DUTIES OF TRUSTEES

Poverty Bay Herald, Volume LX, Issue 18193, 14 September 1933, Page 11

DUTIES OF TRUSTEES

‘‘EXPRESS PROHIBITION” INVESTMENT ON MORTGAGE ! Questions arising out of (lie. will o tin! late ICdward William Lowe wen answered by Mr. .lustier Heed in a re served judgment delivered in the Wrl lingtou Supreme Court-. The ease was one in which the l’ublie Trustee, a: trustee, sought a ruling as to whethei lie be permitted to invest in mortgage.' of land in view of the fact that as a ! result of recent legislation the securitiesstipulated in deceased's will no longei yield 5 per cent. His Honor held theta was an express prohibition against investment on mortgages of land, and then was no state of emergency shown as- ' would justify the Court in authorising a disregard of such prohibition. The will directed that the residuary estate might he invested in tlovermnenl, local body. or otliei securities yielding not less than 5 per cent., hut- excluded mortgages of land. | liis Honor said the adult henclieiaries were desirous that investment should in

permitted on securities that would yield o per cent., and as a means thereto, counsel on their behalf asked that the Public Trustee should be permitted to invest on mortgage of land. There .was no suggestion that any authorised in vestment would yield 5 per rent, at the present time. i The words used in the will, In Ii is Honor’s opinion, clearly forbade and prohibited such an investment., and this construction was not atl’eeted by the fact as was suggested that it was -that the [ testator in the earlier part of the clause 'used different words of prohibition when In* directed that no part of his estate should ho invested in the common fund of the. Public Trust (Mice. ) The second point made by counsel for j l ho adult defendants, said His Honor, was that, the court in the cireuimilunre:of the ease should act on the principle laid down in re New (supra), and. disregarding the prohibition contained m the will, should authorise tin* investj ment of the trust funds upon mortgage(of laud. The only ground suggested for

I invoking the application of the principle | was that the income of the estate would therefore he increased, and Iheretore 'would he to th( advantage of the hem* fieiaries. 'l’he einergeuey suggested wa- | that interest obtainable, from invest,1 men Is riulhorisetl In Hie testators was less than the amount- contemplated by the testator, and the remedy suggesled j was to ignore the terms oi Ilie will and ! permit investment, on the piohihiled security. j In no reported east* had the rourl held that, circumstances such as existed in tin (present ease constituted a ease ol emer gene.y. To hold that they did would he Ito widely extend the accepted principh in the, exorcise of this particular juris diction, and to open the door to simian applications in every ease when* sunn alteration of the trusts of a will would benefit an estate. "It is unnecessary, i think, lo discus: the niceties involved in tin* questions. His Honor said. "The position will hi met by the following declaratory ordci which I now make : ’l’he I’uMie I’rust e< may invest, moneys which may herealtei be in his hands as trust if flu* will o' the said deceased in investments of tin nut tire a tit horised In l lie said will whirl produce on Hie investment a return o' I less ! hail o per cent.. provided iha I a 'the time of investment such moneys can not. In* in \ cst ed on a mm mil y of file mil,lire ‘authorised by the w ill pi *ol mi ii; mi the investment a leturn of o pel rent, or more.”