The Stourbridge Observer, Cradley Heath, Halesowen & District Chronicle.
Stourbridge, West Midlands, England, 1871-12-30 00:00:00

THE LIABILITY OF TRUSTEES.

In the Vire 'haneellors' Courts, the cause of " Sent-
thorpe v. 'upper" has been heard, which ease illus.
buttes verystrongly the duties, revonsildlitics, and iieke
trustees, and the liabilities which they may incur
even when they 4011,i fide act in the way which they
believe to be authorised by the trust, and the best tar
their ce.dui que trustont.

The question in the snit was whether the trustees of the
will rrf NO. John Calmer were liable to make good a loss of
41,i50 incurred in the respect of certain shares hi the Bir-
mingham tanking Company which they held as part
of the trust fronts at the time of its failure. Thirty.
seven of these shares were held by the testator at the
date of his will in August, 1,62, and of his death
in April, 10114. soon after his death the Banking Com-
pany issued new shares, offering them to the original
alareholders at par. Nino of these were offered to the
trustees ill 1..41 of the $7 shares belonging to the testa-
tors estate, and were purchased by them out of the trust
fund for £270, the shares boom then much sought aft, r, and
at a premium. At this time only three of the trainees
were acting in the trusts, the fourth, Sir. Reeves, beteg
thee under age. it was stated in court that the bank had
been established for
_more than '2O years before the death of
the testator: that Andre time of the new shares being taken
It was paying a dividend of £lO per cent., and looked
, upon as a safe investment; and that the testator before
Ws death had told the trustees It was his hest investment.
It was admitted ala that the trustees acted bond fide, and
as they believed to lie best for then *tate, and hart no. personal
hitereat hi the matter, on the '24th reptember, Isite, AIL
Reeves came of age. Nine months after this time, and
nearly two-and-a-half yawn after the testator's death, the
Banking Continuo failed, and was wound up in Chanceiy.
The hank wee an unlimited company, and the calls on
the 48 shares amounted to £1,102. Twit the infant grand-
am/eiders of the testator, who took an intsrest mailer his
alit by their father its next friend, filed a bill against
the trustees to compel thorn to make good the loas
which had been inetirred in respect of the ehan-a, cmtending
that under the words if the will the trusties were bound to
have Judd the old shams within a year after the testator's
death. and had no power to Invest in the new shares. The
material words of the will were as follows r—The testator de-
vised and bequeathed to his truste.a lila frechohl estate at
lapworth, eve leasth.ld houses, his shares in public arm.
Matas, ready money and securities for money, and all
the rest of his estate, upon truet, "to sell arid dispose trf
his freehold estate at I.apworth, and such part of his per.
&oval estate other than and eseept his said leasehold pre-
mise.), immediately after hia decease, er an soon thereafter
as the said trustees might see lit an to it., as to the said
taustecs should seem prayer, Wail to stand pommeled of the
moucys to arise from suck sale or sales, and an the said trust
gurneys upon trust to hived the name in their names upon
mortgage of freehold or leasehold land or buildings of stile-
dant value, hi agland or Wales, or is some one of the public
stoeks or horde d tired lOW oi•. sr en us ortstgo er hoed o
say public dividend-payieg company taffy anthorised to
liorrsw the same."

Mr. tole, (4 , and Mr. (nee. tar the plaintiff, c4ntended
that under these word. the trustees were bound to sell all
the 1011 Alllll.llll within areasonable time after the testator's
death, and lout no imwer to purchase the new Ames, and
were uonsequently liable tor the loss incurred.

Mr. Gla.sse, 1111,1 Mr. Pearson were for the three
trustees a ho were of age at the time 4,f time testator's death ;
Mr. Cotton, Q.C., and Mr. J. T. Humphrey for Mr. Reeves,
who was oot of age at the time of the testator's death nor
at the time of the investment in the 111.,V tthalTi; Mr. Her-
bert Smith for :mother defendant.

Vice-Chancellor Matins said,—There appears ti be no
doubt that the hank was a well-established bank, that the
shares were considered a good investment, that the trustees
acted not for their own personal benefit, but for what they
considered the interests of the persons for whom they were
trustees. There Is little doubt either that these liar-iris
would have acted in the same manner themselves, and
would have been very angry with the trustees if they had
either sold the dl shares or refused to take the new shares.
nor is there any doubt that the testator considered the
Investment a grant one. Indeed, lie pointed It out to the
trustees as being the best investment which he had. Under
these circumstances I am asked to hold these gentlemen re-
sponsible for the loss which has heen occasioned, amount-
ing altogether to g 1,900. It is with great regret that I hold
them IMble to replace this sum, but I am compeliml to do
so. As to the nhse new sluices, I consider it quite clear that
the power of investment did not authorize the purchase of
shares in inicis as c.niffiany, therefore their taking the new
shares was an unauthorized iflVVAlllellt, and for the loss
mused by it there Is no doubt the trustees must be liable.
Then as to 37 old shares, it has been arved,—l, that
the words of the will directing a sale of testator's
personal estate apply only "to such part no of the
trustees tldnk fit to sell." I cannot think that this is the
proper construction ; it would in tact give the trustees power
to retain for so lung as they might think fit, an investment,
such as these shares, in air unlimited company, which might
involve the loss if the whole estate. I think that the direc-
tion to sell applies to the whole of the estate. 2. It was
argued that the words " immediately after his decease, or
so 30011 thereafter no the trustees might see fit to do so,"
vested in the trustees an absolute discretion to settle
the time when they should sell. I do not think that
this is the case. I think the words only mean that
the trustees were not compelled to sell immediately at the
testator's death at any price that they e.w1.1 get
but that they should have a reasonable time for doing so. I
think that the words are equivalent to "so soon as they con-
veniently may," which were the words used In a case cited
before are, and I shall follow that case, which, in fact, laid
down that the sale most he made within a reasonsble time,
such that as some time must lie fixed, the period of a year
from the testator's death must be considered a reasonable
time. In this case the trustees, with the best intentions no
doubt, have retained an existing investment in shares in an
unlimited company for two-nods-half years after the testator's
death, it being hi their power to bare sold them to advantage
within a year. I think, therefore, to have so sold them
would have been their duty, and that as they have not done

to they mud be held liable to ipiace the loss mcurrcd in
respect of the 87 old shares, which they retained, as 'sell as
the loss In respect of the nine new slimes a lack they pur-
chased. Then, as to the ease of 3,ir. Reeve*, be claims to
stand on • different footing from the other trustees, inas-
much as he was not ..kf age at the testator's death, nor until
some time after the new shares had been purchased. As,
however, lie acted In the trusts for nine months before the
company failed, dming which period he might have sold the
shares, I think he adopted the acts of his co-trustees, and
must be lield liable with them.