in equity, 402 Ch. XIV. S. 1.] GETTING IN THE TEUST ESTATE. *291 instituting legal proceedings (/), Personal security changes from day to day, by Teason of the personal responsibility of the debtor giving the security ; and, as a testator's means of judging of the value of that responsibihty are put an end to by his death, the executor who omits to get in the money within a reasonable time * becomes himself [*291] the security (a). An executor will be equally liable if he knows that a co-executor is a debtor to the testator's estate, and does not take the same active steps for recovery of the amount from the co-executor, as it would have been hig duty to take against a stranger. And it does not vary the case that the testator himself was in the habit of leaving money in the hands of that co-executor, and treating him as a private banker (6). Nor will an executor be excused for not calling in money on personal security by a clai:ise in the will, that the executors are to call in " securities not approved hy them ; " for such a direction is construed as referable to securities upon which a testator's property may allowably be invested, and not as authorizing an investment which the Court will not sanction (c). And if a settlement contain a clause that the trustees are to get in the money " whenever they shall think fit and expedient so to do," they will be liable, if they refrain from enforcing payment out of tenderness to the tenant for life without a due regard to the interests of all the cestuis ,que trust (c?). If, however, it appears, or there is reasonable ground for believing, that had legal steps been taken they would have produced no useful result, the executor or trustee is not liable (e). 6. Case of trust fund outstanding on mortgage. — Money outstanding upon good mortgage security an executor is not called upon to realize, until it is wanted in the course of (/) Lowson V. Copeland, 2 B. C. 428 ; and see Scully v. Delany^ 2 Ir. C. 156. Eq. Rep. 165. (a) Bailey v. Gould, 4 Y. & C. 226, (rf) Luther v. Blanconi, 10 Jr. Ch. per Baron Alderson. Bep. 194. (6) Styles v. Guy, 1 Mac. & G. (e) Clack ». Holland, 19 Beav. 422; 1 Hall & Tw. 523; Egbert v. 262; Hobday v. Peters (No. 3), 28 Butter, 21 Beav. 560 ; Candler v. Til- Beav. 603 ; Alexander v. Alexander, lett, 22 Beav. 257. 12 Ir. Ch. Eep. 1 ; Maitland v. Bate-' (c) Styles V. Guy, 1 Mao. & G. man, 16 Sim. 233, note; Walker v. Symonds, 3 Sw. 71. 403 *292 GETTING IN THE TEXJST ESTATE. [Ch. XIV. S. 1. administration (/). "For what," said Lord Thurlow, "is the executor to do ? Must the money lie dead in his hands, or must he put it out on fresh securities ? On the original securities he had the testator's confidence for his sanction, but on any new securities it will be at his own peril " (^). But the trustee should ascertain that there is no reason to suspect the goodness of the security (A) ; and if it be not adequate, it is the; duty of the trustee to insist on its being paid, though by the terms of the settleme,nt every invest- ment ^r change of investlhent is to be with the consent of the tenant for life who refuses, for nothing will justify con- duct that puts the trust fund in danger (i). 7. Ho'w money to be received by trustees. — When [*292] the property is reduced into possession by actual * pay- ment, [and the circumstances of the case are such as render it impracticable or highly inconvenient for both trus- tees to be present at the payment of the money (a), while both must join in signing the receipt, it is conceived that the money may be paid for the time to one without responsi- bility pn the part of the other. In a recent case, how- ever (6), Kay, J. expressed the opinion that it would be a breach of trust on the part of a trustee to allow his co- trustee to receive the trust money. But the early authorities on the point do not seem to have been considered, and it is conceived that the nile which was previously established (e), that a trustee joining in a receipt merely for the sake of con- (/) Orr u. Newton, 2 Cox, 274; Metropolitan Board of Works, 27 Ch. and see Howe v. Earl of Dartmouth, D. 592, 599.] 7 Ves. 150. [(6) fie Mower and Metropolitan (cf) Orr V. Newton, 2 Cox, 276. Board of Works, 27 Ch. D. 592.] (h) See Ames v. Parkinson, 7 [(c) See ante, p. 264; and the Beav. 384. cases there cited note (6). It must (i) Harrison u. Thexton, 4 Jur. however be borne in mind that the N. S. 550. rule allowing a trustee to sign a re- 1(a) If money be laid down on a eeipt for the sake of conformity with- table in the presence of all the tnis- out actually receiving the trust- tees, that is a payment to all of them, money was founded on necessity, and and if one of them be commissioned that as at the present day,; through by the others to take it to the bank, increased means of communication that is an act subsequent to the re- and locomotion and the facilities of ceipt of the money with which the passing money through banks, trus- person paying the money is not con- tees can in most cases at very slight cerned; per Kay, J. Ee Flower and expense avoid the risk of putting the 404 Ch. XIV. S. 1.] GETTING IN THE TRUST ESTATE. *293 formity is not responsible for money not actually received by him stiU remains in force.] But a trustee will not be justified in allowing the co-trustee to retain the money in his hands for a longer period than the particular circumstances of the case may necessarily require. And, indeed, the safer course, where practicable, is,, that the money should not bo handed to either of the trustees personally, but should, in the iirst instance, be paid into some bank of credit to their joint account (^d). 8. Receipts of trustees. — If money be payable to As^ who is simply a trustee for B., it would clearly be a breach of trust to pay it to the trustee against the wishes of the cestui que trust (e) ; and, on the other hand, if the nature of the trust be such that the person who has the money ready in his hands could not reasonably be expected to see to the application, he may pay safely to the trustee (/). Some recent cases in Ireland have gone further, and taken a dis- tiriction between monies which are pure personalty and monies payable on sales or mortgages. Thus, where the owner of a policy assigned it to a trustee for a minor with- out a power of signing receipts, the Master of the Rolls in Ireland expressed an opinion (for a decision was not *then called for), that if the Insurance Company [*293] were released from the debt by the person to whom they were liable at law, and whom the owner of the policy had constituted the trustee of it, they would not be answer- able in equity for the execution of the trusts, and he did not understand how the rules applicable to purchasers of real property could be extended to debtors so as to implicate them in trusts created by their creditors (a). And in another case (J), where the insurer effected a policy for trust-money, even for a moment, in [(. Fry, 27 Beav. 146. 172 ; Lord Dorchester v. Earl of 409 *296 CUSTODY OF THE TRUST PROPERTY. [Qh. XIV. S. 2. [*296] the eestuis que trust may follow the fund * into the hands of the bankers (a), and it is no objection that the bank allows interest on the deposits (J). [But the trustees must not allow the money to remain on deposit longer than the circumstances of the trust require, and, where a mortgage was paid off, and the money was placed on deposit at a bank as an interim in vestment,, until a permanent investment could be found, and remained on deposit for fourteen months when the bank failed, the trustees were held liable for the loss (c). And] if the trustee pay the money to his own credit and not to the separate account of the trust estate (d'), or if he allow the drafts of another person to be honoured who draws upon the account and mis- applies the money (e), the trustee will be personally liable for the consequences. 6. Trustee must not put the trust-fund out of bis own control. — And a trustee must not lodge the money in such a man- ' ner as to put it out of his own control, though it be not under the control of another. White, a receiver appointed by the Court, in order to induce Adams and Burlton to become his sureties, entered into an arrangement with them, that the rents, as received, should be deposited in a bank in the joint names of the sureties, and that all drafts should be in the handwriting of Anderson, who was Adams' partner, and should be signed by White. An account was opened upon this footing, and the bank failed, and a considerable loss was incurred. Sir J. Leach held that the receiver and his sureties were not to be answerable (/); but. his Honour's decision EflSngham, Id. 279 ; Wilks v. Groom, Matthews v. Brise, 6 Beav. 239 ; 3 Drew. 684; Johnson v. Newton, 11 Massey v. Banner, 1 J. & W. 241. Hare, 160; Swinfen v. Swinfen (No. See observations of L. J. K. Bruce 5), 29 Beav. 211. and L. J. Turner on this case in Pen- (a) Ex parte Kingston, 6 L. E. Ch. nell v. Deffell, 4 De G. M. & G. pp. App. 632. 386, 392. (6) Re Maroon's Estate, W. N.- (e) Ingle v. Partridge, 32 Beav. 1871, p. 148 ; 40 L. J. N. S. Ch. 537. 661 ; 34 Beav. 411 ; Evans v. Bear, 10 [(c) Cann v. Cann, 33 W. R. 40; L. R. Ch. App. .76; and see Hardy w. 51 L. T. N. S. 770.] Metropolitan Land and Finance Com- ((/) Wren v. Kirton, 11 Ves. 377 ; pany, 7 L. R. Ch. App. 427 ; reversing Fletcher v. Walker, 3 Mad. 73; Mac- S. C. 12 L. R. Eq. 386. donnell v. Harding, 7 Sim. 178 ; (/) Salway v. Salway, 4 Russ. 60. 410 Ch. XIV. S. 2.] CUSTODY OP THE TRUST PROPERTY. *297. was reversed on appeal by the Lord Chancellor (jg) ; and this reversal was afterwards affirmed on the final appeal by the House of Lords (Ji). 7. Whether executors may place money in bank payable to either of the co-executors. — In a case before Sir A. Hart, in Ireland, an executor was held to be justified, though he had placed the assets in a bank so as to be under the control of the co-executor. The money was entered in the books to the joint account of the co-executors, but the bank was in the habit of answering the cheques of either * co-executor singly. "It is the custom of bankers," [*297] said Lord Chancellor Hart, " that what is deposited by one to the joint account may be withdrawn by the cheque of the other; and for convenience of business, it is necessary this risk should be incurred, for it would be very hard to transact business if every cheque should be signed by all the executors" (a). However, his Lordship admitted that "if there were any fraud or collusion, wilful default or gross neglect, or if the executor had any reason to put a stop to the mismanagement by the co-executor, the case would be altered " (V). But even with this qualification the doctrine is so contrary to the principle of other cases that no trustee or executor could be advised to rely upon it in practice (e). 8. Trustee responsible for bank if he ought not to have placed the money there. — The trustee will also be answerable for the failure of the bank, if he deposited the money there for safe custody, when it was his clear duty to have invested it in the funds for improvement (i), or if he left it there when he ought to have paid it to new trustees duly ap- pointed (e), or into Court (/),; or if when the purposes of (7) 2 R. & M. 215. id) Moyle v. Moyle, 2 R. & M. (A) Id. 220. See the argument of 710 ; Sir W. P. Wood in Johnson v. Lord Brougham stated from MS. in Newton, 11 Hare, 169, called it a very 3d Edition, p. 335. strong ease, and hard upon the ex- (a) Kilbee v. Sneyd, 2 Moll. 188-, ecutors. see 200, 213. (e) Lunham v. Blundell, 4 Jur. N. (6) Id. 203, 213. S. 3. (c) See Clough v. Dixon, 8 Sim. (/) "Wilkinson v. Berwick, 4 Jur. 594 ; 3 M. & Cr. 490 ; Gibbins v. Tay- N. S. 1010. lor, 22 Beav. 344 ; Ingle v. Partridge, 32 Beav. 661 ; 34 Beav. 411. 411 *298 CONVERSION. [Ch. XIV. S. 3. the trust do not require a balance to be kept in hand he lend a sum to the bank at interest upon no other security than their notes, for this in effect cannot be distinguished from an ordinary loan on personal security, which the Court never sanctions (^). And if the trustees ought not under the cir- cumstances to have left so large a balance in the hands_ of the bankers, they will be liable for the excess beyond the proper balance (K). But trustees will not be liable for hav- ing left moneys in the hands of a respectable bank during the first year from the testator's death, when there are no special directions in the will for investment, and the estate has not been wound up (i). But they will be liable, if, dur- ing the first year they draw out of one bank money Avhich (ought, by the will, to be invested in Government stocks, and deposit it in another bank at interest, for this is an irregular investment and not a deposit ; and a direction in the will that the trustees should not be liable for any banker was held not to be material (y). 9. Mixing the trust property with private property. — The trustee, wherever the trust property may be placed, [*298] * must always be careful not to amalgamate it with his own, for, if he do, the cestui que trust will be held entitled to every portion of the blended property, which the trustee cannot prove to be his own (a). SECTION III. OP CONVERSION. 1. General principle. — Express trusts for conversion, must, of course, be strictly pursued according to the directions (6), (j) Darke v. Martyn, 1 Bear. 525. Chedworth v. Edwards, 8 Ves. 46 ; Qi)- Astbury v. Beasley, 17 W. E. White o. Lincoln, 8 Ves. 363; Fellows 638. V. Mitchell, 1 P. W. 83 ; Gray v. Haig, (i) Johnson u. Newton, 11 Hare, 20 Beav. 219; Duke of Leeds v. Am- 160 ; Swinfen v. Swinfen (No. 5), 29 herst, 20 Beav. 239 ; Mason v. Morley Beav. 211. (No. 1), 34 Bear. 471, and S. 0. (Xo. (i) Rehden v. "Wesley, 29 Beav. 2), lb. 475 ; Cook v. Addison, 7 L. R. 213. Eq. 466. (a) Lupton v. White, 15 Ves. 432; (6) See Craven v. Craddock, 20 L. and Panton v. Panton, cited lb. 440 ; T. N. S. 638. 412 Ch. XIV. S. 3.] IMPLIED CONVERSIOK. *298 and where the trustees haye a discretionary jtjower to convert or not, or at such time as they may think fit, the Court can- not interfere with the exercise of the power (c). But besides express trusts of this kind, there is frequently imposed upon trustees a duty to conyert, not directed in terms, but arising out of the nature of the property and the relation in which cestuis que trust stand to each other.^ 2. Implied conversion in cases of bequests of -wasting prop- erty to persons in succession. — As a general rule, if a testator give his personal estate (. Marion, 39 Ohio St. 153 ; the invest ment must secure at least a legal rate of interest : Williams v. Williams. 35 423 *306 INVESTMENT. [Ch. XIV. S. 4. 2. Trustee may not invest on personal security. — It was tlie opinion of Lord Northiagton tliat a trustee might Tse justified N. J. Eq. 100 ; where a trustee is held liable for investments in personal se- CTirities, his liability ceases when the money is paid, whether the estate receives it or not; ^e Foster's Will, 15 Hun, 387; but though a trustee may lend on personal security, yet he cannot take the loan himself : De . Jarnette V. De Jarnette, 41 Ala. 708 ; and in many cases he is not allowed to use trust funds in manufacturing, and trade, any more than in speculation ; King v. Talbot, 40 N. Y.,96; Kyle v. Barnett, 17 Ala^ 306; In re Thorp DaVeis, 290; Brown v. Kicketts, 4 Johns. Ch. 303 ; and an oral request by testator that trustee should continue the business does not show sufficient authority; Raynes ». Baynes, 54 N. H. 201 ; a trustee exceeding his authority must bear all the losses and account for all the profits ; Martin v. Baborn, 42 Ala. 648 ; or if he see his co-trustee do it he is liable; Bates i^. Underbill, 3 Eedf. '365; a trustee, unless by special authority, should not continue a testator's business, but may do so at the request of all parties in interest without becoming liable for any losses accruing ; Poole v. Munday, 103 Mass. 174. Courts may give directions as to investment; Wheeler v. Perry, 18 N. H. 307; but powers must be strictly complied with ; Foscue v. Lyon, 55 Ala. 440 ; Brown v- French, 125 Mass. 410; Wood v. Wood, 5 Paige, 599; Burrill v. Shell, 2 Barb. 457; Ihmsen's App. 43 Pa. St. 471; if it is to be an investment on good and sufficient security. It must accord with the rules and orders of the court ; Nance v. Nance, 1 S. C. 209 ; Womack v. Austin,- 1 S. C. 421 ; to invest at his " discretion " did not include personal securities ; Wormley v. Wormley, 8 Wheat. 421 ; power to loan in bank stocks does not include government bonds; Banister u. M'Kenzie, 6 Munf. 447; good and sufficient securities include town loans ; M'Call v. Peachy, 3 Munf. 288 ; but see Trustees v. Clay, 2 B. Mon. 386; trustees must obey if requested to invest in a particular manner; Mclntire o. Zanesville, 17 Ohio St. 352; and nothing will protect them from disregarding directions if there is a loss ; Spering's App. 71 Pa, St. 11. It has been said that the needs of the government led to the rule requiring investment in trust funds ; Brown v. Wright, 39 Ga. 96; but the English rule has been modified in most of our states, with the exception of Pennsylvania and New York; Worrall's App. 41 Pa. St. 164; Hemphill's App. 18 Pa. St. 303; Morris v. Wallace, 3 Barr, 319; Ackerman o. Eniott, 4 Barb. 626. It has been held that trustees might invest in confederate bonds prior to the downfall of the confederacy ; Watson v. Stone,, 40 Ala. 451 ; Dockey v. McDowell, 41 Ala. 476 ; but not afterwards ; Snelling v. McCreary, 14 Bich. Eq. 291 ; if payment was received in money in common use the trustee was not responsible for the loss ; Campbell ». Miller, 38 Ga. 304 ; Brown v. Wright, 39 Ga. 96; Davis a. Harman, 21 Gratt. 194; Dixon v. McCue, 21 Gratt. 373; Morgans. Otey, 21 Gratt. 619; Walker v. Page, 21 Gratt. 636; Myers v. Zetelle, 21 Gratt. 733 ; Campbell v. Campbell, 22 Gratt. 649 ; Colt- rane v. Worrell, 30 Gratt. 436 ; a guardian was held liable for investing in con- federate bonds ; State v. Simpson, 65 N. C. 497 ; Alexander v. Summey, 66 N. C. 578; so of a trustee; Creighton v. Pringle, 3 S. C. 78; Turner v. Turner, 36 Tex. 41 ; but see Singleton v. Jjowndes, 9 S. C. 465 ; trustee may receive payment in money received by prudent men ; Baird v. Hall, 67 N. C. 230 ; Barker w. McAuley, 4 Heisk. 424 ; if has kept the identical money may escape liability when he otherwise would not; Saunders,?;. Gregory, 3 Heisk. 424 Ch. XIV. S. 4.] INVESTMENT. *306 in lending on personal credit. "Tlie lending money on a note," lie said, "is not a breach of trust, without other cir- 507; only the lawful money of the United States is upheld by the United States Supreme Court; Horn v. Lockhart, 17 Wail. 570; McBurney v. Carson, 99 U. S. 6t)7. It is not culpable to leave funds invested as they were by the testator; Miller v. Proctor, '20 Ohio St. 444; Bowker v. Pierce, 130 Mass. 262; Smith v. Smith, 4 Johns. Ch. 283; Murray v. Feinour, 2 Md. Ch. 418; but see Fray's App. 34 Pa. St. 100; Harvard College v. Amory, 9 Pick. 446; if trustees invest funds in real estate, taking the title in tlieir own name, the cestui que trust may elect between the real estate and the money with interest; Eckford v. De Kay, 6 Paige, 565 ; Morton v. Adams, 1 Strob. Eq. 72 ; Roger's App. 11 Pa. St. 36 ; and the mortgagee cannot enforce his mortgage ; Math- ews V. Hey ward, 2 S. C. 239. A direction to invest in productive real estate was fulfilled by the purchase of a dwelling house ; Parsons v. Winslow, 16 Mass. 368 ; the trust property should not be mortgaged ; Ryder i-. Sisson, 7 R. I. 341. The trustee must invest the trust funds within a reasonable time ; Shipp V. Hettrick,63 N. C. 329; Owen v. Peebles, 42 Ala. 338; Handly v. Snodg^ass, 9 Leigh, 484; Schiefielin v. Stewart, 1 Johns. Ch. 620; a year has been held a reasonable time ; Cogswell v. Cogswell, 2 Ed. Chan.' 231 ; so have three months ; Barney v. Saunders, 16 How. 543 ;' and six months ; Manning v. Man- ning, 1 Johns. Ch. 527 ; Prey v. Erey, 2 C. E. Green, 72 ; Armstrong v. "Walker, 12 Gratt. 608 ; it depends somewhat upon the efiorts made by the trustee and whether it is an investment or a reinvestment ; Witmer's App. 87 Pa. St. 120 ; if a trustee does not separate a legacy from the estate he may be liable for interest; Fowler v. Colt, 25 N. J. Eq. 202. A trustee should not mix trust funds with his own, but he may do so if the amount is small, in order to invest to advantage ; Graver's App. 50 Pa. St. 189 ; if money is deposited in a bank in trustee's name rather than as a trust, he will be responsible for any loss in consequence ; Lukens' App. 7 Watts & S. 48; Royer's App. 11 Pa. St. 36, Perry on Trusts, § 463, Jacot v. Emmett, 11 Paige, 142 ; De Peyster v. Clarkson, 2 Wend. 77 ; Kerr v. Laird, 27 Miss. 544; Mumford v. Murray, 6 Johns. Ch. 1 ; the cestui que trust has a claim on the trust funds on deposit in bank, and in case of mixed deposits, checks will be applied to deposits according to their priority, whether trust or individual funds, and any trust funds remaining are subject to the trust ; School v. Kirwin, 25 lU. 73; Morrison v. Kinstra, 55 Miss. 71; Kennedy v. Strong, 10 Johns. 289; trustees cannot call trust money employed in their business a loan to themselves ; Townend v. Townend, 1 GiJff. 201 ; or their firm, Kyle v. Bamett, 17 Ala. 306; the whole income of the fund belongs to the trust; Hook V. Dyer, 47 Mo. 214 ; if there is a mixture of funds in purchasing stocks the cesttii que trust may select the best; Norris's App. 71 Pa. St. 106; trustees may take notes ; Smith v. Smith, 4 Johns. Ch. 283 ; trustees should not change testator's securities unless for good reason; Ward rVESTMENT. [Ch. XIV. S. 4. where infants were interested, unless an increase of income ■was absolutely required for their maintenance ; but cgnsider- ing the improbabi^ty of there being children in that case, he made the order (e). In another case the tenant for life of a residue applied for the sale of Bank Annuities and the investment of the « pro- ceeds upon Bank stock, and the Court, after taking time to consider, declined to make any order, on the ground that the exercise of the power by the Court was discretionary, and that there were no special circumstances to caU. for such a change of investment (cT). But where a tenant for life had a wife and fiv^ children? and his income, exclusive of the dividends of the fund ia Court (6357Z. 15s. 2d. Consols), was only 701. per annum, the Court thought these circumstances sufficient to justify an investment in Bank stock, and made the order accord- ingly (e). So where the tenant for life was suffering from ill [*311] health and * was straitened in his circumstances, and asked for an investment of one moiety ia India stock and the other moiety in Bank stock, "the Court as- sented to the prayer, with the qualification -that as invest- ment in India stock involved a possible loss of capital, the whole fund should be invested in Bank stock (a). So where a fund was charged with an annuity of 5001. per annum, and was insufficient for its purpose, the Court, though it would not have listened to an application with the mere view of augmenting the income of the tenant for life, di- rected an investment in East India stock, in order to aid the primary intention of providing for the annuity (6). [9. Powers in Acts of Fariiament. — There has been a great conflict of opinion as to whether] the powers conferred by (c) Montefiore v. Guedella, W. N. receive more than two dividends in 1868, p. 87. the year. , (d) Maclaren v. Stainton, M. R. (o) Re Longford's Trust, 2 J. & H. July 4, 1861. 458; and see Vldler v. Parrott, 4 N. (e) Peillon v. Brooking, M. E. R. 392. July 6, 1861 ; and see Re Boyces (6) Mortimer v. Picton, 10 Jur. N. Minors, 1 Jr. R. Eq. 45; Re Ingram's S. 83; and see Hurd v. Hard, 11 W. Trusts, 11 W. R. 980, where the ten- R. 50; Fluid v. Fluid, 7 L. T. N. S. ant for life by the change would 590. 432 Ch. XIV. S. 4.] INVESTMENT. *312 the Act apply to moneys paid into Court under Acts of Par- liament directing the moneys to be invested on securities other than those mentioned in the Act under consideration ; [but the question has been finally settled in favoui- of the application of the powers (c).] 10. Service. — Applications under Rule 17 of Order 22 need not be served on the trustees of the fund, but such service is necessary under Rule 18 of the same Order (d). 11. Consent. — Powers of investment are generally to be exercised with the consent of the tenant for life, and it has been doubted whether the several Acts enlarging the power of trustees apply where such consent is required. It is con- ceived, however, that the effect of the Acts is to authorise trustees to invest on the extended securities, provided the investments be accompanied with all the conditions required for investment upon the securities specified in the settlement. Any other construction would be a trap, into which many trustees must already have fallen. [12. Settled Land Act. — By the combined operation of sects. 21 and 32 of the Settled Land Act, 1882, all moneys in Court which are liable to be laid * out in [*312] the purchase, of land to be made subject to a settle- ment may be "invested on Government securities, or on other securities on which the trustees of the settlement are by the settlement or by law authorised to invest trust money of the settlement, or on the security of the. bonds, mortgages, or debentures, or in the purchase of the debenture stock of any railway company in Great Britain or Ireland incor- porated by special Act of Parliament, and having for ten (c) {^Ex parte St. John Baptist Col- ' Trusts, 23 W. R. 744; Be Southwold lege, Oxford, 22 Ch. D. 93 ; see] Re Railway Company's ' Bill, 1 Ch. D. Birmingham Blueeoat School, 1 L. R. 697; Jackson v. Tyas, 52 L. J. N. S. Kq. 632; i?e WUkinson's Settled Es- 830; Secus,] Re Shaw's Settled Es- tate, 9 L. R. Eq. 343 ; Re Cook's Set- tates, 14 L. R. Eq. 9; Re Boyd's tied Estate, 12 L. R. Eq. 12; Re Settled Estate, 21 W. R. 667; Be Thorold's Settled Estate, 14 L. R. Eq. Vicar of St. Mary, Wigton, 18 Ch. 31 ; Reading v. Hamilton, W. N. 1872, B. 646 ; Ex parte Rector of Kirks- p. 91 ; Re Taddy's Settled Estates, 16 meaton, 20 Ch. D. 203.1 L. R. Eq. 532 ; [Re Fryer's Settle- (d) Be Adams's "Will, "W. N. 1868, ment, 20 L. R. Eq. 468; Re Foy's p. 58; 17 L. T. N. S. 641. 438 *312 INVESTMKNT. [Ch. XIV. S. 4. years next before the date of investment paid a dividend on its ordinary stock or shares." Under this section, moneys in Court which have arisen from the purchase tinder tlie Lands Clauses Consolidation Act, 18J:5, of land belonging absolutely to a charity, have been invested in railway debenture stock (a). • 13. Where under a wOl money was bequeathed to trustees in trust to lay it out in the purchase of real estate, to be settled in strict settlement, with a direction that until the purchase " the legacy should be invested in Government or real securities, but not in any other mode of investment," it was held that the trustees, on the direction of the tenant for life, might invest the legacy in debenture stock (J) .J 14. Investments on mortgage. — With respect to invest- ments upon mortgage Lord Harcourt said, " The case of an executor's laying out money without the indemnity of a decree, if it were on a real security and one that there was no . ground at the time to suspect, had not been settled : but it was his opinion that the executor, under such circumstances, was not liable to account for the loss "(c). And Lord Hard- wicke ((i), and Lord Alvanley (e), appear likewise to have held that a trustee or executor would be justified in laying out the trust-fund upon well-secured real estates. But Lord Thurlow, upon application made to him to lay out on mort- gage money belonging to a lunatic, observed, that " in latter times the Court had considered it as improper to invest any part of a lunatic's estate upon private security " (/). And Sir John Leach refused a similar application with reference to the money of infants, at the same time expressing his surprise that any precedent could have been produced to the contrary (^). Where there was no power of investing [(o) Be Byron's Charity, 23 Ch. (c) Pocock v. Reddhigton, 6 Ve6. D. 171.] 800. [(6) fie Mackenzie's TruBtB, 23 Ch. (J') Ex parte Cathorpe, 1 Cox, D. 750.] 182; Ex parte Ellice, Jac. 284. (o) Brown v. Litton, 1 P. W. 141 ; (j) Norbury v. Norbury, 4 Mad. and see Lyse ». Kingdon, 1 Coll. 191 ; and see Widdowson v. Duck, 188. 2 Mer. 494; Ex parte Ellice, Jac. (d) Knight v. Earl of Plymouth, 234 ; Ex parte Fust, 1 C. P. Cooper 1 Dick. 126. T. Cott. 157, note (e) ; Ex parU 434 ' Ch. XIV. S. 4.] INVESTMENT. • *313 on m'ortgage, and the trustees intending to invest on government * securities, afterwards, at the instance [*313] of the tenant for life, and to procure a higher rate of interest, invested on mortgages which proved deficient, they were held to be liable for the difference to the cestui que trust in remainder. The ground of the decision, however, was, that the trustees had consulted the benefit of the tenant for life at the expense of the remainderman, and the Court gave no opinion upon the dry question, whether trustees without a power could safely invest on mortgage, but did not encourage the idea that they could (a). Trustees, until the recent A,cts, were certainly not justified in lending upon mortgage, when by the terms of their instrument of trust they were expressly directed to invest in \hQ funds (6). Late Acts. — Scotland. — Now by 22 & 28 Vict. c. 35, s. 32 (c), " wlien a trustee, executor, or administrator, shall not by some instrument creating his trust be expressly forbidden to invest any trust fund on real securities in any part of the United Kingdom" he is at liberty to make such investment, provided it be in other respects reasonable and proper. Under this enactment, therefore, trustees may now lend on real security in England or Wales, or Ireland, but not in the Isle , of Man, and as the Act by the last section is not to extend , to Scotland, and as the Scotch real pro"perty law is quite different from the English, trustees could not be advised to lend money on real security in Scotland (c?). Mortmain. — Also by 23 & 24 Vict. c. 38, s. 11, and the general order before mentioned, trustees having power to invest on Government or Parliamentary securities may now invest on real securities in England or Wales, and such investments may be made by corporations and trustees holding moneys in trust for any public or charitable pur- pose notwithstanding the statutes of mortmain (e). Franklyn, 1 De G. & Sm. 531 ; Barry Waring «. Waring, 3 Ir. Ch. Eep. V. Marriott, 2 De G. & Sm. 491 ; Ex 331. parte Johnson, 1 .Moll. 128 ; Ex parte (c) Made retrospective by 23 & 24 Eidgway, 1 Hog. 309. Vict. c. 38, s. 12. (a) Raby v. Ridehalgh, 7 De G. (d) See Re MUes's Will, 5 Jur. N. M. & G. 104. S. 1236. (6) Pride V. Fooks, 2 Beav. 480; (e) 33 & 34 Vict. e. 34. 435 *314 INVESTMENT, [Ch. XIV. S. 4. Investments by the Court. — Previously to these Acts the Court had, even where an express power existed to lend on real security, refused to exercise it by sanctioning a loan on mortgage, on the ground that in ninety-nine eases out of a hundred the expense of the mortgage more thstn counter- balanced the increase of income (y). But the rules, has since been relaxed (^). r*3141 * 15. Where no express power, trustees may invest in Three per Cent. Consols. — In the absence of express powers created by the settlement and irrespective of powers conferred by statute, trustees, executors, or administrators have always been held justiiied in investing in one of the Government or Bank Annuities; for here, as the directors have no concern with the principal, but merely superintend the payment of the dividends and interest till such time as the Government may pay off the capital, it is not in their power, by mismanagement or speculation, to hazard the property of the shareholder (a). It should be observed that all public annuities are not necessarily Grovernment annui- ties (5) ; and of the Government or Bank Annuities, the one which the Court thought proper to adopt was the Three per Cent. Consolidated Bank Annuities, the fund which at , the time when the rule of the Court was estab- lished was considered from its low rate of interest the least likely to be determined by redemption (c). If a trustee, who has money in hand which he ought to render produc- tive, invest it on this' security, he has done his duty, and will not be answerable for any subsequent depreciation (c?). (/) Barry v. Marriott, 2 De G. & though specially exempted from f ur- Sm. 491 ; and see Ex parte Franklyn, ther reduction until 1874, which the 1 De G. & Sm. 531. Three per Cent. Consols were not, (g) See Ungless v. TufE, 9 W. R. the latter are protected by a legisla- 729. tive provision requiring a year's no- (n) TrafEord v. Boehm, 3 Atk. 444, tice to be given before redemption. per Lord Hardwicke. (rf) Ex parte Champion, cited (6) Sampayo v. Gould, 12 Sim. Franklin v. Frith, 3 B. C. C. 434; 435. Powell b. Evans, 5 Ves. 841, and (c) See Howe u. Earl of Dart- Howe v. Earl of Dartmouth, 7 Ves. mouth, 7 Ves. 151. In reference to 150 ; Knight i>. Earl of Plymouth, 1 the New Three per Cent. Annuities Dick. 126, per Lord Hardwicke ; Peat (formerly Three and a Quarter per v. Crane, cited Hancom v. Allen,. 2 Cent.), it is to be observed that, Dick. 499, note; Clongh v. Bond, 3 436 Ch. XIV. S. 4.] rsrVESTMENT. *315 16., Investment on other stock ordered under particular cir- cumstances. — The Court [would, however, even before the recent Acts already referred to], under special circumstances [have invested] in other Government Stock than Consols. Thus, a testator gave his residuary estate to executors upon trust to pay the aniiual produce to A. for life in equal por- tions at Lady-day and Michaelmas-day^ and after his decease in trust for other purposes. A motion was made that the executors might invest a sum in their hands in the Three per Cent. Consolidated Bank Annuities, but it was objected that the dividends of this stock were payable in January and July ; whereas, if the money were laid out in the Three per Cent. Reduced Annuities, the dividends would be payable at the time directed by the testator ; and Sir John Leach made the order accordingly (e). * 17. Whether trustees may invest on any other [*315] Government security. — In the report of Hancom V. Allen (a) it is said, " The trust money had been laid out by the trustees in funds which sunk in their value, without any mala fides ; but the same not being laid out in the fund in which the Court directs trust money to be laid out, the trus- tees were ordered to account for the principal and pay it into the Bank, and then that it should be laid out in Bank Three per Cent. Annuities." It might be inferred from this state- ment, that, if a trustee before the late Acts had invested in any other Governnient Security than the Three per Cent. Consols, the Court would have held him accountable for any loss by a fall of the stock ; but such a doctrine would have been extremely severe against trustees (6), and the case, as extracted from the Registrar's book, is no authority for any such proposition. Thomas Phillips, a trustee of 1500Z., instead of investing tbe money in a purchase of land and in the mean time on some sufficient security, as required by the M. & Cr. 496, per Lord Cottenham ; (a) 2 Dick. 498. Holland v. Hughes, 16 Ves. 114, per (5) See Angell v. Dawson, 3 T. & Sir "W. Grant; Moyle t. Moyle, 2 R. C. 316; Ex parte Projected Railway, & M. 716, per Lord Brougham ; and 11 Jur. 160 ; Matthews v. Brise, 6 see Jackson v. Jackson, 1 Atk. 518. Beav. 239 ; Baud v. Fardell, 7 De G. (e) Caldecott v. Caldecott, 4 Mad. M. & G. 628. 189. 43T *316 INVESTMENT. [Ch. XIV. S. 4 trust, had advanced it to his brother, John Phillips, a banker, •without taking any other precaution than accepting a simple acknowledgment of the loan. John Phillips continued to pay interest upon the money for some time,*but eventually became insolvent, and>the fund was lost. The Court, under these circumstances, called upon the trustee to make good the amount. The decision was reversed in the House of Lords, probably on the ground of the plaintiff's acquies- cence (c). Late Acts. — By 23 & 24 Vict. c. 38, s. 11, and the general order before referred to, trustees having power to invest in Government or Parliamentary Securities are now expressly authorised to invest not only in Consols, but also in Three per Cent. Reduced Bank Annuities and JVew Three per Cent. iBank Annuities. 18. 23 & 24 Vict. o. 145. — By a later Act of the same ses- sion (d), trustees under an instrument dated since 28th August, 1860, and having money in their hands which it was their duty to invest at interest, might invest the same in any of the Parliamentary stocks or public funds, or in Govern- ment securities, with power of variation, but no investment except in Consols was to be made without [such consent as therein mentioned. But this section was rarely acted upon, a*id has since been repealed (e).] 19. 30 & 31 Vict. o. 132, a. 2. — By another Act (/) [*316] it is enacted, that "it shall be lawful for * any trustee, executor, or administrator to invest any trust fund in his possession or under his control in ani/ securities, the inter- est of which is or shall be guaranteed hy Parliament." 20. Metropolitan Board of Works stock. — By another Act (a) a trustee, executor, or other person empowered to invest money in public stocks or funds, or other Government securities, may, unless forbidden by the will or other instru- ment under which he acts, whether prior in date to the Act or not, invest the same in consolidated stock created by the Metropolitan Board of Works. (c; Allen V. Hanoorii, 7 B. P. C. [(e) 44 & 45 Vict. u. 41, ». 71.J 375. (/) 30 & 31 Vict. c. 132, s. 2. (d) 23 & 24 Vict. c. 145, s. 25. (a) 34 & 36 Vict. c. 47, i. 13. 438 Ch. XIV. S. 4.] INVESTMENT. *317 [21. Indian Railway annuities. — By the East Indian Rail- way Company Purchaise Act, 1879 (6), certain annuities were authorized to be created for the purpose of carrying out the terms which ^lad been agreed upon between the Secretary of State for India and the Railway Company, and by sect. 37 any trustee having power under the instrument constituting his trust to invest the trust funds in the shares or stock of any Indian railway the interest on which is guar- anteed by the Secretary of the State, may invest such trust funds in the purchase of annuities of Class B. thereby author- ieed to be created." Under this section the Court has, upon the application of a tenant for life,' sanctioned the con- version into annuities of Class B. of Bank Annuities in Court (c). 22. Church trustees. — Church trustees incorporated un- der the Compulsory Church Rate Abolition Act, 1868, are by that Act empowered to invest any funds in their hands, in Government or real securities (i^).J 23. Trustee, if expressly empo-wered, may lend on personal security. — A trustee may lend even on personal security, where he is expressly empowered to do so by the instrument creating the trust (e). But no such authority is communi- cated by a direction to place out the money at interest at the trustee's discretion (/), or on such good security as the trustee can proqure, and may think safe (^). %jiA. if joint trustees be empowered to lend on personal security, they may not lend to one of themselves, for the settlor must be taken to rely upon the united vigilance of all the trustees with respect to the solvency of the borrower Qi) : and trustees having a power, with the cdnsent of the tenant for life, to lend on * personal security, cannot lend on personal secu- [*317] [(6) 42 & 43 Vict. c. ccvi.] (g') Wilkes v. Steward, G. Coop. 6 ; [(c) Re Mansel, 30 W. R. 133.] Styles v. Guy, 1 Mae. & G. 422; At- [(rf) 31 & 32 Vict. c. 109, s. 9.] tomey-General v. Higham, 2 Y. & C. (e) See Porbes v. Ross, 2 B. C. C. C. C. 634 ; and see Mills v. Osborne, 430; S. C. 2 Cox, 113; Paddon o. 7 Sim. 30; Westover v. Chapman, 1 Richardson, 7 De G. M. & G. 663. Coll. 177. (/) See Pocoek v. Reddington, 5 (A) v. Walker, 5 Russ. 7 ; Ves. 794; Potts w.Britton, 11 L.R.Eq. and see Stickney v. Sewell, 1 M. & 433 ; Bethell v. Abraham, 17 L. R. Cr. 14,; Westover v. Chapman, 1 Coll. Eq. 24. 177. 439 *317 INVESTMENT. [Ch. XIV. S. 4. rity to tlie tenant for life himself (a). And when the Cqurt has assumed the administration of the estate hy the insti- tution of a suit, it will npt direct an investment on personal security, though there be a power to lay out on either per- sonal or Government security, but will order all future investments to be made on Government security (5). A power to lend on personal security may mean on 'the security of personal property, or the security of the personal undertaking of the borrower, and where the trustees had the last mentioned power and lent upon a note of hand, the Court allowed the loan, but directed a bond to be taken (e). 24. Where empo-wered to lend on personal security, trustee may not accommodate a person. — Where the trustees of a sum of money for A. for life, remainder for her children, were authorised by the settlement to lend the trust fund upon real or personal security as should be thought good and sufficient, and the trustees lent it to a person in trade whom A. had married, and the money was lost, they were made responsible for the amount. Sir William Grant said, " The authority did not extend to an acoommodation : it vfos, evi- dent the , trustees had, upon the marriage, been induced to acfiommodate the husband with the sum, which they had no power to do " (c?). And in another case, where a trustee was even required at the request of the wife to advance money to the husband upon his bond, and the husband took the benefit of the Insolvent Act, and the wife requested the trustee to advance 801. to the husband upon his bond, and the trustee refusing, the wife filed her bill to have the trustee removed, the Court said, " that so total a change had taken place in the circumstances and position of the husband, that the clause in question became no longer applicable to him (a) Keays v. Lane, 3 I. K. Eq. 1. (d) Langston v. OlUvant, 6. Coop. But a tenant for life whose consent 33. In this case, as the person to is necessary to the exercise of a whom the money was lent was «, power of sale by trustees, may pur- trader, it has been inferred that under chase from the trustees. See post, c. a power to lend on personal security XVIII. s. 3. the trustee cannot lend to a trader, but (i) Holmes v. Moore, 2 Moll. 328. the Court has never yet gone to that (c) Pickard v. Anderson, 13 L. B. extent. Eq. 608. 440 Ch. XIV. S. 4.] INVESTMENT. *318 and ceased to have lany effect, and tlie trustee had done his duty when he refused to lend the money " (e). 25. TencLnt for life not to be favoured. — No applications from cestuis que trust to their trustees are so frequent as for a more productive investment for the benefit of the tenant for life. In these cases the trustees must remember that any special power which the settlement may give them was * not created for the purpose of favouring one [*318] party more than another, but for the benefit of all, and if they lend themselves improperly to the views of the tenant for Ufe, at the expense of the remaindermen, they will be held personally responsible (a). Trustees bound to protect the remaindermen. — And where trustees have the ordinary power of varying securities with the consent of the tenant for life, the trustees must consider the intention to be that as the icontrol is given to the tenant for life for his protection, so the trustees have a particular discretion reposed in them for the protection of the remain- dermen (J). And on the other hand where every change of investment is to be with the consent of the tenant for life, and he withholds his consent though thes. fund is in danger, the trustee can proceed in equity and compel a change of investment, against the wishes of the tenant for life (a). 26. Consent. — All the conditions annexed to the power must be strictly observed, as if the authority be to lend to the husband with the consent of the wife, the trustees cannot make the advance on their own discretion, and take the con- sent of the wife at a subsequent period (d). And if the con- sent of two trustees be required, the consent of one of them does not operate as the consent of both (e). And where the consent of a married woman was necessary to authorise an investment with the sanction of the Court, a petition by the (e) Boss V. Godsall, 1 Y. & C. C. 6 Ir. Ch. Rep. 145; Vickery u. Evans, C. 617 ; and see Luther v. Bianconi, 3 N. E. 286. 10 Ir. Ch. Eep. 194; Costello v. (b) See Harrison v. Thexton, 4 O'Eorke, 3 I. E. Eq. 172. Compare Jur. N. S. 550. cases at p. 328, note (c), infra. (c) Costello v. O'Eorke, 3 I. E. (a) Raby „. EideHalgh, 7 De G. Eq. 172. M. & G. 104 ; and see Stuart v. Stuart, (rf) Bateman v. Davis, 3 Mad. 98. 3 Beav. 430 ; Fitzgerald v. Fitzgerald, (e) Greenham v. Gibbeson, 10 Bing. 863. 441 *319 INVESTMENT. [Ch. XIV. S. 4. 'husband and wife praying for such investment was no con- sent by the wife, for the petition was regarded as that of the husband only (/), nor will a married woman be deemed to have consented to an investment by joining in a deed of appointment of new trustees, in which such an investment is recited or noticed, for the deed is executed alio intuitu (g'). Where the consent of two trustees is not required to be by deed, one may consent by deed and the other by parol (A). Where the nature and object of the power and the circum- stances of the case point to a previous or contemporaneous consent, then Such previous or contemporaneous consent is necessary although not expressly required by the [*319] terms *of the power (a). If for instance, a consent be required for the substitution of one estate for another, the consent must precede or at all events accom- pany the execution of the power, for the question must be determined by the relative values of the two estates, at the time of substitution (J). But if an investment has been made without the required consent, a cestui que trust cannot complain of it, who, being sui juris at the time, has acquiesced in and adopted the investment (c). 27. Investment in trade. — A power to " invest at the dis- cretion of the trustees " will not authorise an investment on the securities of the United States, or of the railway com- panies in that country (d), and a power " to place out at interest, or other way of improvement," will not authorise an investment of the money in any trading concern (e) ; or in fact any investment but a Government or real or other (/) Norris v. Wright, 14 Beav. (A) Offeu i». Harman, 1 De 6. F. 291, see 303. [But now, by 45 & 46 & J. 253. Vict. u. 75, and Rules of the Supreme (o) Greenham «. Gibbeson, 10 Court, Order 16, Eule 16, a married Bing. 374, per Tindal, C. J. ' woman petitions without a next (6) Greenham v. Gibbeson, 10 friend, and a 'petition by husband Bing. 363. and wife is not necessarily regarded (c) Stevens ». Bobertson, 37 L. J. as the petition of the husband only; N. S. Ch. 499. and such a, petition would, it is con- (d) Bethell v. Abraham, 17 L. K. ceived, if presented under the wife's Eq. 24. instructions, operate as a consent by (c) Cock v. Groodfellow, 10 Mod. her.] 489. {g) Wiles v. Gresham, 2 Drew. 258, see 267. 442 Ch. XIV. S. 4.] INVESTMENT. *320 unobjectionable security (/) ; but it has been held that a direction not to " invest * ' but to " employ " the money, savours of a trading concern (,9) ; but the distinction ap- pears too thin to be relied upon with safety. 28. Loan by way of annuity. — Upon a marriage the wife's portion was settled upon the intended husband and wife for their respective lives, with remainder to the issue, and a power was given to the trustees to " call in and lay out the money at greater interest if they could." The trustees sold out stock to the amount of 400Z., and laid it out in the pur- chase of an annuity for one life, and insured ^q life, and Lord Manners said the purchase of the annuity was not a proper disposition of a trust fund settled as this was (A). 29. Loans upon shares of companies. — A power to invest "upon security of the funds of any company incorporated by Act of Parliament," will not authorise an investment in " Great Northern Preference shares" which are not a secur- ity upon the property of the company, but a participation in the partnership (i). 30. Debentures. — A power to lend on the debentures of a public company did not, it is conceived, authorise an invest- ment on debenture stock, for the settlor in allowing deben- tures relied on the liability of the company to pay the capital ; but . in debenture stock the dividend only can be recovered, and there are no means of realizing the capital but by transfer, and the value in the market may have greatly * sunk. Debenture bonds are a tempo- [*320] rary loan, but debenture stock i§ perpetual. "34 Vict. c. 27. — But by 34 Vict. c. 27, (29 June, 1871), it was enacted that where power had been before the passing of the Act or should at any time thereafter be given to trustees to invest in the mortgages or bonds of a railway or other company, such power should, unless the contrary be expressed in the instrument, be deemed to include a power to invest in the debenture stock of a railway or other com- (/) Dickonson v. Player, C. P. (A"> Fitzgerald v. Pringle, 2 Moll. Cooper's Cases, 1837-8, 178. 534. (9) S. C. (0 Harris v. Harris, No. 1, 29 Beav. 107. 443 *320 INVESTMENT. [Ch. XIV. S. 4. pany, and an investment in debenture stock may now be made accordingly. [31. Local Loans Act. — By "The Local Loans Act, 1875," 38 & 39 Vict. c. 83, s. 27, trustees or other persons for the time being authorised or directed to invest in the debentures or debenture stock of any railway or other company, unless the contrary is expressed in the instrument, are empowered to invest in any nomkial debentures or nominal debenture stock issued under the Act. And a similar power is fre- quently given by Local Acts to invest in corporation and county stocks issued thereunder, but a proviso is sometimes added to prevent the investment in redeemable stock from being made at a price exceeding its redemption value.] 32. Terminable securities. — And where a fund is settled upon trust for one for life with remainders over, a power to "invest upon Government real or personal security, or in such stocks, funds, or shares, as the trustees in their absolute discretion vaay tMnh jit" will not authorise a pur- chase of ordinary consolidated stock, or of preference or guaranteed stock of a terminable character (a). 33. Direction to retain investments. — If a testator direct his " personal estate invested in Government or other securi- ties in bonds or shares of whatever nature or kind, to be held in the same or the like investments," the executors are jus- tified in retaining in specie Victoria bonds, Brazilian and Russian bonds, and English and Indian Railway stock, and East India stock (6). If shares in a banking company are given to trustees "upon trust to permit them to remain in their then 'state of investment," but the Company is recon- stituted, and the shares which were originally fully paid up with unlimited liability are converted into shares of limited liability but with a margin of uncalled capital, the authority to retain the shares is exhausted, as they have ceased to be in the same estate of investment.^ 34. Shares -which must stand in one name only. — If a trust fund be given to three trustees, with power to sell out and (a) Stewart v. Sanderson, 10 L. (6) Arnould v. Grinstead, W. N. E. Eq. 26. 1872, p. 216; 21 W. R. 155. i/Je Morris, 54 L. J. N. S. Ch. 388. 444 Ch. XIV. S. 4.] INVESTMENT. *321 invest in the shares of a company, the trustees may not sell out and invest in the shares of. a company which requires the shares to b.e held by a single person. But if shares in such a company be specifically bequeathed to three trustees, they are justified from the nature of the case in taking the shares in the name of one of them- selves (c). 35. Exchequer bills. — Where monies paid into Court were directed by an Act to be invested in " Three per cent. Consols, or Three per cent. * Reduced, or any Gov- [*321] *ernment securities" the Court refused to allow an investment on Exchequer bills as not within the meaning of the Act (a) ; but where a trustee had engaged to lend a sum upon mortgage, which was authorised by the powers of the will, and instead of leaving the money idle at his bankers', laid it out in Exchequer bUls as a temporary investment, and productive of interest with little fluctuation of value during the interval while the mortgage was in preparation, the Court held that such a dealing with the funds was justifi- able (J) ; and it has ,since been ruled that Exchequer bilM do fall within the description of Government securities (c) ; and they are now expressly authorised as an investment by 23 & 24 Vict. c. 38, s. 11, and the general order before men- tioned. 36. Foreign securities. — ^ Stock of the United States, and even the bond^ and debentures of the particular states, come under the description of ^'■foreign funds" but not so the bonds or debentures of municipal towns or railway compa- nies abroad (c?). [And where a power was given to trustees to invest " upon any of the stocks or funds of the Govefn- (c) Consterdine v. Consterdine, 31 ing disposed of the Exchequer bills Beav. 330; and see Itfendes v. Gue- for his own purposes, and become dalla, 2 J. & H . 259 ; [Lewis u. Nobbs, bankrupt, the trustee was, on that 8 Ch. D. 591.] ground, made responsible for the value (a) Ex parte Chaplin, 3 Y. & C. of the bills at the date of the bank- 397. ruptcy, with four per cent, interest. (5) Matthews v. Brise, 6 Beav. 239. (c) Ex parte South Eastern Eail- But the trustee having left the Exche- way Company, 9 Jnr. 650. quer bills in the hands of the broker (d) Ellis v. Eden, 23 Beav. 543 ; for more than a year, and without Re Langdale's Settlement Trust, 10 being earmarked, and the broker hav- L. B. Eq. 39. 445 *322 INVESTMENT. [Ch. XIV. S. 4. ment of the United States of America or of the Government of France, or any •other Foreign Government,^^ it was held that investments in New York and Ohio stocks and Georgia bonds were authorized by the power (e).J And where trus- tees were empowered to " continue or change securities from time to time, as to the majority should seem meet," and they proposed to call in certain securities and invest in American Government and American railway securities, the Court in an administration suit would not allow the trustees to exer- cise their discretion in this way, though great part of the testator's own estate was left by him thus invested (/). fBut where a testator gave all his residue to trustees upon trust to invest in the parliamentary stocks or funds, or upon real securities, and the will cpntained a proviso authorising the trustees, as often as they should think it expedient so to do, to sell out, transfer or otherwise vary the trust moneys, funds, and securities, and to invest the same in or [*322] on any other funds or securities * whatsoever, it was held that the trustees were acting within their powers in selling out New Three per, cent, annuities, and investing the proceeds in Russian Railway bonds and Egyp- ' tian bonds (a). 37. Indian railways. •'— The Court has even in an admin- istration action sanctioned the conversion of Bank Annuities into East India Railway stock annuity B, and into Scinde, Punjaub and Delhi, Railway bl. per cent, guaranteed stock, where the will authorised an investment in the guaranteed stock of any Railway Company in India, notwithstanding that the Scinde, Punjaub and Delhi, Railway was like most of the Indian Railways held only on a lease under Govern- ment (6). 38. Shares in companies. — However large the i power of investment may be it is the duty of the trustees to exercise their discretion as to the choice of investment, and they should before investing in the shares of a company Tiave [(e) Cadettw.Earle,5Ch.D. 710.] [(o) Lewis v. Nobbs, 8 Ch. D. (/) Bethell v. Abraham, 17 L. E. 591.] Eq.24. [(6) Re Mansel, 30 W. R. 133. See 42 & 43 Vict. c. ocvi. s. 37.] 446 Ch. SIV. S. 4.] INVESTMENT. *322 regard to its constitution and its rights against its shgire- holders (e).j 39. Greek bonds. — Where a testator directed all his prop- erty, except ready money ^or monies in the funds, to be con- verted, and the proceeds to be invested in Three per cent. Consols or other Government securities in England, it was held that Greek bonds, though guaranteed by this country, were not comprehended ia the words '■'■funds," and that they ought to be converted, though the Court disavowed any intention of saying that bonds of that description might not, in other cases, be deemed Government securities (ci!). 40. Colony or foreign country. — A power to invest on " the bonds, debentures, or other securities, or the stocks or funds of any colony or foreign country," will not authorize an investment upon the Preference Bonds of a Foreign Rail- way Company, though a sinking fund for paying off the cap- ital expended, and thp payment of the interest in the mean- time, are guaranteed by the foreign government (e). [41. Colonial stock. — By the Colonial Stock Act, 1877 (/), trustees are not to apply for or hold stock certificates pay- able to bearer issued under that Act, unless expressly author- ised to do so by the terms of their trust.J 42. East India stock. — Government or Parliamentary stocks or funds are such as are managed by Parliament, or paid out of the revenues of the British Government, or at least guaranteed by it, and therefore East India stock, under the charter of the East India Company, as possessing none of these requisites, was never a G-overnment stock (^) ; where trustees are empowered to invest "in such mode or modes of investment as they in their uncontrolled discretion shall think proper," they cannot be made personally liable for investments made bond fide in the purchase of bonds of a foreign government, bonds of a colonial railway company, [(c) New London and Brazilian securities, as Italian, see In re Brack- Bank V. Brocklehurst, 21 Ch. D. enbury's Trusts, 31 L. T. N. S. 79; 302.] 22 W. E. 682. (d) Burnie ». Getting, 2 Coll. 324. [(/) 40 & 41 Vict. c. 59, s. 12.] (e) Re Langdale's Settlement (j) Brown v. Brown, 4 E. & J. Trusts, 10 L. R. Eq. 39. As to In- 704. restments by the Court on foreign 447 *323 INVESTMENT. [Ch. XIV. S. 4. or shares of a bank on wliich there is a further liability; but the Court, if an action is pending for the administra- tion of the estate, will not allow such investments to be re- tained.^ [*323] * 43. Trustees ■where there is po'wer to vary, may sell out stock and invest on mortgage. — Trustees may be, as they generally are, expressly empowered to invest on real as well as Government security, and where this is the case, and there is a power to vary securities, the trustees may safely sell out Three per cent. Bank Annuities, and invest the proceeds on a mortgage ; for, in this case, although the tenant for life may obtain a higher rate of interest, yet no injury is done to the remainderman, as the capital is a constant quantity, and on the tenant for life's death the remainderman himself will have the benefit. A notion is sometimes entertained that where the stock has become de- preciated since the original purchase ^of it by the trustees, the trustees cannot sell out the stock and lend the money on mortgage without being answerable for the difference be- tween the bought and the sale price. But there is no ground for this apprehension, for if the trust authorise the purchase of stock at all, the trustees cannot be wrong in dealing with it at the market price of the day. No doubt if there were a sudden fall under peculiar circumstances, the trustees should not, without good reason, sell out at the very moment of casual depreciation, but if the power be bond fide exercised, the mere fact of a depreciation below the bought price can- not per se constitute a breach of duty. 44. Appointment in respect of dividends upon a change of investment. — The trustees in changing the investment should have regard to the tenant for life's interest in the income. The stock, for instance, should be sold so as to make the time of accruer of the last dividend the starting point as nearly as possible for the commencement of the interest on the mortgage. However, if the sale of the stock be made on an intermediate day between two dividends, although the price may be enhanced by the near approach of 1 Re Brown, 52 L. T. N. S. 853 ; 29 Ch. D. 889. 448 Ch. XrV. S. 4.] INVESTMENT. *324 the dividend, it is not the practice to pay to the tenant for life the estimated amount of the current dividend out pf the proceeds (a), although it was held in one case under very special circumstances, that the tenant for life was entitled to an apportionment (6). [And so after a purchase of stock between two dividend days the tenant for life will be en- titled to the whole dividend which is declared on the divi- dend day subsequent to the purchase (e).J 45. Mortgage to replace stock and pay interim dividends. — Under the ordinary power of varying securities, a trustee w*uld not be justified in lending a sum of stock upon a mortgage of real estate, conditioned for the replacement of the specific stock at a future day, and the payment of half-yearly sums equal to what * would have been [*324] the dividends in the mean time. For the exercise of the power must be supposed to be beneficial to the parties interested, or some of them ; whereas, in this case, it is difiicult to point out what possible advantage can accrue, though the dividends be paid and the stock replaced. Nothing more is secured to the trust than would have been the effect of the original investment had it remained in statu quo ; while a Government security is changed for the risk of a private security, and perhaps some expense incurred, and all this for no purpose. In short, such an arrangement would look like an accommodation to a friend, rather than as an investment in furtherance of the trust (a). 46. Mortgage to replace stock and pay interim interest. — The case is not so objectionable when the stock is to be replaced, and in the mean time interest exceeding the divi- dend is to be paid on the amount produced by the sale ; for here, one of the persons whose interest is to be consulted, viz., the tenant for life, does receive a benefit in prcesenti, and the remainderman, if he outlive the tenant for life and (a) Scholefield v. Kedfern, 2 Dr. t(c) Re Clarke, 18 Ch. D. 160.] & Sm. 173 ; Freeman u. Whitbread, (a) Since the above remarks were 1 L. E. Eq. 266 ; and see Be Ingram's written, judicial opinions have been Trust, 11 W. R. 980; Bostock v. expressed to this effect; Pell v. Blakeney, 2 B. C. C. 654. lie Winton, 2 De G. & J. 18; Whit- (5) Lord Londesborough v. Som- ney v. Smith, 4 L. E. Ch. App. 519, erville, 19 Beav. 295. 521. 449 *325 INVESTMENT. [Ch. XIV. S. 4. the mortgage continue so long, will derive the same advan- tage. 47. Attention to value and title in lending on mortgage. — When trustees propose to lend upon mortgage, their atten- tion should be directed to two leading topics — the suffici- ency of the value and the title of the borrower (5). If trus- tees accept a security without making proper inquiries as to its nature and adequacy, though it may have been pre- viously valued by a surveyor (e) ; or if the trustees rely upon a valuation made by a surveyor employed by the mort- gagor, without having a survey made by a valuer employed by themselves, they will be personally liable for any de- ficiency of the security (rged mto a fee sim- 211. pie, and the question discussed in [(/) Re Chennell, 8 Ch. D. 507.] ■ the text may generally be avoided by [(y) Ee Boyd's Settled Estates, 14 exercising the powers so created.] Ch. D. 626.] (6) See Townend v. Townend, 1 [(a) Now, by 44 & 45 Vict. c. 41, GifE. 201 ; Wyatt v. Sharratt, 8 Beav. s. 65, and 45 & 46 Vict. c. 39, s. 11, ' 498; Fuller v. Knight, 6 Beav. 209; long terms of years at peppercorn [iJe Chennell, 8 Ch. D. 492.] lents may, in the cases provided by 454 Ch. XIV. S. 4.] INVESTMENT. *329 the trustees be authorised and required, at the instance of the tenant for life, to invest the trust fund in a purchase of leaseholds, they have no option if the tenant for life insist upon his right (c). 59. Copyholds. — There can be no objection to copyholds as a real security, but the trustee should of course take care that they are of ad.equate value, and not rely on the mere covenant to surrender, but procure an actual surren- der (cZ). 60. Mortgage of an undivided share or of a reversion. — There does not appear to be any absolute objection to a loan by trustee on the security of an undivided share or of a rever- sion ; but they must not advance more than the proper pro- portion (a third or a half, aacording to the nature of the property), of the value of the undivided share, or of the reversion as such, that is, the ^resewi value of the future in- terest, and in taking securities of this kind a full power of sale would be ai essential provision. 61. Iiending on real security in Ireland. — Where trustees are expressly authorised to lend on real securities in Eng- land, Wales, or Great Britain, they are empowered by 4 & 5 Will. 4, c. 29, to lend on real securities in Ireland. But the second section enacts, that all loans in which any minor, unborn child, ov person of unsound mind is interested, shall be made by the direction of the Court of Chancery, to be obtained in any cause, or (e) upon petition in a summary way. Upon an application to the Court under this Act, for the investment of a fund in Court upon an Irish security, Lord Langdale, * M. R., refused even a reference as to [*329] the propriety of such a step ; for though it would be beneficial to the tenant for life as increasing the annual prod- uce, it was not so safe a security as regarded the remainder- men, and it was the duty of trustees to act impartially for the benefit of all parties alike (a). And Lord Justice Knight (c) Cadogan v. Earl of Essex, 2 (.d) See Wyatt v. Sharratt, 3 Beav. Drew. 227 ; Beauclerk v. Ashburn- 498. ham, 8 Beav. 322 ; see ante, p. 316. («) Ex jiarte French, 7 Sim. 510. (a) Stuart v. Stuart, 3 Beav. 430. 455 *329 INVESTMENT. [Ch. XIV. S. 4. Bruce, when Vice Chancellor, appears to hare entertainei? similar views (J). But an order for such a mortgage was made by the Vice Chancellor of England (c) ; and again by Lord Cottenham, though his Lordship's attention was called to the case at the RoUs (cT) ; and other orders have been made since (e). Consent of feme covert. — Where the consent of a married woman was required by the trust, and the husband and wife presented a petition, with her concurrence, under the Act, it was held that this did not fuliU the requisition of the wife's consent to the investment ; for when the husband and wife joined in any legal proceeding, it was not the act of the wife ; and whenever she was to be bound, it was necessary that she should appear separately from her husband (/). [But now that a married woman can sue and be sued as if she were a, feme sole, it is conceived that she may be bound without appearing separately.] Lord St. Leonard's Act. — By 22 & 23 Vict. c. 35, S. 32 (j^, trustees, executors, and administrators, where not expressly forbidden by the instrument creating the trust, may invest the trust-fund in real securities in any part of the United Kingdom ; and investments on real securities in Ireland may therefore now be made. 62. Securities in Scotland. — Where trustees have a power of investing upon " real securities," it is conceived that real securities in Scotland, where the law is wholly different, would not fall within the description; and though the above-mentioned Act of 22 & 23 Vict. c. 35, allows invest- ments in real securities in any part of the United Kingdom, yet as by the 33d section the Act is not to extend to Scot- land, it would not be safe for trustees to invest ia Scotch securities, until that construction of the Act has been sanc- tioned by some judicial decision (K). (b) Re Kirkpatrick's Trusts, 15 mortgage money should not be called Jur. 941. in for five years. (c) Ex parte French, 7 Sim. 510. (/) NorristJ. Wright, 14 Beav. 291. (rf) Ex parte Pawlett, 1 Ph. 570. (g) Made retrospective by 23 & (e) Re Settlement of Allies and 24 Vict. c. 38, s. 12 ; see ante, p. 313. TJx. N. R. 24 Jan. 1857, in which the (A) See Re Miles's Will, 5 Jur. N. Court sanctioned a proviso that the S. 1236. 456 [ Ch. XIV. S. 4.] INVESTMENT. *330 63. Land Improvement Act. — By the Improvement of Land Act, 1864'(t), trustees having a power to lend on real securities shall (unless the settlement * provide [*830] the contrary) have power, at their discretion, to in- vest their trust-money on charges under the Act or mort- gages thereof. But as the provisions are apparently pro- spective, trustees under a settlement dated before 29 July, 1864, when the statute passed, cannot safely assume that the Act applies to their case. 64. Second mortgages. — Trustees cannot be advised to laake advances upon a second mortgage, for they neither get the legal estate nor the title deeds, and they may be placed under serious diflficulties by the acts of the first mortgagee. If he bring an action for foreclosure, the trustees forfeit their interest unless they redeem, which they may have no means of doing out of their own estate, and they may experience a difficulty in procuring a person to take a transfer ; and if the first mortgage contain a power of sale, the mortgagee may sell the property at a great disadvantage, and the trus- tees cannot prevent it, unless by redemption, which may not. be practicable (a). In addition to which it is ex- tremely difficult to guard satisfactorily against the possible event of the mortgagor obtaining an advance upon a third mortgage without disclosing the second, and should this occur the third mortgagee might as a purchaser for value without notice get in the first mortgage, and tacJs his original mortgage to it, and squeeze out the second mortgage ; or the first mortgagee or his transferee might by consolidation of his mortgage with a mortgage of other property of the same mortgagor, oust the trustees of their security (J). [But by the Conveyancing and Law of Property Act, 1881 (e), sect. 17, in cases of mortgages made or one of which is made (i) 27 & 28 Vict. c. 114, s. 60. the date of the second mortgage, and (a) See Norris v. Wright, 14 Beav. taking with notice of that mortgage, 808 ; Bobinson v. Bobinson, 16 Jur. cannot consolidate a first mortgage 256 ; Drosier v. Brereton, 15 Beav. with his own third mortgage as against 226 ; Waring o. Waring, 3 Ir. Ch. the second mortgagee. Baker v. Gray, Eep. 337 ; Lockhart v. Eeilly, 1 De 1 Ch. D. 491 ; [and see Jennings v. G. & J. 476. Jordan, 6 App. Cas. 698 ; Barter v. (6) But a third mortgagee holding Colman, 19 Ch. D. 630.] a security which had no existence at [(c) 44 & 45 Vict. c. 41.] 457 *331 INVESTMENT. [Ch. XIV. S. 4. after the 31st December, 1881, and subject to any stipulation to the contrary, the right of consolidating separata mort- gages of different properties is taken away.] But a charge under the Improvement of Land Act, 1864, is declared by the Act not to be deemed such an incumbrance as to preclude trustees of money, with power to invest the sa,me in the purchase of land or on mortgage, from investing it upon land so charged, unless the terms of the trust or power expressly provide that the security to be so taken shall not be" subject to any prior charge' (cZ). [*331] * 65. Equitable mortgages. — An investment upon a deposit of title deeds Jias this advantage over a sec- ond mortgage, that it would be difficult for the mortgagor to deal with the property in the absence of the deeds. At the same time it is possible that by some accident of fraud, the legal estate might get into the hands of a purchaser for value without notice, and if so the trustees would be ousted. Sir J. Romilly, M. R., observed, " I do not know that it has ever been determined, and I do not mean to express an • opinion, that a trustee is ever justified in lending mioney on real security, when he does not get the legal estate " (a). [And in a recent case the late M. R. said that " it had never been decided that an investment upon equitable mortgage was unauthorised when there was a power to invest on real secu- rities, because it had always bfeen assumed to be the law of the Court without calling for a decision," and he acted upon that view (5). J There seems to be no objection to trustees investing upon a submortgage where they get the legal estate and are put in a position to exercise the powers arising under the original mortgage deed.^ 66. Mixing trust-money in a mortgage. — ^ Of course trustees should not join with others in a mortgage, so as to mix up the trust fund with the rights of strangers ; and still less could they take a joint mortgage in the name of a conunon trustee, for this would also be a delegation of their duty. {d) 27 & 28 Viet. c. 114, s. 61. [(i) Swaffield v. Nelson, W. N. (o) Norris v. Wright, 14 Bear. 308 ; 1876, p. 255.] and see cases cited p. 330, note (a) . 1 Smethurst v. Hastings, 52 L. T. N. S. 567 ; 33 W. R. 496 ; 30 CIi. D. 490. 458 Ch. XIV. S. 4.] INVESTMENT. *332 67. Powers of sale. — Mortgagees at the present time almost invariably have powers of sale, [either expressed in the mortgage or arising under the recent Act (c),] but for- merly it was otherwise, and trustees would no doubt be held justified in taking a transfer of an old mortgage not accom- panied with a power of sale. Where, however, it is practica- ble, trustees should always insist on a power of sale, though the omission might not amount to a breach of trust ((^). 68. Caution in payment of the money. — When trustees lend on mortgage, they should be careful not to part with ,the money, except on delivery of the security ; for they will be liable for all the consequences if they sell out stock, and allow their solicitor or agent to receive the money on his representation that the mortgage is ready, and it afterwards turns out that the proposed security was a pure invention, and that the money has been misapplied (e). 69. Clause not to call in the money. — A power of invest- ment does not justify trustees in admitting a clause that the mortgage shall not be called in for a certain period, * and if the interests of the cestuis que trust were [*332] thereby affected, the trustees would be personally responsible (a). > 70. In loans of trust-money, the trust kept out of sight. — Where trust-money is lent upon mortgage, it is desirable to keep the trust out of sight, that when the money is paid off, the trust deed may not become an essential link in the mort- gagor's title. It is usual, therefore, to insert in the mortgage deed a declaration, that the money advanced belongs to the trustees (not described in that character, but by name) on a joint account, and that the teceipt of the survivors or sur- vivor, his executors or administrators, their or his assigns, shall be a sufficient discharge (6) ; a practice which, assum- [(c) Under 44 & 45 Vict. c. 41, s. Sim. 265; [iJe Speight, 22 Ch. D. 727; 19, et seg., a statutory power of sale 9 App. Cas. 1 ;] and see Broadhurst arises under every mortgage by deed v. Balguy, 1 Y. & C. C. C. 16. unless expressly excluded.] (a) Viokery v. Evans, 3 N. E. 286. (d) See Farrar v. Barraclough, 2 See p. 329, note (e). Sm. & G. 231. [(i) See now 44 & 45 Vict. c. 41, (e) Rowland v. Witherden, 3 Mac. s. 61, which, subject to a contrary & G. 568; Hanbury v. Klrkland, 3 intention being expressed In the in- 459 *333 INVESTMENT. [Ch. XIV. S. 4. ing the trust settlement to confer the power of executing the trusts and giving receipts on the survivors or survivor, his executors or administrators, their or his assigns, does not seem open to much objection, and has received the sanction of general usage. Any declaration of trust of the mortgage that may be requisite is executed by a separate deed. The trustees should, however, also execute the mortgage deed, 'as doubts have been entertained (though it is conceived with- out reason (c)) whether, if they omit to execute, the decla- ration will bind them. By this method, should the mortgage be called in or transferred before any change of trustees occurs, no inconvenience arises (IENT. [Ch. XIV. S. 4. of course be held evenly as between all parties, and the tenant for life should not be allowed, by an investment on a security less safe or less permanent than the usual one, and therefore yielding to the present holder an increased rate of interest, to advance himself at the expense of the remain- derman (c). 1 [*334] * 74. Long Annuities, &o. — If a testatot's estate ■consist of Long Annuities, or other fund either not a Governinent security or not of the most permanent charac- ter, the Court, as we have seen, as soon as its observation is attracted to the circumstance, invariably directs a conversion of such estate into Three per cent. Bank Annuities (a) ; and even Four per cent, and Five per cent. Bank Annuities, while that description of stock existed, were ordered to be similarly converted (S). It follows that trustees, who must be guided by the practice of the Court, would not be justi- fied, in the absence of a special power, in investing trust moneys settled upon several persons successively upon any securities, which, by the rule of the Court referred to, would be liable to be converted into other securities. Even where the trustees were empowered by the will to continue any of the testator's Grovernment Stocks, it was held that they were not justified in continuing Long Annuities (c). 75. Navy 5 per cents. — However, where- the trustees were directed by the will to invest on " G-overnment or other good security," and part of the testator's estate consisted of Navy Five per cents., and the tenant for life continued to receive the dividends for more than thirty years, the 'Court refused to hold the trustees liable, for not having converted the Navy Five per cents, into Three per cent. Consols (oT). 76. Selling out Consols. — Where the fund is already in- vested in Oonsoh, it would be a clear breach of trust to sell out and invest the proceeds in an irregular fund, as, for instance, in Long Annuities (e). (c) See Baby v. Ridehalgh, 7 De (c) Tickner v. Old, 18 L. K. Eq. G. M. & G. 104. 422. (a) See pp. 298, 300, supra. (rf) Baud v. Fardell, 7 De G. M. (6) Howe V. Earl of Dartmouth, 7 &, G. 628. Ves. 151, per Lord Eldon ; Powell v. (e) Kellaway v. Johnson, 5 Beav. Cleaver, and other cases, cited Id. 142. 319. 462 Ch. XIV. S. 4.] INVESTMENT. *335 77. Where trust funds are irregularly invested, the tenant for life and the trustees may be called upon to answer the differ- ence. — "Where a tenant for life has been wrongly in posses- sion of the dividends of a stock producing an extraordinary- income, he will be accotintable to the remainderman for the ekcess of his receipts beyond the income which he would have received had the fund been properly invested (/). Upon the question whether, if the tenant for life be insol- vent, the trustees should be decreed to make compensation to the suffering' party, Lord Eldon said, he would not state what the Court would do in sUch a case, for it depended on many circumstances (jg). In the case of Dimes v, Scott (K), where the executors were , expressly directed to convert the testator's personal estate into money, and invest the proceeds in * Government or real securities in trust [*335] for A. for life, remainder to B., and the executors for eleven years permitted A. to receive 10 per cent, interest upon an Indian loan, it was held they were chargeable with the difference between 10 per cent, interest which they had wrongfully paid, and the interest that would, have resulted from a conversion into Three per cent. Consols at the expi- ration of one year from the testator's decease. And in other later cases the Court, under similar circumstances, has apparently viewed the trustees as liable, and the tenant for life as liable over to the trustees, to the extent of his bene- fit (a). 78. Of conversion of assets in India. — Where a testator dies in India, and neither the fund nor the parties entitled to it are under the jurisdiction of the Court of Chancery, it is not the duty of the executor in India to transmit the assets to England to be invested in the Three per cent. Consols, but he may invest the property in the securities of the gov- ernment of India, and the tenant for life will be entitled to (/) Howe V. Earl of Dartmouth, (A) 4 Euss. 195 ; and see Mehrtens 7 Ves. 137, see 160, 151 ; Mills v. v. Andrews, 3 Beav. 72. Mills, 7 Sim. 501 ; and see Pickering (a) Hood v. Clapham, 19 Beav. V. Pickering, 4 M. & Cr. 289. 90; Bate v. Hooper, 5 De G. M. & G. (g) See Howe v. Earl of Dart- 338. mouth, 7 Ves. 150 ; Holland v. Hughes, 16 Ves. 114. 468 *336 INVESTMENT. [Ch. XIV. S. 4. the dividends or interest, whatever the amount. If the par- ties return to England, and so come under the jurisdiction of the Court, the fund may then he brought over at the instance of the remainderman, and the tenant for life must submit to the consequential reduction of his income (5). 79. Trust to invest in the funds and the money is retained. -^ If trustees be expressly bound by the terms of their trust to invest in the public funds, and instead of so doing they retain the money in their hands, the cestuis que trust may clearly elect to charge them vi^ith the amount of the money or with the amount of the stock which they might have pur- chased with the money (c). 80. Trustees ordered to invest in stock or on real securities and neglecting to do either. — If trustees or executors be directed by the will to convert the testator's property and invest it in Grovernment or real securities, it was long a ques- tion whether they should be answerable for the principal money with interest, or the amount of stock which might have been purchased at the period when the conversion should have been made with subsequent dividends, at the option of the cestuis que trust (c?) ; or whether they [*336] should be charged with the * amount of principal and interest only, without an option to the cestuis que trust of taking the stock and dividends (a). It has now been decided that the trustee is answerable only for the principal money and interest, and that the cestuis que trust have no option of taking the stock and dividends. The principle upon which the Court proceeds is, that the trustee (6) Holland v. Hughes, 16 Vea. the option of the cestui que trust, for 111 ; S. C. 3 Mer. 685. the principal sum or the amount of (c) Shepherd v. Mouls, 4 Hare, stock which it would have purchased ; 504, per Sir J. Wigram ; Robinson v. Bobinson ) Ex parte Shakeshaft, 3 B. C. C. H. 259 ; Consterdine v. Consterdine. 197 ; Ex parte Gurner, 1 Mont. Deac. 31 Beav. 330 ; [Levfis v. Nobbs, 8 Ch. &DeG. 497. D. 591.] (c) Challenw. Shippam,4Hare,555. (e) Alleyne v. Darcy, 4 Ir. Ch. Id) Walker v. Symonds, 3 Sw. 1, Eep. 199, see 204, 208 ; Fyler v. Py- see66; and see Salway w. Salway, 2 ler, 3 Beav. 550, and see Barnes o. R. & M. 218 ; Ex parte Griffin, 2 Gl. Addy, 9 L. R. Ch. App. 244, and & J. 114; Clough V. Dixon, 8 Sim. post, chap. xxx. s. 3. 466 Ch. XIV. S. 5.] LIABILITY OP TRUSTEES. *338 85. Trustees lending should not employ the same solicitor as the borro-wer. — In laying out trust monies, trustees would do well not to employ the solicitor who acts for the borrower. Besides the inconveniences that arise from the doctrine of implied notice, there is in this case such a conflict of duties on the part of the solicitor, that he cannot adequately rep- resent the interests of both lender and borrower (/). ♦SECTION V. [*338] " LIABILITY OP TRUSTEES TO PAYMENT OF INTEREST. 1. General laches. — It may be Stated ,as a general rule, that if a trustee be guilty of any unreasonable delay in investing the fund or transferring it to the hand destined to receive it, he will be answerable to the cestui que trust for interest during the period of his laches ; and a trustee has been decreed to pay interest even where it was not prayed by the bill (a) ; and in a suit establishing laches, will be decreed to pay personally the costs up to the hearing of a suit arising out of the laches (5).^ (/) See Waring v. "Waring, 3 Ir. v. Chugg, W. N. 1874, p. 186. But Ch. Rep. 331. the court is not in the habit of giving (o) Woodhead v. Marriott, C. P. interest on what may be found due Coop. Cases, 1837-38, 62 ; Turner v. for arrears of income, Blogg v. John- Turner, 1 J, & W. 39; Stafford v. son, 2 L. R. Ch. App. 225. Fiddon, 23 Beav. 286; HoUingsworth (6) Ticknor v. Smith, 3 Sm. & G. V. Shakeshaft, 14 Beav. 492 ; Chugg 42. 1 Interest. — An executor is not usually chargeable with interest for the first year : beyond that interest will be required, and the principal too, if lost ; Minuse o. Cox, 5 Johns. Ch. 441 ; Carter v. Cutting, 5 Munf . 224 ; if the exec- utor receives interest during the first year he must account for it; Wymau V. Hubbard, 13 Mass. 232 ; Stearns v. Brown, 1 Pick. 530 ; Lund v. Lund, 41 N. H. 359; Chambers v. Kerns, 6 Jones Eq. 280. If a trustee neglects to invest trust funds, uses them as his own, or fails to distribute them within a reasonable time, he will be liable for the legal rate of simple interest; "Wistar's App. 54 Pa. St. 60; Duffy v. Duncan, 35 N. T. 187; Mumford v. Murray, 6 Johns. Ch. 1 ; Hess's Est. 69 Pa. St. 272 ; Owen v. Peebles, 42 Ala. 338; Kerr v. Laird, 27 Miss. 544; Nelson v. Bank, 27 Md. 63; Wright «. Wright, 2 McCord Ch. 186; Knowlton v. Bradley, 17 N; H. 458. The trus- tees can make no gain from the trust funds, and if they receive a high rate of interest they must account for it all ; Martin v. Raborn, 42 Ala. 648 ; Barney v. Saunders, 16 How. 543 ; if the trustee has not kept a clear account he will be chargeable with the legal rate ; Rapalje v. Hall, 1 Sandf. Ch. 339 ; 467 *338 LIABILITY OF TRUSTEES [Ch. XIV. S. 5. 2. Executor must pay testator's debts as soon as be has assets. — An executor or administrator should discharge the testator's liabilities as soon as he has collected assets suffi- cient for the purpose, and therefore i£ h6 keep money in his hands idle, when th§re is an outstanding debt upon which interest is running, he will himseK be charged with interest on a sum equal in amount to the debt, and if the outstand- ing debt carry interest at 5 per cent, the executor will be charged with interest at the same rate (c). (c) Domford v. Domford, as cited Hall u. Hallet, 1 Cox, 134 ; Turner in Tebbs v. Carpenter, 1 Mad. 301 ; „. Turner, IJ. & W. 39. Bentley v. Shreve, 2 Md. Ch. 219; but see McKnight v. Walsh, 24 N. J. Eq. 498. If the amounts involved are small, and the trustee receives no profit, the liability for interest may be modified ; Brand v. Abbott, 42 Ala. 499 ; if the trustee pay the funds into court there can be no further claim for interest ; Young u. Brush, 38 Barb. 294 ; Brandon u. Hoggatt, 32 Miss. 335 ; but these same cases hold that if any suits are pending in relation to the trust, the trustee must keep the money at interest.. If the trustee is directed to invest in a certain way within a limited time, and fails to do so, the cestui que trust may elect between the money together with its legal interest, or what he would have had as securities from the special investment with all aqtnal dividends ; Darling v. Hammar, 5 C. E. Green, 220; McElhenny's App. 46 Pa. St. 347., If the trustee converts a properly invested trust fund into money, and neglects to reinvest it, invests it unwisely, or uses it in speculation, the cestui que trust may take what he would have received if the original invest- ment had not been disturbed, or the fund and legal interest; or all that has been realized ; Norris's App. 71 Pa. St. 125 ; Kyle v. Barnett, 17 Ala. 306. In the preceding cases, or in case of a mixture of trust with personal funds, the trustee maybe charged with compound interest; Eliott v. Sparrell, 114 Mass. 404, but not unless the trustee is particularly blameworthy; Eay v. Howe, 1 Pick. 528 ; Cartledge o. CutlifE, 21 Ga. 1. The trustee must show that he received no profit or benefit from the money ; Hughes v. Smith, 2 Dana, 253; Karr K. Karr, 6 Dana, 3 ; Smith i>. Kennard^ 38 Ala. 695 ; Livingston ». Wells, 8 S. C. 347 ; but see Graver's App. 50 Pa. St. 189. Where the funds were used in business compound interest is allowable ; Lathrop v. Smalley, 23 N. J. Eq. 192 ; McKnight v. Walsh, 23 N. J. Eq. 1.36. The trustee must see to it that the cestui que trust receives the income, or it will bear interest. Where the trustee had unnecessarily sold lands to pay debts and had also applied trust funds to his own use, the acooimt was taken against him with annual rests ; Wiard v. Gable, 8 Chy. 458 ; where a trustee had retained money six years after it should have been paid over, he was ordered to pay six per cent, annual interest; Small v. Eccles, 12 Chy. 37; Wrightroan v. Helliwell, 13 Chy. 330 ; Beaton v. Boomer, 2 Chy. Chamb. 89. Interest is charged that the cestui que trust may not sufEer loss, rather than for the purpose of punishing the trustee ; Inglis v. Beaty, 2 App. E. 463. 468 Ch. XIV. S. 5.] TO PAYMENT OF INTEREST. *339 3. After payment of debts and legacies executor must ac- count for surplus. — After payment of debts and legacies, if the executor or administrator be guilty of laches in account- ing for the surplus estate to the residuary legatee (cZ) or next of kin (e), he will be ,charged by the Court with inter-^ est for the balance improperly retained. 4. Trustees under bankruptcy must not neglect to pay divi- dends. — So, if the trustee of a bankrupt's estate neglect to pay a dividend to the creditors (/), or the receiver of an estate do not move * the Court in proper time to [*339] have the rents in his hands made productive (a), they will be ordered to account for the money with interest from the time when the breach of duty commenced. 5. No excuse that the trustee or executor did not use the money. — And an executor or other fiduciary cannot excuse himself by saying that he made no actual use of the money, but lodged it at his bankers (6), and to a separate account (c), for it was a breach of trust to retain the money. 6. Belay may be explained by the mistake of the trustee or executor. — But, where an executor conceived himself to be entitled to the residue, and the Court considered his claim to be just in itself, but was obliged from a particular circum- stance in the case to give judgment against him, it was thought too severe to put him in the situation of one who (rf) Forbes v. Ross, 2 Cox, 113 ; see 224 ; Heathcote v. Hulme, 1 J. & Seers i>. Hind, IVes.jun. 294; Younge W. 122; Holgate v. Haworth, 17 V. Combe, 4 Ves. 101 ; Longmore v. Beav. 259. Broom, 7 Ves. 124; Rbcke v. Hart, (/) Treves v. Townshend, 1 B. C. 11 Ves. 58 ; Piety v. Stace, 4 Ves. C. 384 ; In re Hilliard, 1 Ves. jun. 620; Ashburnham v. Thompson, 13 89; Hankey v. Garrett, 1 Ves. jun. Ves. 402 ; Eaphael v. Boehm, 11 Ves. 236. 92; S. C. reheard, 12 Ves. 407; S. C. (a) Foster v. Foster, 2 B. C. C. spoken to, 11 Ves. 590; Domford v. > 616; Hicks v. Hicks, 3 Atk. 274. Dornford, 12 Ves. 127; Franklin v. (6) Younge v. Combe, 4 Ves. 101; Frith, 3 B. C. C. 433 ; Littlehales v. Franklin v. Frith, 3 B. C. C. 438 ; Gascoyne, 3 B. C. C. 73 ; Newton u. Treves v. Townshend, 1 B. C. C. 384 ; Bennet, 1 B. C. C. 359 ; Lincoln d. In re Hilliard, 1 Ves. jun. 89 ; Daw- Allen, 4 B. P. C. 553 ; Crkckelt v. son «. Massey, 1 B. & B. 230 ; Browne Bethune, 1 J. & W. 586 ; Tebbs v. v. Southouse, 3 B. C. C. 107 ; and see Carpenter, 1 Mad. 290. Eocke v. Hart, 11 Ves. 60. (e) Hall V. Hallet, 1 Cox, 134 ; (c) Ashburnham v. Thompson, 18 Perkins v. Baynton, 1 B. C. C. 375 ; Ves. 402. Stacpoole v. Stacpoole, 4 Dow, 209, 469 *340 LIABILITY OP TEUSTEES [Ch. XIV. S. 5 had neglected his duty, and the demand against him for interest was consequently disallowed (c?). 7. Formerly the executor might have used the assets. — For- merly it was held that an executor might employ the assets in his trade, or lend them upon security, and he should not he ca.lled upon to account for the profits or interest (e). . And such was the case even where money which had heen lent by the testator on good security was called in by the execu- tor for the express purpose of being re-lent by himself. For the executor, it was argued, was not bound to lend the assets, and if he did so, it was at his peril, and he was answerable for losses, and if accountable for any loss, he was surely entitled to any gains (^). But Lord North overruled the doctrine in spite of the alleged practice of the Court for the last twenty years, and the authority of aboTe forty prece- dents ; and as to the argument, that, if the money should be lost, the executor would be personally responsible, his Lord- ship said, it was very well known that a man might insure his money at the rate of one per eefit. (jg). 8. At least -where he was solvent. — A distinction was afterwards taken between a solvent and an insolvent executor ; that the former, as he might suffer a loss, should take the gain, but, as an executor who was insolvent at the time of the loan could incur no risk of a loss personally, he should not be allowed to take to himself any benefit (A). [*340] * 9. And where the assets used ■were not specinoally bequeathed. — And Lord Hardwicke drew another dis- tinction ; that if an executor had placed out assets that were specifically bequeathed, he would be made to account for the interest, but that the Court never directed interest against an executor who made use in the way of his trade of general assets come to his hands (a). (rf) Bruere v. Pemberton, 12 Ves. (/) See Eatcliff v. GraTes, 2 C. 386 ; but see Sutton v. Sharp, 1 Russ. Ca. 152. 146; Turner v. Maule, 3 De G. & Sm. ( j) Ratcliff w. Graves, 1 Vern. 196; 497; [Evans .,. Evans, W. N. 1876, S. C. 2 Ch. Ca. 152. p. 205.] Qi') Bromfield v. Wytherley, Pr. (e) GroBvenor v. Cartwright, 2 Ch. Ch. 505 ; Adams v. Gale, 2 Atk. 106 Ca. 21 ; Linch v. Cappy, 2 Ch. Ca. 35 ; (a) Child v. Gibson, 2 Atk. 603. and see Brown v. Litton, 1 P. W. 140. 470 Ch. XIV. S. 5.] TO PAYMENT OP INTEREST. *340 10. Rule now general that executor must account for all profits. — But all these refinements have long since been swept away (6) ; and the rule is now universal, that, whether the executor be solvent or insolvent, whethex the money be part of the general assets or specifically bequeathed, whether it be lent upon security or employed in the way of trade, the executor shall account for the utmost actual profits to the testator's estate (c). 11. Trustee using trust money in trade must account for it ■with 5 per cent, interest, or the actual profits. — Where the nJoney has been employed by breach of trust in trade, the ceshd que trust has the option of taking the actual profits or of charging the executor with interest (cZ). And the execu- tors cannot disguise the employment of the money in their business under the garb of a loan to one of themselves (e). And an executor who is a trader is considered to employ the mon^y in trade, if he lodge it at his banker's and place it in his own name, for a merchant miist generally keep a balance at his banker's, and this answers the purpose of his credit as much as if the money were his own (/). 12. Executor charged with 4 per cent, interest only unless he made more. — The rate of interest with which an executor is usually charged is 4 per cent, (gr) ; but the rule holds only (6) As to the former distinction, Sutton v. Sharp, 1 Russ. 146; Rocke see Newton y. Bennet, 1 B. C. C. 361 ; v. Hart, 11 Ves. 61 ; but see .Browne Adye v. Feuilleteau, 1 Cox, 25; and v. Southouse, 3 B. C. C. 107. as to the latter, see Newton v. Bennet, (j) See rietcherV. Green, 33 Beav. 1 B. C. C. 361. 426 ; Forbes v. Ross, 2 Cox, 116 ; Hall (c) Tebbs v. Carpenter, 1 Mad. w. Hallet, 1 Cox, 138 ; Tebbs v. Car- .•504, per Sir T. Plumer; Lee u. Lee, penter, 1 Mad. 306; In re Hilliard, 1 2 Vern. 548; Adye v. Feuilleteau, 1 Ves. jun. 90; Browne v. Southouse, 3 Cox, 24; Piety v. Stace, 4 Ves. 622, B. C. C. 107; Mosley v. Ward, 11 per Lord Alvaiiley. Ves. 582 ; Perkins v. Baynton, 1 B. (rf) Heathcote v. Hulme, IJ. & W. C. C. 375'; Treves v. Townshend, 1 122; Anon, case, 2 Ves. 630, per Sir B. C. C. 386; Hicks v. Hicks, 3 Atk. T. Clarke ; Docker v. Somes, 2 M. & 274 ; Younge v. Combe, 4 Ves. 101 ; K. 655; Ex parte Watson, 2 V. & B. Rocke v. Hart, 11 Ves. 58; Hankey 414; Brown v. Sansome, 1 M'Clel. & Garret, 1 Ves. jun. 236; but see Bird Y. 427 ; Bobir^son v. Robinson, 1 De v. Lockey, 2 Vern. 744, 4th point ; G. M. & G. 257 ; see ante, p. 276, 277. Carmichael v. Wilson, 3 Moll. 79 ; (e)Townendu. Townend,lGiff.201. Attorney'-General o. Alford, 4 De G. (/) Treves v. Townshend, 1 B. C. M. & G. 843 ; Johnson v. Prendergast, C. 284 ; Moons v. De Bernales, 1 Russ. 28 Beav. 480. [Re Emmet's Estate, 301; In re Hilliard, 1 Ves. jun. 90; 17 Ch. D. 142.] 471 *341 LIABILITY OF TRUSTEES [Ch. XIV. S. 5. where it does not appear that the executor has made greater interest, for the Court invariably compels the executor to ac- count for every farthing he has actually received (h). [*341^ * 13. Under what circumstances trustees ■will be charged with extra interest. — It is not easy to define the circumstances under which the Court will charge execu- tors and trustees with more than 4 per cent, interest or with compound interest. In a late case it was laid down by Sir John Romilly, M. E,. : 1. That if an executor retain balances in his hands, which he ought to have invested, the Court will charge him with simple interest, at 4 per cent. 2. That if, in addition to such retention, he has committed a direct breach of trust, or if the fund has been taken by him from a proper state of investment, in which it was producing 5 per cent., he will be charged with interest after the rate of 5 per cent, per annum. 3. That if in addition to this, he has employed the money so obtained by him in trade or speculation, for his own benefit or advantage, he will be charged either with the profits actually obtained from the use of the money, or with , interest at 5 per cent, per annum, and also with yearly rests, that is, with compound interest (a). 14. Trustee charged -with 5 per cent, where gross miscon- ' duct. — The dicta and decisions undoubtedly seem to estab- lish, in accordance with the view just quoted, that an execu- tor will be charged with interest at 6 per cent, where he is guilty, not merely of negligence, but of actual corruption or misfeasance, amounting to a wilful breach of trust (b~). But in Attorney-Genera! w. Alford(c), Lord Cranworth expressed (A) Forbes v. Boss, 2 Cox, 116, per (b) Tebbs ». Carpenter, 1 Mad. 306, Lord Thurlow; In re Hilliard, 1 Ves. per Sir T. Plumer; Bick v. Motley, 2 jun. 90,per eundem ; Hankey v. Garret, M. & K. 312 ; Mousley v. Carr, 4 Beav. 1 Ves. jun. 239, per eundem; Brown 53,pc)-LordLangdale; andseeCrack- V. Litton, 10 Mod. 21, per Lord Har- elt v. Bethune, IJ. & W. 588 ; Docker court ; Hall v. Hallet, 1 Cox, 1.38, per v. Somes, 2 M. & K. 670 ; Munch v. Lord Thurlow. Cockerell, 5 M. & Cr. 220 ; Ex parte (a) Jones v. Poxall, 15 Beav, 392; Ogle, 8 L. R. Ch. App. 716; Hooper and see Saltmarsh v. Barrett (No. 2), u. Hooper, W. N. 1874, p. 174. But 31 Bear. 349; [Gilbert v. Price, W. see Meader ». M'Cready, 1 Moll. 119. N. 1878, p. 117. In Jamaica interest (c) Attorney-General v. Alford, 4 at the rate of 6 per cent, per annum De G. M. & G. 851, 852 ; and see will be allowed ; De Cordova v. De Vyse v. Foster, 8 L. R. Ch. App. 333 ; Cordova, 4 App. Cas. 692:] affirmed 7 L. R. H. L. 318. 472 Ch. XIV. S. 5.] TO PAYMENT OF INTEREST. *342 his disapprobation of charging the executor with a higher rate of interest by way of penalty ; and laid it down that an executor was chargeable only with the interest which he had received, or which he ought to have received, or which it was so fairly to be presumed that he had received that he was estopped from saying that he did not receive it. And it was subsequently observed by V. C. Wood that there were three cases where the Court charged more than 4 per cent, upon balances in the hands of a trustee: — 1. Where he oug}it to have received more, as by improperly calling in a mortgage cfirrying 5 per cent. ; 2. Where he had actually received more than 4 per cent. ; and 3. Where he must be 'presumed to have received more, as if he had traded with the money (c?). But in a subsequent case, Lord * Cranworth offered [*342] some explanatory remarks (a) upon the notions im- puted to him ; L. J. James, however, in a recent case (J) approved of the doctrine thought to have been laid down by Lord Cranworth, viz., that the Court had no jurisdiction to punish an executor for misconduct by making him account for more than he actually received, or which it presumed he did receive, or ought to have received, and that the Court was not a Court of penal jurisdiction. 15. Money used in trade. — Where money has been em- ployed in trade, the rate of interest has been almost invari- ably 5 per. cent, (c), the Court presuming every business to yield a profit to that amount. But Lord Thurlow, in one case, offered an inquiry whether, under the circumstances, (rf) Penny v. Avison, 3 Jur. N. S. (J) Vyse v. Foster, 8 L. R. Ch. 62 ; and see Burdick w. Garrick, 5 L. App. 333, affirmed 7 L. E. H. L. 318. R. Ch. App. 233 ; [Price v. Price, 42 But see Ex parte Ogle, 8 L. R. Ch. L. T. N. S. 626 ; but see Re Jones, 49 App. 716. L. T. N. S. 91, where the executors ' (c) Treves «. Townshend, 1 B. C. C. and trustees were charged 5 per cent. 384; Rocke v. Hart, 11 Ves. 61, per on the balance in their hands, V. C. Sir W. Grant ; Heathcote v. Hulme, 1 Bacon observing that if a man choose J. & W. 122, see 134; Attorney-Gen- not to invest money, but pays it into eral v. Solly, 2 Sim. 518 ; Moualey i!. his account at his bankers, he borrows Carr, 4 Beav. 63, per Lord Langdale ; it, and must pay 5 per cent, from the Westover v. Chapman, 1 Coll. 177 ; date of the payment of the testator's Williams ». Powell, 15 Beav. 461 ; debts and liabilities.] Robinson v. Robinson, 1 De G. M. & (a) Mayor of Berwick v. Murray, G. 257 ; Burdick v. Garrick, 5 L. R. 7 De G. M. & G. 519; and see Town- Ch. App. 233. end V. Townend, 1 Gifl. 212. 473 *343 LIABILITY OF TRUSTEES [Ch. XIV. S. 6. sucli a rate of interest might not be too higli ( with the fund to an agent without some document produci- ble at any moment by which he could estabUsh the fact of the agency. 30. Genuineness of the authority. — The trustee must look well to the genuineness of the authority, for if he pay to a wrong party it will be at his own peril. ■ Thus, where A., possessed of 1000?. Million Bank stock, employed B., a broker, to receive the dividends for her, and B. forged a letter of attorney authorising him to sell the stock, and a sale was effected accordingly, it was decreed by Lord Northington that the company must bear the loss : for " a trustee," he said, "whether a private person or body cor- porate, must see to the reality of the authority empowering him to dispose of the trust money; and if the transfer be made without the authority of the owner, the act is a nul- lity, and in consideration of law and equity the rights remain as before " (a). 31. Forged mortgage. — Where a trustee [handed over money to his solicitor for investqjent, and subsequently 'took] a sup- posed mortgage, but which, in fact, had been forged by the trustee's own solicitor, and the trustee did not take all the precautions that he might have done (viz., by calling for a receipt under the hands of the mortgagor for the money), [(rf) Notwithstanding the Judica- (o) Ashby v. Blackwell, 2 Eden, ture Act, 1873, and Ord. 19, R. 4, of 299 ; Sloman v. Bank of England, 14 the Eules of the Supreme Court, 1883, Sim. 475; Eaves v. Hickson, 30 Beav. signature by counsel is still necessary. 136 ; Sutton v. Wilders, 12 L. R. Eq. Re Boulton's Trusts, 51 L. J. N. S. 378 ; and see Harrison v. Pryse, Barn. Ch. 493.] 324 ; Ex parte JolifEe, 8 Beav. 168. (e) See post, chap, xxiii, B. 2, dir. 4; 487 *354 DISTRIBUTION OP THE TKUST FUND. [Ch. XIV. S. 6. it was held tliat the loss must fall on the trustee, and was not to be borne by the trust estate so as to fall upon the cestui que trust (J). 32. Cestui que trust abroad. — A cestui que trust is often abroad, and then the trustee cannot be sure that at the time of payment under the power of attorney the cestui que trust is aHve, and if he were dead the power of attorney would be at an end (c). If, however, the cesUd que trust give to the trustee a written direction by deed or otherwise [*354] to pay * money to a particular person, any payment made under such written direction, until it is revoked, and the revocation comes to the knowledge of the trustee, would be binding on the cestui que trusfs executors (a). A convenient course in cases of this kind is to transmit the money to a Bank abroad, making it payable to the order of the cestui que trust; but where the cestui que trust is unable to receive his money, in person, his direction had better be asked as to the particular mode of remittance to be adopted. Now, by Lord St. Leonards' *Act, 22 & 23 Vict. c. 35, s. 26, a trustee paying under a power of attorney is expressly exempted from liability, notwithstanding the death of [or avoidance of the power byj the person who gave the power of attorney, provided the trustee did not know of such death (6) Bostock II. Floyer, 1 L. E. Eq. eeniber, 1882, and expressed to be 26 ; 35 Beay. 603. [" The ratio deci- irrevocable is not, in favour of a pur- dendi of the case was this, that it was chaser, revoked by anything done by not the ordinary course of business the donor of the power without the to place money in the hands of a concurrence of the donee, or by the solicitor to inyest. It was not a death, marriage, lunacy, unsoundness specific investment, it was handed to of ntind or bankruptcy of the donor; the solicitor, and in that point of view and by s. 9 a power of attorney the case is intelligible enough upon the whether for valuable consideration ground that it was not right for the or not given since the 31st December, trustee to hand over the money to 1882, and expressed to be irrevocable the solicitor for the purpose of invests for a fixed time not exceeding one ment," per L. J. Lindley, Re Speight, year from the date of the instrument, 22 Ch. D. 727, 761;] and see Hop- is not, in favour of a purchaser, Aurmg good V. Parkin, 11 L. E. Eq. 75 ; the fixed time, revoked by any simi- Sutton V. Wilders, 12 L. E. Eq. 373. lar act or occurrence.] [(c) Now by the Conveyancing (a) See Vance v. Vance, 1 Beav. Act, 1882 (45 & 46 Vict. u. 89), s. 8, 605; Harrison v. Asher, 2 De G. &. a power of attorney given for valua- Sm. 4.36 ; Kiddill v. Famell, 3 Sm. & ble consideration since the 31st De- G. 428. 488 Ch. XIV. S. 6.] DISTEIBTJTION OF THE TETJST FUND. « *355 [or avoidance] at the time of payment (6),; [and tliis has been extended by the Conveyancing and Law of Property Act, 1881, to cases of payments or acts made or done by any person in good faith since the 31st December, 1881, and applies whether " the donor of the power has died or become lunatic, of unsound mind or bankrupt, or has revoked the power," if the fact was not known to the donee of the power at the time of exercising it (c).] 33. Letters of administration. — If a legacy to a wife be a small sum, as under 501., and the husband survives her, the Court orders payment to him without taking out letters of administration to the wife(£Z); and, on the other hand, where the wife has survived, the Court has ordered a small sum, as a legacy of 131., to which the husband was entitled, to be paid to the widow, without taking out administration to the husband (e). But the Court refused to order pay- ment to the husband, without letters of administration to the. wife, of a sum of 80Z., and remarked that the husband was not liable after the wife's death for her debts contracted before marriage, and that the fund would get into a wrong channel (/). Where a married woman was entitled to a small sum under 501., representing real estate, the Court ordered it to be paid to her without a deed of acknowl- edgment (^). It is presumed that a' trustee, acting in a * similar manner under similar circumstances, [*355] would be protected by the Court. 34. Payment to an infant. — A testamentary guardian has, by Act of Parliament (12 Car. 2, c. 24), the " custody, tui- tion and management of the infant's goods, chattels, and personal estate " [and this has generally been considered as not] authorising a trustee to pay to the guardian a capital (b) But where the title of the per- (e) Callendar v. Teasdale, 3 W. E. son giving the power determines with 289. , his life, as in the case of a husband (/) Re Cabel, 3 W. E. 280, revers- claiming in right of his wife, the diffi- ing S. C. 3 W. E. 84. culty seems insurmountable. See Re (g) Knapping i'. Tomlinson, W. N, Jones, 3 Drew. 679. 1870, p. 107 ; Re Clarke's Estate, 13 [(c) 44 & 45 Vict. c. 41, s. 47.] W. E. 401 ; [Frith w. Lewis, W. N. (d) Re Jones' Trusts, 1866, W. N. 1881, p. 145.] p. 65 ; Hiiiings v. Hinings, 2 H. & M. 32 ; King v. Isaacson, 9 W. E. 369. 489 *355 DISTEIBTJTION OF THE TETJST FUND. [Ch. XIV. S. 6. sum to wMcli the infant is entitled. [But under tlie corre- sponding Irish Act, 14 & 15 Car. 2, c. 19 (ir.) it has been held that the receipt of the testamentary guardian for a leg- acy of the infant is a good discharge (a) ; and in a recent case in England, Fry, J., while refusing payment to the tes- tamentary guardian of a legacy which had been paid, into Court under the Legacy Duty Act (5), on the special ground that the testamentary guardian was not a " person entitled " within the meaning of that Act, intimated that he had no intention of interfering with the decision in the Irish case (e) ; and] where an infant .cesf mi que irits* represented himself to be of age, and induced the trustee to pay him, it was held that as the infant was old enough to commit a fraud, the trustee was not liable to him over" agaiu when he came of age (tZ). 35. Lunatic. — The mere appointment by the Court of the committee of the estate of a lunatic, would not justify a trustee iu paying trust-money, to which the lunatic is entitled, to the committee of his estate, in the absence of any special power to receive conferred upon him by the Court. 36. Payment to a partner. — Where a debt is owing to a firm jointly the amount may be paid to the surviving part- ners without the concurrence of the representatives of the deceased partners (e). 37. Payment to a single trustee. —^ The Court will not, in the exercise of its discretion, except under special circum- stances (/), pay out money to a single trustee who has sur- vived his co-trustees (jg) ; and a trustee out of Court would do well to throw all the protection he can about a trust fund •' but it must not be inferred that he would not be safe [(a) M'Creight v. M'Creight, 13 p. 148. In Clark ». Fenwick or Fen- Ir. Eq. E. 314.] nick, W. N. 1873, p. 38, 21 W. R. 320, [(6) 36 Geo. 3, c. 52, s. 32.] the Court ordered a sum of cash, the [(c) Re Cresswell, 45 L. T. N. S. accumulation of income, to be paid 468 ; 30 W. R. 244.] to three out of four trustees, the (d) Overton ». Banister, 3 Hare, ' fourth trustee being abroad. 503 ; and see Wright v. Snowe, 3 De (jg) Re Dickinson's Trust, 1 Jur. G. & Sm. 321 ; Nelson v. Stocker, 4 N. S. 724 ; Re Roberts, 9 W. R. 758 ; De G. & J. 458. , and see Baillie v. McKewan, 35 Beav. (e) Philips V. Philips, 3 Hare, 289. 183 ; Re Dickson's Estate, 3 I. R. Eq. (/) Re Courts of Justice Concen- 344 ; and'note to s. 32 of Trustee Act, tration (^Site) Act, 1865, W. N. 1867, 1860, post. Appendix No. 2. 490 Ch. XrV. S. 6.] DISTRIBUTION OF THE TRUST FUND. *356 in. paying to a single surviving trustee, for payment to a surviving trustee for * sale is of constant occur- [*356] rence. [In cases of sales under the Settled Land Act, 1882, it must be borne in mind that sect. 39 expressly provides that capital money arising under that Act shall not be paid to fewer than two persons as trustees of a settle- ment, unless the settlement authorises the receipt by one trustee (a)-] 38. Overpayment. — If a trustee or executor has made an overpayment in error to a cestui que trust or legatee, he has a right to recoup himself out of any other interest in the trust fund of that cestui que trust or legatee (J). 39. Repayment to executor. — The Court will not generally, in favour of an executor, make an order on a legatee to refund personally (c) ; and it certainly will not make an order to refund to an executor who voluntarily and in spite of ex- pression of doubts on the part of a legatee has made overpay- ments to the latter (d') ; and the Court will not, it seems, at the instance of an executor who is liable to a creditor, com- pel a purchaser from a legatee to refund (e). But an execu- tor who has been made to pay a creditor, and has under his control a legacy appropriated by him as such, but not actually paid over, has been allowed to throw the debt upon the legacy (/), but is disentitled to his costs of obtaining relief (. Osborne, 6 Ves. see Moore v. Moore, 1 Coll. 54. As 455 ; but query if the release spoken to a wrong payment to one cestui que of was not a conveyance. trust by arrangement with another (6) Eaves ii. Hickson, 30 Beav. cestui que trust, see Kogers v. Ingham, 142. 3 Ch. D. 351. 493 *359 DISTEIBUTION OB" THE TETTST PTJND. [Ch. XIV. S. 6. it is primd facie a solemn, simple, and valid defence, and throws on the relessor the heavy onus of displacing it (c). In strict right, however, a trustee in the absence of special cir- cumstances cannot insist upon a release under seal (d). But it has been held that an executor, though he cannot insist on a release from a pecuniary legatee (e), yet on the estate being wound up, has a right to a release from the residuary lega- tee (/). King V. Mullins. — In one case (^), where the trust was by parol for A. for life, and on her death for B. and C, and the costs of the suit depended on the question whether the trus- tee ought, as required, to have transferred the sums on the joint receipt of A., B. and C, or whether he was right in re- fusing, unless they executed a release under seal, Vice Chan- cellor Kindersley decided that the trustee was entitled to a release on the grounds, fkst, that the trust was by parol, and secondly, that the time of payment, according to the tenor of the deed, was anticipated, as the tenant for life was still liv- ing. These reasons are not satisfactory. The circumstance that the trust was by parol, and therefore obscure, might have been an excuse for not paying at all, or ground for demanding an indemnity ; but seems to afford no reason for requiring a relfease under seal, as distinguished from a simple receipt or acquittance in writing. Neither does the anticipa- tion of the time appear to be material, for A., B. and [*359] C. were admitted to be the only cestuis que * trust, and their concurrence in the receipt was equivalent to a reduction into possession (a). In another case, V. C. Wood observed, that every trustee had a right to have some sort of a discharge, perhaps not a release, unless the trust was created by an instrument under (c) See Fowler v. Wyatt, 24 Beav. (e) Re Fortune's Trust, 4 I. E. Eq. 232. 351. (d) Chadwick v. Heatley, 2 Coll. (/) King v. Mullins, 1 Drew. 311. 137 ; Fultoii v. Gilmour, Hill-on Trus- (g) King u. Mullins, Vice Chan- tees, 604; Be Wright's Trust, 3 K. cellor Kindersley, 21st Dec. 1852, & J. 421 ; Warter v. Anderson, 11 M. S. ; 1 Drew. 308. Hare, 303; Re Cater's Trust, 25 Beav. [(a) See Anson v. Potter, 13 Ch. 366 ; Foligno's Mortgage, 32 Beav. D. 141.] 131. 494 Ch. XIV.. S. 6.] DISTRIBUTION OF THE TEUST FUND. *359 seal (J). But no sucli distinction has ever yet been made, and V. C. Kindersley, as we have seen, required a release because the trust was by parol. [45. Property falling in after release. — A release of the executors and the estate of the testator given by a pecuniary legatee on payment of part of his legacy, on the footing of the estate being insufficient for payment of the legacies in full, will not enure for the benefit of the residuary legatee, if, by reason of additional funds falling in, the estate subse- quently becomes sufficient to make a further payment to the legatees (c).] 46. Release from trustees to trustees, — The trust fund is not unfrequently transferred from the trustees of an old set- tlement to the trustees of a new settlement, and the trustees of the old settlement insist on a general release before they will part with the fund, while, on the other hand, the trus- tees of the new settlement feel a reluctance to give more than a simple receipt. The requisition of the trustees of the old settlement has usually been complied with, but perhaps it could not be enforced (cZ). Of course, the trustees of the new settlement cannot be called upon to enter into any cove- nant of indemnity. 47. Expense of the release. — As the party to benefit by the deed is, in general, the one to prepare it, the release will be drawn by the solicitor of the trustee. Another reason would be that the trustee has the necessary documents in his possession. The expense must be paid out of the trust fund. 48. Order of the Court. — When a trustee pays money under the direction of the Court, he is indemnified by the order itself, and is not entitled to any release from the par- ties (e). It would be impossible to hold a trustee answera- (6) Re Wright's Trust, 3 K. & J. 137 ; Underwood v. Hatton, 5 Bear. 421; and see Re Cater's Trusts, 26 39; Farrell v. Smith, 2 B. & B. 337; Beav. 366. Fletcher v. Stevenson, 3 Hare, 370 ; [(c) Re Ghost's Trusts, 49 L. T. N. KnatchbuU v. Fearnhead, 3 M. & Cr. S. 588.] 126; David v. Frowd, 1 M. & K. 209; ((f) Re Cater's Trusts, 25 Beav. Sawyer v. Blrchmore, 1 Keen, 401 ; 866. Smith v. Smith, 1 Dr. & Sm. 384 ; Ben- (e) See Waller v. Barrett, 24 Beav. nett o. Lytton, 2 J. i B. 155 ; Wil- 413; Gillespie v. Alexander, 3 Russ. liams v. Headland, 4 GifC. 495; Eng- 495 *360 DISTRIBUTION OF THE TRUST FUND. [Ch. XIV. S. 6. ble for an act not done by himself, but by the Court. It is the duty, however, of the trustee to fully inform the Court of all the material facts within his knowledge, and if [*360] he * improperly withheld them, he would be made responsible for the results of his suppression of facts. [49. Where a settlement is executed in contemplation of an intended marriage, which is never solemnized, or "of a marriage which is annulled on the groimd of impotency, the trustees of the settlement will be ordered to reconvey the trust property to the settlor discharged from the trusts (a).] 50. 36 Geo. 3, o. 52. — By 36 G. 3, c. 51, s. 32, executors and administrators, where legatees or next of kin are infants, or beyond seas, may pay the legacies or shares into Court (J), and by 45 C 3, c. 28, s. 7, the ^provisions of the former Act are extended to trustees and owners of real estate charged with legacies. 51. 10 & 11 Vict. c. 96. — By 10 and 11 Vict. c. 96, entitled " An Act for better securing trust funds and for the relief of trustees," it is enacted : I. That all trustees, executors, administrators, or other persons having in their hands any moneys belonging to any trust whatever, or the major jfart of them, shall be at liberty on filing an affidavit shortly describing the instrument creating the trust, to pay the same into the Bank of England, to the account of the particular trust, subject to the order of the Court of Chancery, and that all trustees or other persons having any annuities or stocks of the Bank of England, of the East India Company, or South Sea Company, or any Government or Parliamentary., securities standing in their names, or in the names of any deceased persons of whom they shaU. be personal representatives, upon any trust, or the land V. Lord Tredegar, 35 Beav. 256 ; ing the legacy in Consols and accu- Lowndes v. Williams, 24 L. T. N. S. mulating it at compound interest, 465. Eimell v. Simpson, 18 L. J. N. S. Ch. [(a) Essery t). CowlaS-d, 26 Ch. D. 55; but it may well be doubted 191 ; Addington v. Mellor, 33 W. R. whether this decision would now be 232.] followed, as a trustee may properly [(6) It has been held that under deal with a fund out of Court in the this Act it is the duty of executors to same manner as the Court would have pay an infant's' legacy into Court, and dealt with it if under its control.] that they are not justified in invest- 496 Ch. XIV. S. 6.] DISTEIBTJTION OP THE TRUST FUND. *361 major part of them, shall be at liberty to transfer or deposit such stocks or securities into or in the name of the Account- ant^General (c), with his priyity, in the matter of the par- ticular trust subject to the orders of the said Court, and in every such case the receipt of one of the cashiers of the said Bank for the money so paid, or the certificate of the proper officer of the transfer or deposit of such stocks or securities, shall be a sufficient discharge to such trustees or other per- sons for the money so paid, or the stocks or securities so transferred or deposited. ♦ II. That such orders as shall seem fit shall from [*361] time to time be made by the Court of Chancery in respect of the trust moneys, stocks, funds or securities so paid in, transferred and deposited as aforesaid, and for the investment and payment of any such moneys, or of any divi- dends or interest on any such stocks or securities, and for the transfer or delivery out of any such stocks and securities, and for the administration of any such trusts generally upon a petition to be presented in a summary way ; and service of such a petition shall be made on such persons as the Court shall direct ; and every order made upon any such petition shall have the same effect as if the same had been made in a suit regularly instituted ; and if it shall appear that any such trust funds cannot safely be distributed without the institu- tion of one or more suit or suits, the Court may direct any such suit or suits to be instituted. 52. 12 & 13 Vict. o. 74. — This Act did not enable the major part of trustees to pay in or transfer a fund where the other trustees had a legal control over the fund and would not concur. But by 12 & 13 Vict. c. 74, it was enacted, that where moneys, annuities, stocks, or securities were vested in persons as trustees, executors, administrators, or otherwise, and the major part of them were desirous of transferring the funds into Court under the Trustees Relief Act, the Court, on a petition presented under the said Act for that purpose, might direct the transfer by the major part, without the con- currence of the rest, and might make an order on the neces- sary parties to permit such a transfer. (c) Now the Paymaster General ; sep 35 & 36 Vict. c. 44, ss. 4, 6. 497 *362 DISTRIBtJTIOJf OF THE TRUST FTJND. [Ch. XIV. S. 6. The decisions upon Uhese important Acts, and the General Orders relating to them, wiU be found separately considered in the Appendix. 53. Payment to official trustees of charities. — rBy 18 & 19 Vict. c. 124, s. 22, any trustee or other person having stock or money in- his hands for a charity may, by an order of the Board of Charity Commissioners, transfer the stock or pay the money to the Official trustees of charitable funds, and such payment or transfer will be an indemnity to the person paying or transferring. 54. Payment into County Court. — By 30 & 31 Vict. C. 142, s. 24, trust funds not exceeding 500Z. in amount or value may, if money, be paid into the Post Office Savings Bank of any county court town, in the name of the registrar of such Court, or, if stock or' securities, be transferred into the joint names of the treasurer and registrar of such Court. 55. Protection against creditors, &c. — Trustees who are also executors may be embarrassed as to the distribution of the trust fund, not merely by the diffictdty in [*362] * ascertaining who are their cestuis que trust, but by reason of the possible existence of paramount claims on the part of creditors or others. Turner's Act. — To meet this difficulty provision was made by Sir George Turner's Act (a) for directing a reference, upon motion or petition of course, to inquire whether there were any outstanding debts or liabilities affecting the estate of any deceased person, and for enabling the personal repre- sentative to distribute the estate subject to the result of the inquiry, without the cost of a general administration under the direction of the Court ; and by a more recent enactment, the benefit of these provisions might be obtained by summons at chambers (J). 56. Lord St. Leonards' Act. — By Lord -St. Leonards' Act (c), even the necessity of an application to the Court under that of Sir George Turner was in most cases rendered unnecessary, it being by Lord St. Leonards' Act in substance enacted that executors and administrators, after giving such (o) 13 & 14 Vict. c. 35, ss. 19-25. (c) 22 & 28 Vict. c. 35, s. 29. (4) 28 & 24 Vict. c. 38, s. 14. s 498 Ch. XIV. S. 6.] DISTKIBTJTION OF THE TRUST FUND. *362 notices for creditors and others (c?) to send in their claims as would have been given by the Court of Chancery, may at the expiration of the time named in the notices proceed to dis- tribute the estate, without being liable for any claim of which they shall not have had notice at the time of 4istribution (e). [And the above provisions in Sir George Turner's Act, and the amending Act, have since been repealed (/).J 57. Jurisdiction of County Courts. — By 28 & 29 Vict. c. 99, administration suits and suits for the execution of trusts and proceedings under the Tijustees Relief Act, or the Trus- tee Acts, may be instituted in the County Courts where the value does not exceed 500Z. Qg) (d) This includes the claims of tribution are bound to give all proper next of kin under an intestacy, New- information to unpaid creditors, or ton V. Sherry, 1 C. P. D. 246. they will be deprived of their costs (e) Sums appropriated by execu- in suits b'y such creditors. In re Lind- tors and retained by them as trustees say, 8 I. R. Eq. 61. are moneys distributed and cease to [(/) 46 & 47 Vict. c. 49.] be assets, CJegg v. Rowland, 3 L. R. (ig) The County Courts Acts Eq. 368. Executors, to entitle them- Amendment Act, 30 & 31 Vict. c. selves to the protection of the Act, 142, s. 8, [and 36 & 37 Vict. c. 66, s. must insert advertisements in the 67, enable] parties to apply at cham- London Gazette, as well as in local bers for transfer of a suit pending in papers. Wood v. Weightman, 13 L. the High Court, affecting property not R. Eq. 434; and executors after dis- exceeding 600/. to a Covinty Court. 499 [*363] * CHAPTER XV. THE DXTTIES OF TRUSTEES OF EENEWABLE LEASEHOLDS. Upon this head we propose — I. To examine the preliminary question, in what cases the obligation to renew is imposed by the settlement. II. To inquire in what manner the trustees are to levy the fines payable, upon the renewals. I. In what cases the obligation to renew is imposed by the settlement.^ 1. Settlement of leaseholds does not per se imply a direction to renew. — It might .naturally be supposed, that, from the very circumstance of the leaseholds being of a renewable character, a settlement of them to several persons in succes- sion would per se imply a right in the remainderman to call upon the tenant for life to contribute to the fine (a) ; and indeed Lord Thurlow, in the instance of a lease which had not previously been treated as renewable, observed, " The cases in which the nature of the estate or the will of the testa- tor compels a renewal, appear not to apply to the present : where there is no such custom, or direction, it is in the dis- cretion of the tenant for life to renew or not " (5). However, it seems to be now established generally, that, in a device of renewable leaseholds without the interposition of a trustee, (o) See White ». White, 4 Ves. 32. (6) Nightingale v. Lawson, 1 B. C. C.443. 1 Renewal of leases. — In America there are no fees or fines attending either the making or the renewal of leases, so that much of what is important in England in reference to leases is of no consequence here. The right to renew a lease is capable of sale and conveyance ; Anderson v. Lemon, 8 N. Y. 236 ; Phyfe v. Wardell, 6 Paige, 268. The trustee must renew a lease, if at all, for the benefit of the trust estate, and he cannot take it in his own name, and for his own advantage, even if it is impossible to get it for the benefit of the trust ; Galbraith v. Elder, 8 Watts, 81 ; Holridge v. Gillespie, 2 Johns. Ch. 33; Fisk v. Sarber, 6 Watts & S. 18; M'Clanahan ». Henderson, 2 A. K. Marsh. 388 ; and if they do renew in any name, it inures to the benefit of the trust ; Van Home v. Fonda, 6 Johns. Ch. 388 ; Smiley v. Dixon, 1 Pa. 439. 500 Ch. XV.] RENEWAL OF LEASES. *364 the remainderman cannot oblige the tenant for life to con- tribute to the fine (e^ > ^^^ ^^ i* "^^^ determined even where the devise was expressly made, " subject to the payment of all fines, and as they became due yearly and for every year " (c?). However, as the interest given is in its nature capable of renewal, the Court says, " If the tenant for life do renew, he shall not by oonverting the new acquisition to his own use derive an unconscientious benefit out of the estate"(e); but on the remainderman's * contributing [*364] to the fine, shall be regarded as a trustee, and shall hold the renewed interest upon the trusts of the settle- ment (a). 2. AVhether a direction to rene'w be implied by the interposi- tion of a trustee. — Will the interposition of a trustee sufii- ciently indicate an intention of obliging the tenant for life to renew? "In a devise to trustees," says Lord Hardwicke, "If cestui que trust for life be one of the lives, I ^should doubt whether such cestui que trust could be compellable to con- tribute ; but here all these lives were strangers ; the intent of the testator certainly was, that the lease should continue, and be kept on foot, and something must be done for a renewal, though nothing is mentioned" (b^. Lord Alvanley on one occasion alluded to the point, but said he was not called upon to decide it(c). In Hulkes v. Barrow (c?), where the^ devise was to trustees upon trust to permit one to receive the rents for life, with remainders over, " subject to the payments of the rents and performance of the covenants reserved and con- tained, or to be reserved and contained, in the present ov future leases, whereby such premises were or should be held, and also all taxes, fines, and expenses attending the premises," it was held that the obligation of renewing the lease was imposed by the will. And in Lock v. Lock (e), where a (c) "White V. White, 4 Ves. 32, per C. 440; Stone v. Theed, 2 B. C. C. Lord Alvanley ; S. C. 9 Ves. 561, per 248, per Lord Thurlow ; Coppin v. Lord Eldon ; Stone v. Theed, 2 B. C. Fernyhongh, 2 B. C. C. 291 ; Fitzroy C. 248, per Lord Thurlow. v. Howard, 3 Euss. 225. (d) Capel B. Wood, 4 Russ. 500. (6) Verney v. Verney, 1 Ves. 429. (e) Stone v. Theed, 2 B. C. C. 248, (e) White v. White, 4 Ves. 33. per Lord Thurlow. (rf) Taml. 264. (a) Nightingale v. LawBon, 1 B. C. (e) 2 Vern. 666. 501 *865 EBNEWAL OF LEASES." [Ch. XV. testator had devised a college lease of twenty-one years to his wife for life, remainder to her son J she paying lOZ. per annum to her son during her life ; it was ruled, that, as the testator contemplated the continuaijce of the lease during the life of the wife, she was bound to renew. These, however, were cases accompanied with special circumstances. It has since been decided by Lord Plunket, m Ireland, that a settle- ment with the mere interposition of a trustee does not impose an obligation to renew (/). 3. Whether implied in a.marrlage settlement. — Where lease- holds of this kind are made the subject of a marriage settle- ment, it may be argued, that as the parents and issue who have any interest given them are purchasers for value, the enjoyment of the tenant for life should be consistent with that of the other subsequent takers. But ia Lawrence v. [*365] Maggs (g), the case of * a marriage settlement with trustees interposed, but without any mention of re- newals. Lord Northington was apparently of opinion that the tenant for life was not bound to renew. 4. Implied in articles for a settlement. — If renewable leaseholds upon marriage be articled to he settled, the Court will, in executing the settlement, insert the proper direction for renewals. This, it seems, was directly determined in Graham v. Lord Londonderry (a) : and the case of Lawrence V. Maggs, before Lord Northington, was cited before Lord Thurlow in Pickering v. Vowles (5), as establishing the same doctrine; but it appears by the report taken from Lord Northington's own MS. that the Bar were mistaken in (/) OTerrall v. O'Ferrall, LI. & submitted to contribute. See pp. G. Kep. temp. Plunket, 79. In Trench 454-456. , V. St. George, 1 Dru. & Walsh, 417, (j) 1 Eden, 453. Search has been before the same Judge, it is not clear made for this case in B. L. through whether his Lordship did or not con- several years, but the decree has not sider the wiU as creating an obliga- been found. See Lord Montfort v. tiou to renew, but it would rather Cadogw, 17 Ves. 488, S. C. 19 Ves. appear that he did. The remainder- 638 ; Trench ». St. George, 1 Dru. & man was held not liable to contribute Walsh, 417. towards the renewal fines in favour of (a) Cited Stone v. Theed, 2 B. C. the tenant for life, except as respected C. 246. certain fines paid subsequently to (6) 1 B. C. C. 197. The cause 1819, as to which the remainderman does not appear in B. L. 502 Ch. XV.] RENEWAL OF LEASES. *366 this ((?). However, Lord Thuiiow himself seems to have entertained that opinion, for in the same ease of Pickering V. Vowles, where the property was articled to be settled, but there was no direction for renewals, his Lordship said, " It was intended the lease should be fully estated, and that the husband and wife should have life estates, and that so fuUy estated it should go to the children." 5. Of discretionary renewals. — A direction for renewals where successive estates are limited is sometimes in the form of a discretionary power. The instrument may, indeed, be so specially worded, that the power should be perfectly arbi- trary ; but if the proviso be simply that " it shall be lawful for the trustees to renew, from time to time, as occasion may require, and as they may think proper," the clause will be construed, not as conferring an option upon the trustees of renewing or not, but as a safeguard against any unreasonable demands on the part of the lessor (d). 6. 23 & 24 Vict. o. 145. — By an Act passed 28th August, 1860, trustees (under instruments of trust executed since the date of the Act) of leaseholds renewable hy contract, or custom, or usual practice are avthorised in the exercise of their discretion, and, if so required by any person beneficially interested, are bound as a duty, to use their best endeavours to renew ; but the Act is not to apply, where by the terms of the settlement or will, the person in possession for his life or other limited interest is entitled to enjoymfent without any obligation to renew the lease, or to contribute to the expense of renewal ; and the Act where it applies enables the trustees to pay the expense out of any monies in their hands held upon similar trusts, or to raise * the same by [*366] mortgage (a). [This enactment has since been repealed (5), but the repeal is not to affect any right ac- crued or obligation incurred before the commencement of the Repealing Act, 31st December, 1882, and is not to affect (c) 1 Eden, 453. 5 Beav. 134; Luther v. Biaiiconi, 10 Id) Milsington r. Mulgrave, 3 Mad. Ir. Ch. Bep. 203. 491, 5 Mad. 472 ; Mortimer t;. Watts, (a) 23 & 24 Vict. i;. 145, ss. 8 & 9. 14 Beav. 416 ; and see Verney v. Ver- [(6) 45 & 46 Vict. c. 38, s. 64.] ney, 1 Ves. 480; Harvey v. Harvey, 503 *366 RENEWAL OF LEASES. [Ch. XV. any operation, effect, or consequence of any instrument executed or made before the same date. The powers and obligations to renew under instruments which came into operation before 31st December, 1882, are accordingly un- affected by this repeal and are stUl in force.] 7. 23 & 24 Viot. c. 124. — By another Act, also passed 2^th August, 1860, where any estate or interest under any lease or grant from an ecclesiastical corporation, is Tested in a person as trustee, whether expressly or by implication of law, with a power to raise money for procuring a renewal, or where such power is vested in any person, it is made lawful for such person to raise money for the ptirpose of purchasing the reversion or otherwise enfranchising the property (c) ; and it has been held that this enactment confers a power not only to raise the money, but also to effect the purchase or enfranchisement (JT). But this wiU not authorise the trus- tees to make any arrangement with the reversioners which will disturb the relative rights of the tenant for life and the remaindermen \mder the settlement ; and where it was pro- posed to surrender part of the leaseholds in consideration of a release of the reversion of the rest of the leaseholds, and the interests of the tenant for life would suffer -by the arrangement, the Court had no power, without the consent of the tenant for life, to give effect to the proposal, though beneficial on the whole (e). II. How fines on renewals to be levied. — We next proceed to inquire in what manner the fines for renewals are to be levied by the trustees. Upon this subject we shall advert. First, to the case where the settlor himself has specifically marked out the fund from which the fines are to be raised, and Secondly, to the rules adopted by the Court, where the settlor himself has omitted to declare any intention. (c) 23 & 24 Vict. c. 124, s. 20. trust for renewal, overriding the in- (rf) Hay ward v. Pile, 5 L. B. Ch. terest of the tenant for life, the Court App. 218, per Lord Hatherley. made the order, Hollier v. Bume, 16 (e) Hayward v. Pile, 5 L. R. Ch. L. R. Eq. 163; [See Maddy v. Hale, App. 214. But in another special 3 Ch. D. 327; Re Lord Ranelagh's case where there was an absolute Will. 26 Ch. D. 691.] 504 Ch. XV.] EENEWAL OF LEASES. *367 First. Where the fund for the fines is pointed out. 1. Ho'w to be levied out of " rents, issues, and profits," -where the leases are for years. — If there be an express trust to pro- vide the fines for renewals out of the " rents, issues, and prof- its," and the leaseholds are terms of years not deter- minable on lives, so that the times of renewal can * be [*367] certainly ascertained, it will be the duty of the trus- tees to lay by every year such a proportion of the annual income as against the period of renewal will constitute a fund sufficient for the purpose (a). '2. Fines to be levied out of rents and profits, or by mortgage. — If the trust be to levy the fines for renewal out of the " rents, issues, and profits, on^ hy mortgage" it was held in a case before Sir J. Leach that the annual rents only would in the first instance be applicable, for he considered the author- ity to mortgage not as making it optional with the trustees whether they should or not affect the interests of the re- mainderman, by throwing the charge of the renewal upon the corpus of the property, but as given for the protection of the cestuis que trust in case the amount of' the fine should not be otherwise forthcoming (6), andintimated that should the trustees be under the necessity of mortgaging, the Court would call back from the party in possession the amount of the incumbrance thus temporarily incurred (c). However, in the later case of Jones v. Jones (c?), where the trustees were empowered to levy the fines " by and out of the rents, issues, and profits, or by mortgage, or by such other ways and means as should be advisable," the Court, after observing that to levy the fines from the rents would throw them on the tenant for life, while a mortgage would be oppressive to the remainderman, declined to give any opinion whether the trustees might not, had they exercised their discretion, have determined upon whom the burthen should fall ; but as the trustees had not exercised their discretion, it was held that (a) Lord Montfort v. Lord Cado- more, 5 Mad. 471 ; and see Milles d, gan, 17 Ves. 485 ; S. C. 19 Ves. 635; Milles, 6 Ves, 761. see Earl of Shaftesbury v. Duke of (c) 5 Mad. 472 ; and see Earl of Marlborough, 2 M. & K. 121 ; Blake Shaftesbury v. Duke of Marlborough, V. Peters, 1 De G. J. & S. 345. 2 M. & K. 121, 123. (6) Milsintown v. Earl of Port- (d) 5 Hare, 440. 505 *368 EEKEWAL OP LEASES. [Ch. XV. the Court could adjust the onus amongst the parties accord- ing to the equitable rule, viz. in proportion to their actual enjoyment, as soon as it could be ascertained (e). And in Greenwood v. Evans (/), Reeves v. Creswick (^), and Ains- lie V. Harcourt (A), where the fines were to be raised out of the rents, issues, and profits, or by mortgage, the Court in Jike manner adopted the principle of throwing the onus on the successive tenants of the estate, in proportion to their enjoy- ment (i). In the first two cases the leaseholds were [*368] for lives, and in the last the leaseholds were * partly for lives and partly for years, but no distinction was taken on that account. The present leaning of the Courts would appear, therefore, to be,i:o consider the language of the - instrument, as directing only the temporary mode of raising the fines, without prejudice to the ultimate equitable adjustment according to the principles now acted upon in equity in ordinary cases. But if the trusts be to pay the renewal fines by and out of " the annual rents, issues, and profits," with a power, if the money wanted for renewal be not produced, to raise it by mortgage, the onus will fall upon the tenant for life (a). 3. How to be levied when the leases are for lives. — If the leaseholds be either for lives ox for years determiTiable on lives, and the trust is to raise the fines for renewal out of the '■'■rents, issues, and profits," the expenses of renewal must still be cast upon the annual rents, if it clearly appear' that such were meant, though from the uncertainty of the time, the trustees cannot be sure they shall have accumulated an adequate fund. 4. Whether rents and profits mean annual rents. — But the expression " rents, issues, and profits," often stands by itself, without any sufficient indication aliunde, that annual rents are intended, and then the question arises, and is attended with great difficulty, whether the fines shall be raised out of the annual rents or the corpus. (e) Jones v. Jones, 5 Hare, 440. (A) 28 Beav. 313. (/) 4 Beay. 44. [(() See Isaac v. "Wall, 6 Ch. D. (S) S Y. & C. 715, as corrected 706; iJe Marquess of Bute, 27 Ch. D. from Beg. Lib.; see note (a) ; p. 369. 196.] (a) Solly V. Wood, 29 Bi-av. 482. 506 Ch. XT.] BENEWAL OP LEASES. *369 Stone V. Theed. — In Stone v. Theed (J), Lord Thurlow held that annual rents only were applicable. In Allan v. ■ Backhouse (c) Sir T. Plumer considered that the trustees might sell or mortgage, and that the tenant fcir life and remainderman must contribute in the usual proportions, and this decision was affirmed on appeal by Lord Eldon (c?). In Shaftesbury v. Marlborough (e) Sir J. Leach observed upon the conflict between the preceding cases, and followed the authority of Lord Thurlow. [In lie Barber's Settled Estates (/), the authority of Allan v. Backhouse was con- ceded without argument.] The decisions in Playters v. Abbott (^) and Townley v. Bond (A), must be viewed as resting only upon the special wording of the instruments which were under consideration. Greenwood V. Evans, &o. — In Greenwood V. Evans(i), Jones V. Jones (/), Reeves v. * Cresyick (a), and [*369] Ainslie v. Harcourt (J), the trustees were empowered to levy the fines from the rents, issues, and profits, or by mortgage, and the Court, as we have seen, apportioned the burthen amongst the successive tenants, according to their enjoyment. (6) 2 B. C. C. 243; see the case following extract from the will : "It stated from 'Reg. Lib. with some re- shall be lawful for my said trustees; marks, in Jones v. Jones, 5 Hare, 451, and the survivor of them, and the note (a) ; and see Metcalfe v. Hutch- heirs, executors, administrators and inson, 1 Ch. D. 591. assigns respectively of such survivor (c) 2 V. & B. 65. to renew, or use their or his endeav- (d) Jac. 631. ' [A full copy of ours to renew, the leases for the time Lord Eldon's judgment will be found being of such part of my said estates in the Law Magazine, vol. 26, p. 112.] as shall be accustomably renewable (c) 2 M. & K. 111. from time to time and as often as oc- [(/) 18 Ch. D. 624.] casion shall require, and for that (j) 2 M. & K. 97. purpose to make such surrenders of (A) 2 Conn. & Laws. 393. the then leases, or any renewed (i) 4 Beav. 44. leases, as shall be requisite and nec- (j) 5 Hare, 440. essary in that behalf, and by and out (a) 3 Y. & C. 715. It is stated in of the rents, issues, and profits, of the the report that " there were no funds premises, the leases whereof may be provided for the purpose of renewal so renewed, or by mortgage thereof, to by the testator's will ; " from which it raise so much monies as shall be suf- might be supposed that the will was ficient for paying the several renewal altogether silent upon the subject, fines and other necessary charges for but Mr. Shapter, Q. C, who had occa- such renewals." sion to consult the Keg. Lib. oblig- (b) 28 Beav. 313. ingly furnished the author with the SOT *370 RENEWAL OF LEASES. [Ch. XV. Result of the cases. — The result appears to be that where the direction is to raise the fines out of "the rents, issues, and profits," simply, the Court may be compelled, by the express language of the instrument, to throw the fines upon the annual rents, but will lean strongly against such a con- struction, and where the trustees are empowered to raise the fines out of " the rents, issues, and profits, or by mortgage," it will hold the discretion to apply only to the temporary means of raising the fund, and will apportion the burthen according to the general rule (c). 5. Of raising the fines by Mray of insurance. — On a refer- ence to the Master in Chancery by Sir J. Leach, how a fund for payment of fines on the renewal of leaseholds for lives, where the fines were to be paid from the annual rents, could best be secured, the Master proposed in his report, that each of the lives, upon which the leases were held, should be insured against the life of the tenant for life in a sum suffi- cient to cover the amount of the fine, and that the premiums upon the policies should be paid out of the annual rents and profits (c?). Upon this arrangement we must remark that the lives of the cestuis que vie ought to have been insured unconditionally, and not against the life of the tenant for life, for the estate was continually deteriorating as the lives wore out, and the remainderman was entitled to have good lives or equivalent insurances. In leaseholds for years, the remainderman has a right to a proportional accumulation towards the payment of the next fine, and why is not the same principle to prevail in the case of leaseholds for [*370] lives ? Subject to this observation, a * more con- venient mode of raising the fines could not perhaps be suggested, and a trustee under similar circumstances would scarcely incur a risk in acting upon it at his own discretion. 6. Power to charge freeholds for raising fines. — Where free- holds and leaseholds for lives are limited to the same uses, it is usual, from the difficulty of mortgaging leaseholds vested [(p) See Be Marquess of Bute, 27 (rf) Earl of Shaftesbury v. Duke Ch. D. 196.] of Marlborough, 2 M. & K. 124; and see Greenwood v. Evans, 4 Beav. 44. 608 Ch. XV.] EBNBWAL OF LEASES. *370 in trustees (who will not covenant beyond their own acts), to insert a power to charge the freeholds for raising the fines ; and it would be well to provide that the freeholds and lease- holds might be joined together in the security, and that the loan should precede other charges created by the settlement, and that the corpus of the property should be subject to the mortgage, so as to shut out the question of apportionment between tlje tenant for life and the remainderman. 7. Who shall have the accumulations -where renewal cannot be had. — [Where there is an absolute trust for renewal of lease- holds out of the rents and profits over-riding the interest of the tenant for life, but from the unwillingness or incapacity of the lessor no renewal can be obtained, it is the duty of the trustees to make the best arrangement which is practi- cable for rendering the property permanent for the benefit of the persons successively entitled, either by purchasing the reversion where this can be done on advantageous terms, and with a due regard to the interests of the successive ces- tuis que trust, or by converting the leaseholds and investing the proceeds, allowing the tenant for life only the income of the investments during his life (a) ; but where no such abso- ^ lute trust for renewal exists, although] a portion of the annual rents and profits may have been destined by the settlor to defray the expenses of renewals, if no renewal can be ob- tained, the sums which would have been raised will be regarded as a charge which fails of taking effect, and will merge for the .benefit of the tenant for life (V). 8. Who must compensate the remainderman where no renewal has been made. — If a trustee (e), or tenant for life in the situation of a trustee (c?), fail in his duty to apply the given fund, the remainderman may call for a compensation from [(a) Maddy v. Hale, 3 Ch. D. 327 In r^ Wood's Estate, 10 L. E. Bq. 572 HoUier v. Burne, 16 L. R. Eq. 163 Beav. 629; In re Money's Trusts, 2 Dr. & Sm. 94. See Colegrave v. Man- by, 6 Mad. 86, 87, 2 Russ. 252 ; Ben- Be Barber's Settled Estates, 18 Ch. nett v. CoUey, 5 Sim. 181, 2 M. & K. D. 624; Re Lord Ranelagh's Will, 26 231; Browne v. Browne, 2 Giff. 304. ,Ch. D. 590.] (c) Lord Montfort ». Lord Cado- (6) Morres v. Hodges, 27 Beav. gari, 17 Ves. 486 ; S. C. lOVes. 635j 625 ; Richardson v. Moore and TardifE and see Wadley v. Wadley, 2 Coll. 11. V. Robinson, cited Colegrave v. Man- (rf) Colegrave v. Manby, 6 Mad. by, 6 Mad. 82, 83, and reported 27 72 ; S. C. 2 Russ. 238. 509 *371 EEXEWAL OF LEASES. [Ch. XV. such trustee, or tenant for life, or their assets. But when, by the permission of the trustee, the tenant for life has [*371] been in the full enjoyment of the rents and * profits ■without deduction for renewals, though the trustee is primarily answerable tO the remainderman, yet the tenant for life, who has had the actual pernancy, must to that extent make it good to the trustee (a). 9. Of fines on underleases. — And where the leaseholds were annually renewable for twenty-one years, and the cus- tom had been for the lessee annually to grant underleases for twenty years, the tenant for Mfe, las bound to pay the fines to the lessor out of the annual rents and profits, was declared entitled to the fines paid annually by the under- lessees' (6). How fines' to be levied where no direction by the settlor. — Secondly. It often happens that renewable leaseholds are devised to trustees with a direction, either expressed or im- plied, to keep the leases continually renewed, but without any declaration of intention out of what fund the settlor meant the exppnses to be levied. 1. Where paid by tenant for life or reniaii}derm.an. — Where this is the case, the tenant for life and remainderman may possibly agree to contribute towards the fine out of their own pOckets, at the time of the renewal ; or if the tenant for life and remainderman cannot agree to join in raising the fine, one of them mky be willing to advance the whole amount pro tempore out of his Own pocket, and then an apportion- ment on the principles adopted by the Court may be com- pelled between the tenant for life's estate and the remain- derman at the tenant for life's decease, and either party advancing the fin,e wiU have a lien on the renewed lease for the amount expended beyond his proportional part. If the tenant for life and remainderman will neither jointly,, nor win either of them singly advance the fine, then it is said~the (a) Lord Montf ort v. Lord Cado- 2 Coll. 11 ; [Brigstocke v. Brigstocke, gan, uU supra ; Townley v. Bond, 2 8 Ch. D. 357.] Conn. & Laws. 403, 406, per Sir E. (6) MUleB v. Milles, 6 Ves. 761 ; Sugden ; and see Wadley v. Wadley, and see Earl Cowley v. Wellesley, 1 L. K. Bq. 656; S. C. 35 Beav. 640. 610 Ch. XV.] RENEWAL OF LEASES. *372 trustees must raise the expenses out of the estate by way of mortgage (. Adams, 25 Beav. 652; Adams v. Eobarts, lb. 658), a testatrix bequeathed her Imperial an- nuities and five per cent, stock in trust, upon the termination of the Imperial annuities (which event oc- curred in May, 1819) for the children of her daughter Mary Paul, except an eldest son. Mary Paul had at the testatrix's death five children, viz. two sons, John and Walter, and three daughters. John died before the ter- mination of the annuities, so that on the occurrence of the latter event Walter was the eldest son, and the question was, whether he was to share in the portions and it was ruled that he was not, for that as the time of distribution was the period for ascer- taining who were to be included in the class, it must equally be the period for ascertaining who were to be ex- cluded. Here there was no real estate in settlement at all, and therefore the principle of Chadwick „. Doleman did not come into question. The Court, however, during the argument, observed, "The oases where this rule 533 *391 DUTIES OF TEUSTEES [Ch. XVII. S. 1. wick V. Doleman to the case, where a grandmother [*391] having a power over the settled * estate, appointed has been adopted hare arisen on gifts by parents or persons in loco, parentis. In general the estate passing to the eldest son has been in the power of the persons making the provision for the younger children, and the same instrument has comprised the estate and the provision. Has the mle ever been applied to portions given by a stranger, who merely contemplated the chance of property descending to the eldest son, as representative Of the family ? " In Lincoln v. Pelhajn, 10 Ves. 166, (and see Bowles v. Bowles, lb. 177) the circumstances were somewhat similar. Lady Pelham gave a residuary fund in trust for Frances Pelham for life, and after her death for the younger chil- dren of the testatrix's late daughter, Catherine, Duchess of Newcastle. At the date of the will there were three children living of Catherine, viz. Lord Lincoln, Thomas, and John. Lord Lincoln died in the testatrix's life- time, and Thomas contended that as he was a younger child at the date of the will, though not at the death of the testatrix, he was entitled to a share. Lord Eldon disallowed the claim, and considered that the general description of younger children was not equivalent to naming the younger children living at the date of the will, but meant younger children for the time being, and added, that "what- ever was the principle as to parents or persons in loco parentis, it had no application here, for though the grand- mother was executing a purpose, which as to this kind of doctrine might be considered parental, (the purpose of providing for the younger branches, of other persons certainly, but in a sense her family,) yet she thought that her daughters were suf- ficiently provided for, so as to make it unnecessary to consider them ob- jects of her care," 10 Ves. 174. Here, again, there was no dispute as to ^he effect of the shifting of any estate, but it was simply a question of con- struction, who were the persons meant by the description of younger children. In Scarisbrick v. Lord Skelmers- dale, 4 Y. & C.116, Justice Maule said, " It is to be observed that it is only in cases of provision made by parents or persons standing hco parentis, that courts of equity give this forced construction to the word ' younger.' In cases of gifts by stran- gers courts of equity, as well as courts of law, construe the word according to its literal import, as laid down by Lord Hardwicke in Hall k. Hewer. The distinction is founded on the con- sideration, that in the one case the party giving or settlmg is regarded as doing an act which he was under a moral, though not a legal obligation to perform, whereas in the case of a gift by a mere stranger, no such obli- gation exists," &c. In Sandeman v. Mackenzie, 1 J. & H„613, Mrs. Chisholm, a widow with three children (Alexander, the eldest — who was in possession of the Chis- holm estates, subject to his mother's jointure — Duncan, and Jemima), married Sir Thomas Hamsay, and by the settlement made on the marriage. Sir T. Ramsay settled 10,000/. upon himself and wife successively for life, with remainder to the then present children of Mrs. Chisholm (except Alexander) equally at twenty-one; and if none of such younger children of Mrs. Chisholm should attain twen- ty-one, then in trust for Alexander. Sir T. Ramsay died in 1830, and Lady Ramsay in 1859 ; Alexander died in his mother's lifetime in 1838, and therefore Duncan came into posses- sion of the Chisholm estates. All the three children attained twenty- one. The question was whether Dun- 534 Ch. XVII. S. 1.] FOK KAISING 'POKTIONS. *S92 portions to her younger grtodchildfen (a) ; but he also applied it where the settlor was an unde, and this not because he considered the uncle as standing loco parentis, but on general * principles (a). "Where," [*392] he said, "• a provision is made by a father either by will or settlement for younger children, an elder unprovided for shall be deemed a younger, and the ground is that every branch of the family should be provided for, the Court not considering the words elder or younger. The question then ia, whether there exists any difference where the settle- ment is made by a father's brother to a collateral relation, a can, though he had succeeded to the Chishohn estates, was entitled to share in the 10,000/. portions, and it was held that he was entitled, and Sir W. P. Wood in delivering judgment, made some important observations. " I should have been glad," he said, " if the doctrine had been confined to the class of cases in which it origi- nated, where a settlor by marriage settlement makes provision for his family generally, limiting the estate to the eldest son in tail, giving' the usual powers for jointures and por- tions (though, even when this is not done, the son might still make any provision he pleased on attaining his majority), and then going on to charge the settled estate in favour of younger children. In such cases it is reason- able enough to regard the limitations for younger children as intended for the benefit not merely of those who happened to be younger children at the time of vesting, but of those who might fill that character when the fund should come into possession. A settlor under such circumstances may fairly be presumed to provide for the whole of his family, and younger children would in such an instrument naturally be taken to mean those who should not otherwise be provided for. But the moment you extend the doctrine to other cases where the provision for younger chil^ dren is made by some person in loco parentis, not by marriage settlement, but by some independent deed, you have an extremely different case to deal with. When the rule is laid down thus broadly, it includes cases where the effect of it may be to ren- der it impossible, for a second son marrying in his father's lifetime, to make any jointure or settlement, ex- cept on a contingency. Still the cases, to whatever extent they may go, have not been carried beyond those where the donor is, if not a parent, at any rate in loco parentis. No authority goes so far as to apply the rule to a person, not a 1-elative of those for whom provision is made, and not having any interest in the family estate. But here Sir Thomas Eamsay had nothing to do with the family or the estate." The substan- tial ground for the Court's decision in this case was that the younger child (who was declared entitled to the portions though he also took the estate) did not take the estate by any title derived from the persons who created the portions. And see Cooper V. Cooper, 8 L. E. Ch. App. 813. (o) Lord Teynham v. Webb, 2 Ves. sen. 198; as to a grandfather stand- ing loco parentis, see Farrer v. Barker, 9 Hare, 737 ; Swallow v. Binns, 1 K. & J. 417. (a) Duke b. Doidge, 2 Ves. sen. 203, note. 535 *393 DUTIES OF TRUSTEES [Ch. XVII. S. 1. nephew," &c., and he laid it down broadly that " eyery cMld except the heir is considered a younger, and that eldership which does not carry the estate along with it is not such- an eldership as will exclude from sharing in the portions." From this judgment may be inferred the principle that where the settlor (whether a parent, or standing in loco parent'^, or a stranger') settles an estate upon a particular famUy, and means to provide for all the family by limiting the estate to one and portions to the others, there no one of them shaU under the same settlement take the estate and a portion also, but in such cases the Court will, if necessary, disregard the strictly literal meaning of the words eldest and younger, and carry out the substantial intention. 9. General rule. — This point however remains to be set- tled, and the only general rule to be laid down at present is that where the settlor is the parent or stands loco parentis, and portions are provided for younger children, and the estate upon which the portions are charged devolves (before the time for distribution of the portions) on one of the chil- dren, under the same settlement or under a settlement incorporated into it (6), there the words " eldest child " and " younger children " are capable of what has been called " a prodigious latitude of construction," viz., an eldest may be treated as a younger, and a younger as an eldest ; but that where portions are provided for younger children, and the estate either does not devolve before the time for distribution of the portions on any of the children, or does not so devolve under the settlement creating the charge or a settlement incorporated iu it by recital or otherwise, there the words " eldest child " and " younger children " receive their ordi- nary and natural interpretation. Secondly. Who are meant hy younger children where the estate charged is not settled on an " eldest " son. 1. 'Where no one is made an eldest son. — We now proceed to the cases where a settlor provides portions for younger children generally, without the ingredient that one [*393] is *to take the estate and the others to have the (6) See Stanhope v. Collingwood, 4 L. K. Eq. 286 ; Collingwood v. Stan- hope, 4 L. E. H. L. 43. 636 Ch. XVII. S. 1.] FOR RAISING PORTIONS. *393 charge. Here the ordinary rules of construction apply, and "eldest" is taken to mean the eldest actually, and "younger" to mean the younger actually (a), and the time for asaertaining who is eldest and who are younger is not the period of distribution but the period of vesting,. Thus in Adams v. Adams (S) Sir W. Curtis, the father of Emma Adams, bequeathed 6,000Z. to trustees in trust for Emma Adams for life, and after her decease "in trust for the children born or to be born of Emma Adams, who not b^ing an eldest or only son *for the time being," should as to sons attain twenty-one, or as to daughters attain twenty-one or marry, in equal shares. Emma Adams died in 1857, and there were eight children. Henry William the eldest at- tained the age of twenty-one in 1826, and died in 1854, in the lifetime of his mother. George the second son attained twenty-one in 1828, and at the death of his mother was the eldest son. The question was whether the words "eldest son " meant eldest at the time of the first portion Testing,, or eldest at the' time of its falling into possession ; that is, whether George was or not entitled to a share. The M. R. adopted the principle laid down by Sir T. Plumer, viz., that there cannot be two periods, one for ascertaining who com- pose the class to take, and the other for ascertaining who are to be excluded (c) ; and that as George was not the eldest son when he attained twenty-one, he took a vested interest, and that the interest being once vested there was nothing to divest it, except to a limited extent by the attainment of vested interests by the other younger children. 2. Exceptions. — To the general rule that the eldest son in these cases is to be ascertained nofat the time of distributio'ti, but at the time of vesting, there may be exceptions as in Livesipy v. Livesey (cZ), with reference to which the M. R. observed, " a testator may say ' I do not intend any child to take a share unless at the period of distribution he shall ful- [(o) DomvUe v. Winnington, 26 try, 15 L. E. Ir. 101.] But see Re Ch. D. 382.] Rivers' Settlement, 40 L. J. N. S. Ch. (i) 25 Bear. 652 ; Matthews v. 87. Paul, 3 Sw. 328 ; Lyddon v. Ellison, (c) Matthews v. Paul, 3 Sw. 328. 19 Beav. 565 ; [Domvile v. Winning- (d) 13 Sim. 33; 2 H. L. Ca. 419. ton, 26 Ch. D. 382 ; Longfield v. Ban- 537 *394 DUTIES OF TRUSTEES [Ch. XVII. S. 1. fil the condition of not being an eldest son.' In Livesey v. Livesey the class was to be ascertained when the youngest child attained twenty-one, and there was a direction that the son who was or should become an eldest son should not take anything under the devise or bequest, and consequently the person who filled the character of eldest son at that period could not take. Unless the testator has said, ' I do [*394] not intend a person *to take any interest who at the time of distribution fills the character of eldest son,' I think the character of eldest son is to be ascertained when the interest becomes vested " (a). Thirdly. At what time the portions vest. 1. General rule as to vesting. — In every well drawn settle- ment whether by deed or will, the period of vesting is clearly expressed upon the face of the instrument itself, and the usual period is as to sons at twenty-one, and as to daughters, at twenty-one or marriage, with a declaration that the por- tions are not to be payable until after the death of the tenants for life, unless with the consent of the tenants for life. It often happen^, however, that the language of the instrument is contradictory or inconsistent, or in some way ambiguous, and in order not to defeat the probable intention a peculiar and important canon of construction has been established; and it is this — Where a parent or a person standing loco parentis provides portions for children, the strong presumption is that he means to provide portions for all such children as may live to require it, i.e. for sons who attain twenty-one, and daughters who attain twenty-one or marry. If, therefore, the language of the instrument be uncertain but is capable 'of the construction, that sons at twenty-one, and daughters at twenty-one or marriage, shall take a vested, interest, the Court will so decide it by force of the presumption. Thus, in Howgrave v. Cartier (6) a fund was vested in trustees upon trust for Peter for life, subject to 200Z. pin- money to Elizabeth his intended wife, and if Elizabeth should die before Peter, " without leaving any child or chil- (a) 25 BeaT. 656. (6) 3 V. & B. 79. 538 Ch. XVII. S. 1.] FOR RAISING POKTIONS. *395 dren, or leaving such they should all die under twenty-one, then to pay any sum not exceeding 3,000Z. as Elizabeth should appoint. But in case Elizabeth survived Peter then in trust for Elizabeth for life, and after the decease of the survivor in case there should happen to be any child or children of their two bodies living, who should attain twen- ty-one, then in trust for such child or children attaining twenty-one as Elizabeth should appoint, or in default as Peter should appoint^ and in default among such children equally. Peter died leaving Elizabeth his widow and two children, John and Mary. Elizabeth appointed the fund between John and Mary, and then John having attained twenty-one died in the lifetime of his mother, and then Elizabeth died leaving Mary her only child. The question was whether Mary, as the only child who survived her mother, was not absolutely entitled to the whole fund, to the exclusion of John who had died in her lifetime. Si^r W. Grant observed, " If the settlement clearly * and [*395] unequivocally makes the right of a child to a provis- ion depend upon its surviving both or either of the parents, a Court of Equity has no authority to control that disposi- tion. If the settlement is incorrectly or ambiguously ex- pressed, if it contains conflicting and contradictory clauses, so as to leave in a degree uncertain the period at which, or the contingency upon which, the shares are to vest, the Court leans strongly towards the construction which gives a vested interest to the child, when that child stands in need of a provision, usually as to sons at the age of twenty-one, and as to daughters at that age or marriage." And after commenting upon the various clauses contained in the settle- ment he came to the conclusion that John was entitled to the share appointed to him. So in Swallow v. Binns (a), Nathaniel Binns made a voluntary settlement by which a trust fund was limited to himself for life, with remainder to his son George Binns for life, and after his decease in trust " for all and every of the children of the said George Binns, which might be living at (a) 1 K. & J. 417. 539 *396 DUTIES OF TEtrSTEES [Ch. XVH. S. 1. the time of his decease," to be equally divided, and the shares of sons to vest at twenty-one and of daughters at twenty-one or marriage. Had the settlement stopped there those chil- dren only who survived George would have taken, but then followed other inconsistent limitations, namely, If awy child being a son died under twenty-one, or being a daughter died under twenty-one unmarried, the share of such child was to survive to the other or others ; " and in case all such of the children of the said George Binns as were sons should die under twenty-one, and all such ' of them as were daughters under that age without having been married," then the trust fund was to be held in trust for other persons. Nathaniel died in 1822 and George in 1851, having had six children, all of whom attained twenty-one, but two of them died in his lifetime, and the question was whether such two were entitled to share with the four who survived George. Vice- Chancellor Wood observed, " The rule applies not only to settlements but also to the case of a will, so far as it provides for children towards whom the testator places himself in loco parentis. In this case the grandfather is providing for his children and grandchildren in such a manner, as throughout to place himself, with regard to the grandchildren, in the position of one who is performing a father's part, and pro- viding what are expressly stated to be portions in one part of the settlement, and what, without that expression, would, I apprehend, be regarded as portions for his several grand- children. The canon of construction to which I [*396] have * referred may be thus stated : That whereas in the case of ordinary instruments an express estate thereby limited cannot be enlarged, except by necessary inference, yet, upon instruments of this description, there is an implication of law arising upon the instrument itself, subject of course to any expressions to the contrary, that it is the intention of any person who places hiinself in loco parentis to provide portions for children or grandchildren, as the case may be, at the period when those portions will be wanted, namely, upon their attaining the age of twenty-one years, or (as is usually provided in the case of daughters) upon their attaining twenty-one or marriage ; and that such 540 Ch. XVII. S. 1.] FOE RAISING PORTIONS. *397 portions shall then vest whether the children do or dp not survive their parents. It is thought to be an unnatural supposition that the circumstance of such children or grand- children predeceasing their parents, should have been con- templated as depriving them of the whole of the portion intended for their benefit. What the Court has said is this, that you do not require a necessary implication to arrive at the conclusion, that all children, who being sons attain twenty-one, or being daughter's attain that age or marry, were intended' to take, irrespectively of the question whether they survive their parents or not, and that if you find upon the face of the settlement a clause which renders it doubtful whether it was intended that all such children should take, or that those only should take who might survive their parents, the Court leans Wrongly in favour of the previous supposition, namely^ that the probable intention of a person making a settlement would be in favour of the vesting at such fixed period> independently of the question of survivor- ship. On the other hand the rule is not one of arbitrary construction; the Court does not go out of its way by a forced construction to raise this iniplication ; it must find an implication upon the natural and plain construction of the words in the settlement." And the Vice-Chancellor, apply- ing these principles to the case before him, came to the con- clusion that the two children who predeceased George their father were entitled to shares. The general principles laid down iu the two foregoing examples have been approved and acted upon in numerous other cases (a) ; [and the rule applies as well to portions created by will as to those created by deed (5).] * 2. Presumption overcome by the language. — But [*397] strong as the presumption is in favour of portions vesting in children at an age when they require it, yet if the (o) Emperor t>. Rolfe, 1 Ves. sen. v. Bythesea, 2.3 L. J. N. S. Ch. 1004 ; 208; Powis v. Burdett, 9 Ves. 428; In re Goddard's Trusts, 5 I. E. Eq. Bemnant v. Hood, 27 Beav. 74; Per- 14; [Wakefield v. Kichardson, 13 L. feet V. Curzon, 5 Mad. 442 ; Torres E. Ir. 17.] V. Franco, 1 R. & M. 649; Woodcock [(6) Jackson v. Dover, 2 H. & M. V. Dorset, 3 B. C. C. 569; Hope v. 209; Be Knowles, 21 Ch. D. 806.] Lord Clifden, 6 Ves. 499; Bythesea 541 *397 DUTIES OF TEtJSTEES [Ch. XVII. S. 1. language of the instrument be clear and unambiguous, that the vesting of portions in sons who attain twenty-one or in daughters who attain twenty-one or marry is to depend on some contingency, as the event of their surviving their parents, the Court cannot contradict the written instru- ment (a). 3. Where portioual fund has to be created. — A distincfion must also be made between those cases where the portional fund exists or is to be raised at all events, so that the ques- tion relates only to the distribution of the fund, and those cases where the fund itself is to be called into existence upon a contingency, so that the latter contingency leavens aU the portions and makes them all contingent. Thus in Hotchkin v. Humfrey (6) a term of 500 years was created in trust that "m case the husband should leave one or more younger children that should be living at the decease of the survivor of the husband and wife," the trustees were to raise portions for " such younger children," the same to be paid to daughters at the age of eighteen or marriage, and to sons at twenty-one ; and should there be no such son or daughter then the term to cease. There were four children of the marriage who attained twenty-one, but two only sur- vived both parents. Was the portional fund to be divided between the four or given to the two who survived? Sir T. Plumer said, "If the children who died before the sur- viving parent are to be considered as having taken vested interests, it must follow that a vested interest was given on a contingency. Can that be ? When a fund is contingent the shares to be paid out of it must be contingent. If all- the children had died before the surviving parent, the fund would not have been raisable, and therefore till such parent's death it was uncertain and contingent whether it could be raised. The intention appears to me, therefore, to have been (a) Be WoUaston's Settlement, 27 Skipper v. King, 12 Beav. 29 ; What- Beav. 642 ; JefEery v. Jeffery, 17 Sim. ford v. Moore, 7 Sim. 574 ; Farrer v. 26 ; Bradley v. Powell, Cas. t. Talb. Barker, 9 Hare, 737 ; and see Wors- 193, but doubted by Lord Hardwicke, ley v. Granyille, 2 Ves. sen. 333. in Tunstal v. Bracken, 1 B. C. C. 124, (6) 2 Mad. 66; and see Swallow v. note; Fitzgerald v. Field, 1 Buss. Binns, 1 K. & J. 426; Fitzgerald v. 430 ; Bright v. Howe, 3 M. & K. 316 ; Field, 1 Euss, 430. 542 Ch. XVII. S. 1.] FOB RAISING POETIONS. *398 to provide only for such children as should survive the sur- viving parent." 4. Where vesting not provided for by the settlement. — Where the settlement is silent as to the vesting of the por- tions, the Court has to fall back upon general principles, and Remnant v. Hood (c) is an important case upon this head. A testator devised *his estate to Samuel [*398] Thorold for life, with remainder to his &st and other sons successively in tail, with remainder to his first and other daughters successively in tail, and enabled the tenant for life to charge 2,000?. for the portions of his younger children. S. Thorold accordingly upon his marriage charged 2,0001. to be raised within three months from his decease in favour of his younger children, but gave no directions as to the time of vesting. There was issue of the marriage a son and six daughters ; the son died an infant in the father's hfetime, so that on the death of the father the eldest daugh- ter became tenant in tail in possession. Two others of the daughters died infants in their father's lifetime, and the three remaining daughters married and attained twenty-one and two of them survived the father, but the other died in his lifetime. It was conceded by the counsel that the infants who died in the father's lifetime would take nothing, though L. J. Knight Bruce entertained a doubt (a). But as to the one who attained twenty-one and died in the father's Hfe- time, it was contended that the portion as a charge upon land had by the death of the portionist before the time for raising it sunk for the benefit of the estate. It was ruled, however, to the contrary, and the deceased child who had attained twenty-one and married was held entitled to par- ticipate. Lord Justice Turner, who applied himself to the points raised with his usual care, observed, " There are three periods at which the portions may have been intended to vest ; the period of the birth of the children, the period at which they would require their portions (which, according to the ordinary habit in such cases as evidenced by the usual course of settlement, would be at twenty-one, or as to the daughters on marriage), and the period of the death of the (c) 2 De G. F. & J. 396. (a) See 2 De G. F. & J. 403. 643 *399 DUTIES OF TRUSTEES [Ch. XVII. S. 1. parents. Looking bpth to the language and to the purpose of this instrument, I see nothing which in any way imports that the portions were not intended to vest during the lives of the parents, and to adopt the period of the death as the time of vesting would be to deprive the provision of that certainty which it must, I think, fairly be taken to have been the object of the settlement to secure. It would render the interests of the children contingent upon their surviving their parents, and deprive them of the means of making any certain provisions for their families during the whole of their parents' lives. This is a result against which the Court has struggled and successfully struggled in many cases, and 1 think therefore that we should not be justified in adopting this period as the time of vesting, in the absence of [*399] anything on the face of the * instrument indicating that it was so intended. Between the other two periods it is not as I have said necessary for us to decide, but I think it right to state that I lean to the opinion, that in this particular case the true period of vesting was at twenty-one, or as to the daughters on marriage. The con- sequence of holding the portigns to vest at the birth would be that the shares of children dying in early infancy would go to the parent, thus contravening the purpose of the settlement, by giving to the father what was intended for the children, and the Court in these cases seems to have regarded rather the purpose than the words of the settle- ment "(a). 5. General rule. — Upon the authority of these and other cases it may be considered as established, that unless there be something special in the instrument (5), the portions of the younger children, whether they survive the tenant for life or not, will not vest" in sons unless they attain twenty- one, or in daughters unless they attain twenty-one or marry (c) ; and that the shares of sons who attain twenty- one and of daughters who attain twenty-one or marry, wiU (a) The whole of the judgment (c) Bru6n v. Bruen, 2 Vera. 439 ; well deserves a perusal. S. C. Pr. Ch. 196 ; Edgeworth v. Edge- (6) See Earl Elvers v. Earl Derby, worth, Beat. 328 ; Warr v. Warr, Pr. 2 Vern. 72. Ch. 213 ; Hinchinbroke v. Seymour, 1 644 Ch. XAai. S. 1.] FOE RAISING PORTIONS. *400 vest absolutely, so as not to be devested by subsequent death in the lifetime of .the tenant for life ((?). 6. Vesting of portions. — Where portions are expressly made to vest in sons at twenty-one, and in daughters at twenty-one or marriage, if any son or daughter die before that period the share sinks into the estate (e), even though the instrument direct the interest on the portion to be ap- plied during minority towards that child's maintenance (/). 7. Where raisable out of rents. — Several cases, however, seem to have m,ade good the exception that where no time is liamed in the settlement for vesting, and the portions are to be raised, not out of the corpus, but out of the annual rents and profits, and the rents and profits have begun to be available for the purpose, then the portionist takes a vested interest, though he dies in infancy (^). The portion must, as a whole, be either vested or not vested, and can- not be intermittent, *and therefore as the trust to [*400] raise the portion has commenced it must go on. [8. Appointment to infant. — The question arose in the re- cent case of Henty v. Wrey (a), whether a power to appoint portions could be so exercised as to vest portions absolutely in children of tender years, and Kay, J., relying on Lord Hinchinbroke v. Seymour as reported by Brown (J), held that it could not, but that such an appointment would be so improper that the Court would control it by refusing to allow the portions to be raised if the children did not Hve to want them. But this view was overruled on appeal, when the late M. R., after careful consideration of the case of Lord Hinchinbroke v. Sej'^mour, came to the conclusion that it was really decided on the ground of fraud on the B. C. C. 395 ; Teynham v. Webb, 2 (e) Jennings ». Looks, 2 P. W. Ves. sen. 209; Davies v. Huguenin, 1 276; Boyeot v. Cotton, 1 Atk. 552. H. & M. 730, see 743; [Henty v. (/; Hubert ». Parsons, 2 Ves. sen. Wrey, 19 Ch. D. 492;] and see' Ere- 261. lyn !). Evelyn, 2 P. W. 659, and the (_g) Evelyn v. Evelyn, 2 P. W. cases there cited; Tunstal w. Bracken, 659; Cowper v. Scott, 3 P. W. 119; 1 B. C. C. 124, note ; Mayhew v. Mid- Earl of Eivers v. Earl of Derby, 2 dieditch, 1 B. C. C. 162. Vem. 72. (rf) Davies v. Huguenin, 1 H. & M. [(a) 19 Ch. D. 492 ; 21 Ch. D. 730 ; Macoubrey v. Jones, 2 K. & J. 332.] 684. [(6) 1 B. C. C. 395.] 545 #401 DUTIES OF TRUSTEES [Ch. XVII. S. 1. power, and was no authority in support of the view that the power could not be exercised in favour of infants ; and Lind- ley, L. J., laid down the following rules as the result of his examination of the authorities (c) : — "1. That powers to appoint portions charged on land ought, if their language is doubtful, to be construed so as not to authorise appointments vesting those portions in the appointees before they want them — that is, before they attain twenty-one, or (if daughters) marry. 2. That where the language of the power is clear and unambiguous, effect must be given to it. 3. That where upon the true construction of the power •and the appointment the portion has not vested in the life- time of the appointee, the portion is not raisable, but sinks into the inheritance. 4. That where upon the true construction of both instru- anents the portion has vested in the appointee, the portion is raisable, even although the appointee dies under twenty-one, or ("if a daughter) unmarried. 5. That appointments vesting portions charged on land in children of tender years, who die soon afterwards, are looked at with suspicion; and very little additional evidence of improper motive or object will induce the Court to set aside the appointment or treat it as invalid, but that without some additional evidence the Court cannot do so."]- Fourthly. Of Ademption and Satisfaction. — The question who are portionists involves the doctrine of Ademption and Satisfaction, and we propose briefly to state the leading principles. [*401] * 1. Ademption and satisfaction. — The nature of Ademption and Satisfaction may be best illustrated by instances. A father by his will bequeaths 1,000Z. to a daughter, and after the date of the wiU he settles 1,OOOZ. upon the same daughter upon the occasion of her marriage, and dies without having altered his will. Here the father, owing a debt of nature to his daughter (a), had originally [(c) 21 Ch. D. 859.] Cr. 34 ; Powell v. Cleaver, 2 B. C. C. (a) See "Watson v. Earl of Lincoln, 516 ; Cooper v. Cooper, 8 L. R. Ch. Amb. 326 ; Pym v. Lockyer, 5 M. & App. 813. 646 Ch. XVII. S. 1.] FOK KAISING PORTIONS. *401 intended to satisfy the obligation by a bequest in his -will, but before the will takes effect the marriage occurs, and he makes the like provision for her by act inter vivos. In such a case the Court presumes that the father did not mean to bestow iwo portions upon the. daughter at the expense perhaps of his other children, but to substitute the one portion for the other. Equity therefore holds that the subsequent (J) advance is an ademption of the legacy. "Where," said Lord Eldon, "a parent or person standing locQ parentis gives a legacy as a portion, and afterwards, upon marriage or any other occasion calling for it, makes an advance in the nature of a portion to the child, that will amount to an ademption of the gift by the will, and this Court ■^ill presume he meant to satisfy the one by the other " (c). Ademption, therefore, is where the will pre- cedes, and the settlement follows. If, again, a father by act inter vivos covenants to settle 1,000?. on the marriage of his daughter, and afterwards either by act inter vivos (d) or by vdll gives 1,000?. to the same daughter, here the Court leaning against double por- tions precludes the daughter (in the absence of evidence to the contrary) from taking both the marriage portion and also the subsequent gift or legacy, and puts her to her elec- tion which one of the two she will prefer (e). Satisfaction therefore, is where the settlement precedes and the gift or legacy follows. It might have been wise, as observed V. C. "Wood, if the rule had never been applied where the settle- ment is anterior to the gift or will, as the testator or donor might well be said to know what had been previously done (/). But the law is established otherwise, and in general terms Satisfaction may be defined to be the donation , (6) A gift prior to the will ia no Papillou v. Papillon, 11 Sim. 642 ; ademption, unless it be especially con- Warren v. Warren, 1 B. C. C. 305, tracted for, see Taylor v. Cartwright, &c. ; Byde v. Byde, 2 Eden, 19 ; 14 L. R. Eq. 176. Sparkes v. Cator, 3 Ves. 530, &c. ; (c) Trimmer v. Bayne, 7 Ves. 515. Hinchcliffe v. HinchclifEe, 3 Ves. 516 ; (rf) Jesson V. Jesspn, 2 Vern. 255 ; Weall v. Rice, 2 R. & M. 251 ; Bruen Thomas i>. Kemeys, 2 Vern. 348 ; v. Bruen, 2 Vern. 439. Keays v. Gilmore, 8 I. R. Eq. 290. (/) Dawson v. Dawson, 4 L. B. (e) Copley v. Copley, 1 P. W. 147 ; Eq. 513 ; per V. C. Wood. 647 *402 DUTIES OF TRUSTEES [Ch. XVII. S. 1. of a thing with the intention that it is to be 'taken [*402] * either wholly or in part, in extinguishment of some prior (legal) claim of the donee (a). 2. Persons loco parentis. — The doctrine of Ademption and Satisfaction applies only as between parents (whether father or mother) (6), or persons loco parentis on the one *hand, and children on the other. The doctrine does not hold as between strangers (c), or as between husband and wife (li), or as between brothers, or as between grandfather and grand- child, or as between uncle and nephew, or as between any other relatives than as above. But a brother may by his conduct place himself loco parentis to a brother (e), and a grandfather (/), uncle (^), or other relative or connection as a stepfather (K), may place himself loco parentis to a grandchild, nephew, or other relative or connection; and this though the person loco parentis has children of his own (i), and though the actual father be living and the child be resident with him and is maintained by him (/). So a putative father is not in law the parent of the illegiti- mate child (A), but he may place himself loco parentis by a course of conduct. And Lord Thurlow, in speaking of a parent's provision for a child, observed generally, " as to its being considered as the payment of a debt, the law does not (a) Chichester v. Coventry, 2 L. (/) Powys v. Mansfield, 3 M. & E. H. L. 95, per Lord Romilly. Cr. 359 ; 6 Sim. 528 ; Campbell „. (6) Finch u. Finch, 1 Ves. jun. 534. Campbell, 1 L. K. Eq. 383; Pym v. (c) Powel V. Clearer, 2 B. C. C. Lockyer, 5 M. & Cr. 29 ; and see 499. But even as between strangers Roome b. Roome, 3 Atk. 183. " if a legacy appears on the face of (g) Shudal v. Jekyll, 2 Atk. 516. the will to be bequeathed for =■ par- (A) Curtin t. Evans, 9 I. E. Eq. ticular purpose, and a subsequent 553. gift appears by proper evidence to (i) Monck v. Monck, 1 B. & B. have been made for the same pur- 298. pose, a presumption is made prima (j) Powys v. Mansfield, 3 M. & Cr. Jacie in favour of ademption," per 359 (see 368), reversing S. C. 6 Sim. Lord Selborne, 1..C.; Re Pollock, 28 528 ; Pym v. Lockyer, 5 M. & Cr. 29 ; Ch. D. 552, 556. Shudal v. Jekyll, 2 Atk. 518. (d) Richardson v. Elphinstone, 2 (Ic) Ex parte Pye, 18 Ves. 140; Ves. jun. 463 ; Haynes v. Mico, 1 B. Grave v. Earl of Salisbury, 1 B. C. C. C. 129; Couch v. Stratton, 4 Ves. C. 425; Wetherby v. Dixon, 19 Ves. 391. 412, per Cur. ; Smith v. Strong, 4 B. (e) Monck i>. Monck, 1 B. & B. C. C. 493; Jeacock v. Falkener, 1 B. 298. ' C. C. 295. 648 Ch. XVII. S. 1.] FOR RAISING PORTIONS. *403 compel the parent to give the legacy ; the Court can only- mean a moral obligajtion, a laudable affection which may exist in others besides a parent " (V). 3. How persons constituted loco parentis. — By what acts a person will place himself loco parentis is a question upon which parol evidence is admissible («i), and is often in prac- tice a question of extreme difficulty (n). According to Sir W. Grant, " A person loco parentis is one who assumes the parental character or discharges parental duties " (o). Sir L. ShadweU said, " The legal sense of the term is that the party has so acted towards the children, as that he has thereby imposed upon himself a moral obligation to provide for them " (^) ; and Lord Eldon speaks of him *as "a person meaning to put himself loco parentis, [*403] in the situation of the person described as the lawful father of the child " (a) ; and Lord Cottenham attached grea^ force in this description to the word "meaning," as referring to the intention rather than the act of the party (J), and added, that the definition was to be considered as appli- cable not to a;ll the parental offices and duties (for they were infinitely various) but to such offices and duties as related to the making provision for a child (c). If a person has con- tributed to the maintenance of a female relative from the time of her father's death, and has been treated as one whose consent was necessary upon her marriage, and has taken upon himself the obligation of making a provision for her upon marriage, he must under such circumstances be re- garded as having placed himself loco parentis (. Field, 3 Ch. D. 587 ;] and see Hartopp Bayne, 7 Ves. 615, per Lord Eldon; v. Hartopp, 17 Ves. 191. cited with approbation, Powys v. [(A) See also Be Dowse, 50 L. J. Mansfield, 6 Sim. 661 ; Powys v. N. S. Ch. 286.] Mansfield, 3 M. & Cr. 374, per Lord (o) Thynne v. Glengall, 2 H. L. Cottenham ; Weall v. Rice, 2 R. & M. Ca. 131. 251 ; Piatt v. Piatt, 3 Sim. 503 ; (b) Coventry v. Chichester, 2 De Monck V. Lord Monck, 1 B. & B. 304, G. J. & S. 336; 2 L. R. H. L. 71; 2 per Cur. ; Lloyd v. HarTey, 2 R. & M. H. & M. 149 ; [Tussaud v. Tussaud, 310; Sheffield v. Coventry, 2 R. & M. 9 Ch. D. 363.] 317 ; Hartopp v. Hartopp, 17 Ves. (c) Chichester v. Coventry, 2 L. R. 184; Stevenson v. Masson, 17 L. R. H. L. 71; 2 De G. J. & S. 336; 2 H. Eg. 78; [Edgeworth v. Johnston, 11 & M. 149; Lethbridge v. Thurlow, 15 I. R. Eq. 326.] Beav. 334 ; Paget v. Grenfell, 6 L. R. (?) Clark «. Sewell, 3 Atk. 98, per Eq. 7 ; AUeyn v. AUeyn, 2 Ves. sen. Lord Hardwicke ; Thynne k. Glen- 37. gall, 2 H. L. Ca. 131 ; Campbell -u. (d) Dawson v. Dawson, 4 L. R. Eq. Campbell, 1 L. R. Eq. 383 ; Sparkes 504. 554 Ch. XVII. S. 1.] FOR RAISING PORTIONS. *408 child, as for money advanced by the child or on any other account, a bequest by the father to the child is no satisfaction, where it would not be a satisfaction as between the father and a stranger (e), but what woijild be a satisfaction as be- tween strangers, wiU also be a satisfaction as between father and child (/). 13. Contingent legacy. — A contingent legacy bequeathed by a fathet will not be a satisfaction of a vested interest in the child under a previous settlement (^). 14. strangers may be benefited. — A Stranger may indirectly derive advantage from the doctrine of ademption, as where a testator gives a legacy to the child, and the residue to strangers, and then in his lifetime advances the child beyond the amount of the legacy. Here the ademption of the legacy swells the quantum of the residue for the benefit of the resid- uary legatees. This arises not from the application of the doctrine, but in spite of it, and therefore, where a testator bequeaths his residue equally between his wife or a stranger, and his child, and then advances the child in his lifetime, here the advance is not brought into account so as to augment the residue for the benefit * of the wife [*408] or stranger, but the wife or stranger can claim only the moiety of the actual residue (a). 15. Ademption and satisfaction distinguished. — Ademption and satisfaction are often confounded, but one broad distinc- tion between them must not be lost sight of. Where the will precedes and the settlement follows, the settlement is an actual extinguishment of the claim under the will. But where the settlement precedes and the will or gift follows, - here as the settlement created a legal obligation or vested a legal right by , act inter vivos, the subsequent testamentary disposition cannot annul it, but all that equity can do is to put the parties entitled under the legal obligation or legal gift, to their election. Thus a testator bequeaths lOOOZ. to (e) Tolson 0. Collins, 4 Ves. 483 ; 352 ; Chichester v. Coventry, 2 L. R. Fairer v. Park, 3 Ch. D. 309. H. L. 96, per Lord Komilly. (/) Edmunds v. Low, 3 K. & J. (a) Meinertzhagen o. Walters, 7 318. L. R. Ch. App. 670 ; [and see Stewart 0) Bellasis v. Uthwatt, 1 Atk. v. Stewart, 15 Ch. D. 539.] 426 ; Hanbury v. Hanbury, 2 B. C. C. 555 *409 DUTIES OF TRUSTEES [Ch. XVH. S. 2. his daughter, and afterwards on the daughter's marriage set- tles lOOOZ. upon her. Here the will is considered as revoked, and the claims under the will are actually extinguished. If on the other hand, a father covenants on the daughter's mar- riage to settle lOOOZ. upon her and afterwards by will be- queaths lOOOZ. to the daughter, here the legal obligation under the settlement remains, and the daughter if she chooses may insist on her claims under the settlement. But if she does so, the Coiu-t will not also allow her to claim under the will, or in other words the Court puts her to her election (6). SECTION II. WHAT AMOUNT IS EAISABLB UNDER THE HEAD OP PORTIONS. This question arises as to capital and interest, and mainte- nance money and costs. 1. Capital. — As to the amount of capital to be raised, the instrument itself generally prescribes the sum with sufficient exactness, and according to the common form now adopted in settlements, the amount graduates according to the num- ber of children, i.e. a certain sum if there be only one younger child who takes a vested interest, an increased sum if there be two such children, and a larger sum still if there be three or more such children. [*409] * 2. Ambiguity. — Occasionally the settlement has been so ambiguously expressed with reference to the events contemplated, that recourse to the Court has become necessary. Thus, in Hemming v. Griffith (a), the trust was that if there should be one younger child the trustee should raise 8,000Z., and if two younger children 12,000?., and if three or more younger children 15,000Z., the said portions to be paid as the husband and wife or the survivor should appoint, and in default of appointment the portions to vest (6) Chichester v. Coventry, 2 L. v. Byde, 2 Eden, 19. As to interest K. H. L. 90, per Lord Eomilly ; Bus- on the advance made after the date sell V. St. Aubyn, 2 Ch. D. 398; of the will, see the decree in Beckton Thomas v. Kemeys, 2 Vern. 348 ; v. Barton, 27 Beav. 106. Copley V. Copley, 1 P. W. 147; Byde (a) 2 Gift. 408. 656 Ch. XVII. S. 2.] POK RAISING POETIONS. *410 in sons at twenty-one, and in daughters at twenty-one or marriage, and the settlement contained powers of mainte- nance and advancement put of the portions after the death of the parents, or in their lifetime with their consent. There were three younger children, but two of them died in infancy; and the quesjiion was whether the one who attained twenty-one was entitled to the 8,000Z. or the 15,000Z. Sir J. Stuart said, " It seems clear enough that if there should be three or more younger children, during the infancy of the three children the trusts for raising the 15,000?. were to have an operation and might be resorted to for the purposes of advancement and maintenance. If so, how can anything which has happened since the three younger children were born, reduce the trust for raising 15,000Z. to a trust for rais- ing 8,000Z. only which was to be raised expressly, and in terms, in the event of there being' only one younger child ? " and the surviving portionist was declared entitled to the 15,000?. 3. Interest. — The right to interest and the rate of it, and the time from which it is to be calculated, should all be spe- cified in the settlement, but in the absence of any express direction, a portion lite any other sum of money charged on land, will carty interest with it by implication from the time when the capital ought to have been raised (6), and this interest will in England be at 4 per cent, (e) ; and in Ireland at 5 per cent. (c?). But if the settlement while' it is silent as to the interest on the portions, expressly and carefully and with all necessary circumstantiality provides for the in- terest on all the other charges, the presumption arises that interest on the portions was intentionally excluded, and the 'Court considers the general rule as inapplicable (e). * 4. Out of rents. — In the rare case where the por- [*410] tions are to be raised not by sale or mortgage out of (b) Evelyn v. Evelyn, 2 P. "W. 669, (d) Purcell v. Purcell, 1 Conn. & per Cur. ; Kan v. Carter, 2 Atk. 358, Laws. 371; [Balfour u. Cooper, 23 per Cur. ; Earl Pomfret v. Lord Wind- Ch. D. 472 ;] and see Young v. Water- sor, 2 Ves. sen. 487, per Cur. park, 13 Sim. 199 ; Denny v. Denny, (c) Young V. Waterpark, 13 Sim. 14 L. T. N. S. 854. 199; affirmed 15 L. J. N. S. Ch. 63; (e) Clayton v. Earl of Glengall, 1 [Balfour v. Cooper, 23 Ch. D. 472.] Dr. & W. 1 ; S. C. 1 Conn. & Laws. 311. 557 *410 DUTIES OP TEtrSTEES [Ch. XVII. S. 2. tlie corpus of the estate, but out of tlie annual rents and profits, the Court looking to the hardship of allowing the interest to accumulate for years against the income, raises the capital only and gives no interest (a). 5. Interest given, though portion not vested. — Where there is the -relation of father and child, or of a person standing loco parentis and a child, the natural duty and therefore the presumed intention of providing for the child is so strong as to have led to the establishment of peculiar prificiples. Some of these have already passed under review, and another is this: Maintenance. — A legacy given to a stranger and payable at the age of twenty-one carries no interest in the meantime, but a legacy to a child being an infant (6) and payable at twenty-one, if maintenance be not otherwise provided for the child (e), carries interest with it (d") from the death of the testator, and not as in ordinary legacies from the expira- tion of one year from the testator's death (e). So a portion charged on land in favour of a child, whether made payable at a particular age or without any direction as to payment, will carry interest with it from the death of the testator. Rate of interest. — But as the rate of interest is discretion- ary, the Court has not considered itseK bound by the general rule of 4 per cent., but has regxilated itself by the circum- stances of each particular case. The application of these principles will be best understood by the following instances: In Warr v. Warr (/) a father charged the estate with por- tions for younger children, "to be paid at such time as the trustees should appoint for their better maintenance and pre- ferment." There were three younger children, a son and two daughters. The son was apprenticed to a sea captain (a) lyy v. Gilbert, 2 P. W. 13; ford v. Tobin, 1 Ves. sen. 308; Hill Evelyn v. Evelyn, 2 P. W. 659. But v. Hill, 3 V. & B. 183 ; Tyrrell v. Tyr- see Eavenhill v. Danaey, 2 P. W. 179. rell, 4 Ves. 1 ; Chambers v. Goldwin, (6) Raven v. Waite, 1 Sw. 553. 11 Ves. 1 ; Lowndes v. Lowndes, 15 (c) Mitchell v. Bower, 3 Vee. 287 ; Ves. 301. Long V, Long, lb. 286, note ; Wynch (c) Gary v. Askew, 1 Cox, 241 ; V. Wynch, 1 Cox, 433. Mole v. Mole, 1 Dick. 310. (d) See Crickett v. Dolby, 3 Ves. (/) Pr. Ch. 213. 16 ; Eaven v. Waite, 1 Sw. 557 ; Beck- 558 Ch. XVII. S. 2.] FOE EAISOTG PORTIONS. *411 and a sum paid by the trustees for his outfit; the two daughters attained twenty-one and received their portions. The son died under age before the trustee had named any day for payment of his portion. It was ruled that the son's portion was not to be raised, as he had not lived to jvant it ; but it was " agreed that all the children were to be main- tained, out of the trust estate, they having no maintenance in the meantime, and what had been employed for putting out the younger son was to come out of the trust estate." * In Staniforth v. Stamforth (a) an estate was set- [*411] tied on the father and mother successively for life, with remainder in default of issue male to trustees for a term of five hundred years in trust to raise 1,000Z. for the daugh- ters' portions, but no time was appointed for payment. The father died without issue male, leaving a daughter who filed her bill, living the mother, to have tiie 1,000Z. raised. The M. E. held : 1. That by the failure of issue male the term had arisen, though not to take effect in possession until the death of the mother. 2. That the portion vested in the daughter in the lifetime of the mother (the daughter it is presumed having attained twenty-one) ; and 3. That no time being appointed for the payment of any portion, nor any maintenance in the meantime, she was entitled to a rea- sonable maintenance not. exceeding the interest of the portion from the death of the father, or at the least from such time as the portion might have been raised by sale. Beal V. Beal (i) was this : An estate was settled on the father and mother successively for life, with remainder to the father's brother in tail, &c., and a power to charge portions was limited to the father. He appointed the sum of 2,000?. for his two daughters, payable at eighteen or marriage, but without saying after the death of his wife, and then died. The two daughters, who were under eighteen, filed their biU in the lifetime of the mother, to have interest for their por- tions until raisable. Lord Harcourt decreed that they should have interest at 3 per cent, until they were twelve years old, and then 4 per cent, until the portions were raisable. Being (a) 2 Vem. 460. (*) Pr. Ch. 405. 559 *412 DUTIES OF TRUSTEES [Ch. XVH. S. 2. dissatisfied with the rate of interest, they had the case re- heard before Lord Cowper, who said he thought the former decree very tender in the provision thereby made, and that it was rather a recommendation to the mother to make them that allowance than a decree to charge her jointure there- with, but that since they were not satisfied, he must now give them no more than what in strict justice they could demand, and that since the portions were not payable tiU eighteen or marriage, he could not charge the jointress with .interest thereof in the meantime, but that as the reason for postponing the payment till eighteen was in favour of the jointress, she ought to maintain them out of the profits of her jointure lands. In Harvey v. Harvey (c) a testator charged all his real and personal estate with 1,000?. apiece to all his younger children, payable at twenty-one,- but gave no directions as to mainte- nance in the meantime. The younger children during their infancy -filed their bill to be allowed interest or main- [*412] tenance. The M. R. said * " that in this case the Court would do what in common presumption a father if Hvingwould, nay, ought to have done, wliich was to provide necessaries for his children, but a Court of Equity would make hard shifts for the provision of children, as where the younger children were left destitute and the eldest an infant, the Court would make such a liberal allowance to the guardian of the eldest, as that he might thereout be ena- bled to maintsiin all the children. And for the same reason the Court would likewise take a latitude in this case, and that since interest was pretty much in the breast of the Court, though the v^ill was silen,t with regard to that, yet it should be presumed that the father who gave these legacies intended they should carry interest if the estate would bear it, for every one must suppose it to have been the intention of the father that his children should not want bread duiing their infancy, but that where the estate appeared to be small, the Court, in whose discretion it always lay to determine the quantum of interest, had ordered the lower interest." (c) 2 P. W. 21. 560 Ch. XVII. S. S.] FOR RAISING PORTIONS. *413 6. General rule. — It will be collected from the preceding cases that portions provided for cliildren have this peculiar quality, that whe'ther made payable at a certain age or not, they are so far contingent as not to be raisable, but to sink into the land, where the children do not live to want their portions — that is, where the children being sons do not attain twenty-one, or being daughters do not attain that age or marry ; but that on the other hand portions are so far con- sidered Tested as to carry with them such a rate of interest or such allowance as the Court may deem necessary for the r^sonable maintenance of the children. 7. Costs. — As regards the costs of raising portions the general rule as to charges applies, that is, the costs must be thrown on the estate, and the portions bear no part of them (a), and of course under the head of costs will be in- cluded aU charges and expenses properly incurred. SECTION III. AT WHAT PERIOD THE PORTIONS ARE RAISABLE. 1. Portions out of reversions. — We have next to inquire at what period the portions are to be raised, and upon this subject the great contest has been whether they shall or not be raised while the security created for the purpose * is still reversionary/. The cases are ur^usually nu- [*413] merous and extremely conflicting, and the only result to be obtained is that the question must be decided by the "penning of the trust," or in other words, that if the instru- ment be unequivocal in itself as to -the actual intention of the parties, the Court must carry out the intention whatever may be the consequential inconvenience. A sale or mortgage must necessarily be made at a disadvantage when the secur- ity is reversionary, but if the meaning be clear it must be done. We cannot better explain the principles by ■«rhich the Court is now regulated, than by a statement of the two lead- ing authorities. (a) Armstrong v. Armstrong, 18 Beav. 549; Trafiord v. Ashton, 1 P. L. R. Eq. 541 ; Michell «. Michell, 4 W. 415. 561 *414 DUTIES OF TBUSTEES [Ch. XVII. S. 3. 2. Codiington V. Foley. — In Codrington v. Foley (a) a tes- tator devised an estate to trustees for ninety-nine years from the testator's decease, remainder to Lord Foley for life, re- mainder to other trustees for 1,000 years, to commence from the death of Lord Foley, for raisiug 30,000?. for portions of younger children, remainder to the iirst and other sons of Lord Foley in* tail. The trusts of the term of ninetyrnine years were for applying the rents with the proceeds of the timber in discharge of certaiu incumbrances. Lord Foley died in 1793, leaving an only son, and a daughter who became Mrs. Codrington. Mr. and Mrs. Codrington filed their bill to have the 30,000Z. raised, and it was objected that the trusts of the term of ninety-nine years were stUl in operation and unsatisfied, and that the 1,000 years term was consequently reversionary both at law and in equity, and while so reversionary it could not be sold or mortgaged, to the great injury of the tenant in tail. Lord Eldon came to the conclusion that the 30,000Z. must be raised, though the term for raising it was reversionary, and after reviewing the opin- ions of Lord Cowper, Lord Macclesfield, Lord Hardwicke, Lord Talbot, Lord Thurlow, and Lord Alvanley upon the subject (6), he proceeded, " Upon this general state of the doctriae of the Court, it appears to me that the proper rule is what Lord Talbot states — that the raising or not raising must depend upon the particular penning of the trust, and the intention of the instrument. I do not think the Court ought to be eager to lay hold of circumstances. The Court ought to hold an equal mind whilst construing the instru- ment, and I cannot agree with what is stated in Stanley v. Stanley (e) that very small grounds are sufficient. If they are sufficient to denote the intention^ they are not small grounds., If they are not sufficient to denote the intention, the Court does not act according to its duty by treating them as sufficient, thereby disappointing the true [*414] * intention of the instrument. The rule upon the whole depends upon this, whether it was the inten- tion, attending to the whole of it, that the portion should or (o) 6 Ves. 364. (c) 1 Atk. 549. ^ (6) The whole judgment well deserves a perusal. 662 Ch. XVII. S. 3.] rOE RAISING PORTIONS. *414 should not be raised in this manner. If there be nothing more than a limitation to the parent for life, with a (rever- sionary) term to raise portions at the age of twenty-one or marriage, and the interests are vested and the contingencies have happened at which the portions are to be paid, the inter- est is payable and the portions must be raised, in the only manner in which they can be raised, that is, by mortgage or sale of the reversionary term " (a). 3. In Codrington v. Foley the term for raising the portions was reversionary upon another term, the trusts of which were imsatisfied : but in the case of Smyth v. Foley (J) it was reversionary upon the life estate of the father, and yet the same result followed. Smyth V. Foley. — Thus an estate was limited by settle- ment upon marriage' to R. Chambers for Ufe, remainder to M. E. his wife for life in bar of dower, remainder to trustees for 500 years, remainder to the first and other sons succes- sively in tail, and the trusts of the term were declared to be by sale or mortgage or other means to raise 4,000Z. for the younger children, the portions " to be paid " at their respec- tive ages of twenty-one years, and of daughters at those ages or marriage ; and upon further trust " until the same por- tions should become payable as aforesaid, to raise a compe- tent yearly sum out of the rents and profits," for maintenance and education, with a power " after the decease of Richard Chambers, or in his lifetime with his consent," to raise moneys for advancement. There were six children of the marriage, three sons and three daughters, all of whom at- tained twenty-one. After the death of M. E. Chambers the wife, but in the lifetime of R. Chambers, the younger chil- dren filed their bill to have the 4,000?. raised. Baron Alder- son in giving judgment laid down the following rules : That First, where a term is limited in remainder to commence in possession after the death of the father, yet if the trust is to raise a portion payable at a fixed period, the child shall not wait for the death of the father before the portion is raised, but at the fixed period may compel a gale of the term (c). (a) 6 Ves. 379. (c) Sandys v. Sandys, 1 P. W. 707 ; (J) 3 Y. & C. 142. HelUer v. Jones, 1 Eg. Ca. Ab. 337; 563 *415 Durnss or tettstebs [Ch. xvii. s. 3. Secomdly. Wliere the period is not fixed by the original set- tlement, but depends on a contingency"; the rule applies as soon as the contingency happens (c?). Thirdly. Where [*415] not only *the period but the class of children, in favour of whom- the portions are to be raised, de- pends on a contingency (as when it is limited to take effect in case the father dies without issue male by his wife), there also on the contingency happening by the death of the wife without issue male the portions are raisable immediately, and the term is salable in the lifetime of the father (a). The Judge then expressed his entire concurrence in the princi- ples laid down by Lord Eldon (viz. that the intention must be collected from the whole settlement taken together), and finding an express direction that the portions were to be paid at twenty-one or marriage, and that the settlement contained nothing at variance with that construction, he decreed the portions to be raised by sale or mortgage of the reversionary term. 4. General rule and exceptions. — Such are the general rules by which the Courts now profess to be governed. We must, however, add the caution that when the grounds upon which the Court acted in any case are not suificient to war- rant the decision upon a fair construction of the instrument itself, and independently of and apart from any arguments based on the inconvenience of burdening the estate, such case cannot at the present day be relied upon as an authority. And particular and special cases have occurred in which the Court has refused to raise the portions out of a rever- sionary term. Thus, in Corbett v. Maidwell (6), the estate was settled upon marriage on Thomas for life, remainder to trustees for Bacon v. Clerk, Pr. Ch. 500 ; Stanley Ca. Ab. 336 ; Eavenhill v. Dansey, 2 V. Stanley, 1 Atk. 549; Conway v. P. W. 180; Smith v. Evans, Arab. Conway, 3 B. C. C. 267; Brome v. 633; Staniforth k. Staniforth,2 Vern. Berkley, 2 P. W. 486, per Cur. ; Cot- 460. In other oases the contingency ton V. Cotton, 3 Y. & C. 149, note. did not occur. See Woraley v. Gran- (d) As where the portions are to ville, 2 Ves. sen. 331 ; Hall v. Hewer, vest at such times as the father shall Amb. 203 ; Corbett e. Maidwell, 1 appoint and he has not yet appointed. Salk. 159. (a) Hcbblethwaite v. Cartwright, (6) 1 Salk. 159. For. 30 ; Greaves v. Mattison. 1 Eq. 564 Ch. XVII. S. 3.] FOB BAISING PORTIONS. *416 500 years, remainder to the heirs male of the body of Thomas by his intended wife, " and if he died without issue male by his intended wife, and there should be one or more daughters which should be ummar/ied or unprovided for at the time of his death" then to raise portions for the daughter or daugh- ters payable at eighteen or marriage with maintenance in the meantime. The wife died without issue male, but leaving a daughter who married, and she and her husband filed their bill to have the portions raised during the father's life. The Court refused the relief asked, on the ground that the por- tten was contingent on the daughter being unmarried and unprovided for at the father's death, a contingency which had not yet happened. In Butler v. Duncomb (e), the marriage settlement limited the estate to George for life, remainder to Mary for life, remainder * to the first and other sons in tail [*416] male, remainder to trustees for 500 years upon trust, that the trustees should " from and after the commencement of the term " raise portions for the younger children payable at twenty-one or marriage ; remainder to George in fee. George died, leaving a daughter the only issue, who married, and then she and her husband filed their biU to have the portion raised in the lifetime of the mother. But the Court declined to make any such order, as the trust was to raise the portion from and after the commencement of the term, which meant the commencement in possession, and that this implied a negative, viz. that it was not to be raised before. In Brome v. Berkley (a) the marriage settlement was to George for life, remainder to the wife for life for her jointure, remainder to the first and other sons in tail, remainder to trustees and their heirs to raise portions for daughters, paya- ble at twenty-one or marriage with maintenance in the mean- time, "the first payment of the maintenance money to be made at such half-yearly feast as should next happen after the estate limited to the trustees should take effect in posses- sion." The husband died leaving no issue but a daughter who attained twenty-one, and filed her bUl in the mother's life- (c) 1 P. W. 448; and see Church- (a) 2 P. W. 484. But see Cotton man v. Harvey, Amb. 336. v. Cotton, 3 Y. & C. 149,note. 565 *417 DUTIES OP TRUSTEES [Ch. XVIL S. 3. time, to have the portion raised. Lord King dismissed the bm, on the ground that the maintenance was not to be raised until the estate of the trustees came into possession, and " it was absurd to say that the portion should be raised first, and the maintenance money'paid afterwards." In Stevens v. Dethick (6) the estate was hmited to Detjiick for life, remainder to his -v^^ife for life, remaiuder to his first and other sons in tail, remainder to trustees for 500 years, to raise portions for daughters payable at twenty-one or mar- riage, with a direction that the daughters should have main- tenance out of the premises comprised in the term " and that the residue of the rents, issues, and profits above such yearly maintenance should in the meantime, till the portions became payable, be received by such persons as should be entitled to the reversion expectant upon the determination of the said term." Lord Hardwicke considered the latter clause to show an intention, that the maintenance money and therefore also the portion itself was not to be raised untH the term fell into possession. He therefore dismissed the bill filed by the only daughter after the death of her mother, but in the lifetime of her father. [*417] * In Massy v. Lloyd (a) the estate was hmited to trustees for 999 years upon trust for the wife for her life, and after her decease upon trust to pay an annuity to the husband, and to apply the residue of the rents during the husband's life, as the wife should appoint (a power which was executed), and on the death of the survivor of the hus- band and wife to raise 15,000Z. for younger children's por- tions, and subject as above the estate was settled on the first and other sons in tail. The wife died, and it was held that the portions were not raisable during the life of the husband. The case was a very special one, but the argument that chiefly prevailed was based upon the fact that all the rents, issues, and profits during the lifetime of the husband had been expressly disposed of otherwise. 5. Hitherto we have averted only to the question whether (5) 3 Atk. 39; and see Reynolds v. (a) 10 H. L. Cas. 248; 11 Ir. Eq. Meyriok, 1 Eden, 48. But see Cotton Rep. 429 ; 12 Ir. Eq. Rep. 298. B. Cotton, 3 1. & C. 149, note. 566 Ch. XVII. S. 3.] FO]^ EAISING PORTIONS. *418 portions shall be raised, while the term charged with them is still- reversioTiary . But there are also other circumstances affecting the portionists personally, which have a material bearing upon the inquiry, at what time the portions are to be raised. 6. Time of raising portions in special cases. — If a specific sum be given to A., payable at her age of twenty-one, or day of marriage, the money cannot be raised until the interest has become vested ; for should the fund on which the money raised is invested prove deficient, the portionist might still Ijave recourse to the estate (J). And so where the trust of a term was to raise 3,000Z. for younger children, payable at their respective ages of twenty-one years, or days of mar- riage, it was held that the trustees were not authorised, when one child had attained his age of twenty-one years, to raise the entire sum, for the infant children could not be deprived of the real security for their shares (e). But from the mani- fest convenience of raising the portions at once, it seems the Court will lean to that construction where anything appears upon the instrument to warrant such a course. Thus the trustees of a marriage settlement were directed, after the death of the husband, to levy and raise by mortgage, sale, or other disposition of the estate, if there should be more than three children, the sum of 10,000Z. for their portions, the shares of the sons to be vested in, and payable to them at the age of twenty-one, and the shares of the daughters at twenty-one or marriage; and it was provided that no mort- gage should he made until some one of the portions should become payable. Four of the children had attained * twenty-one and three were under age ; and the [*418] Vice-Chancellor said, " In this settlement there is a clause that no mortgage is to be made until some one of the portions shall become payable. The whole 10,000Z. must therefore be raised at once. It is objected that some of the shares may become diminished in amount: the answer to that is, that the Court considers the investment in the 3 per cent. Consols as equivalent to payment. If there is any rise (6) Dickinson ^. Dickinson, 3 B. (c) Wynter v. Bold, 1 S. & S. C. C. 19. 507. 567 *419 DUTIES OP TETJSTEBS [Ch. XVII. S. 4. in the funds the children nnder age will have the benefit of it"(«)- SECTION rv. IN WHAT MODE THE PORTIONS AKE TO BE KAISED. Where an estate is settled subject to portions, the pre- sumed intention is that the portions should impede as little as possible the devolution of the property in the main chan- nel of the limitations. Moral duty requires that some sup- port should be secured for the younger children, but this should be done at as little sacrifice as circumstances will allow to the family consequence as represented by the eldest son. 1. Modes of raising portions. — In raising portions, there- fore, it is primd facie undesirable to sell any part of the estate. So recourse should rather be had to levying the required amount by a side wind, as by the produce of mines or a faU of timber; or, if this cannot be done, then by a mortgage rather than by an absolute disposition, for though a mortgage is usually accompanied with a power of sale, so that eventually the property may' pass into the hands of a stranger, yet until actual sale the owner under the settlement has the opportunity of paying off the charge from his private means. In every ease, however, the language of the instru- ment must govern. If portions be simply charged on an estate, either expressly or by implication, (as where a charge is implied from a power limited to the portionist of distrain- ing for non-payment (i),) the money may be raised by mortr gage or sale as in the case of any other charge. 2. "Where a sale is excluded. : — A trust to raise the portions by mortgage will not authorise a sale, but if the trust be to \eyj the amount by mortgage or otherwise a power of sale is implied (c). If the trust be to raise the charge by and out of the rents or by such other ways and means except [*419] * a sale as the trustees may think proper, not only a sale is prohibited but a mortgage also which may lead (a) Gilllbrand v. Goold, 5 Sim. 149. (c) Tasker v. SmaU, 6 Sim. 626. (6) Meynell v. Massey, 2 Vern. 1. 568 Ch. XVII. S. 4.] FOR RAISING PORTIONS. *419 to an absolute disposition, as it enables the mortgagee by foreclosure to get possession of the estate (^d). 3. Out of income or corpus. — If the portions be raisable by and out of the rents and profits or by mortgage, here ,the words are ambiguous, and are capable of the construction that the trustees have an option of levying the portions either out of the income or out of the corpus, and so of . throwing the onus at their discretion either upon the tenant for life or upon the remainderman (6). But the Court will lean strongly against such a construction (c). In some cases the meaning is that the annual rents should be prima- rily charged, and that the deficit only should be raised out of the corpus. Thus where the trustees were to hold an estate during the minority of the devisee, and to raise por- tions by and out of the rents and profits or hy sale or mortgage, and on the devisee attaining the, age of twenty-one to pay the rents to him after payment of the portions, the Court said that as the devisee on attaining twenty-one. was to take such accumulated rents and profits only, as should remain after satisfying the portions, the testator intended that the rents and profits shoiild be first applied, and that the balance only could be raised by sale or niottgage (d'). [Where the portions were raisable " by mortgaging or otherwise disposing of the lands, or out of the rents and profits, or by any other ways or means," and unsuccessful efforts had been made to raise the portions by mortgage of the property, it was held that the trustees were at liberty to apply the rents and profits first iu payment of the interest, and secondly in reduction of the capital of the portions (e)-] 4. Out of rents. — A more common case is where the portions are directed to be raised out of the rents and profits simply, and nothing more is said. Here if a definite time be fixed for payment of the portions, the ordinary and primd facie meaning of rents and profits is taken to be inconsis- tent with the direction for payment at a time certain, and (o) Bennett a. 'Wyn^ham, 23 Beav. (d) Warter v. Hutchinson, 1 S. & 521. S. 276; and see Okeden v. Okeden, 1 (6) See Hall v. Carter, 2 Atk. 354. Atk. 550. (c) See the cases referred to, ante, [(e) Balfour v. Cooper, 23 Ch. D. p. 367. 472.] 569 *420 DUTIES OP TEUSTBBS [Ch. XVII. S. 4. recourse is therefore had to the corpus by sale or mortgage. But even if a definite time of payment be not an ingredient in the case, yet from the very nature of portions, as rents and profits without stint represent the whole estate, [*420] the Court assumes the * jurisdiction of ordering a sale or mortgage (a) ; and where there is no suit pending the trustees of an estate subject to such a charge may sell or mortgage, if they can find a purchaser or mort- gagee, without the intervention of the Court (F). 5. Out of annual rents only. — If, however, the clear inten- tion be that annual rents and profits only are meant, the Court cannot break in upon the corpus ; and such is the case where the portions are directed to be raised expressly out of the annual rents (e) ; or where it is evident from the whole context that by rents and profits were intended the annual rents (c?). 6. Out of rents or othervrise, except a sale. — In Bennett v. Wyndham (e), where the trust was to raise the charge out of the rents and profits, or by such other ways and means except a sale as the trustees should think proper, the Court on the one hand collected an intention that annual rents and profits were meant, and on the other hand that the tenants for life were not to be deprived of all usufructuary enjoy- ment, and the Court adopted a middle course by holding that part of the rents should be impounded and part be handed over to the tenants for life, and referred it to cham- (a) Warburtou u. Warburton, 2 this enlarged construction in a deed ; Vern. 420 ; Sheldon v. Dormer, 2 Garmstone v. Gaunt, 1 Coll. 577 ; Vern. 310; Baines v. Dixon, 1 Ves. Lingon ». Foley, 2 Ch. Ca. 205 ; Mills sen. 41 ; Hall v. Carter, 2 Atk, 358, v. Banks, 3 P. W. 1. per Lord Hardwicke ; Backhouse i/. (6) Backhouse v. Middleton, 1 Oh. Middleton, 1 Ch. Ca. 173 ; Green v. Ca. 176, per Cur. Belcher, 1 Atk. 505; Trafford v. Ash- (c) Anon. 1 Vern. 104; Solley v. ton, 1 P. W. 415 ; Countess of Shrews- Wood, 29 Beav. 482. bury V. Earl of Shrewsbury, 1 Ves. (d) Mills v. Banks, 3 P. W. 1; j un. 2-34, per Cur. ; Okedena.Okeden, Wilson v. Halliley, 1 E. & M. 590; 1 Atk. 550 ; and see Allan v. Back- Ivy v. Gilbert, 2 P. W. 13 ; Evelyn ». house, 2 V. & B. 65; [Be Barber's Evelyn, 2 P. W. 659, see 666; Earl Settled Estates, 18 Ch. D. 624 ;] of Rivers v. Earl of Derby, 2 Vern. Bootle V. Blundell, 1 Mer. 238 Anon. 72; Okeden ti. Okeden, 1 Atk. 550. 1 Vern. 104, in which it was said that (e) 23 Beav. 521. rents and profits could not receive 570 Ch. XVn. S. 4.] FOR RAISING PORTIONS. *421 bers to inquire what proportion of the rents ought to be impounded, and what to be paid to the tenant for life. 7. Bdines and timber. — In Offley v. pffley (^) a term was created for raising 10,000Z. for a daughter's portion, but the term was so short that the ordinary profits of the land would not raise above half the sum. There was an open coal mine in the land which the Court ordered to be wrought, with powers to the trustees to make soughs and drains as need should require, and Lord Commissioner Hutchins said that in such a case where the usual profits of the land would not r^ise the money appointed within the time, the Court might order timber to be felled off the land to make up the amount. 8. Out of rents by fixed annual payments. — If the trusts of a term be to " raise and levy from time to time * a sum certain, by with and out of the rents and [*421] profits, by certain annual payments or sums in each year and not otherwise," the portional sum to be raised is a charge on the annual rents and profits generally, and the estate is not 'discharged at the expiration of six years, though the rents and profits during that period were sufficient to raise it (a). 9. Mortgage of undivided shares of the estate. — Where portions are raisable at different times as they are wanted, it is usual, as each portion is raised, not to mortgage the entire estate charged, but a proportional part only. Thus if the proportional sum be 6,0001. divisible among three younger children, and secured by a term of 1,000 years, when the first 2,000Z. is raised, the trustee of the term mortgages an undivided third part of the hereditaments comprised in the term, and when the second 2,000Z. is raised, another undi- vided third part, and when the remaining 2,000Z. is raised, the other individed third part. The result of tlys is, that each mortgage takes the lejal estate in the subject of the mortgage, whereas if the entire estate had been comprised in the first mortgage, the two other securities would have been equitable, and exposed to all the consequent risks. 10. Custody of title deeds. — Trustees of a term of years (/) Pr. Ch. 26. (a) Re Forster's Estate. 4 I. K. Eq. 152. 571 *421 DUTIES OF TRUSTEES. [Ch. XVII. S. 4. for raising portions as between them and the freeholder are not entitled to the custody of the title deeds, and cannot deliver them to a mortagee. But they and their mortgagees " have a right in equity to the production of them for all necessary purposes (6), * 11. 36 & 37 Vict. c. 66.— By 36 & 37 Vict. c. 66, s. 34, subs. 3, all causes and matters for raising portions are to be assigned to the Chancery Division of the High Court of Justice. (6) Churchill v. SmaU, 8 Ves. 322, & J. 117 ; Hotham v. Somerville, 5 note (6) ; Harper v. Faulder, 4 Mad. Bear. 360. 129, 138 ; Wiseman ». Westland, 1 Y. 672 * CHAPTER XVIII. [*422] DITTIES OF TRUSTEES FOE SALE. (1) The subject of trusts for sale may be conveniently dis- tributed under three heads: Mrst., The general duties of trustees for sale; Secondly, The power of trustees to sign diScharges for the purchase-money; and. Thirdly, The disa- bility of trustees to become purcljasers of the trust property. SECTION I. THE GENERAL DUTIES OF TRUSTEES FOE SAIB.^ 1. Trustees may sell without applying to the Court. — It need scarcely be observed that- trustees for sale where they are not parties to a suit, are authorised to enter into contracts [(1) It should be borne in mind that under the Settled Land Acts, restric- tions are placed on the powers of trustees to sell settled land. This subject is dealt with in chap, xxiii. sect. 2, v. to which the reader is referred.] 1 Trustee for sale. — If the trust instrument contains an express pr implied power, the trustee need not apply to court for power to sell ; Lowe v. Grinnan, 19 la. 193; lies u. Martm, 69 Ind. 114; Eeeside v. Peter, 35 Md. 221; but see Foscue V. Lyon, 55 Ala. 440. The trustee may convey to the cestui que trust, even though there is a provision in case of the latter's death, if authorized ; Sellew's App. 36 Conn. 186. This power of sale may go with the legal estate, or be entirely independent of it; Reid v. Gordon, 35' Md. 184; Prather v. McDowell, 8 Bush, 46 ; Tainter v. Clark, 13 Met. 220 ; White v. Howard, 52 Barb. 294; Peter v. Beverly, 10- Pet. 532;' Jackson a. Burr, 9 Johns. 104. Where the land descends to the heirs, the executors having a power to sell, it is a naked power, and until executed, the rents and profits belong to the heirs ; Braman v. Stiles, 2 Pick. 460 ; McKnight v. Wimer, 38 Mo. 132 ; Allen V. Demitt, 3 Comst. 276 ; Marsh v. Wheeler, 2 Edw. Ch. 156 ; so too, if a trustee is the devisee. In the United States there are statutory provisions for the sale of real estate by those holding a, fiduciary relation, and the heirs, devisees, or wards, hold until the sale takes place. 4 Kent, 321, n. No particular form of words is required to establish a power of sale, if the intention appear, or if certain duties, necessitating a sale, are to be per- formed, it is sufiBcient ; Going v. Emery, 16 Pick. 107 ; Stockbridge v. Stock- bridge, 99 Mass. 244 ; Savings Bank v. Ross, 11 Allen, 443 ; Williamson v. 573 *422 TRUSTEES FOE SALE. [Ch. XVIH. S. 1. without the previous sanction of the Court (a) ; but where a suit has been instituted for the execution of the trust, that (a) Eari of Bath v. Earl of Bradford, 2 Ves. 590, per Lord Hardwicke. Suydam, 6 Wall. 723; Stall v. Cincinnati, 16 Ohio St. 169; Rankin v. Eankin, 36 111. 293; instructions to make a division are insufficient; Mapes v. Tyler, 43 Barb. 421 ; Winston v. Jones, 6 Ala. 550 ; Moore v. Lockett, 2 Bib!). 69. The successor of a trustee may exercise the power of sale ; Buchanan v. Hart, 31 Tex. 647. , An authority to sell docs not include the right to mortgage ; Paine v. Barnes, 100 Mass. 470; Wood v. Goodridge, 6 Cush. 117; 'Ferry v. Laible, 31 N. J. Eq. 567 ; Stokes v. Payne, 58 Miss. 614 ; Huntt v. Townshend, 31 Md. 338 ; Tyson v. Latrobe, 42 Md. 325 ; but see Goehring's App. 81 J Pa. St. 284 ; Zane v. Kennedy, 73 Pa. St. 183 ; but if trustee and cestui que trust are parties to it, they cannot iuTalidate it; Ryder v. Sisson, 7 R. I. 341. Where a trust is charged with debts, the trustee may have an option to sell or mortgage, the latter being favored; Britton u. Lewis, 8 Rich, Eq. 271; Duval's App. 38 Pa. St. 112 ; and a mortgage may be regarded as a condi- tional sale ; Leavitt v. Pell, 25 N. Y. 474 ; a partial sale or a mortgage does not exhaust the power; Asay v. Hoover, 5 Barr, 21 ; if the court can provide for raising monejr it may decree a mortgage or a sale ; Williamson v. Field, 2 Sandf. Ch. 533. A power to sell does not include an exchange ; King v. Whiton, 15 Wis. 684; School t. McCuUy, 11 Rich. 424; nor a partition ; Borel u. Rollins, 30 Cal. 408; Bradshaw v. Eane, 3 Drew, 536; but power to "sell and exchange" authorizes partition ; Phelps v. Harris, 51 Miss. 789 ; trustees may have power to have a partition, although they personally cannot make it; Naglee's Est. 52 Pa. St. 154 ; nor does a power include the right to convey to a cestui trust or a legatee; Goode v. Comfort, 39 Mo. 313; Russell v. Russell, 36 N. Y. 581; or to lease; Hubbard o. Elmer, 7 Wend. 446; but see Treat v. Peck, 5 Conn. 280 ; unless strong reasons could be shown by the trustees ; Blake v. Sander- son, 1 Gray, 333 ; Hedges v. Riker, 5 Johns. Ch. 163 ; where the heirs hold until sale, they have power to reap the profits; Seymour v. Bull, 3 Day, 389. The trustees in selling must act for the best interest of the cestuis que trust ; Gould V. Chappele, 42 Md. 466 ; Chesley v. Chesley, 49 Mo. 640. Trustees must give sufficient notice of the sale to bring about all reason- able competition, but no particular form of advertising is required ; Harper v. Hayes, 2 Gif . 216 ; Reeside v. Peter, 33 Md. 120 ; Stephenson v. January, 49 Mo. 465; Newman v. ilackson, 12 Wheat. 570; Cushman v. Stone, 69 111. 616; if notice must be given at a particular place, notice elsewhere is void; Scars !'. Livermore, 17 la. 297 ; if in discretion of trustee, advertising may be dis- pensed with ; M'Dermut v. Lorillard, 1 Edw. Ch. 273 ; any statutory require- ments must be followed; Campbell v. Tagge, 30 la. 305; Stine u. Wilkson, 10 Mo. 75. Mere inadequacy of price is not sufficient cause for setting aside a sale; Booker v. Anderson, 35 111. 66; Boehlert v. McBride, 48 Mo. 605; Carter v. Abshire, 48 Mo. 300; Waterman v. Spaulding, 61 111. 425; Clark v. Freedman's Savings Co. 100 U. S. 149; see also Carpenter v. Robinson, 1 Holmes, 67; Horsey v. Hough, 38 Md. 130; McNeil t. Gates, 41 Ark. 264; Morse v. Hill, 136 Mass. 60 ; if there are two equally advantageous offers,- the trustee may choose between them ; Selby v. Bowie, 4 Gif. 300. A trustee who takes no part in the sale is nevertheless responsible, for he cannot delegate his power; Oliver v. Court, 8 Price, 166; Berger v. Du£E, 4 674 Ch. XVin. S. 1.] TKUSTEES FOE SALE. *422 attracts the jurisdiction of the Court, and the trustees would not be justified in proceeding to a sale without the Court's Johns. Ch. 368. It would be a breach of trust to insist upon a sale at an inopportune time; Johnston v. Eason, 3 Ired. Eq. .330; Hunt v. Bass, 2 Dev. Eq. 297 ; a trust to sell within a certain time does not invalidate a title given after that time has elapsed; Smith v. Kinney, 33 Tex. 283; unless time is of the essence of the power; Bporaem v. "Wells, 4 C. E. Green Ch.ST; in which case the trustee would be responsible for any loss incurred thereby ; Isham v. Delaware, &c., R. R. Co. 3 Stock, 227; trustees may make no distinction between timber and minerals; Cadwalader's App. 64 Pa. St. 298; several parcels may be sold in ohe lot ; Kellogg v. Carrico, 47 Mo. 157 ; Quidnick Co. 1). Chafee, 13 E. I. 367 ; Tatum v. HoUiday, 59 Mo. 422 ; Benkendorf v. Vincenz, 52 Mo. 441 ; or one parcel sold in several lots ; Miller v. Evans, 35 Mo. 45; Gillespie v. Smith, 29 III. 472; Sumrall v. Chaffin, 48 Mo. 402; Stall V. Macalester, 9 Ohio, 19 ; the object in selling is ordinarily to make a better investment elsewhere ; Wormley v. Wormley, 8 Wheat. 421 ; and the trustee must not be influenced by any personal or selfish motive. A trustee cannot delegate the power; Hawl»y v. James, 5 Paige, 487; Black V. Erwin, Harp. L. 411 ; Cushman v. Stone, 69 III. 516 ; except as to mere ministerial matters ; Graham v. King, 50 Mo. 22 ; Howard v. Thorn- ton, 50 Mo. 291 ; Bales v. Perry, 51 Mo. 449 ; and the trustee should be pres- ent during the sale; Brickenkamp ». Eees, 69 Mo. 426; and also the prop- erty ; Hannah v. Carrington, 18 Ark. 85. A sale though not for money may be valid ; Speigle v. Mereditli, 4 Biss. 120 ; and neglect to take security will not avoid it ; Yaryau v. Shriner, 26 Ind. 364. A sale by an agent, except ministerially, is void ; Pearson v. Jamison, 1 McLean, 197. Trustees should all join in the appointment of an agent ; Sinclair v. Jackson, 8 Cow. 582 ; all deeds should be executed by them, not by attorney ; Cranston v. Crane, 97 Mass. 459 ; Hawley v. James, 5 Paige, 487 ; the husband need not join in deed of wife, who is holder of the power ; Cranston v. Crane, 97 Mass. 459. Trus- tees for creditors may convey by attorney; Blight v. Schenck, 10 Barr, 286; but the powers of those holding a fiduciary relation are regulated largely by local statutes. A sale may be private if it seems more advantageous ; Jackson t>. Williams, 50 Ga. 553; Crane v. Eeeder, 22 Mich. 339; Ashurst u. Ashtirst, 13 Ala. 781 ; Shacklett v. Eansom, 5i Ga. 350 ; unless the power requires an action ; Greenleaf v. Queen, 1 Pet. 145 ; but this requirement may be waived if it is for any reason impracticable; Gibbs v. Cunningham, l,Md. Ch. 44; Tysoq v. Mickle, 2 Gill, 383. A private sale may be without notice ; Minuse v. Cox, 5 Johns. Ch. 441 ; a bid by letter at an auction is valid ; Tyree v. Williams, 3 Bibb, 367. A bid made by mistake may be waived, even it the sale is for less; Waterman v. Spaulding, 51 III. 425; so a bid maybe rejected, if deemed advisable ; Gray v. Veirs, 33 Md. 18. An auction sale is most desirable, if bona Jide; Shine v. Hill, 23 la. 264; while there is always some risk attend- ing private sales; Johnson v. Dorsey, 7 Gill, 269; and they will be set aside on slight provocation ; Penny v. Cook, 19 la. 538. An advertised sale may be adjourned ; Eichards v. Holmes, 18 How. 143; Bennett v. Brundage, 8 Minn. 432 ; but see Griffin v. Marine Co. 52 111. 130 ; in case of failure to sell, the property must be readvertised, as a sale on the same day would be improper; Judge v. Booge, 47 Mo. 544; trustees must show that power was complied with ; Hahn v. Pindell, 1 Bush, 538 ; Gibson ». 575 *422 TEUSTEES FOB SALE. [Ch. XVIII. S. 1. sanction (J). Private contracts, therefore, after the institu- tion of a suit, can only be entered into by trustees subject to (b) Walker t. Smalwood, Amb. Culpepper v. Aston, 2 Gh. Ca. 116, 676 ; and see Eaymond v. Webb, LofCt, 223 ; and see further, infra. 66 ; Di^ayson v. Focock, 4 Sim. 283 ; Jones, 5 Leigh, 370. If proper notice was given an error in its recital in the deed will not yitiate it; O'Ncil v. Vanderburg, 25 la. 104. A purchaser cannot avoid purchase by questioning the notice ; Cassell v. Boss, 33 111. 244 ; Greenleaf v. Queen, 1 Pet. 145. A stranger may post the notices and conduct the sale if the trustee ratify his acts ; Johns v. Sergeant, 45 Miss. 332 ; but a stranger cannot object to the sale ; Herbert v. Hanrick, 16 Ala, 581 ; Wight- man V. Doe, 24 Miss. 675; Lareo v. Casaneuava, 30 Cal. 560; and the pro- ceedings cannot be collaterally attacked ; Williams r. Munroe, 67 N. C. 164 ; Reid V. MuUins, 48 Mo. 344. If the cestui que trust waives irregularities, no one else can object; Schenck ». EUingwood, 3 Edw. Ch. 175; and there is always a presumption of correctness ; Marshall v. Stephens, 8 Humph. 159. A power of sale must be exercised exactly in accordance with its terms and conditions ; Alley v. Lawrence, 12 Gray, 373 ; Mills v. Traylor, 30 Tex. 7 ; Young V. Van Benthuysen, 30 Tex. 762 ; Berrien v. Thomas, 65 Ga. 61 ; Bar- rett V. Bamber, 81 Pa. St. 247 ; James v. Cowing, 17 Hun, 256 ; Loring v. Salis- bury Mills, 125 Mass. 138; Scott v. Sierra Lumber Co. 67 Cal. 71; a sale on credit is bad, if cash was required ; Waterman v. Spaulding, 51 111. 425 ; Palmer V. Williams, 24 Mich. 328 ; or for less than sum named ; Cadwell v. Brown, 36 111. 103; Drusadow i<. Wilde, 63 Pa. St. 170. A sale before the happening of specified events is bad; Davis v. Howcott, 1 Der. & Bat. Ch. 460; Ervine's App. 16 Pa. St. 256; Loomis v. M'Clintock, 10 Watts, 274; Blacklow v. Laws, 2 Hare, 40. A power to sell when income is insufficient for support cannot be exercised until then ; Minot v. Prescott, 14 Mass. 495 ; a sale within a limited period by deed dated after is good ; Harlan v. Brown, 2 Gill, 475. A trustee may, if allowed to exercise his discretion, not be disturbed, unless guilty of fraud; Greer v. McBeth, 12 Rich. Eq. 254; Bunner v. Storm, 1 Sandf. Ch. 357. A trustee may exercise his power so long as anything remains to be done ; Cresson v. Ferree, 70 Pa. St. 446 ; afterwards the power terminates; Ward v. Barrows, 2 Ohio St. 241; Sharpsteen «. Tillou, 3 Cow. 651 ; and a court may for that cause forbid a sale ; Murdock v. Johnson, 7 Coldw. 605. . Sometimes a power of sale will be exercised only in case of great urgency ; Goddard v. Brown, 12 B. I. 31. The court may elect between a sale and an extension of time in which to redeem ; Johns v. Smith, 56 Miss. 727. A sale on a general election day is not sufficient ground for avoiding it ; Bank of Commerce v. Lanahan, 45 Md. 396. A sale with great loss requires that the need of the sacrifice should be shown; Cocke v. Minor, 25 Gratt. 246. A wrongful sale passes no title ; Welch v. Greenalge, 2 Heisk. 209 ; Mills v. Traylor, 30 Tex. 7. If a sale is to be by/Consent of majority, the meaning is a majority of those living; Sohier v. Williams, 1 Curtis, 479; Leeds v. Wake- field, 10 Gray, 514. A power is defeated by death of one whose consent is required; Alley v. Lawrence, 12 Gray, 373; unless it be a person, practically a corporation sale ; Barber v. Cary, 1 Kern. 397. If. there is a power to sell if personal property is insufficient to pay debts, it must be proven ; Graham v. Little, 5 Ired. Eq. 407 ; Roseboom v. Mosher, 2 Denio, 61, and trustees must 676 Ch. XVIII. S. 1.] TKXJSTEES FOE SALE. *423 tlie approbation of the Court, and a condition is commonly annexed that the contract shall be null and void, unless the sanction of the Court be obtained within a limited period. Cases have occurred where, from accidental circumstances, the sanction has not been obtained within the time, and then by the death of the purchaser the contract has dropped to * the ground, and the representatives of [*423] the purchaser have not felt themselves justified in renewing it. The better mode would be to give liberty to the purchaser at any time after the expiration of the limited self, whether they approve or not; Caleraan v. M'Kinney, 3 J. J. Marsh. 246. In case a sale takes place there is a presumption that all necessary conditions have been performed ; Wilson u. South Park Commissioners, 70 111. 46 ; Graham v. Fitts, 53 Miss. 307 ; Penniman v. Sanderson, 13 Allen, 193 ; Hamil- ton V. Crosby, 32 Conn. 342. See distinctions between conditions precedent and subsequent ; Mason v. Martin, 4 Md. 125 ; Hill on Trustees, 178. Trustees should covenant only against their own acts; Barnard v. Duncan, 38 Mo. 170. If a trade is thrown up and any of the consideration is forfeited, the trustee must account for it; Campbell v. Johnston, 1 Sandf. Ch. 148. A tenant for life may purchase; Miltenberger v. Morrison, 46 Mo. 251. The purchaser is not bound to see to the application of the purchase money; Norman v. Towne, 180 Mass. 52 ; Wagner v. Blanchet, 27 N. J. Eq. 356 ; Conover v. StothofiE, 38 N. J. Eq. 55 ; Keister v. Scott, 61 Md. 507 ; John v. Barnes, 21 W. Va. 498 ; but see Jackson v. Davis, MacArthur & Mackey, 334. Insolvency of the trustee is immaterial ; Tooke v. Newman, 75 111. 215 ; MoGready v. Harris, 54 Mo. 137. The trustee advertised and sold whole land, but the purchaser only get- ting deed of part, the trustee could make a deed for the balance; O'Day v. Vansant, 3 Mackey, 196. Guardian sold less than he held, and then acquiring it for himself improved it, but lost all he had done; Dickinson v. Durfee, 139 Mass. 232. Library association bought more land than it needed, and sold part ; Attor- ney-General V. Greenfield Library Association, 135 Mass. 563. Court cannot decree sale of corpus of estate when one is trustee for life only ; Rogers a. Pace, 75 Ga. 436. The power given to an executor to sell, did not extend to an administrator with the will annexed ; Banting v. Gummerson, 24 Q. B. 287 ; a power to sell does not include a power to mortgage ; Nowlan v. Logie, 7 Chy. 88 ; Hender- son V. Woods, 9 Chy. 539; Edinburgh Life Ins. Co. c. Allen, 18 Chy. 425; see also Ewart v. Dryden, 13 Chy. 50. Courts will not set aside sales made by trustees merely because of inade- quacy of price; Linton v. Michie, 7 Chy. 182; but if the trustee made no effort to get a higher price, and it is clear that he might have sold to better advantage, he may be held responsible for the loss ; Graham v. Teomans, 18 Chy. 238. If a trustee has discretion to sell or not, courts will not interfere, but leave him in free exercise of his privilege ; In re Parker, 20 Chy: 389 ; Coy V. Coy, 25 Chy. 267. Devisees in trust for sale of real estate must jointly receive or unite in receipts for purchase money ; Ewart v. Snyder,- 13 Chy. 55;, a power to sell residue of lands, is a general power as to them; In re Evans, 4 Chy. Chamb. 102. 577 *423 TRUSTEES POK SALE. [Ch. XVIII. S. 1. period, but before any confirmatian by the Court, to deter- mine the contract. 2. Must consult the interest of the cestuis que trust. — A trustee for sale will remember that he is bound by his office to sell the estate under every possible advantage to his ces- tuis que trust (a), and in the case of several successive cestuis que trust, with a fair and impartial attention to the interests of all the parties concerned (6). If trustees, or those who act by their authority, fail in reasonable diligence in inviting competition (c), or in the management of the sale (as if they contract under circumstances of haste and improvidence, or contrive to advance the interests of one party at the expense of another), they will be personally responsible for the loss to the suffering party (<^) ; and the Court, however correct the conduct of the purchaser, will refuse at his instance to compel the specific performance of the agreement (e). But if a trustee has once contracted to sell hand fide, a court of equity will not allow the contract to be invalidated because another person comes forward and is willing to give a higher price (/) ; and where there are two offers equally advanta- geous, one of which is preferred by a cestui que trust, it is not the duty of the trustees against their own opinion to accept the offer preferred by such cestui que trust (jg~). 3. "Where sale is a breach of trust. — In no case will the Court enforce the specific performance of a contract which amounts to a breach of trust (K). ' (a) Downes ». Grazebrook, 3 Mer. Ves. 394; White ». Cuddon, 8 CI. & 208, per Lord Eldon; and see Matthie Fin. 766. I/. Edwards, 2 Coll. 480. (/) Harper v. Hayes, 2 Giff. 210, (6) Ord V. Noel, 6 Mad. 440, per reversed 2 Xie G. F. & J. 542. Sir J. Leach ; and see Anon, case, 6 (j) Selby v. Bowie, 4 GifE. 300. Mad. 11. (A) Wood v. Eichardson, 4 Beav. (c) Ord V. Noel, 5 Mad. 440, per 176, per Lord Langdale ; Fuller v. Sir J. Leach ; and see Harper v. Knight, 6 Beav. 205 ; Thompson v. Hayes, 2 Giff. 217. ' Blackstone, 6 Beav. 470 ; Sneesby v. (d) See Pechel v. Fowler, 2 Anst. Thome, 7 De G. M. & G. 399; Muc- 550. hoUand v. Belfast, 9 Ir. Ch. Rep. (e) Ord V. Noel, 5 Mad. 440, per 204; Saunders v. Mackeson, W. N. Sir J. Leach ; Turner v. Harvey, Jac. 1866, p. 400 ; [Oceanic Steam Navi- 178, per Lord Eldon ; Bridger v. Rice, gator Company v. Sutherberry, 16 1 J. & W. 74 ; Mortlock v. Buller, 10 Ch. D. 236 ; Dunn v. Flood, 25. Ch. Ves. 292 ; and see Hill v. Buckley, 17 D. 629 ; 28 Ch. Div. 586.] 578 Ch. XVIII. S. 1.] TBUSTEBS FOR SALE. *424 4. Cestuis que trust may contract conditionally. — The usual course is said to be for the cestuis que trust, who are the per- sons most interested in the matter, and who have the strong- est motives for obtaining the highest possible price, to enter into a conditional contract, and then to obtain the assent of the trustee, who, when he has satisfied himself that the sum proposed *is the value of the property, [*424] sanctions a sale which is beneficial to his cestuis que trust (a^. 5. Valuation of the property. — A trustee for sale must iflform himself of the real value of the property, and for that purpose, will, if necessary, employ some experienced person to furnish him with an estimate (6). If the property be sold at a grossly inadequate value, it is a breach of trust, which affects the title in the hands of the purchaser (c). 6. Each trustee responsible for the sale. — A trustee who takes no active part in the business cannot excuse himself by saying he had nothing to do with the conduct of the other to whom the management was confided ; for where several trustees commit the entire administration of their trust to the hands of one, they are all equally responsible for the faithful discharge of their joint duty by that one whom they have substituted (cf). 7. Vyhat time allcwed for disposing of the estate. — The trustees will be allowed a reasonable time for disposing of an estate, and though the instrument creating the trust direct them to sell " with all convenient speed" that is no more than is implied by law, and does not render an immediate sale imperative (e). On the other hand, if the trust be to sell " at such time and in such manner as the trustee shall think fit," this will not authorise the trustees as between them and (a) Palairet v. Carew, 32 Beav. re Chertsey Market, 6 Price, 285, per 668. eundem. (b) See Oliver v. Court, 8 Price, (e) Buxton v. Buxton, 1 M. & Cr. 165 ; Campbell v. Walker, 5 Ves. 680 ; 80 ; Garrett v. Noble, 6 Sim. 504 ; Fry Conolly V. Parsons, 3 Ves. 628, note ; i^. Fry, 27 Beav. 144 ; and see Fitz- Sugd. Vend. & Purch. 55, 11th ed. gerald v. Jerroise, 5 Mad. 25 ; Vickers (c) Steyens v. Austen, 7 Jur. N. S. o. Scott, 8 M. & K. 500; Sculthorpe 873. V. Tipper, 13 L. E. Eq. 232 ; Turner (d) Oliver v. Court, 8 Price, 166, v. Buck, 18 L. E. Eq. 301. per Lord Chief Baron Richards ; In 579 *425 TEtJSTEES FOE SALE. [Ch. XVIH. S. 1. their cestuis que trust to postpone the sale arbitrarily to an indefinite period. The trustees cannot by such postpone- ment vary the relative rights of the tenant for life and re- maindermen, and so interfere with the settlor's intention (/). If trustees for a length of time, as for twenty years, neglect without any sufficient reason to sell, they will be answerable for any depreciation,- and be decreed to account for interest instead of rents (g^. 8. Trust to sell within a limited period. — If the trust be "with all convenient speed and within Jive i/ears," to sell the estate and apply the funds in payment of debts, &c., the proviso as to the five yeais is considered as directory only, and the trustees can sell and make a good title after, the lapse of that period. The Court could scarcely impute to the settlor the inteijtion that the sale at the end of [*425] the five years should be made * by the Court, which would be the case if the power in the trustees were extinguished (a). [9. Cestuis que trust all sui juris. — A trust for sale is not put an end to by reason of all the persons beneficially inter- ested becoming sui Juris, for any one of the cestuis que trust has a right to insist on the trust being carried out, but if they all agree to take the property as realty, the trust for sale is extinguished (6). J 10. Trustee for sale may not grant leases. — In a case where the trustees had endeavoured for some tinie to sell, and not having succeeded, they agreed to execute a lease, the Court, on a bill filed by the trustees, to compel specific performance, refused to decree the lease, as the trust for sale did not primd facie imply a power to grant leases (c). And so exec- utors who are quasi trustees for sale, would, under special circumstances only, be justified in granting a lease (jT) ; for (/) See Walker v. Shore, 19 Ves. E. Eq. 8 ; [Edwards v. Edmunds, 34 391 ; Hawkins v. Chappel, 1 Atk. 623. L. T. N. S. 522.] {g) Fry u.Fry, 27 Beav. 144; Pat- [(6) Biggs v. Peacock, 22 Ch. D. tenden v. Hobson, 1 Eq. Rep. 28. 284; Re Tweedie and MUes, 27 Ch. (a) Pearce v. Gardner, 10 Hare, D. 315.] 287 ; and see Cufe v. Hall, 1 Jur. N. (c) Evans v. Jackson, 8 Sim. 217. S. 973; De la SaUe v. Moorat, 11 L. (rf) Hackett v. M'Namara, LI. & G. Kep. t. Plunket, 283. 580 Ch. XVIII. S. 1.] TRUSTEES FOR SALE. *426 • such an act is not regularly within their province, and it is iucumhent on the persons taking a lease from them to show that it was called for by the interests of the parties entitled to the property (e). [11. May not give option to purchase. — And executors and administrators equally with trustees cannot bind the trust estate by a proviso in a lease that the lessee shall dur- ing the term have an option of purchasing the property at a fixed price (/) ; for it is the duty of the trustees to exer- cise their discretion at the time of sale as to whether the terms are in the circumstances as then existing beneficial to the cestuis que trust. And on the same principle a covenant by a trustee in a lease to renew on the payment of a fixed fine was held to be a breach of trust and not enforceable by the lessee (^).J 12. Trust for sale Tvill not in general authorise a mortgage. — A trust for sale, if there be nothing to negative the set- tlor's intention to convert the estate absolutely, will not authorise the trustees to execute a mortgage (Ji). But where an estate is devised to trustees, charged with debts, the sub- ject thereto, upon trust for certain parties, so that a sale, though it may be required, is not the testator's object, the trustees may, for the purpose of paying the debts, more prop- erly mortgage than sell (i). " A power of sale out * and out," observed Lord St. Leonards, " for a pur- [*426] pose or with an object beyond the raising of a partic- ular charge, does not authorise a mortgage : but where it is for raising a particular charge, and the estate is settled sub- ject to that charge, then it may be proper, under the circum- stances, to raise the money by mortgage, and the Court will support it as a conditional sale, as sbmethiug within the power, and as a proper mode of raising the money " (a). (e) Keating v. Keating, LI. & G. [(j') Bellringer v. Blagrave, 1 De' Eep. «. Sugden, 133; [Oceanic Steam G. & Sm. 63.] Navigation Company v. Sutherberiy, (Ji) Haldenby v. SpofEorth, 1 Bear. 16 Ch. D. 236.] 390; Stroughill v. Anstey, 1 De G. M. & [(/) Oceanic Steam Navigation G. 635; Page a. Cooper, 16 Beav. 396; Company v. Sutherberry, 16 Ch. D. Devaynes i'. Robinson, 24 Beav. 86. 236; Clay v. Rufiord, 5 De G. & Sm. (0 Ball v. Harris, 4 M. & Cr. 264. 768.] ^ (a) Stroughill v. Anstey, 1 De G. 581 *426 TRUSTEES FOE SALE. [Ch. XVIII. S. 1. 13. Where the po'wei; is left to the discretion of the trustees the purchaser cannot question the exercise of the discretion. — A testator devised an estate to trustees upon trust to apply the rents for fifteen years in payment of incumbrances charged thereon, and if, for any reason whatever, in the opinion of the trustees a sale shoijld become necessary, " they were authorised to sell." The purchaser objected that the amount of the incumbrances would not justify a sale of the whole estate, but it was held that the power of sale depended on the opinion of the trustees, and the fact that they thought it necessarj'- would be evidenced by the conveyance (J). 14. A trust to mortgage vrill not authorise a sale. — A trust to raise money by mortgage will not authorise a sale, though the latter may be more beneficial to the estate ; and the Court itself has no jurisdiction to substitute a sale for a mortgage (c). 15. Powers of sale. — It was held by V. C. Kindersley, that in the absence of any special direction a mere power to mortgage does not authorise a mortgage with a power of sale, since how can a trustee who has not in himself even any power to sell give authority to another to sell (. Wilson, W. N. 1880, p. 83.] 584 Ch. XVIII. S. 1.] TEXJSTEES FOE SALE: *429 under the Drainage Acts, that as the sale can only be made subject to the charge, the exercise of the power will confer a benefit on the tenant for life, for before the sale he is bound by the Acts to pay not only the interest on the charge, but also part of the principal, but after the sale he becomes under the settlement tenant for life of the whole proceeds. [20. At the request and by the direction of tenant for life, — . Where the power of sale was given to the trustees " at the request and by the direction of " the tenant for life, the Court refused to restrain a sale although no immediate reinvest- Aent was contemplated, being of opinion that the tenant for life had a right to call upon the trustees to sell, and that they had no right to refuse his request (<^). 21. Settled Land Act. — Under the Settled Land Act, 1882, the power of sale is given to the tenant for life, and may be exercised by him without reference to any prospec- tive reinvestment of the purchase-money in the purchase of another estate. In fact there is no restriction whatever in the Act on his power of sale, which, subject to the giving of certain notices (e), may be exercised by him, on any grounds which he thinks sufficient, without any liability on his part, to justify *the grounds, and without any [*429] power in the trustees of the settlement or in the Court to' interfere with his power of sale so long as the same is honestly and properly exercised («). It must however be borne in mind that the tenant for life is under the 53d sec- tion "in relation to the exercise of any power under the Act, to be deemed in the position and to have the duties and lia- bilities of a trustee for all parties entitled under the settle- ment," and it is conceived that the effect of this is to put the tenant for hfe in the position of a trustee with a power of sale exercisable in all respects at his absolute discretion, and to make the exercise of the power subject to the control of the Court in all cases in which the tenant for life is influ- enced by dishonest or improper motives (6). [(d) Thomas t. "Williams, 24 Ch. [(a) "Wheelwright v. "Walker, 2.3 D. 558.] Ch. D. 752.] [(e) 45 & 46 Vict. c. 38, s. 45; 47 [(6) As to the control of the Court &i48 "Vict.c. 18, s. 5.] fiver the exercise of powers, see post, 585 *430 TEtrSTEES FOR SALE. [Ch. XVHI. S. 1. 22. The resiolt of the late Act is that it is now unnecessary and unadvisable to insert a power of sale in a family settle- ment of real estate ; but the powers arising under the Act which are sufficient for any ordinary case should be relied on((?). 23. Sale with consent. — : Where trustees were empow- ered to sell and enfranchise with the consent of the person for the time being entitled as beneficial tenant for life, and the will contaiaed a direction that no repurchase or reinvest- ment should be made while there should be any person en- titled as beneficial tenant for life or tenant in tail in posses- sion and of the age of twenty-one years, without the previous consent of such person, it was held that the trustees could during the infancy of a tenant in tail in possession make a good title under the power (c?).!] 24. Sale at request of a party. — Trustees for sale at the request and by the direction of another party, to be testified in writing, &c., cannot obtain a decree for specific perform- ance without first proving that the contract was entered into at such request and by such direction, and that such request and direction have, either before or since the contract, been testified by the requisite writing (e). Nor if trustees have a power of selling or leasing at the written request of another, will the Court enforce a contract without such' request, though it is alleged that there was part performance [*430] by the trustees and by the person * whose request was necessary, and that it is therefore a case where a mere parol contract is sufficient (a). 25. Trustees for sale of a limited interest in an estate or of an aliquot part of an estate. — If an estate be vested in trus- tees upon trust for A. for life, and on the decease of A. to chap, xziii. s. 2. See also the obser- man and Wren, 49 L. J. N. S. Ch. vations in Wheelwright v. Walker, 23 642.J Ch. D. 759, which seem ncit to give (e) Adams v. Broke, 1 T. & C. C. full effect to sect. 53 of the Settled C. 627; Sykes v. Sheard, 33 Beav. Land Act, 1882.] 114; see the decree at the foot of the [(c) As to the powers of a tenant case ; and see Blackwood v. Borrowes, for life under the. Act, and the effect 2 Conn. & Laws. 459. of the Act generally, see post, chap. (a) Fhillips <,. Edwards, 33 Beav. xxii.] 440. [(d) Be Sir T. Neave and Chap- 586 Ch. XVIII. S. 1.] TETJSTJEES FOR SALE. *430 sell, the trustees have no power to sell during the life of A., however beneficial it may be to the parties interested in the trust (6). But if an estate be devised to A. for life, and after her decease to trustees upon trust to sell " as soon as conveniently may be after the testator's decease," the trus- tees, with the concurrence "of A., can make a good title (c) ; and if the tenant for life and the trustees in remainder sell for one entire sum, it has been held that the purchaser will get a good title, and the tenant for life and the trustees may agree as amongst themselves how the pui^chase money is to be apportioned, or if they cannot agree it will be apportioned by the Court (c?) ; [and the same principle was applied where the trustees of a reversion expectant on a lease concurred with the owner of the lease in selling the fee (e).] And generally trustees for sale of any aliquot part of an estate may join in a sale of the whole estate for one entire sum, and the purchase money, as amongst the respective owners, may be left to be apportioned as before (/) ; and where a testator's estate was under administration ' by the Court, and a house, part of that estate, was put up for sale with another house which was comprised in the testator's marriage settle- ment, in one lot, and the trustees of the settlement had -leave to attend, it was held that as the sale of the entirety was beneficial, a good title could be made, and that the purchase- money could be apportioned in chambers (^). But a pur- chaser cannot be compelled to accept such a title if the separate interests of the cestuis que trust in such a joint sale be not brought to the sale with every advantage, or if the nature of the case be such that the purchase-money will not admit of apportionment upon any intelligible principle (A). (6) Johnstone v. Baber, 8 Beav. (f) See M'Carogher v. Whieldon, 233 ; Blacklow v. Laws, 2 Hare, 40 ; 34 Beav. 107. Mosley v. Hide, 17 Q. B. 91 ; Want v. (g) Cavendish v. Cavendish, 10 L. Stallibrass, 8 L. K. Ex. 175. K. Ch. App. 319 [As to the power of (c) Mills V. Dugmore, 30 Beav. 104. trustees to grant a lease of two estates (c?) Clark v. Seymour, 7 Sim 67 ; held upon different trusts, see Tolson [and see Re Cooper and Allen's Con- v. Sheard, 5 Ch. D. 19.] tract, 4 Ch. D. 802.] (h) Rede v. Oakes, 32 Beav. 555 ; [(e) Morris v. Debenham, 2 Ch. D. 10 Jur. N. S. 1246 ; [4 De G. J. & S. 540.] 505 ; see Me Cooper and Allen's Con- tract, 4 Ch. D. 802.] 587 *431 TKTTSTBBS FOB SALE. [Ch. XVIII. S. 1. 26. Trust for sale survives. — Where an estate is vested in several trustees upon trust to raise a sum by sale or mort- gage, and one of the trustees dies, the survivors or sur- vivor may sell or mortgage, unless there be words in [*431] *the settlement which expressly declare that the trust shall not be exercised by the survivors or sur- vivor, for the execution of a trust is not regarded in the same light as that of a power ; but the presumption is that, as the estate, so the discretionary part of the trust passes to the survivors or survivor (a). Though there be a povrer to appoint new trustees. — The objection is sometimes taken that where there is a power of appointment of new trustees, and one of the trustees has died and a new trustee has not been substituted, the survivor is incompetent to execute a valid conveyance. But though a proviso for appointment of n,ew trustees may certainly be so framed that the execution of the trust should, until a new trustee has been substituted, remain in suspense (5), yet the clause, as usually penned in settlements [and as framed in the Conveyancing and Law of Property Act, 1881, s. 31,] is considered by the Courts to be merely of a directory char- acter (c). 27. Power of sale in a mortgage. — In a mortgage to two persons to secure a joint advance with a. power of sale to "them, their heirs and assigns," if one dies, the survivor may sell ((^) ; and in a mortgage to A. in fefe, with a power of sale to him, "his heirs, executors, administrators or as- signsv" the administrator of the assign of A., though the legal estate of the lands be not in himself, but in a trustee for him under a conveyance from the heir of the assign, is, together with such trustee, an assign within the meaning of the power, and can therefore sell (e). And it does not vitiate the sale, that part of the purchase-money is left on mortgage of the estate, but the mortgagee is answerable for the whole amount to the mortgagor (/). (a) Lane v. Debenham, 11 Hare, (d) Hind v. Poole, 1 K. & J. 383. 188. (e) Saloway v. Strawbridge, 1 K. (6) See Foley v. Wontner, 2 J. & & J. 371 ; 7 De G. M. & G. 594. W. 246. (/) Davey v. Durrant, 1 De G. & (c) See supra, pp. 262, 263. J. 535 ; [Bettyes v. Maynard, 49 L. 588 Ch. XVIII. S. 1.] TBUSTEBS FOE SALE. *432 28. 23 & 24 Viot. c. 145. — By 23 & 24 Vict. c. 145, as to mortgages bi/ deed created since 28t]i August, 1860, and where the security does not speak to the contrary, any mort- gagee, though' his security contain no power of sale, may, when the principal sum has been in arrear for twelve months, or the interest for" six months, or there has been any default by the mortgagor in insuring, proceed to a sale, after six months' notice, and sign a valid receipt for the purchase- money (^). [44 & 45 Viot. c. 41. — But this has been repealed as to instruments executed after the 31st of December, 1881, and its place supplied as to such instruments by the Conveyanc- ing and Law of Property Act, 1881, which gives to * mortgagees of property generally, whether real or [* 432] personal, where the mortgage is by deed, and no con- trary intention is expressed in the instrument, power to sell the mortgaged property when the mortgage money has be- come due ; but the power is not to be exercised unless and until — (1). Notice requiring payment of the mortgage money has been given, the default made in payment for three months; or (2). Some interest has been in arrear for two months after becoming due ; or (3). There has been a breach on the part of the mort- gagor of some provision contained in the mortgage deed or in the Act other than and besides a covenant for payment of the mortgage money or iijterest thereon (a).] 29. Trustees must show a good title. — - As a trustee, like any ordinary vendor, is bound to make the purchaser a good title (6), it would be prudent before proceeding to the exe- cution of the trust, to take the opinion of counsel whether a good title can be deduced. Should the contract for sale be unconditional and the title prove bad, the purchaser in a T. Hr. S. 389 ; reversing S. C. 46 L. [(a) 44 & 45 Vict. c. 41, ss. 19, 20, T. N. S. 766.] 71.] (g) 23 & 24 Vict. c. 145, ss. 11- (6) White v. Foljambe, 11 Ves. 16 ; and s. 34. 343, 345, per Lord Eldon ; and see M'Donald v. Hanson, 12 Ves. 277. 689 *433 TRUSTEES FOE SALE. [Ch. XVIII. S. 1. suit for specific performance would have his costs against the trustee (c), though the trustee, where his conduct was excusable, might charge them upon the trust estate under the head of expenses. 30. Timber. — If trustees have a power of sale only, they cannot sell the estate separate from the timber standing upon it, though the tenant for life be without impeachment of waste, and might have cut the timber previously to the sale ; and a sale so affected is absolutely void (^d), unless it be effected subsequently to 13th August, 1859, when it may be confirmed by means of a legislative enactment in that behalf (e). 31. Minerals. — It is conceived that no distinction exists between timber and minerals, for both until severed form an integral part of the property. And it was accordingly, be- fore the late Act, decided that the surface could not be sold apart from the minerals (/). [*433] • * 25 & 26 Vict. c. 108. — But now, by 25 & 26 Vict. c. 108, trustees and other persons (a) are authorised, with the previous sanction of the Court of Chancery, to be ob- tained on petition in a summary way (6), to sell the surface (c) Edwards a. Harvey, G. Coop. to sell the minerals together with, or 40. apart from, the surface, and to grant (d) ChoUneley v. Paxton, 3 Bing. or reserre such rights of way as in- 207; 5 Bing. 48; S. C. nom. Cockerel! stroke or out-stroke, and any other V. Cholmeley, 10 B. & C. 654 ; 3 Buss. easements in, upon, over, or under 565 ; 1 R. & M. 418 ; 1 CI. & Fin. 60. any of the said premises as may be (e) 22 & 23 Vict. c. 35, b. 13. [As necessary or desirable for the winning, to the power of a tenant for life working, storing, selling, and carrying impeachable for waste with the con- away of any such minerals." sent of the trustees of the settlement (o) And " other persons " has been to cut and sell timber under the Set- held to comprise mortgagees ; Re tied Land Act, 1882, see sect. 35 of Beaumont's Mortgage Trusts, 12 L. that Act.] R. Eq. 86 ; Re Wilkinson's Mortgaged (/) Buckley v. Howell, 29 Beav. Estates, 13 L. E. Eq. 634. 546; as to sales under the Settled (6) Where the power of sale is in Estates Act, see Me Mallins, 3 Giff. the trustees, with the consent of the 126 ; \_Re Milward's Estate, 6 L. R. tenant for life, a petition by the trus- Eq. 248.] In settling lands where tees must be served on the tenant for there are minerals, it may be con- life, but not on the remainderman, venient to enable the trustees for Re Pryse's Estate, 10 L. E. Eq. 531 ; sale " as to any of the premises under [fle Nagle's Trusts, 6 Ch. D. 104;] w^iich minerals may lie, to sell the and the sanction of the Court being surface apart from the minerals, or required for the protection of the 590 Ch. XVm. S. 1.] TRUSTEES FOE SALE. *434 separate from the minerals, and the minerals separate from the surface, and such sales for the time past, where they have not been the subject of litigation, either concluded or pend- ing, are confirmed. [32. In the case of a sale by the tenant for life under the Settled Land Act, 1882, the sale may be made either of land with or without an exception or reservation of all or any of the mines and minerals therein, or of any mines and miner- als, and in any such case with or without a grant or reserva- tion of powers of working, wayleaves or rights of way, rights of water and drainage, and other powers, easements, rights and privileges for or incident to or connected with mining purposes, in relation to the settled land, or any other land ( tee acts as prudently for the cestuis que trust as he would have done for himself (a). But an agent for sale must not be allowed to receive the purchase-money; [and an agent should not be employed to do anything out of the ordinary scope of his business ; and it has even been held that the trus- tse's solicitor ought not to choose the valuer, as the choice is a matter on which the discretion of the trustee should be exercised (5). J 37. If the sale be by auction, proper advertlsementB must be given. — If the trustee think a sale by auction the more eli- gible mode, he must see that all proper advertisements are made, and due notice given. It was ruled in an old case (c) that a cestui que trust could not, by alleging the want of these preliminary steps, obtain an injunction against the sale ; for the trustee being personally r,esponsible to the cestui que trust for any consequential damage, the Court, it was said, could not regard it as a case of irreparable injury. But in more recent cases an injunction has been granted, it being the clear duty of the trustee to procure for the cestuis que trust the most advantageous gale (c?). [38. Prior charges. — ^By the Conveyancing and Law of Property Act, 1881, as to trusts or powers created since 31st December, 1881, and unless the settlement otherwise directs, a trustee may sell, or concur in selling, all or any part of the property either subject to prior charges or not (e).] ' 512 ; and see Sidebotham v. Barring- (c) Pechel v. Fowler, 2 Ans{. ton, 4 Beav. 110. 549. (g) Hardwick v. Mynd, 1 Anst. (d) Anon. Case, 6 Mad. 10 j Blen- 109. nerhasset v. Day, 2 B. & B. 133. As (a) Ex parte Belchier, Amb. 218 ; to restraining a mortgagee from selling, [Ee Speight, 22 Ch. D. 727 ; 9 App. see Matth'ie v. Edwards, 2 Coll. 465 ; Cas. 1 ;] and see Ord v. Noel, 5 Mad. S. C. on appeal nomine Jones v. Mat- 438; Rossiter (.Trafalgar Life As- thie, 11 Jur. 504; Jenkins v. Jones, 2 sxirance Association, 27 Beav. 377. GifE. 99. [(6) Fry v. Tapson, 28 Ch. D. [(e) 44 & 45 Vict. c. 41, s. 35.] 268.] 693 *436 TKUSTBES FOK SALE. [Ch. XVIU. S. 1. 39. Conditions of sale. — A trustee may sell subject to any reasonable conditions of sale (/), but would not be justified ill clogging the property with restrictions that were evidently uncalled for by the state of the title (^). [Prior to the re- cent enactments it was] «usual, in penning a trust for sale, to give express authority to the trustees to insert special condi- tions of sale ; [but] as to trusts created after 28th August, 1860, and where the settlement did not otherwise direct, trustees [were authorised by Lord Cranworth's] Act to insert such special or other stipulations, either as to title or evidence of title or otherwise, as they might think [*436] fit (A). [This enactment has since * been re- pealed (a), but its place had been previously sup- plied by the Conveyancing arid Law of Property Act, 1881, s. 35, which provides that, as to trusts for sale and powers of sale created by instruments coming into operation after the 31st day of December, 1881, trustees may, unless the instru- ment creating the trust or power otherwise provides, sell or concur with any other persons in selling, subject to any such conditions respecting title and evidence of title or other mat- ter, as they think fit (J)-] But still this would be no warrant for the introduction of stipulations which are plainly not rendered necessary by the state of the title, and are calcu- lated to damp the success of the sale ; [as, for instance, a condition lipiiting the commencement of the title to a recent date where there is no difficulty in giving the earlier title and no special advantage in withholding it, or a condition making all recitals in the abstracted documents conclusive evidence of the matters recited, or a condition that the prop-» erty is sold subject to the existing tenancies, restrictive cove- nants, and other ineidents of tenure (if any) when there are (/) Hobson V. Bell, 2 Beav. 17. effect, or consequence of any instru- {g) Wilkins v. Fry, 2 Rose, 375 ; ment executed or made before the S. C. 1 Mer. 268 ; Rede v. Oakes, 4 commencement of the Act. The sec- De G. J. & S. 505, 10 Jur. N. S. 1246; tion of Lord Cranworth's Act may Dance v. Goldingham, 8 L. R. Ch. therefore be called in aid in cases of App. 902; [Dunn v. Flood, 25 Ch. D. settlements executed after 28th Aug. 629 ; 28 Ch. Div. 586.] 1860, and prior to the Conveyancing (h) 23 & 24 Vict. o. 145, ». 2. and Law of Properijr Act, 1881.] [(a) 45 & 46 Vict. c. 38, s. 64. The [(6) 44 & 45 Vict. c. 41, s. 35.] repeal is not to affect the operation, 594 Ch. XVm. S. 1.] TRUSTEES POK SALE. *437 no such tenancies or covenants (c), but a condition limiting the title to ten years in a case where the land was broken up into small lots, and the condition was inserted for the pur- pose of saving expense, was held by the Court of Appeal, overruling North, J., to be reasonable and proper under the special circumstances (cZ). And] trustees would, it is con- ceived, be justified in inserting a condition, now not uncomr mon, empowering the vendor, if unable, or unwilling, for reasonable cause, to, remove the purchaser's objection, to can- cel the contract. Such a condition may be depreciatory at the sal6 itself, and yet beneficial in its results (e). [40. If trustees have agreed to sell property subject to conditions of , such a nature that the sale could be im- peached by the eestuis que trust, the Court wUl not, at the instance of the trustees, enforce the contract against the purchaser (/)• 41. As a tenant for life selling under the powers of the Settled Land Act, 1882, is by sect. 53, in relation to the exercise of the power to have the duties and liabili- ties of a trustee, it is conceived * that the same rules [*437] with regard to depreciatory conditions apply to him as to any other trustee.] 42. Selling in lots. — There is no rule to prevent the trus- tees from selling in lots, should the auctioneer or other expe- rienced person recommend it as the most advisable course (a), and this liberty is now given by express enactment as to trusts created since 28th August, 1860, where the settlement does not direct the contrary (J). [43. Cheque for deposit. — A trustee or mortgagee is justi- fied, on the sale of a property of large value, in allowing the custom of auctioneers to accept a cheque in lieu of cash for [(c) Dunn v. Flood, 25 Ch. D. 629 ; 5 Mad. 438 ; Ex parte Lewie, 1 Gl. & 28 Ch. Div. 586.] J. 69. [(rf) Dunn V. Flood, 28 Ch. Div. (6) 23 & 24 Vict. c. 145, s. 1. [Re- 586.] pealed by 45 & 46 Vict. c. 38, s. 64 ; (e) Falkner , v. Equitable Rerer- a similar power having been previ- sionary Society, 4 Drew. 352. ously given to trustees under instru- [(/) Dunn u. Flood, 25 Ch. D. 629; ments coming into operation after 28 Ch. Div. 586.] 31st December, 1881, by 44 & 45 Vict. (a) See Co. Lit. 113o; Ordu. Noel, c. 41, s. 35. As to the effect of the repealing clause, see p. 436, note (a).] 595 *438 TRUSTEES FOB SALE. [Ch. XVIH. S. 1. the deposit to be acted upon, and will not be held guilty of negligence if the cheque be dishonoured (e).J 44. Buying in. — Trustees of bankrupts cannot bui/ in at the auction without the authority of the creditors, and where the assignees had put up the estate in two lots, and bought them in, and afterwards upon a re-sale there was a.gaia upon one -lot and a loss upon the other, the balance upon the whole being in favour of the estate, Lord Eldon compelled the assignees to account for the diminution of price on the one lot, and would not allow them to set off the increase of price on the other lot (cZ). It may be thought perhaps that as trustees in bankruptcy act under a statute they have less discretionfwy power than belongs to ordinary trustees ; but in Taylor v. Tabrum (e) the same principle was applied to trustees in the proper sense of the word. By 23 & 24 Vict. c. 145, as to trusts created [after 28th August, 1860, and prior to the repeal of the Act,] and where the settlement does not otherwise direct, trustees may sell at one time or at several times, and may buy in, or rescind a private contract, and resell without being responsible (/). [By a later Act as to trusts or powers created since 31st December, 1881, where the settlement does not otherwise direct, trustees may " vary any contract for sale," and may " buy in at any auction or rescind any contract for sale and resell without being answerable for any loss" (^g^-] [*438] *45. 37 & 38 Vict. o. 78. — By the Vendor and Purchaser Act, 1874 (a), it is enacted, by the first section, that as to any contract " made after 31s* December, 1874, and subject to any stipulation to the contrajiy, forty years shall be substituted as the period of commencement of title which a purchaser may require in place of sixty years, [(c) Farrer v. Lacy Hartland & Mad. 440; Conolly !>.• Parsons, 3 Ves. Co., 25 Ch. D. 636.] 628, note. (d) Ex parte Lewis, 1 Gl. & J. 69; '(/) 23 and 24 Vict. c. 145, as. 1 and see Ex parte Buxton, Id. 355 ; Ex and 2. [Since repealed : see supra, parte Baldock, 2 D. & C. 60 ; Ex parte note (6), and p. 436, note (a).] Gover, 1 Be G. 349; Ex parte Tom- ,[(j) 44 and 45 Vict. c. 41, ». 35.] kins, Sugd. V. & P. 815, 14 ed. (a) 37 & 88 Vict. c. 78. (e) 6 Sim. 281 ; see Ord v. Noel, 5 596 Ch. XVIII. S. 1.] TRUSTEES FOR SALE. *438 the present period of such commencement; nevertheless earlier title than forty years may be requii-ed in cases simi- lar to those in which earlier title than sixty years may now be required." And the second section (as to any contract made after 31si December, 1874, and subject to any stipulation to the con- trary), enacts : — (1). That "under a contract to grant or assign a term of years, whether derived or to be derived out of a freehold or leasehold estate, the intended lessee or assign shall not be entitled to call for the title to the freehold." (2). That recitals, statements and descriptions of facts, matters, and parties in instruinents twenty years old "shall, unless and except so far as they shall be proved to be inacovr rate, be taken to be sufficient evidence of the truths of such facts, matters and descriptions." (3). That " the inability of the vendor to furnish the pur- chaser with a legal covenant " for production of documents shall not be an objection to the title, if " the purchaser tvill, en completion of the contract, have an equitable right to the production." (4). That "such covenants for production as the pur- chaser can and shall require, shall be furnished at his ex- pense, and the wemc^or ..shall bear the expense of perusal aiid execution on behalf of and by himself, and on behalf of and by necessary parties other than the purchaser." (5). That "where the vendor retains any part of an estate to which any documents of title relate, he shall be entitled to retain such documents." By the third section, it is enacted that " trustees who are either vendors or purchasers may sell or buy without exclud- ing the' operation of the second section." This express reference to the second section, suggests a doubt whether by implication trustees were meant to be excluded from the benefit of the first section. It is con- ceived, however, that no such distinction was intended, and that trustees who buy or sell may take advantage of the general enactment contained in the first section. [46. 44 & 45 Vict. o. 41. — The 3d section of the Con- 597 •439 TKtrSTEES FOR SALE. [Ch. XVUI. S. 1. [*439] veyancing and Law of Property * Act, 1881, enacts (as to any sale made after the 31st December, 1881, and subject to any stipulation to the contrary in the contract of sale) — (1). That "under a contract to sell and assiffn a term of years derived out of a leasehold interest in land, the intended assign shall not have the right to call for the title to the leasehold reversion." . (2). That "where land of copyhold or customary tenure has been converted into freehold by enfranchisement, then under a contract to sell and convey the freehold, the pur- chaser shall not have the right to call for the title to make the enfranchisement." (8). That a purchaser shall not require the production, or any abstract or copy of any document " dated or made before the time prescribed by law,- or stipulated for com- mencement of the title, even though the same creates a power subsequently exercised " by an abstracted instrument, or " require 9.ny information or make any requisition, objec- tion, or inquiry with respect to any such deed, will or docu- ment, or the title prior to that time, notwithstanding that any such deed, will or other document, or that prior title is recited, covenanted to be produced or noticed; and he shall assume, unless the contrary appears, that the recitals, con- tained in the abstracted instruments, of any document forming part of that prior title are correct, and give all the material contents of the document so recited, and that every document so recited was duly executed by all necessary parties, and perfected if and as required by fine, recovery, acknowledgment, inrolment or otherwise." (4). That " where land sold is held by lease (not includ- ing underlease), the purchaser shall assume, unless the con- trary appears, that the lease was duly granted ; and on production of the receipt, for the last payment due for rent under the lease before the date of actual completion of the purchase, he shall assume, unless the contrary appears, that all the covenants and provisions of the lease have been duly performed and observed up to the date of actual comple- tion." 598 Ch. XVIII. S. 1.] TRUSTEES FOE SALE. *440 (5). That " where land sold is held by u^ider-lease, the purchaser shall assume, unless the contrary appears, that the under-lease and every superior lease were duly granted ; and, on production of the receipt for the .last payment due for rent under the under-lease before the date of actual completion of the purchase, he shall assume, unless the contrary appears, that all the covenants and provisions of the under-lease have been duly performed and observed up to the date of actual completion of the purchase, and * further that all rent due under every superior [*440] lease, and all the covenants and provisions of every superior lease, have been paid and duly performed and observed up to that date." (6). That " on a sale of any property, the expenses of the production and inspection of all documents, not in the vendor's possession, and the expenses of all journeys inci- dental to such production or inspection, and the expenses of searching for, procuring, making, verifying, and producing all certificates, declarations, evidences and information not in the vendor's possession, and all copies or abstracts of, or extracts from, any documents not in the vendor's posses- sion," if required by a purchaser for any purpose, shall be borne by him (a) ; " and where tjie vendor retains possession of any document, the expenses of making any copy thereof, attested or unattested, which a purchaser requires to be delivered to him, shall be borne by that purchaser." (7). That " on a sale of any property in lots, a purchaser of two or more lots, held wholly or partly under the same title, shall not have a right to more than one abstract of the common title, except at his own expense." And by the IStJi section, " on a contract to grant a lease for a term of years, to be derived out of a leasehold interest with a leasehold reversion, the intended lessee shall not have the right to call for the title to that reversion." [(. Scott, 1 Y. & C. 257. 301; Thomas w.Townsend, 16 Jut. 736. ^ Application of the purchase-money. — If the trust is general to pay debts, the purchaser need not see to the application of the purchase-money ; Goodrich v. Proctor, 1 Gray, 570 ; Potter v. Gardner, 12 Wheat. 498 ; Hauser v. Shore, 5 Ired. Eq. 357 ; Laurens v. Lucas, 6 Rich. Eq. 217 ; or if it is to pay debts and legacies ; Andrews w. Sparhawk, 13 Pick. 393 ; Dewey v. Buggies, 25 N. J. Eq. 35 ; Sims v. Lively, 14 B. Mon. 435 ; Grant v. Hook, 13 S. & E. 259 ; or to pay debts and use balance in a certain way ; Stall v. Cincinnati, 16 Ohio St. 169. But if certain debts or legacies are to be paid from the proceeds of a 613 *452 trustees' receipts. [de. xviii. s. 2, Lord St. Leonards' Act. — We must here advert in limine to some important recent enactments. By Lord St. Leonards' Act, 22 & 23 "Vict. c. 35, s. 23 (passed 13tli August, 1859), it is declared that "the bond fide payment to and the receipt of any person to whom any purchase or mortgage money shall be payable upon any express or implied trust shall effectuaily discharge the person paying the same from seeing to the application or being answerable for the misapplication thereof, unless the contrary shall he expressly de- [*452] clared by the instrument creating the * trust or security." It will be observed, 1. That the Act applies not to all monies subject to a trust, but only to mon- ies arising from sales and mortgages and subject to a trust. 2. That the language of the section, more particularly of the latter part of it, is in the future tense, so that the enactment is not to be retrospective. If future settlors are to have the option of excluding the operation of the Act, it should not affect prior settlors who had no such option. 3. As regards trusts or mortgages created by instruments since the date of the Act, it would seem that to the extent of sale monies and mortgage monies the whole doctrine in equity of seeing to the application of money has been swept away. It cannot be said that where A. is trustee for B. the money is payable to B. and not to A., and that therefore the clause shall not apply, for the doctrine of equity is that the money is payable to A., but the purchaser or mortgagee is bound to see it prop- erly applied by A. sale, then the purchaser ordinarily must see the money properly applied; Swasey v. Little, 7 Pick. 296; Bughee v. Sargent, 23 Me. 269; Hoover ». Hoover, 5 Barr, 351 ; Leavitt y. Wooster, 14 N. H. 560 ; Lnpton v. Lupton, 2 Johns. Ch. 614; 3 Kedf. Wills, 235. See further, Gardner v. Gardner, 3 Mason, 178 ; DufEy v. Calvert, 6 Gill, 487 ; Hauser v. Shore, 5 Ired. 357 ; St. Mary's Church v. Stockton, 4 Halst. Ch. 520. If a purchase is made under decree, the application of the purchase-money is immaterial ; Wilson v. Davisr son, 2 Rob. (Va.) 385 ; Coombs v. Jordan, 3 Bland, 284. The American rule Is much less strict regarding the application of the money, than the English, Bedheimer v. Pyron, 1 Speer's Eq. 141 ; Rutledge v. Smith, 1 Busb. Eq. 283. The purchaser will not be protected if he had any notice of an intention to misapply the purchase-money; Shaw v. Spencer, 100 Mass. 388; Clyde v. Simpson, 4 Ohio St. 445 ; Williamson v. Morton, 2 Md. Ch. 94. The settlor's intention, if it can be determined, has much to do with the necessity of looking after the application of the money, 614 Ch. XVin. S. 2.] TRUSTEES' RECEIPTS. *453 Lord Cranworth's Act. — By Lord CranwortKs Act, 23 & 24 Vict. c. 145, s. 29 (passed 28th August, 1860), it was enacted that " The receipts in writing of any trustees or trustee for any money payable- to them or him by reason or in exercise of any trusts or powers " should be good discharges ; but by section 34, the operation of the Act was expressly confined to instruments executed after the passing of the. Act. [44 & 45 Vict. o. 41. — By the Conveyancing and Law of Property Act, 1881, which repealed the 29th section of Lord Cranworth's Act, " the receipts in writing of any trustees or trustee for any money, securities, or other personal property or effects payable, transferable, or deliverable to them or him under any trust or po'wer " are made sufficient discharges, and the section applies to trusts created either before or after the commencement of the Act (a).] As the clauses in [the Acts prior to the Conveyancing and Law of Property Act, 1881, were not restrospective, and questions may stUl arise on titles as to the validity of receipts by trustees who had no express powers of signing receipts,] it is necessary to consider generally and apart from legislative enactment the power of trustees for sale to sign receipts. 1. Principle of requiring a purchaser to see to the application of his purchase-money. — As a general rule, if a person have in his hands money or other property to which another per- son is entitled, he cannot discharge himself from liability but by payment or transfer to the true owner. If an estate be vested in A. upon trust to sell and * divide the [*453] proceeds between B. and C, in a Court of law the absolute ownership is in A., and his receipt, therefore, will discharge the purchaser ; but in equity B. and C, the cestuis que trust, are the true proprietors, and A. is merely the instrument for the execution of the settlor's purpose, and the receipt, therefore, to be effectual, must be signed by B. and C. (a). [(o) 44 &45 Vict. c. 41, S8. 36, 71.] chase-money is a question not of (a) See Weatherby v. St. Giorgio, conveyance but of title ; Forbes v. Pea- 2 Hare, 624. The power of the ven- cock, 12 Sim. 521. dor to sign a discharge for the pur- 615 *454 trustees' ebceipts.. [Ch. xvni. s. 2. 2. The rule controlled by the intention of the settlor. — Such is the primd facie rule in trusts ; but in every instance it is liable to be controlled and defeated by an intention to the contrary collected from the instrument creating the trust, whether that intention h& expressed or implied. 8. Either expressed. — The former is the case, if the settlor ^ direct in express terms that the receipts of A., the trustee, shall discharge the purchaser from seeing to the application of the purchase-money; for B. and C cannot at the same moment claim under and contradict the instrument — they cannot avail themselves of the sale, and reject the proviso affecting the receipt. The words in a power of attorney, " to sign discharges in the name of the assignor or otherwise, and to do all other acts as the principal might have done," have been held to carry such a direction (6) where not controlled by a subse- quent receipt clause tending to negative that intent (c). But the receipt clause has not always been liberally con- Gtrued ; as where trustees were entitled to receive a sum of stock with a power of varying securities, a receipt signed for cash was held to be no discharge, though the Court said that had there been any indication of an intention to exercise the power of var3dng securities for which cash would be required, the decision might have been different (cZ). [*454] It would * have been more satisfactory had the Court (6) Binks v. Lord Eokeby, 2 Mad. cases has been, that after paying upon 227 ; see 238, 239 ; Desborough v. the equitable title they might incur Harris, 5 De G. M. & G. 439. In this costs pending an action upon the case L. C. Cranworth considered that legal title. However, a defendant an assignment of a policy by way of may now plead an equitable defence mortgage . vests a power of signing at law ; and if successful upon the receipts in the mortgagee from the equitable defence would recover his nature of the case, and independently costs in the action. See further of any express power of signing re- Ottley w. Gray, 16 L.J. N. S. Ch. 512; ceipts, for the possession of the policy Curton v. Jellicoe, 14 Ir. Ch. Eep. 180. is evidence that something is due, and A late Act has enabled the assignee the Insurance Company cannot be of a policy to bring an action in a expected to take the account between court of law. 30 & 31 Vict. c. 144, s. mortgagor and mortgagee. Of course 1. And see 36 & 37 Vict. c. 66. it would be otherwise if the company (c) Brasier v. Hudson, 9 Sim. 1. had express notice that the mortgage (d) Pell u. De Winton, 2 De G. & had been satisfied. The difSculty felt J. 13. by the insurance companies in such 616 Ch. XVIII. S. 2.] TETJSTEES' BECBIPTS. - *454 held that as the trust fund in the hands of the trustees in the shape of cash did not necessarily imply a hreach of trust the receipt was sufficient. 4. Or implied. — In what cases a power of signing receipts is implied, has never heen satisfactorily ascertained. How- ever, two principles appear to be the basis upon which most of the distinctions taken by the Courts have been founded. 5. Direction to sell implies pow^er in some one to sign dis- charges at time of sale. — First. In the creation of a trust for immediate sale, it is implied that a legal and equitable discharge for the purchase-money shall be signed by some one at the time of the sale. There can be no conveyance of the estate without payment of the money, and there can be no such payment without a complete discharge. Should the settlor have contemplated a sale at a time when, as he must have knoAvn, the cestuis que trust, or some of them, were either not in existence, or not of capacity to execute legal acts, the intention must be presumed that the receipts of the trustees should be a release to the purchaser. Balfour v. Welland. — Thus, where a deed was executed in India for payment of debts, with a proviso that creditors in India should be allowed six months to come in, and those in Europe eighteen months, and if any were under disability, they should be further allowed the like periods from the time the disability ceased, Sir W. Grant said, "The deed very clearly confers an immediate power of sale for a pur- pose that cannot be immediately defined. It is impossible to contend that the trustees might not have sold the whole property at any time they thought fit after the execution of the deed, and yet it could not be ascertained, until the end of eighteen months, who were the persons among whom the produce cf the sale was to be distributed. If the sale might take place at a time when the distribution could not possibly be made, it must have been intended that the trustees should of themselves be able to give a discharge for the produce, for the money could not be paid to any other person than the trustees " (a). • (a) Balfour v. Welland, 16 Ves. 151, see 166. 617 *456 trustees' eeceipts. [Ch. xvni. s. 2, Case of infancy. — So where A. devised certain lands to his children, some of whom were infants, " the same to be sold when the executors and trustees of his will should see proper, and the purchase-money to be equally and severally divided amongst his .above-named children," Sir J. Leach said, "It is plain the testator intended that the trustees should have an immediate power of sale. Sonie of the chil- dren were infants, and not capable of signing receipts. [*466] I must therefore * infer, that the testator meant to give to the trustees the power to sign receipts, being an authority necessary for the execution of his declared purpose " (a). As to cestuis que trust out of the jiirisdiction. — As to eei- tuis que trust who, after the date of the instrument, go out of the jurisdiction, or are otherwise incapacitated to concur, the general rule does not apply, for it cannot be said that the settlor meant the trustees to sign receipts for them, the presumption beiag the other way. 6. 'Where trust is annexed to the purchase-money it is im- plied that the trustee shall apply it. — Secondly. If a sale be directed, and the proceeds are not simply to be paid over to certain parties, but there is a special trust annexed, the infer- ence is, that the settlor meant to confide the execution of the trust to the hands of the trustee, and not of the pur- chaser, and that the .trustee therefore can sign a receipt (6). Mr. Booth's opinion. — An Opinion of Mr. Booth shows that even in his time regard was had to the nature of the trust in (a) Sowarsby v. Lacy, 4 Mad. 142 ; struments, but often excluded, and Lavender v. Stanton, 6 Mad. 46 ; and when excluded, was never implied, see Breedon v. Breedon, 1 R. & M. except under very special circumstan- 413 ; Cuthbert v. Bajker, Sugd. Vend. ces. Tlie question in that case arose & Purcli. 842, 843, 11th ed. upon the construction of a wiU which (h) Doran v. Wiltshire, 3 Sw. 699 ; gave to the tenant for life the like Balfour v. Welland, 16 Ves. 157 ; powers of selling and exchanging as Wood w. Harman, 5 Mad. 368; Locke were contained in a settlement re- V. Lomas, 5 De G. & Sm. 326. See ferred to, and in which were, not only Glynn «. Locke, 3 Dr. & War. 11 ; powers of sal? and exchange, but also Ford V. Ryan, 4 Ir. Ch."Rep. 342. In a power of signing receipts, and the Gox V. Cox, IK. & J. 251, Vice- Vice-ChauceUor was o£ opinion that Cliancellor Wood held, that a power the powers of sale and exchange only, of signing receipts was by no means without the power of signing receipts, one inserted as of course in legal in- were incorporated by reference. ~ 618 Ch. XVni. S. 2.] TKUSTEES' RECEIPTS. *456 exempting the purchaser from liability. A testator had directed his trustees to sell and invest the proceeds upon the trusts thereinafter mentioned, and then gave his wife an annuity of 501. a year, for her life, to be paid out of the pro- ceeds, and subject thereto, gave the fund to his son ; but in case of his death under twenty-one, to the person entitled to his Taunton lands. Mr. Booth wrote, "I am df opinion, that all that will be incumbent on the purchaser to see done will be to see that the trustees invest the purchEise-money, in their names, in some of the public stocks or funds, or on Gt)vernment securities, and in such case the purchaser will not be answerable for any misapplication, after such invest- ment of the money, of any monies which may arise by the dividends or interest, or by any disposition of such funds, stocks, or securities, it not being possible that the testator should expect from any purchaser any further degree of care or circumspection than during the time that the trans- action *for the purchase was carrying on, and there- [*456] fore the testator must he supposed to place his sole confidence in the trusses, and this is the settled practice in these cases, and I have often advised so much, and no more, to be done." And in this opinion Mr. Wnbraham also con- curred (a). 7. Trust to pay debts. — To the principle under considera- tion is referable the well-known rule, that a purchaser is not bound to see to the application of his money where the trust is for payment of debts generally ; for to ascertain who are the creditors, and what is the amount of their respective claims, is matter of trust involving long and intricate ac- counts, and requiring the production of vouchers, which the purchaser would have no right to require (F). And mere (a) 2 Cas. and 0pp. 114. 109; Johnson v. Kennett, 3 M. & K. (6) Forbes v. Peacock, 11 Sim. 630, per Lord Lyndhurst ; Rogers v. 152; and see S. C. 12 Sim. 528; 1 SkiUicorne, Amb. 189, joer Lord Hard- Pli. 717 ; Stroughill v. Anstey, 1 De wioke ; Walker v. Smalwood, Id. 677, G. M. & G. 635 ; Corser v. Cartwright, per Lord Camden ; Barker v. Duke of 7 L. R. H. L. 731; Dowling v. Hud- Devonshire, 3 Mer. 310; Abbott v. son, 17 Beav. 248;, Culpepper 17. Aston, Gibbs, 1 Eq. Ca. Ab. 358; Binks v. 2 Ch. Ca. 223 ; Watkins ,,. Cheek, 2 Rokeby, 2 Mad. 238, per Sir T. Plum- S. & S. 205, per Sir J. Leach ; Anon. er ; Dunoh v. Kent, 1 Vern. 260, ad- Mos. 96 ; Hardwicke v. Mynd, 1 Anst. mitted ; Elliot o. Merryman, Bam. 619 *457 trustees' eeceipts. [Ch. xvin. s. 2. absence of statement of the purpose for which the money is wanted will not make a purchaser or mortgagee liable on the ground of presumed knowledge that the money was to be applied otherwise than for payment of debts (e). So if the trust be for payment of a particular debt named, and of the testator's other debts (d). So if the trust be for pay- ment of debts and legacies, the purchaser is equally pro- tected; for as the discharge of the debts must precede that of the legacies, and the purchaser is not called upon to mix himself up with the settlement of the debts, he is necessarily absolved from all liabilities in respect of the legacies (e). 8. Scheduled debts or legacies. — But if. the trust [*457] be for payment of particular or scheduled * debts only (a), or of legacies only (6), then, as there is no trust to be executed requiring time or discretion, but the purchase-money is simply to be distributed amongst certain parties, there is no reason why the purchaser should not, under the general rule, be expected to see that the purchase- money finds its way into the proper channel. Late Assets Act. — And the purchaser, where legacies only are charged, is stUl bound to see to the application of his 78; Smith v. Guyon, 1 B. C. C. 186, S. & S. 20b, per Sir J. Leach; Eland and cases cited lb. note ; Ithell v. v. Eland, 1 Bear. 235 ; S. C. 4 M. & Beane, 1 Ves. 215; per Lord Hard- Cr. 420; Page v. Adaih, 4 Beav. 269; wicke; Lloyd v. Baldwin, lb. 173, per Forbes v. Peacock, 12 Sim. 528 ; 1 Ph. eundem ; Dolton v. Hewen, 6 Mad. 9 ; 717. Ex parte Turner, 9 Mod. 418, per Lord (a) Doran v. Wiltshire, 3 Sw. 701, Hardwicke ; Gosling v. Carter, 1 Coll. per Lord Thurlow ; Smith a. Guyon, 644 ; Eland ». Eland, 1 Beav. 235 ; 1 B. C. C. 186, per eundem, and cases S. C. 4 M. & Cr. 420; Jones v. Price, cited, lb. note; Rogers v. Skillicorne, 11 Sim. 557; Currer v. Walkley, 2 Amb. 189, ;)«• Lord Hardwicke ; Hum- Dick. 649, corrected from Reg. Lib. 3 ble v. Bill, 1 Eq. Ca. Ab. 359, per Sir Sugd. Vend. & Purch. 168, 10th ed. N. Wright; Anon. Mos. 96; Spalding (c) Corser v. Cartwright, 7 L. R. v. Shalmer, 1 Vern. 303, per Lord H. L. 731. North ; Abbot v. Gibbs, 1 Eq. Ca. Ab. ((f) Robinson v. Lowater, 17 Beav. 358 ; Elliot v. Merryman, Barn. 81, 692 ; 5 De G. M. & G. 272. per Sir J. Jekyll; Binks u. Rokeby, (e) Rogers v. Skillicorne, Amb. 2 Mad. 238, ;)er Sir T. Plumer ; Ithell 188; Smith v. Guyon, 1 B. C. C. 186; v. Beane, 1 Ves. 2\h,per Lord Hard- Jebb V. Abbott, and Benyon v. Gol- wicke ; Lloyd v. Baldwin, 1 Ves. 173, lins, cited Co. Lit. 290 b. note by per eundem; and see Dunch v. Kent, 1 Butler; Williamson «. Curtis, 3 B. C. Vern. 260; Culpepper c. Aston, 2 C. 96 ; Johnson v. Kennett, 3 M. & K. Ch. Ca. 223. 630; per Lord Lyndhurst; 6 Ves. (4) Johnson «. Kennett, 3 M. & K. 654, note (o) ; Watkins v. Cheek, 2 930 ; Horn v. Horn, 2 S. & S. 448. 620 Ch. XVIII. S. 2.] TBTJSTEES' KECEIPTS. *458 money, though by 3 & 4 W. 4, c. 104, the real estate of all persons deceased since the 29th of August, 1833, is liable, in the hands of the heir or devisee, to the payment of debts generally, whether by specialty or simple contract (e). 9. 'Where, not'withstanding a charge of debts, the purchaser must see to the application of his money. — And even where the estate is subjected by the testator to a trust for payment of debts generally, the purchaser will not be indemnified by the receipt of the trustee if there be any collusion between them (d) ; or if the purchaser have notice from the intrinsic evMence of the transaction that the purchase-money is in- tended to be misapplied (e) ; or if a suit has been instituted which takes the administration of the estate out of the hands of the trustees (/) ; and these doctrines, it is conceived, are not affected by the clauses in Lord St. Leonards' and Lord Cranworth's Acts, [and the late Conveyancing Act] which apply only to bond fide payments. 10. Purchase from trustees after a . length of time. — And if the purchaser is dealing with trustees at a great distance of time, and when the trust ought long since to have been executed, the purchaser is bound to enquire and satisfy him- self to a fair and reasonable extent, that the trustees are acting in the discharge of their duty (^). But where twenty- seven years had elapsed, and the beneficiaries subject to the charge had been let into possession, and the pur- chaser asked if there were any debts * and the ven- [*458] dors declined to answer, it was held that the vendors could make a good title (a), and Lord Romilly observed that he had known so many cases where after distribution of the assets, debts had appeared which did not exist at the death (c) Horn v. Horn, 2 S. & S. 448. (/) Lloyd v. Baldwin, 1 Ves. 173. (Ji) Rogers v. SkilUcorne, Amb. (jr) Stroughill v. Anstey, 1 De G. 189, per Lord Hardwicke ; Eland u. M. & G. 654, per Lord St. Leonards ; Eland, 4 M. & Cr. 427, per Lord Cot- and see Forbes v. Peacock, 11 Sim. tenham. 502 ; 12 Sim. 528; 11 M. & W. 6.37 ; 1 (e) Watkins v. Cheek, 2 S. & S. Ph. 717; Devaynes v. Robinson, 24 199, Eland v. Eland, 4 M. & Cr. 427, Beav. 93 ; Sabin v. Heape, 27 Bear. per Lord Cottenham ; Burt v. True- 553 ; McNeillie v. Acton, 2 Bq. Rep. man, 6 Jur. N. S. 721 ; and see Strong- 21. hill V. Anstey, 1 De G. M. & G. 648 ; (a) Sabin v. Heape, 27 Beav. 558. Colyer v. Pinch, 5 H. L. Ca 923. 621 *458 TBtrSTEES' KECEIPTS. [Ch. XVHI. S. 2. of the testator, but which arose subsequently out of obliga- tions entered into by him, that a very liberal term ought to be allowed for the exercise of the power of sale (J). [The Court of Appeal has, however, recently expressed an opinion that twenty-seven years is too long a period, and laid down the rule that for a period of twenty years from the testator's death a purchaser should not be bound or entitled to ascer- tain whether the debts were paid, but that after the lapse of that period it is fair to presume that the debts have been ■ paid and the purchaser is bound to enquire (e), and this rule has been followed in Ireland (<^).J 11. Power of signing receipts a question of intention at the date of tbe' instrument. — As the exemption of the purchaser from seeing to the application of the purchase-money de- pends as a general rule upon the settlor's intention, the question must be viewed with reference to the date of the instrument, and not as affected by circumstances which have subsequently transpired (e). Thus, if a trust be created for payment of debts and legacies, and the trustees, after fuU payment of the debts contract for the sale of the estate, the purchaser will not, upon this principle, be bound to see to the application of the money in payment of the legacies (/). 12. Forbes v. Peacock. — In Forbes V. Peacock (^), a tes- tator directed his debts to be paid, and gave the estate to his wife (whom he appointed his executrix) for life, subject to his debts and certain legacies, and empowered her to sell the estate in her lifetime, and directed that if it were not sold in her Ufetime, it should be sold at her death and the proceeds applied in a manner showing that they were intended to pass through the hands of the executors, and the testator re- quested certain persons to act as executors and trustees with his wife. The widow lived twenty-five years, and after her (6) lb. 560. (/) Johnson v. Kennett, 3 M. & K. [(c) Re Tanqueray-Willaume and 624, reversing S. C. 6 Sim. 384; Eland Landau, 20 Ch. D. 466.] o. Eland, 4 M. & Cr. 420 ; Page v. [(^d) Re Molyneux and White, 13 Adam, 4 Bear. 269; Stroughill v. L. K. Ir. 382.] Anstey, 1 De G. M. & G. 635. (e) See Balfour v. "Welland, 16 (g) 11 Sim. 152; 12 Sim. 528; 11 Ves. 156 ; Johnson v. Kennett, 3 M. M. & "W. 637 ; 1 Ph. 717 ; see Strong- & K. 681 ; Eland v. Eland, 4 M. & Cr. hill v. Anstey, 1 Be G. M. & G. 650. 428. 622 Ch. XVIII. S. 2.] TRtrSTEBS' EECEIPTS. *459 death the surviving executor contracted for the sale of the es- tate. The Vice-chancellor of England held that, after so long a lapse of time from the testator's death, the purchaser had a right to ask if * the debts had been paid, and if [*459] he received no answer, it amounted to notice that they had been paid, and he must see to the application of his pur- chase-money. The V. C. observed, " When the objection is made by the purchaser that the executors cannot make a good title because all the debts have been paid, if the question is put by him simply, are there or are there not any debts re- maining unpaid, he has a right to an answer " (a). And on a subsequent day he observed, " Here the purchaser has asked the executor whether any of the testator's debts were unpaid at the date of the contract, and the executor refused to give Mm an answer. Under these circumstances, if it should turn out that all debts were paid, I should hold that the purchaser had notice of that fact, and that he was bound to see that his purchase-money was properly applied " (J). It is evident that this doctrine was not in accordance with former decisions, and the cause was carried'upon appeal to the Lord Chancellor, when the decision below was reversed (c). Lord Lyndhurst said, " If the purchaser had notice that the vendor intended to commit a breach of trust, and was selling the estate for that purpose, he would, by purchasing under such circumstances, be concurring in the breach of trust, and (a) 12 Sim. 837; see Sabin i,'. chaser would rather not know. The Heape, 27 Beav. 553. In the case of requisition should, he thought, be A. Salomon, vendor, and F. Davey, added to, thus, ' and which, if remain- purchaser, under the 9th section of ing undisclosed might prejudicially 37 & 38 Vict. c. 78, V. C. Hall decided affect the purchaser,' " March, 1875. that the vendor was bound to answer [But this view has since been over- the purchaser's inquiry " whether the ruled by the Court of Appeal in the vendor is or her solicitors are aware case of Re Ford and Hill, 10 Ch. D. of any judgments, settlements, mort- 365, where it was held that the pur- gages, charges, or incumbrances of chaser was not entitled to make any any description affecting the property such requisition at all.] not disclosed by the abstract of the (6) 12 Sim. 542. vendor's title." But the V. C. added (c) 1 Ph. 717 ; see StroughiU v. that he " must not be considered as Anstey, 1 De G. M. & G. 653 ; Mather altogether approving of the requisi- v. Norton, 16 Jur. 309 ; [Re Tanque- tion being made in the form above- ray-Willaume and Landau, 20 Ch. D. mentioned. The answer might lead 465.] to the disclosure of what the pur- 623 *460 TETJSTEBS' EECBIPTS. [Ch. XVUI. S. 2. there Dy become responsible. But assuming that the facts relied upon in this case amount to notice that the debts had been paid; yet, as the executor had authority to sell not only for the payment of debts, but also for the purpose of dis- tribution among the residuary legatees, this would not afford any inference that the executor was committing a breach of trust in selling the estate, or that he was not performing %hat his duty required. The case then comes to this : If authority is given to sell for the payment of debts and legacies, and the purchaser knows that the debts are paid, is he bound to see to the application of the purchase-money ? I apprehend not." [*460] *Lord St. Leonards, with reference to the same important case, observed, "When a testator by his will charges his debts and legacies, he shows that he means to entrust his trustees with the power of receiving the money, anticipating that there will be debts, and thus providing for the payment of them. It is, by impUcation, a declaration by the testator that he intends to entrust the trustees with the receipt and application of the money, and not to throw any obligation at all upon the purchaser or mortgagee. That intention does not cease because there are no debts. If a trust be created for payment of debts and legacies, the purchaser or mortgagee should' in no case (in the absence of fraud), be bound to see to the application of the money raised." And his Lordship added, " as to Forbes v. Peacock it is quite a mistake to suppose that that was a trust executed at a dis- tance of twenty-five years from the time when it arose, for it was executed at the time when it did arise, which happened to be twenty-five years after the death of the testator " (a). 13. PoTver of varying securities, and of investment. — If a trustee have authority to invest the trust fund with a power of varying securities, but without an express power of sign- ing receipts, it is imphed from the nature of the trust that he shall sign receipts (V) ; and if he be authorised to invest on security simply without power of varying securities he can sign receipts, for he cannot prevent the borrower from pay- (a) Stroughill v. Anstey, 1 De G. (6) Locke c. Lomas, 5 De G. & M. & G. 653, 654. Sra. 326. 624. Ch. XVin. S. 2.] TBUSTEES' EECEIPTS. *461 ing off the money, and who but the trustee can receive it back ((?). Indeed a power of. investment has been held to carry with it a power of varying the securities (. Harman, 5 Mad. 368. (e) Hanson v. Beverly, Sugd. (d) Re Cooper's Trust, W. N. Vend. & P. 848, Hth edit. 1873, p. 87. (/) Cox V. Cox, 1 K. & J. 251. 625 *462 TEtrSTBES' EECEIPTS. [Ch. XVHI. S. 2 Settled Land Act, which will be subsequently discussed (a), j the trustees and the executor together can sell (5), and the question is, upon what principle this proceeds. Is the execw- tor the vendor, and if so, has he a legal power which enables him to pass the estate at law independently of the trustee ? V. C. (late L. J.) Knight Bruce seemed, on one occasion, to think that the cases of Shaw v. Borrer and Ball v. Harris might have been decided on this footing (c), and some recent cases lean in the same direction (cT). But the notion of the executor passing the legal estate in such a case was never suggested until the last few years, and what was said by the Court of Exchequer in Doe v. Hughes was at least true at the time it was spoken, viz., that not a single case could be produced in which a mere charge had been held to give the executors a legal power (e). Have the executors [*462] * then an equitable power, and is the trustee who has the legal estate bound to convey it as the executor directs? This doctrine would be a very rational one, but there is no trace of it in the cases themselves. Apparently they were decided on the familiair principle that in a Court of Equity there is no difference between a charge of debts and a trust for payment of debts (a), and that the triistees [(a) Post, p. 470.] (c) Gosling «. Carter, 1 Coll. 649. (6) Shaw V. Borrer, 1 Keen, 559; (d) See Robinson v. Lowater, 17 Ball V. Harris, 8 Sim. 485; S. C.4 M. BeaT. 592; 5 De G. M. & G. 272; & Cr. 264; Page v. Adam, 4 Beav. Eidsf orth y. Armstead, 2 K. & J. 333 ; 269; and see Forbes v. Peacock, 11 Wrigley v. Sykes, 21 Beav. 337; Sim. 1-52 ; 12 Sim. 528; 11 M. & W. Storry v. Walsh, 18 Bear. 568; Col- 630; 1 Ph. 717; Sabin v. Heape, 27 yer d. Finch, 5 H. L. Ca. 905; Hod- Beav. 553 ; Corser v. Cartwright, 7 L. kinson v. Quinn, 1 J. & H. 310 ; R. H. L. 731. In Shaw v. Borrer, the Greetham v. Colton, 34 Bear. 615. trustees and executors were co-plain- (e) Doe v. Hughes, 6 Exch. 231. tiffs, and the prayer of the bill was, [See Re Tanqueray-Willaume and that the purchase-money might be Landau, 20 Ch. D. 476, where it was paid to the executors. This, if done, regarded as settled law, that a charge by the order of the Court, would in- alone would not enable the executors demnify the trustees ; but it did not to pass the legal estate.] follow that the trustees, on the com- (a) Elliott v. Merryman, Barn. 81 ; pletion of the sale out of Court, could Hx parte Turner, 9 Mod. 418; Jenkins have allowed the executors to receive v. Hiles, 6 Ves. 654, note (o) ; Bailey the money. The question to whom v. Ekins, 7 Ves. 323 ; Ball v. Harris, the money should be paid was not 4 M. & Cr. 267 ; Wood v. White, 4 M. adverted to in the argument, nor & Cr. 482; Commissioners of Dona- does it appear to whom it was paid. tions v. Wybrants. 2 Jon. & Lat. 197. 626 Ch. XVIII. S. 2.] TEUSTEES' EECBIPTS. *463 therefore took the legal estate upon the trusts of the will, the first of which was to pay the testator's debts. It is cer- tainly not a little remarkable that after an examination of all the authorities upon the subject, there does not appear to be one in which the trustee has sold alone, without the con- currence of the executor. This circumstance may be easily accounted for, as trustees of the will are almost invariably appointed executors also, and where that is not the case, the purchaser naturally requires the concurrence of the executor, not on the ground that he is the vendor, but to satisfy the purchaser that the sale of the real estate is bond fide from the insufficiency of the personal assets. In some of the cases the Court has noticed, but not laid any stress upon, the cir- cumstance of the personal representative concurring (6), or of the characters of trustee and personal representative being combined ; but in others that fact has been passed over in silence as a mere accident, and the Court has relied on the .general doctrine that a trustee of the estate charged with debts could sell and sign a valid discharge for the purchase- money (e). In Doe w. Hughes (cT), the case most adverse to the powers arising from a charge of debts, it was admitted that by a devise to trustees of the real estate, subject to a charge of debts, the trustees had thereby imposed upon them the duty of raising the money to pay the debts, and this was the opinion of Lord Hardwicke, as expressed in a case which we do not remember to have seen cited. In Ex parte Turner (e), where the estate had been given subject to debts, but no express trust was created for * the [*463] purpose, he observed, "Where a devise is general (6) See Shaw v. Borrer, 1 Keen, and it is equally clear that Lord Cot- 859 ; Forbes v. Peacock, 12 Sim. 537 ; tenham was of opinion that Harris and see V. C. Ejiight Bruce's remarks was a trustee for payment of debts, 4 upon Shaw v. Borrer, and Ball v. M. & Cr. 267. Harris, in Gosling v. Carter, 1 Cojl. (c) See Ball b. Harris, at the pas- 649. But in Ball v. Harris, the V. C. sages referred to in the preceding of England observed, " It is manifest note ; Forbes v. Peacock, 12 ■ Sim. that Harris (the trustee), who had 546. the legal fee was competent to mort- (rf) 6 Exch. 231. gage that estate to any person who (e) 9 Mod. 418 ; and see Colyer v. would advance money for the benefit Finch, 5 H. L. Cas. 922. of the testator's estate," 8 Sim. 497 ; 627 *463 trustees' eeceipts. [Ch. xvni. s. 2. ' in trust ' or ' subject to pay debts,' the devisee may sell or mortgage, but he must pay the money to the creditors of his devisor ; but if he do not, the mortgagee is not to suffer, for in cases of these general devises he is not obliged to see to the application of the money he advances. But even in this case inconveniences often arise, for where the estate is equitable assets, as it is where it is accom- panied with a trust, the creditors who have not specific liens upon the land ought tp come in equally, and pari passu. However, if the trustee prefer one creditor to another, where he ought not, the remedy usually is against the trustee, and not the lender of the money, for if the latter was to see to the application of his money upon so general a trust, he could not safely advance his money without a decree in this Court." If the trustees of an estate charged with debts can, by virtue not of the express trust but of the trust implied by the charge. Sell the estate, and sign a receipt for the pur- chase-money, it would seem to follow that they cannot allow the proceeds to be paid to the executor as not being the proper hand to receive (a), the executor in that character having no privity with the real estate. The necessity of requiring the concurrence of the personal representative would often lead to practical inconvenience, for on the death of the executor intestate there would be no personal representative of the testator, and the personal assets having been exhausted, there would be no fund for taking out letters of administration ; not to mention that, should the executor be held to have any concern with the proceeds of the real estate, by virtue of the will, the administrator, not being appointed by the will, would not succeed to the power of the executor, which should be borne in mind as of some importance in 'considering whether the sale is substantially that of the executor or of the trustee who takes subject to the charge. Should the neat potat ever call for a decision, it will (a) See Gosling v. Carter, 1 . Coll. one, it is not, necessarily, a good pay- 650, where V. C. Knight Bruce says, ment to make that payment to one " If payment ought to be made to and another." 628 Ch. XVIII. S. 2.] TKUSTBBS' RECEIPTS. *464 probably be held that the trustee, without the concurrence of the executor, can give a good title (6). Lord St. Leonards' Act. — By Lord St. Leonards' Act (22 & 23 Vict. c. 35, s. 14) where by a will coming into op- eration after 13th August, 1859, a testator * charges [*464] real estate with the payment of debts, or any specific legacy or suvi,, and devises the estate so charged to trustees for the whole of his estate or interest, and makes no express provision for raising the debts, legacy, or sum, the devises in trust may sell or mortgage ; and by s. 15, the power is con- tinued to all persons taking the estate so charged by survivor- ship, descent, or devise; and by s. 17, purchasers and mort- gagees are not bound to inquire whether such powers " have , been duly and correctly exercised by the person or persons acting in virtue thereof." Where debts are charged, of course a purchaser or mortgagee under these powers is not bound to see to the application of his money, and where a specific legacy or sum is charged, if the above enactments do not per se confer a power of signing receipts, the purchaser or mortgagee is exempted from seeing to the application by the 28d section of the same Act (a). The 18th section declares that the Act shall "not ex- tend to a devise "to any person or persons in fee or in tail, or for the testator's whole estate and interest, charged with debts or legacies, nor shall it affect the power of any such devisee or devisees to sell or mortgage as he or they may by law now do." To make this section consistent with the 14th, the " devise " referred to in the 18th sec- tion must mean a beneficial devise, and "devisee or de- visees " a beneficial devisee or devisees, and the inference would seem to be that, in the view of the framer of the Act, no legislative assistance was needed in the case of a beneficial devise subject to a charge. Indeed the conclud- ing words of the section seem almost tantamount to a declaration of the legislature that beneficial devisees sub- (4) The recent case of Hodkinson tion ; and see Cook v. Dawson, 29 V. Quinn, IJ. & H. 303, when closely Beav. 126 ; 3 De G. F. & J. 127. considered, will be found to afford [(a) See also 44 & 45 "Vict. c. 41, little aid towards solving this ques- s. 36.] 629 *465 trustees' ebceipts. ICh. xvm. s. 2. Jeet to a charge have power to sell or mortgage, which is the case we next proceed to consider. ^. Devise to a person beneficially with a chcirge of debts. — ■■^ If a testator charge his debts and devise the estate subject to the charge to A. and his heirs not upon trust but for his own use, can the beneficiary in this case make a good title? The answer to the question last discussed is an answer also to this, for if where the express trust negatives the intention of conferring a power to sell the trustee can still make a good title, it is evident that he can only do so by virtue of the charge. Any distinction between the two cases would be in favour of the beneficial devisee, for if the trustee in defiance of the express trust can sell, a fortiori the devisee can, who is fettered by no such restriction. In' both instances the charge operates as a trust for payment of debts, and is attended with all the same consequences. "A [*465] charge," said Lord * Eldon, " is in substance and effect pro tanto a devise of the estate upon trust to pay the debts " (a), and " this," observed Lord St. Leonards, on citing the dictum, "is supported by the current of authorities "(5). It is clear that the devisee* can, where he also fills the character of executor, make a good title (c), and in some of the cases the Court did not in terms rely on the characters being combined Qd^, but it is singular that no authority can be found in which the question whether the devisee alone can make a good title has arisen. In the Court of Exchequer (e) it was said that in a devise to trustees, subject to a charge of debts, the trustees could sell ; but that a charge in the hands of a devisee if the lands were devised, or in the hands of the heir-at-law if the lands descended, was a charge only in equity. The Court was there considering, more particularly, the question of legal (a) Bailey v. Ekins, 7 Ves. 323. 269 ; Corser v. Cartwright, 8 L. R. Ch. (6) Commissioners of Donations v. App. 971 ; affirmed by H. L. 7 L. R. Wybrants, 2 Jon. & Lat. 198. H. L. 731. (c) Elton -•. Harrison, 2 Sw. 276, (rf) Elliot v. Merryman, Dolton v. note; Elliot u. Merryman, Bam. 78; Young, Johnson o. Kennett, Eland v. Dolton V. Young, 6 Madd. 9; John- Eland, ubi supra; Colyer k. Finch, 5 son V. Kennett, 6 Sim. 384 ; 3 M. & K. H. L. Ca. 905, 922. 624 ; Eland v. Eland, 1 Beav. 235, 4 (e) Doe v. Hughes, 6 Exch. 231. M. & Cr. 420 ; Page t;. Adam, 4 BeaY. 630 Ch. XVIII. S. 2.] TKUSTEES' RECEIPTS. *466 powers ; but if it was intended to be said that a devisee, subject to a cbarge, could not sell and sign a receipt for the money, the doctrine is inconsistent with the nature of a charge of debts in equity as commonly understood. The prevalent opinion hitherto is believed to have been that a devisee subject to debts can sign a receipt for the purchase- money (/), and the cases in which the Court has upheld purchases from a devisee with the concurrence of the execu- tor but without relying upon such concurrence, would be a trap for purchasers should the Court now refuse to uphold ja purchase from a devisee only. Consideriag the declaratory words contained at the end of the 18th section of Lord St. Leonards' Act, it may now, it is conceived, be safely as- sumed that a purchaser from a devisee subject to a charge of debts, will without the concurrence of the executor acquire a good title. ry. Charge of debts 'virhere there is no devise of the estate. — If a testator charge his debts on the real estate, and does not devise the estate at all, but allows it to descend to the heir, can the heir sell and sign a receipt for the purchase-money ? It appears to be clear that he cannot, for he takes nothing under the will, and cannot therefore be regarded as a person constituted by the * testator a trustee by [*466] implication for payment of debts (a) ; he can pass the legal estate, but he could not sign the receipt ; i.e., if the heir misapplied the money the creditors might still come upon the estate. , But in this case, if the heir is disabled from selling can the executor sell (i.e., independently of Lord St. Leonards' Act, to be mentioned presently), for otherwise the charge of debts amounts to a direction for a Chancery suit? (6). The legal question arose in Doe v. Hughes (c) before the Coui't of Exchequer, and the Court held that a charge had (/■) See the cases cited in note (a), 110, 5 N. R. 344; S. C. on appeal, 4 p. 462, supra. De G. J. & S. 608 ; Doe v. Hughes, fi (a) See Gosling v. Carter, 1 Coll. Exeh. 231 ; Forbes v. Peacock, 11 M. 650 (where the V. C. said that the & W. 637, 638. intention to be collected was, that the (6) See Robinson v. Lowater, 5 I>e heir-at-law should have nothing to do G. M. & G. 275. with it) ; Robson v. Flight, 34 Beav. (c) 6 Exch. 223. 631 *4S7 trustees' receipts. [Ch. XVIII. S. 2. no operation at law hut must be enforced in equity. This •decision lias been found mucli fault with. The Master of the Rolls said that before the case in the Exchequer he had considered the law to be that a charge of debts gave the executors an implied power of sale (. 122, 128, 131.] 24; see ante, p. 36.] 1(e) Per Lord Selborne, L. C, (a) Ghost w. Waller, 9 Bear. 497 ; Klngsman v. Kingsman, 6 Q. B. D. and see Wood v. Weightman, 13 L. 122, 128.] R. Eq. 434 ; West ». Jones, 1 Sim. [(/) Kingsman v. Eingsman, ubi N. S. 205. supra.^ 642 Ch. XVIII. S. 2.] TE.TJSTBES' EECBIPTS. *476 each creditor or legatee, upon receiving his money, should give as many receipts as there are purchasers, so that each purchaser may have one ; or if the creditors or legatees are but few they may be made parties to the conveyance. An- other mode by which the purchaser may be secured is an assignment by all the creditors and legatees of their debts and legacies to a trustee, with a declaration that his receipts shall be sufficient discharges, and then the trustee can be made a party to the several conveyances. Sometimes a bill is^ed for carrjdng the agreement into execution, when the purchase-money is of course directed to be paid into Court ; and this is the surest mode, because the money will not be paid out of Court without the knowledge of the pur- chaser " (6). 28. New principle suggested. — From the preceding discus- sion the fundamental principle may be collected, that (where no Act of Parliament applies (c)) a purchaser is in all cases bound to see to the application of his purchase-money, unless a positive intention to the contrary on the part of the settlor be either expressed or implied in the instrument creating the trust. Such indeed is the conclusion to which the authorities con- duct us ; but, independently of precedent, it might be sug- gested that the better principle would be, that, primd facie, a direction to sell should imply in all cases a power of signing discharges ; but that where it was practicable, and no impedi- ment to the execution of the trust was thereby created, the pur- chaser should pay his money directly to the party beneficially entitled. The distinction between the two principles is very material. According to the former rule, if a trust be created for payment of debts and legacies, and the debts be paid, and then the trustees sell, though the purchaser has notice of all debts having been discharged, he is nevertheless not bound to see to the application of his purchase-money, because there was an implied intention by the settlor that the receipts of trustees should be sufficient acquittances (c?) ; but, by the operation * of the latter rule, the purchaser [*476] (6) Vend. & Purch. 848, 11th edit. 23? & 24 Vict. c. 145, s. 29 ; [44 & 45 (c) See 22 & 23 Vict. c. 35, s. 23 ; Vict. e. 41, =. 36,] referred to ante. (d) See supra, pp. 458 et seq. 643 *476 trustees' keceipts. [Ch. xviii. s. 2. would be bound, for the necessity of his paying the money immediately to the legatees would not, if they were of age, prevent the completion of the sale, and therefore there is no reason why the purchaser should be exempted from see- ing to the application. Cestui que trust abroad. — Again, suppose a trust for»sale, with a direction to distribute the proceeds between A., B., and C, and that, after the date of the instrument, C. quits the country or cannot be found. According to the first prin- ciple, as the absence of C. was not an event in the contem- plation of the settlor, and no inference can be drawn that he meant the trustees to sign receipts, it follows that the sale is rendered impossible, and the contradiction arises, that the settlor having in express terms directed a sale, and it being admitted that the will of the settlor is authoritative, yet the execution of that intention is intercepted by the construction of equity. " It were dif&cult," says Lord St. Leonards, " to maintain that the absence of a cestui que trust in a foreign country should, in a case of this nature, impede the sale of the estate " (a), and yet to such a result the rule in question, if there be no exception to it, would apparently lead. But according to the other principle suggested, no such obstacle arises. The receipts of the trustees would then primd fade be discharges, as necessary to the execution of the sale ; and as C. is not at hand, the purchaser in respect of C.'s share ia the purchase-money could not be called upon to observe a rule which would interpose a bar to the accomplishment of the expressed purpose of the settlor (6). [29. If a person is interested in property in several capaci- ties, and in one of such capacities can give a valid discharge for the purchase-money on the sale of the property, a pur- chaser who has no notice of an intended misapplication by such person of the purchase-money will be discharged by his receipt (c), and it is immaterial that the conveyance does not (a) Sugd. Vend. & Purch. 844, charges by Act of Parliament, see 11th ed. ; and see Forbes v. Peacock, ante, pp. 451, 452. 1^ Sim. 544 ; Ford v. Ryan, 4 Ir. Ch. [(c) Corser v. Cartwright, 7 L. B. Rep. 342. ' H. L. 731 ; West of England and (i) Receipts of trustees are now South Wales District Bank v. Murch, in most cases made sufficient dis- 23 Ch. D. 138.] 644 Ch. xviii. s. 2.] executors' eegeipts. *477 show that the vendor is selling or receiving the purchase- money in the capacity in which he is empowered to do so ; and where a person was both executrix and trustee, and as such executrix and trustee had power to' carry out a transac- tion which she purported to carry out as a trustee in which capacity she had not the power, it was held that the transac- tion was validly effectuated (cZ).] * 30, Receipts of executors. — As executors are to [*477] a certain extent invested with the character of trus- tees, it may be proper to introduce a few remarks upon their pojvers in disposing of the assets.^ Po-wer to sell or mortgage. — On the death of a testator the personal estate vests wholly in the executor, and to enable him to execute the office with facility, the law per- mits him, with or without the concurrence of any co-execu- tor (a), to sell or even to mortgage (6), by actual assign- ment or by equitable deposit (c), with or without power of [(d) "West of England and South 3 Atk. 240, per Lord Hardwicke; "Wales District Bank v. Murch, ubi Andrew v. "Wrigley, 4 B. C. C. 138, supra.l per Lord Alvanley ; M'Leod v. Drum- Co) Scott V. Tyler, 2 Dick. 725, mond, 17 Ves. 154, per Lord Eldon; per Lord Thurlow ; Smith v. Everett, Keane v. Eohartg, 4 Mad. 357, per 27 Bear. 446; Shep. Touch. 484; Sir J. Leach; and see Humble u. Bill, Murrell v. Cox and Pitt, 2 "Vern. 570 ; 2 Vern. 444 ; Sanders v. Kicbards, 2 Fellows V. Mitchell, 2 Vern. 515 ; Doe Coll. 568 ; Miles v. Dnrnf ord, 2 De V. Stace, 15 M. & "W. 623 ; Dyer, 23, G. M. & G. 641. a ; and see Sneesby v. Thome, 7 De (c) Scott v. Tyler, 2 Dick. 725, per G. M. &G. 399. Lord Thurlow; and see M'Leod «. (6) Bonney v. Eidgard, 1 Cox, 145, Drummond, 14 Ves. 360 ; S. C. 17 see 148 ; Scott v. Tyler, 2 Dick. 727, Ves. 167 ; Ball v. Harris, 8 Sim. 485. per Lord Thurlow; Mead v. Orrery, 1 Executors' receipts. — An executor can do alone many things which a trustee may not; Shaw v. Spencer, 100 Mass. 392; Field v. Schieftelin, 7 Johns. Ch. 150 ; Tyrrell v. Morris, 1 Dev. & B. Eq. 559 ; Petrie v. Clark, 11 S. & E. 377. If there is a misapplication of the purchase-money, the remedy is against the executor ; Penn. Ins. Co. u. Austin, 42 Pa. St. 257. In case of fraud by executors, the purchaser has no protection ; "Wilson v. Doster, 7 Ired. Eq. 231 ; Williamson v. Bank, 7 Ala. 906 ; "Williamson ». Morton, 2 Md. Ch. 94 ; Joyner v. Conyers, 6 Jones Eq. 78 ; Pendleton v. Fay, 2 Paige, 202 ; Austin V. "Willson, 21 Ind. 252 ; Champlin v. Haight, 10 Paige, 274. Although an executor gives a bond, yet he does not hold estate funds in his own right ; Atkinson v. Atkinson, 8 Allen, 15 ; Barker i-. Barker, 14 "Wis. 131 ; neither can he receive nor receipt for funds until he has qualified ; Luscomb v. Bal- lard, 5 Gray, 403. 645 *478 executors' ebcbipts. [Ch. xvrn. s. 2. sale (d), all or any part of the assets, legal or equitable (e) ; and though liable to render an account to the Court, he can- not be interrupted in the discharge of his office by any person claiming either dShors the will, as a creditor, or under it, as a legatee. The creditor has merely a demand against the executor personally (/), the pecuniary or specific legatee is not entitled to the legacy or bequest until the execute* has assented (^), and the residuary legatee has no lien until the estate has been liquidated and cleared of all liabilities, both dehors and under the will (K). Upon the sale of the chattel, the purchaser is not concerned to see to the application of his purchase-money, and it need not be recited in the con- veyance that the money is wanted for the discharge of habiU- ties (i) : it is sufficient that the purcheiser trusts him whom the testator has trusted (J') : if there be any misapplication, the remedy of the creditor or legatee is not against the purchaser, but the executor (^). It is impossible for the purchaser to ascertain the necessity of the sale, for [*478] this * must depend upon the state of the accounts, which he has no means of investigating without the powers annexed pnly to the executorship (a). . Kotice of the will. — Even express notice of the will, and of the bequests contained in it, works to the purchaser no prejudice ; for " every person," said Sir J. Leach, " who deals with an executor has necessarily implied if not express notice of the wUl : but as a 'purchaser of real estate devised (d) Kussell V. Plaice, 18 Bear. 21 ; (A) M'Leod i!„Drummond, 17 Ves. and see p. 426, supra. 163, 169, per Lord Eldon ; and see (e) M'Leod V. Drummond, 14 Ves. Mead v. Orrery, 3 Atk. 238, 240. 360, per Sir W. Grant ; Nugent v. (i) Bonney v. Ridgard, 1 Cox, 148, Gifford, 1 Atk. 463. per Lori Kenyon. (/) Nugent V. Gifford, 1 Atk. 463,. (j) Id. per Lord Hardwicke ; Mead v. Orrery, (t) Humble v. Bill, 2 Vern. 445, 3 Atk. 238, per eundem ; M'Leod v. per Cur.; Ewer ». Corbet, 2 P. W. 149, Drummond, 17 Ves. 163, per Lord per Sir J. Jekyll; Watts v. Kancie, Eldon. Toth. 77 ; Nurton v. Nurton, id. (S) Mead v. Orrery, 3 Atk. 238, (a) Ewer v. Corbet, 2 P. W. 149, 240, per Lord Hardwicke. But the per Sir J. Jekyll; Humble v. Bill, 2 executor is bound to assent as soon Vern. 445, per Cur. ; Nugent u. Gif- as the funeral and testamentary ex- ford, 1 Atk. 464, per Lord Hardwicke ; penses and debts have been paid. Mead ». Orrery, 3 Atk. 242, per Greene v. Greene, 3 I. E. Eq. 102, eundem. per Cur. 646 Ch. XVIII. S. 2.] EXECITTOKS' RECEIPTS. *479 in aid for payment of debts is not bound to inquire into the fact whether the sale is made necessary by the existence of debts, because he has no adequate means to prosecute such an inquiry, so he who deals for personal assets is, for the same reason, absolved from all inquiry with respect to debts : and it is upon this principle altogether indifferent what dispositions may be made in the will with respect -to the personal property for which he deals; for whether it be specifically given or be part of the residuary estate, it is equally available in law for the payment of debt's " (J). Thus nothing can be clearer than that an executor may go Co market with his testator's assets, (even with a chattel specifically bequeathed (e),) and the purchaser will not be bound to see to the application of his purchase-money (<^). [But an executor or administrator cannot mortgage the assets to raise money for repairing or re-instating dilapidated buildings unless the testator or intestate was liable under covenants to execute the works (e).] 31. Fraud an eziception. — But fraud and collusion will viti- ate any transaction, and turn it to a mere colour (/), and there- fore if fraud be proved, either expressed or implied, the par- ties cannot protect themselves by pleading the general rule (^). The only question is. What will amount to a case of fraud ? * a. Sale at a nominal price. — The sale cannot stand _^ „ if the chattel be sold at a nominal price or a fraudu- *- -' lent undervalue (a). (V) Keane v. Robarts, 4 Mad. 356. Eldon ; Hill v. Simpson, 7 Ves. 166, (c) Watts u.Kancie.Toth. 77,161; per Sir W. Grant; Taner u. Ivie, 2 Nurton v. Nurton, lb. ; Ewer v. Cor- Ves. 469, per Lord Hardwicke ; Keane bet, 2 P. W. 148. As to Humble v. v. Robarts, 4 Mad. 357, per Sir J. Bill, 2 Vern. 444, 1 B. P. C. 71, see Leach ; Crane v. Drake, 2 Vern. 616 ; Ewer w. Corbet, «ii sK^-a; Andrew a. Nugent v. Gifford. 1 Atk. 463, per Wrigley, 4 B. C. C. 137 ; M'Leod v. Lord Hardwicke ; Mead v. Orrery, 3 Drnmmond, 17 Ves. 160. Atk. 240, per eundem ; Scott' v. Tyler, (rf) Bonney v. Eidgard, 1 Cox, 147, 2 Dick. 725, per Lord Thurlow ; Wliale per Lord Kenyon. v. Booth, 4 T. R. 625, note (a), per [(e) Ricketts f. Lewis, 51 L. J. N. Lord Mansfield ; Elliot v. Merryman, S. Ch. 837.] Barn. 81, per Sir J. Jekyll; Bonney (/) Scott V. Tyler, 2 Dick. 725, v. Ridgard, 1 Cox, 147, per Lord Ken- per Lord Thurlow. , yon; Earl Vane v. Eigden, 5 L. li. (y)*"Watkins v. Cheek, 2 S. & S. Ch. App. 663, &c. 205, per Sir J. Leach; M'Leod v. (a) Scott u. Tyler, 2 Dick. 725, per Drummond, 17 Ves. 154, per Lord Lord Thurlow ; Ewer v. Corbet, 2 P. 647 *479 EXECUTOES' KECEIPTS. [Ch. XVIU. S. 2. (8. Sale by executor for payment of his own debt. — The executor may not sell or pledge the assets for raising money to carry on the testator's business, though in pursuance of the directions contained in his will, for the debts of the busi- ness are not the testator's debts, [and a direction by a testar tor that his trade shall be carried on by his executors does not authorise the employment in that trade of more of ^e testator's property than was employed by him in his busi- ness] (6), or to pay or secure the executor's own debt (c), or for a debt wrongfully contracted by him as executor (d~), for primd facie this i^ a diversion of the assets to a purpose wholly foreign to the administration, and therefore a devastor vit. " Though," observed Sir W. p-rant, " it may be danger- ous at all to restrain the power of purchasing from the exec- utor, what inconvenience can there be in holding that the assetsi known to be such should not be applied in any case for the executor's debt, unless the creditor could be first satis- fied of his right? It may be essential that the executor should have the power to sell the assets, but it is not essential that he should have the power to pay his own creditor ; and it is not just that one man's property should be applied to the payment of another man's debt" (e). Where the executor is specific or residuary legatee. — Sut if the executor be also the specific (/), or residuary legatee (^), W. 149, per Sir J. Jekyll ; M'MuUen 616 ; Anon, case, cited Pr. Ch. 434 ; (,-. O'Keilly, 15 Ir. Ch. Kep. 251 ; and Andrew v. Wrigley, 4 B. C. C. 137, see Drohan v. Drohan, 1 B. & B. 185. per Lord Alvauley ; and see Eland v. (J) McNeillie v. Acton, 2 Eq. Kep. Eland, 4 M. & Cr. 427 ; Miles v. Durn- 21 ; 4 De G. M. & G. 744. [But the ford, 2 De 6. M. & G. 641 ; [Jones v. executors may sell or pledge any part Stohwasser, 16 Ch. D. 577.] of the property actually employed in (rf) CoUinson v. Lister, 20 Beav. the business, and it has been held in 356 ; 7 De G. M. & G. 634. a recent case in Ireland that the (e) Hill v. Simpson, 7 Ves. 169. power of disposition extends to raort- (/) Taylor v. Hawkins, 8 Ves. 209. gaging the freehold premises upon (j) Nugent u. GifEord, 1 Atk. 463; which the business is carried on ; corrected from Eeg. Lib. 4 B. C. C. Devitt V. Kearney, 13 L. R. Ir. 45; 136; Mead ./. Orrery, 3 Atk. 235; reversing S. C. 11 L. R. Ir. 225.] Whale v. Booth, 4 T. E. 625, note (a). (c) Scott V. Tyler, 2 Dick. 712; See the comments of Lord Eldon, Hill V. Simpson, 7 Ves. 152 ; Watkins M'Leod v. Drummond, 17 Ves. 163 ; V. Cheek, 2 S. & S. 205, per Sir J. and see Bedford v. Woodham,*4 Ves. Leach ; Keane v. Robarts, 4 Mad. 357, 40, note ; Storry v. Walsh, 18 Beav. per eundem ; Crane v. Drake, 2 Vern. 559. 648 Ch. XVIII. S. 2.] BXECUTOKS' RECEIPTS. *480 then it seems to be established upon the authority of several cases that he may dispose of the chattel in payment of his own debt, for as soon as the debts and legacies of the testa- tor have been discharged, the property is the executor's; and how is a piifchaser to, ascertain, but from the mouth of the executor, whether such prior liabilities upon the estate have been fully satisfied ? * 'Where the executor is specific legatee jointly with [*480] another, or subject to a charge. — But if the executor is specific or residuary legatee, jointly with others, or subject to certain charges under the will, then he has no power by himself to offer the chattel in payment of his own debt. For in what character does the executor sell ? It must be either as executor or as legatee: not as executor, for then he cannot pay his own debt with the testator's assets ; and not as legatee, for he is not exclusively such, but only jointly with others, or subject to certain charge's. The creditor therefore cannot deal for the chattel without the concurrence of the co-legatees, or of the other persons jointly entitled (a). And the mere representation by the executor that he is abso- lute owner under the will is no protection, for common pru- dence requires that the purchaser should look to the will himself and ascertain the fact; and if he neglect this pre- caution, and assume the executor's veracity, he must incur the hazard of the executor's falsehood (5). Express notice that debts not paid. — The executor in his character of specific or residuary legatee cannot pay or secure the debt of his own creditor out of the testator's assets, if such creditor have express notice that any debt of the tes- tator still remains unsatisfied (e). fy. Sale by executor for other private purposes. — If the executor sell or mortgage for money either advanced at the time or to be advanced, the dealing primd facie is in a due course of administration (<:?). " Where," observed Sir W. (o) Bonney w.Ridgard,! Cox. 145; (c) See Nugent v. Gifford, 1 Atk. Hill V. Simpson, 7 Ves. 152, see 170; 464; "Whale v. Booth, 4 T. R. 625, and see Haynes v. Forshaw, 11 Hare, note (a) ; M'Leod v. Druramond, 17 93. Ves. 163. " (6) Hill V. Simpson, 7 Ves. 152, (rf) M'Leod v. Drummond, 17 Ves. see 170. 155, per Lord Eldon. 649 *481 BXECTTTOES' RECEIPTS. [Ch. XVni. S. 2. Grant, " a party having a debt due to him by the executor takes, in satisfaction of that debt, the assets which he knows . belong to the executor only in that character, undoubtedly suspicion of fraud must always arise; but where a man is applied to for a loan of mpney there is no motive of fraud, for he may keep Jiis money if not satisfied with the secu- rity " (e). But such is the primd facie presumption quly, for if there be legal evidence to the purchaser or mortgagee that the immediate or future advance is not on account of the testator's estate, but is meant to be applied to the private purposes of the executor, the Court must regard the transaction as fraudulent, and will not allow it to stand (/). ' 8. Sale of specific chattel, and notice that there are no debts. — A purchaser cannot deal with an executor for the [*481] purchase * of a chattel specifically bequeathed, if the purchaser have notice; (a fact, however, not easUy to be proved, and not lightly to be presumed,) that there were no debts of the testator, or that they have since been dis- charged (a). ' 6. P'ayment to executor -who -will probably misapply it. — If a person owe money to a testator's estate, and be apprised that the executor means to misapply it, he cannot safely hand it over (V). 9. Payment after long interval from testator's death. — If a great length of time has elapsed since the testator's death, it may be argued that here all debts must be presumed to be paid, and that the executor is a trustee for the next of kin, and that the money cannot be paid safely to any other than the next of kin as the cestui que trust. However, in the absence of all mala fides the executor's receipt will in general be sufiieient. Where there had been a lapse of sixteen years, (c) M'Leod V. Drummond, 14 Ves. (a) Ewer v. Corbet, 2 P. W. 149, 362; and see Miles v. Durnford, 2 De per Sir J. Jekyll; and see M'Mullen G. M. & G. 641. V. O'Reilly, 15 Ir. Ch. Rep. 251. (/) M'Leod V. Drummond, 14 Ves. (6) See Watkins v. Cheek, 2 S. & 353 ; S. C. reversed, 17 Ves. 152 ; S. 199 ; Eland v. Eland, 4 M. & Cr, Scott V. Tyler, 2 Dick. 712, compare 427 ; Stroughill v. Anstey, 1 De G. 17 Ves. 166 ; and see Keane v. Robarts, M. & 6. 648. 4 Mad. 358. 650 Ch. XVIII. S. 2.] EXBCUTOES' RECEIPTS. *482 Lord Hatherley observed, " there is no authority for holding that merely because a debt to the testator's estate is not called in for some time, we are to imply that the executors have ceased to be executors, and have become trustees. A debtor who has been paying interest for perhaps twenty years, does not therefore become cognizant of the fact of all the testator's estate having been administered, and of the executors having become trustees. The persons with whom the executors are dealing, are not bound to know the state of the testator's assets, and it may be many years before all his debts are paid, and his estate wound up " (c). In a case where there had been a lapse of thirty-five years from the testator's death, and no allegation of debts, the late V. C. of England held that the executor could sign a receipt (d'), [but the rule has now been adopted that after twenty years it is fair to presume that the debts have been paid and the onus is upon the executors to show such is not the case (e).J As regards an administrator it will be remembered that all nec- essary protection is thrown around the estate by the bond taken for due administration, and also by the form of proceeding in the Probate Court ; for if A., (to * whose [*482] estate the money is owing) die, leaving B. his next of kin, who afterwards dies, leaving C. his next of kin, who afterwards dies, leaving D. his next of kin, in order to take out letters of administration to A., you must first show your- self to have an interest by taking out letters to B. And again, to take out letters to B. you must first, for the same reason, take out letters to C. ; so that, in fact, letters cannot be taken out to A. without previously taking out letters to B. and C. If, in such a case, the receipt of A.'s adminis- trator, even after the lapse of twenty years, were not suffi- (c) Charlton v. Earl of Durham, v. Binney. Jac. 523 ; Pierce u. Scott, i L. K. Ch. App. 438 ; and see Sabin 1 Y. & C. 257 ; Forbes v. Peacock, 11 V. Heape, 27 Beav. 553. Sim. 152 ; Hawkins v. Williams, Q. {d) Gough V. Birch, July 10, 18.39, B. 10 W. E. 692 ; Greetham v. Colton, MS. ; see StroughiU v. Anstey, 1 De 6 N. R. 311 ; Williams «. Massy, 15 G. M. & G. 654 ; [iJe Tanqueray- Ir. Ch. Eep. 68. Willaume and Landau, 20 Ch. D. 465 ; [(e) Re Tanqueray-Willaume and Re Molyneux and White, 13 L. R. Ir. Landau, 20 Ch. D. 465; Re Molyneux 382 ;] Ewer v. Corbet, 2 P. W. 148 ; and White, 13 L. R. Ir. 382.] Court V. Jeffery, 1 S. & S. 105 ; Orrok 651 *482 executors' receipts. [Ch. XVIII. S. 2. cient, it -would be necessary in a suit to make tlie adminis- trators of B. and C. parties as ces^uis que trust, a thing quite unheard of in practice. In an extreme case, however, where an administrator who was beneficially entitled to one-fourth, filed a bill one hundred and fifty years after the intestate's decease, the Court, while it admitted the plaintiff's legal title to the whole, refused to order payment to him of the other three-fourths, which apparently belonged in equity to other parties (a). f, Sale by banker by direction of executor. — An agent is accountable to his principal only, and therefore if an execu- tor employ a banker to sell out part of the testator's stock and remit the proceeds to him, it seems the banker, though he has reason to believe that a misapplication is intended, is bound to transfer the money to the executor, and does not thereby render himself accountable. A contrary doctrine would carry the principle of constructive trust to an incon- venient and, indeed, to an impracticable length (J) ; [and (a) Loy V. Duckett, Cr. & Ph. 305. [In a recent case, in 1885, where stock standing in the name of an owner, who died in 1791, had been transferred to the Commissioners for the reduction of the National Debt, and an inquiry was directed upon petition who were the persons entitled to the fund, the Court directed that the beneficial title should be inquired into as regarded all the shares to which the legal personal representa- tives of persons who died before 1871 were entitled ; Ex parte Roskrow, W. N. 1885, p. 3.] (6) Keane v. Robarts, 4 Mad. 332, see 356, 359 ; and see Davis o. Spur- ling, 1 R. & M. 64; S. C. Taml. 199; London Chartered Bank of Australia V. Lemprifere, 4 L. R. P. C. 585; [The New Zealand and Australian Land Company v. Watson, 7 Q. B. D. 374 ; reversing S. C. 5 Q. B. D. 474;] Crisp V. Spranger, Nels. 109 ; Saville I'. Tancred, 3 S. W. 141, note ; Ex parte Barnwell, 6 De G. M. & G. 801 ; Gray V. Johnston, 3 L. R. H. L. 1. In this case, before the House of Lords, the doctrine as laid down by Lord Cairns was, that on the one hand bankers were not on grounds of mere sus- picion or curiosity, to refuse to hon- our the cheque of an executor or trustee, being their customer, and on the other hand, that bankers were not, under shelter of that title, to be at liberty to become parties or privies to a breach of trust, and to pay away trust money when they knew it was going to be misapplied, and for the purpose of its being so misapplied; and he stated the result of the cases to be, that to justify a banker in refusing payment, 1. There must be a misapplication or breach of trust actually intended. 2. The bankers must be privy to such intended mis- application or breach of trust, and 3, That any personal benefit to the bankers designed or stipulated for, would be the strongest evidence of Such privity, lb. p. 11. But the prin- ciple enunciated by Lord Westbury went further, for he said that a banker could not be allowed to set up the jus tertii against the order of his own 652 Ch. xviii. s. 2.] executors' receipts. *483 an agent is bound to accept as correct the *trus- [*483] tees' statement as to the intended application of the fund (a).] But an agent who derives a personal benefit from the breach of trust . of his principal will be account- able (6). - ■q. Sale before probate. — Though an executor can make an assignment and give a receipt for purchase-money before probate, yet a purchaser is not bound to pay his purchase- money before probate, which is the evidence of the execu- tor's title (c). [32. Payment by order of executor. — If a person indebted to a testator's estate pays a third party by order of the exec- utor and obtains the executor's receipt without notice that the payment is wrongfully made, he thereby obtains a com- plete discharge (<^).] » 33. Who may impeach the sale. — Wherever, as in the sev- eral cases mentioned, there is suspicion of fraud, the trans- action may be impeached by creditors (e), or specific (/), residuary (^), or even pecuniary legatees (Ji). Effect of time. — But in no case will the Court grant re- customer, or refuse to honour his draft [(a) Rodbard «. Cooke, 25 W. R. on any other ground than some suffi- 555.] cient one resulting from the act of the (ft) Pannell v. Hurley, 2 Coll. 241 ; customer himself, and that if a banker Bodenham v. Hoskyns, 2 De G. M. & became incidentally a\rare that a G. 903 ; [Foxton v. Manchester and trustee, his customer, meditated a Liverpool District Banking Company, breach of trust, and drew a cheque for 44 L. T. N. S. 406. that purpose, the banker had no right (c) Newton o. Metropolitan Rail- to refuse payment of the cheque, as way Company, 1 Dr. & Sm. 583. this would be making himself party [(ei) Terrier v. Ferrier, 11 L. R. to an inquiry as between his customer Ir. 56 ; and see ante, p. 447.] and third persons. But that if a (e) Crane v. Drake, 2 Vern. 616 ; trustee being indebted to a banker. Anon, case cited, Pr. Ch. 434 ; and applied part of the trust estate in the see Nugent v. Gifford, 1 Atk. 463 ; banker's hands to the payment of the Mead v. Orrery, 3 Atk. 238. debt, the banker became particeps (/) Humble v. Bill, 2 Vern. 444; criminis, and was answerable. lb. Scott u. Tyler, 2 Dick. 712. p. 14. It would seem, therefore, that, ( j) See Burting v. Stonard, 2 P. in Lord Westbury's opinion, if the W. 150 ; Mead v. Orrery, 3 Atk. 235, trustee did not himself confess the see 238 ; M'Leod v. Drummond, 17 breach of trust, the banker could not Yes. 161, 169. refuse payment on evidence aliunde (K) Hill v. Simpson, 7 Ves. 152 ; that a breach of trust was intended ; and see M'Leod v. Drummond, 17 and see Barnes v. Addy, 9 L. R. Ch. Ves. 169. A^p. 244. 653 *484 PURCHASES BY TETJSTBES. [Ch. XVIII. S. 3- lief where the right of unravelling the transaction has been neglected for a period of twenty years (i). 34. Executor or administrator of a trustee. — The preceding powers belong to executors and administrators for the pur- pose of administration of the testator's or intestate's estates. But these powers cannot be assumed to exist where prep- erty, though legally vested in an executor or admin- [*484] istrator, is not * available for the ordinary purposes of administration. Thus the executor or administra- tor of a surviving trustee stands on no higher ground than an ordinary trustee, and cannot therefore pass a good title to the purchaser, unless it be warranted by the terms of the trust. SECTION III. DISABILITY OF TRUSTEES FOR SALE TO BECOME PURCHASERS OF THE TRUST PROPERTY. We now come to the subject of purchases iy trustees of the property vested in them upon trust.^ Under this head it will be proper to consider, First, The extent and operation of the rule, that a trustee shall not purchase the trust estate ; Secondly, The species of relief (t) Andrew v. Wrigley, 4 B. C. C. and see MiLeod v. Drummond, 14 125; Bonney v. Ridgard, 1 Cox, 145; Ves. 353; reversed 17 Ves. 152, see Mead v. Orrery, 3 Atk. 235, see 243 ; 171. 1 Trustee purchasing. — A trustee who is selling trust property may not pur- chase at his own sale for his own benefit, and this applies generally to any one holding any fiduciary relation ; Blanvelt v. Ackerman, 20 N. J. Eq. 141 ; Dyer v. Shurtleff, 112 Mass. 165 ; Wistar's App. 54 Pa. St. 60 ; European R. E. Co. V. Poor, 59 Me. 277 ; Prewett v. Coopwood, 30 Miss. 369 ; Gass v. Mason, 4 Sneed, 497 ; Powell v. Cobb, 3 Jones Eq. 456 ; Taylor v. Taylor, 8 How. 183. This applies generally to all sales, contracts and negotiations between cestui que trust and trustee ; Pairo v. Vickery, 37 Md. 467 ; Wriglit v. Camp- bell, 27 Ark. 637; Boynton v. Brastow, 53 Me. 362; Farnam v. Brooks, 9 Pick. 212 ; Staats v. Bergen, 2 C. E. Green, 554. Either the trustee purchasing will become a constructive trustee or the sale will be void, at the option of the cestui que trust, unless he can show it to be fair and favorable to the cestui que trust ; Shelton v. Homer, 5 Met. 462 ; Johnson v. Blackman, 11 Conn. 343 ; Freeman v. Harwood, 49 Me. 195 ; Child V. Brace, 4 Paige, 309 ; Michoud i;. Girod, 4 How. 503 ; Cram u. Mitchell, 1 Sandf. Ch. 251. 664 Ch. XVni. S. 3.] PURCHASES BY TRUSTEES. *484 to which the cestui que trust is entitled; Thirdly, The time within which the cestui que trust must apply to the Court. Neither may the trustee receive a gift from the cestui que trust ; Wright v. Smith, 23 N. J. Eq. 106 ; Renew v. Butler, 30 Ga. 954 ; Smith v. Drake, 23 N. J. Eq. 302 ; Cadwalader's App. 64 Pa. St. 293. These principles are not to be received without some modification. If, on careful examination, it clearly and plainly appears that the transaction is favorable to the cestui que trust, that there is no fraud or concealment of material facts and that a strict investigation can discern no fault in the trustee in the'managetnent of the trust sale, the trustee may hold even though he purchases at his own sale ; Brown v. Cowell, 116 Mass. 465 ; Dunn v. Dunn, 431 N. J. Eq. 431 ; Pratt v. Thornton, 28 Me. 356; Lyon .;. Lyon, 8 Ired. Eq. 201 ; Johnson v. Bennett, 39 Barb. 237 ; Jennison v. Hapgood, 7 Pick. 1 ; Mc- Cartney V. Calhoun, 17 Ala. 301 ; Rice v. Cleghorn, 21 Ind. 80. Such purchases by the trustee are not void, but voidable only ; Ives v. Ashley, 97 Mass. 198 ; Dodge v. Stevens, 94 N. Y. 209 ; Davoue v. Fanning, 2 Johns. Cli. 252; Tdrrey v. Banlc of Orleans, 9 Paige, 649; Graves v. Water- man, 63 N. Y. 657 ; Mercer v. Newsom, 23 Ga. 151 ; Hoitt v. Webb, 36 N. H. 158 ; Van Epps v. Van Epps, 9 Paige, 237. To sustain such a sale the purchaser must show the straightforwardness of the transaction, the burden of proof resting on him; M'Cants v. Bee, 1 McCord's Cli. 383 ; 16 Am. Dec. 610 ; Pairo v. Vickery, 37 Md. 467 ; Mackey V. Coates, 70 Pa. St. 350; Jamison v. Glascock, 29 Mo. 191 ; Robbins v. Butler, 24 111. 387. The utmost good faith is required to sustain such a sale ; Juzan V. Toulrain, 9 Ala, 662; 44 Am. Dec. 448 ; any profit obtained by trustee in purchasing accrues to the trust estate ; Brackenridge v. Holland, 2 Blackford, 377 ; 20 Am. Dec. 123 ; if the cestui que trust objects, the trustee may not purchase ; Chorpening's App. 32 Pa. St. 315 ; 72 Am. Dec. 789 ; a trustee should not purchase while a fiduciary relation exists ; Pratt v. Thornton, 28 Me. 355; 48 Am. Dec. 492; Wormley v. Wormley, 8 Wheat. 421; he should first divest himself of his fiduciary character; Murdock's Case, 2 Bland's Ch. 461 ; 20 Am. Dec. 381. A purchase by a trustee can be questioned only by the cestui que ti-ust; Wilson v. Troup, 2 Cow. 195; 14 Am. Dec. 458 Larco v. Casaneuava, 30 Cal. 560 ; Thorp v. McCuUum, 1 Gilm. 614 ; Davoue V. Fanning, 2 Johns. Ch. 252 ; Newcomb v. Brooks, 16 W. Va. 32. An ad ministrator is so far a trustee that he should not purchase at his own sale Martin v. Wyncoop^ 12 Ind. 266; 74 Am. Dec. 209; Mulford v. Minch, 3 Stock' Ch. 16; Murchison v. White, 54 Tex. 85; Boyd v. Blankman, 29 Cal, 19 ; Gardner v. Butler, 30 N. J. Eq. 725 ; Morgan v. Wattles, 69 Ind. 263, A very slight advantage- to the trustee, or showing of his bad faith, is suffi- cient for setting the sale aside ; Buell v. Buckingham, 16 la. 284 ; 85 Am, Dec. 516; Herbert u. Hanrick, 16 Ala. 581; Hannah v. Carrington, 18 Ark, 85. A trustee may not acquire an outstanding title to trust property for his own benefit ; Morrison y. Caldwell, 5 T. B. Mon. 426 ; 17 Am. Dec'. 84 ; whether he be trustee, mortgagee, life tenant or purchaser otherwise; Morgan v. Boone, 4 T. B. Mon. 291 ; 16 Am. Dec. 153. If a trustee purchases a mortgage or a judgment at a discount he cannot claim the benefit; Green v. Winter, 1 Johns. Ch. 27 ; 7 Am. Dec. 475. An executor may not purchase for himself ; Bailey v. Robinsons, 1 Gratt. 4 ; 42 Am. Dec. 540. That a person holding a fiduciary relation may not purchase does not apply to any particular class of persons, but it is of universal application ; cases of pledgor and pledgee come 655 *484 PTJBCHASBS BY TKTJSTEBS. [Ch. XVIII. S. a First. The extent of the rule. 1. Trustee for sale may not purchase. — A trustee for sale, that is, a trustee who is selling, is absolutely and entirely disabled from purchasing the trust property (a), whether i;fc be real estate or a chattel personal (6), land, or a ground rent (c), in reversion or possession (ti), whether the pur- (a) rox V. Mackreth, 2 B. C. C. S. C. S B. C. C. 117 ; Killick o. Flex- 400 ; S. C. 2 Cox, 320 ; affirmed in ney, 4 B. C. C. 161 ; Hall v. Hallet, D. P. 4 B. P. C. 258, &e. That Fox 1 Cox, 134 ; Whatton v. Toone, 5 Mad. V. Mackreth was decided upon this 54 ; 6 Mad. 153. ground, see Gibson v. Jeyes, 6 Ves. (c) Price b. Byrn, cited Campbell 377 ; Ex parte Lacey, Id. 627 ; Ex v. Walker, 5 Ves. 681. paHe James, 8 Ves. 353 ; Coles », Tre- {d) Re Bloye's Trust, 1 Mac. & G. eothick, 9 Ves. 247 ; Ex parte Ben- , 488, see 492, 495 ; Spring v. Pride, nett, 10 Ves. 394. 4 De G. J. & S. 395. (6) Crowe v. Ballard, 2 Cox, 253 ; under this rule ; Maryland Fire Ins. Co. v. Dalryraple, 25 Md. 242 ; 89 Am. Dec. 779. In case such a purchase is made a resale may be ordered ; Buckles V. Lafferty, 2 Rob. (Va.) ^92; 49 Am. Dec. 752; Scott v. Frceland, 7 Smed. & M. 409 ; 45 Am. Dec. 310. A trustee may purchase after the trust ceases ; Munn V. Burges, 70 111. 604 ; Bush v. Sherman, 80 III. 160. A cestui que trust may so acquiesce in, and confirm a sale, as to estop himself from objecting to it; Mulford o. Minch, 3 Stock Ch. 16; 64 Am. Dec. 472; Hallman's St. 13 Phila. 562 ; especially if it be for a long time ; Mitchell v. Berry, 1 Met. (Ky.) 602 ; Scott V. Freeland, 7 Sm. & Marsh. 409 ; and if ratified by a cestui que trust it cannot be set aside by a strangerj .Tohnson v. Bennett, 39 Barb. 237 ; Jackson v. Van Dalbsen, 5 Johns. 43; Beeson o. Beeson, 9 Pa. St. 279; Boerum v. Schenck, 41 N. Y. 182 ; the cestui que trust must either ratify or set aside the sale, whether public or private, within a reasonable time; Har- rison V. McHenry, 9 Ga. 164 ; 52 Am. Dec. 435 ; Alexander v. Alexander, 46 Ga. 291. The rule forbids that a receiver, who has bought at a foreclosure, when he as receiver held the equity, should be allowed to hold as against a cestui que trust who claims beneficially of the purchaser; Jewett v. Miller, 10 N. Y. 402 ; 61 Am. Dec. 751. A trustee for bondholders cannot deal in the bonds for his own benefit, or lease a road to a company in which he is a stockholder; Ashuelot R. R. v. Elliott, 57 N. H. 397 ; a trustee purchasing for less than value, may be charged full value ; Prichard v. Farrar, 116 Mass. 213. A pur- chase by a wife of a trustee may be allowed by an order of court ; Dundas's App. 64 Pa. St. 325 ; a confidential adviser should not purchase on his own account; Wakeman v. Dodd, 27 N. J. Eq. 564. A trustee may not allow land to be sold for taxes, and then acquire a title at the sale; Frierson v. Branch, 30 Ark. 453. A purchase at a foreclosure sale may be valid ; Adams V. La Rose, 75 Ind. 471 ; or one indirectly, through a third party ; Creveling v. Fritts, 34 N. J. Eq. 134. Such a sale, though it may be set aside by^ the trustee ; Clark v. De-i-erans, 1 S. C. 172 ; Star Co. v. Palmer, 41 N. Y. Supr. Ct. 267 ; Kern v. Chalfant, 7 Minn. 487 ; is valid as against strangers; Union Slate Co. V. Tilton, 69 Me. 244 ; Miller v. Iowa Land Co. 56 la. 374. Trustee must make full disclosure and show adequate price ; Spencer's App. 80 Pa. St. 317. 656 Ch. XVIII. S. 3.] PURCHASES BY TRtTSTEBS. *485 chase be made in the trustee's own name or in the name of a trustee for him (e), by private contract or public auc- tion (/), from himself as the single trustee, or with the sanction of his *co-trustees (a) ; for he who [*485] undertakes to act for another in any matter cannot, in the same matter, act for himself (S). The situation of the trustee gives him an opportunity of knowing the value of the property, and as he acquires that knowledge at the expense of the cestui que trust, he is bound to apply it for the cestui que trust'' s benefit (c). Besides, if the trustee appeared at the auction professedly as a bidder, that would operate as a discouragement to others, who seeing the vendor ready to purchase at or above the real value, would feel a reluctance to enter into the competition, and so the sale would be chilled (c?). Trustee who has disclaimed. — But the rule does not apply to a person named as trustee, but who has disclaimed without having acted in the trust (e), [or to a person who has the power of becoming a trustee though he never actually does become one (/),J or to a tenant for life whose consent to the sale is required by the terms of the power (^) ; or to mere nominal trustees as trustees to preserve contingent remain- ders (K) ; or where A. is the trustee in fee for B. in- fee, and (e) Campbell v. Walker, 5 Ves. (a) Whichcote v. Lawrence, 3 Ves. 678; S. C. 13 Ves. 601; Randall v. 740; Hall «. Noyes, cited Id. 748; Errlngton, 10 Ves. 423 ; Crowe v. and see Morse v. Eoyal, 12 Ves. 374. Ballard, 2 Cox, 253 ; S. C. 3 B. C. C. (6) Whichcote v. Lawrence, 3 Ves. 117; Hall v. Hallett, 1 Cox, 134; 750; per Lord Rosslyn; Ex parte Watson V. Toone, 6 Mad. 153 ; Baker Lacey, 6 Ves. 626, per Lord Eldon ; V. Carter, 1 Y. & C. 250 ; Knight v. Be Bloye's Trust, 1 Mac. & G. 495. Majoribanks, 2 Mac. & G. 12. (c) See Ex parte James, 8 Ves. 348. (/) Campbell v. Walker, Randall (d) See Ex parte Lacey, 6 Ves. 629. V. Errington, ubi supra ; Ex parte Ben- (c) Staoey v. Elph, 1 M. & K. 195 ; nett, 10 Ves. 381, see 393; Ex parte andseeChambersi;. Waters, 3 Sim.42. James, 8 Ves. 337, see 349 ; Whelp- [(/) Clark v. Clark, 9 App. Cas. dale V. Cookson, 1 Ves. 9 ; S. C. stated 733.] from R. L. Campbell v. Walker, 5 (j) Howard w. Ducane, T. & R. 81 ; Ves. 682 ; Ex parte Hughes, 6 Ves. Bevan v. Habgood, 1 J. & H. 222 ; 617 ; Ex parte Lacey, Id. 625 ; Lister Dicconson v. Talbot, 6 L. R. Ch. App. ». Lister, Id. 631 ; Whichcote v. Law- 32, see ante, p. 317. rence, 3 Ves. 740 ; Attorney-General (h) Sutton v. Jones, 15 Ves. 687 ; ». Lord Dudley, G. Coop. 146 ;Downe8 Naylor v. Winch, 1 S. & S. 567; V. Grazebrook, 3 Mer. 200. Pooley ■». Quilter, 4 Drew. 189 ; Farkes V. White, 11 Ves. 226. 657 *486 PtJKCHASES BY TRUSTEES. [Ch. XVin. S. 3. A. has no duty to perform (i) ; or where a trustee sells to the trustees of his own settlement and under which he has par- tial interest (y). 2. Lord Rosslyn's doctrine. — Lord Rosslyn is reported to have considered that to invalidate a purchase hy a trustee it was necessary to show that he had gaiued an actual advanr tage (¥) ; but the doctrine (if any such was ever held by his Lordship (J) has since been expressly and unequivocally denied (m). The rule is now universal, that, however fair the transaction, the cestui que trust is at liberty to set aside the sale and take back the property (ot). If a trustee £*486] were * permitted to buy in an honest case, he might buy in a case having that appearance, hut which, from ■the infirmity of human testimony, might be grossly otherwise (^a"). Thus a trustee for the sale of an estate may, by the knowl- edge acquired by him in that character, have discovered 'a valuable coal mine Tinder it, and, locking that up in his own breast, might enter into a contract for the purchase by himself. In such a case, if the trustee chose to deny it, how.€Ould the Court establish the fact against the denial? The probability is that the trustee who had once conceived such a purpose would never disclose it, and Hie cestui que trust would be effectually defrauded (J). 3. Trustee may not buy as agent. — As a trustee cannot buy on his own account it follows that he cannot be per- mitted to buy as agent for a third person: the Court can (t) Pooley V. Quilter, 4 Drew. 189 ; 393, per Lord Eldon ; Randall v. Br- and see Denton v. Donner, 23 Beav. rington, 10 Yes. 423, see 428 ; Camp- 289, 290. bell v. Walker, 5 Ves. 678, see 680; (J) Hickley ... Hickley, 2 Ch. D. Ex parte James, 8 Ves. 347, 348, per 190. Lord Eldon ; Lister v. Lister, 6 Ves. (fc) See Whichcote v. Lawrence, 3 631 ; Gibson v. Jeyes, 6 Ves. 277, per Ves. 750. Lord Eldon; see Kilbee v. Sneyd, 2 (0 See Ex parte Lacey, 6 Ves. 626 ; Moll. 186. Lister v. Lister, Id. 632. (o) Ex parte Bennett, 10 Ves. 385, (m) Ex parte Bennett, 10 Ves. 385 ; per Lord Eldon. Et parte Lacey, 6 Ves. 627 ; Attorney- (i) Ex parte Lacey, 6 Ves. 627, per General v. Lord Dudley, G. Coop. 148 ; Lord Eldon ; and see Exparte Bennett, Ex parte James, 8 Ves. 348 ; Mulvany 10 Ves. 385, 394, 400 ; Ex parte James, V. Dillon, 1 B. & B. 409, see 418. 8 Ves. 348, 349; Parkes ». White, 11 (n) Ex parte Lacey, 6 Ves. 625, see Ves. 226 ; Campbell v. Walker, 5 Ves. 627 ; Owen v. Foulkes, cited. Id. 630, 681 ; Lister v. Lister, 6 Ves. 632 ; Ex note (b) ; Ex parte Bennett, 10 Ves. parte Badcock, 1 Mont. & Mac. 239. 658 Ch. XVIII. S. 3.] PXJKCHASES BY TEUSTEES. *487 with as little effect examine how far the trustee has made an undue use of information acquired by him iu the course of his duty in the one case as in the other (e). 4. Agent of trustee may not buy. — And the rule against purchasiag the trust property applies to an agent employed by the trustee for the purposes of the sale, as strongly as to the trustee himself (d). And an agent not for sale, hut for management only (e), and a receiver appointed by the Court (/) stand in a confidential relation, and cannot purchase with- out putting themselves at arm's length, and a full disclos- ure 'of their knowledge; [and the partner of a trustee, or any other person through whom the trustee may directly or indirectly derive benefit by reason of the purchase, cannot purchase the trust property from the trustee (^).] 5. Trustees may not lease to themselves. — The lease of an estate is in fact the sale of a partial interest in it, and there- fore ^trustees for sale cannot demise to one of themselves, but the lessee, while he shall be held to his bargain if disad- vantageous to him, shall be made to account for the profits if it be in his favour (K). *6. Specific performance. — Where a trustee for [*487] sale was the purchaser by an agent at the auction, the heir of the trustee had no right to have the contract completed at the expense of the personal estate, though the cestuis que trust were willing to acquiesce in the sale (a). 7. Trustee may purchase from the cestui que trust. — When it is said that a trustee for sale may not purchase the trust property, the meaning must be understood to be that the trustee may not purchase from himself that is, he cannot (c) Ex pane Bennett, 10 Ves. 381, (/) Alvenu. Bond, 1 Flan. & Kelly, see 400 ; Coles v. Trecothick, 9 Ves. 196 ; White v. Tommy, referred to, 248, per Lord Eldon ; and see Gregory lb. 224. f. Gregory, G. Coop. 204; [Mockerjee [(y) Ex parte Moore, 51 L. J. N. V. Mockerjee, 2 L. R. Ind. App. 18.] S. Ch. 72; 45 L. T. N. S. 558; Ex (d) Whiteomb v. Minchin, 5 Mad. parte Burnell, 7 Jur. 116.] 91 ; In re Bloye's Trust, 1 Mac. & G. (A) Ex parte Hughes, 6 Ves. 617 ; 488, see 495 ; [Martinson v. Clowes, 21 Attorney-General u. Earl of Claren- Ch. D. 857.] don, 17 Ves. 491, see 500. . Bradley, 1 353, per Lord Manners. J. & W. 51. (rf) Campbell v. Walker, 5 Ves. (n) Oliver v. Court, 8 Price, 127; 678; S. C. 13 Ves. 601; Roche v. see 167, 168; and see Gregory v. O'Brien, 1 B. & B. 330, see 339 ; and Gregory, G. Coop. 201 ; Roche v. see Scott v. Davis, 4 M. & Cr. 92. O'Brien, 1 B. & B. 342. (e) 3 & 4 W. 4, c. 74; and see 8 & (a) Roberts v. Tunstall, 4 Hare, 9 Vict. o. 106. 257 ; see p. 267. [(/) 45 & 46 Vict. c. 75.] 672 Ch. XVIII. S. 3.] COISTIEMATION OF PTJECHASE. *498 (provided her power of anticipation be not restrained), has, to the extent of her interest in the property, all the capacity of a. feme sole Qg'). ^. The confirmation must be a solemn and deliberate act, not, for instance, fished out from loose expressions in a let- ter (A) ; and particularly As^here the original transaction was infected with fraud, the confirmation of it is so inconsistent with justice, and so likely to be accompanied with imposition, that the Court will watch it with the utmost strictness, and not allow it to stand but on the very clearest evidence Qi). y. There must be no suppressio veri or suggestio falsi, but the cestui que trust must be honestly made acquainted with all the material circumstances of the case (y). 5. It has been laid down that the confirming party must not be ignorant of the law, that is, he must be aware that the transaction is of such a character that he could impeach it in a Court of Equity (Ic) ; but it may be doubted whether this view is consistent * with the estabhshed doctrine, [*498] that mistake of law as distinguished from ndstake of fact forms no ground for relief (a). 6. The confirmation must be wholly distinct from and in- dependent of the original contract (6) — not a conveyance of the estate executed in pursuance of a covenant in the original deed for further assurance (e). (j) See infra. 15 ; Molony v. L'Estrange, 1 Beat. (A) Carpenter o. Herlot, 1 Eden, 413 ; Crowe v. Ballard, 2 Cox, 357 ; 338 ; and see Montmorenoy v. Deve- S. C. 1 Ves. jun. 220 ; S. C. 3 B. C. C. reux, 7 CI. & Fin. 188. 120 ; Watts v. Hyde, 2 Coll. 377 ; (0 Morse v. Koyal, 12 Ves. 373, Cockerell v. Cholineley, 1 E. & M. per Lord Erskine. ' 425 ; Murray v. Palmer, 2 Sch. & Lef . 0") See Murray v. Palmer, 2 Sch. 486; Roche v. O'Brien, 1 B. & B. 339; & Lef. 486 ; Baugh v. Price, 1 G. Ex parte James, 9 L. E. Ch. App. 609. Wils. 320 ; Morse u. Eoyal, 12 Ves. (a) Midland Great Western Rail- 373 ; Cole v. Gibson, 1 Ves. 507 ; way of Ireland Company v. Johnson, Eoche ». O'Brien, 1 B. & B. 338, and 6 H. L. Cas. 798 ; and see Stafford v. following pages ; Adams v. Clifton, 1 Stafford, 1 De G. & J. 202 ; Stone v. Euss. 297 ; Cockerell v. Cholmeley, 1 Godfrey, 5 De G. M. & G. 76 ; Re R. & M. 425 ; S, C. Taml. 444; Ches- Saxon Life Assurance Company, 2 J. terfield v. Janssen, 2 Ves. 146, 149, & H. 412. 152, 158 ; Chalmer v. Bradley, 1 J. & (6) See Wood v. Downes, 18 Ves. W. 51. 128; Morse v. Royal, 12 Ves. 373; (k) See Cann v. Cann, 1 P. W. Scott v. Davis, 4 M. & Cr. 91, 92; 727 ; Dunbar v. Tredennick, 2 B. & B. Roberts v. Tunstall, 4 Hare, 267. 317 ; Burney v, Macdonald, 15 Sim. (c) Roche v. O'Brien, 1 B. & B. 673 •498 COSTFIEMATION OF PURCHASE. [Ch. XVin. S. 3. 9. The confirmation must not be wrung from the cestui que trust by distress or terror (c?). f. Where the cestuis que trust are a class of persons, as creditors, the sanction of the major part will not be obliga- tory on the rest, but the confirmation to be complete, must fee the joint act of the whole body (e). 330, see 338 ; Wood v. Downes, 18 (e) Sir G. Colebrooke's case, cited Ves. 120, see 123; and see Tox v. Ex parte Hughes, 6 Ves. 622; Ex Maokreth, 2 B. C. C. 400. parte Lacey, Id. 628 ; the cases cited, (rf) See Eoche v. O'Brien, 1 B. & B. Id. 630, note (6). Whelpdale v. Cook- 330 ; Dunbar v. Tredennick, 2 B. & B. son, cited Campbell v. Walker, 5 Ves. 317 ; Crowe v. Ballard, 2 Cox, 257. 682, has been doubted by Lord Eldon, 6 Ves. 628. 674 * CHAPTER XIX. [*499] DUTIES OF TRUSTEES FOR PURCHASE. A TRUST for purchase is not so frequent as a trust for sale, and yet occurs often enough to merit a separate considerar tipn. 1. Trustees liable for consequences of breach of duty. — The general rule is that trustees for purchase, Mke all other trus- tees, are bound to discharge the duty prescribed, and failing to do so are answerable for the consequences ; as, if a speciiic fund be bequeathed to trustees upon trust to lay out on a purchase, and they neglect to call in the fund and lay it out, they are liable to compensate the eestuis que trust for the con- sequences (a). 2. May enter into a previous contract. — It is almost unnec- essary to premise, that trustees for purchase are not confined to the mere act of paying the purchase-money and taking a conveyance, but may in the ordinary course of business, enter into a previous written contract as a preliminary to the pur- chase. 3. Must see to value. — A material point to which trustees of this kind have to advert is the intrinsic palue of the estate proposed to be bought, and, to arrive at a sound conclusion on this head, they must employ a valuer of their own (J), and must not rely upon any valuation made on behalf of the vendor; "nothing," said Lord Romilly, "is more uncertain than a valuation, and the Court has constantly to observe upon the great discrepancy between valuations made by those persons who want to enhance, and by those persons who want to depreciate the value of the property. A man (o) Craven v. Craddock, W. N. to the trustees' solicitor, but that the 1868, p. 229. trustees were bound to exercise their [(i) In Fry v. Tapson, 28 Ch. D. own judgment as to the selection of 268 ; it was held that the appoint- «, valuer.] ment of the valuer could not be left 675 *500 DUTIES OF TRUSTEES FOB PUECHASE. [Ch. XIX. bond fide forms his opinion, but he looks at the case in a totally different way, when he knows on whose behalf he is acting ; " and in reference to the case of a loan by trustees on mortgagb (but which is not on principle distinguishable from a sale) he added, " a trustee cannot with propriety lend trust money on mortgage upon a valuation made by or on behalf of the mortgagor. If he does so, and the valuer has bond fide valued the property at double its value, the [*500] trustee must take * the consequences : he ought to have employed a valuer on his own behalf to see to it " (a). 4. There must be a good title. — Another question of im- portance is that of title. Every direction or authority to lay out trust money upon a purchase of real estate, carries with it the tacit condition that there shall be a good title. Whether, therefore, the trustees are proposing to purchase by private contract or by auction, they must take care not to bind them- selves by any agreement which shall preclude them from requiring a good marketable title. If the intended contract or conditions of sale contain anytl^ng of a special character, the trustees should lay them before their counsel for his opinion, whether the stipulations are consistent with their trust (J). Formerly a good marketable title was one traced back for a period of sixty years, but by 37 & 38 Vict. c. 78, s. 1, a forty years' title has now been substituted. [5. Conditions incorporated in the contract. — The 2d sec- tion of the same Act as to contracts for sale made after the 31st December 1874, and the 3d section of The Conveyanc- ing and Law of Property Act, 1881 (c) as to contracts for sale made after the 31st December 1881, incorporate in such contracts various conditions and stipulations (cZ) unless the same are expressly excluded, and by the 3d section of the (o) Ingle V. Partridge, S4. Beav. erty; and see Be Pearson, 51 L. T. 412-414 ; [but see Re Godfrey, 23 Ch. N. S. 692.] D. 483, where trustees were held not (6) See Eastern Counties Railway liable though they had not made an Company u. Hawkes, 6 H. L. Cas. independent valuation, and in all cases 363. the true test seems to be whether the [(c) 44 & 45 Vict. c. 41.] trustees have acted as prudent men [(d) For these conditions and stip- would in dealing with their own prop- ulations see ante, p. 43&-440.] 676 Ch. XIX.] DUTIES OF TRUSTEES FOE PUKCHASE. *501 former Act and the 66tli section of tlie latter Act trustees who are purchasers are authorised to buy without excluding the application of the Acts, and the 66th section of the latter Act expressly exonerates trustees and their solicitors from all liability for so doing, but nothing in that Act is to be taken to imply that the adoption in connection with or application to any contract or transaction of any further or other provis- ions, stipulations, or words is improper. 6. Official searches. — Sect. 2 of The Conveyancing Act, 1882 (e) provides for an official search being made on the request of a purchaser for entries of judgments. Crown debts, and similar matters, and provides that when a solicitor acting for trustees obtains an. office copy certificate of the result of the search under the section, the trustees shall not be answer- able for any loss that may arise from error in the certificate. 7. Yorkshire Register. — As to lands situate in Yorkshire, " The Yorkshire Registries Act, 1884," (/) provides for an official search of the register being * made at [*501] the request of any person, and further exempts any trustee, executor, or other person in a fiduciary position who has obtained a certificate of the result of an official search or a certified copy of any document enrolled in the register, or of any entry in the register from any loss, damage, or injury that may arise from any error in such certificate or copy. And where a deed or will has been enrolled at full length, the comparison of an abstract with the copy so enrolled is to be a sufficient discharge of the duty to compare the abstract with the original document.] 8. Deposit. — As a deposit is almost invariably required upon a sale by auction, and not uncommonly by private con- tract, it is conceived that trustees would bs justified upon signing the contract in paying a deposit in part discharge de bene esse of the purchase-money. But generally the charac- ter of trustee is pleaded as an excuse for not paying a de- posit, and is allowed. 9. Where purchase-money is in Court. — Where the money is in Court the trustee must enter into a conditional contract. [(e) 45 & 4C Vict. c. 39.] [(/) 47 & 48 Vict. c. 54, bs. 20, 23.] 677 *502 DUTIES OP TRUSTEES FOE PUECHASB. [Ch. XIX. that is, " subject to the approbation of the Court," and then apply by petition or summons at chambers for the Court's sanction, and the practice is to direct an inquiry whether the proposed purchase is fit and proper,' and if so, whether a good title can be made. " As long," said Sir G. Jessel, " as an estate is under the administration of the Court, the Cgurt does not allow a purchase or mortgage or any other invest- ment to be made, without seeing to its safety. The Court has to protect the property for aU claimants, and a reference is made to ascertain the propriety of the investment, that is to say, its propriety in all respects " (a). And the practice is not to inquire whether a good title can be made xuhject to the conditions, but whether a good title can be made abso- lutely, and if in the course of investigation an objection to the title arises, it is brought under the attention of the judge, who then exercises his discretion (the whole title being be- fore him), whether the objection can be waived with reason- able safety (J). " Much too great laxity," observed V. C. Wood, "has been gaining ground amongst the advisers of those who have to manage trust property, and there is a dis- position to rest satisfied with imperfect titles. I cannot ap- prove of such a practice, and cannot permit trustees to take a defective title, even though it may be in accordance with the contract " (c). • 10. How purchase -will affect the interest of cestuis que trust. — Trustees for purchase have to look not only [*502] to the adequacy of * the value and the goodness of the title, but also to the effect which the purchase wUl have upon the relative interests of the cestuis que trust. Purchase of houses. — Thus where the property is directed by the settlement to be held in trust for a person for life with remainders over, a trustee might no doubt pur- chase an estate with a suitable house upon it, but (with- out saying that he could not legally do so) he ought not to purchase a house merely. This is a property of a (a) Bethell v. Abraham, 17 L. R. (c) Ex parte The Goyernors of Eq. 27. Christ's Hospital, 2 H. & M. 168. (6) Ex parte The Governors of Christ's Hospital, 2 H. & M. 166. 678 Ch. XIX.] DUTIES OP TRUSTEES FOR PURCHASE. *502 wasting nature, and the tenant for life could not be com- pelled to preserve it against natural decay.' A power to invest on Crovemment Annuities would not justify the pur- chase of Long Annuities, and there is a similar difference between land and houses, the former being worth about thirty years purchase, and the latter much less, so that the tenant for life would be benefited at the expense of the remainderman (a). 11. Ground rents. — Even a purchase of ground rents of houses, though coming under the description in the trust defed of " hereditaments," is not free from objection, for the object would of course be to procure for the tenant for life a higher income, but this would be at the cost of the remain- derman in point of security. Should the houses be burnt down, and should the lessee have neglected to insure or the insurance monies not be forthcoming, the trustee might have nothing to show for the purchase but a worthless site, and , then the remainderman might seek to hold him responsible as for a fraudulent execution of his trust in equity, though the purchase was within the words of the trust according to the letter (5). However, it has been held that the purchase of freehold ground rents reserved upon building leases for ninety-nine years is justifiable under a power to purchase "hereditaments in fee-simple in possession " (c). 12. A timbered estate. — Again, if a sum be given to be laid out in the purchase of an estate to be settled on a person for life without impeachment of waste, with remainders over, trustees should not purchase a wood estate, as the tenant for life, on being put into possession, could by a fall of the timber possess hiinself of a great part of the capital or corpus of the fund (. Huth, 4 B. Mon. 423; Catlin v. Eagle Bank, 6 Conn. 233; McCallie v. Walton, 37 Ga. 611 ; Dana v. Bank of U. S. 5 Watts & S.523 ; but see Loring v. U. S. Co. 30 Barb. 644 ; Beans v. Bullitt, 57 Pa. St. 221. No particular form of assign- ment is required unless there is a statutory requirement ; Musaey v. Noyes, 26 Vt. 462; United States v. Bank of U. S. 8 Rob. (La.) 262 ; Bishop v. Harts' Trustees, 28 Vt. 71 ; Gordon v. Green, 10 Ga. 534 ; Page i;. Weymouth, 47 Me. 238; Wallace v. Wainwright, 87 Pa. St. 263. In some states the assent of creditors to the trust deed is not required, it being presumed ; Fellows o. Greenleaf, 43 N. H. 421; Gibson v. Rees, 50 111. 383; Stimpson v. Fries, 2 Jones Eq. 156; Tennant v. Stoney, 1 Rich. Eq. 222 ; 44 Am. Dec. 213; while in others the creditors must either be parties to the assignment or at leiist assent to it ; Widgery v. Haskell, 5 Mass. 144 ; Pierce v. O'Brien, 129 Mass. 688 Cii. XX. S. 1.] VALIDITY OF TETJST. *509 a nullity, that the executor is bound, at all events, to provide for the payment of debts out of the assets in a due course 314; May v. Wannemacher, 111 Mass. 202; and that too within a certain time ; Whitney v. Kelley, 67 Me. 377 ; Carr v. Dole, 17 Me. 358. If such an assignment is intended to delay or hinder creditors it will be void; Bodley v. Goodrich, 7 How. 277 ; Jessup i: Hulse, 29 Barb. 539 ; Knight v. Packer, 1 Beasley's Ch. 214; 72 Am. Dec. 388; Baldwin v. Peet, 22 Tex. 708; 75 Am. Dec. 806. The debtor must cease to have any control over the property ; Planck V. Schermerhorn, 3 Barb. Ch. 644; Hardcastle v. Fisher, 24 Mo. 70; Pope V. Brandon, 2 Stew. 401 ; 20 Am. Dec. 49 ; Reed v. Emery, 8 Paige, 417 ; Litchfield v. White, 3 Sandf. 547. Fraud vitiates an assignment, and that tnay be evidenced in a variety of ways ; Bennett v. Union, 5 Humph. 612 ; Mitchell v. Beal, 8 Yerg. 142 ; Hindman v. Dill, 11 Ala. 689 ; Sheldon V. Dodge, 4 Denio, 218; Meachara v. Sternes, 9 Paige, 398; D'lvernois v. Leavitt,*23 Barb. 63. A power to sell other than for cash may or may not affect the trust; Pierce v. Brewster, 32 111. 268; Booth v. McNair, 14 Mich. 19; Page v. Olcott, 28 Vt. 465; Neally w. Ambrose, 21 Pick. 185; Ely v. Hair, 16 B. Mon. 230 ; a power to sell does give power to bind estate by a covenant of warranty; Welsh v. Davis, 3 S. C. 110; likewise possession of the trust property by the settlor ; Foster v. Saco Co. 12 Pick. 451 ; Coburn v. Picker- ing, 3 N. H. 415 ; 14 Am. Dec. 375 ; Putnam v. Osgood, 52 N. H. 148 ; Strong V. Carrier, 17 Conn. 319; Eogers v. Vail, 16 Vt. 329; Brooks v. Marbury, 11 Wheat. 82 ; but see Lockhart v. Wyatt, 10 Ala. 231 ; 44 Am. Dec. 481 ; like- wise of a reservation of a surplus to the settlor ; Dana u. Lull, 17 Vt. 390 ; Doremus v. Lewis, 8 Barb. 124 ; Austin v. Johnson, 7 Humph. 191 ; Partridge V. Messer, 14 Gray, 180 ; Case v. Gerrish, 15 Pick. 50. The creditors must not be required to cancel their claims until a settlement is made ; Grover o. Wakeman, 11 Wend. 187; Doe v. Scribner, 41 Me. 277; Hind v. Silsby, 10 N. H. 108; Brown v. Lyon, 17 Ala. 659; but see Halsey v. Whitney, 4 Mason, 207; Nostrand v. Atwood, 19 Pick. 281; Skipwith v. Cunningham, 8 Leigh, 272. An assignment containing trust for assignor is void in some states ; Pettibone v. Stevens, 15 Conn. 19; 38 Am. Dec. 57. The difference between a sale and an assignment is that in case of a sale a consideration passes, if an assignment, it does not ; Euhl v. Phillips, 48 N. Y. 125 ; 8 Am. Rep. 522. The beneficial ownership of property, assigned for creditors, is in the credi- tors for whom trust is created, and in those holding collatera,l, as well as in those who do not; Patten's App. 45 Pa. St. 151; 84 Am. Dec. 479. Trustee may use discretion in selling and need not always sell immediately for cash ; Inloes V. American Ex. Bank, 11 Md. 173; 69 Am. Dec. 190; see McCleery v. Allen, 7 Neb. 21 ; 29 Am. Rep. 377 ; a reservation to debtor not fraudulent, and sale may be either public or private ; Hoffman v. Mackall, 5 Ohio St. 124 ; 64 Am. Dec. 637. Property should not be kept more than a year ; Grimsley v. Hooker, 3 Jones Eq. 4; 67 Am. Dec. 227. Trustee may be allowed to cultivate land till sold ; Dubose v. Dubose, 7 Ala. 235 ; 42 Am. Dec. 588. If the assignment has been executed, delivered, and assented to, if assent is necessary, it cannot then be revoked; Petrikin v. Davis, 1 Morris, 296; Robertson v. Sublett, 6 Humph. 313 ; Ingram v. Kirkpalrick, 6 Ired. Eq. 463 ; 51 Am. Dec. 428 ; Scull v. Reeves, 2 Green's Ch. 84 ; 29 Am. Dec. 694 ; a debtor cannot make an assignment providing for the settlement of his estate for his own use ; Mackason's App. 42 Pa. St. 380 ; 82 Am. Dec. 517. The 689 *509 VALIDITY OF TEX7ST [Ch. XX. S. 1. of administration, and would not be justified in the breach of this legal obligation by pleading any expression of inten- property rests in an assignee immediately on acceptance of the trust by lilra, and he cannot then divest himself of it by simply refusing to carry out the trust ; Seal v. Duffy, 4 Pa. St. 274 ; if trustee is not knowing to the instru- ment, his assent will be presumed; Ward v. Lewis, 4 Pick. 518; PiiJgree v. Comstoek, 18 Pick. 46; Shepherd v. M'Evers, 4 Johns. Ch. 136; Merrills ». Swift, 18 Conn. 257. An assignment has been held good as against creditors, where assignor is out of state, from the time of his placing it in the post . ofSce; Johnson u. Sharp, 31 Ohio St. 611. Liens may take priority of the actual acceptance by the trustee ; Crosby v. Hillyer, 24 Wend. 280. If there is sufficient reason, one creditor may have an assignment nullified, and some- times obtains a preference ; Wakeman v. Grover, 4 Paige, 24 ; Burrall i: Les- lie, 6 Paige, 445 ; in such case creditors will be paid pari passu ; Austin v. Bell, 20 Johns. 442 ; M'Meekin v. Edmonds, 1 Hill Eq. 293. * In enforcing a trust of this kind, the nature of the instrument will deter- mine who are necessary parties; Haughton v. Davis, 23 Me. 28; Kerr v. Blodgett, 48 N. Y. 62 ;. Hobart v. Andrews, 21 Pick. 532. One may be credi- tor, cestui que trust, and trustee, but can receive no advantage over other creditors, because of it; Harrison v. Mock, 10 Ala. 185; Prevost v. Gratz, Pet. C. C. 373 ; Miles i>. Bacon, 4 J. J. Marsh. 468 ; Jewett v. Woodward, 1 Edw. Ch. 195; Pratt v. Adams, 7 Paige, 615. An assignment to pay debts, carries with it by implication, a power to sell the assigned property; Gould o. Lamb, 11 Met. 84; Goodrich v. Proctor, 1 Gray, 567. The purchaser need not look after the application of the purohase-money ; Gardner v. Gardner, 3 Mason, 178 ; Hauser v. Shbre, 5 Ired. Eq. 357 ; Wil- liams V. Otey, 8 Humph. 568; Andrews v. Sharhawk, 13 Pick. 398; unless the trust is confined to special debts ; Cadbury v. Duval, 10 Barr, 267 ; Duffy v. Calvert, 6 Gill, 487. The same rules apply to partnerships, and the general principles relating to firm and' individual debts; Murrill v. Neill, 8 How, 414; Andress «. Miller, 15 Pa. St. 318; Mills v. Argall, 6 Paige, 577; Jackson v. Cornell, 1 Sandf. Ch. 348. A direction to pay debts includes only such as could be legally collected from the estate ; Rogers v. Rogers, 3 Wend. 503. Only debts bearing interest, will have it added to the principal; Bryant v. Russell, 23 Pick. 508. An assignment or trust for the benefit of creditors does not affect thg Statute of Limitations ; Christy v. Flemington, 10 Barr, 129; Read v. Johnson 1 R. I. 81. A creditor need not have a judgment at law to maintain a bill against t ;trustee, to prevent him from abusing the trust and appropriating the trusi funds to himself; Miller i,. Davidson, 3 Gil. 518; 44 Am. Dec. 715. Thu icourt will see that such a trust does not fail for want of a trustee, even it tin, assignee named renounces or relinquishes it; Scull v. Reeves, 2 Green's Ch. .131; 29 Am. Dec. 703; the ignorance of the assignor will not be cause for setting aside the assignment ; lb. ; assignees in trust for creditors are not bona fide purchasers for value, and will not be protected as they would be ; Clark V. Flint, 22 Pick. 231 ; 33 Am. Dec. 733 ; in case of suit assignee brings action in his own name; Buck ». Swazey, 35 Me. 41; 56 Am. Dec. 681. Creditor to take advantage of fraud in deed of trust, should get judgment 690 Ch. XX. S. 1.] FOR PAYMENT OF DEBTS. *509 tion on the part of the testator. It is only as respects any surplus personal estate after payment of debts that the ex- ecutor ought to regulate his administration by the directions of the will. A devise, however, of real- estate for payment of debts is in all cases unimpeachable, for the statutes that have avoided devises as against specialty creditors (a), and now as against simple contract creditors (ft), have expressly excepted devises for payment of debts. 3. Trust created by act inter vivos attended ■with fraud. ' — As to trusts crea;ted by act inter vivos^ a trust for payment of debts vfill in all eases be void, if vitiated by actual fraud, as if the debtor by an understanding between him and his trustees be left in possession of the estate so as to obtain a fictitious credit (e). (o) 11 G. 4 & 1 W. 4, c. 47. Skinner, "W. Bl. 996 ; and see Worse- (6) 3 & 4 W. 4, c. 104. ley v. De Mattos, 1 Burr. 467 ; Stone (c) Twyne's case, 3 Kep. 80 a ; v. Grantham, 2 Buls. 218 ; Pickstock Wilson V. Day, 2 Burr. 827 ; Hunger- v. Lyster, 3 M. & S. 371 ; Dutton ». ford V. Earle, 2 Vern. 261 ; Tarback Morrison, 17 Ves. 197. ». Marbury, 2 Vern. 510; Law v. and execution; Green k. Kornegay, 4 Jones Law, 66; 67 Am. Dec. 261. A bona fide trust deed to secure future advances may be valid; Wilson v. Russell, 13 Md. 495; 71 Am. Dec. 645. Misconduct of trustee in not selling trust property cannot affect the creditors, or impair their rights; Carter ». Neal, 24 Ga. 346; 71 Am. Dec. 136. An assignee of the trustee will be com- pelled to execute the original trust at the instance of the cestui que trust ; Pierce v. McKeehan, 3 Pa. St. 136 ; 45 Am. Dec. 635. A vendor selling land and not receiving all the purchase-money will bfecome a trustee, and if he is insolvent at any tiqie his interest therein passes to his assignee ; Swepson v. Rouse, 65 N. C. 34 ; 6 Am. Rep. 735. A trust in favor of an insolvent may be enforced in equity by the beneficiary against the trustee ; Baker v. Evans, Winston's Eq. 109 ; 86 Am. Dec. 456 ; Ferguson v. Haas, 64 N. C. 778. Any balance remaining after the payment of debts goes to the assignor; Steevens v. Earles, 25 Mich. 41; Hall v. Denison, 17 Vt. 311. Any hostile creditors may resort to a trustee process or its equivalent ; Hastings v. Bald- win, 17 Mass. 558 ; Todd v. Bucknam, 2 Fairf . 41 . A deed absolute on its face may create a trust; 'Campbell v. Dearborn, 109 Mass. 130. Corpora- tions may receive deeds of trust ; Wright v. Bundy, 11 Met. 398 ; Eogarty V. Sawyer, 23 Cal. 570 ; Wilson v. Troup, 7 Johns. Ch. 25 ; Smith v. Doe, 26 Miss. 291. Acceptance of trust may be shown by parol; Field v. Arrowsmith, 3 Humph. 442 ; Brevard v. Neely, 2 Sneed, 164. A trust to secure bondsmen is good; Roden v. Jaco, 17 Ala. 344. Statutes regulate powers, but do not create them; see Richmond v. Hughes, 9 R. I. 228; Elliott «. Wood, 45 N. Y. 71. 691 *510 VALIDITY OP TRUST [Ch. XX. S. 1. r*510] * 4. Person not a trader might create trust for payment of debts. — Under the old bankruptcy laws, a broad distinction was made between non-traders and traders. If the settlor was not a trader he was not amenable to the bankrupt laws, and therefore was at perfect liberty to dispose either of the whole (a) or of part of his property (S), for payment of all (c), or ani/ number. oi. his creditors (. Lyster, 3 M. & S. 371 ; M. & S. 371 ; Leonard v. Baker, 1 M. Leonard v. Baker, 1 M. & S. 251. & S. 251 ; see Meux v. Howell, 4 East, (rf) Estwick v. Caillaud, 6 T. R. 1. As to what property will pass by 420 ; Nunn v. Wiismore, 8 T. R. 528, general words in a creditors' deed and per Lord Kenyon ; Goss v. Neale, 5 whether the trustees can disclaim any Taunt. 19 ; Wood v. Dixie, 7 Q. B. part which is a damnosa possessio, see 892. How u. Kennett, 3 Ad. & EU. 659 ; (e) Perpetuated 29 Eliz. c. 5. Carter v. Warne, Moo. & Ma. 479 ; (/) Meux v. Howell, 4 East, 9. West V. Steward, 14 M. & W. 47. Ig) Estwick v. Caillaud, 5 T. R. (6) Estwick V. Caillaud, 5 T. R. 424 ; [Alton v. Harrison, i L. R. Ch. 420 ; GosB v. Neale, 5 Taunt. 19 ; see App. 622 ; Boldero v. London and Meux V. Howell, 4 Bast, 1. Westminster Discount Company, 5 Ex. D. 47.] 692 Ch. XX. S. 1.] FOK PAYMENT OF DEBTS. •^511 which satisfaction is to be made to his creditors. But the feoffment, judgment, &c., must be devised of malice, fraud, or the like, to bring it within the statute : .the Act was meant to prevent deeds, &c., fraudulent in their concoction, and not. merely such as in their effect might delay or hinder other creditors "(^)' 5. Fraudulent conveyance. — If the settlor was a trader, then by 12 & 13 Vict. c. 106, s. 67 * (being a [*511] re-enactment of the previous statutes), it was de- clared that "a,nj fraudulent conveyance, with intent to defeat or dtlay creditors, should be deemed an act of bankruptcy; " and it was adjudged fraudulent within the meaning of this clause, if a person assigned the whole of his property (a) (whether expressed to be the whole or not in the deed (S)), or all but a colourable part (c), or all the stock, without which he could not carry on his trade (cZ). 6. Grounds of the rule. — It was immaterial whether the trust was for any particular creditor (e), or a certain number (A) Meux B. Howell, 4 East, 13, 14 ; [and see Spencer v. Slater, 4 Q. B. D. 13.] (a) Nunn v. Wilsmore, 8 T. R. 528, per Lord Kenyon ; Alderson v. Tem- ple, 4 Burr. 2240, per Lord Mansfield ; Hooper v. Smith, 1 W. Bl. 441, per eundem ; Wilson v. Day, 2 Burr. 827 ; Rust V. Cooper, Cowp. 632, per Lord Mansfield ; Leake v. Young, 5 Ell. & Bl. 955 ; Bowker v. Burdekin, 12 M. & W. 128 ; Johnson v. Fesenmeyer, 25 Beav. 88 ; Smith v. Cannan, 2 Ell. & Bl. 35. But see the recent case of Ex parte Gass, 2 I. R. Eq. 284, in which it was held (though the decision rested on other grounds), that the question of fraud is one of fact, and therefore if under the peculiar cir- cumstances the Court is satisfied that the conveyance of the bankrupt's whole property was bond fide, and with a view to pay his creditors rather than to defeat them the deed will be sup- ported. (6) See Button v. Morrison, 17 Ves. 193 ; Lindon v. Sharp, 6 Man. & Gr. 905. But the assignment of all his property at a certain place is not an act of bankruptcy, unless it be proved that he liad no other property ; Chase «. Goble, 2 Man. & G. 930. (c) Law V. Skinner, 2 "W. Bl. 996 ; Hooper ?;. Smith, 1 W. Bl. 442, per Lord Mansfield; Wilson v. Day, 2 Burr. 832, per eundem; Alderson v. Temple, 4 Burr. 2240, per eundem ; Estwick u. Caillaud, 5 T. R. 424, per Lord Kenyon ; Gayner's case, cited 1 Burr. 477 ; Compton v. Bedford, 1 W. Bl. 368; Johnson v. Fesenmeyer, 25 Beav. 88 ; Ex parte Foxley, 3 L. R. Ch. App. 515. (cf) Hooper v. Smith, 1 W. Bl. 442 ; Law V. Skinner, 2 W. Bl. 996 ; Siebert V. Spooner, 1 M. & W. 714 ; Porter v. Walker, 1 Man. &. Gr. 686; Ex parte Bailey, 3 De G. M. & G. 534; Ex parte Taylor, 5 De G. M. & G. 392 ; Lacon v. Liffen, 4 GifE. 75 ; and see Ex parte Hawker, 7 L. R. Ch. App. 214. (e) Wilson u. Day, 2 Burr. 827 ; Hassell v. Simpson, 1 B. C. C. 99; S. 693 *512 VALIDITY OB^ TRUST [Ch. XX. S. 1. of them (/), or all the creditors at large (£), for by the assignment of his whole substance the bankrupt became utterly insolvent ; and if the trust was for one or some only of his creditors, it was a fraud upon the rest, and if it was for all the creditors,Jt was a fraud upon the spirit of the bankruptcy laws, which require a bankrupt's estate to be under the management of certain commissioners and assign- ees appointed as prescribed by the legislature — not of per- sons nominated by the debtor himself, and so more likely to further his views than promote the interest of the credit- ors (K). [*512] * 7. Where deed could be supported. — But in order to avoid the deed, there must have been in the exist- ence a debt due at the time of its execution (a) ; and the assignment, though void as against creditors and the assignees in bankruptcy (J), was good as between the parties them- selves (c). And assignments for valuable consideration at the full price, where the purchaser was not party or privy to the fraudulent designs of the vendor (cZ), or for less than the full price, if the transaction was bond fide (e), and mort' gages made bond fide for fresh advances (/), or to secure payment of old debts and further advances combined (. Stewart, 1 & Laws. 616. 1 Trustees for the payment of debts. — In America all the property of a deceased person, whether real or personal, is liable for his debts, and the statutes of the various states make special provision for debts ; generally, however, the personal property is primarily liable. Creditors of an estate are 702 Ch. XX. S. 3.] TRUSTEES FOR PAYMENT OP DEBTS. *519 as regards priority ; and, Thirdly. What interest is to be allowed. First. What debts are within the scope of the trust. ,1. Debts to be paid are prima facie those at date of deed or death of testator. — If the trust be created by deed, then, unless a contrary intention be expressed, the debts only at the date of the deed will be intended (a) ; but if the provis- ion be contained in a will, the direction will include all debts ' at the testator's death ; unless he specially restrict his mean- ing to the debts at the making of his will (6). 2. " Debts affecting the estate." — Where a settlor by deed conveyed all his real and personal property upon trust to pay "all debts then owing by him, and which affected the estates thereby conveyed;" the trust, as the , settlor had no judgment debts at the time, was extended to hand debts, but not to simple contract debts (c). But this distinction was taken upon a deed dated before the Acts making real estates assets for payment of simple contract debts. (a) Purefoy v. Puref oy, 1 Vern. 28. (c) Douglas v. Allen, 1 Conn. & (6) Loddington v. Kime, 3 Lev. 433. Laws. 367 ; 2 Dru. & War. -213. not cestuls que trust. If creditors acquiesce in a trust in a will, so directing, the executors will become trustees to settle the estate ; Bank of TJ. S. v. Beverly, 1 How. 134; Gardner v. Gardner, 3 Mason, 178. Payment from personalty shall be first made, and this includes the cancelling of any mort- gages existing on the realty ; Hewes v. Dehon, 3 Gray, 205; Seaver v. Lewis, 14 Mass. 83 ; Adams v. Brackett, 6 Met. 280 ; Schermerhorn v. Barhydt, 9 Paige, 29 ; Hancock v. Minot, 8 Pick. 29 ; Marsh v. Marsh, 10 B. Mon. 360 ; Leavitt v. Wooster, 14 N. H. 551. If, however, real estate is purchased sub- ject to a mortgage, it will not be paid off unless a clear intention appears ; Cumberland v. Codrington, 3 Johns. Ch. 229 ; Andrews v. Bishop, 5 Allen,t490. If personal property is iijsuflBcient any real estate specially indicated by the testator for the payment of debts, will come next, as there is a difference between a general and a special charge for debts ; Martin v. Fry, 17 Serg. & R. 426. Then came lands naturally going to heirs, no indication having been expressed regarding its disposition; Livingston v. Livingston, 3 Johns. Ch. 148 ; Commonwealth v. Shelby, 13 Serg. & E. 348 ; Robards v. Wortham, 2 Dev. Eq. 173. Finally, if necessary, debts will be paid out of specifically devised realty ; Ruston t'. Ruston, 2 Yeates, 54 ; Chase v. Lockerman, 11 G. & J. 186. No deviation from this will be made unless it is the manifest, if not the express, intention of the testator; Plimpton v. Fuller, 11 Allen, 140; Livingston v. Newkirk, 3 Johns. Ch. 312 ; Stroud v. Bamett, 3 Dana, 394 ; Blaney v. Blaney 1 Cush. 107. 703 *520 TRUSTEES FOR PAYMENT OF DEBTS. [Ch. XX. S. 3. Father providing for debts of son. — In another case a testa- tor directed his trustees to apply lOOOZ. in releasing his son from his liabilities, should the testator not hare done so in his lifetime. The son was an uncertificated bankrupt, and the Court considering that debts subsequently to the testa- tor's death were not contemplated, discharged the debts up to that period out of the lOOOZ., and gave the surplus to the testator's residuary legatee (c?). 3. Debts barred by the Statute of Limitations. — A direc- tion for payment of debts will not revive a debt barred by the Statute of Limitations (e), though the trustee or ex- ecutor may have advertised for all creditors to come in and ' prove their debts (/) ; and, if a debt might with due diligence have been established, but there has been laches which under ordinary circumstances would be a bar [*520] to relief, the mere fact of the * creation and exist- ence of a trust for payment of debts will not justify the laches and enable the claimant to obtain relief (a). But a will may be so specially worded as to dreate a trust for creditors generally, notwithstanding any bar from the Stat- ute of Limitations, for the debts still subsist though the rem- edy is ,gone (6) ; and if there be a debt in fact not barred at the date of the deed, or at the death of the testator, the stat- ute will not run afterwards (c) ; for it is not to be inferred that a man abandons his debt because he does not enforce payment at law when he has a trustee to pay him (ti). Be- sides, unless delayed of necessity, the trustee ought to discharge the debt at once, and the universal rule is, that the cestui que trust ought not to suffer for the laches of the (rf) Re Landon's Will, W. N. 1871, (6) Williamson v. Taylor, 3 Y. & p. 240. C. 208. (e) Burke v. Jones, 2 V. & B. 275, (c) Hughes v. Wynne, T. & R. where the previous cases are collected ; 307 ; Crallan o. Oulton, 3 Beav. 1 ; Hargreaves v. Michell, 6 Mad. 326; Hargreaves v. Michell, ,6 Mad. 326; O'Connor v. Haslam, 5 H. L. Gas. 170. Executors of Fergus v. Gore, 1 Sch. (/) Jones V. Scott, 1 B. & M. 255 ; & Lef . 107 ; and see Mors v. Lang- 4 CI. & Fin. 382 ; (overruling An- hkm, cited Burke ». Jones, 2 V. & B. drews v. Brown, Pr. Ch. 385); and 286; O'Connor v. Haslam, 5 H. L. see O'Connor v. Haslam, 5 H. L. Cap. Cas. 178. 177. (d) Hughes v. Wynne, T. & E. (a) Harcourt v. White, 28 Beav. 309, per Cur. 303. 704 Ch. XX.' S. 3.] TRUSTEES EOE PAYMENT OP DEBTS. *521 trustee (e). If a testator create a trust for payment of the debts of another person deceased, the debts to be paid are those which were not barred by the Statute of Limitations at the death of the person so deceased (/). 4. Legacy duty. — If g, person who has been a bankrupt direct payment of twenty shillings in the pound upon the debts proved in the bankruptcy, the creditors are legatees, and pay legacy duty, but there is wo lapse though a creditor die in the testator's lifetime (^g). 5. statute of Limitations. — Where a testatrix had devised an eltate to trustees upon trust to sell and pay debts, but no part of the produce of sale had been set apart for that pur- pose, the right of the creditor was held by the late V. C. of England not to be within the exception of the 25th section of the Statute of Limitations, 3 & 4 W. 4, c. 27, but ,to fall under the 40th section ; but that inasmuch as the debt had been acknowledged by the surviving trustee, the case was taken out of the statute (A). However, the opinion of the Vice Chancellor that the case was not within the 25th sec- tion would not, it is thought, now prevail, but the right of the creditor would subsist until adverse possession had run against his trustee («'). 6. But not as regards a testator's personalty. — The rule that the creation of a trust keeps alive a debt not barred at the testator's death does not apply to a trust de- clared of * personal estate by will, for the person- [*521] alty vests in the executor upon trust for the credi- tors by act of law, so that the words of the will are nugatory (a). Nor does a devise of real estate upon trust to pay debts prevent the operation of the Statute of Limi- (e) See Executors of Fergus v. (t) See infra as to the Statutes of Gore, 1 Sch. & Lef. 110. Limitations. (/) O'Connor v. Haslam, 5 H. L. (a) Jones v. Scott, 1 R. & M. 255; Cas. 170. reversed 4 CI. & Fin. 382 ; Freake v. (g) Turner v. Martin, 7 De G. M. Cranefeldt, 3 M. & Cr. 499; Evans v. & G. 429 ; Ee Sowerby's Trust, 2 K. Tweedy, 1 Beav. 55 ; Crallan v. Oul- & J. 620; Philips o. Philips, 3 Hare, ton, 3 Beav. 1 ; Re Hepburn, 14 Q. B. 281. D. 394. N. B. In Moore v. Petchell, (h) Lord St. John v. Boughton, 9 22 Beav. 172, the doctrine established Sim. 219. by Jones v. Scott, appears to have escaped notice. 705 *521 TRUSTEES FOR PAYMENT OF DEBTS. [Ch.XX. S. 3. tations when the testator leaves no real estate to support the trust.^ 7. Debt contracted by infant for necessaries. — The terms of the trust will extend to the replayment of a sum of money borrowed by the settlor when an infant for the purchase of necessaries (6). , 8. Case of a mortgagee with covenant for payment. — Shall a mortgagee who has a covenant for payment of his debt be allowed to prove and receive a dividend upon the whole amount of his debt pari passu with the other creditors, or shall he prove only for the excess of the debt beyond the value of the security, or what rule is to govern the case ? In bankruptcy, the mortgagee proves only for the excess of the mortgage debt over the value of the security, so that he must first dispose of the estate (with the concurrence, if he has no power of sale, of the trustee in bankruptcy), [or assess the value of it,] and then prove for the difference. In the administration of assets in Courts of equity, a mort- gagee [was until recently] allowed to prove for his whole debt without being put on terms as to his security (c) ; [but by the Judicature Act, 1875 (d), the rule in equity has in insolvent estates been assimilated to that in bankruptcy.] The trust deed usually provides for the case of personS hav- ing specific liens, and ingrafts the principle established in bankruptcy. If there be no such clause, and if the deed provide that the creditor shall release his debt and all secu- rities for the same, the mortgagee, by executing the deed, binds himself to the other creditors, notwithstanding any (i) Marlow v. Pitfield, 1 P. W. Vict. c. 77, s. 10, the rule in bank- 568. ruptcy has been adopted both in (c) See Greenwood v. Taylor, 1 administrations of insolvent estates K. & M. 185; Mason v. Bogg, 2 M. in Courts of Equity and in liquida- & Cr. 433; Rome v. Young, 4 Y. & tions under the Companies' Acts, C. 204 ; Hanman v. Riley, 9 Hare, 1862 & 1867 of joint stock companies. App. xli. ; Ex parte Middleton, 3 De By the Bankruptcy Act, 1883, s. 125, G. J. & Sm. 201. The rule in equity the estate of a person dying insolvent was also held to apply in liquidations can now be administered in bank- et joint stock companies under the ruptcy.] Companies' Act, 1862^ Kellock's case, [((£) 38 & 39 Vict. c. 77, B. 10.] 3 L. E. Ch, App. 769. [By 38, & 39 , 1 Be Hepburn, 14 Q. B. D. 394. 706 Ch. XX. S. 3.] TRUSTEES FOR PAYMENT OP DEBTS. *522 private arrangement with the debtor to the contrary, that he wUl not take advantage of his specific Jien, but will bring it into the common stock and prove for his whole- debt, and accept a dividend pari passu with the rest (e). " The moment," observed Lord Lyndhurst, "a creditor releases his debt, which he does by executing a deed of * this kind, there is, of course, a,p. end of any lien he [*522] may have for it " (a). But though the word " re- lease " be used in the deed, it will not necessarily operate as an absolute and unconditional release, if the whole con- tenffe of the instrument, when taken together, show that such was not the intention (J). 9. Trust for creditors who come in -within certain time. — It was held in Dunch v. Kent (e) that where there is a trust for payment of such creditors as shall come in within a t/ear, a creditor who delays beyond the year is not therefore pre- cluded from taking advantage of the trust ; and in Raworth V. Parker (ci), V. C. Wood, after observing that there was no modem authority in which relief, had been given after the time fixed for the execution of the deed had expired, added, that if it were to be held that creditors are not admissible after the prescribed period, Dunch v. Kent must be overruled. And in a more recent case, where the trust was for the benefit of creditors who should execute or accede within three months, the Vice Chancellor held, and the decision was affirmed by the Lord Chancellor on appeal, that a creditor who had not acceded within the prescribed time might claim the benefit of the trust (e). ; (e) CuUingworth v. Lloyd, 2 Beav. the authority of Dunch v. Kent, but 385 ; Buck v. Shippam, 1 Ph. 694 ; upon general reasoning, and thought 14 Sim. 239. that the decision in that case might (a) Buck V. Shippam, 1 Ph. 697. he accounted for on special grounds ; (6) Squire v. Ford, 9 Hare, 47. but L. C. in aflBrming the judgment (c) 1 Tern. 260. of the V. C. said that he considered (d) 2 K. & J. 170, 171 ; and see the doctrine of the Court since Dunch Collins V. Eeece, 1 Coll. 675 ; Jolly v. v. K^ent, to have been that a creditor Wallis, 3 Esp. 228; Spottiswoode v. might come in after the time pre- Stockdnle, G. Coop. 102; Johnson v. scribed, and that the time was not of Kershaw, 1 De G. & Sm-. 260. the essence of the deed, and that, in (e) Whitmore v. Turquand, 1 J. his opinion, the view originally taken & H. 444 ; 8 De G. F. &,. J. 107. V. in Raworth v. Parker, by V. C. Wood C. Wood rested his judgment, not on of Dunch v. Kent, was the correct one. 707 *523 TETJSTEES FOE PAYMENT OP DEBTS. [Ch. XX. S. 3. 10. Adoptioa of deeds. — It is not necessary that a creditor, to entitle himself to the benefit of the deed, should execute it, but" it will be sufficient if he assent to it, or acquiesce in it, or act upon its provisions, and comply with its terms (/). But the creditor must do some act to testify his acceptance of the deed, and not merely stand by and remain passive (^). 11. Disputed debt. — If the trustees permit a person to sign the deed as creditor in a certain sum specified in the schedule, they cannot afterwards contest the debt (Ji). But where there has been fraud, forgery, or perjury by the creditor, the trustees can apply to the Court to have the execution by the creditor set aside (i). [*523] * 12. Trustee cannot arbitrarily admit a creditor who has repudiated the deed. — • A creditor who repudiates the deed by his acts, as by suing the debtor contrary to the provisions of the deed, will not be allowed afterwards (more particularly after a long lapse of time) to retrace his steps and take the benefit of the deed; and though the trustees should admit him to sign the deed, the other creditors will not be bound by the act of the trustees (a). 13. Discretion in trustees to admit creditors' claims. — A discretion is sometimes given to the trustees to admit or exclude such creditors as they shall think proper. The Court will endeavour, if possible, to withdraw the rights of the creditors from the caprice of the trustees (6) ; but if the settlement clearly give such a discretionary power, and the trustees are willing to exercise it, and no fraXid be foimd, the Court cannot interfere to compel the admission of any particular creditor (c). 14. ReUef in equity. — If the trustees have power of enlarging the time and advertise to that effect, but do not (/) Field V. Lord Sonoughmore, (a) Field v. Donoughmore, 1 Dru. 1 Dru. & War. 227 ; Biron v. Mount, & War. 227 ; reversing the decision 24 Beav. 642 ; Spottiswoode v. Stock- of Lord Plunket, 2 Dru. & Walsh, dale, G. Coop. 102 ; Jolly v. Wallis, 630 ; Re Meredith, 29 Ch. D. 745. 3 Esp. 228. (6) See Nunn ». Wilsmore, 8 T. (g) Biron v. Mount, 24 Beav. 642. E. 521 ; Cosser v. Eadford, 1 De G. (A) Lancaster v. Elce, 31 Beav. J. & S. 585. 325- (c) Wain t,. Egmont, 3 M. & K. (i) Lancaster «. Elce, 31 Beav. 445; Drever v. Mawdesley, 16 Sim. 828, per M. E. 511. 708 Ch. XX. S. 3.] TEUSTEES FOB PAYMENT OF DEBTS. *524 exercise the power, and so exclude a person who desires to come in, but could not do so before the day named in the deed, the creditor will be relieved in equity (c?). 15. Resumption by trustees of possession after parting -with it. — If there be trustees for payment of debts and legacies, and subject thereto upon trust for A. for life with remainder over, and the Court has- taken an account of debts and lega- cies, and declared A. entitled to the possession, who is put into possession accordingly, it is not competent for the trus- tees afterwatds to make an admission of some further debt, and to resume the possession in order to discharge it (e). 16. Secret agreements. — If the debtor agree behind the back of the general creditors, to give an extra benefit to one particular creditor, such agreement is a fraud upon the gen- eral creditors, and illegal and void (/). Secondly. As to the order of payment. 1. Creditors paid before legatees. — Where the trust is created by will, the direction generally is for payment of "debts and legacies." As regards the administration of assets, creditors tkke precedence of legatees; but Jbere, as both take under the will, and the testator has made no distinction, it seems upon strict principle, as was formerly held, that creditors * and legatees ought to [*524] be T^ziA pari passu («). However, there can be little doubt that the testator, although he may not have explicitly declared it, meant the creditors to precede, arid the Courts accordingly (rather straining a point, that a man might not " sin in his grave ") have now indisputably established that creditors shall have the priority (6). (d) Raworth o. Parker, 2 K. & J. (6) Greaves v. Powell, 2 Vern. 163. See ante, p. 522. 248; 302, Eaithby's ed.; Bradgate v. (e) Underwood v. Hatton, 5 Beav. Ridlington, Mose. 56 ; 1 Eq. Ca. Ab. 36. 141, pi. 3; Walker v. Meager, 2 P. (/) Mare v. Sanford, 1 Giff. 288. W. 550 ; Martin v. Hooper, Rep. t. (a) Hixon ». Wytham, I Ch. Ca. Hardwicke, by Ridg. 209; Whitton 248 ; Gosling v. Dorney, 1 Vern. 482 ; v. Lloyd, 1 Ch. Ca. 275; Foly's case, Anon. 2 Vern. 133 ; Powell's case, 2 Freem. 49 ; Kidney v. Coussmaker, Nels. 202 ; Wolestoncroft v. Long, 1 12 Ves. 154, per Sir AV. Grant ; Peter Ch. Ca. 32 ; and see Walker u. Mea- v. Bruen, cited 2 P. W. 551 ; Lloyd v. gfer, 2 P. W. 552. Williams, 2 Atk. Ill, per Lord Hard- wicke. 709 *525 TEUSTEES FOE PAYMENT OF DEBTS. [Ch. XX. S. .5, 2. All creditors to be paid pari passu. — As amongst the creditors themselves, the Court acts upon the well-known principle that " equality is equity," and, therefore, whether the trust be created by deed (c) or will (cZ), the specialty debts in the absence of express directions to the contrary will have no advantage over simple contract debts, |jut all will be paid in ratable proportions; and, of course, the trustees will not be allowed to break in upon the rule of equality by first discharging their own debts (e). 3. Specialty creditors. — It was formerly ruled', that where a testator charged his freehold estate with debts, and the estate subject to the charge descended to the heir, the spe- cialty creditor had precedence, for it was argued that he had his remedy at law against the heir independently of the wiU, and therefore ought not to be put on a level with those taking under the will (J^. The answer is, that the specialty creditor has no lien upon the estate, but can only recover the debt from the heir personally to the extent of the assets descended. If the estate be subject to the charge, the heir takes not beneficially but only as trtistee, g-nd then there are no legal assets in consideration of equity, and the bond creditor may be enjoined from pursuing his legal right. And on these grounds it has been decided that specialty debts are not entitled to a preference (jg). 4. Case of trustee being also executor. — It was also [*525] thought at one time, that if the estate charged *with the debts was to be administered by the executor, the testator must have meant that the executor should, as in his executorial capacity, observe the legal priorities (a); how- (c) Wolestoncrof t v. Long, 1 Ch. 290 ; Delany v. Delany, 15 L. B. Ir. Ca. 32 ; Hamilton w. Houghton, 2 55. Bligh, 187,;)er Lord Eldon; Child v. {g) Shiphard i-. Lutwidge, 8 Yes. Stephens, 1 Vern. 101. 26 ; Pope ». Gwyn, cited lb. 28, note ; (d) Wolestoncroft v. Long, 1 Ch. Bailey v. Eltins, 7 Ves. 319 ; Batson Ca. 32; Anon. 2 Ch. Ca. 54; &c. v. Lindegreen, 2 B. C. C. 94; Har- (e) Anon. 2 Ch. Ca. 54. grave v. Tindal, cited Newton ». (/) Fremoult v. Dedire, 1 P. "W. Bennet, 1 B. C. C. 136, note. 429; Young v. Dennett, 2 Dick. 452; (a) Girling v. Lee, 1 Vern. 63; Blatch V. Wilder, 1 Atk. 420; Allan Cutterback v. Smith, Prec. Ch. 127; V. Heber, Str. 1270 ; S. C. 1 W. Bl. Bickham v. Freeman, lb. 136 ; Mas- 22 ; and see Flunket v. Penson, 2 Atk. ham v. Harding, Bunb. 3-39 ; Foly's 710 Ch. XX. S. 3.] TRUSTEES EOR PAYMENT OF DEBTS. *525 ever, there was no reason, in fact, why the characters of trustee and executor should not be united in the same person without confusion, and so it has since been determined (S). But where the trust was expressly to pay the settlor's debts "according to their priority, nature, and specialty," a bond debt with interest was payable before a simple contract debt (c). But now all debts of persons who may hare died on or after 1st January, 1870, are payable pari passu. 5. TTnclaimed dividends. — If there be a remnant of un- claimed dividends left in the hands of the trustees, it does not belong to the trustees for their own benefit, but will be divisible amongst the unpaid creditors who do claim (d). Thirdly. As to allowance of interest. 1. Interest nof allo-wed on simple contract debts. — Whether the trust be created by deed (e), or will (/), and though the fund has been making interest (^), the trustees will not be justified in paying interest upon simple contract debts not carrying interest ; and d fortiori, this is the case where interest is expressly directed as to some particular debts (K). Where the trust was hy deed, but the creditors had not been made parties. Lord Eldon observed, " The mere direction to pay a debt does not infer either contract or trust to pay interest upon debts by simple contract. As to contract, the creditors did not execute the deed, and there was nothing to prevent their suing the debfSr after the execution ; and no considera- case, 2 R'eem. 49 ; Delany v. Delany, Stewart v. Noble, Vern. & Scriv. 536 ; 15 L. R. Ir. 65. Creuze u. Hunter, 2 Ves. jun. 165 ; (i) Prowse V. Abington, 1 Atk. S. C. 4 B. C. C. 319. 482; Newton v. Bennet, 1 B. C. C. (/) Lloyd v. Williams, 2 Atk. 135; Silk v. Prime, lb. 138, note ; S. 108; Stewart v. Noble, Vern. & Scriv. C. 1 Dick. 384 ; Lewin v. Okeley, 2 528 ; Dolman o. Pritman, 3 Ch. Eep. Atk. 50; Barker v. Boucher, 1 B. C. 64; Nels. 136; Freera. 133; Bath «. C. 140, note. Bradford, 2 Ves. 588, per Lord Hard- (c) Fassingham k. Selby, 2 Coll. wicke ; and see Talt v. Northwick, 4 405. Ves. 816; Bothomly K.Fairfax,! P. (rf) "Wild V. Banning, 12 Jur. N. S. W. 334, note ; Maxwell v. Wettenhall, 464. 2 P. W. 26, ed. by Cox, are over- (e) Hamilton ». Houghton, 2 Bligh, ruled. 469, see 186; Car v. Burlington, 1 P. (y) Shirley v. Ferrers, 1 B. C. C. W. 228, as corrected in Cox's ed. ; 41 ; but see Pearce v. Slocombe, 3 Barwell v. Parker, 2 Ves. 364; Shir- Y. & C.,84. ley V. Ferrers, 1 B. C. C. 41 ; and see (h) Jenkins v. Perry, 3 Y. & C. 178. 711 *526 TKtrSTEES I'OE PAYMENT OF DEBTS. [Ch. XX. S. 3. tion was given to the debtor by charging the land and dis- chargiag the person " (i). Eyen where the debts [*526] * did in their nature carry interest, and the direction in a will was to pay " the debts owing by the testar trix's brother at the time of his death," but forty years had elapsed since the death of the brother, so that the interest if allowed would, have amounted to more than double the 'prin- cipal, the Court thought the direction could not have been intended to include interest as well as principal (a). 2. The trust deed does not make the debts specialties. — It was once suggested by Lord Abinger that " if a man execute a trust of a term for the benefit of his creditors, the deed makes them mortgagees if they execute it, and so gives them a right to interest " (6) ; and it was held in some old author- ities, that even in a deed to which the creditors were not par- ties, or in a trust created by mil for payment of debts, the creditors were to be regarded as mortgagees and were enti- tled to interest (c) ; but the doctrine in the latter cases has long since been overthrown, and it is apprehended that the distinction taken by the Chief Baron cannot at the present day be supported (d). Again, it was said by Lord Hard- wicke that " if a man by deed in his life creates a trust for payment of his debts, annexes a schedule of some debts, and creates a trust term for the payment, as that is in the nature of a specialty, it will make these, though simple contract debts, carry interest " (e). But this dictum also is not in conformity with the law as now established and cannot be maintained (/). 3. Pearce v. Slooombe. — But where A. and B. assigned their joint property to C, D., and E. upon trust, in the first (t) Hamilton v. Houghton, 2 Bligh, Chancery Division gives simple con- 186 ; and see Barwell v. Parker, 2 tract creditors a right to interest from Ves. 364 ; Bath v. Bradford, lb. 688. the date of the decree out of any (a) Askew v. Thompson, 4 K. & J. surplus assets after paying all debts, '620. and the interest, of such as by law (6) Jenkins v. Peny, 3 Y. & C. 183. carry interest ; see rules of Supreme (c) Maxwell v. Wettenhall, 2 P. W. Court, Ord. 55, B. 63. 27 ; Car v. Burlington, 1 P. W. 229. (e) Barwell v. Parker, 2 Ves. 364. (d) Barwell v. Parker, 2 Ves. 364. (/) Stone v. Van Heythuysen, Kay, It must be borne in mind, however, 721 ; Clowes v. Waters, 16 Jur. 632. that the practice of the Court in the 712 Ch. XX. S. 3.] TRUSTEES FOE PAYMENT OF DEBTS. *527 place to pay the joint debts at the expiration of a year from the date of the assignment, and then as to a moiety to pay the separate debts of A., and at the end of a year suificient assets were realised to have discharged the joint debts, but the money, instead of being so applied, was invested in the 'funds and the interest accumulated, it was held, that as the fund applicable to the payment of the joint debts had been making interest from the time the debts should have been paid, the joint creditors, though on simple contract, were en- titled to interest at 4 per cent, before the separate creditors w^e paid their principal. The separate creditors "would otherwise try to impede the general * settle- [*527] ment, in order that, in the meantime, they might en- joy the interest from the joint creditor's fund (a). 4. Creditors may stipulate for interest. — The creditors may stipulate for payment of interest, or the settlor, if so minded, may insert such a direction (6). But a trust for payment of specialty and simple contract debts and all interest thereof, will not amount to such a direction, but the words will be taken to have reference to the debts carrying interest of their own nature (c). 6. Specialty debts. — Specialty debts, though actually re- leased by a creditors' deed will carry interest up to the time of payment. It might be urged, indeed, that as regards specialty debts the amount of the debt is the principal and interest; and therefore in a trust for payment of debts interest as well as principal must be taken into calculation to ascertain what the debt is at the date of the deed or the death of the testator; but that interest ought not to run beyond the date of the trust deed or the death of the testator, for that principal and interest together are then regarded as one sum, not as a debt but the claim of a cestui que trust. And some principle of this kind appears to have been acted upon in the case of Car v. Burlington (c?), where a person vested estates in trustees upon trust to pay all such debts as (a) Pearce v. Slocombe, 3 Y. & C. (c) Tait ti. Northwick, 4 Ves. 816. 84. (d) 1 P. W. 228, as corrected in (6) See Bath v. Bradford, 2 Ves. Cox's ed. from Reg. Lib. 588; Barwell v. Parker, lb. 364; Stew- art V. Noble, Vem. & Scriv. 636. 713 *527 TEtrSTEES FOE PAYMENT OF DEBTS. [Ch. XX. S. 3. he should owe at his death, and the Court directed the Master to calculate interest on such of the debts as carried > interest up to the death of the settlor ; but the Master was not to carry on any interest on any security beyond the settlor's decease, but in case there were assets to pay the simple con- tract debts as well as the specialty debts, the question of ulterior interest was reserved. At the present day, ho-vfever, the rule is to consider the specialty debt as subsisting up to the time of payment, i.e., to calculate interest on the principal not only up to the date of the deed or the death of the testator, but up to the day of payment (e). 6. Bond creditors not entitled tq interest beyond the pen- alty. — Bond creditors, it must be observed, will in no case be entitled to receive more for principal and interest than the amount of the penalty (/). (e) Bateman v. Hargerison, 16 (/) Hughes ». Wynn, 1 M. & K. Beay. 477. 20; Anon. 1 Salk. 154; Clowes v. Waters, 16 Jur. 632. 714 * CHAPTER XXI. [*528] THE DITTIES OF TRUSTEES OP CHAEITIES.^ jl. Charities may either be established by charter, as eleemosynary corporations, or may be placed under the man- agement of individual trustees. 1 Charities and charitable uses. — The intention of the settlor must be de- termined whether the trust is public or private, charitable or otherwise; OUiffe V. Wells, 130 Mass. 221 ; but if a trust has been found to be for a charity, different rules apply to it ; Saltonstall v. Sanders, 11 Allen, 466 ; Odell V. Odell, 10 Allen, 1 ; Contain v. Ravenel, 17 How. 384. Charities are subject to equitable jurisdiction and construction; Vidal v. Girard's Ex'rs, 2 How. 127 ; Vidal v. Philadelphia, 2 How. 128 ; Tappan v. Deblois, 46 Me. 122 ; Ould V. Washington Hospital, 96 U. S. 303 ; Jackson v. PhilUps, 14 Allen, 668. Definition. — "A charity, in the legal sense, may be more fully defined as a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons, either by bringing their minds or hearts under the influence of education or religion, by relieving their bodies from disease, sufEering^r constraint, by assisting them to establish themselves in life, or by erecting or maintaining public buildings or works, or otherwise lessening the burdens of government. It is immaterial whether the purpose is called charitable in the gift itself, if it is so described as to show that it is charitable in its nature ; " Jackson v. Phillips, 14 Allen, 556. A " purely public charity " may be one in which the designated beneficiaries are to be all of one particular religious faith, provided that the persons to be benefited are indefinite with- in the specified class. " Purely "means completely, entirely, unqualifiedly, &c. Public charities may be restricted to a class of people of a state, or city, &c., but must be general for all the class. The test is in the object of the investment, not the public or private gain ; Burd Orphan Asylum v. School . Dist. Upper Darby, 90 Pa. St. 21 ; McDonald v. Mass. Gen. Hospital, 120 Mass. 432; 21 Am. Rep. 529; Clement v. Hyde, 60 Vt. 716; 28 Ap. Rep. 522 ; Warde v. Manchester, 56 N. H. 508. " Whatever is given for the love of God, or for the love of our neighbor, in the catholic and universal sense, given from these motives and to these ends, free from the stain of everything that is personal, private, or selfish, is a gift for charitable uses." Mr. Binney's argument in the Girard Will case, 41; Price v. Maxwell, 4 Casey, 28; Rhymer's App. 9-3 Pa. St. 142; Schiiorr's App. 17 P. F. Smith, 138; Everett v. Carr, 59' Me. 325; Perin v. Carey, 24 How. 506. Public charity. — A gift " for the relief of the resident poor " is a charitable bequest; Howard v. American Peace Soc. 49 Me. 288; Swasy i'. American Bible Soc. 67 Me. 523; Hesketh v. Murphy, 36 N. J. Eq. 304; Craig v. Secrist, 54 Ind. 419; Webster v. Morris, 66 Wis. 366; 57 Am. Rep. 278. A 715 *528 TRUSTEES OF CHARITIES. [Ch. XXI. 2. Charities by charter. — Before entering upon the duties of trustees for charities,, it may be proper to introduce a few limitation to " needy relatives " creates a charitable bequest ; Beardsley v. Selectmen, 53 Conn. 489; 55 Am. Rep. 152; Quinn i;. Shields, 62 la. 129; 49 Am. Kep. 141; Sowers v. Cyreniuse, 39 Ohio St. 29; 48 Am. Rep. 418; De Campo V. Dobbins, 29 N. J. Eq. 36; Webster v. Morris, 66 Wis. 366; Sutjr v, Hilliard, 132 Mass. 412 ; 42 Am. Rep. 444. A gift to erect a house of vpor- ship may constitute a public charity if there is no definite body for whose use the gift was intended. If definite in its limitations it cannot be a public charity. Old South Soe. v. Crocker, 119 Mass. 1 ; 20 Am. Rep. 298 ; Salton- stall V. Sanders, 11 Allen, 446; Atty. Gen. v. Federal St. Meeting House, 3 Gray, 1 ; Cong. Soc. v. Waring, 24 Pick. 304. A corporation, the object of which is to provide for the sick without compensation, is a public charity; McDonald v. Mass. Gen. Hospital, 120 Mass. 432; 21 Am. Rep. 529; Gooch V. Association for Relief Aged Females, 109 Mass. 558 ; Sanderson ti. White, 18 Pick. 328 ; County of Hennepin v. Brotherhood of Gethsemane, 27 Minn. 460. So is a gift for use of Sabbath-schools for the diffusion of Christian principles as taught and practised by Evangelical denominations ; Morville :;. Fowle, 144 Mass. 109; or for aid of such indigent, needy and meritorious widows and orphans as need temporary help; Camp v. Crocker, 64 Conn. 21. Likewise a bequest of money to be " expended in the education of the scholars of poor people; Clement v. Hyde, 50 Vt. 716; "for purchase and' distribution of such religious books or reading as they shall deem best ; Simp- son V. Welcome, 72 Me. 496; Drew v. Wakefield, 54 Me. 291 ; Going v. Emery, 16 Pick. 107 ; Bartlet v. King, 12 Mass. 537. A masonic lodge is not a public charity or benevolent institution ; Bangor v. Masonic Lodge, 73 Me. 428 ; 40 Am. Rep. 369 ; Bolton v. Bolton, 73 Me. 299 ; but see Indimiapolis v. Grand Master, 25 Ind. 518 ; King v. Parker, 9 Cush. 71 ; Duke v. Fuller, 9 N. H. 536; Mayor of Savannah b. Solomon's Lodge, 53 Ga. 93. Such a lodge may receive in trust for charitable purposes ; Everett v. Carr, 59 Me. 326. Neither is an Odd Fellows' lodge a charitable institution; Babb v. Reed, 5 Rawle, 157. For case of an institution of science, see Delaware Co. Inst. V. Delaware Co. 94 Pa. St. 163. Gift to church to suppress manufac- ture and sale of intoxicating liquor is valid; Haines v. Allen, 78 Ind. 100; 41 Am. Rep. 555. A gift "for benevolent purposes " is not a public charity; Chamberlain «. Stearns, 111 Mass. 267 ; unless used in connection with charity, when the two words may be regarded as synonymous ; Saltonstall v. Sanders, 11 Allen, 446 ; Rotch v. Emerson, 105 Mass. 431. A public library may be a public charity ; Donohugh o. Library Co. 5 Norris, 306 ; Miller u. Porter, 53 Pa. St. 292 ; City of Philadelphia v. Girard's Heirs, 9 Wright, 9 ; a parochial school not carried on for profit but to which parents are to make contribu- tions as able is a charity; Gerke v. Purcell-, 26 Ohio St. 229. For the aid and support of those of my children who may be destitute, not a public charity ; Kent v. Dunham, 142 Mass. 216 ; Brattle Sq. Church v. Grant, 3 Gray, 142 ; Thorndike v. Loring, 15 Gray, 391 ; Sears v. Russell, 8 Gray, 86. Uncertainty. — Our laws are more strict than the English as to the cer- tainty and definiteness with which the cestuis que trust are named. A bequest to trustee " for any and all benevolent purposes that he may see fit," is void for uncertainty; Adye o. Smith, 44 Conn. 60; 26 Am. Rep. 424; but see Beardsley v. Selectmen of Bridgeport, 53 Conn. 489 ; so is gift to " next of kin who may be needy;" Fontaine's Admr. o. Thompson's Admr. 80 Va. 229; 716 Ch. XXI.] TRUSTEES OP CHARITIES. *528 preliminary remarks upon the subject of the Court's (a) jurisdiction over charities established by charter. [(a) By 36 & 37 Vict. e. 66, s. 34, signed to the Chancery Division of causes and matters for the execution the High Court of Justice.] of Charitable Trusts, are to be as- 56 Am. Rep. 588; so to one "to use and apply the same for such religious and charitable purpbses and objects as will in his judgment best promote the cause of Christ ; " Maught v. Getzendanner, 65 Md. 527 ; 57 Am. Rep. 352 ; Dashiell v. Atty. Gen. 5 H. & J. 393 ; Church v. Smith, 56 Md. 397. To build a free sqhool house and extend the education of poor children is void ; Stone- street V. Doyle, 75 Va. 356 ; Baptist Asso. v. Hart, 4 Wheat. 4 ; and a home for educational purposes and society for christianizing the African race; Rizer v. Perry, 58 Md. 112 ; Nichols v. Allen, 130 Mass. 211 ; Prichard v. Thompson, 95 N. T. 76. A misnomer in referring to a corporation will not defeat the charity; Barnum v. Mayor of Baltimore, 62 Md. 275; 50 Am. Rep. 219; McAllister v. McAllister, 46 Vt. 272; Chapin v. School Dist. 35 N. H. 445; Lefevre v. Lefevre, 59 N. Y. 434 ; Minot v. Boston Asylum, 7 Met. 416. A 'gift to a charitable institution to be incorporated is v(iUd; Universalist Soc. v. Kimball, 34 Me. 424; Sewall v. Cargill, 15 Me. 414. A bequest "equally to the author- ized agents of the Home and Foreign Missionary Society and to aid in pro- pagating the holy religion of Jesus Christ " is valid ; Hinckley v. Thatcher, 139 Mass. 477; 52 Am. Rep. 719; American Tract Soc. v. DeWitt, 9 Allen, 447; Tilton v. American Bible Soc. 60 N.H. 377; Dunham v. Avefill, 45 Conn. 61. To clergymen "to be expencied in the education of children, in such way and manner as they may deem best and the majority approve " ; Grimes' Exrs. v. Harmon, 35 Ind. 198 ; White v. Fisk, 22 Conn. 31 ; Downing V. Marshall, 23 N. Y. 366. To be distributed " among such Roman Catholic charities, institutions, schools or churches in the city of New York " as the executors may select; this is valid, there being corporations answering the description and empowered to take ; Power v. Cassidy, 79 N, Y. 602 ; 35 Am. Rep. 559 ; the beneficiary need not be described by name, it is enough if the beneficiary can be ascertained ; Holmes v. Mead, 52 N. Y. 332. There must be an ascertainable beneficiary ; Wheeler v. Smith, 9 How. 55 ; Sherwood u. American Bible Soc. 1 Keyes, 561 ; O'Hara v. Dudley, 95 N. Y. 403 ; 47 Am. Rep. 53 ; Beekman v. Bonsor, 23 N. Y. 298 ; 80 Am. Dec. 269. To executors to distribute the residue among relatives and for beneficial objects in such manner as they deem best is valid; Goodale v. Mooney, 60 N. H. 528; 49 Am. Rep. 334. Bequest to an institution to be incorporated for respectable and indigent women, is valid; Colt v. Comstock, 51 Conn. 352; 50 Am. Rep. 29; Church V. Mott, 7 Paige Ch. 77. If possible to reduce such a devise to a cer- tainty it will be done; Brewster v. McCall, 15 Conn. 292; White v. Howard, 38 Conn. 366 ; for the support of young men preparing for the ministry is void unless power is given to trustees to make a selection; White v. Fisk, 22 Conn. 31 ; Washburn v. Sewall, 9 Met. 280 ; Fellows v. Miner, 119 Ma%s. 541. There must be a clear distinction noticed between a declaration of a gift and its purposes and the mode of administration; City of Phila. v. Girard's Heirs, 45 Pa. St. 9; 84 Am. Dec. 470. A devise to "a public sem- inary" is a valid charity; Curling's Admrs. v. Curling's Heirs, 8 Dana, 38; so is a bequest to a church to be expended yearly for bread for the poor; 717 *528 TRUSTEES OF CHARITIES. [Ch. XXL 3. Visitor. — On the institution of such a charity a visi-^ to^oriar jurisdiction arises of common right to the founder Witman v. Lex, 17 Serg. & R. 88; Zeisweiss v. James, 63 Pa. St. 469. A charity will not be allowed to fail for want of a trustee; M'Girr v. Aaron, 1 Pen. & W. 49; 21 Am. Dfec. 361; Levy v. Levy, 40 Barb. 625; Stark- weather i;. American Bible Soc. 72 111. 58; Heiss v. Murphey, 40 Wis. 201. Bequest of so much as shall remain at the death of a certain person; Mills v. Newberry, 112 111. 123; 54 Am. Rep. 213; Howard v. Carusi, 109 U. S. 725 ; to dispose of for such charitable pm-poses as he thinks proper ; White V. Ditson, 140 Mass. 351; 54 Am. Rep. 473; it is not material that "in trust "is not found in the bequest; Schouler v. Peter, 134 Mass. 426; Nichols 0. Allen, 130 Mass. 211. A bequest may be valid but the trust 'void; Shattuck v. Hastings, 99 Mass. 23; Drury v. Natick, 10 Allen, 188. Religious societies and uses. — A religious society is not a charitable cor- poration ; De Wolf v. Lawson, 61 Wis. 469 ; 50 Am. Rep. 148. A trust to permit all white religious societies to use land for a common burying ground and no other purpose is void ; Brown v. Caldwell, 23 W. Va. 187 ; 48 Am. Rep. 376 ; Fairfield v. Lawson, 50 Conn. 501 ; Ayer v. Emery, 14 Allen, 67 ; Sohier «. 'Trinity Church, 109 Mass. 1 ; Stanley J. Colt, 5 Wall. 119 ; for be- quests for keeping burial lots in order, see Bates v. Bates, 134 Mass. 110; 45 Am. Rep. 305; Johnson v. Holifield, 79 Ala. 423; 58 Am. Rep. 596; Dexter V. Gardner, 7 Allen, 243 ; but see Piper v. Moulton, 72 Me. 155. For religious uses, see Holland v. Peck, 2 Ired. Eq. 255 ; Ruth o. Oberbrunner, 40 Wis. 238 ; Miller v. Teachout, 24 Ohio St. 525. A gift to the Methodists is good; Church V. Remington, 1 Watts, 224; to Friends or Quakers; Price i,. Max- well, 28 Pa. St. 23 ; for the distribution of religious books and reading; Simp- son V, Welcome, 72 Me. 496 ; for school " wherein no books of instruction are to be usied except the spelling book and the Bible " ; Tainter v. Clark, 5 Allen, 66. Gift to pay for masses for souls is a religious use ; Rhymer's App. 93 Pa. St. 142. Cn pres. — America adopts the English doctrine of cy pres in a modified form only ; Grimes' Exrs. v. Harmon, 35 Ind. 198. Cy pres has no existence in New York; Bascomb v. Albertson, 34 N. Y. 590; nor Kep.tucky; Cromie V. Lousville Soc. 3 Bush, 375 ; nor South Carolina ; Pringle v. Dorsey, 3 Rich. N. S. 509; nor Michigan, Minnesota and Connecticut; Hughes v. Daly, 49 Conn. 34 ; Methodist Church v. Clark, 41 Mich. 730 ; Little v. Willford, 31 Minn. 173. See also Carter t'. Balfour, 19 Ala. 814 ; Byers v. McCartney, 62 la. 339 ; State V. Warren, 28 Md. 338 ; Pearsall v. Post, 20 Wend. Ill ; Carpenter v. Miller, 3 W. Va. 174; Green v. Allen, 6 Humph. 170. For a full discussion of this doctrine, see Jackson v. Phillips, 14 Allen, 574; Moore v. Moore, 4 Dana, 354; Wells v. Doane, 3 Gray, 201; Lorings v. Marsh, 6 Wall. 337. For latitude allowed by cy pres, see Marsh v. Renton, 99 Mass 132 ; Carter v. Balfour, 19 Ala. 814 ; Atty. Gen. v. Wallace, 7 B. Mon. 611 ; Curtiss v. Brown, 29 111. 201 ; Henry Co. v. Winnebago, &c. 52 111. 464. '^Statute of uses. — The statute of 43 Elizabeth has effect in Alabama ; Johnson v. , Longmire, 39 Ala. 143. In Arkansas public charities , are not governed by rules as to perpetuities ; Grissom v. Hill, 17 Ark. 483. The statute is in force in Connecticut; Treat's App. 30 Conn. 113. The local courts control in Georgia; Walker v. Walker, 25 Ga. 420. Statute is applied in Illinois and cy pres doctrine is limited; Heuser v. Harris, 42 111. 718 Ch. XXI.] TRUSTEES OP CHAKITIES. *528' (whether the Crown or a private person), or to those whom the founder-has substituted in the place of himself (6) ; and the office of visitor is to hear and determine all differences of the members of the society amongst themselves, and generally to superintend the internal government of the body, and to see that all rules and orders of the corporation are observed (o). The visitor must take as his guide the statutes originally propounded by the founder (c^) ; but so long as he does not exceed his proper province, his decision is final, and cannot be questioned by wa,y of appeal (e). * (6) Eden v. Foster, 2 P. W. 326, per Sir J. Strange ; Id. 472, per Lord resolved ; Attorney-General v. Gaunt, Hardwicke. 3 Sw. 148. (e) St. John's College, Cambridge (c) See Philips v. Bury, Skin. 478 ; ji. Todington, 1 Burr. 200, per Lord Attorney-General ». Crook, 1 Keen, Mansfield; Attorney-General w. Lock, 126 ; Attorney-General v. Archbishop 3 Atk. 165, per Lord Hardwicke ; of York, 2 R. & M. 468; /Je Birniing- Attorney -General ti. The Master of ham School, Gilb. Eq. Bep. 180, 181. Catherine Hall, Cambridge, Jac. 392, (d) Green v. Rutherford, 1 Ves. 469, per Lord Eldon. 425. So, top, the statute has been reenacted in Indiana, and the cy pres doctrine is generously construed; Grimes u. Harmon, 35 Ind. 198. The same is true in Iowa; Miller u. Chittenden, 4 la. 252. Also in Kentucky; Church V. Churfih, 18 B. Mon. 635; Atty. Gen. v. Wallace, 7 B. Mon. 611. Statute not in force in Louisiana, but is in Maine ; Swasey v. American Bible Soc. 57 Me. 526 ; Tappan v. IJeblois, 45 Me. 122. Not in force in Maryland ; Keedles v. Martin, 33 Md. 609. Statute is applied in Massachusetts, and cy pres doctrine has a comparatively broad scope ; Hosea v. Jacobs, 98 Mass. 65 ; Fairbanks v. Lamson, 99 Mass. 533 ; Atty. Gen. v. Garrison, 101 Mass. 223. In Michigan charities are no different from other trusts; Newark Church V. Clark, 41 Mich. 730. In Missouri and Mississippi the courts ad- minister the charities ; Chambers v. St. Louis, 29 Mo. 543. In New Hamp- shire charitable trusts are recognized ; Dublin Case, 38 N. H. 459 ; Chapin v. School Dist. 35 N. H. 454. Statute has never been in force in New Jersey ; Attyj G«n. v. Moore, 4 C. E. Green, 503. Charities and cy pres are strictly dealt with in New York ; Chamberlain v. Chamberlain, 43 N. Y. 424 ; Holmes «.«Mead, 52 N. Y. 339. In North Carolina the courts will not apply the special rules to public, but only to private charities ; Bridges v. Pleasants, 4 Ired. Eq. 26 ; Miller t/. Atkinson, 63 N. C. 537. Statute is in force in Ohio ; American Bible Soc. v. Marshall, 15 Ohio St. 537. In Pennsylvania the statute is only partially applicable ; McLain v. School Directors, 51 Pa. St. 196 ; Henderson «. Hunter, 59 Pa. St. 335. Rhode Island adopts a different but similar statute ; Baptist Soc. V. Hail, 8 R. I. 240. Courts of South Carolina control the matter as they choose; Atty. Gen. v. Clergy Soc. 8 Rich. Eq. 190; and Tennessee; Franklin v. Armfleld, 2 Sneed, 305. In Texas the court controls ; Paschal v. Acklin, 27 Tex. 173. Statute is applicable in Vermont; Penfield o. Skinner, 11 Vt. 296. Statute was repealed in Virginia ; Seaburn v. Seaburn, 15 Gratt. 423 ; Commonwealth v. Levy, 23 Gratt. 21. 719 *529 TEUSTEES OF CHAEITIES. [Ch. XXI. 4. Jurisdiction of the Court over corporate bodies. — With this visitatorial power the Court has nothing to do : it is only as respects the administration of the corporate property that equity assumes to itself any right of interference (/), [*529] *6. Informal election. — Mal-administration. — Upon the ground of this distinction between the visitatorial power and the management of the revenue, an information for the removal of governors or other corporators, as having , been irregularly appointed, would be dismissed with costs (a) ; but wherever the administration of the property by the gov- ernors can be shown to have a tendency to pervert the end of the institution, the Court will immediately interpose, and put a stop to such wrongful application (J). 6. How property nevrly given is affected by the visitatorial power. — An estate* newly bestowed upon an old corporation is not to be regarded in the same hght as property with which the charity was originally endowed. The visitatorial power is /orwm domesticum — the private jurisdiction of the founder; and' the new gift will not be made subject to it, unless the will of the donor be either actually expressed to that effect, or is to be collected by necessary impUcation (c). (J") See the observations of Lord Sim. 137; Attorney-General ». Ded- Commissioner Eyre in Attorney-Gen- ham School, 23 Beav. 350 ; Daugara eral v. The Governors of the Found- u. Rivaz, 28 Beav. 233. ling Hospital, 2 Tes. jun. 47. But (a) Attorney-General v. Earl of Chief Baron Richards once observed, Clarendon, 17 Ves. 491, see 498; Whis- he had been of counsel in the Found- ton v. Dean and Chapter of Roches- ling Hospital case, and he remem- ter, 7 Hare, 532 ; Attorney -General v. bered some of the first men of the Dixie, 13 Ves. 519 ; Attorney-General bar were not satisfied with the decis- v. Middleton, 2 Ves. 327, see 330 ; ion ; In re Chcrtsey Market, 6 Price, Attorney-General v. Dulwich College, 272. See also the observations of 4 Beav. 255; Attorney-General v. Lord Hardwicke in Attorney-General Magdalen College, Oxford, 10 Bea.v. V. Lock, 3 Atk. 165; and see upon 402; Attorney-General u. Corporation' this subject generally Ex parte Berk- of Bedford, Id. 505 ; In re Bedford hampstead Free School, .2 V. & B. Charity, 5 Sim. 578. 138; The Poor of Chelmsford w. Mild- (6) See Attorney-General v. St. may, Duke, 83 ; Attorney-General v. Cross Hospital, 17 Beav. 435 ; Attor- Earl of Clarendon, 17 Ves. 499; Eden ney-General v. The Governors of the o. Foster, 2 P. W. 326; Attorney-Gen- Foundling Hospital, 2 Ves. jun. 48; eral v. Dixie, 13 Ves. 533, 539 ; Attor- Attorney-General v. Earl of Claren- ney-General v. Corporation of Bed- don, 17 Ves. 499. ford, 2 Ves. 505; 5 Sim. 578; Attor- (c) Green v. Rutherforth, 1 Ves. ney-General v. Browne's Hospital, 17 sen. 472, per Lord Hardwicke. 720 Ch. XXI.J TRUSTEES OF CHAEITIES. *530 If a legal or equitable interest be given to a body corporate, and no special purpose be declared, the donor has plainly implied that t^ estate shall be under the general statutes and rules of the society, and be regulated in the same manner as the rest of their property ((2) : but if a particular and special trust be annexed to the gift, that excludes the visitatorial power of the original founder ; and the Court, viewing the corporation in the light of an ordinary trustee, will determine all the same questions as would have fallen under its juris- diction had the administration of the fund been entrusted to the hands of individuals (e). * 7. Private foundation with a charter. — Where a [*530] private person founds a charity, and then the Crown grants a charter, the presumption is that the Crown meant to carry put the foimder's intentions, and the jurisdiction of the Court which existed before will be continued (a). 8. Cases where the visitatorial power may be e3:ercised by the Lord Chancellor. — Even the visitatorial power may, under particular circumstances and in a special manner, be exer- cised by the Lord Chancellor ; for the Crown may be visitor by the terms of the foundation ; and, if the heir of the founder cannot be discovered (6), or become lunatic (e), the visitatorial power, rather than that the corporation should not be visited at all, will result to the , Crown. And while in dvil corporations the Crown is visitor through [the High Court of Justice (c?)] ; (for corporate bodies which respect the public policy of the country and the administration of justice, are necessarily better regulated under the superin- tendence of a Court of law :) yet, as regards eleemosyTiary corporations, the Crown's visitatorial power is committed to the Lord Chancellor, as in matters of charity the more ap- (d) Id. 473, per eundem ; Ex parte of Clarendon, 17 Ves. 498, per Sir W. Inge, 2 K. & M. 596, per Lord Broug- Grant; Attorney-General v. Blaclf, II liam ; Attorney-General ». Clare Hall, "Ves. 191 ; Case of Queen's College, 3 Atk:' 675, perJjOTi Hardwicke. Cambridge, Jac. 1. (e) Green v. Kutherforth, 1 Ves. sen. (e) Attorney-General v. Dixie, 13 462. Ves. 519, see 533. (o) Attorney-General v. Dedham [(rf) This visitatorial power was School, 23 Beav. 350. formerly exercised through the Court (6) Ex parte Wrangham, 2 Ve?. of Queen's Bench, but by 36 & 37 jun. 609; Attorney-General v. Earl Vict. c. 66, the jurisdiction of the ' 721 *531 TRUSTEES OF CHABITIES. [Ch. XXI. propriate supervisor (e). And the mode of application to the Lord Chancellor in these cases is by petition to the Great Seal (/). ^ We now proceed to the consideration of the duties of trustees of charities. 9. Fund must be applied to the charity prescribed. — -,It is of coarse imposed upon the trustees, whether individuals or a corporation, not to convert the charity fund to other uses than according to the intent of the founder or donor; so long as those uses are capable of execution (jg). Thus if the gift be to find a preacher in Dale, it would be a breach of trust to provide one in Sale ; if it be to find a J*531] preacher, it would be a breach of trust to apply it * to the poor (a) : if the trust be for the poor of O., it ■would be a breach of trusjb to extend it to other parishes (5) : ;if the trust be to repair a chapel, the rents must not be mixed up with the poor-rate for parochial purposes (c) : if a fund be raised for erecting a hospital, it cannot be diverted to lighting, paving, and cleansing the town (cT). 10. Chapel for school. — A chapel was granted to the trus- tees of a school for the use and benefit of the said school, and though the inhabitants of the hamlet had been long accustomed to attend divine service in the chapel, it was ; Court of Queen's Bench was trans- (jr) See Attorney-General v. Sher- if erred to the High Court of Justice, horn? School, 18 Beav. 256 ; Attor- and by s. 34 of that Act, matters ney-General ». Calvert, 23 Beav. 248 ; which were formerly within the ex- Attorney-General v. Corporation of elusive cognizance of the Court of Rochester, 6 De G. M. & G. 797 ; In Queeo's Bench have been assigned to re Stafford Charities, 25 Beav. 28 ; the Queen's Bench Division of the Attorney-General i/. Boucherett, 25 Court] Beav. 116; Attorney-General W.Gould, (e) King v. St. Catherine's Hall, 4 28 Beav. 485 ; Ward v. Hipwell,. 3 T. E. 233, see 244 ; and see Ex parte GifE. 547. Wrangham, 2 Ves. jun. 619. [By 36 (a) Duke, 116 ; Attorney-General & 37 Vict. c. 66, s. 17, the visitatorial v. Newbury Corporation, C. P. Coop, jurisdiction of the Lord Chancellor is Cases, 1837-38, 72 ; Attorney-Gen- reserved to him and is not transferred eral v. Goldsmiths' Company, lb. 292 ; to the High Court of Justice or the and see Wiv^lescom case, Dukt, 94. Court of Appeal.] (6) Attorney-General v. Brandreth, (/) See the cases cited in notes 1 T. & C. C. C. 200. (6) and (c) ; and Ex parte Inge, 2 E. (c) Attorney-General v. Vivian, 1 & M. 694 ; Re Queen's College, Cam- Euss. 226, see 237. bridge, 5 Euss. 54 ; Re University (d) Attorney-General v. Kell, 2 College, Oxford, 2 Ph. 521. Beav. 576. 722 Ch. XXI.] TRUSTEES OF CHARITIES. *532 held that, as the chapel was for the exclusive benefit of the school, the trustees had no power to apply the revenues of the charity towards enlarging the chapel for the better ac- commodation of the inhabitants (e). 11. Chapel pulled dovrn. — The trustees for maintaining a chapel had pulled down the edifice, converted the burial ground to profane purposes, carried the bell to the market- place, put the pews in the parish church, and employed the stones of the chapel for repairing a bridge. Sir T. Plumer said, " It was an enormous breach of trust, and sucK as could not have been expected in a Christian coun- try;" and directed an inquiry what emoluments had come to the hands of the trustees on account of the breach of trust, and what would be the expense of restoring the chapel to the state in which it stood at the time of its de- struction (/). 12. Charity in aid of rates. — A fund in aid and relief of '■'■poor .citizens who often were grievously burdened by the imposts and taxes of the city " was held not to be applicable to the payment df rates and other expenses of the city that would otherwise have been raised by public levies and im- positions; nor to be distributable to such of the poor as received parish relief, for that would be so much in aid of the ratepayers ; but ought to have been administered for the exclusive benefit of the poor (^). 13. Poor of a parish. — Where a trust is created for the "poor of a parish," it was for a long time doubted what class of persons was entitled to the benefit. Lord Eldon thought, that the fund should be * administered [*532] without reference to parochial relief ; for assistance might be given to a pauper without exonerating the rich from their usual contribution to the rates — to the relief, which the law had provided, further relief might be added. (e) Attorney-General v. Earl of (g) Attorney-Greneral v. Corpora- Mansfield, 2 Euss. 501. tion of Exeter, 2 Russ. 45; S. C. 3 (/) Sx parte Greenhouse, 1 Mad. Russ. 395 ; and see Attorney-General 92 ; reversed on technical grounds, 1 v. Wilkinson, 1 Beav. 372 ; Attomey- Bligh, N. S. 17. General v. Bovill, 1 Ph. 762 ; Attor- ney-General V. Blizard, 21 Beay. 233. 723 *533 TRtrSTEES OF CHAKITIES. [Ch. XXI. which the parish was not bound to afford (a) : besides, the appropriation of the fund to the poor not in receipt of parochial relief might still have the effect of conferring a benefit on the rich; for persons who could not otherwise have maintained themselves might, by means of the charity, be prevented from seeking assistance from the rate (6). However, it has been determined in" several cases, and seems, therefore, to be now settled, that the charity must be confined to those not in receipt of parochial relief (ji) (1). [*533] * 14. Trust for maintaining " the worsMp of God." — If land or money be ^ven for maintaining " the wor- ship of Crod "(a), or the promotion of " Godly learning "(5), (a) Attorney-General j>. Corpora- administer the charity, and leave to tion of Exeter, 2 Buss. 51-54. chance to what extent it may operate (6) See S. C. 3 Russ. 397. to the relief of the poor-rates." The (c) Attorney-General v. Corpora- decree, however, seems in the main tion of Exeter, 2 Russ. 47 ; S. C. 3 to be in accordance with the previouB Buss. 859 ; Attorney -General v. Wil- decisions ; and see Attorney-General kinson, 1 Beav. 372; Attorney-Gen- ». Blizard, 21 Beav. 233. eral v. BoviU, M. B. 1 July, 1839. (a) Attorney-General v. Pearson, 3 But see Attorney-General v. Bovill, 1 Mer. 409. Ph. 768, where Lord Cottenham is (6) Re Ilminster School, 2 De G. reported to have said, " I am inclined & J. 535. to think that the right course is, to (1) 59 G. 3, c. 12. — As to parish property ; by the effect of the decisions on 59 Geo. 3, c. 12, s. 17, all hereditaments belonging to the parish at the time of the Act, or subsequently acquired, whether for a chattel (Alderman v. Neate, 4 M. & W. 704) or freehold interest, and though originally conveyed to express trustees for parish purposes, if it be unknown or uncertain in whom the legal estate is vested (Doe v. Hiley, 10 B. & C. 885; and see Churchward- ens of Deptford ;;. Sketchley, 8 Q. B. 394), or generally where it is unascer- tained in whom the legal estate is outstanding, but the parish have exercised all the rights of ownership, and the property belongs to them in the popular sense (Doe v. Terry, 4 Ad. & Ell. 274; Doe v. Cockell, lb. 478), are now transferred to the churchwardens and overseers of the parish, not indeed as a corporation and having a common seal (JSx parte Annesley, 2 Y. & C. 350), but as persons taking, by parliamentary succession, in the 'nature of a cor- poration (Smith V. Adkins, 8 M. & W. 362). The Act does riot extend to copyholds (Attorney-General ». Lewin, 8 Sim. 366 ; In re Paddington Charities, lb. 629), nor to freeholds of which the trusts are not exclusively for the parish, but also embrace other objects (AUason i'. Stark, 9 Ad. & Ell. 255; Attorney-General v. Lewin, 8 Sim. 366; In re Pad- dington Charities, lb. 629) ; nor to lands vested in existing trustees, and who are actually in discharge of their duties in that character (Churchwardens of Deptford v. Sketchley, 8 Q. B. 394, overruling Rumball v. Munt, lb. 382 ; ar.d see Goulsworth v. Knight, 11 M. & W. 337). However, though all the trusts must be for the parish, they may be directed to some special trust, if cxclu- 724 Ch. XXI.] TRtrSTEBS OF CHARITIES. *533 and nothing more is said, the Court will execute the trust in fayour of the established form of religion ; and dissenters cannot be appointed trustees (c). But though the trustees of a Church of England school must be members of the Established Church, it does not follow that the children of dissenters are not to be admitted into the school, or even that the master may not be a dissenter, though the latter appoint- ment could only be justified by peculiar circumstances (^d). If it be clearly expressed upon the deed or will that the purpose of the settlor is to promote the maintenance of dissenting doctrines, the Court, provided such , doctrines be not contrary to law, will execute the intention (e). 15. iTumerous contributors. — Where a fund has been raised for the purpose of founding a chapel or any other charity, and the contributors were so numerous as to pre- clude the possibility of their aU concurring in any instru- ment declaring the trust, and a declaration of trust was made by the persons in whom the property was vested at or about the time when the sums were raised, that declaration may reasonably be taken primd facie as a correct exposition of the minds of the contributors (/). 16. The trust originally intended ■will be preserved. — Where an institution exists for the purpose of religious worship, and it cannot be discovered from the instrument declaring the trust what form or species of religious worship was in the intention of the settlors, the Court will then inquire what (c) Be Stafford Charities, 25 Beav. (e) Attorney-General v. Pearson, 3 28 ; Be Ilminster School, 2 De G. & Mer. 409, per Lord Eldon ; see S. C. J. 535 ; S. C. nom. Baker v. Lee, in 7 Sim. 290. I). P. 8 H. L. Cas. 495 ; Attorney- (/) Attorney-General v. Clapham, General v. Clifton, 32 Beav. 596. 4 De G. M. & G. 626. (d) Attorney-General v. Clifton, 32 Beav. 596. sively parochial, as a trust for aiding the church-rates (Doe v. Hiley, 10 B. & C. 855 ; Doe v. Terry, 4 Ad. & Ell. 274; and see Allason v. Stark, 9 Ad. & Ell. 266, 267; Doe v. Cockell, 4 Ad. & Ell. 478), or furnishing » poor-house (Alderman v. Neate, 4 M. & W. 704), or for the' relief of the poor of the parish, whether the objects of the charity be or be not held to include those in the receipt of parochial relief ; for if non-recipients only of parochial relief are to be. admitted, the parish is still benefited by keeping that class of poor, by means of the charity, off the parish books {Ex parte Annesley, 2 Y. & C. 350; Churchwardens of Deptford v. Sketchley, ^ Q. B. 394). 725 *534 TRUSTEES OF CHARITIES. [Ch. XXI. has been tlie u»age of the congregation ; and, if such usage do not contravene public policy, will be guided by it as evidence of the intention in the administration of the trust. And by 7 & 8 Vict. c. 45, s. 2, if the instrument of trust do not in express terras, or by reference to some book or other document, define the religious doctrines, twenty-five years' usage immediately preceding any suit is made con- clusive evidence thereof (^). But if the purpose of the settlors appear clearly upon the instrument, the Court, in that case, though the usage of the congregation [*534] may have run in a different channel, * cannot change the nature of the original institution : it is not competent for the majority of the congregation, cr for the managers of the property, to say, " We have altered our opinions : the chapel in future shall be for the benefit of persons of the same persuasion as ourselves " (a). 17. Appointment of new trustees. — If the deed of endow- ment neither provide for the succession of trustees nor the election of the minister, an inquiry will be directed, who, according to the nature of the establishment, are entitled to propose trustees, and to elect the minister (V) ; and. if the electi5h of the minister properly belong to the congregation, the majority is for that purpose the congregation (c). The appointment of the minister cannot, in such a case, belong to the heir of the surviving trustee, who may not be of the same persuasion, but, it might happen, a Roman Catholic or Jew (d'). Notices. — For the valid election of a minister due notice (. Magdalen E. Eq. 606. College, 18 Beay. 223. (c) 1 Ch. D. 160. (/) Attorney-General v. Green, 6 ' (rf) Duke, 116. Ves. 452 ; Attorney-General i>. Parge- (e) Attorney-General v. Kerr, 2 ter, 6 Bear. 150. Bear. 420; Blackston v. Hemswofth ' (j) Lydiatt t'. Foach, 2 "Vern. 410 ; Hospital, Duke, 49 ; Attorney-Gen- Attorney-General v. Brooke, 18 Ves. eral v. Brettinghara, 3 Beav. 91 ; and 326. . see Attorney-General v. Buller, Jac. (*) See Attorney-General v. Kerr, 2 Beav. 420. 733 *540 TRUSTEES OF CHARITIES. [Ch. XXI. " I do not doubt," observed Sir J. Wigram, " tbe existence of this power in Court: tbe trustees have the power to sell at law, they can convey the legal estate, but it is only a Court of equity that can recall the property, and if tMt Court should sanction a sale it would be bound to protect the purchaser" (a). The true principle was, that an abso- lute disposition was then only to be considered a breach of trust when the proceeding was inconsistent vrith a provi- dent administration of the estate for the benefit of the char- ity (6). And the transaction was strongly assumed to be improvident as against a purchaser until he had established the contrary (c). 38. Recent charity Acta. — Now under .the provisions of the recent Acts the Commissioners of Charities are empowered on application mafie to them to authorise the sale or exchange of any part of the charity property (i), and the trustees are restricted from any sale, mortgage or charge, without the con- sent of the Commissioners (e). Sales to railway companies. — But this does not interfere -with the powers of trustees of charities to sell under railway and other public Acts, where the legislature has made proper provision for the due application of the purchase-monies (/). 39. Power of trustees to pass the legal estate. — By another Act, " a majority of two-thirds of the trustees of any charity (o) Attorney-General v. Mayor of Vict. c. 136, s. 16. The 16 & 17 Vict. Newark,.! Hare, 400; and see Be c. 137, s. 21, authorises improvements Ashton Charity, 21 Beav. 288 ; Anon. with the sanction of the Charity Com- case, cited Attorney-General v. War- missioners ; and the 23 & 24 Vict. c. ren, 2 Sw. 300, 302. 136, s. 15, authorises the application (b) See Attorney-General v. Wai> of charity monies to " any other pur- ren, 2 Swans. 802; S. C. Wils. 411; pose or object" which the Commis- Attorney-General «. Hungerford, 8 BI. sioners may think beneficial, and 437; S. C. 2 CI. & Fin. 357; Attor- which is not inconsistent with the ney-General v. Kerr, 2 Beav. 428 ; foundation. Attorney-General v. South Sea Com- (e) 18 & 19 Vict. c. 124, s. 29. pany, 4 Beav. 543 ; Attorney-General [The power of the Commissioners to V. Newark, 1 Hare, 895 ; Parke's authorise a sale of land falling under Charity, 12 Sim. 329; i?c -Siiir Island the provisions of the Allotments Ex- Female Charity School, 3 Jon.'fe Lat. , tension Act, 1882 (45 & 46 Vict. c. 80), 171. is not affected by that Act, Parish of (c) Attorney-General v. Bretting- Sutton to Church, 26 Ch. D. 173.] ham, 3 Beav. 91. (/) See the language of 18 & 19 (d) 16 & 17 Vict. 0. 137, s. 24; 18 Vict. c. 124, s. 29. & 19 Vict. c. 124, s. 32; see 23 & 24 734 Ch. XXI.] TEtrSTEES OP CHARITIES. *541 assembled at a meeting of their body duly constituted, and having power to determine on any sale, exchange, partition, mortgage, lease, or other disposition of any .property of the charity," are empowered to pass the legal estate for giving effect to such disposition (^). 40. Re-investment of sale monies. — Wh^ere a sale or ex- change is effected under the Charity Acts, the purchase or exchange monies may be laid out with the consent of the Commissioners in the purchase of other lands with- out a licence * in mortmain (a). But the Act is silent [*541] as to the requirement of 9 G. 2, c. 36, and the con- veyance should therefore be by deed indented attested by two witnesses, and inroUed in Chancery within six calendar months (J). 41. Investment of accumulations in land. — Where there are accumulations from a charity estate, the Court, consider- ing the purchase of land with personal estate belonging to charity to be opposed to the general policy of 9 G. 2, c. 36, will not as a general rule sanction such an investment (e). But there is nothing illegal in such an investment, if accom- panied with the formalities required by the Mortmain Act ; and therefore should a highly beneficial purchase offer itself, the trustees themselves would, it is conceived^ run no risk in so investing the accumulations (d). Indeed the Court itself has made such orders where the purchase of the land was not the main object, but incidental to a general scheme as for the enlargement of a school (e). But in every case where land comes into mortmain for the first time, the con- veyance must be by indenture sealed and delivered in the presence of two credible witnesses, and inroUed w;ithin six calendar months from the execution (/). Inrolment. — Even where the land of a charity, whether (j) 28 & 24 Vict. c. 136, s. 16 ; and (rf) See Vaughan v. Farrer, 2 Ves. see the still later enactment of 32 & 188. 33 Vict. c. 110, 8. 12, post, p. 547. (e) Attorney-General v. Mansfield, (a) 18 & 19 Vict. c. 124, s. 35. 14 Sim. 601 ; Honnor's Trust, V. C. (6) As to these requirements, see Kindersley, May 3, 1853. ante, p. 96. (/) But see Attorney- General v. (c) Attorney-General v. Wilson, 2 Day, 1 Ves. sen. 222. As to pur- Eeen, 680. chases before 25 July, 1828, see 9 G. 4, 0. 85. 735 *542 TEUSTBES OF CHAKITIES. [Ch. XXI. vested in tlie corporation or in trustees, is taken by a public company, and the purchase-money is laid, out under the direction of the Court in the purchase of other lands upon the like trusts, the deed must be inrolled (jg"). "" 42. Loans of charity money on mortgage. — Trustees of a charity may lend the trust fund upon a mortgage of real estate, though a legal condition is expressly reserved,' and though after default an equity of redemption arises by the rules of equity. The .Statute of Mortmain (9 Geo. 2, c. 36) which avoids conveyances to a charity containing anjj reser- vation or condition for the benefit of the grantor, is held not to apply to such a case Qi). But of course care should be taken that the mortgage is by indenture attested by two witnesses, and inrolled. The Court itself on one occasion, when its attention had been directed to the question, author- ised the trustees of a charity to lend, on mortgage(i). [*542] *43. 33 & 34 Vict. c. 34. — Now by 33 &- 34 Vict. c. 34, corporations and trustees holding monies in ■ trust for any public or charitable purpose, may invest them on any real security authorised by, or consistent with, the trTist, and the requirements of the Mortmain Act are dispensed with. But upon foreclosure or release of the eqtuty of redemption, the land is to be held upon trust to be con- verted into money, and to be sold accordingly. [44. Church trustees. ^ — By the Compulsory Church Rate Abolition Act, 1868, a body of trustees may be appointed in any parish for the purpose of accepting by bequest, donation, contract or otherwise, and of holding any contributions which may be given to them for ecclesiastical purposes in the parish. The trustees are to consist of the incumbent and two house- holders or owners or occupiers of land in the parish, one to be chosen by the patron and the other by the Bishop of the diocese ; and the trustees so appointed are to be a body cor- porate with perpetual succession and a common seal (a).] (jr) Re Christ's Hospital, V. C. Ex parte Lushington, Be Lady Prior's Wood, 12 W. E. 669. Charity, July 21, 1853, M. B. The (A) Doe d. Graham «. Hawkins, 2 mortgage was for 50,O00Z. upon an Q. B. 212. estate in Northamptonshire. (0 Attorney-General v. Gibson, [(a) 31 & 32 Vict. c. 109, s. 9.] 736 Ch. XXL] LEASES OF CHARITY LANDS. *543 45. Lease to a trustee. — Trustees of charities cannot grant leases to or in -trust for one of themselves, for no trustee can be a teniant to himself, and the Court will charge him with an occupation rack-rent (S). Where two trustees were expressly authorised by the will to grant a lease to themselves, or either of them, with the consent of the tenant for life, and one of them took a lease with such consent accordingly, which was fair and proper, but it was found in effect that the relative characters of trustee -and lessee were inconsistent, and led to inconveniences, the Court removed the trustee at the in- stance of the cestuis que trust, on the ground of the repug- nant characters in tliis particular case of trustee and tenant ; and though the trustee offered to surrender the lease, the Court, as it was beneficial to the cestuis que trust, held him to it, and dismissed him from the trust (c). 46. Relations. — Trustees should be cautious how they grant leases to their own relations, ioi th&t circumstance is calculated to excite a suspicion, which, if confirmed by ahy other fact, it might require a strong case to remove (cZ). 47. So a lease should not contain any covenant for the private advantage of the trustee; as where a corporation directed the insertion of a covenant that the lessee should grind at the corporation * mill, in a suit for [*543] the establishment of the charity the corpora,tion were, for this instance of misbehaviour, disallowed their costs (a). 48. Fines or rack-rent. — Where trustees have a power given to them in general terms to grant leases, it is said that they may take fines or reserve rents as, according to the cir- cumstances of the case, may be most beneficial to the char- ity (J). If the trust estate held on lease increase in value upon the outlay of the tenant, the trustee is not called upon immediately to raise the tenant's rent, for such a practice would obviously prevent any improvement of the prop- (6) Attorney-General v. Dixie, 13 per Lord Cottenham; and see Ex Ves. 519, see 534; Attorney-General parte Skinner, 2 Mer. 457. a. Earl of Clarendon, 17 Ves. 491, (a) Attorney-General v. Mayor of see 500. Stamford, 2 Sw. 592, 593. , (c) Fassingham v. Sherbom, 9 (6) Attorney-General v. Mayor of Beav. 424. Stamford, 2 Sw. 692, See now p. (d) Ferraby v. Hobson, 2 Ph. 261, 546, infra. 73T «544 LEASES OF CHARITY LANDS. [Ch. XXL erty (c). Nor if the value of the estate increase froni the rise of agricultural produce wiU the trustee .be personally liable, because he neglects for a few months to raise the rent ; but if he wilfully continues the old rent when clearly a much higher rent can be obtained, he may be held responsi- ble (d-). 49. Adequate consideration. — In granting leases of ctarity lands care must be taken that the lease be for an adequate consideration, and if this be not observed, the Court will interfere and order the lease to be cancelled, and with the lease will also cancel the covenants (e). 60. Leases at an under-value. - — The lease may be annulled on the mere ground of under-value (/) ; but it must be an under-value satisfactorily proved and considerable in amount; it is not enough to show that a little more might have been got for the estate than has been actually obtaiaed ; still less is it sufficient to ,infer the under-letting from the value of the property at some subsequent period (^). 51. " Rent not to be raised." — Even where it was ordained at the creation of the trust, that no lease should be made for above twenty-one yearsy and the rent should not he raised, it was held that the trustee would not be justified in granting leases from time to time at no more than the original reser- vation : that as the times alter and the price of provisions rises, the rent ought to be raised in proportion (A). [*544] The * direction for leasing under the true value is no part of the charity, and in fact is void in itself for perpetuity (a). (e) Ferraby i'. Hobson, 2 Ph. 258, Duke, 46 ; Bowe v. Almsmen of Tav- per Lord Cottenham. istock, Duke, 42 ; Crouch v. Citizens (d) See Ferraby v. Hobson, 2 Ph. of Worcester, Duke, 33 ; Attomcy- 255. General v. Foord, 6 Beav. 288.. (e) Attorney-General v. Morgan, 2 (jf) Attorney-General v. Cross, 3 Russ. 306. Mer. 541, per Sir W. Grant. (/) East V. Eyal, 2 P. W. 284; (A) Watson ». Hinsworth Hospital, Attorney-General v. Lord Gower, 9 2 Vern. 596 ; and see Lydiatt v. Foach, Mod. 224, see 229 ; Attorney-General Id. 410 ; Attorney-General v. Master V. Magwood, 18 Ves. 315 ; Attorney- of Catherine Hall, Cambridge, Jac. General ». Dixie, 13 Ves., 519; Poor 381; Attorney-General «. St. John's of Yervel v. Sutton, Duke, 43 ; El- Hospital, 1 L. R. Ch. App. 92. tham Parish ». Warreyn, Duke, 67 ; (a) Hope v. Corporation of Glou- Wright V. Newport Pond School, cester, 7 De G. M. & G, 647 ; Attor- 738 Ch. XXI.] LEASES OP CHARITY LANDS. *644 52. XTnder-value must be fraudulent to render the lease ini- peachable. — In considering the question of value it must be remembered that the case of a charity estate is one in which of all others, the security of the rent is the first point to be regarded, and therefore the inadequacy of the amount re- served is less a badge of fraud in this than it would be in almost any other instance (S). And Lord Eldon desired it might not be considered to be his opinion that a tenant who had got a lease of charity lands at too low a rate with reference to the actual value was therefore to be turned out, if it appeared he had himself acted fairly and honestly. The only ground for so dealing with him would be some evidence or presumption of collusion or corruption of motive (c). 53. Compensation for the under-value. — When leases are set aside for under-value and the Court awards a compensa- tion to the charity for the loss which hasi been sustained by the charity through the collusion of the trustees and the tenant, the burden will fall upon the trustees or the tenant according to the circumstances of the case (cZ). For what- ever length of time renewals of leases of charity lands upon payment of fines certain may have been granted, and though in pursuance of a scheme settled by the Courts, the tenants have gained no right, and cannot insist upon any further renewals (e). But if money has been laid out in improve- ments upon the faith of renewals, and the lessees have not been recouped their outlay by any subsequent enjoyment of the property, the Court, in the charity scheme, will have regard to their claims (/). 54. Unreasonable extent of the lease. — A lease of charity lands may also be invalidated on the ground of the unreason- able extent of the term. The duration of the lease should be such only as is consistent with the fair and provident man- ney-General ». Greenhill, 33 Beav. eral v. Mayor of Stamford, 2 Sw. 592, 193. ' per Cur. ; Attorney -General v. Dixie, (6) Ex parte Skinner, 2 Mer. 457, 13 Ves. 540 ; Rowe v. Almsmen of per Lord Eldon. Tavistock, Duke, 42. (c) Ex parte Skinner, 2 Mer. 457. (e) Attorney-General v. St. John's (rf) See Duke, 116 ; Poor of Yer- Hospital, 1 L. R. Ch. App. 92. vel V. Sutton, Id. 45 ; Attomey-Gen- (/) S. C. 739 *645 ^ LEASES OF CHARITY LANDS. [Ch. XXL agement of tlie estate (^). It was therefore always a direct Tiolation of duty to grant a lease for one thousand years (A), not only on the ground hefore noticed that such a demise would in effect be an absolute alienation, but also on [*546] the * principle*' that no private proprietor would choose to debar himself from profiting by the j)ro- jgressive improvement of the property. Sir Thomas Plumer observed, "The compensation which the trustees receive may be adequate at the date of the contract, but they are precluded for one thousand years from any advantage of increased' value. It is true they are secured from dimi- nution, and in some instances to guard against fluctua- tion may be as much the interest of one party as the other; but that would be an answer to all cases in which the trustees have made an alienation at a fixed rent. At the same time," continued his Honour, "it is just to say, that these principles seem not to have been acted upon at so early a period as 1670. In many cases in Duke's collection the Court acted on inadequacy of value, in none on mere extent of term" (a). 55. Husbandry leases. — Husbandry or farm leases should not be granted for a term certain exceeding twenty-one years (6). But neither is this rule to be taken as absolutely inflexible ; but where the alienation is for any longer period, as for ninety-nine years, the Court will put it upon those who are dealing for and with the charity estate to show the reasonableness of such a transaction, for primd fade it is unreasonable ; there is no instance of a power in a marriage settlement to lease for ninety-nine years, except with refer- (j) See Attorney-General D.Owen, v. Almsmen of Tavistock, Id. 42; 10 Ves. 660 ; Attorney-General v. Wright v. Newport Pond School, Id. Brooke, 18 Ves. 326 ; Attorney-Gen- 46 ; Crouch v. Citizens of Worcester, eral v. Griffith, 13 Ves. 575. Id. 33. (K) Attorney-General v. Green, 6 (6) See Attorney-General v. Owen, Ves. 452 ; Attorney-General v. Cross, 10 Ves. 560 ; Attorney-General v. 3 Mer. 540 ; Attorney-General v. Dixie Backhouse, 17 Ves. 291 ; Rowe v. 13 Ves. 531 ; Attorney-General v. Almsmen of Tavistock, Duke, 42 ; Brooke, 18 Ves. 326. Wright v. Newport Pond School, Id. (a) Attorney-General n. Warren, 2 46 ; Poor of Tervel v. Sutton, Id. 43, Sw. 304. But see Poor of Yervel v. resolution 2 ; Attorney-Genexal v. Sutton, Duke, 43, resolution 2 ; Bowe Pargeter, 6 Beav. 150. 740 Ch. XXI.] LEASES OF CHARITY LANDS. *546 enee to very particular circumstances; the ordinary hus- bandry lease is for twenty-one years (c). 66. Leases determinable on lives. — In Attorney-General V. Cross (<^), the trustees had been in the habit of granting leases for ninety-nine years, determinable on lives^ in consid- eration of fines and the reservation of a small rent, a mode of letting very general in the county where the lands were situate, and which was proved to have been adopted by the Roundel himself. A biU was filed to set aside such a lease, but Sir W. Grant said, " I am not aware of any principle or authority on which it can be held that such a lease is on the very face of it a breach of trust. The legislature has, both in enabling and disabling statutes, * considered [*546] leases for three lives as on a footing with leases for twenty-one years absolute. So have thfe founders of charities, who prohibited the letting on lease for more than three lives, or twenty-one years." And his Honour dismissed the bill, and allowed the trustees their costs out of the charity estate. 57. Leases for lives. — In a later case, where charity lands had for two hundred years been let for lives upon a fine or foregift at a small reserved rent. Lord Langdale said there was no principle that a lease of a charitable estate for lives was, on the face of it, a breach of trust; and as there ap- peared no other ground of invalidating the leases, he refused to set them aside (a). 58. Building leases. — Building leases should be for a term not exceeding sixty, or ninety, or ninety-niaie years (6). If granted for a longer period, it would be thrown upon the parties to show the reasonableness of the prolonged term from the particular circumstances of the case. 59. Pounder's intention. — What has been said as to the proper duration of leases is of course only applicable where (c) Attorney-General v. Owen, 10 421; Attorney-General v. Hall, 16 Ves. 560, per Lord Eldon ; and see Beav. 388. Attorney-General v. Griffith, 13 Ves. (d) 3 Mer. 524; see pp. 530, 539. 575 ; Attorney-General v. Backhouse, (a) Attorney-General v. Crook, 1 17 "Ves. 291 ; Attorney-General v. Keen, 121, see 126. Brooke, 18 Ves." 326 ; Attorney-Gen- (i) See Attorney-General v. Owen, eral v. Lord Hotham, T. & E. 216; 10 Ves. 560; Attorney-General ». Attorney-General u. Kerr, 2 Beav. Backhouse, 17 Ves. 291; Attorney- General V. Foord, 6 Beav. 290. 741 *547 LEASES OF CHAEITY LANDS. [Ch. XXI. the founder himself has not otherwise given directions, for in general the will of the settlor, where explicit, must he strictly followed; as if the terms of the endowment be that the charity estates shall be let only for twenty-one years, the trustees, though satisfied that leases for ninety-nine years would be more beneficial, could not make such a deviation from the directions of the trust without the sanction of the Court. It was said on one occasion, with reference --to such variations from the founder's' intention, that the Court itself- could not give a good title to the lessee, but that it required the authority of an Act of Parhament (e). It is plain, how- ever, that there is a wide distinction between a deviation from the founder's intention as to the objects of the charity, and a deviation from the directions as to management, which were no doubt originally meant to be governed by circum- stances. 60. Improvements by lessees. — When there has been no actual fraud, and the lessee or assignee of the lease is ejected after having laid out money in the permanent improvement of the property, the Court will direct an inquiry to what extent the charity estate has been benefited, and will allow the holder of the lease the amount of the benefit found ((^). [*547] *61. Late Acts. — By the Charitable Trusts Acts the Commissioners of Charities are empowered to authorise the grant by charity trustees of building, repairing, improving, mining or other leases (a), and the trustees are restricted fropi granting without the sanction of the Conimis- sioners " any lease in reversion after more than three years of any existing term, or for any term of life, or in consideration wholly or in part of any fine, or for any term of years exceed- ing twenty-one years " (6). [62. Agricultural Holdings Act. — The powers conferred by the Agricultural Holdings (England) Act, 1883, on a land- (c) Attorney-General «. Mayor of 518 ; Attorney-General v. Balliol Col- Eoche6ter, 2 Sim. 34. lege, 9 Mod. 411 ; Savage e. Taylor, (d) Attorney-General v. Day, V. Fol-r. 234; Shine «. Gough, 1 B. & B. C. Knight Bruce, March 9, 1847 ; and 444. see AttorneyrGeneral v. Green, 6 Ves. (o) 16 & 17 Vict. c. 137, ss. 21, 26 ; 452 ; Attorney-General v. Kerr, 1 18 & 19 Vict. c. 124, s. 39. Beav. 420 ; Swan v. Swan, 8 Price, (6) 18 & 19 Vict. c. 124, s. 29. 742 CH.XXI.] STATUTOET PROVISIONS AS TO CHAEITTES. *548 lord in respect of charging the land are not to be exercised by trustees for ecclesiastical or- charitable purposes, except with the previous approval in writing of the Charity Commis- sioners (e).J 63. Power of majority to pass legal estate. — By 32 & 33 Vict. 0; 110, s. 12, it is enacted that " where the trustees or persons acting in the administration of any charity have power to determine on any sale, exchange, partition, mort- gage, lease, or other disposition of any property of the charity, a majority of those trustees or persons who are present at a meeting of their body duly constituted, and vote on the question, shall have and be deemed to have always had full power to execute and do all such assurances, acts, and things as may be requisite for carrying any such sale, exchange, parti- tion, mortgage, lease, or disposition into effect ; and all such assurances, acts and things shall have the same effect as if they were respectively executed and done by all suc^ trustees or persons for the time being, and by the official trustee of charity lands " (dT). The majority, therefore, in those cases of charity can bind the estate not only in equity but at law also, and that, whether the legal estate be vested in the trustees or other the persons aforesaid, or in the offi- cial trustee of charity lands. 64. Charities may be incorporated. — By "The Charitable Trustees Incorporation Act, 1872 " (35 & 36 Vict. c. 24), it is enacted by s. 1, that from the date of the Act the trustees or trustee for the time being of any charity, may apply to the Charity Commissioners for a certificate of registration, and the Commissioners may grant such certificate subject to such conditions and directions as they may think fit as to the qualifications and number of the trustees, their tenure or avoidance of office, and the mode of ap- pointing new trustees, and the custody *and use of [*548] the common seal, and thereupon the trustees shall become a body corporate, hy the name described in the, certifi- cate, and may sue and be sued in their corporate name, and [(c) 46 & 47 Vict. c. 61, s. 40.] enactment of 23 & 24 Vict, c. 136. (d) And see the nearly similar s. 16, and ante, p. 540. 743 *548 STATUTOKY PROVISIONS AS TO CHAEITIBS. [Ch. XXI hold, acquire, convey, assign, and demise any present or future property of the charity as the trustees might have done before the incorporation. But the Act is not to extend, modify, or control the Act of 9th Geo. II. c. 36. By section 2, the certificate of iacorporation is to vest in the body corporate all the real and personal estate belonging to the charity, or held in trust for it ; and persons ill whose names any stocks, funds, or securities are standing in trust for the charity, are to transfer the same into the name of the body corporate ; but, if such property be copyhold, liable to the payment of a fine or heriot on the death or alienation of the tenant, the lord of the manor shall receive a corre- sponding fine or heriot on the granting of the certificate, and a> like fine or heriot at the expiration of every subse- quent period of forty years. But the certificate is not to vest in the body corporate any stocks, funds, or securities held by the official trustees of charitable funds, which are not to be transferable except under an order of the Com- missioners, and by ordinary transfer or assignment. By the 4th section, the Commissioners are to see that proper trustees have been appointed before they grant the certificate, and after the grant the trusteeship is to he duly kept up, and a return of the names of the trustees is to be made at the expiration of every five years. By the 5th section, the trustees of the charity, notwith- standing their incorporation, shall continue chargeable for such property as shall come to their hands, and be answer- able for their own acts, receipts, neglects, and defaults, and for the due administration of the charity. By the 10th section, donations and dispositions in favour of the charity by deed, will, or otherwise, shall take effect as if the same had been made to the charity by its corporate name. By the 11th section, contracts iy the trustees of a charity which would have been valid and binding if no incorporation had talfen place, shall be valid and binding though not made under the seal of the body corporate. 65. Exempted charities. — It should be noticed that the Universities and the Colleges thereof, and various other 744 Ch. XXL] STATTJTOKY PROVISIONS AS TO CHARITIES. *549 bodies of a charitable description, and charitable institu- tions wholly maintained by voluntary- contributions (which expression is used in contradistinction to the term * endowments (a)), are excepted from the operation [*549] of the Charitable Trusts Acts (S). 66. Roman CathoUc Charities. — Charities the funds of which are applicable exclusively for the benefit of Roman Catholics were originally exempted for a period of two years, which was afterwards rfepeatedly extended, and by the latest of these Acts was extended to July 1st, 1860 (c). Roman Cat|iolic charities have therefore now fallen within the oper- ation of the Charitable Trusts Acts. (a) See Governors for Relief of (c) 19 & 20 Vict. c. 76; 20 & 21 Widows, &c. of Clergymen v. Sutton, Vict. c. 76 ; 21 & 22 Vict. c. 51 ; 22 27 Beav. 651. & 23 Vict. c. 50 ; see 23 & 24 Vict, (6) 1,6 & 17 Vict. c. 137, s. 62; 18 c. 134. & 19 Vict. c. 124, s. 47. 745 [*550] [* CHAPTER XXII. OF TRUSTEES TINDER THE SETTLED I^AND ACTS. Under the Settled Land Act, 1882, fundamental changes hare been introduced in dealing with and disposing of Settled Estates, the powers which under the old law were usually given to the trustees of the settlement, and in some cases much more extensive powers, having been conferred on tenants for life and other limited owners. With a view, probably, to the protection of the remaindermen (though such protection has not been satisfactorily provided for), a class of trustees has been called into existence whose duties arise under the Act ; but these duties are, with a few ex- ceptions, to which attention will be drawn, principally of a ministerial nature, and do not involve the exercise of dis- « cretion. In the present chapter we propose to treat of the position and duties of these trustees; but incidentally to this it will be necessary to refer to the principal provisions of the Act, and to glance at the important changes which have been introduced by it. 1. Trustees of the settlement. — The trustees for the pur- poses of the Settled Land Act may either be nominated by the settlement itself, or appointed by the Court ; and sect. 2 of the Act of 1882, provides that " the persons, if any, who are for the time being, under a settlement (a), trustees with power of sale of settled land, or with power of consent to or [(o) The term "settlement" in- complete in itself, and derivatire eludes any instrument, or any numher settlements have afterwards heen of instruments, whether made before made by persons who take interests or after, or partly before and partly which have not yet fallen into posses after the commencement of the Act, sion under the original settlement, under which land, or any estate or the original settlement alone is the interest in land, stands limited to or settlement for the purposes of the in trust for persons in succession ; Act, Re Knowles' Settled Estates, 27 see sect. 2, sub-s. (1). It has, how- Ch. D. 707; but this view seems ever, been held by Pearson, J., that hardly consistent with the language where there is an original settlement of the Act. 746 Ch. XXII.] TRUSTEES tTNDEB SETTLED LAND ACTS. *551 approTal of the exercise of such a power of sale, or if under a settlement there are no such trustees, then the persons, if any, for the time being, who are by the settlement declared to be trustees * thereof for the purposes of [*551] the Act, are for the purposes of the Act trustees of the settlement." From this definition it appears that in ,the case of settlements created before the Act, trustees with a power of sale, or a power of consenting to or approving of a sale, if there are any such trustees, and they only, are " trus- tees of the settlement " within the meaning of the Act. But trustees to whom personal estate has been bequeathed upon trust to convert it and invest the proceeds in the purchase of real estate to be settled strictly, are not trustees of the settlement for the purposes of the Act (a). Executors with charge of debts. — Executors or trustees who, under a charge of debts, have an over-riding power to sell settled land, seem to be trustees for the purposes of the Act. In instruments since the Act it is usual and proper to appoint expressly trustees of the settlement for the purposes of the Act. 2. Appointment by the Court. — Where there are no trus- tees of the settlement within the definition, or where in any other case it is expedient for the purposes of the Act that new trustees of the settlement should be appointed, the Court may, if it thinks fi.t, on the application of the tenant for life, or of any other person having under the settlement an estate or interest in the settled land, in possession, re- mainder or otherwise, or in the case of an infant of his testa- mentary or other guardian or next friend, appoint fit persons to be trustees under the settlement for the purposes of the Act (J). The exercise of this power is in the discretion of the Court, and it has been laid down in a case in Ireland, that, upon an application under this section to appoint trustees, the Court should not only require to be ^satisfied of the fitness of the proposed trustees, but also that the purpose for which their appointment is asked is such as to render (o) Burke v. Gore, 13 L. E. Ir. 367. (6) Sect. 88, sub-sect. (1). 747 *552 TRUSTEES UNDER SETTLED LAND ACTS. [Ch. XXII. their appointment safe and beneficial to all parties interested. And where the application was with a view to having a large fund taken out of Court and invested upon mortgage of lands in Ireland, it was refused (e). 3. On summons. — The application to the Court should be by summons, which should be served on the trustees (if any), and also on the tenant for life, if he is not the appli- cant, but not on any other person unless the Judge so di- rects (c?). The persons ' appointed by the Court, and the survivors and survivor of them, while continuing to be trustees or trustee, and until the appointment of new trustees [*552] the personal representatives or * representative for the time being of the last surviving or continuing trustee, are for the purposes of the Act the trustees or trus- tee of the settlement (a). Solicitor of tenant for life not appointed trustee. — As the ap{)oint^ent of trustees is required to impose a check upon the extensive powers conferred upon the tenant for life, and sect. 44 contemplates the probability of there being differ- ences between the trustees and the tenant for life, the Court vdll not appoint any member of the firm of solicitors who act for the tenant for life (S), and d fortiori will not appoint the actual tenant for life, or any person who may become tenant for life, to be a trustee of the settlement (c). Infant's share in unconverted realty. — The share of an infant under the Statute of Distributions in realty which has been improperly allowed to remain unconverted, is settled land within the meaning of the Act, so as to enable the Court, under sect. 38, to appoint trustees to exercise the powers of the Act; but the order appointing the trustees vdll be made without prejudice to any question as to the interests of the infants (d). (c) Burke v. Gore, 13 L. R. Ir. .367. Ch. D. 485 ; Re J. Walker's TrastB, Id) Rules of the Supreme Court 48 L. T. N. S. 632 ; 31 W. R 716. under the Settled l,and Act, 1882, (c) Re Harrop's Trusts, 24 Ch. D. B. R. 2, 4 and 6. 717. (a) Sect. 38, sub-sect. (2). frf) Re Wells, 48 L. T. N. S. 859; (J) Be Kemp's Settled Estates, 24 31 W. B. 764 j but see Re Greenrille Ijlstate, 11 L. K. Ir. 138. 748 Ch. XXII.] TRUSTEES T7NDEE SETTLED LAND ACTS. *553 Tenant for life a lunatic. — Where a tenant for life is a lun- atic, and his committee applies, under sect. 62 of the Act, for an order enabling him to exercise the powers of the Act, and no trustees are in existence, new trustees must be appointed for the purposes of the Act, and be served with notice of the application (e). 4. By sect. 39, sub-sect. (1), capital money arising under the Act is not to be paid to fewer than two persons as trus- tees of a settlement, unless the settlement authorises the receipt of capital trust money of the settlement by one trus- tee. « But subject thereto, by subject. (2), the provisions of the Act referring to the trustees of a settlement apply to the surviving or continuing trustees or trustee of the settlement for the time being. Where personal estate is settled so that the trustees have authority to vary the investments, and after-acquired prop- erty is settled, by reference, upon the same trusts, the trus- tees, having an implied power of sale, fall within the defini- tion of trustees of. the settlement for the purposes of the Act (/), and if in such a case power is given by the settle- ment to the trustees or trustee to act and give receipts for moneys subject to the trusts of the settlement, *the case falls within the exception of sect. 39, [*553] suhssect. (1), and a singlb trustee may receive the purchase-money of the real estate arising from a sale by the tenant for life (a). 5. Tenant for life. — We will next advert to the position of the tenant for life, and the powers given by the Act to the tenant for life, under which term we shall include not only the person or persons beneficially entitled to the possession of the settled land, or the receipt of the income thereof for his life (6), but also the limited owners, who, under sect. 58, have the powers of a tenant for life under the Act. Defined. — We may here rematk that by sect. 2, the ten- ant for life is defined to be " the person for the time being (e) iJe Taylor, 52 E. J. N. S. Ch. (o) iJe Garnett Orme and Har- 728 ; SI W. R. 596 ; 49 L. T. N. S. 420. greares' Contract, 25 Ch. D. 595. (/) fie Garnett Orme' and'Har- (5) See sect. 2, sub-BS. (5) and (10) greayes' Contract, 25 Ch. D. 595. (i). 749 *554 TRUSTEES UNDER SETTLED LAND ACTS. [Ch. XXII. under a settlement beneficially entitled to possession of set> tied land for his Hfe " (c) ; and " if there are two or more persons so entitled as tenants in common, or as joint- tenants, or for other concurrent estates or interests, they together constitute the tenant for life for the purposes of the Act " ; and a person who is " tenant for life within the foregoing definition is to be deemed such, notwithstanding that, under the settlement or otherwise, the settled land, or his estate or interest therein, is incumbered or charged in any manner or to any extent " ; and, by sub-sect. (10), possession includes receipt of income. 6. Persons having po'wers of tenant for life. — By 'sect. 58, sub-sect. (1), the powers of a tenant for Kfe are given to each of the following persons, when his estate or interest is in possession, namely — (1). A tenant in tail, including a tenant in tail who is by Act of Parliament restrained from barring or defeatmg his estate tail, and although the reversion is in the Crown, and so that the exercise by him of his powers shall bind the Crown, but not including such a tenant in taU where the land in respect whereof he is so restrained was purchased with money provided by Parliament in consideration of pub- lic services. (2). A tenant in fee simple, with an executory limitation, gift, or disposition over, on failure of his issue, or in any other event. (3). A person entitled to a base fee, although the rever- sion is in the Crown, and so that the exercise by him of his powers shall bind the Crown. (4). A tenant for years determinable on life, not holding merely under a lease at a rent. [*554] *(5). A tenant for the life of another, not holding merely under a lease at a rent. (6). A tenant for his own or any other life, or for years determinable on life, whose estate is liable to cease in any event during that life, whether, by expiration of the estate, (c) By sect. 8 of the Settled Land Act of 1882, to be deemed an estate Act, 1884, the estate of a tenant by arising, under a settlement made by the curtesy is, for the purposes of the his wife. 750 Ch. XXII.] TRUSTEES UNDER SETTLED LAND ACTS. *554 or by conditional limitation, or otherwise, or to be defeated by an executory limitation, gift, or disposition over, or is subject to a trust for accumulation of income for payment of debts or other purpose. (7). A tenant in tail after possibility of issue extinct. (8). A tenant by the curtesy. (9). A person entitled to the income of land under a trust or direction for payment thereof to him during his own or any other life, whether subject to expenses of management or not, or until sale of the land, or until forfeiture pf his interest therein on bankruptcy or other event. Under this section it has been held that, where estates were devised to the use of trustees upon trust to pay the net income to the testator's wife, for the maintenance, edu- cation, and benefit of the testator's son until he should at- tain twenty-one, g-nd without being liable to account to the trustees, or to the son for the same, and upon the son's at- taining twenty-one, then upon trust for him absolutely, but if he should die under twenty-one without leaving issue, then upon other trusts, the infant son had the powers of a tenant for life, as being tenant in fee simple, with an execu- tory limitation over in the event of his death under twenty- one without issue (a). So where, subject to a term for rais- ing certain sums, freehold estates were devised to the use of trustees during the life, of A., with remainders over, and the trustees were to enter into possession, and during the life of A. manage the property and pay all expenses and outgoings, and keep down the interest on charges, and pay an annuity, and then pay the ultimate residue of the rents and profits to A., and the income was insuificient after payment of the outgoings and interest to pay the annuity, it was held that A. .came within sub-sect. (1), clause (9), of sect. 68, and had the powers of a tenant for life (J). So where estates were limited to trustees for a term of 1300 years, and sub- ject thereto to A. for life, with remainders over in strict set- tlement, and the trusts of the term were to raise portions, to pay annuities, including an annuity to A., and to apply the (o) Re Morgan, 24 Ch. D. 114. (6) Re Jones, 24 Ch. D. 683; 28 Ch. D. 736. 751 *555 TRUSTEES UNDER SETTLED LAND ACTS. [Ch. XXII. residue as a sinking fund to pay off mortgage debts and other charges, and the trustees were, "during the [*555] * continuance of the trusts," to enter into and hold possession of the rents and profits of the estate, and " not deliver the same to any person beneiicially interested in any part thereof," and manage the estate as therein men- tioned, and full powers of management were given to the trustees, and they were also given such other powers over the estate as were given to a tenant for life in possession by the Settled Land Act, 1882, it was held that A. was a tenant for life, or a person having the powers of a tenant for life, within the meaning of the Act, and that the trustees could not sell or enfranchise without his consent, as required by sect. 56 of the Act (a). A gift of an estate comprised in a lease for years to a person during the remainder of the term, if he shall so long live, is not within either clause (4) or clause (6) of sub- sect. (1), and the devisee cannot exercise the powers of a tenant for life under the Act (V). 7. Powers of tenant for life. — Speaking in general terms, the Settled Land Act has not only given to the tenant for life aU. the powers of disposition of the settled land which were previously given in well-drawn settlements to the ten- ant for life, or to the trustees with the consent of the tenant for life, but has also conferred on the tenant for life larger and more extended powers, and has effected a complete revolution in the manner of dealing with settled estates, and in the mutual relations of the tenant for life and trustees. Thus the Act has given to the tenant for life an absolute power at his own discretion to sell, enfranchise and ex- change the settled land, to grant building, mining and other leases thereof, to concur in a partition, to accept surrenders of lease, to dedicate pai-ts of the settled land for streets and open spaces, and other similar purposes, and various other powers, the details of which, and the bonditions and restric- (a) Re Duke of Buccleugh's (6) Be Hazle's Settled Estates, 26 (Clitheroe) Estate, Re CUtheroe Es- Ch. D. 428 ; affirmed 29 Ch. D. 78. tate, 28 Ch. D. 378. 752 Ch. XXII.] TEtrSTEES UNDEK SETTLED LAND ACTS. *556 tions upon and subject to which they are exercisable, do not fall within the purview of the present work. 8. Cannot be assigned or released. — These powers of the tenant for life are not capable of assignment or release, and do not pass to a person as being by operation of law or otherwise an assignee of a tenant for life, and remain exer- cisable by a tenant for life after and notwithstanding any assignment of his estate or interest ; and a contract by the tenant for life not t'o exercise any of the powers is void. But the exercise of the powers will be without prejudice to the rights of the assignee for value of the tenant for life's estate or interest ; and the assignee's rights are not to be affected without his consent, except * that un- [*556] less the assignee is in actual possession of the settled land or part thereof, his consent is not to be requisite for the making of leases by tfie tenant for life at the best rent, without fine, and in other respects in conformity with the Act (a). Provisions prohibiting exercise of powers void. — By sect. 51, any provision in a settlement tending or intended to prohibit or prevent • the tenant for life from exercising, or to induce him to abstain from exercising, or to put him into a position inconsistent with his exercising any power under the Act, is made void ; and by sect. 52, notwithstanding any- thing in a settlement, the exercise by the tenant for life of any power under the Act shall not occasion a forfeiture. 9. Powers of the Act cumulative. — By sect. 56, the powers conferred by the Act are not to effect prejudicially any powers subsisting under the settlement, or by statute or otherwise, exercisable by a tenant for life, or by trustees, and -the powers given by the Act are cumulative, by which is understood that the powers of the settlement, and those under the Act, are co-existent, and that it is optional with the tenant for life to exercise the powers conferred by the Act, or, his consent to the exercise by the trustees of their (a) Sect. 50. In this section " as- qualified ftssignment, and any charge signment" includes assignment by or incumbrance, and "assignee" has way of mortgage, and any partial or a corresponding meaning. 753 *557 TRUSTEES UNDER SETTLED LAND ACTS. [Ch. XXH powers being rendered necessary to sub-sect. (2), to allow tbe powers under the settlement to be exercised (6). 10. Po-wers of tenant for life absolute. — But in exercis- ing them he is in position of a trustee. — One of the ob- jects of the Act doubtless was to give the tenant for life, in his uncontrolled discretion, large and absolute powers of dealing with and disposing of the settled land, without re- quiring him to procure the consent of any person interested in remainder, or making him responsible to- any one for the exercise of his discretion ; subject only to this, that by sect. 53 the tenant for life, in exercising any power under the Act, is to have regard to the interests of all parties entitled under the settlement, and is, in relation to the exercise . thereof by him, to be deemed in the position, and to have the duties and liabilities, of a trustee for those parties. In one case, Pearson, J., even said, "there is nothing in the Act to enable the Court to restrain the tenant for life from selling, whether he desires to sell because he is in debt and wishes to increase his income, or whether, without being in debt, he thinks he can increase his income, or [*557] whether he desires to sell from mere * unwillingness to take the trouble involved in the management of landed property ; or whether he acts from worse motives, as from mere caprice or whim, or because he is desirous of doing that which he knows would be very disagreeable to those who expect to succeed him at his death. There is not, so far as I can see, any power, either in the Court or in trustees, to interfere with his power of sale " (a). But this seems to go too far, and not to give due effect to the pro- visions of sect. 53, under which the tenant for life is, in re- lation to the exercise of the powers of the Act, made a trustee for all parties interested, and must, it is conceived, in the exercise of his discretion, be subject to the same rules (i) As to the effect of the restric- Haden's Settled Estates, W. N. 1883, tion in sub-sect. (2), on the powers of p. 188. trustees, see chap, xxiii. s. 2, v. ; and (o) Wheelwright v. Walker, 23 see Be Duke of Newcastle's Estates, Ch. D. 752 ; Re Chaytor's Settled 24 Ch. D. 129; Re Chaytor's Settled Estate Act, 25 Ch. D. 651; and see Estate Act, 25 Ch. D. 651 ; Re Barrs- Thomas v. Williams, 24 Ch. D. 558. 754 Ch. XXII.] TEtrSTEBS TJNDEE SETTLED LAND ACTS. *558 as any other trustee ; and be liable to the interference of the Court if, the exercise of the discretion is affected by im- proper motives (S). - And in a subsequent phase of the same case, the remain- derman having offered to purchase the estate for 7,500Z., and undertaken at the bar not to withdraw his offer, an injunc- tion was granted by Kay, J., to restrain the tenant for life from selling for less than 7,5001., and from entering into any contract (otherwise than by public auction), for sale of the estate, or any part thereof, without first communicating the offer to the remainderman, and giving him two clear days to make an advance on the price offered (c). Effect of decree in action to execute trusts. — It is con- ceived, that the fact that a decree has been made in a pend- ing action for the execution of the trusts of a will or settle- ment of realty, will not prevent a tenant for life thereunder from exercising the powers of the Act without procuring the consent of the Court. To require such consent would be to impose a fetter on the free alienation by the tenant for life inconsistent with the spirit and terms of the Act.^ i 11. Notice to trustees. — By sect. 45, sub-sect. (1), the tenant for life, when intending to make a sale, exchange, partition, lease, mortgage, or charge, is to give notice of his intention to each of the trustee? of the settlement, and also to the solicitor for the trustees, if any such solicitor is known to the tenant for life, by registered letter, posted not less than one month before the making by the tenant for life of the sale, exchange, partition, lease, mortgage, or charge, or of a contract for the same ; and by sub-sect. (2), at the date of notice given the number of trustees shall not be less than two, unless a contrary intention is expressed in the settlement. General notice sufficient. — Under this section it * was held that a general notice of intention to sell [*558] or lease all or any part of the settled estate at any (6) See post, p. 616; and see Re (c) Wheelwright v. Walker, 48 Hansel's Settled Estates, W. N. 1884, L. T. N. S. 867 ; 31 W. R. 912. p. 209. 1 So now decided, Cardigan i>. Curzon-Howe, 33 W. R. 836; 30 Ch. D. 531. 755 1 *558 TETTSTEES UNDER SETTLED LAND ACTS. [Ch. XXIL time or times as opportunity should occur, was insuffi- cient (a) ; but by sect. 5 of the Settled Land Act, 1884 (V), it is now provided, by sub-seCt. (1), that the notice required by sect. 45 of the Act of 1882 of intention to make a sale, exchange, partition, or lease, may be notice of a general intention in that behalf ; but by sub-sect. (2), the tenant for life is, upon request by a trustee of the settlement, to fur- nish to him such particulars and information as may reason- ably be required by him from time to time with reference to sales, exchanges, partitions, or leases effected or in progress, or immediately intended ; and the sectioli applies, by sub- sect. (4), to a notice given before, as well as to a notice given after, the passing of the Act; provided, by sub- sect. (5), that no objection to such notice was taken before the passing of the Act. Except as to a mortgage or charge. — It is to be observed that, the Act of 1884 does not extend to the case of notice of intention to make a mortgage or charge; and such a notice, to be valid, must Specify, the particular mortgage or charge contemplated at the time when the notice is given (c). Committee of lunatic. — The committee of a lunatic tenant for life cannot give a legal notice under the Act, unless he has previously obtained the sanction of thp Court of Lunacy thereto (jl). Waiver of notice. — Any trustee, by writing under his hand, may waive notice, either in any particular case or gen- erally, and may accept less than one month'^ notice (e). And it is conceived that the waiver of notice, or acceptance of shorter notice, if signed by all the trustees, wiU extend as well to the notice to be given to the trustees' solicitor under the Act of 1882, as to the notice to be given to the trustees themselves. 12. Where notice to sole trustee sufBcient. — Where trustees are appointed by a settlement with such powers as to make (a) Re Kay's Settled Estates, 26 (rf) Be Bay's Settled Estates, Ch. D. 464. uhi supra. (5) 47 & 48 Vict. c. 18. (e) 47 & 48 Vict. c. 18, s. 5 (3). (c) Re Ray's Settled Estates, 25 Ch. D. 464. 756 Ch. XXII.] TRUSTEES UNDER SETTLED LAND ACTS. *559 them, under sect. 2, of the Act of 1882, trustees of the set- tlement for the purposes of the Act, and the powers are made by the settlement exercisable by the trustees or trustee for the time being, it will be sufficient to give notice under sect. 45, to a sole surviving or continuing trustee : and the number .of trustees need not, for the purposes of the notice, be completed (/) 13. Purchaser need not inquire as to notice. — By sect. 45, subnsect. (3), a person dealing in good faith with the tenant for life is not concerned to inquire respecting the giving * of any notice required by that section. As, [*559] hcfwever, tinder the Act of 1882 at least a month's notice to the trustees was imperative, any person dealing with the tenant for life was bound to see that there had been, for at least that period, before any dealing took place, proper trustees to whom notice could have been given ; but now, under the Act of 1884, it will be sufficient if the trus- tees, although more recently appointed, by writing under their hands, either waive notice altogether or accept shorter notice, and it would seem to follow that the purchaser is not now in any case bound to do more than ascertain that there were trustees in existence at the .time the contract was entered into. Notice by registered letter. — If a shorter notice is ac- cepted, it may still be sent by registered letter, as provided by the Act of 1882. It is conceived that it is not essential to the validity of the notice that it should be sent by a registered letter, but that that is only a convenient mode authorised by the Act of serving the notice. 14. Duties of trustees on receipt of notice. — We come now to consider what are the duties of trustees of the settlement under the Act after they have received a notice of an in- tended dealing by the tenant for life, and it is somewhat remarkable that, having regard to the importance attached by the Act to the service on the trustees of notice of any intended dealing by the tenant for life with the settled land, (/) Re Gamett Orme and Hargreaves' Contract, 25 Ch. D. 595. 757 *660 TRUSTEES TINDEE SETTLED LAND ACTS. [Ch. XXH. the Act should be silent as to what the trustees on their part ought to do in the interest of. the remaindermen when they receive a notice. No doubt if it comes to their knowl- edge that the tenant for life is contemplating or attempting to commit a fraud — as, for instance, by selling or leasing the property at a gross undervalue under some secret arrange- ment by which he is to derive a personal benefit, it would be their duty to come to the Court and ask for an injunction to restrain the sale or lease (a). But if the dealing is not on the face of it fraudulent or improper, thefe is no obligation on the trustees to inquire into or take any steps in the mat- ter ; and in any case they are, by sect. 42, expressly protected from any liability for giving any consent, or for not making, bringing, taking, or dping any such application, action, pro- ceeding, or thing as they might make, bring, take or do. On the whole, it seems that the protection afforded to the remaindermen against an improper exercise by the tenant for life of his powers by the appointment of trustees of the set- tlement, coupled with notice to them under sect. 45, is of a very shadowy riature, and in the majority of cases is of no practical value. [*560] * 15. Where consent of trustees necessary to exer- cise qf powers. — There are however some powers which the tenant for life can only put in force either with the consent of the trustees or under an order of the Court, and as to these the trustees before ^ving their consent must exercise their discretion on behalf of all, persons interested. Sale of mansion house. — Timber. — Thus under sect. 15, the principal mansion house on any settled land, and the demesnes thereof, and other lands usually occupied there- with, cannot be sold or leased by the tenant for life without such consent or order (a), and under sect. 35, a tenant for (a) See Wheelwright v. Walker, all times be kept in the mansion 23 Ch. D. 752, 762. house, if a proper case for sale is (a) The Court will sanction a sale made out, but the sale will not be even though the testator has expressly sanctioned without proper directions directed that the mansion house is to being given for the disposal of the ■ be kept up as a place of residence for heirlooms. They may, however, be the person for the time being entitled sold under sect. 37, if the tenant for to the possession thereof under his life so desires and the Court approves, will, and that the heirlooms shall at Re Brown's Will, 27 Ch. D. 179. 768 Ch. XXII.] TRUSTEES UNDER SETTLED LAND ACTS. *561 life impeachable for waste in respect of timber, can on ob- taining such consent or order, cut and sell timber ripe and fit for cutting. Improvements. — So again sect. 25 enumerates the various improvements which ~fall under the description of improvements authorised by the act (i), * but by [*561] sect. 26, sub-sect. (1), where the tenant for life is (6) These improvements are the making or execution on, or in connec- tion with, and for the benefit of settjed land, of any of the following works, or of any works for any of the following purposes, and any operation incident to or necessary or proper in the execution of any of those works, or necessary or proper for carrying into effect any of those purposes, or ■ for securing the full benefit of any of those works or purposes, namely : (1.) Drainage, including the straightening, widening, or deepen- ing of drains, streams, and water- courses. (2.) Irrigation, warping. (3.) Drains, pipes, and machinery for supply and distribution of sew- age as manure. (4.) Embanking or weiring from *a river or lake, or from the sea or a tidal water. (5.) Groynes, sea walls, defences against water. (6.) Inclosing, straightening of fences, re-division of fields. (7.) Reclamation, dry warping. (8.) Farm roads, private roads, roads or streets in villages or towns. (9.) Clearing, trenching, plant- ing. (10.) Cottages for laborers, farm- servants, and artizans, employed on the settled land or not. (11.) Farmhouses, oflSces, and out-buildings, and other buUdings for farm purposes. (12.) Saw-mills, scutch-mills, and other mills, water-wheels, engine- houses, and kilns, which will in- crease the value of the settled 759 land for agricultural purposes, or as woodland or otherwise. (13.) Reservoirs, tanks, conduits, wa,tercourses, pipes, wells, ponds, shafts, dams, weirs, sluices, and other works and machinery for supply and distribution of water for agricultural, manufacturing, or other purposes, or for domestic or other consumption. (14.) Tramways, railways, ca- nals, docks. (15.) Jetties, piers, and landing places on rivers, lakes, the sea, or tidal waters, for facilitating trans- port of persons and of agricultural stock and produce, and of manure and other things required for agri- cultural purposes, and of minerals, and of things required for mining purposes. (16.) Markets and market-places. (17.) Streets, roads, paths, squares, gardens, or other open spaces for the use, gratuitously or on payment, of the public or of in- dividuals, or for dedication to the public, the same being necessary or proper in connection with the conversion of land' into building land. (18.) Sewers, drains, water- courses, pipe-making, fencing, pav- ing, brick^making, tile-making, and other works necessary or proper in connection with any of the objects aforesaid. (19.) Trial pits for mines, and other preliminary works necessary or proper in connection with de- velopment of mines. *56l TKUSTEES UNDER SETTLED LAND ACTS. [Ch. XXIL desirous that capital money arising under the Act, shall be applied in or towards payment for an improvement author- ised by the Act (a), he may submit for approval to the trustees of the settlement, or to the Court as the case may require, a scheme for the execution of the improvement showidg the proposed expenditure thereon; and by sub- sect. (2), where the capital money to be expended is in' the hands of trustees, then, after a scheme is approved by them, the trustees may apply that money in or towards payment for the whole or part of any work or operation comprised in the improvement, on — (a), a certificate of the land commissioners certifjdng that the work or operation, or some specified part thereof has been properly executed, and what amount is properly payable by the trustees in respect thereof, which certificate is to be conclusive in favour of the trustees, as an authority and discharge for any payment made by them in pursuance thereof; or on (b). a like certificate of a competent engineer or able practical surveyor nominated by the trustees and approved by the commissioners, or by the Court, which certificate shall be conclusive as aforesaid ; or on (c). An order of the Court directing or authorising the trustees to so apply a specified portion of the capital money. 16. Capital money under the Act. -^ We may here observe that under the term " capital money arising under the Act," are comprised, (1). Monies received upon any sale or en- iranehisement, or for equality of exchange or partition; (2). Fines received on the grant of leases under any power conferred by the Act of 1882 (6) ; (3). The proportion of rent under mining leases to be set aside under sect. 11 of the Act of 1882 ; (4). Money raised on mortgage of the settled (20.) Keconstruction, enlarge- Estate, 27 Ch. D. 349; aflBrmed 29 ment, or iraprovement of any of Ch. Div. 588. those works. (b) The Settled Land Act, 1882, (a) This section is not retrospec- omitted to provide that these fines tive and does not apply to improve- should be capital money vmder the ments effected before the passing of Act, but the omission has been sup- the Act. Re Knatchball's Settled plied by The Settled Land Act, 1884. 8. 4. 760 Ch. XXII.;i TKtrSTEES TJ]OT)BR SETTLED LAND ACTS. *562 land, under sect. 18 of the Act ; (5). Three-fourths of the net proceeds of the sale of timber cut under the powers of sect. 35, where the tenant for life *is [*562] impeachable for waste in respect of timber ; and (6). Money arising from the sale of heirlooms under sect. 37 of the Act. Money arising from other sources. — By sect. 32, where under an Act incorporating or applying, wholly or in part, the Lands Clauses Consolidation Acts,, or under the Settled Estates Act, 1877, or under any other Act, public, local, personal, or private, money is at the commencement of the Act in Court, or is afterwards paid into Court, and' is liable to be' laid out in the purchase of land to be made subject to a settlement, then, in addition to any mode of dealing there-; with authorised by the Act under which the money is in Court, that money may be invested or applied as capital money arising under the Settled Land Act. And by sect. 33, where, under a settlement, money is in the hands of . trustees (a), and is liable to be laid out in the purchase of land to be made subject to the settlement, then, in addition to such powers of dealing therewith as trustees have inde- pendently of the Act, they may, at the option of the tenant for life, invest or apply the same as capital money arising under the Act. 17. Application of capital money. — By sect. 21, capital money arising under the Act, subject to payment of claims properly payable thereout, and to application thereof for any special authorised object for which the same was raised, is to be invested or applied in one or more of the following modes : (1). In investment on Government securities, or on other securities on which the trustees of the settlenient are by the settlement or by law (6) authorised to invest trust money of the settlement, or on the security of the bonds, mortgages, (a) It has been held in Ireland ceeds in the purchase of lands to be that this section does not apply to settled; Burke v. Gore, 13 L. E. Ir. money in Court in an administration 367. action, which has arisen from per- (6) As to investments - authorised sonal estate given to trustees upon by law see ante, Chap. xiv. s. 4. trust to convert and to invest the pro- 761 *563 TBUSTEBS TmDEE SETTLED LAND ACTS. [Ch. XXII. or debentures, or in the purchase of the debenture stock, of any railway company in Great Britain or Ireland incorpo- rated by special Act of Parliament, and having for the ten years next before the date of investment paid a dividend on its ordinary stock or shares, with power to vary the invest- ment into or for any other such securities. (2). In discharge, purchase, or redemption of iacumbratices affectiag the inheritance of the settled land (c), or [*563] other the whole estate *the subject of the settle- ment (a), or of land-tax, rent-charge in lieu of tithe, Crown-rent, chief rent, or quit-rent, charged on or payable out of the settled land. (3). In payment for any improvement authorised by the Act (6). (4). In payment for equality of exchange or partition of settled land. (5). In purchase of the seignory of any part of the settled land, being freehold land, or in purchase of the fee simple of aiiy part of the settled land, being copyhold or customary land. (6). In purchase of the reversion or freehold in fee of any part of the settled land, being leasehold land held for years, or life, or years determinable on life. (7). In purchase of land in fee simple, or of copyhold or customary land, or of leasehold land held for sixty years or more unexpired at the time of purchase, subject or not to any exception or reservation of or in respect of mines or minerals therein, or of or in respect of rights or powers rela- (c) The words "incumbrances af- Therefore, where before the passing fecting the inheritance of the set- of the Settled Land Act charges of tied land " must be taken in their this nature have been created, the ordinary sense of mortgages, portions, tenant for life is not entitled to have &c., and not as meaning incumbrances them discharged out of the capital of such as charges for land drainage the settled land, lb. and improvements created under the (o) It is not necessary that the Land Improvement Act, 186i, and incumbrance should affect the whole other similar Acts, which, although of the settled estates, it is sufficient in one sense affecting the inheritance, if it affect any land the subject of are in numerous cases charges rather the settlement ; Be Chaytor's Settled affecting the tenant for life than the Estate Act, 25 Ch. D. 651. remainderman, per Pearson, J.; Re (6) For the authorised improve- Knatchbull's Settled Estate, 27 Ch. ments, see ante, p. 560, note (6). D. 349; affirmed 29 Ch. Div. 688. 762 Ch. XXII.] TRUSTEES UNDBK SETTLED LAND ACTS. *564 tive to the working of mines or minerals therein or in other land. (8). In purchase, either in fee simple, or for a term of sixty years or more, of mines and minerals convenient to be held or worked with the settled land, or of any easement, right, or privilege convenient to be held with the settled land for mining or other purposes. (9). In payment to any person becoming absolutely en- titled or empowered to give an absolute discharge. (10). In payment of costs, charges, and expenses of or incidental to the exercise of any of the powers, or the exe- cution of any of the provisions, of . the Act. (11). In any other mode in which money produced by the exercise of a power of sale in the settlement is applicable thereunder. Improvementa under Agricultural Holdings Act. — And under the Agricultural Holdings (England) Act, 1883 (c),' capital money arising under the Settled Land Act, 1882, may be applied in payment of any monies expended and costs incurred by a landlord under the former Act in the execution of any improvement mentioned in the first or second parts of the schedule thereto (c?), as * for an improve- [*564] ment authorised by the Settled Land Act; and such (c) 46 & 47 Viet. c. 61, s. 29. (8.) Making or Improving of (d) The first part of the schedule watercourses, ponds, wells, or reser- relates to improvements to which the voirs, or of works for the applica- landlord's consent is required, and tion of water power or for supply comprises : of water for agricultural or domes- (1.) Erection or enlargement of tic purposes, buildings. (9.) Making of fences. (2.) Formation of sUos. As to (10.) Planting of hops, the Court authorizing the forma- (11.) Planting of orchards or tion of silos, see Re Broadwater fruit bushes. Estate, 33 W. R. 738. (12.) Reclaiming of waste land. (3.) Laying down of permanent (13.) Warping of land, pasture. (14.) Embankment and sluices (4.) Making and planting of osier against floods, beds. • The second part of the schedule (5.) Making of water meadows relates to drainage an improvement or works of irrigation. in respect of which notice to the land- (6.) Making of gardens. lord is required. (7.) Making or improving of roads or bridges. 763 *565 TETJSTEES UNDER SETTLED LAND ACTS. [Ch. XXII money may also be applied in discharge of any charge created on a holding under the Act in respect of any such improvement as aforesaid, as in discharge of an incumbrance authorised by the Settled Land Act to be discharged out of such capital money. 18. Subject to direction of tenant for life. — By sect. 22, sub-sect. (1), capital money arising under the Act is to be paid either to the trustees of the settlement or into Court, at the option of the tenant for life, and is to be invested or applied by the trustees, or under the direction of the Court, as the case may be accordingly. Sub-sect. (2). The investment or other application by the trustees is to be made according to the direction of the tenant for life, and in default thereof, according to the direc- tion of the trxistees, but in the last-mentioned case subject to any consent required or direction given by the settlement with respect to the investment or other application by the trustees of the trust money of the settlement ; and any invest- ment is to be in the names or under the control of the trustees. Sub-sect. (3). The investment or other application under the direction of the Court is to be made on the application of the tenant for life, or of the trustees. Sub-sect. (4). Any investment or other application is not during the life of the tenant for life to be altered without his consent. Sub-sect. (5). Capital money arising imder the Act, and the securities arising from the investment thereof, are for all purposes of disposition, transmission, and devolution, to be considered as land, and to be held and go accordingly. Sub-sect. (6). The income of the securities is to be paid or applied as the income of the land, if not disposed of, would have been payable or applicable under the settlement. Sub-sect, (7). The securities may be converted into money, which is to be capital money arising under the Act [*565] * It will be observed that the tenant for life may direct in what manner, consistently with the Act, the capital money is to be invested or apphed, and, the duty of the trustees in carrjdng out such directions is purely minis- terial, and, except where the consent or approval of the trus- 764 Ch. XXII.] TKUSTEES UNDER SETTLED LAND ACTS. *565 tees is expressly required as for an outlay on improvements, does not involve the exercise of any discretion. 19. "Where settled real estate has been sold under the Lands Clauses Consolidation Acts, and the purchase-money paid into Court, the Court will appoint trustees of the settle- ' ment for the purposes of the Settled Land Act, and order the fund in Court to be paid out to them to be held upon the trusts of the settlement (a). 20. Purchases confined to England. — By sect. 23, capital money arising under the Act from settled land in England is nqt to be apphed in the purchase of land out of England, ouiless the settlement expressly authorises the sa;me. 21. Form of conveyance. — By sect. 24, land acquired by purchase or in exchange, or on partition, is to be made subject to the settlement, as follows : freehold land is to be conveyed to the uses, on the trusts, and subject to the powers and provisions subsisting with respect to the settled land, but not so as to increase or multiply charges or powers of charging. Copyhold, customarj-^, or leasehold land is to be conveyed to and vested in the trustees of the settlement on trusts, and subject to powers and provisions corresponding with the uses, trusts, powers, and provisions of the freehold land, but so that the beneficial interest in land held by lease for years shall not vest absolutely in a person who is by the settlement made by purchase tenant in tail, or in tail male, or in tail female, and who dies under twenty-one. 22. Application of money arising from limited interests. — By sect. 34, where capital money arising under the Act is purchase-money paid in respect of a lease for "y^ars, or Hfe, or for years determinable on life, or in respect of any other estate or interest in land less than a fee simple, or in respect of a reversion, the trustees of the settlement or the Court, as the case may be, may require the same to be laid out, ^invested, accumulated, and paid in such manner as in the judgment of the trustees or of the Court, as the case may be, will give to the parties interested in that money the like benefit therefrom, as they might lawfully have had from th^ (a) Re Harrop's Trusts, 24 Oh. D. 662 ; Re Duke of Rutland's Settle- 717; Re Wright's Trusts, 24 Ch. D. ment, W. N., 1883, p. 140. 765 *666 TRtrSTBES UNDER SETTLED LAND ACTS. [Ch. XXII. lease, estate, interest, or reversion, in respect whereof the money was paid, or as near thereto as may be. Under this section it will be the duty of the trustee to take care upon a sale by the tenant for life of a lease- [*666] hold interest, or a * reversion, that the proceeds of the sale are so dealt with as not to affect the relative interests of the tenant for life and remainderman (a). This section corresponds with the 74th section of the Lands Clauses Consolidation Act, 1845, and its construction will be regulated by the decisions tinder that Act (J). Thus, if the property is subject to a lease at a rent less than the income produced by the investment of the purchase-money the tenant for life will be entitled during the remainder of the term, for which the property was let, to a sum equal only lo the rent, and the residue of the income should be accumu- lated at compound interest until the end of the term, after which the tenant for life will be entitled to the whole of the income including the income of the accumulations (c). So, on the other hand, if the property sold was a lease for a short term, the tenant for life is entitled to receive an an- nuity of such an amount as will exhaust the proceeds of sale in the number of years which the lease had to run ( ^that if it [*585] were requisite for the trustees to exercise any of the special powers of sect. 42, they would be treated as having entered into possession under that section, and that the accumulations of income would go accordingly, but that in a simple case where the trustees merely received the income as legal owners and had no occasion to exercise any of the powers of sect. 42, the accumulations would go as directed by sect. 43. It would, however, be prudent, in framing any instrument under which, the difficulty could arise, to provide for the disposition of the accumulations.] 31. Out of principal. — Where the amount of the legacy is inconsiderable, as 100?., the Cotirt would, in the absence of other means, direct maintenance to the child out of the prin- cipal itself (a) ; the executor, therefore, who, under similar (a) Ex parte Green, 1 J. & W. 253 ; order maintenance, where tlieve were Ex parte Chambers, 1 R. & M. 577 ; no other means, out of the corpus of Ex parte Swift, lb. 575; Re IWary an infant's freehold estate; and in England, Id. 499; Harney v. Harvey, De Witte v. Palin, 14 L. R. Eq. 251, 2 P. AV. 21 ; Ex parte Hays, 3 De G. V. C. Malins allowed maintenance to & Sm. 485. In Re Howarth, 8 L. R. be raised by a charge on reversionary Ch. App. 415, the Lords Justices held property, that the Court had jurisdiction to 791 *586 GENERAL POWERS OF TRUSTEES. [Ch. XXIII. S. 1. circumstances, but without the authority of the Court, breaks in upon the capital, would not be liable, on the cestuis que trust's coming of age, to account for the expenditure (S). But where payments of this kind, which are not strictly authorised, are made by executors or trustees, and the pro- priety of them is questioned in a suit, and there is a defi- ciency of assets, the costs of suit will have priority over the allowances to the executors or trustees (e). Where the leg- acy was not more than SOOL, Sir W. Grant determined that the trustee had exceeded his duty, and said his impression was, that the rule had been never to permit trustees of their own authority to break in upon the capital (c?) ; but the case of Barlow v. Grant, which is clearly to the contrary, must have escaped his Honour's recollection (e). The general rule is, however, not to break into capital for maintenance, and where the legacy is considerable, as lOOOZ., or the like, as the Court itself would most probably not order the appli- cation of part of the principal, the trustee would not be safe in exceeding of his own authority the amount of the in- terest (/). [*586] * 32. Maintenance where father alive. — Where the father of an infant is alive, trustees should, in gran1> ing maintenance, bear in mind that the Court never allows a father maintenance out of his children's property mthout a previous inquiry as to his ability to maintain them him- self (a). The term ability, however, is relative to the position of the father and children ; and maintenance has been allowed to a father who had 6000Z. a year (i). And an express declar ration in the instrument of trust, or a previous contract, as in the case of a marriage settlement to which the father is a party, may confer on the father a right to have maintenance (6) Barlow v. Grant, 1 Vern. 255 ; (/) Barlow v. Grant, 1 Vern. 255, Carmicliael v. Wilson, 3 Moll. 79 ; per Lord Guildford ; Davies v. Austen, Bridge v. Brown, 2 Y. & C. C. C. 181, 1 Ves. jun. 247 ; S. C. ,3 B. C. C. 178 ; 189. Beasley v. Magrath, 2 Sch. & Lef. 35. (f) Robinson v. Killey, 30 Beav. (o) See now 23 & 24 Vict. c. 146, 520. 8. 26; [since repealed and its place (d) Walker v. Wetherell, 6 Ves. supplied by 44 &*45 Vict. o. 41, s. 43.] 478. (6) Jervoise v. Silk, 1 G. Coop. 52 ; (e) See also Prince v. Hine, 26 Ex parte Williams, 2 Coll. 740 ; Cul- ■Bear. 636. bertson v. Wood, 5 I. R. Eq. 23, see 41. 792 Ch. XXIII. S. 1.] GENERAL POWEES OP TRUSTEES. *587 for his children out of the settlement funds (e). But the decisions in this respect have gone as far as can be justified upon principle (d). [Where there was a power of maintenance in the usual form in the discretion of the trustees, and the trustees with- out exercising any discretion in the matter paid the whole income to the father of the infant, it was held that the . father's estate must account for the income received by him (e). Past maintenance. — Where the father had borrowed money to enable him to keep his infant children at school and was unable to repay the debt, the Court allowed him to be re- couped the amount so borrowed as an allowance for past maintenance (/)•] 33. After death of father. — It was formerly much doubted whether after the death of the father maintenance should be granted to the mother so long as she continued a widow with- out an inquiry as to her ability (y). But it was ruled that where she had married again there should be no inquiry as to ability, the second hiisband being, it was said, under no liability to maintain his wife's children (K). It has been since settled that no inquiry as to the mother's ability will be directed even during her widowhood (i) ; and as a widow is undoubtedly liable at law to maintain her chil- dren (y), the * direction of the inquiry cannot be [*687] regarded as depending upon the legal liability. It would seem to follow that the enactment rendering a husband liable to maintain his wife's children by a former marriage (a) (c) Mundy u. Lord Howe, 4 B. C. [(/) Daveiy v. Ward, 7 Ch. D. C. 223 ; Meacher v. Young, 2 M. & K. 754.] 490; Stocken v. Stocken, 4 SiiQ. 152, (j) As to the mother's right to be 2 M. & K. 489, 4 M. & Cr. 95 ; White recouped for past maintenance of a V. Grane, 18 Beav. 571 ; Bansome v. child, see Re Cottrell's Estate, 12 L. Burgess, 3 L. R. Eq. 773; Newton v. R. Eq. 566. Cnrzon, 16 L. T. N. S. 696. (A) Billingsly v. Critchet, 1 B. C. (c?) Thompson v. Griffin, Cr. & Ph. C. 268. 321, per Lord Cottenham ; [Wilson v. (i) Douglas v. Andrews, 12 Beav. Turner, 22 Ch. D. 521 ;] and see Re 310 ; and see the note, p. 311. Kerrisou's Trusts, 12 L. E. Eq. 422, (,7) 43 Eliz. c. 2, s. 6; 4 & 5 W. 4, the case of a voluntary settlement. c. 76, s. 56. [(c) Wilson V. Turner, 22 Ch. D. (o) 4 & 5 W. 4, c. 76, s. 57. 521.] 7&8 ♦587 GENERAL POWEBS OF TRUSTEES. [Ch. XXIII. S. 1. ought not to make (and it is believed tliat it has not in fact made) any alteration in the practice of the Court of granting maintenance where the mother has married again without any inquiry as to ability. [34. "WTiere accumulation directed. — Where a testator left property to the value of 10,000L a year to be accumulated for twenty-one years, and directed that the accumulattons should be laid out in the purchase of lands which, after the expiration of the twenty-one years, were to be held for A. for life, and after his death for his 'sons in strict settlement, and A.'s income was insufficient to enable him to bring up and educate his infant sons in a manner suitable to their prospective position iu life, V. C. Malins allowed him 2,7001. a year out of the income of the property, with liberty to apply for an increased allowance if necessary when the chil- dren grew older (J). But in a subsequent case in Ireland where the circumstances were similar, the Court refused to follow the decision of V. C. Malins, and held that where there is an imperative trust to accumulate, it is the duty of the Court to carry out the testator's intention, and that the Court has no discretion to allow maintenance out of the income (c) ; and the Irish decision seems to be in accordance with sound principle. 35. Interests of third parties protected. — Where an accu- mulation has been directed by a testator, and the Court allows maintenance out of the accumulations, the order should be framed so as to protect the interests of third parties by dii-ecting the interests of the infants in any legacy or share of residue to be held as a security ;for recouping any diminution in the accumulations (ci). , , ' Where an infant was entitled, contingently on her attain- ing twenty-one or marrying, to a large property, the Court sanctioned a scheme for providing for her past and future maintenance, by effecting a policy of assurance payable on [(6) Havelock w. Havelock, 17 Ch. 8 Ir. Eq. E. 584; affirmed 15 L. R. D. 807 ; and see Bennett v. Wyndham, Ir. 90.] 23 Beav. 521; and S. C. 4 De 6. F. [(rf) Me Colgan, 19 Ch. D. 305; & J. 259.] see this case and Re Arbuckle, 2 Set. [(c) Kemmis v. Eemmis, 13 L. R. on Dec. 4th Ed. 726, for form of order Ir. 372 ; following Shaw v. M'Mahon, providing for the reooupment.J 794 Ch. XXIII. S. 1.] GENEEAL POWERS OF TRUSTEES. *588 her death before either attaining twenty-one or marrying under that age, and mortgaging the policy and charging the infant's contingent interest to secure the necessary ad- vances and compound interest, but it was expressly * provided that the interest of any person other than [*688] the infant was not to be affected («).] 36. Advancement out of capital. — A part of the capital may be sunk by a trustee without the direction of the Court for the advanvement of a child, where the same sums if ex- pended for maintenance would not have been allowed (6). ^7. Advancement -when there is a limitation over. — But . a trustee cannot apply part of the principal towards the ad- vancement of the child where the legacy is subject to* a limi- tation over in favour of a stranger, for in such a case the Court itself could not make an order to that effect. Thus in Lee v. Brown (c), where a testatrix gave 1001. to trustees upon trust to apply the produce to the maintenance and eduQation of A. B., and when he should attain twenty- one to transfer to him the capital, but in case he died under [(a) Re Bruce, 30 W. R. 922 ; and business and giving stock-in-trade, or Bee Re Tanner, 53 L. J. N. S. Ch. supplying /urtAer capital for carrying 1108 ; 51 L. T. N. S. 507, as to adopt- on the business, or paying the entrance^ ing a similar course for securing the fee to an Inn of Court with a view to other persons interested where an ad- the Bar, or buying a commission and vance is required for an infant whose providing the outfit. So a large sum interest is only contingent.] given to a child in one payment might (6) Swinnock v. Crisp, Freem. 78; be presumed in the absence of evi- "Walker v. Wetherell, 6 Ves. 477 ; and dence to be an advancement by way see Ex parte M'Key, 1 B. & B. 405. of portion. But the qualities of a As to what purposes will fall under portion would not attach to small sums the description of advancement, see paid by a father to a child whether Boyd w. Boyd, 4 L. K. Eq. 305 ; Roper- an infant or adult, or to temporary Curzon v. Eoper-Curzon, 11 L. R. Eq. assistance in the discharge of his debts, 452 ; Re Gore's Settlement Trusts, W. or to payment of his travelling ex- 's. 1876, p. 79 ; Taylor ,/. Taylor, 20 penses, as a passage to India, or to L. R. Eq. 155. In the last case an the payment of a fee to a special advancement by way of portion was pleader, which would come rather said to be something given by a under preliminary education than ad- parent to establish his child in life, vancement. But in the case of Re a provision for him, and not a casual Blockley, 29 Ch. D. 250, Pearson, J., payment. Under portions would be dissented from the view that a sum ranked the following, viz. sums ad- given by a father to his son to enable vanced on marriage, on setting up a him to pay his debts could not be child in business or putting him into treated as an advancement. a profession, buying the goodwill of a (c) 4 Ves. 362. 795 *589 GENBKAL POWERS OF TRUSTEES. [Ch. XXIII. S. 1 that age the testatrix gave the legacy to his brother and sister equally, Lord Alvanley said, "It certainly was not competent under this trust to the executor, nor could he, if he had applied, have obtained permission from this Court, to advance any part of the capital of the legacy in putting the child out in the world ; for if it had been such a case that the Court would have authorised the act that was done, I desir% to he understood that it would he considered as properly done; for the principle is now established, that if an executor does without application what the Court would have approved, he shall not he called to account, and forced . to undo that merely because it was done without application " (d). But [*589] where an infant was entitled, on a contingency, * and at a certain time but which had not arrived there was a power of advancement, and the trustee took upon himself the risk as against the person entitled if the contingency did not happen, and applied part of the capital for the ad- vancement of the infant, he was allowed it in his account as between him and the infant who in the event became enti- tled (a). ' 38. Where there are cross limitations amo£igst the children. — And where legacies were given to children payable at twenty-one or. marriage, with a limitation over on the death of any child before attaining twenty-one or marriage, not in favour of a stranger, hut for the benefit of such of the children as should attain twenty-one or marry, a trustee, who had paid a premium on the apprenticeship of a child who died under twenty-one was allowed it by the Court (6). The case turned upon the same principle as where a legacy is given to a class, all or some of whom must take the fund abso- lutely, when, as all have an equal chance of survivorship, the individuals of the class will be ordered maintenance even be- fore their shares in the fund have become actually vested (c). This power is exercised by the Court, but cannot be exer- (d) lb. 369. tioned in the report, but appears from (a) Worthington v. M'Craer, 23 Keg. Lib. Beav. 81. (c) See Eop. Leg. chap. xx. s. 5, (6) Franklin v. Green, 2 Vem. 137. Greenwell v. Greenwell, 5 Ves. 194 ; That the limitation over was for the Cavendish ». Mercer, cited lb. ; Bran- henefit of the children is not men- don v. Aston, 2 Y. & C. C. C. 30. 796 Ch. XXIII. S. 1.] GENERAL POWERS OF TRUSTEES. *590 cised by trustees without the authority of the Court, nor can the Court itself make such an order in a summary way with- out the institution of a suit (<^). [39. "Where consent of bankrupt tenant for life required. — Where there is a power of advancement with the consent of the tenant for life, and the tenant for hfe becomes a bankrupt, his power of consenting is not extinguished, but can only be exercised with the consent of his trustee in bankruptcy acting under the directions of the Court of Bank- ruptcy (e)-] 40. General po'wer of advancing tenant for life. — Where trustees had a power to apply a moiety of a trust fund in or towards the preferment or advancement of the tenant for life, or otherwise for his benefit, in such a manner as they should in discretion think fit, it was held that they might apply the moiety in payment of the debts of the tenant for life, the interest of which absorbed nearly the whole of his income and the principal of which he was unable 'to pay out of his own resources (/). [So a power of applying the capi- tal for the benefit and advancement in the world of the ten- ant for life, coupled with words showing that the power * of^ advancement was a large one, has been [*690] held to justify applications of the trust funds for the benefit of the tenant for life which were not strictly advance- ments (a).j 41. Debts barred by the Statute of Limitations. — An execu- tor has never been held responsible for paying a debt due and owing from the testator's estate, the remedy for which has been barred by the Statute of Limitations ; and upon the same principle he may retain his own debt though barred (6). But an executor would not be at liberty to pay such a debt after a decree for the administration of the testator's estate, for from that time any other creditor, or even a legatee, spe- cific, pecuniary, or residuary, may plead the statute in taking (_d) Re Breeds' Will, 1 Ch. D. 226. [(a) Be Brittlebank, 30 W. K. 99.] [(e) Re Cooper, 27 Ch. D. 565.] (6) Stahlsohmidt v. Lett, 1 Sm. & [(/) Lowther v. Bentinck, 19 L. (J. 415 ; Hill v. "Walker, 4 K. & J. R. Eq. 166; and see Be Breeds' Will, 166; Hunter v. Baxter, 3 Gift 214; 1 Ch. D, 226; Jte Gore's Settlement Bring v. Greetham, 1 Eq. Eep. 442; Trusts, "W. N. 1876, p. 79.] Louis v. Rumney, 4 L. E. Eq. 451. 797 . *591 GENEKAL POWEES OP TKUSTEES. [Ch. XXIU. S. 1. the accounts (c), except to the debt of a plaintiff in a credi- tors' suit, to which debt the defendant, the executor, did not plead the statute by his statement of defence, and on the basis of which the decree has been made (tZ). If after a de- cree neither the executor nor the parties beneficially inter- ested before the Court plead the statute, the Court wiU not set up the statute on behalf of absent parties, but if the «9;ec- utor omits to plead the statute, it is at his own risk (e). 42. Promise of subscription. — It sometimes happens that the deceased made some promise, written or verbah'to sub- scribe a certain sum for the promotion of some "charitable or public purpose." If nothing has been done in consequence of such promise, the executor or administrator must treat the promise'as voluntary, and therefore null. But if other persons have acted on the faith of the promise and would suffer loss if it were not observed, the executor or admin- istrator, it is conceived, would be justified in giving it ef- fect (/). [43. When trustees may apply under Settled Estates Act. — If an estate is vested in trustees and there is not for the time being any beneficial owner of the rents and profits, the trus- ' tees are the proper persons to apply to the Court under the 23d sect, of the Settle'd Estates Act, 1877, to exercise the powers conferred by the Act (5').] 44. Power to release or compound debts. — A trustee may, under circumstances, release or compound a debt (K). But if a trustee release or compound a debt without [*591] * some suificient ground in justification (a), or if he sell the debt for a grossly inadequate considera- (c) See Puller v. Bedman, 26 Bear. (/) See Cooper v. Jarman, 3 ti. R. 614; Shewen v. Vanderhorst, 1 R. & Eq. 98; Baxter v. Gray, 3 Man. & G. M. 347; 2 R. & M. 75; Dring v. 771; Shallcross v. Wright, 12 Bear. Greetham, 1 Eq. Rep. 442. 558. {d) Adams v. Waller, 35 L. J. N. [(j) Viae t. Raleigh, W. K. 1883, S. Ch. 727 ; Fuller v. Redman (No. 2), p. 128.] 26 Beav. 614 ; Briggs v. Wilson, 5 De (A) Blue ». Marshall, 3 P. W. 381 ; G. M. & G. 12; S. C. 2 Eq. Rep. 153; and see Ratcllfie o. Winch, 17 Beav. Ex parte Dewdney, 15 Ves. 496. 216; Forshaw u. Higginson, 8 De G. (c) Alston V. TroUope, 2 L. R. Eq. M. & G. 827. 205; S. C. 35 Beav. 466; and see (a) Jevon v. Bush, 1 Vern. 342; Dring'V. Greetham, 1 Eq. Rep. 442. Gorge u. Chansey, 1 Ch. Rep. 125; 798 Ch. XXIII. S. 1.] GENBBAL POWERS OF TKTJSTEES. *591 tion (6), he will clearly be answerable to the cestuis que trust far the amount of tbe devastavit. 23 & 24 Vict. o. 145. — Executors ynder wills executed after the 28th August, 1860, [were by Lord Cranworth's Act] ex- pressly authorised " to accept any composition, or any secu- rity, real or personal, for any debts due to the deceased, and to allow any time for payment of any such debts as they should think fit, and also to compromise, compound, or sub- mit to arbitration all debts, accounts, claims and things what- soever relating to the estate of the deceased, without being responsible for any loss to be occasioned thereby " (c). 1^44 & 45 Vict. c. 41. — But this section has been repealed and its place supplied by the Conveyancing and Law of Property Act, 1881, which as to executorships and trusts constituted or created either before or after the commence- ment of the Act provides by sect. 37, that (1) " an executor may pay or allow any debt or claim on any evidence that he thinks sufficient " ; (2) " an executor, or- two or more trus- tees acting together, or a sole acting trustee where, by the ' instrument, if any, creating the trust, a sole trustee is author- ised to execute the trusts and powers thereof, may, if and as he or they think fit, accept any composition, or any security, real or personal, for any debt, or for any property, real or personal, claimed, and may allow any time for payment of any debt, and, may compromise, compound, abandon, submit to arbitration, or otherwise settle, any debt, account, claim, or thing whatever relating to the testator's estate or to the trust," and may execute and do all such releases and things as may seem expedient without being responsible for any loss occasioned by anything done in good faith. But as regards trustees the section is subject to any contrary intention ex- pressed in the instrument creating the trust (c?). In exercising the powers of this section in a case where Wiles V. Gresham, 5 De (J. M. & G. [This section was held not to be con- *770. A trustee is not liable for fined to claims in the nature of debts, omitting to compound ; Ex ' parte but to extend to claims of legatees, Ogle, 8 L. R. Ch. App. 715, per Cur. Re Warren, 53 L. J. N. S. Ch. 1016; (6) Re Alexander, 13 Ir. Cli. Eep. 51 L. T. N. S. 561 ; 32 W. R. 916.] 137. [(d) 44 & 45 Vict. c. 41, ss. 87, (c) 23 & 24 Vict. c. 145, s. 30. 71.] 799 *592 6BNBEAL POWERS OF TBUSTEES. [Ch. XXIII. S. 1. there are several trustees, it is conceived that all the trustees must " act together," except in cases in which, independently of the section, a majority of the trustees are by law capable of binding the minority («). The object of the section was not to enable some of the trustees to act without the concurrence of , .their co-trustees. [*592] * It will be observed that the powers of this^sec- ' tion are only exercisable by a sole acting trustee in cases where a sole trustee is by the instrument, if any, creating the trust "authorised to execute the trusts and powers thereof," but by the 38th section, as to trusts created by instruments coming into operation after the 31st Decem- ber, 1881, any trust or power vested in two or more trustees jointly, in the absence of a contrary intention in the instru- ment creating the trust or power, may be exercised or per- formed by the survivor for the time being, and it seems to follow that in the case of trusts falling within this section the powers of sect. 37 may be exercised by a sole surviving trustee. This section has largely extended the powers of executors and trustees^ and it would seem that in future the only ques- tion will be whether the executors or trustees have acted in good faith in relation to any of the matters authorised by the section. Discretion of executors. — Independently of the section, executors have a fair discretion whether they will press a debtor for payment, and will not be held liable for wilful neglect or default if they have exercised their discretion honestly and fairly in giving time to a debtor although loss may result from the delay (a).] 45. Settlement with one residuary legatee. — ExeCUtorS and trustees of a will when they have discharged the funeral and testamentary expenses, debts and legacies, may come to a final account with one of the residuary legatees separately, and if such residuary legatee be paid only what is his fair share at the time, he will not be made to account to the [(e) As to a majority binding a [(o) iJc Owens, 47 L. T. N. S. 61.] minority in charity trusts, see ante, p. 259; and see post, p. 597.] 800 Ch. XXni. S. 1.] GENERAL POWERS OF TRUSTEES. *593 other residuary legatees, if the undistributed part afterwards becomfe depreciated or lost (5). 46. Appropriation of residue. — Where the residue consists of a great variety of securities, the question arises whether the trustees in the absence of any special power can virtute officii, where infants are concerned, divide the residue by appropriating some securities to one residuary legatee and other securities to another, but so that the distribution is a fair one according to the market price of the day of the funds so appropriated. The Court can make such an appor- ti(jnment, for in a suit guardians ad litem of the infants are appointed and are heard on their behalf to protect their interests; but out of Court where the voice of the infants cannot be heard, it would be unsafe for trustees to make such an apportionment on their own responsibility. However, where trustees are directed to invest the infants' share on any particular securities, they might accept securities , of * the nature prescribed at the market price, as the [*593] transaction when resolved would be the payment of so much money, and the investment of it by the trustees in the requisite securities. Where there are no special powers, the trustees should turn the whole of the irregular species of property into money and divide the proceeds. 45. Release of equity of redemption. — Trustees of an equity of redemption of lands mortgaged for more than their value, may, it is conceived, release ^ the equity of redemption to the mortgagee, rather than be made defendants to a foreclosure suit, the cost of which, so far as incurred by themselves, would fall upon the trust estalte. 46. Whether trustees mortgagees can release part of the land In mortgage. — Where trustees are mortgagees they are often requested to release part of the land from the security, in order to enable the mortgagor to deal with it for his own convenience. Where the value of the land is not excessive as compared with the debt, it would, of course, be a gross breach of trust to deteriorate the security. But suppose the value of the part left in the mortgage to be (say) double the amount of the debt, may the trustees release the residue ? ' Q>) Peterson v. Peterson, 3 L. R. Eq. 111. 801 *594 GENERAL POWERS OF TRUSTEES. [Ch. XX.1II. S. 1. It is presumed that trustees can never justify the abandon- ment of any part of the security on the mere ground of consulting the convenience of the mortgagor; and they must be prepared to show that the act v^as calculated under the circumstances to promote the interest of the cestuis que trust. But if the mortgagor be ready to pay off the mort- gage on a transfer of the security, unless the trustees will consent to release, and the existing mortgage, even when confined to the narrower parcels, is a clearly beneficial one and the value still abundantly ample, the trustees would surely incur no responsibility by acceding to the arrange- ment (a). The prevailing opinion of conveyancers appears to be that where trustees hav.e a power of investing on mort- gage and of varying securities (which a power of investing on mortgage implies) the transaction will be considered as tantamount to repayment of the mortgage money, and rein- vestment by the trustees on a mortgage of the hereditaments retained as a security, and that the purchaser of the released hereditaments is not bound to see to the sufficiency of the new security, or that the acceptance of the new security does not involve a breach of trust (6). [47. "Whether bound to consolidate mortgages. — It is con- ceived that although trustees holding independent securities from the same mortgagor may have the right to consolidate them, it is not imperative upon them to do so, but [*594] that they * may deal with the securities independ- ently, or allow one or more of them to be redeemed, without incurring any liability for loss which may arise from .the subsequent depreciation in the other securities. They should, however, satisfy themselves before parting with any of the securities, or allo^^ving any of them to be redeemed, that the margin of value on those which are retained is then sufficient to justify a present advance to the amount remain- ing due to the trustees upon such securities.] 48. Discharge of a mortgage on a settled estate. — Trustees of a settled estate with a power of sale and reinvestment (a) See Whitney v. Smith, 4 L. (i) See Davidson's Preced. vol. R. Ch. App. 513; Pell v.De Winton, ii. p. 835, 3d ed. ; Dart's V. & P. vol. 2 De G. & J. 13. u. p. 612, 6th ed. - 802 Ch. XXni. S. 1.] GENERAL POWERS OF TRTTSTEES. *596 may, it is conceived, sell part of the estate to pay off a mort- gage affecting the estate though not mentioned in the settle- ment, for this in substance is a reinvestment, and d fortiori if the trustees have a power of investing on real securities until a purchase can be found, they can sell part of the estate and apply the proceeds in taking a transfer of the mortgage, provided it be an adequate security. 49. Sale of limited interests. — Trustees for sale of a limited interest in an estate (as a remainder), or of an aliquot part of the estate (as an undivided one-fourth), may concur with thf other parties in a sale of the whole estate for one entire sum, and may agree afterwards as to the apportionment of the purchase-money, and if the parties cannot agree the apportionment will be made by the Court (a). But other- wise, if there be not any iatelUgible principle upon which the apportionment can be made (V). 50. Reimbnrsement of expenses on account of the trust. A trustee may reimburse himself a sum of money bond fide advanced by him for the benefit of the cestui que trust, or even for his own protection in the execution of his office. For, " As it is a rule," said Lord Chancellor King, " that the cestui que trust ought to save the trustee harmless, so within the reason of that rule, when the trustee has honestly and fairly, without any possibility of being a gainer, laid down money by which the cestui que trust is discharged from being liable for the whole money lent, or from a plaia and great hazard of being so, he ought to be repaid "(c). 51. Pow^er of trustees for sale to clear the estate. — A trus- tee for sale has been held to be justified in applying part of the purchase-money in paying off a charge without satisfac- tion of wliich the purchaser refused to complete, and which the trustee was professionally advised was still subsisting, though the charge itself was open to doubt (d). * 52. Power to grant leases. — A trustee of lands [*595] (a) Clark v. Seymour, 7 Sim. 67 ; 10 Jur. N. S. 1246 ; S. C. 4 De G. J. Rede v. Oakes, 32 Beav. 555; see & S. 505. Earl Powlett v. Hood, 5 L. R. Eq. (c) Balsh v. Hyham, 2 P. W. 453. 115, and ante, p. 430. (d) Porshaw v. Higginson, 8 De (6) Rede v. Oakes, 32 Beav. 555; G. M. & G. 827. 803 *595 GENEEAL POWERS OF TRUSTEES. [Ch. XXIH. S. 1. may grant a reasonable husbandry lease (a), in the fair management of the estate (5). But he has no power to de- mise where it is a simple trust, and the cestui que trust is in possession, except he do it with the cestui que trust's concur- rence. And primd facie a trustee for sale would not be justified in granting a lease (c). And though a trustee may grant a farming lease, it does not follow that he could gfant a mininff lease, for the latter is pro tanto a destruction of the corpus (c?). [Trustees having power to grant leases to " any person or persons " may lease to a limited company (e). By sect. 43 of the Agricultural Holdings (England) Act, 1883 (/), when, by any instrument, a lease of a holding is authorised to be made, provided that the best rent or reser- vation in the natui;e of rent is reserved, on a lease to the tenant of the holding, it shall not be necessary, in estimating such rent or reservation, to take into account against the tenant the increase (if any) in the value of such holding arising from improvements made or paid for by him.] 53. Powers of directors, &c. — The managers of a trading company or partnership ha-N^e no power, whatever the neces- sity of the case, to borrow money beyond the capital pre- scribed by the Act or deed of settlement, so as to give the lenders a remedy against the company (