THE DANGERS OF TRUSTEESHIP.

Cromwell Argus, Volume XVII, Issue 830, 10 March 1885, Page 2

THE DANGERS OF TRUSTEESHIP.

A case in which judgment was given in the High Court of Justice recently, shows how real and numerous are the dangers attaching to trusteeship. The judgment was on a motion to make the respondent, Mr Henry Mitchell, liable, as trustee, for sums amounting to £8564 entrusted by him to a solicitor for payment into Court. Mr Mitchell was, by the sanction of the Court, acting as salaried manager of a colliery, a moiety of which was the property of his late father, under whose will he was one of the trustees of the estate. He was accustomed to employ a solicitor named Tattershall, both before and after that person’s bankruptcy in 1879, and had entire confidence in his integrity. In January, 1882, and on other subsequent occasions, he paid Tattershall £8564 the moiety of the profits of the colliery—directing him to pay it into Court to the credit of the administration action. Instead of paying the money into Court, Tattershall, embezzled it and was sent to gaol in June. Under these circumstances the beneficiaries under the will of Mr Mitchell’s father (with the exception of himself and his son, who, as beneficiaries were each entitled to one-sixth of the amount) asked for an order of the Court to compel him to refund the money. Mr Justice Chitty, in giving judgment, said the question was whether the respondent had, as paid agent, acted with a “ proper amount of care.” The learned Judge considered that he was justified in employing Tattershall as a solicitor, for, although a bankrupt, the latter had not been struck off the rolls, and since his bankruptcy had been entrusted by other persons with large sums of money. But he held that the respondent was liable, because he had made no enquiries as to what had become of the sums from time to time transmitted to Tattershall. He appeared, said Mr Justice Chitty, to have placed a blind confidence in Tattershall, and the result was that he must hold the respondent responsible for the sums lost. This judgment will create uneasiness in the breasts of not a few trustees. One would have thought, if Mr Mitchell was justified in employing Tattershall as a medium between himself and the Court, that, holding Tattershall’s receipt, he was justified in placing entire confidence in him, and could not have been held liable. But it appears not, and in future, a trustee, who wishes to place himself beyond the reach of an action of this kind, will have to dog every footstep of the solicitor that he employs. For Mr Mitchell one cannot but feel profound sympathy, because there was certainly no wilful negligence on his part; in fact he took as much care as ninety-nine men out of a hundred would have done—viz., he took the solicitor’s receipts for the various sums. The term “ proper amount of care ” is capable, however, of a very wide application, and trustees who read this case will feel very uncomfortable when they reflect on their own responsibilities,