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(60 L. J. Ch. 594 ; (1891) 3 Ch. 82 ; 65 L. T. 533 ; 40 W. E. 50.)

In answer to an inquiry addressed by an intending mort-
gagee to the trustee of a fund whether the life-tenant had
incumbered his interest, the trustee enumerated certain specific
charges on the life interest. At this date the trustee had
received notice of several other incumbrances, but he had for-
gotten their existence. In an action to recover the loss arising
from the insufficiency of the mortgage —

Held, by the Court of Appeal, that the trustee was not
liable in the absence of estoppel, and that his answer did not
amount to a positive representation that there ivere no other
incumbrances on the life interest, so as to create an estoppel
against him.

Per Lindley, L. J.: The positive duties of trustees arc
to properly preserve the trust f mid, to pay the income and
the corpus to those who are entitled to them respectively ,
and to give all their cestuis que trust on demand informa-
tion ivith respect to the mode in which the trustees have
dealt ivith the fund and ivhere it is.

There is no duty upon the trustee to answer inquiries
made by persons about to deal ivith their cestui que trust,
and if a trustee gives an honest answer he discharges the
only obligation which he is under.



TRUSTS AND TRUSTEES. 233

Where Money is received in a fiduciary capacity the Cestui que
Trust is entitled, as long as it can be traced, to follow it and
claim it against all the World. If Trust Money is paid into
a Trustee's own Account, the Trustee is presumed to pay out
his own Moneys first.

IN EE HALLETT'S ESTATE, KNATCHBULL v. HALLETT.

[1879]

(49 L. J. Ch. 415 ; 13 Ch. D. 696 ; 42 L. T. 421 ;

28 W. B. 732— C. A.)

A trustee improperly sold Russian bonds and paid the pro-
ceeds to the credit of his own account at his bank, mixing them
with his own private moneys. After such payments in he paid
in sums of his own and also drew out others by cheques for his
own purposes. There was a balance standing to his credit at
his death.

Held, iv here a person occupying a fiduciary capacity pays
trust money into his own account at the bank, the cestui que
trust is entitled to follow the money into the banking
account, and to have a charge on the balance in the banker 's
hands, for the rule in Clayton's Case, 1 Mer. 572, attri-
buting the first drawings out to the first payments in, does
not apply as between trustee and cestui que trust, and the
trustee must be taken to have drawn out his own money,
and not the trust money.



A Trustee may rely on the Statutes of Limitation in an Action
for Breach of Trust unless " party or privy " to the Fraud,
or the Property or its Proceeds are still retained by him.

THOENE v. HEAED AND MAESH. [1895]

(64 L. J. Ch. 652 ; (1895) A. C. 495 ; 11 E. 254 ; 73 L. T. 291 ;

44 W. E. 155— H. L.)

In 1878 first mortgagees under their power of sale sold the
mortgaged property and received the amount due to them from



234 EQUITY.

their solicitor, who was also a solicitor tor a second mortgagee
and for the mortgagor. They handed over the balance of the
purchase- money to the solicitor, who gave them a receipt
acknowledging payment of the moneys due to the second
mortgagee. But he retained the whole balance for his own
use, did not inform the second mortgagee of the sale, and
continued to pay interest on the second mortgage until, in
1892, he became bankrupt, when his fraud was discovered.

Held, by the House of Lords, the first mortgagees were
entitled to the benefit of the Statute of Limitations under
the Trustee Act, 1888; that they were not u party or
privy'''' to the fraud of the solicitor ; that the moneys were
not u still retained " by them within sect. 8 of that Act;
and that the statute began to run in their favour from the
(late of the transaction in 1878, and not from the discovery
of the fraud in 1892.

By the Lord Chancellor [Lord Herschell) and Lord
Davey. — It is open to question ivhether, even apart from
the statute of 1888, the defendants would have been liable
in the circumstances of the case.



Where a Transfer of Property is made by one Person into the
name of another, who gives no value, and to whom he is not
in loco parentis, there is prima facie a Resulting Trust for the
Transferor. But this Presumption may be rebutted by
showing that a Benefit was intended.

STANDING v. BOWKING. [1886]

:>:> L. J. Oh. 218 ; 31 Oh. D. 282 ; 54 L. T. 191 ; 34 W. E.

204— C. A.)

Mrs. Standing transferred stock standing in her own name in
the books of the bank into the joint names of herself and Bow-
ling, her godson, who was entirely ignorant of the transfer,



TRUSTS AND TRUSTEES. 235

with the settled intention of conferring a benefit on Bowring
after her own death.

Mrs. Standing brought this action seeking a declaration that
Bowring held the stock as trustee for her, and to compel him to
re-transfer it into her sole name.

Held, that the rule is well settled that, in the case of a
transfer into the names of the transferor and a person not
his son or adopted son, there is prima facie a resulting
trust for the transferor. But the presumption is capable
of being rebutted by showing that a benefit was intended.
In this case, Mrs. Standing having transferred the stock
with the deliberate intention of benefitting Bowring, and as
no such trust as was now sought to be declared could be
implied, the gift to Bowring was complete, and the legal
title vested in him notwithstanding that he was ignorant of,
and consequently had not assented to, the transfer.

When a transfer is made to a person, even though
accompanied by onerous obligations, the property vests in
kirn subject to his right of repudiation on becoming cognisant
of the transfer.



CHARITABLE TRUSTS.



Charitable Gifts will be applied cy pres where it is no longer
possible to beneficially apply Property in the same way as
directed by the Founder of the Charity.

IN EE THE CAMPDEN CHAEITIES. [1880]
(50 L. J. Ch. 646 ; 18 Ch. D. 310 ; 45 L. T. 152 ; 30 W. E. 496.)

In the first half of the seventeeth century, substantial sums
of money were left by Lord and Lady Campden, the income of



2S6 EQUITY.

which was to be spent in pensions to the deserving poor and in
apprenticing poor boys in the parish of Kensington.

At the time these proceedings were brought the income of the
charities exceeded 3,500/., but there was in the parish of Ken-
sington no lack of deserving recipients of the charities as thus
administered.

In 1879 the Charity Commissioners made an order confirming
a new scheme for the administration of the charities, under
which one moiety of the entire income was in effect devoted to
the advancement of the education of the children resident in
Kensington attending public elementary schools.

This scheme was objected to by the trustees on various
grounds, and on petition to the Court to set aside or vary the
scheme —

Held, by the Court of Appeal) that the scheme had been
properly made in pursuance of what is commonly known as
the cy pres doctrine) -which is applied in cases like this, where
from lapse of time and change of circumstances it is no
longer possible beneficially to apply the property left by the
founder or donor in the exact way in ivhich he has directed
it to be applied) but it can only be applied beneficially to
similar purposes by different means.

When a scheme has been settled by the Charity Cornmis-
sio?ierS) the Court will not interfere unless the Commissioners
have exceeded their jurisdiction or have made .some slip or
gross miscarriage which calls for the intervention of the

Court.



CONVERSION. 237

The Rule against Perpetuities does not apply to Property given

to Charities.

IN EE TYLEE, TYLEE v. TYLEE. [1891]
(60 L. J. Ch. 686; (1891) 3 Ch. 252 ; 65 L. T. 367 ; 40 W. E. 7—

C. A.)

Sir James Tyler made a bequest to a charitable institution —
the London Missionary Society — subject to a condition that
they should keep the testator's tomb in repair, with a gift over
to another charitable institution on failure to comply with the
condition.

An originating summons was taken out to ascertain whether
the condition attached to the legacy to the London Missionary
Society was binding on the trustees of that society or was
void.

Held, that the condition as to the repair was valid and
binding on the trustees, and that the gift over to another
charity on failure to comply with the condition was good,
as the rule against perpetuities had no application to
charities.



CONVERSION.

Where a man seised of real estate contracts to sell it and dies
before the Contract is carried into execution, it is, as between
his Heir and Next of Kin, deemed to have been converted,
from the Date of the formation of the Contract, into Per-
sonalty.

IN EE ISAACS, ISAACS v. EEGINALL. [1894]

(63 L. J. Ch. 815 ; f 1894) 3 Ch. 506 ; 8 E. 660 ; 71 L. T. 386 ;

42 W. E. 685.)

Isaacs died intestate, having granted certain freehold here-
ditaments to T. A. Cadle on lease for the grantor's life, with an



238 EQUITY.

option to Cadle of purchasing the property at a given price,
such option to be declared by Cadle within six calendar months
from the time of the grantor's death. Cadle duly exercised the
option.

Held, following Laws v. Bennett, 1 Cox, 167, that the
conversion as between the heir and next of kin took place
from the date of the contract giving the option, and therefore
the purchase-money went to the testator's legal personal
representative, and not to his heir-at-law.



ELECTION.



If a Person whose Property another Person affects to give away
takes other Benefits under the same Instrument, and at the
same time elects to keep his own Property, he must make
Compensation to the Person affected by his election to an
extent not exceeding the Benefits he receives.

IN EE BOOTH, BOOTH v. EOBINSON. [1906]
(75 L. J. Ch. 610 ; (1906) 2 Ch. 321 ; 95 L. T. 524.)

The testator was absolutely entitled to some copyhold pro-
perty, and had a life interest in some settled property over
which he had no power of disposition, but which went on his
death to all his children who, having reached twenty-one years,
survived him.

The testator, by will, purported to dispose of both properties
partly to his children and partly to others, so that some of those
who were benefited under the settlement also took other benefits
under the will. They all elected to take against the will. This
election deprived some of the electing parties of shares in the
settled property given to them by the will.



ELECTION. 239

Held, that the persons electing to take against the ivill
ivere respectively bound to make compensation to other per-
sons so electing, as well as to persons who took under the
will , only for an y disappointment occasioned by the election,
to the extent of the benefits received under the will by the
several persons electing to take against it.

The true principle of compensation in these cases is stated
by Jessel, M. R., in Rogers v. Jones (1876), 3 Ch. D.
688, 689, in the following words: "If a person whose
property a testator affects to give away takes other benefits
under the same will, and at the same time elects to keep his
own property, he must make compensation to the person
affected by his election to an extent not exceeding the benefits
he receives." In other words, so far as he receives benefits
under the ivill, he must give effect to the testator 's intention,
and compensate the persons whom he disappoints to the
extent of the benefits which he receives under the ivill,
including any compensation made to him by another legatee
by iv horn he is himself disappointed.



The doctrine of Election depends on Intention, and where Settlor
settles Property on a Woman without Power of Anticipation
this is a declaration of Intention inconsistent with and
excluding the doctrine of Election.

IN EE VARDON'S TRUSTS. [1885]
(55 L. J. Ch. 259 ; 31 Ch. D. 275 ; 53 L. T. 895 ; 34 W. R. 185.)

In 1860, a marriage being in contemplation between Mr.
Walker and Miss Yardon, then an iufant, a settlement was
executed whereby 5,000/. was settled upon the wife for her life
for her separate use with a restraint on anticipation. The
settlement contained a covenant by each of them to settle any



240 EQUITY.

after-acquired property upon trust for the husband for life with
remainder to the wife in default of children. In 1883, under a
bequest to Mrs. Walker contained in the will of her deceased
brother, she became entitled to 8,573/. for her separate use, and
the question arose whether she was entitled to take this legacy
without compensating, out of the 5,000/., the persons who were
disappointed by her not settling the 8,573/.

Held, the wife was not bound to elect, for the doctrine of
election depends on intention, and a settlement which settles
property on the ivife without potver of anticipation, contains
a declaration of a particular intention inconsistent with and
excluding the doctrine of election ; so that the married
woman who by the settlement has [being an infant) cove-
nanted to settle future property is not bound, on taking a
bequest for her separate use, /■> make compensation to her
husband and children out of the income of the fund settled
to her separate use without power of anticipation.



ADEMPTION AND SATISFACTION.



If a Legacy is bequeathed to a Person for a particular purpose,
and a subsequent Gift is made for the same purpose, there is
prima facie Presumption of Ademption or Satisfaction of the
Legacy.

IN EE POLLOCK, POLLOCK v. WORRAL. [1884]
(54 L. J. Ch. 489 ; 28 Ch. D. 552 ; 52 L. T. 718— C. A.)

The testatrix by her will dated the 24th of October, 1874,
bequeathed to her niece 500/., "according to the wish of my
late beloved husband."

In July, 1881, she sold out some stock to which she was



ADEMPTION AND SATISFACTION. 241

entitled, and out of the proceeds thereof paid to her niece the
sum of 300/., making contemporaneous entries relative to such
payment in a diary which she kept, in one of which it was
described as "the legacy," and in another as " being a legacy
from her Uncle John."

Held, the legacy was adeemed or satisfied pro tanto by
the gift of 300/.

Numerous authorities have determined that if a legacy
appears on the face of the will to be bequeathed for a
particular purpose, and a subsequent gift appears by
proper evidence to have been made for the same purpose,
a prima facie presumption is raised in favour of
ademption.



Equity leans against Double Portions, but Substantial Differences
between the two will rebut the presumption of Satisfaction.

TUSSATJD v. TUSSAUD. [1878]
(47 L. J. Ch. 849 ; 9 Ch. D. 363 ; 39 L. T. 113; 26 W. E. 874.)

In 1867 Tussaud, on the marriage of his daughter to Mr.
White, covenanted with the trustees of her settlement that, if
he should predecease his wife, his executors would, within
six months after her death, transfer to the trustees of the settle-
ment 2,000/. Consols, to be held upon trust for such persons as
the daughter should, with consent of the trustees, by deed or
will appoint ; and in default of appointment upon trust for the
daughter for life, then for the husband for life, then for the
children of the marriage ; and then, in default of children, for
the husband absolutely.

Tussaud, by his will made in 1874, bequeathed 2,800/. upon
trust for his daughter for life for her separate use without
power of anticipation, and after her death for her children by
any marriage ; and in default of children the fund fell into the



242 EQUITY.

residue of Tussaud's estate, and went to liis sons. Tussaud
•lied in 1874 and his wife in 1877.

Held, by the Court of Appeal, that there were such
substantial differences betiveen the provisions of the settle-
ment and of the will that the presumption against double
portions ivas rebutted.

It is tvell established that there is a presumption against
double portions founded on the assumption that, in making
the second instrument, the maker of it supposes himself to be
substantially satisfying the obligations of the first. But this
presumption must yield to any sufficient indication of inten-
tion on the part of the maker of the instrument, whether
expressed on the face of the document or proved by parol
evidence.



EQUITABLE LIEN.



Where a Debtor is entitled to Indemnity, his Creditor is entitled
by the Doctrine of Subrogation to stand in his shoes and avail
himself of that Indemnity.

IN EE FEITH, NEWTON v. EOLFE. [1902]
(71 L. J. Oh. 199 ; (1902) 1 Ch. 342 ; 86 L. T. 212.)

Certain trustees under powers contained in the will carried on
the testator's business after his death and employed his estate
therein, and one of them made default for which he alone was
liable.

Held, the creditors of the business will not, on account of
such default, be precluded from their right to rank against
the testator's estate by subrogation to the right of the
innocent trustees to be indemnified in respect of debts
properly incurred by the trustees in carrying on the business.



MARRIED WOMEN'S PROPERTY. 243



MARRIED WOMEN'S PROPERTY.



Where a Married Woman possessed of Property subject to Restraint
on Anticipation becomes Bankrupt, the Property vests in her
Trustee subject to the Restraint during the lifetime of her
Husband, and free from Restraint on his Death.

EE WHEELEE'S SETTLEMENT, BEIGGS v. EYAN. [1899]

(68 L. J. Ch. 663; (1899) 2 Ch. 717; 81 L. T. 172;
48 W. E. 10; 6 Mansou, 372.)

In 1859 certain real property was vested in a trustee upon
trust during the life of Caroline Wheeler to pay her the rents
and profits for her sole and separate use, but without power to
her, whilst covert or sole, to charge or anticipate the same.
Caroline Wheeler married Albert Byan in 1868. In 1891 she
was carrying on business as a schoolmistress apart from her
husband, and in June, 1891, she was adjudicated a bankrupt.
In February, 1899, her husband died, she being then still an
undischarged bankrupt.

Held, that the entire life estate of Mrs. Ryan was her
separate estate at the date of the bankruptcy within the
meaning of sect. 1, sub-sect. 5, of the Married Women's
Property Act, 1882, and that the restraint upon anticipa-
tion attached only during her married life, and that the
residue of the life interest from the death of her husband
belonged to the trustee in bankruptcy, and must be applied
in satisfaction of Mrs. Ryan's debts.



r2



244 EQUITY.



RESCISSION.

Damages in addition to Rescission will not be given for Breach of

Contract.

HENTY v. SCHEODEE. [1879]
(48 L. J. Ch. 792 ; 12 Ch. D. 666; 27 W. E, 833.)

The plaintiff obtained judgment for specific performance of a
contract for the purchase by the defendant of certain real
estate, and after tender of the conveyance of the property to the
defendant found the defendant was unable to pay the sum due.

The plaintiff then applied for rescission of the agreement and
damages for the breach of contract, and filed an affidavit to the
effect that he did not believe the defendant then was or would
at any future time be able to pay the sum due for the purchase
and costs.

Held, per Jessel, M. /?., the Court cannot rescind an
agreement and at the same time give damages for its breach.
The only order he could make would he to direct the contract
to be rescinded and the defendant to pay the costs of the
action.

SPECIFIC PERFORMANCE.



Specific Performance of a Contract will not be granted where the
conduct of the Plaintiff disentitles him to the Relief in Equity,
or where hardship would be done to some Innocent Lessor or
Grantor by reason of some mistake which he has made.

HEXTEE v. PEAECE. [1900]
(69 L. J. Ch. 146; (1900) 1 Ch. 341; 82 L. T. 109; 48 W. E. 330.)

The defendant, an owner in common of an undivided moiety
of freehold lands, agreed to grant the plaintiff a lease to work



SPECIFIC PERFORMANCE 245

the minerals in or upon such moiety from the 29th September,
1898, for five years.

The defendant and his co-owner in common of the land sub-
sequently granted a certain Mr. Wilkinson a lease of the whole
property from the same date and for the same purpose.

The defendant refused to grant the lease to the plaintiff, who
accordingly brought this action for specific performance.

At the trial it was proved there was still a considerable
quantity of clay left, and that in previous years the land had
been worked simultaneously by different persons.

Held, by Farwell, J., the plaintiff was entitled to
specific performance.

The whole doctrine of specific performance rests on the
ground that a man is entitled in equity to have in specie
the specific article Jor which he has contracted, and he is
not bound to take damages instead. The Court will grant
the equitable remedy in all cases unless there has been
some conduct on the part of the plaintiff disentitling him
to the relief in equity, or in some rare instances unless
there would he a, great hardship imposed on an innocent
grantor or lessor by reason of some mistake which he has
made, although the other party has not contributed to it.



INJUNCTIONS.



Where Damages are inadequate the Court will grant an Injunction
to restrain a serious Nuisance except under very exceptional
circumstances.

SHELFEE v. THE CITY OF LONDON ELECTEIC

LIGHTING CO., LIMITED [1895]

(64 L. J. Ch. 216; (1895) 1 Oh. 287; 12 E. 112; 72 L. T. 34 ;

43 W. E. 238— C. A.)

The defendants were carrying on their work under certain
provisional orders granted by the Board of Trade under the



246 EQUITY.

Electric Lighting Acts, 1882 and 1888, and confirmed by
special Acts of Parliament. Under the several orders they
were, subject to the provisions of the orders and the principal
Act, empowered to supply energy within certain areas and for
that purpose to execute certain works within such areas, and
were to furnish energy to owners and occupiers of premises
within the areas upon being required so to do. They might
also acquire land to a limited extent for the purposes of the
orders. The orders provided that nothing therein should
exonerate the undertakers from any proceedings for nuisance
in the event of a nuisance being caused by them.

The defendants had under these powers acquired land and
erected buildings and machinery for the supply of electricity.
The working of their engines had caused vibration and noise,
which had interfered with the comfort of the occupation of a
neighbouring house to the extent of making the occupier's wife
and daughter ill. It had also so shaken the walls of the house
as to cause cracks in them and a settlement of the house.
There was evidence that the defendants intended to erect more
powerful engines. In an action by the tenant and reversioners
of the house —

Held, the tenant was entitled to an injunction to protect
him from the nuisance diwing his tenancy ; and the nuisance
being of such a permanent character as to cause injury to
the reversion, the reversioners were entitled to an injunction
also.

iSect. 2 of Lord Cairns' Act, gave to Courts of equity
jurisdiction to award damages, which they had not before ;
but it did not interfere with the princij)les upon which those
Courts had acted as regards granting injunctions up to that
lime. Accordingly, where a plaintiff has established a legal
right and its infringement already, and threatened further
infringement, he is entitled to an injunction according to the
ordinary 'principles on ivhich the Court acts in such cases.



INJUNCTIONS. 247

The Court will not alloiv a wrong to continue simply because
the wrongdoer — whether a private individual or a corpora-
tion acting in some sense for the benefit of the public — is
able and willing to pay for the injury inflicted.

Per Smith, L. J. : In my opinion, it may be stated as
a good working rule that first, if the injury to the plain-
tiff's legal right is small; and secondly, is one which is
capable of being estimated in money ; and thirdly, is one
which can be adequately compensated by a small money
payment ; and fourthly, the case is one in which it would
be oppressive to the defendant to grant an injunction,
damages in lieu of an injunction may be awarded. If these
Jour requirements are found in combination in a case, then
damages in substitution for an injunction may be given.



Although there is no Property in a Name, an Injunction will be
granted where the Name of a New Business so nearly re-
sembles that of a previously existing Business as to be likely
to Deceive.

TUSSAUD v. TUSSAUD. [1890]



Online LibraryPhilip Bertie PetridesStudent's cases : illustrative of all branches of the law → online text (page 19 of 29)