IMPORTANT DECISION RE TRUST MONEY.

South Canterbury Times, Issue 3372, 24 January 1884, Page 2

IMPORTANT DECISION RE TRUST MONEY.

[By Telegeaph.] Auckland, Jan. 23. Mr Justice Gillies, in Banco to-day, gave the following important judgment affecting trustees. In the case Marshall and others v. Battley and others, Mr Theo. Cooper for plaintiffs and Mr E. Hesketh for defendants, His Honor delivered the following judgment :—Upon a very careful consideration of this case, I can come to no other conclusion than that defendants, by leaving trust moneys in Mr Halse’s hands, without their interference as to how it was invested, committed a breach of trust, for the consequences of which they are responsible. (Lewin on Trusts, 4th ed. 1., pp. 182, 246 and 590, and cases there cited). Griffiths and Peter (25 Boer, 236). and Bostock v. Floyer (L.E., I. Exq) are clear authorities for this position, that trustees leaving trust funds in the hands of their 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 Eolls in Speight v. Gaunt (61 L.J., ch. 715), and by Tice- Chancellor Bacon in Godfrey v. Faulkner (L.E. ch. Div. 1183) 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 settled law that trustees leaving trust funds in their solicitors’ hands are not acting as prudent men. As regards the infant plaintiffs, therefore, 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 acquiescence. In these circumstances the trustees cannot be held liable (Lewin, p. 59, 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 notification to defendants they do invest on securities authorised by the deed of settlement in their own nances on a joint account, to the satisfaction of the Eegistrar, a sum equal to the amount so lost, with power, with the approval of the Eegistrar, from time to time, to vary such securities, to be held by them subject to the trusts of the deed of settlementof May 25,1871; and they shall be entitled during the lifetime of the said Jane Marshall to receive and take 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 defendants do pay the costs of this action, to be taxed as if there had been but one plaintiff.