The Legal Observer, AND SOLICITORS' JOURNAL. SATURDAY, JUNE 3, 1854. JOINT-STOCK TRUST COMPANIES. to alter the Bill in any mode, and to any extent, that their Lordships might deem. proper. PROGRESS OF THE SOUTH SEA AND EXECUAfter some formal proofs, three Bank TOR AND TRUSTEE COMPANIES' BILLS. Directors were called, who stated they had THE Select Committee of the House of heard of breaches of trust, but as the Bank Lords, to whom these Bills were referred, did not take cognizance of trusts, they were met on Wednesday, the 24th May. The not personally acquainted with the facts. Duke of Buccleuch was in the Chair, and They inferred where two or more persons the following Peers were also present :- held stock, that it was trust property; they the Earl of Lonsdale, Lord Brougham, Lord admitted that where the stock stood in the St. Leonards, and Lord Overstone. The names of three trustees, they knew of no case of the South Sea Company was opened cases of fraud, but there were some inby Mr. Rolt at great length. He contend-stances in which complaints were made of ed that a company for administering private improper dealing with trust stock, where trusts was required for the convenience of two trustees only were the holders of it. the Public, and that the South Sea Com- In 30 years one of the Directors had heard pany was peculiarly adapted to supply the of eight complaints of that kind. want. He alleged that responsible trustees were difficult to procure, and that the ne- We may observe, that the Bank would, of cessity of procuring new trustees in conse- course prefer that a joint-stock company quence of deaths and retirements was at- should hold large amounts of stock, instead tended by inconvenience, expense, and of numerous individuals with comparatively delay. He urged also that individual trus- small sums. The Directors and their officers tees were liable to failure and often com- and clerks would thus have less trouble and mitted breaches of trust. He combated probably less risk of mistake. The Directors the objections stated in the Petition of the who have their own mercantile affairs to Incorporated Law Society regarding the transact, as well as the Bank business, would unfitness of a board of directors to execute no doubt gladly escape from the gratuitous family and other private trusts. Having duties of private trustees; and they consestated the grounds on which he contended quently spoke in favour of a company which that the preamble of the Bill was proved, would enable them to decline trusteeships and that legislation was necessary to re- and refer the applicants to the company. move the evils complained of,-he went They stated some instances in which trusthrough the clauses under which the plan tees, and others in which the cestui que is to be carried into effect, and particularly trusts, had sustained loss, delay, and exthose for the security of the trust funds pense; but on cross-examination, it apand the due keeping of accounts, - on peared that if there were failures of indiwhich many doubts and difficulties were vidual trustees so there were of joint-stock suggested by members of the Committee, companies; and in litigated cases there must and especially by the Law Lords. The be the same course of proceeding, whether learned counsel, on all these points, pro- the trustees were a body of Directors or a fessed the entire willingness of his clients few private individuals. VOL. XLVIII. No. 1,369. 3rd. That although Courts of Equity al was expressly provided for in the will or settlement,-in the absence of such express provision, no allowance could be made to a trustee for the employment of his time, or for his trouble or exertions in the affairs of the trust. Mr. Franks, the Deputy Governor of the should be responsible only to the extent of company, was also examined, and he de- their guarantee fund and other property, but scribed the intended mode of executing the that the directors should incur no personal trusts, the constitution of the board of responsibility whatever. management, the anticipated extent of business, and the profit to be derived from lowed a remuneration to trustees where it it. He expected that they would have trusts to the extent of 10,000,000l. annually, that they would probably require one per cent. on the gross amount of the property; that the expense of the establishment would be about 5,000l. a year; and that the shareholders, in addition to the 4th. That the holding of estates in trust interest derived from the guarantee fund, by corporate bodies had been declared inmight receive one per cent. out of the expedient by the legislature, for by the profits. On cross-examination, it appeared Municipal Corporations' Act property held that the details of the scheme were in a for charitable purposes was directed to be very unsettled and unconsidered state. conveyed from such corporations to indiThe witness saw no difficulty in undertaking vidual trustees. Although the motive for any kind of trusts, whether of large landed this enactment was a political one, in order estates, or any other class of business. to prevent corporations from exercising an The Select Committee again met on influence over tenants or others employed Monday, the 29th May, when Sir John in the trust affairs, the same objection Patteson was examined in support of both Bills, and particularly of the Executor and Trustee Bill,-stating his opinion to be in favour of such institutions if a competent board of directors could be induced to attend personally to the duty, but if it were delegated to paid officers he should not approve of the plan. He stated the case of a relative who had lost a very large sum of money as a trustee, and had heard of difficulties in procuring responsible and competent trustees. would apply to a joint-stock trust company, if they should have the management and control of large estates or other property, necessarily carrying with it considerable influence in public affairs. 5th. That if their Lordships should be of opinion that the principle of the Bill ought in any respect to be adopted, it should be carried into effect by a public and not a private Bill, and there was no reason for giving a preference to the South Sea Company, originally established to Mr. Selwyn appeared as counsel for the carry on trade in the South Sea fisheries.1 Incorporated Law Society, and addressed If this Bill were passed, all the insurance the Committee at considerable length. He and many other companies would be enurged the following and other objections titled to similar powers. against the Bills : 6th. The main point in support of the Bill 1st. The alteration of the rule of law was, that the company would secure cestui that trustees shall not be placed in a situa- que trusts from the losses they now sustain tion in which their duties and their in- by the malversation of individual trustees. terests conflict; that whilst they would be On the other hand, it was contended that bound to execute the trust at as little ex- those cases were few in number and did not pense as possible in favour of the parties justify a new law, and that the frauds, failbeneficially interested, their interest would ures, neglect, and mismanagement of pubinduce them to obtain as large a profit as lic companies, were quite as numerous as possible out of the trust funds to divide those of individual trustees, and in case of amongst the shareholders by whom they failure, the extent of mischief would be were elected, and the danger was, that if the enormous. Indeed, the winding up of a present board of directors did not make a joint-stock trust company would be attended good dividend, they would be displaced at the next annual meeting to make room for less scrupulous persons. 2nd. It was proposed to abrogate another rule of law, by which trustees were personally responsible for their acts and deeds to an unlimited extent. Here it was proposed that not only the company at large with incalculable mischief. The accounts of all the trusts must be taken before the parties entitled could be paid, and there would be the expense of transferring every separate trust to new trustees. slave trade. Joint-Stock Trust Companies. 7. The learned counsel adverted to various South Sea Company Bill, and report altoother points connected with the duties of gether against the Executor and Trustee trustees, and the difficulties which a board Bill. If they should not reject the prinof directors would have to encounter, in the ciple in toto of such projects, it may be proper management of the infinite variety presumed they will come to the conclusion of trusts which might come into their that the object should be effected by a hands. public Bill, in which general rules for the In opposition to the Bill, Mr. Henley, the constitution and management of such commember for Oxfordshire, late President of panies may be laid down for the security of the Board of Trade, was examined. He the Public (and which are not provided stated he had been a trustee in numerous in these Bills), and the Board of Trade instances for many years. He rarely ex- authorised to examine into applications for perienced any difficulty in carrying those charters of incorporation in conformity to trusts into effect; changes of trustees were such general regulations. seldom necessary; competent persons were readily found to undertake trusts, and the expense of new trustees was small. He thought a board of directors could not efficiently enter into all the details of private trusts, and that they were unfit to discharge the various duties required. Mr. Kinderley, the President of the Incorporated Law Society, was next examined, and stated that he and his partners were chiefly engaged as solicitors in trust affairs. He had been in practice for 23 years, and was not aware of any difficulty in procuring competent persons of large property to undertake trusts. He believed that the cestui que trusts were fully as secure, under the present arrangements, as they would be by the proposed guarantee fund, in lieu of the unlimited responsibility of the existing We understand that already several life insurance companies have declared their intention, if these Bills should be passed, to apply for similar powers; and no doubt the several insurance offices, whose boards of directors consist equally of barristers and solicitors, would be at least as competent as the South Sea Board to administer trusts and executorships; and most of them are already in possession of a capital of sufficient amount to constitute a guarantee fund. It appears that the Bank of England at one time contemplated accepting trusts, and the joint-stock banks and numerous other companies throughout the country might also compete for this new branch of business. But we insist that a numerous and fluctuating board of directors are radically incompetent, effectually and properly, to discharge the duties applicable to private Mr. G. B. Gregory was also examined, trusts. The sound and sensible rule proand proved several instances of the failure posed by Sir John Patteson, that trustees of joint-stock banking and other companies, occasioned by the speculations and indiscretion of the several boards of directors, to an enormous amount. He also deposed to the management of trusts of large estates by private trustees who gave their personal attention to, and superintendence of, the various affairs of the trust. trustees. Mr. Arthur Morgan was also called, as one of the proprietors of the South Sea Company, who, on behalf of himself and many other proprietors, dissented from the company's undertaking trust business and delaying the winding up of their own affairs and the payment of the proprietors of the stock. should personally transact the business, cannot be carried out. The directors, for the most part, will be uncertain in their attendance; and old members of the board will be retiring and new ones coming in; so that the theory of a continuous body of trustees is a practical fallacy. Interested motives have been ascribed to the Law Society acting on the part of their brethren; but the probability is, that in many respects litigation would be increased, and at all events the joint-stock company's solicitor would only represent the trustees. The cestui que trusts, tenants for life, reversioners, remainder-men, legatees, annuitants, mortgagees, creditors, lessees, and all other persons having claims or interests in Thus the case stands upon the evidence the trust would be represented by their repro and con, the substance and effect of spective solicitors. Moreover (as the Law which we have endeavoured fairly to state. Review held out), testators or grantors might We cannot conceive that the Committee direct that their own solicitors should be will report in favour of these alterations of employed whenever legal advice and assistthe Law in a private Bill. It is probable ance are required. Nor is it to be overthey will expunge the trust clauses in the looked that as wills and settlements are pre 76 Joint-Stock Trust Companies.-Stamp Duties' Bill. Another meeting of the Select Committee took place on Thursday, the 1st June, when the following witnesses were examined :— Mr. Bell, of the Imperial Insurance Company, who approved of the measure; three merchants from Cape Town who described a trust society there with five directors; Mr. Bellenden Ker, who prepared the South Sea Bill and approved of its principle, but admitted that several clauses were defective; and Mr. Headlam, who deposed in favour of the plan. Mr. Selwyn addressed the Committee on the further evidence, and in opposition to the Executor and Trustee Bill; Mr. Hope Scott replied on both Bills; and their Lordships intimated their intention of taking both cases into their consideration, on Saturday the 3rd instant. STAMP DUTIES BILL. Bills and notes. It is intended by this Bill to alter the amount of the stamp on inland bills and notes, and to extend the enactment to foreign bills. Foreign bills. Adhesive stamps. The duties by this Act granted in respect of bills of exchange drawn out of the United Kingdom shall attach and be payable upon all such bills as shall be paid, indorsed, trans ferred, or otherwise negotiated within the United Kingdom wheresoever the same may be payable, and the said duties shall be denoted by adhesive stamps, to be provided by the Commissioners of Inland Revenue for that purpose, and to be affixed to such bills as hereinafter directed; s. 3. person The holder of any bill of exchange drawn out of the United Kingdom, and not having a proper adhesive stamp affixed thereon as herein directed, shall, before he shall present the same for payment, or indorse, transfer, or in any manner negotiate such bill, affix thereon a proper adhesive stamp for denoting the duty by this Act charged on such bill; and the who shall indorse, transfer, or negotiate such bill shall, before he shall deliver the same out of his hands, custody, or power, cancel the stamp so affixed by writing thereon his name or the name of his firm and the date of the day and year on which he shall so write the same, to the end that such stamp may not be again used for any other purpose. Penalty of 50%. for negotiating such a bill without a stamp affixed or neglecting to cancel such stamp; s. 4. Bankers' drafts.-Unstamped drafts on bankers not to be circulated beyond 15 miles of the banker on whom drawn, under a penalty of 50%. 17 Geo. 3, c. 30, so far as it extends to drafts on bankers repealed; s. 7. Receipts. By the Act of last Session, c. 59, a stamp duty of 1d. was granted and imposed upon any receipt or discharge given for or upon the payment of money amounting to 21. or upwards, and doubts are entertained as to the receipts to which the said duty extends: it is therefore proposed to enact, that the said lastmentioned duty shall be deemed to extend to and be payable upon every receipt or acknowledgment given for any sum of money of the amount aforesaid, whether such money shall be paid or received in discharge or on account of any debt or legal obligation or other claim or demand, or as a voluntary or gratuitous gift, or under any other circumstance whatever, subject, nevertheless, to the exemptions from the said duty expressly contained in the several Acts in force; s. 8. Under certain Acts relating to stamp duties, safe arrival of any bills of exchange, promissory letters by the general post acknowledging the notes, or other securities for money are exempted from the stamp duty granted and imposed on receipts or discharges given for or upon the payment of money: it is now proposed that this exemption shall be repealed; s. 9. Receipts for money paid to the Crown exempted from stamp duty; s. 10. Conveyances.-By the 13 & 14 Vict. c. 97, reduced rates of stamp duty were granted and made payable under the respective heads or titles of "Conveyance, Duplicate, or Counterpart" and "Progressive Duty" in the Schedule to that Act; and by the 16 & 17 Vict. c. 63, stamp duties were granted and made payable upon conveyances, charters, dispositions, and contracts described under the head or title of " Conveyance" in the Schedule, but no provision is made for charging the said conveyances, charters, dispositions, and contracts with the said progressive duties, or for charging the duplicates or counterparts thereof with the said reduced duties. It is now proposed, that the respective stamp duties granted and made payable under the several heads or titles of "Duplicate or Counterpart" and "Progressive Duty," in the Schedule to the 13 & 14 Vict., and the provisions and regulations hereby respectively, made payable upon and in relating thereto, shall be, and the same are respect of, and deemed to apply to, the several conveyances, charters, dispositions, and contracts described under the head or title of "Conveyance" in the Schedule to the Act of last Session, cap. 63, which shall be made after the passing of this Act, and any duplicate or counterpart thereof; s. 11. Relief to persons who have made duplicates of such conveyances before the passing of this Act; s. 12. The duty on conveyances for annual sums payable for lives to be calculated on the gross value; s. 13. Deeds made for several valuable considera tions to be chargeable in respect of each; s. 14. Testamentary Jurisdiction Bill.-Mortmain Bill. The Commissioners, before assessing the duty upon any deed, may require proof that the facts upon which the duty depends are truly stated; s. 15. The affidavit not to be used for any other purpose; s. 16. Contracts to serve as artificers, servants, and labourers in the colonies exempted from stamp duty; s. 18. Allowance of 74 per cent. on the purchase of stamps not exceeding the rate of is. duty for drafts, bills, and notes amounting to 5l.; s. 19. No charge to be made for paper on sale of bill or note stamps where the rate of duty does not exceed 18.; s. 20. The alterations in the amount of stamps on bills and notes are stated in the Schedule to the Bill. TESTAMENTARY JURISDICTION BILL. PETITION OF THE ATTORNEYS AND SOLI CITORS OF CHESTER. THIS petition states, that the petitioners view with alarm the provision in the Testamentary Jurisdiction Bill, now before the House of Commons for transferring the whole of the original wills, wherever proved, to London. "That in the event of a fire, or public disturbance, the whole of the wills forming the title-deeds to a great part of the whole property of the country, would be liable to be involved in common destruction, which while deposited in different registries could never be the case. 77 form, and the true interests of the public consulted. "The petitioners view the proposed measure with considerable fear of the injurious effects likely to be produced to the country at large by the withdrawal from the provinces of so large a portion of the capital at present circulated therein by the local practitioners, for the sole benefit of the London practitioners, which must, as they conceive, be the result of the limitation in all cases of the local jurisdiction to grants where the effects are under 1,500l.; and that, inasmuch as the grants in all cases must be perfected in London, and the course of proceeding does not vary in the slighest degree with the amount of effects, there does not appear any reason for the restriction but that of abstracting the most valuable portion of the business of the provinces for the benefit of the metropolis. "That it should also be borne in mind that the cases above 1,500l. are likely to be attended with far less trouble and difficulty, as the parties where property is large almost always have recourse to professional assistance, and universal experience will attest the fact, that those cases in which the nicest points arise as to the validity of a will, or any portion of it, the appointment of executors and residuary legatees, &c., are those in which the property concerned is small. "The petitioners therefore pray that the House will provide for the retention of all original wills within the district in which they are proved, and that executors and administrators may in all cases have the option of resorting to the local Court without reference to the amount of effects. MORTMAIN BILL. AGAINST THE RESTRICTION OF BEQUESTS OF PERSONAL PROPERTY. "That by the periodical transmission to London of copies of all wills and notes of the administration, proved and granted to the local Courts, together with copies of the local indexes, all uncertainty as to the Court in which REASONS a grant had been made would be removed, and every information respecting it would be obtained with the same facility (or greater, as the indexes would be classified according to the residence of the deceased) as if the grant itself had been made in London. "The petitioners submit that the original wills forming title-deeds to so large a proportion of the property of the country, ought to remain in the custody of the local registrars, for the more easy inspection of those interested under them who are generally speaking the only persons likely to require a personal inspection, and are usually resident in their immediate neighbourhood. "That if the peculiar jurisdictions throughout the country be abolished, and the other jurisdictions consolidated so as to leave in each diocese a district attached thereto one Testamentary Court, and if the law of bona notabilia, which alone causes the present incon venience, be abolished, all doubts of the validity of the grants of probate or administration would be removed, great expense saved, the course to be adopted rendered simple and uni It is proposed by the Bill to forbid bequests of personal property of any sort to charitable purposes except under the restriction— 1st. That the will is made three months before death. 2nd. That in a month after the making of the will the testator gives full notice of the bequest and its nature. These provisions will prevent legacies to various valuable charities. Up to the present time such legacies have been frequent, and open to no reasonable objection. Bequests for religious purposes may be brought about by religious influence, and if they are esteemed pernicious may be restrained. But there is no reason for confounding with them bequests of mere charity, whose only advocates are the testators own charitable impulses, and which neither in their origin nor their effect can be deemed pernicious. Protection against undue influence is the object of the Bill: its effect will be to destro |