F.C. 1898 MATTHEWS v. THE TRUSTEES EXECUTORS AND AGENCY COMPANY LIMITED. which he has given in favour of the other plaintiff, he has given her the relief which she asked. [HOLROYD, J. Is not that quite right? Prima facie it appears to be quite right; but I understand that there are decisions in England on it. MADDEN, C.J. The statute does not bar the action, because you do not impeach the decision so far as it says the money is to be repaid.] The learned primary Judge decided with us, that the statute did bar the right of action of Mrs. Matthews, though it did not that of the younger plaintiff, and he gave the younger plaintiff relief, which Mrs. Matthews gets the benefit of. It is submitted that that is contrary to the express words and intention of sec. 29, sub-sec. 2, of the Trusts Act 1896 (No. 1421) (a). [HOLROYD, J. Unless the statute interferes with it, I should say that that part of His Honor's decision is absolutely right.] The statute does prevent her recovering: In re Somerset (b). [MADDEN, C.J. Having a co-plaintiff, her action is not barred.] The remedy for her cause of action is barred. [HOLROYD, J. Does not the section apply to the case of one beneficiary suing by himself? ] It is submitted that it was meant to and does cover a case like the present, and the Court of Appeal in that case so decided. The learned primary Judge should have made an order that Mrs. Matthews should get only so much of the interest earned on the restored fund as represents interest on the market value of the deposit receipts. As put by Davey, L.J., in that case, at p. 276, the trustees are entitled to retain for their own use the income of the restored fund. [MADDEN, C.J. If they leave the unauthorized investment on foot. But suppose the unauthorized investment brings in a large income, while the market price is low, is the tenant for life to lose the benefit of that income?] (a) Sub-sec. 2 is as follows:-"No obtained by another beneficiary than beneficiary as against whom there he could have obtained if he had would be a good defence by virtue of brought such action or other proceeding this section shall derive any greater or and this section had been pleaded." other benefit from a judgment or order (b) [1894] 1 Ch. 231. The trustees cannot be asked to keep on foot the two investments. Nor did the learned primary Judge so order. Apart from the order of the Court, the trustees would be entitled at any time to get in the moneys invested on unauthorized securities and invest them upon authorized investments. The only test of the value of things is their market price. [HOLROYD, J. Not so. You may be perfectly certain that at such and such a date the price of them will be so much, and you may know perfectly well that they will not fetch one-tenth of that now.] If the public are so certain that it will be so they will give a larger price for them. If these deposit receipts are likely to pay a large interest the trustees will get a larger price for them, the benefit of which Mrs. Matthews will receive. But it is alleged even in the statement of claim that the bank is not and will not be able to pay interest on the deposit receipts. [MADDEN, C.J. If the statute prevents her getting an advantage, surely she is entitled to have matters remain as they were.] She brings an action in which she alleges that she does not want that. [MADDEN, C.J. Is not the effect of the statute to leave her where she is?] No-not to leave her where she is, but to bar her action. If the market value is not the real value, there ought to be an inquiry as to the real value. As the company has itself to make up the difference it will get the best price for the deposit receipts that it can. But, whether she is to have the interest on the old investment or not, it is submitted that the learned primary Judge was wrong in deciding that she was entitled to the whole of the interest on the investment of the restored fund. He has also ordered the company to pay the costs of the plaintiff Mrs. Matthews, who, according to his decision, has been beaten. There is no authority for ordering a successful defendant to pay an unsuccessful plaintiff's costs. [HOLROYD, J. I do not see how the infant's costs of action can be separated from her costs.] F.C. 1898 MATTHEWS v. THE TRUSTEES EXECUTORS AND AGENCY COMPANY LIMITED. F.C. 1898 MATTHEWS V. THE TRUSTEES EXECUTORS AND AGENCY COMPANY LIMITED. Kekewich, J., seems to think, in Re Somerset, at p. 258, that they can be separated. Irvine and Wanliss for the plaintiff Mrs. Matthews, respondent-If this investment is not to be treated as a bad investment for Mrs. Matthews she is entitled to have it remain there. [MADDEN, C.J. Were it not for the statute the trustee would be entitled, as Mr. Cussen says, as soon as he found that it was a bad investment to sell it, make up the difference, and invest the whole on a proper security.] In Re Somerset, cited contra, there was no order to sell. The mortgaged property was confirmed as part of the trust estate, but the balance had to be made up by the trustees-it was an authorized investment made negligently. [HOLROYD, J. You cannot elect to hold the security if the infant's interest requires that the whole money should be replaced. What judgment do you say ought to have been made?] We say the judgment of A'Beckett, J., is perfectly right. [HOLROYD, J. If it had not been for the statute I should agree with you. WILLIAMS, J. So should I, but the statute and Somerset's Case alters it.] When His Honor ordered that all the money should be restored he deprived us of any interest that we should have got on the deposits. [MADDEN, C.J. Before the statute the Court would have required the unauthorized investment to be sold and the balance to be made up by the trustees, but the question is whether the statute has not made an alteration. It says that one barred by it is not to get the advantage which another not barred might get. The statute takes from the former the right to complain, but it does not do away with his interest in the improper investment.] The judgment of A'Beckett, J., was correct on other grounds. The statute did not apply, because this was a specialty debt. The company was a party to the settlement, which was under seal. Its provisions show the company was a party to a contract which amounted to more than a mere acceptance of the trusts of the settlement, e.g., there was a covenant by the trustees to invest. [HOLROYD, J. The agreement is between parties other than the trustee. As a rule a trustee merely accepts the trust out of pure goodnature. There is no consideration for his doing it.] No consideration is necessary. Even a declaration under seal that he will stand possessed on certain trusts would be sufficient: Richardson v. Jenkins (e); or an acknowledgment that he received the money under his hand and seal: Gifford v. Manley (ƒ); or an acceptance under seal of a trust: Wynch v. Grant (g); Isaacson v. Harwood (h). [HOLROYD, J. The parties other than the trustees seem to declare the trusts of this deed, e.g., the use of the words "declared and agreed."] Such words are sufficient to make a covenant by any of the parties who execute the instrument. It is further submitted that there was a continuing duty to invest on a proper investment, and that the not doing so was a continuing breach of trust. [WILLIAMS, J. If it was his duty at once to put the money on a proper security I do not see the continuing breach of trust.] His duty under the deed remained the whole time. [HOLROYD, J. The last deposit was on 22nd March 1890. The trustees could not help the reconstruction in 1892. They were forced to it by the Act of Parliament.] No; it was not done under the Act of 1892, which was not then passed, but under the Companies Act 1890, although it is included as one of the banks as to which the Act of 1892 afterwards applied, by reason of the Reconstructed Companies Act 1893 (No. 1546). Nor under the scheme of reconstruction was there any compulsion put upon trustees to take the new deposit receipts. There was in the scheme special provision made for those depositors who could not properly take the new deposit receipts. There was also an option given to take preference (c) [1869] L.R. 4 Ch. 449. (d) [1846] 2 Coll. 542. (e) [1853] 1 Drew. 477. (f) [1735] Cas. Temp. Talb. 108. (g) [1854] 2 Drew. 312. (h) [1868] L. R, 3 Ch. 225. F.C. 1898 MATTHEWS v. THE TRUSTEES EXECUTORS AND AGENCY COMPANY LIMITED. F.C. 1898 MATTHEWS v. THE TRUSTEES EXECUTORS AND AGENCY COMPANY LIMITED. shares in place of the old deposit receipts. If they could take new deposit receipts in place of the old it might as well be argued that they could take the preference shares (i). It is therefore submitted that the learned primary Judge was in error when he held that the transaction of 1892 was a salvage operation, because they could have done something else under the scheme. (i) By the scheme of reconstruction of the old bank or company referred to it was provided that the liquidator of the old company should sell to the new bank or company (which had been formed to buy its assets) all the old company's real and personal property, and that the new company should pay to him 800,000l. in ten payments, as follows, namely: -7 eightieth parts thereof on the 1st April in each year up to and inclusive of the 1st April 1897, and 9 eightieth parts on the 1st April 1898 and on the 1st April in each of the following years up to and inclusive of the year 1902, and should issue to such debenture holders or depositors or customers of the old company as it in its discretion might think fit preference shares in the new company in exchange for their debentures or deposit receipts or claims against the old company to the extent of at least 500,000l., and should indemnify the liquidator against all claims of every description in respect of such debentures, deposit receipts, or claims against the old company, and in the event of any debentures, deposit receipts, or claims against the old company being exchanged for preference shares in the new company in excess of 500,000l., the amount of such excess should from time to time as it arose be deducted from the said 800,000l., and the new company might at its option, with the consent of any debenture holder or depositor or customer of the old company, take over the liability of the old company with reference to any such person's debenture or deposit receipt or claim against the old company, and issue to any such person the debenture or deposit receipt of the new company in exchange for the debenture or deposit receipt or indebtedness of the old company, and the amount of such debenture or deposit receipt or claim so taken over should from time to time be deducted from the said sum of 800,000., and the new company should indemnify the liquidator against all claims in respect thereof respectively. It also provided that if default were made in payment by the new company the liquidator should immediately acquire and enforce a lien or charge on all such of the property sold as had not been then realized, and it provided that the agreement should not be binding on the liquidator or on the new company unless and until debenture holders, depositors, and customers of the old company actually applied for and accepted the preference shares of the new company in exchange for the debentures, deposit receipts, or indebtedness of the old company to the extent of 500,000l. at least, nor unless and until debenture holders, depositors, and customers of the old company actually accepted or agreed to accept the debentures or deposit receipts of the new company upon such terms as the new company might be willing to agree to in exchange for the debentures, deposit receipts, or indebtedness of the old company to the extent of at least 600,000l., but it should be lawful for the new company and the liquidator to waive such portions of these latter conditions as they might jointly agree upon. |