So the acquiescence of a cestui que trust entitled in remainder after the death of a tenant for life will not be binding on him during the continuance of the preceding life estate; for until his own title accrues in possession he has no immediate right to interfere in the ordinary administration of the trust estate (1). If a trustee have lent the trust monies upon the personal security of one of the cestuis que trusts in a manner not authorized by the trust instrument, he has a right to institute a suit against the party to have the money replaced; and in such a case he will be entitled to his costs (m). This may also be done by the representatives of the trustee, by whom the improper investment was originally made (n). And in like manner if the trust fund have been transferred by two trustees from their joint names into the name of one of them only, the trustee, who has concurred in the transfer, may institute a suit against the other to have the fund replaced (o). And in such a case the cestuis que trusts need not be made parties to the suit (p).* An authority given to a trustee to lay out and invest the trust money empowers him to do all acts essential to such a trust; and it therefore necessarily enables him to give sufficient discharges to the borrowers of the money upon calling it in (q). Where a trustee for investment in real estate has possessed himself of the trust money, and afterwards purchases real estate in his own name without any allusion to the trust, the purchased estate will not be held liable to the trusts, unless some positive or presumptive evidence be adduced, that the purchase was made in execution of the trust (r). A trust to invest in the purchase of land does not authorize the trustees to lay out money in repairs and improvements of the estate (s). Trustees for investment in the purchase of lands, which are settled in strict settlement are bound to watch the proceedings for the benefit of the persons beneficially entitled in remainder, and they are therefore entitled to be present in the Master's office at the investigation of the title to the lands, which are proposed to be purchased, (1) Bennett v. Coley, 5 Sim. 181; S. C. 2 M. & K. 225. (m) Payne v. Collier, 1 Ves. jun. 170; Greenwood v. Wakeford, 1 Beav. 576; Fuller v. Knight, 6 Beav. 205. (n) Greenwood v. Wakeford, 1 Beav. 576. (0) Franco v. Franco, 3 Ves. 75; May v. Selby, 1 N. C. C. 235. (p) Franco v. Franco, 3 Ves. 75; May v. (9) Wood v. Harman, 5 Mad. 368. que trusts a loss * If a trustee be compelled to make good to the cestuis occasioned by the default of a co-trustee, who has become bankrupt, he may prove for the amount so paid by him as a debt against the bankrupt's estate. Lincoln v. Wright, 4 Beav. 427. PART III. although it would be otherwise where all the persons beneficially interested are before the court (t). Div. I. CHAPTER II. SECT. 2. Usual indem nity clause does not apply to breach of trust in not invest ing. The usual indemnity clause will not exonerate a trustee from the consequences of a breach of trust, in neglecting to convert and invest as directed by the trust instrument (u). Where a specific sum (as 2,000l.) is given by will to trustees to be invested, the costs of the investment in the absence of any express Costs of invest- directions must be defrayed out of the particular sum, and will not fall ment how paid. upon the testator's general estate (x). Duty of trustees to give information as to investments. Trustee, and not equitable tenant for life of real estate, entitled to deeds. It is the duty of trustees to give their cestuis que trusts full information as to the disposition and investment of the trust property (y). VI.-Of Trustees of Property settled for life with Remainder over. Trustees of settled property hold as much for the protection and benefit of those entitled in remainder, as of those to whom the immediate beneficial enjoyment is given. In administering the trust therefore the interests of both must be equally consulted, nor must any advantage be given to either of them at the expense of the other. It has been already seen (z), that in the case of real estate, the trustees, and not the equitable tenant for life, are entitled to the custody of the title deeds: although it is otherwise if the tenant for custody of title life have the legal estate (a). And if the trustees be guilty of great negligence by suffering the tenant for life to possess himself of the deeds; or a fortiori if they deliver them over to him with cognizance of the intention to make an improper use of them, they will be responsible to the remainder-man for any loss that may ensue (b). In the recent case of Denton v. Denton (c), in the Rolls, a testator by his will charged certain annuities on his residuary real estate, which he devised to two trustees, in trust to pay or permit the rents to be received by A. for life with remainder over. Upon the testator's death, A. entered into possession of the estate, and acquired possession of the title deeds, which he kept with the acquiescence of the trustees for four years; the annuities were also regularly paid by him. The trustees then insisted upon having possession of the title deeds, and gave notice to the tenants to pay the rents to them, and commenced an action against A. for the recovery of the deeds. A. filed his bill to restrain the trustees from continuing these proceedings; and the Master of the Rolls granted the injunction on terms, one of which was, that A. was to bring the deeds into court. His Lordship appears (t) Davis v. Combermere, 9 Jur. 76. (x) Gwytter v. Allen, 1 Hare, 505. (z) Ante, Pt. II. Ch. III. to have attached much weight to the long acquiescence of the trustees PART III. in the possession of the tenant for life (c). Div. I. CHAPTER II. SECT. 2. So it has been also stated, that in the absence of any express directions in the instrument creating the trust, the trustees will be And to the pos entitled to the possession and management of the estate, if the nature session and of their duties require that they should have a controlling power. For trust estate. When? instance, where the trust is to keep up insurances, or pay annuities, or other periodical sums, out of the rents, the cestui que trust, who is entitled for life subject to those charges, cannot assert a claim to the possession and management of the estate to the exclusion of the trustees (d). In Naylor v. Arnitt, a testator devised all his real estates to two trustees, their heirs and assigns, in trust out of the rents and profits to pay two life annuities, and subject thereto to permit and suffer A. to receive and take the rents, &c. during his life, with a similar trust in favour of the wife of A., and subsequent limitations over to their children. It was held by Sir J. Leach, M. R., that the trustees had power to lease the lands for ten years (e). However where the income of the estate is amply sufficient to defray the prior charges upon it, the tenant for life will be let into possession upon giving proper security for payment of the annuities or other charges (f). Although possession will not be given him until the sufficiency of the estate for that purpose has been ascertained by taking the accounts (g). In the case of Denton v. Denton (h), which is stated above, the trustees of an estate, charged with the payment of annuities, were restrained from taking proceedings to compel the payment of the rents into their hands, rather than into those of the cestui que trust for life, upon the latter's undertaking to keep down the annuities (h). Where the cestui que trust for life is a female, that is an additional reason for excluding her from the control or management of the estate (i). But we have also seen, that where it appears, that the trustees were not intended to have the exclusive management of the property, that intention will prevail (k). And if the personal possession or occupation of the property be essential to its beneficial enjoyment, as in the case of a family residence, there the court will in any case deliver the possession to the cestui que trust for life, taking means to secure due protection of the property for the benefit of those in remainder (1). Where the tenant for life takes the legal estate as well as the Denton v. Denton, 8 Jur. 388. (e) Naylor v. Arnitt, 1 R. & M. 501. Blake V. Bunbury, 1 Ves. jun. 194, 514; S. C. 4 Bro. C. C. 21. (g) Blake v. Bunbury, 1 Ves. jun. 194, (h) Denton v. Denton, 8 Jur. 383. (k) 5 Mad. 432. (1) 5 Mad. 432, 3; ante, Pt. II. Ch. III. management of PART III. equitable interest, the right of possession usually follows, and is commensurate with, the legal title (m). Div. I. CHAPTER II. Trustees must protect the estate against the waste and other acts of tenant for life. May cut timber for tenants for life without im peachment of waste. Duty of trustees, as to fur niture, heirlooms, &c. settled in trust for life. Trustee of per- must not trans- But may give of him a power attorney to receive the in come. It is the duty of the trustees to protect the estate for the benefit of the remainder-men against the acts of the equitable tenant for life. Therefore they must not permit him to cut timber, or open mines, or commit other waste (n). But where the cestuis que trusts for life are without impeachment of waste, the trustees with the concurrence of the tenants for life, will be justified in cutting such timber as shows symptoms of decay (o). But not ornamental timber (p), nor to such an extent as will materially lessen the value of the estate (q). Where the beneficial enjoyment of moveable articles, such as heirlooms, or furniture, plate, &c., is given to the tenant for life, it will be a sufficient precaution on the part of the trustees to take a schedule of the articles, signed by the cestui que trust for life. And as a general rule, and in the absence of special circumstances of danger or suspicion, it is not requisite to take any security from the tenant for life for the safe keeping of such articles, and their redelivery to the trustees upon the determination of the life estate (r). Where the trust property consists of stock or other personal estate, which is necessarily much more within the power of the immediate possessor than real estate, it is unquestionably the duty of the trustees to retain the possession for the benefit of those entitled in remainder; and if they deliver over the fund unprotected into the possession or power of the tenant for life, who disposes of it for his own benefit, they would unquestionably be answerable to the remainder-men for the loss. However although the trustees would not be justified in putting the corpus of the fund within the exclusive control or possession of the cestui que trust for life, the annual income as it arises is his sole property; and therefore a power of attorney for him to receive the dividends, (which is the readiest method of putting him in possession of what the author of the trust intended him to have,) cannot entail any responsibility upon the trustees; as long as no circumstance occurs to alter or defeat the right of the tenant for life, to the enjoyment of the Power of attor- income. However it may be added, that if the trustee or one of several trustees, by whom a power of attorney is given, himself once receive the dividends, that will operate as a revocation of the power, ney how in validated. (m) See Tidd v. Lister, 5 Mad. 432; supra, Pt. II. Ch. III. (n) Whitfield v. Benett, 2 P. Wms. 242; Denton v. Denton, 8 Jur. 388. (0) Waldo v. Waldo, 7 Sim. 261; see Smythe v. Smythe, 2 Sw. 251; Brydges v. Brydges, id. 150; Wykham v. Wykham, 19 Ves. 419. (p) Newdigate v. Newdigate, 1 Sim. 131; Davies v. Leo, 6 Ves. 786; Chamberlaine v. Dummer, 3 Bro. C. C. 549. (q) Burges v. Lamb, 16 Ves. 174. (r) Bill v. Kynaston, 2 Atk. 82; Leeke v. Bennett, 1 Atk. 471. and a new one must consequently be executed for the receipt of future dividends. It is almost needless to add, that the death of the trustee, or all the co-trustees, who have executed such a power, will have the same effect. It is settled, that any extraordinary bonus or addition to the usual annual income of stock or other property, which is settled in trust for one for life with remainder over, must be treated as capital and added to the principal fund. The trustees therefore will not be justified in paying over these unusual additions to the beneficial tenant for life, but they must invest them for the benefit of all parties (s). PART III. CHAPTER II. Div. I. SECT. 2. Extraordinary bonuses not paid to tenant for life, but to be invested. nature. This brings us to the consideration of a very important rule, which Duty of trushas been established as to the duty of trustees of property settled for tees, where the settled prolife with remainder over, where the property is of a perishable nature, perty is of a such as leaseholds, or annuities for some limited period. As such perishable interests become exhausted by the effluxion of time, if the whole amount of the annual income were paid to the tenant for life, he would in reality be in receipt not only of the interest, but also to a certain extent of the capital of the trust fund to the prejudice of the remainder-men; and if the life estate lasted sufficiently long, there might be nothing left at its expiration. trustees for not converting such It has therefore been long established as a general rule, that where a testator makes a general gift of his estate or the residue of his estate generally to, or in trust for, a person for life with remainder over, so much of the property as consists of leaseholds, or terminable annuities, or other interests of a perishable nature, must be converted and invested in permanent securities for the benefit of the remainder-man (†). And the same rule applies to articles, which ipso usu consumuntur, such as wines, live-stock and other property of that nature (u). And Liability of if in contravention of this rule the trustees suffer the tenant for life to receive the whole income arising from the perishable securities, he will be decreed to refund what he may have received over and above what he would have received, if the conversion had been duly made, and the proceeds invested in the three-per-cents. (x); and this difference will be treated as capital to be invested for the benefit of all parties entitled (y). The tenant for life is in the first place bound to make good this difference, but on his failure or inability the parties entitled in remainder may claim against the trustees the full amount, which has so been paid by them in breach of their trust (z). (s) Brander v. Brander, 4 Ves. 800; Paris v. Paris, 10 Ves. 185; see Hooper v. Rossiter, 13 Price, 774; S. C. 1 M'Clel. 527. (t) Howe v. Earl of Dartmouth, 7 Ves. 137; Fearns v. Young, 9 Ves. 552; Dimes v. Scott, 4 Russ. 200; Alcock v. Sloper, 2 M. & K. 701, 2; Mills v. Mills, 7 Sim. 501; Pickering v. Pickering, 2 Beav. 57; S. C. 4 M. & Cr. 298; Lichfield v. Baker, 2 Beav. (u) Randall v. Russell, 3 Mer. 194, 195. (z) Howe v. Earl of Dartmouth, 7 Ves. CC property." |