might purchase leaseholds without investigating the lessor's title to the freehold. By the Conveyancing and Law of Property Act, 1881 (ss. 3 & 66), a trustee might purchase property held on an underlease without investigating the title to the leasehold reversion. The present section extends these provisions both in case of a freehold or a leasehold reversion to mortgages of leaseholds 1.

Sub-section 3 enables trustees, on the purchase of any property, or in lending money on the security of any property, under an open contract to accept less than a forty years' title. A common form clause to this effect has usually been inserted in wills and settlements, and it is thought that conveyancers will be well advised in still inserting it, as the final words of the sub-section appear to rob it of any value it might otherwise have had. To exonerate trustees from a charge of breach of trust, the title must be such as, in the opinion of the Court, a person acting with prudence and caution would have accepted. What a prudent and cautious man would do under certain circumstances is so extremely problematic that trustees will do well not to place too great reliance on this sub-section.

There was in the bill, as originally introduced by Lord Herschell, a clause providing that it should be lawful for a trustee to employ and pay any duly qualified agent or agents to transact any business or do any act which might be required by the nature of the trusts notwithstanding that the trustee might be capable of transacting the same in person.'

This clause was struck out during the passage of the bill through Parliament, as it probably went a little too far and would have led trustees to delegate their duties to an extent prejudicial to the interests of the cestuis que trust. Even if the clause had not been passed in its entirety, a provision might well have been inserted in the Act exonerating trustees from any liability in cases where they bona fide acted upon counsel's opinion. If a trustee is justified in acting upon a report of a surveyor upon the value of a security, a point upon which, up to the present time, he has been held to be capable of forming an opinion for himself, by a process of a fortiori reasoning it would appear to follow that he should be free from all liability when he acts under competent advice upon matters of law; for among the multitude of accomplishments judicially attributed to trustees, a capability to determine difficult questions of law has never yet been included.

Section 5 of the Act introduces a very proper and reasonable modification of the law as it formerly stood. Trustees who had invested trust-moneys on unauthorised or insufficient securities

1 See Memorandum to Bill.

were, under the former practice, declared jointly and severally liable for the full amount of the mortgage together with interest at four per cent. from the time of the loan; the trustees taking over the security for what it was worth. In Learoyd v. Whiteley a charging order was made in favour of the beneficiaries upon the security until the money was refunded. In that case the trustees had invested, at the request of the tenant for life, upon what proved to be an insufficient security, but upon which interest was paid for several years to the tenant for life at the rate of five per cent. The judges in every Court held that the trustees were not entitled to call upon the tenant for life to return the one per cent. actually paid to her over and above the four per cent. directed by the order. By this section it is provided that when a trustee who has improperly advanced trust-money upon a mortgage security, shows that at the time of investment it would have been a proper investment in all respects for a less sum, the security shall be deemed an authorised security for such sum, and the trustee shall only be liable to make good the amount advanced in excess thereof with interest. A somewhat similar course to that provided by the present section was adopted in 1885 by North J. in The Earl of Gainsborough v. The Watcomb Terra Cotta Clay Company, Ld., 54 L. J. Ch. 991. In that case a loss had accrued to the trust estate by reason of the trustees' neglect to convert certain property at the proper time. It was contended that the trustees were jointly and severally liable for the full value of the property, but his lordship held that the trustees were entitled to the benefit of an enquiry, to show the actual amount which would have been realized at the proper time, and limited their liability accordingly.

Section 6. By this section it is provided that where a trustee shall have committed a breach of trust at the instigation or request or with the consent in writing of a beneficiary, the Court may, if it shall think fit, and notwithstanding that the beneficiary may be a married woman entitled for her separate use, whether with or without a restraint upon anticipation, make such order as to the Court shall seem just for impounding all or any part of the interest of the beneficiary in the trust estate by way of indemnity to the trustee or person claiming through him.' In Sawyer v. Sawyer, 28 Ch. Div. p. 595, the position of the beneficiary who has been party to a breach of trust is fully discussed. The result of the decision appears to be that the measure of the liability of such beneficiary is the amount received by way of capital or income under the breach. A married woman, however, even though not restrained from anticipation, was held to be exempt from all liability, unless the trustees could show that she was fully informed of the state of the

case and that she really acted for herself. It will be noted that this section does not give to the trustee a right of retainer against the cestui que trust, but gives a discretionary power to the Court to make an order impounding all or any part of the interest of the beneficiary. It is probable that the Court in making such an order will follow the principles laid down in Sawyer v. Sawyer. Trustees should therefore be careful in the case of a cestui que trust who is a married woman, to see that she is fully informed of the whole circumstances of the case and is separately advised. In order that trustees may avail themselves of the provisions of this section the consent to the breach of trust must be in writing. This section does not appear to deprive the trustees of their former right of retainer in the case of a cestui que trust who is sui juris.

Section 7. The doubts which existed in the profession as to a trustee's power to insure against loss by fire any portion of the trust property, are set at rest by this section. The law has been clearly laid down that a trustee is not liable for a breach of trust in not insuring buildings which were subsequently destroyed by fire. By the present section it is provided that it shall be lawful for, but not obligatory upon a trustee to insure any building or other insurable property to any amount not exceeding three-fourths of the value thereof, and to pay the premium for such insurance out of the income arising therefrom, or out of the income of any other property subject to the same trusts, without obtaining the consent of any person who may be entitled, wholly or partly, to such income.'

Section 8 enables trustees to plead the Statute of Limitations. It does not, however, apply to the following cases: (1) where the claim is founded upon any fraud or fraudulent breach of trust to which the trustee was party or privy; (2) where the claim is to recover trust property, or the proceeds thereof, still retained by the trustee, or previously received by him and converted to his use. The former law still applies to these exceptions, and is laid down in section 25 of the Judicature Act of 1873, viz.: that no action of a cestui que trust against his trustee for any property held on an express trust, or in respect of any breach of such trust, shall be held to be barred by any Statute of Limitations. In respect to all other cases it is provided (a) That all rights and privileges conferred by any Statute of Limitation shall be enjoyed in like manner, and to the like extent, as they would have been enjoyed in such action or other proceeding if the trustee or person claiming through him had not been a trustee or person claiming through him. (This sub-section provides for cases to which no existing Statute of Limitation applies. In these cases a trustee is to be at

liberty to plead the lapse of time in the like manner and to the like extent, as if the claim had been against him in an action of debt for money had and received. The statute is to run against a married woman entitled in possession for her separate use, whether with or without a restraint upon anticipation, but in no case is it to begin to run against any beneficiary, unless and until the interest of such beneficiary shall be an interest in possession.

Sub-section 2. A judgment obtained by one beneficiary is not to operate to keep alive the claim of another, and reliance cannot therefore be placed on the diligence of a co-beneficiary.

Sub-section 3. It must be noted that this section is only to apply to actions commenced after the 1st January, 1890, and it does not deprive any executor or administrator of any right or defence to which he is entitled under any existing statute of limitations.

Section 9 authorises, under certain circumstances, investment of trust moneys upon mortgage of leasehold securities. These securities must however answer the following conditions. There must be an unexpired term of not less than 200 years, and no greater reservation of rent than 18. per annum. The property must not be subject to any right of redemption or to any condition for re-entry except for non-payment of rent. A security which fulfils these requirements is to be deemed a real security, and the section is retrospective in its operation. This is an innovation upon the former principles adopted by the Courts; although in re Chennell (8 Ch. Div. 492), the Master of the Rolls appears to have thought that trustees would be justified in investing on leaseholds held for a long term at a peppercorn rent without covenants and without impeachment of waste. In re Boyd's Estate (28 W. R. 233), he however appears to have withdrawn from that position and expressed his opinion that, as a general rule, long terms of years did not answer the description of real securities. In the more recent case of Leigh v. Leigh (55 L. T. 634), Mr. Justice Stirling adopted and followed this latter view.

Sections 10 and 11 reproduce corresponding sections in Lord Cranworth's Act, which had been repealed by the Settled Land Act of 1882, by which trustees of renewable leaseholds may renew and may raise money to meet fines on the renewal of a lease.

We have now traced, section by section, the important alterations in the law of trustees effected by this Act. These changes are conceived in a liberal spirit, and if they do not go quite as far and are not as drastic as some of us would have wished, we look upon the Act as an earnest of good things to come. We, who are engaged in actual practice as solicitors, know only too well from

experience, what hardship, amounting in many cases to actual ruin, has been wrought by the harsh and unreasonable rules laid down by equity judges in the past, and we trust that with this Act an era of a more liberal treatment of trustees has been entered upon. It must be remembered that a man of ordinary intelligence does not, by becoming a trustee, change his entire intellectual being and become a paragon of wisdom and prudence.

R. WATSON EVANS.