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ferred the said sum of £ , —l. per cent. Bank Op Stock., For

Annuities, into the names of the said E. F. and G. H. BANI,. AND NOW THIS INDENTURE WITNESSETH, that, in Child,.tm,

P , /. i • i i • -i WIT" USUAL

turther pursuance ot the said agreement, and in considera- Clauses.

tion of the said intended marriage, it is hereby agreed and witnesseth de

declared between and by the parties to these presents, that claration of

the said hi. r. and (j. ri., their executors, administrators, stock; and assigns, shall stand possessed of and interested in the

said sum of £ , —l. per cent. Bank Annuities,

and the dividends thereof, In Trust for the said C. D., her — for the in

, . . . , . tended wife un

executors, administrators, and assigns, in the meantime, til the marriage; until the solemnization of the said intended marriage; And From And After the solemnization thereof, Upon Trust —afterthemarthat they the said E. F. and G. H., and the survivor of 3iasPtothe them, and the executors or administrators of such survivor, investment and do and shall either permit and suffer the whole or any part lnKt monies °

of the said sum of £ , —l, per cent. Bank An- and securities;

nuities, to remain in its actual state of investment, or do and shall at any time or times, with the consent in writing of the said A. B. and C. D., during their joint lives, and of the survivor of them, during his or her life, and after the death of the survivor of them at the discretion of the said E. F. and G. H., or of the survivor of them, or of the executors or administrators of such survivor, sell, transfer, and

dispose of the said sum of £ , —l. per cent.

Bank Annuities, or any part thereof, and do and shall, with

1 Myl. & K. 610, in which all the earlier cases are cited and commented on by Lord Brougham, and the general result, according to his Lordship.s view, is stated Id. pp. 622, 623.

The object of the settlement is a point to be considered, inasmuch as, Such disposi

in some cases, settlements made by widows, in contemplation of second jjons ^na5, Per"

marriages, in favour of the children of the former marriage, have been cj va|id ^

held good against the second husband, although made without his know- their object, ledge. In other cases, however, such settlements have been set aside.

In the case of Edmonds v. Dennington, 1 Eq. Ca. Ab. 59, an agree- Jjow far a set_

ment made before a first marriage, that the wife should have a power to tlement on a

act as a feme sole, was held void at the suit of a second husband, who ?"^.r njarrla"e

married without a knowledge of the settlement. But the circumstances of an after-taken

the case are not stated; and of course, in ordinary cases, a settlement on husband, a first marriage is valid against any future husband.

Of Stock, For such consent or at such discretion as aforesaid, lay out or Band' And invest the monies to arise by such sale, transfer, or dispoChildren, sition, in their or his names or name, in the purchase of a


Clauses. competent share or shares of any of the parliamentary stocks or public funds of Great Britain, or at interest upon government or real securities in England or Wales, (but not in Ireland (e)), and shall and may from time to time, with such consent, or at such discretion as aforesaid, alter, vary, or transpose such stocks, funds, or securities into or

Necessity of an express restriction against lending money on real securities in Ireland.

(c) It was enacted by the statute 4 & 5 Will. 4, c. 29, that it should thenceforth be lawful for any person or persons, who, under or by virtue of any direction, trust, or power then already given, created, or reserved, or thereafter to be given, created, or reserved, was or were or should be authorized or directed to lend money at interest on real securities in England or Wales, or Great Britain, to lend the same or any part thereof at interest on real securities in Ireland, in the same manner, in all respects, as if such investment had been expressly authorized in or by such direction, trust, or power as aforesaid; and that such person or persons should not, on account of his or their so lending money on real securities in Ireland, be considered, in a court of equity, guilty of any breach of trust, or held accountable further or otherwise than if the money had been laid out by him or them on real securities in England, Wales, or Great Britain; but nevertheless, that all such loans of any money in which any minor, or unborn child, or person of unsound mind, was or might be interested, should be made by the direction, and under the authority of the Court of Chancery or Exchequer in England, such direction or authority being obtained in any cause upon petition, in a summary way. This, however, is to be read "in any cause, or upon petition in a summary way" and there must be a reference to the Master to approve of the security. (Ex parte French, 7 Sim. 510). The act also gives certain facilities for recovering money by suit in the English equity courts, and requires the consent, duly testified, of the person or persons, if any, whose consent may be required as to the investment upon real securities in England, Wales, or Great Britain. It declares, moreover, that the provisions shall not extend to any case in which such direction, trust, or power as aforesaid, did, or shall, or may contain any express restriction against the investment of such money as aforesaid, on securities in Ireland.

Now, as the intention of the parties, in the absence of express instructions, is always presumed to be, and probably is, to authorize real securities only in England or Wales, it has become the practice of conveyancers since the above act expressly to negative the power to lend money on Irish real securities.

for others of the same or a like nature (/); And Do And —anduponfurShall, during the joint lives of the said A. B. and C. D., ing^hejo'int""

lives of the hus

(/) An express trust or direction as to the investment of the trust Propriety of in

monies, and a power to vary such investment, should always be inserted sorting a trust

in settlements of personalty. The usual form is that in the text, which anc| a p0wer t0'

reposes the power of investment, and of changing the securities, in the change securi

trustees or trustee for the time being, with the consent of the tenants or tles, tenant for life, during their lives.

In the absence of any direction as to investment, it is the duty of trus- The duty of

tees to lay out all monies, which come to their hands in the Three per tTMstees,he

'r absence of such

cent. Bank annuities, in which, as the safest and most permanent fund, trust, as to mo

the Court of Chancery lays out the monies of suitors. (Ex parte Cham- ney;
pion, 3 Bro. C. C. 434; see, too, 16 Ves. 114). And if they lay it out in
any other fund, they will probably be held liable for any loss which may
be occasioned by the fall or insecurity of the fund. (Hancom v. Allen, 2
Dick. 498). It is said, however, that this case is wrongly reported,
and is not an authority for holding trustees responsible, if they have laid
out their money in government securities other than the Three per cents.
(Lewin on the Law of Trusts, 311). It is said, too, that trustees are
bound to invest in the Three per cent, consolidated annuities; but this at
least does not hold, where the terms of their trust make it more conve-
nient to invest in the Three per cent, reduced annuities (Caldecott v. Calr
deeott, 4 Madd. 189.) It does not seem clear, whether a trustee may not
invest on mortgage, even in the absence of an express authority; (Brown
v. Litton, 1 P. Wins. 141; Knight v. The Earl of Plymouth, 1 Dick.
126; Pocock v. Reddington, 5 Ves. 800; Norbury v. Norbury, 4 Madd.
191; Poore v. Hawker, 76; Widdowsonv. Duck, 2 Mer. 494); but it
is usually held, that he cannot, and of course he would never be advised,
to make such an investment.

It does not, however, follow that trustees are bound to call in any as to funds.

specific fund which is transferred to them, in order to invest the produce in the Three per cents; it appears rather to be their duty to allow the security to remain unchanged, unless a change would clearly be for the benefit of the cestuis que trust . (Howe v. The Earl of Dartmouth, 7 Ves. 137, 150; Angell v. Dawson, 3 You. & C. 317; Lord v. Godfrey, 4 Madd. 454; see, too, Mills v. Mills, 7 Sim. 501). If the fund be converted by act of parliament into one bearing a lower rate of interest, although trustees may be absolutely protected by the provisions of the act if they assent to the conversion, yet they are only protected in dissenting, if, upon examination of the circumstances, it shall appear to the court that they acted prudently. (Angell v. Dawson, 3 You. & C. 308, 317.)

If the trust contains the usual power for the trustees to invest in the The powers public funds, or upon government or real securities, they are not bound to &ve^ ^ invest in the Three per cents; (3 You. & C. 316); and if a power to to invest and

vary securities; band and wife, to pay the income of the trust monies

pay the dividends, interest, and annual proceeds of the said sum of £ , —l. per cent. Bank Annuities, and

—do not authorizeinvestments in certain securities.

Extent of the authorities to lend on real securities.

Trustees forbidden to lend on personal security, except under an exi-res« authority:

ami such authority must be used with discretion.

vary securities be given them, they are not at liberty to convert into money a specific fund, which has been transferred to them, in order to invest the produce in the Three per cents, even though the specific fund be of a perishable nature. (Lord v. Godfrey, 4 Madd. 455; see, too, 3 You. & C. 317; De Manneville v. Crompton, 1 Ves. & B. 359). For such a power is given them, with a view to the security of the property and the common benefit of all the cestuis que trust, and not with a view to varying or aflecting the relative rights of the cestuis que trust, as by increasing the income at the expense of the corpus of the trust fund, or vice versS.

Bank stock is not a government security. (7 Ves. 150; Mills v. Mills, 7 Sim. 501); nor are Bank stock or South Sea stock considered as included in the terms "good securities." (3 Atk. 444). East India Stock is, of course, in the same predicament; and an investment in an East India Company.s loan is forbidden. (Dimes v. Scott, 4 Russ. 195; 3 Swanst. 66). But a power to invest in good securities probably authorizes an investment on mortgage. (Widdowson v. Duck, 2 Mer. 494).

It is usually considered, that the power to invest in government securities extends to an investment, at least for temporary purposes, in Exchequer bills; but where an act of parliament provided that monies subscribed for parliamentary undertakings should be paid into the Bank, in the name of the accountant-general of a court of equity, and be invested in the Three per cent, consolidated or Three per cent, reduced Bank Annuities, " or any government security or securities," it was held, that an investment in Exchequer bills was not authorized. (Ex parte Chaplin, 3 You. & C. 397).

Trustees having power to lend on mortgage, are at liberty to advance two-thirds of the estimated value on lands; but the same rule does not apply to an advance on houses, or commercial real property, even if such be at all a proper security. (Stickney v. Sewell, 1 MyL & C. 8).

An investment in turnpike securities may, perhaps, come within a permission to invest on real securities; (Mills v. Mills, 7 Sim. 501); but the money cannot be lent on mortgage to one of the trustees. (Stickney v. Sewell, 1 Myl. & C. 1; v. Walker, 5 Russ. 7).

Of course, trustees are not permitted to lend money on personal security, unless there be an express and clear direction for that purpose, even if the investment be to be made at their discretion. (Ryder v. Dickerston, 1 Eden, 149, n.; S. C. 3 Swanst. 80, n.; Holmes v. Dring, 2Cox, 1); and personal security is not good security. ( Wilkes v. Steward, G. Coop. 6). And where trustees were authorized to lend money on such personal security as should be thought good and sufficient, and they lent to a trader, the husband of the tenant for life, it was held to be a breach of the monies to arise by the sale, transfer, or disposition »nd securities, thereof, or of any part thereof, and of the stocks, funds, u°el 0f thiTwife, and securities in or upon which the same monies, or any with a restric

, . . "tion on antici

part thereof, may be invested to [such person and persons pation; and for such intents and purposes as the said C. D. shall, notwithstanding her said intended coverture, by any writing

of trust, on the ground that the loan was made as an accommodation, and not with a view to the security of the trust-fund. (Langtlon v. Ollivant, G. Coop. 33). But if trustees are authorized, to lend to a trader, and he fails, it is not a breach of trust to lend him (after he has got his certificate) the dividend received under his bankruptcy. (Burt v. Ingram, Lewin on the Law of Trusts, 307; see, too, Keble v. Thompson, 3 Bro. C. C. 112; Ex parte Woodward, 2 Dea. 401; French v. Hobson, 9 Ves. 103; CoWu v. Colli*, 2 Sim. 365).

If the consent of any person or persons is required in order to authorize Consents rethe trustees to make an investment or vary a security, that consent should quired should be previously obtained, since, in some cases at least, a subsequent appro- j^y^[t^atf0TM bation will not make good the want of the previous consent . (Bateman v. Davis, 3 Madd. 98; see, too, Ryder v. Bickerton, 3 Swanst. 80, n.).

Trustees who do not invest at the proper time, or make improper sales of Trustees bound

their securities, are charged with the loss by the rise in stocks. Thus, trus- t0 make good

tees, who were directed to invest in government or real securities, and who improper

allowed part of the funds to remain invested in an Indian loan, were charg- dealings with

ed with the difference between the ten per cent, interest they had received tne trust securi


and paid to the tenant for life, and the interest that would have resulted from a conversion into Three per cent, consols at the proper time. (Dimes v. Scolt, 4 Russ. 195). And if the Three per cents, have risen in the interval, the trustees must purchase the sums they would have obtained with their money if laid out at the proper time. (S. C; and Hockley v. Bantock, 1 Russ. 141; Byrchall v. Bradford, 6 Madd. 235). And if the Three per cents, have fallen, the cestuis que trust will, of course, have the advantage of the fall. (Harrison v. Harrison, 2 Atk. 121; Earl Powlelt v. Herbert, 1 Ves. jun. 297; Pocock v. Reddington, 5 Ves. 794; hostock v. Blakency, 2 Bro. C. C. 653; 4 Ves. 497; Bate v. Scales, 12 Ves. 402). It seems, however, that if trustees be authorized to invest in government or real securities, and they lend on personal security, and the money is lost, they shall be charged, not with the amount of stock which might have been purchased, but only with the actual money lost; for they might have lent on real security, and it is only for the absence of such security that they are liable. (Marsh v. Hunter, 6 Madd. 296).

Further information with respect to the duty of trustees, as to the in- Reference to vestment of trust monies and the variation of their securities, will be further informfound in Lewin on the Law of Trusts and Trustees, ch. xvi. sect, 3, pp. 305—316.

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