IMPORTANT JUDGMENT.

Daily Telegraph (Napier), Issue 3904, 24 January 1884, Page 3

IMPORTANT JUDGMENT.

Auckland, This day.

In Banco yesterday Mr Justice Gillies gave the following important judgment affecting- tho trustees in the case of Marshall and others v. Buyley and others. Mr Tlico. Cooper nppeared for the plaintiffs and Mr E. Ilcskcth for the defendants.

His Honor said: Upon a very careful consideration of this case I can come to no other conclusion than that tho defendants by leaving trust moneys in Mr Halso's hands without their interference as to how it was invested committed a breach of trust, for the consequences of which they are responsible. Lowin on trusts, 4 cd., pp. 192, 24G and 590, and tho cases there cited, are clear authorities for this position, that trustees leaving trust funds in the hands of a solicitor are responsible for any loss that may thereby accrue, even though in employing the solicitor they exercised ordinary care and discretion ; nor is this doctrine at all modified by what was said by the Master of the Rolls in Speight v. Gaunt (51 L J. Ch. 715), and by Vice-Chancellor Bacon in Godfrey v, Faulkner (LR. 23 Ch. div. 483), that it is the duty of a trustee to deal with trust funds just as a prudent man would deal with his Own property, for it is a settled law that trustees leaving trust funds in their solicitors' hands are not acting as prudent men. As regards the infant plaintiffs therefore the defendants must replace the moneys lost by their breach of duty. As regards the plaintiff Jane Marshall, however, the jury have found that, this breach of trust was committed with her full consent and acquiesence. In these circumstances the trustees cannot be held liable to her. (Lewin, p. 595, and cases therein cited.) The decree will therefore be that it be referred to the Registrar to ascertain what portion of the principal of the trust fund has been lost by.the breach of trust of the defendants ; that within three months after such ascertainment and notificatiou to the defendants they do invest on securities authorised by the deed of settlement, in their own names on joint account, to the satisfaction of tho Registrar, a sum equal to the amount so lost, with power, with the approval of the Registrar, from time to time to vary such securities, to be held by them subject to the trusts of the deed of settlement of the 25th of May, 1871, except that they shall be entitled during tho life time of the said Jane Marshall to receive and take the interest or annual income arising from the said securities for their own proper use and benefit, instead of paying the same to the said Jane Marshall; and that the defendants do pay the costs of this action, to be taxed as if there had been but ono plaintiff."