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ULTIMATE TRUSTS.

to the statutes; omitting the words "if she had died, &c.," the intention in either case being to ensure that the property, in default of issue of the marriage attaining vested interests, shall necessarily devolve on the statutory next of kin of the wife. If the property settled on the wife's behalf does not belong to her, the settlor can practically insist on any ultimate trusts that he thinks fit; but it is most improper to make the omissions above mentioned in a settlement of property belonging to the wife; for the effect of the omission of the power of appointment is to render it impossible for the wife to provide for her husband, a person who, after a long and blameless married life, has at least a moral claim on his wife as strong as that of her next of kin have, who may be very distant relations, and perhaps not on good terms with her. If the ultimate trust, in the case of the wife surviving, is for her next of kin, it may, in the absence of any power of appointment, prevent her from making any settlement of her own property on a second marriage, and she becomes poorer than if she had never been married. A solicitor who receives instructions to prepare on behalf of the lady a marriage settlement in the form above objected to must be very careful, if the lady is adult, to see that he receives the instructions from her personally, and that she fully understands what she is doing, and to warn her of her imprudence. If the lady is an infant, it appears hardly safe for a solicitor to settle on her behalf a draft in the form above objected to; for, in the possible event of the lady subsequently impeaching the settlement, he may be exposed to an action for negligence (t). Where instructions to prepare a settlement of this nature are laid before counsel, he should, if the lady be adult, call the attention of the solicitor to his duty on this point; but, if the lady be an infant, he may consider it his duty to decline to approve of the draft on her behalf (u). The reason why the power of appointment

(t) Consider Clark v. Girdwood,

7 Ch. D. 9.

(u) A very eminent conveyancer, whose pupil the author was, im

355

Effect of

death on

wife's will

made under

the power of appoint

ment.

"Next of kin."

"Unmarried."

given to the wife, in case she dies under coverture, is to be exercised by will, but not by deed, is that a will is always revocable, and that, therefore, whatever pressure may be put on the wife by the husband or his creditors to dispose of her property in their favour, she is unable during her husband's lifetime to dispose of the property irrevocably. Formerly the wife's power of appointment by will was made exercisable only in the event of her dying before the husband; so that the death of the husband in his wife's lifetime rendered her appointment void; for her will spoke from her death, at which time the power was not exercisable (Noble v. Willock, L. R. 8 Ch. 778). In all cases, therefore, where a wife has made a will under such a power, she ought to re-execute it, or, rather, to make a new will, immediately after her husband's death (x), but where the power is given to her whether she survives the husband or not, this is unnecessary.

In declaring the class who are to take under the ultimate trust in default of appointment by the wife, the phrase "next of kin " is sometimes used without adding a reference to the Statutes of Distribution. This is improper, as "next of kin" simpliciter means the nearest blood relations of the same degree; see M. L. P. P. 378; Interp. 304. Be careful also not to say "the persons who would be entitled thereto under the Statutes for the Distribution of the effects of intestates as if she had died unmarried; " it should be, "as if she had died without ever having been married." For the words "die unmarried are considered to mean in a marriage settlement "die a widow" (y), so that, while they exclude the husband, they do not exclude infant children surviving the wife. The share which any such child takes passes on its death under age to its adminstrator-i.e., the M. W. P. A. 1893, s. 3.

pressed on him the duty of pro-
tecting the interests of the lady,
and of warning the solicitor as to
his duty, in a case of this nature.
-H. W. E.

(x) This is not affected by the

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(y) Clarke v. Colls, 9 H. L. C. 601. It does not necessarily bear this meaning in a will, Dalrymple v. Hall, 16 Ch. D. 715.

POWER TO APPOINT NEW TRUSTEES.

husband if he should survive it; so that if the words "die unmarried" be used, he might under the ultimate trust take the whole of the wife's property, to the exclusion of her relations. If the woman is a widow having children by a former husband, it is by no means clear whether they would be excluded by the ultimate trust in the usual form (2).

Clauses of the Fifth Class (see ante, p. 307).

These consist of

(a) The power to appoint new trustees.

(8) The clauses for the indemnity and reimbursement of

trustees.

357

The are power to appoint

new trus

tees.

a sole

(a) As it is possible that, before the trust funds finally distributed, some of the trustees may die or wish to be discharged, it is necessary to have some means of appointing new trustees; for it is of very great importance Danger of to take care that the number of trustees should not fall as trusting low as one, or that if it does, another should be appointed trustee. immediately; so as not to allow the trust funds to remain in the name of a sole trustee. The reasons are the following: The trustee is at law the absolute owner of the trust property; and in most cases he can, with very small risk of detection, sell it and apply the proceeds to his own This form of fraud is almost unknown so long as there is more than one trustee, as a trustee wishing to commit a fraud would seldom ask the other to concur with him.

use.

It is impossible to state too strongly the great danger of trusting a sole trustee, and the importance of not delaying the appointment of a new trustee when there is only one trustee left. Cases are unfortunately by no means uncommon in which a family has been ruined, or at least sustained very serious loss, by having trusted a sole trustee.

Where the trust moneys are invested in the public funds, Stop order. or in a public company, whether incorporated or not,

(*) See 2 K. & E. 482.

Analysis of power.

security may be obtained by making and filing an affidavit under the Rules of the Supreme Court, 1883, Order XLVI., rr. 3 et seq., and serving an office copy in manner provided in the Order on the Bank of England or the company; the effect of which is the same as if a writ of distringas had been duly issued under the Court of Chancery Act, 1841 (5 Vict. c. 5), s. 5, i.e., to prevent the transfer of the stock or shares without eight days' notice to the solicitor in the matter (see 2 K. & E. 114).

The objection to this course is that it appears to imply suspicion of the trustees; so that it is never adopted in the case of a marriage settlement, except where the interest of the cestui que trust has been incumbered; in which case it is not unusual for the incumbrancer to adopt it.

In order to avoid frequent appointments of new trustees, the modern practice is to appoint three or four trustees originally. It is inconvenient to have more than four, as the Bank of England refuses to allow stock to stand in the names of more than four persons, in the absence of special circumstances.

The express power (see form in 2 K. & E. 518) to appoint new trustees contains four sub-clauses :

1. The power of appointing the new trustees.

2. A declaration that on the appointment the number may be increased or diminished.

3. A direction for the transfer of the trust estate to the new and continuing trustees.

4. A declaration that any new trustee may act before the transfer is made.

1. The power of appointing a new trustee in the place of one dying, being abroad, or wishing to be discharged, or refusing or becoming incapable to act, was generally vested in the intended husband and wife, and the survivor of them, and after the death of such survivor, in the surviving or continuing trustees (with power to a retiring trustee to act for that purpose), or the executors or administrators of the last surviving or continuing trustee.

1.

POWER TO APPOINT NEW TRUSTEES.

2. In the absence of the second sub-clause, the two following questions would arise on any attempt, prior to 1882, to exercise the power:—

359

number of

appointed.

First, whether less than the original number might be What appointed. The opinion of most conveyancers was that trustees this was improper, and some thought that a title depending should be on such an appointment was bad. But in Re Poole Bathurst's Estate, 2 Sm. & G. 169, where two trustees had been appointed in the place of three, and in Emmet v. Clark, 3 Giff. 32, where three trustees were appointed in the place of four, a title depending on the appointment was forced on the purchaser. But if possible, the number was always filled up. This was, however, sometimes impracticable where the trusts were very complicated, or where it was impossible to find persons to supply all the vacancies. In such cases each new trustee was appointed in the place of one only of those who were dead, &c., leaving the other vacancies unsupplied, so that, if other persons were subsequently found to undertake the trusts, it would be possible to appoint new trustees to supply such vacancies, and thus fill up the number of original trustees.

Second, whether the original number of trustees might be increased. The rule (as laid down by Lord St. Leonards) was the following:-"If the power clearly requires that only one person shall be substituted in the place of another, of course it must be complied with. But under a power in

the common form, or general in its terms, it seems, upon both principle and authority, that more than one person may be appointed to fill a vacancy by the death, &c., of one of the old trustees."

When the Court appointed trustees, it did not consider itself bound to appoint the original number.

3 & 4. The third sub-clause was merely directory; the fourth was originally inserted owing to the old doctrine, that a trustee could not act till the transfer had been completed; but this doctrine appears to be overruled. (See 3 Dav. Prec. 245; Noble v. Meymott, 14 Beav. 478).

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