Fowler v Reynal
| Jurisdiction | England & Wales |
| Judgment Date | 05 November 1851 |
| Date | 05 November 1851 |
| Court | High Court of Chancery |
English Reports Citation: 42 E.R. 353
HIGH COURT OF CHANCERY
[GOO] fowler v. reynal. Jan. 15, 17, Nov. 5, 1851. By an ante-nuptial settlement, a sum of stock was settled upon certain trusts for the benefit of the wife and children of the marriage. The settlement contained powers for the trustees to sell the trust fund and reinvest the proceeds in Government or real securities. By a contemporaneous memorandum, which was executed by the father, the wife, and the intended husband, and indorsed upon the deed of settlement^ the trustees were empowered to advance any portion of the trust fund to the owners or lessees of Vauxhall Gardens, upon mortgage either as first, second or third mortgagees, for such time and at such rate of interest as the trustees might think fit. The trustees lent the whole of the trust fund to three persons, who afterwards became the joint proprietors of and partners in Vauxhall Gardens, but no written security was then taken by the trustees. One of the three proprietors of Vauxhall Gardens subsequently retired from the partnership. Some time afterwards, the trustees obtained a covenant from the two remaining partners to surrender the Vauxhall Gardens by way of mortgage, subject to two prior charges. This mortgage eventually proving a wholly inadequate security for the trust fund, a suit was instituted to compel the trustees to reinstate the stock. Held, that, under the circumstances, the trustees must be considered in having made the advance without security, and in having afterwards accepted the covenant of two only of the three joint debtors, to have misapplied the trust fund, and that they had subjected themselves to the-liability of replacing it. The bill was filed by the wife and children of the marriage, but there was no evidence in the suit that the children were in fact the children of the marriage. The answer neither admitted nor denied the allegation in the bill to that effect. An objection by the Defendants taken for the first time on the rehearing, that it did not appear that all the parties, co-Plaintiffs, were interested in the suit, and that the bill ought to have been dismissed, was overruled. AVhether, if the objection had been taken in proper time and in proper form, it would have been valid. Quaere. If the objection had been open to the Defendants on the rehearing of the cause, an affidavit to repel it would have been admissible. C. xxii.-12 354 FOWLER V. EEYNAL 3 MAC,* 0.801. The bill in this case was filed by the Plaintiff, Frances Elizabeth Fowler, the widow of the Rev. Robert Hodgson Fowler, and by several other persons alleged to be the children of Mr. and Mrs. Fowler, as parties interested under a marriage settlement, for the purpose of making the Defendants, the trustees of the marriage settlement, accountable for the trust fund, upon the ground of certain acts on the part of the trustees, which were alleged to have amounted to breaches of their trust. The facts of the case will be found reported in the 2d volume of Messrs De Gex & Smale's Reports, page 749, and so far as they are material to the present report, are the following:- [501] On the 15th January 1825 a deed of settlement was executed, by which a sum of 8450 3 per cent, reduced annuities was settled on the marriage of Mr. and Mrs, Fowler, upon trust, to apply the dividends to various purposes, and among them, a certain portion to the separate use of Mrs. Fowler during her life, with a. trust as to the principal, for the benefit of the children of the marriage, in certain events which had happened. The parties to that settlement were Thomas Bish, the father of Mrs. Fowler, who gave the 8450 stock by way of marriage portion, Mrs. Fowler and her intended husband, and the Defendants G. T. R. Reynal, George Webb, William Fowler and Chappel Fowler, the trustees. The settlement contained a power to the trustees, and the survivors and survivor of them, with the consent of the Plaintiff and her intended husband, or the survivor of them, and after the decease of such survivor, at their own discretion to sell the trust fund, or any part thereof, and to invest or place out the monies to arise by such sale on any other public stock or funds, or upon real security, and from time to time to call in the monies so placed out on security, or to sell the stock in which the same might be invested, or any part thereof, as they should think fit. The four trustees named in the settlement accepted the trusts, but the Defendant G. T. R. Reynal had throughout been the acting trustee. It was understood by the parties, previously to the execution of the settlement, that the fund about to be settled should be lent to Thomas Bish the settlor, F. Gye and R. Hughes, who were joint lessees of Vauxhall, and who were also joint equitable owners of the same property under a purchase contract, dated the 6th December 1824, and the loan was proposed to be secured by a [502] mortgage upon the property which was of copyhold tenure. With the view of carrying into eft'ect the proposed arrangement contemporaneously with the execution of the settlement, a memorandum was accordingly indorsed upon the deed of settlement, and signed by Mr. Bish and Mr. and Mrs. Fowler, which was as follows :-" We hereby request tha trustees. within named to advance, pursuant to the power within contained for that purpose,, the sum of 8450 3 per cent, reduced Bank annuities, or any part thereof, to-the owners or lessees of Vauxhall Gardens, in the county of Surrey, upon mortgage-either as first, second or third mortgagees, for such time and at such rate of interest as the said trustees may in their discretion think fit.-(Signed) T. Bish, R. H. Fowler,. F. E. Bish." The stock was transferred to the trustees, and the whole was shortly afterwards sold, and the produce of the sale, amounting to about 8000, was, on the 24th February 1825, advanced to Bish, Gye and Hughes, but no written security was then taken for the repayment. On the 25th March 1825 the purchase of Vauxhall Gardens was completed by a surrender to Bish, Gye and Hughes. On the 30th July 1825, Bish retired from the partnership with Gye and Hughes, and his interest in the property at Vauxhall was surrendered to and became vested in Gye and Hughes. By an indenture elated the 29th November 1826, Gye and Hughes covenanted with the trustees of the settlement to surrender the Vauxhall Gardens by way of mortgage, to be subject to two prior charges of 7000 each, created in favour of the Defendant Reynal and others, as trustees under the will of T. Bish, the elder. The security proving wholly inadequate, the present suit was instituted to compel the trustees to reinstate [503] the stock, and the Vice-Chancellor Knight Bruce,, having held that the trustees were bound to replace such stock, and having ordered the amount of the produce to be paid into Court, the present appeal was brought, from that decision. 3 MAC. & O. 804. FOWLER V. EEYNAL 355 Mr. Bacon and Mr. H. Humphreys, for the Plaintiffs, and in support of the decree. Assuming that the trustees had authority to invest the trust monies on the security of Vauxhall Gardens, still it was their duty to have ascertained that the property was a sufficient security, and this it manifestly was not. Trustees are not justified in lending trust monies, even on freehold security, beyond two-thirds of its value, Stickwy v. Sewell (1 Myl. & Cr. 8); and the memorandum endorsed on the settlement could not vary the duties of the trustees, for even in a case where executors had a power to lend on personal security they were held responsible for a loss incurred by lending to a trader on his bond, Langston v. Ollivant (Cooper, 33). It is also submitted that, where a married woman has a power to exercise, it must be strictly followed, Bateman v. Davis (3 Madd. 98); and that no consent of a married woman is availing, unless in the precise form required by the power or the money lent on the precise security; Srice v. Stokes (11 Ves. 319), Cocker v. Quayle (1 Russ. & M. 535), Hopkins v. Myall (2 Buss. & M. 86), Nail v. Punter (5 Sim. 555), Kdlaway v. Johnson (5 Beav. 319). In the present case, the trustees took no security from the parties at the time of the loan, and they ultimately took a security from two only of the three parties to whom the trust fund had been lent. It was argued in the Court below that [504] the interests of the mother and children were not identical, and that they ought not to join as co-Plaintiffs, bat on that point the case of Cocker v. Quayle (1 Russ. & M. 535) is a direct authority for their being co-Plaintiffs. Assuming that Mrs. Fowler has concurred in the breach of trust, that will not preclude her from bringing her bill to be relieved, Buckeridge v. Glasse (Cr. & P. 126). Mr. Freeling, for one of the...
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