TRUST MONEYS

Star (Christchurch), Issue 19813, 3 December 1919, Page 8

TRUST MONEYS

ALLEGATION OF FRAUD. |( A PROPERTY AT GUST. W hj .Misapplication of trust moneys was . alleged in an interesting ease heard iu the Supremo Court to-day hafore hi? Honor Mr Justice Be'rdman. Tlie | plaintiff was James \Valter I'if.bhie, ( tanner, ilalswell, and the defendant j George Root-h M'Donald, farmer, (Just, j Mr \\. J. Sim, with him Mr 1). l'~ , Wanklyn, appeared for plaintiff, ami , Mr S. G. Raymond, K.C., with him Mr | i)\ V\. Johnston, for the defendant. . The statement of claim set out that George M'Donald, late of Crescent i Road, Sydenham,' died on February 1, 1886, leaving his widow, Agues M'Donald, and tnroo sons, George Rooth M'Donald, Ralph Ogilvie M'Donald, . ' carpenter of Christchureh, and Alex- ■ ander Peebles M'Donald, farmer of lai . Tapu. Ry his will, dated April 15, | I&js, the father left his widow as sole executrix and trustee, setting out that all his real and other estate was to bo held upon trust for sale to pay the testator's debts. The balance- of tne income, derived from the investment of j the proceeds was to be paid to the j executrix for life, and, thereafter, in ' trust- m equal shares for all tne testa- . tor's children, who should attain the j ago ol twenty-oile years. Mrs M'Don-; aid died on ".July 8, 1918, intestate J without appointing » trustee to succeed • her. By an order of tuo Court on \ May a, 1919, plaintilf was appointed : trustee of tho estate. When the testator died, ho left real property valued ; nt *:o4i;, ami personal property valued \ at £1295 Us lOd. \the capital value of ; the estate, alter expenses had been 1 paid, was'£l2so ltis' JUd. Plaintiff contended that tho executrix ! paid away to G. R. M'Donald, or his j agents, all tho trust moneys and their ! accretions, including eaattels, either ' fraudulently in breach of trust, or w G. R. M'Donald as agent for Himself in the administration oi the trust. N'itn part of such money deieudant hod purchased, or paid portion ol the purchase money for, a property at Gust and certain stoclt. Tho balance of the trust moneys had been employed and retained with the result that on the death ol MrsJll Donald, tiie only estate to be found anywhere in hvr own name was &i 13s ad in the i'ost Ulbce. Tho I plaintiff claimed:—A, (1) A declaration that G. R. M Donald held tho land as trustee lor the estate ol George M'Donald; (2) an account ol suun sums ol money as the Court should deem to be owing by the deieudant to the estate; (6) juugmeut tor suun sums with mterest; R, 0) ludt'iueut tor the sum ol I tizoo 18s lOd with lnteiest; C, m| eitner case (1) a declaration as to how much ol tho trust pioperty should lie j deemed capital of tne trust estate and how much as income, tne property of the tenant,, (2) such furtner relief as the Court should decide, and (3) the costs of tno action. Mr Sim said t-iiat it would be shown that U. R. M'Donald had used tho money belonging to the trust estate to buy land. Mr Raymond: There is no controversy about tnat. Mr Sim said that it would be shown that Mrs M'Donald had been very anxious to buy the property at Oust. She inspected the place, and, following the Durchaso. went into possession m company with the defendant, it would be shown that Mrs M'Donald, though uneducated, was by no means a person who would play aoeond fiddle to anyone else. Mrs M'Donald died on July 3, 1918, and, upon hor death, defendant's conduct indicated that he wished to work a fraud upon his brothers. He toot no steps to notify them of her death. His Honor*. Do we need to go into I that? It is admitted that the amount i comes out of trust money. Tho whoa* i matter has been brought to light -ml J hos in the open. Mr Sim said there was rather more lin it than that. There was the ques- | lion of defendant's knowledge. Tho I plaintiff by no means relinquished the j allegation of fraud against the defendant, and would put in certain letters bearing on the matter. Mrs M'Donald had 'been buried in Christchureh, and immediately ono of tho sons had gone to the Public Trustee and acquainted him with the clrcumstauoes of the case; he knew all about the will and that he had a third share. Roth tho other beneficiaries had also known that they were entitled to a third share. If the defendant came into Court and said thai- ho did not know that lie was entitled to a third share, then counsel would fia.y that he was not worthy of credit. Tt was submitted that "tho I trust was entitled to tho whole of tho . profits from the trust moneys sineo , their receipt by George Booth M'Donald. A certain portion of the profits - might be deemed to be income from , tho property, and, therefore, the per- , sonal property of the lite tenant. Coun- . sel asked for a declaration as to how ~ much was to bo deemed income. The t allegation of fraud against Mrs M'Donj aid was withdrawn. (Proceeding.)