4. Claim by Owner and Borrower of a Chattel for its 1. On the 1st of January, 1880, the plaintiff A. B. lent to the plaintiff C. D. a phaeton, the property of the plaintiff A. B. 2. While the said phaeton was in the possession of the said plaintiff C. D., the defendant seized the same and removed it from the premises of the plaintiff C. D., and though both the plaintiffs A. B. and C. D. demanded its return, sold it and converted the proceeds to his own use. The plaintiff A. B. or in the alternative the plaintiff C. D. claims £100 damages. Defence. 1. At the time when the defendant seized and removed the said phaeton the plaintiff C. D. was tenant of the defendant's house in Mayfair, and a large sum was then due and owing to the defendant in respect of arrears of rent. 2. The defendant distrained upon the said premises for the said arrears of rent and seized the said phaeton which was sold in due course, and the proceeds applied to the payment of the said arrears of rent. 3. The defendant denies that the plaintiff A. B. had at the time of the said distress or sale any property whatever in the said phaeton. Reply. The plaintiff joins issue upon the statement of defence. 5. Claim against a Pawnbroker for Loss of a Pledge. The plaintiff has suffered damage by the defendant failing to re-deliver to him a silver trophy cup which he deposited with the defendant as security for an advance, and which he demanded from the defendant before action brought, accompanying such demand with a tender of the monies advanced and all interest. Particulars of damage: Value of the said cup . The plaintiff claims £75. £75 Defence. 1. The said cup while in the defendant's custody was destroyed by an accidental fire originating on adjoining premises, and extending to the defendant's shop without any negligence on his part. Reply. The plaintiff joins issue on the statement of defence. Trusts (a). Breach of Trust. 1. By a settlement dated July 3rd, 1872, on the marriage of the plaintiffs' father and mother, of which the defendants A. B. (a) By the 7th section of the Statute of Frauds it is enacted that "all Trusts to declarations or creations of trusts or confidences of any lands, tene- be proved ments, or hereditaments, shall be manifested and proved by some by writing. 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." The statute extends to copyholds and leaseholds, but not to chattels personal, and it cannot be invoked by a defendant to support a fraud. (Davis v. Otty, 35 Beav. 208.) Note that the statute does not require trusts to be declared in writing, but only that they shall be proved by some documentary evidence. (Forster v. Hall, 5 Ves. 315.) Trusts are express, implied, or constructive. Express private trusts are executed or executory; in the latter case, Classifica i.e., when the person creating the trust has merely indicated his intention tion of in general terms, leaving the Court to effect the necessary conveyance trusts. and settle the proper limitations, more regard is had to the intention of the creator of the trust than in the former case, where he has carefully acted as his own conveyancer. An express trust, if voluntary, will not be enforced by the Courts unless it has been perfected by conveyance, or the donor has constituted himself a trustee for the donee, or has done all in his power to perfect the assignment. (Kekewich v. Manning, 1 De G. M. & G. 176. Cf. Baddeley v. Baddeley, 9 Ch. Div. 114.) Of course a voluntary conveyance may be avoided if fraudulent against creditors under 13 Eliz. c. 5, or against purchasers under 27 Eliz. c. 13, or the Bills of Sale Act, 1882, or the Bankruptcy Act, 1883. Trusts for the benefit of creditors are revocable except as against such creditors as have been informed of the existence of the trust and have thereupon forborne to exercise their legal rights against the debtor. (Johns v. James, 8 Ch. Div. 744.) For the creation of a trust three things must be certain. The words Requisites used must be imperative or certain, and the objects and subject-matter to creation of the trust must likewise be certain. "If," said Lord Langdale, M. R., of a trust. Resulting trusts. Implied trusts. and one C. D. were trustees, the plaintiffs are absolutely entitled to the settled property on the deaths of their father and mother. 2. On August 5, 1874, C. D. died, and the defendant E. F. was appointed in his place. in Knight v. Knight, 3 Beav. 172, 11 Cl. & Fin. 513, "the giver accompanies his expression of wish or request by other words from which it is to be collected that he did not intend the wish to be imperative, or if it appears from the context that the first taker was intended to have a discretionary power to withdraw any indefinite part of the subject from the object of the request, or if the objects are not such as may be ascertained with sufficient certainty, no trust is created." (Cf. Hutchinson v. Tennant, 8 Ch. Div. 540; Dawson v. Lord Penrhyn, 4 App. Cas. 51.) Purchasers were formerly under an onerous liability to see to the application of purchase or other moneys paid to trustees without the consent of their cestuis que trusts, but it is now provided by s. 36 of the Conveyancing and Law of Property Act, 1881, as follows: "The receipt 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 power, shall be a sufficient discharge for the same, and shall effectually exonerate the person paying, transferring, or delivering the same from seeing to the application or being answerable for any loss or misapplication thereof. This section applies to trusts created either before or after the commencement of this Act." The former statutes on the same subject applied only to money. Resulting trusts arise where a purchaser takes a conveyance or assignment in the name of a stranger, who in such a case is held to be a mere trustee for the person who really paid the purchase-money. But this would not be so if the purchaser intended a gift, or the relationship of the parties was such that the law would presume an intention by the purchaser to advance the person in whose name he took the conveyance. The presumption of advancement arises where the person in whose name the purchase is taken is the legitimate child of the purchaser, or the latter stands towards him or her in loco parentis. It likewise arises when a husband purchases in the name of his wife. (Currant v. Jago, 1 Coll. Ch. Cas. 261; Re Eykyn's Trusts, 6 Ch. Div. 115; Bennett v. Bennett, 10 Ch. Div. 474.) A resulting trust also arises where the settlor conveys property on trusts which do not exhaust the whole estate conveyed. (Pannell v. Hingston, 3 Sm. & Giff. 344.) If it should happen that the person beneficially entitled, whether as settlor entitled to a resalting trust in his favour, or as cestui que trust, should die intestate, without heirs or next-of-kin, a distinction is to be observed. If the property is realty, the trustee takes it beneficially, but if it be personalty, the Crown takes it as bona racantia, unless the trustee is also executor. Since the statute 1 Will. 4, c. 40, where a testator makes no disposition of his personal estate (which vests in his executor), as to wills made after Sept. 1, 1830, the executor is to be deemed by the Court of Equity to be a trustee for the persons, if any, who would be entitled, under the Statute of Distributions, in respect of any residue not expressly disposed of, unless it shall appear by the will that the executor was intended to take beneficially. The executor is now bound, as against the next-of-kin, to show that it was intended that he should take beneficially. (Harrison v. Harrison, 2 H. & M. 237.) Implied trusts may arise out of joint-tenancies upon purchases or mortgages made by two or more jointly, and out of commercial purchases, as to which see Snell on Equity, 5th ed., P. 133. 3. On December 1st, 1879, the plaintiffs' father died. 4. On January 1st, 1880, the plaintiffs' mother died. 5. The defendants have committed the following breaches of trust by (a.) Sale of £3000 Bank Stock and investment of the proceeds in the business of the defendant A. B.; Constructive trusts, i.e., trusts which arise by construction of equity, Construc apart from the intention of the parties, as in the case of equitable liens, tive trusts. such as a vendor's lien for unpaid purchase-money, a vendee's lien for prematurely paid purchase-money, and a trustee's or part owner's lien for charges in preserving or renewing the trust property, are the third class. It is beyond the scope of this note to state the whole of the rules of law and equity which have been held applicable to the office of a trustee. Any one of the cestuis que trusts is entitled to bring his action against the trustee to have the trusts carried into execution, subject, of course, to the risk of being compelled personally to bear the costs of the action, if it should turn out to be frivolous or vexatious. : It may be laid down generally that the duty of a trustee is to take the Duties of same care of the trust property as a prudent person would take of his own trustees. property. He is further bound to follow all the directions contained in the instrument or instruments creating the trust. In a very recent case, Speight v. Garnet, 22 Ch. Div. 727, which, however, is now under appeal to the House of Lords, the law was explained by the Court of Appeal "A trustee is bound to conduct the business of the trust in the same way in which an ordinary prudent man of business conducts his own, and has no further obligation. He may employ brokers and agents in cases in which they are employed in the ordinary course of business." In this case a trustee, with the consent of his cestuis que trust, employed a broker for the investment of £15,000 of the trust funds in Corporation Stocks. On the day before the next settling-day the broker brought to the trustee a bought note and obtained the £15,000 from him, on the statement that the money would have to be paid next day. The space left in the bought note for the date of the settling day was not filled up, and no charge was inserted for commission. The broker never acquired the securities, but appropriated the money to his own purposes, as was discovered about a week afterwards, when he became bankrupt. A few days after the payment the trustee had inquired of the broker whether the securities were ready, and was told it would take some time to obtain them. On subsequent occasions similar excuses were given. There was evidence that about a fortnight was generally required to get corporation bonds completed when obtained direct, the broker holding, in the meantime. a banker's receipt for the money. Evidence was given that the form of the bought note would indicate to brokers, though probably not to others, that the bonds were to be procured from the corporation direct-Held (reversing the judgment of Bacon, V.-C.) that the trustee, having acted in the ordinary course of business, was not liable to make good the loss occasioned by the embezzlement of the trust moneys by the broker. Unless expressly awarded it by the person creating the trust, a trustee Trustees is not allowed any remuneration. "A trustee shall not profit by his not entrust." Even if he be a solicitor, he may only have his costs out of titled to pocket, that is, in the absence of a stipulation in the will or deed creating remunera the trust that he shall be allowed to charge for his professional services. tion. Such a clause will only allow him to charge for services strictly profes Trustee may bargain for remunera tion. Trustee's receipts. Unauthorised investments. Powers of trustee. (b.) Sale of leasehold property worth £5000 to G. H. for £1000 (without taking any proper steps to ascertain its value, or to obtain such value). The plaintiffs claim— (1.) The replacement of £3000 Bank Stock and £5 per cent. interest on the proceeds of the Bank Stock sold from the date of sale till replacement; (2.) Payment of £4000 and interest at £5 per cent. per annum from the date of the sale. sional, and not for acts which an executor or trustee need not employ a solicitor to do. (Harbin v. Darley, 28 Beav. 325.) There is, however, nothing to prevent a person bargaining before he accepts the office of trustee that he should be remunerated for his trouble. (Ayliffe v. Murray, 2 Atk. 58.) Upon the principle that a trustee may not profit by his trust, a trustee may not reserve to himself the shooting over the trust estate, or charge the nominal value if he buy up debts at an undervalue, nor use the trust fund in trade, paying interest for it. These remarks apply to constructive trustees, as agents, as well as to express trustees. The extent and limits of the liability of one trustee for the receipts of another are explained in the notes to the leading case of Townley v. Sherburne, 2 Wh. & Tudor's Lead. Cas. p. 870. A mere receipt given for the sake of conformity imposes no liability on the trustee if his co-trustee should embezzle the money expressed to be received. A trustee is liable for any loss resulting from improper investments. (Cf. Lewin on Trusts, 252, et seq.) The trustee may be charged by the Court with more than £4 per cent., or even with compound interest, in some cases of breach of trust. It is not easy to lay down any positive rules as to the manner in which the discretion of the Court will be exercised, but the result of the cases is stated by a learned author (Snell on Equity, p. 167) to be that more than £4 per cent. will be charged in the following cases :- (1.) Where the trustee ought to have received more, or where he had (2.) Where he had actually received more than 4 per cent. ; (4.) Where the trustee is guilty of direct breaches of trust or gross misconduct. See also Emmet v. Emmet, 17 Ch. Div. 142. As to the power of executors and trustees to pay, compound, and compromise debts and claims, see the Conveyancing and Law of Property Act, 1881, by which it is enacted, s. 37 : (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 trustees acting together, or a sole acting trustee where, by the instrument if any creating the trust, a sole trustee is authorised 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, |