Letterstedt v Broers
| Jurisdiction | UK Non-devolved |
| Judgment Date | 1883 |
| Date | 1883 |
| Year | 1883 |
| Court | Privy Council |
Equitable Jurisdiction - Removal of Trustees.
There is a jurisdiction in Courts of Equity to remove old trustees and substitute new ones in cases requiring such a remedy.
The main principle on which such jurisdiction should be exercised is the welfare of the beneficiaries and of the trust estate.
Case in which their Lordships, overruling the decree of the Court below, held that the trustees (the Board of Executors of Cape Town, a body incorporated by an ordinance of the Cape of Good Hope) should, in the special circumstances of the case, be removed without costs of appeal, the Appellant having persisted in charges of fraud which the evidence did not sustain.
APPEAL from certain parts of a judgment of the Supreme Court (July 11, 1879), an order of the same Court (September 14, 1880), and a judgment dated the 2nd of July, 1881.
The subject-matter of the appeal is as to the right of the appellant to have from Frans Jacob Broers, the first named respondent, in his capacity of Secretary to the Board of Executors of Cape Town, an account, supported by vouchers, shewing the amount of a four-sixths share of certain profits to which the appellant is absolutely entitled under the will of her father, the late Jacob Letterstedt, deceased (such account to be taken from the date of the commencement of the administration by the Board of Executors of Cape Town, of the estate of Jacob Letterstedt), and to be paid by Frans Jacob Broers, in his capacity aforesaid, the amount of the four-sixths share of profits, and to have the Board of Executors of Cape Town removed from the executorship of the will, and to have the costs of the action paid by the Board of Executors of Cape Town.
The facts and proceedings are stated in the judgment of their Lordships.
Davey, Q.C., and Jeune (Elgood, with them), for the appellant, with regard to the order of the 14th of September, 1880, contended that the account prayed for by her should be granted, and that proper vouchers should be produced in support of such account, and that such relief ought not to have been refused by the said order. The appellant was declared by the judgment of the 11th of July, 1879, absolutely entitled to the four-sixths of the profits claimed by her from the decease of the testator, and an account was necessary in order to ascertain them. They contended that the account should be taken from May, 1862, of the business authorized to be carried on by the executors and trustees, with interest and compound interest on the amount of such profits from the time that they came to hands of the executors. The account might proceed upon the assumption that every item of the account was correct up to the end of 1872, and without requiring the defendants to produce vouchers up to that date, and since that date to have vouchers in the ordinary way. Then as regards the judgment of the 2nd of July, 1881, they contended that the Board had committed the several breaches of trust alleged, and ought to be removed. [Reference was made to Story's Equitable Jurisprudence, sect. 1287 et seq., and corresponding passages in Lewin on Trusts.]
[LORD BLACKBURN referred to Fleming v. CraigF1.]
Mathews, Q.C., and Rigby, Q.C. (Greene, with them), for the Respondents, the Board of Executors, were ready to submit to inquiry — but inquiry was one thing, an account another. They suggested an inquiry whether the portion of the estate of the testator now existing represents or has been produced by the business authorized to be carried on in accordance with the will, regard being had to the compromise, and on the footing that all accounts are to be treated as final and settled accounts before and after 1872; also as to what portion of the assets, as shewn by the accounts, are attributable to four-sixths of the profits. Then, with regard to the removal of the board, it was contended that they had not been guilty of any misconduct or maladministration.
E. W. Byrne, for the respondent Giddy, appointed curator ad litem to the person or persons who may be entitled under Jacob Letterstedt's will to any portion of his estate after the death of the appellant.
Davey, Q.C., replied.
The judgment of their Lordships was delivered by
LORD BLACKBURN: —
This is an appeal against part of a judgment of the Supreme Court of the colony of the Cape of Good Hope, dated the 11th of July, 1879, an order dated the 14th of September, 1880, and a judgment of the 2nd of July, 1881.
These judgments and order were made in an action commenced by the appellant in June, 1878, against the defendant Broers, in his capacity of secretary to “the Board of Executors of Cape Town,” who are the principal defendants below, and respondents now.
This is a body incorporated by an ordinance of the Cape of Good Hope. It is not necessary to say more of them than that, by the terms of their deed, they might act as executors and trustees, on the terms that they were to have remuneration for so acting.
The other respondent was added during the litigation by directions of the Court below. It is not necessary to notice him further until the costs of this litigation are to be disposed of.
It is desirable, before proceeding to discuss the judgments and order to state so much of the facts as is necessary to make them intelligible.
The appellant is the only daughter of Jacob Letterstedt. She was born on the 13th of May, 1853, and consequently attained the age of twenty-one on the 13th of May, 1874, and the age of twenty-five on the 13th of May, 1878.
Jacob Letterstedt, her father, died on the 10th of March, 1862, leaving a will.
This appeal does not require their Lordships to construe that will, and it is not necessary to state its provisions further than is required to make intelligible the questions which their Lordships are called upon to decide.
The testator carried on in his lifetime a brewing distillery and malting business, at two places, Mariedahl and Cape Town, and he directed in his will that this business should be carried on after his death as the same was carried on by him, and that his executors should advance a sufficient capital for the purpose, not exceeding in all £10,000. He makes rather elaborate provisions as to how the business should be carried on by managers; and he directs that the profits of the business should, until his child or children should attain their age of twenty-five years, be divided into six shares, “whereof four shares shall be for the benefit of my child or children, one share to the manager of the business at Mariedahl, and one share to the manager of Cape Town.” He appoints David Thompson to be manager at Mariedahl. At Cape Town he appoints Per Oscar Hedelius, and failing him Tobias Spengler. And he directs that in case of a vacancy the executors shall, when requisite, appoint a fit person to be manager. If the manager at Cape Town prefers it, he is to receive an annual salary of £350, with a further allowance of £150 for a clerk, instead of a share in the profits. So long as the business is carried on in the above manner the executors are to appoint two persons to inspect the property and examine the accounts twice in every year, receiving two guineas a day for their trouble.
The testator also at the time of his death carried on a business in partnership with Per Oscar Hedelius under the firm name of Jacob Letterstedt & Co.
There is no direction in the will as to this business; but under the terms of the deed of partnership, paragraphs 13 and 14, it is clear that the testator was not bound to carry on that business after the 1st day of January next ensuing after the death of Per Oscar Hedelius; that is, as he died on the 6th of July, 1863, after the 1st of January, 1864. What might be the obligations of the testator's executors under that deed during the twenty-one months between the death of the testator in March, 1862, and the 1st of January, 1864, it is not necessary to consider; but after that date they had no authority to carry on the business.
The following parts of the will may conveniently be read now:—
“I declare that in case my said daughter shall marry and have a son or sons, such son or the eldest son shall upon his attaining the age of twenty-one years be absolutely entitled to the house and premises situated No. 5, Heeren Gracht, including the stores, Nos. 3, 4, and 5, Castle Street, or in case the same shall have been sold, the proceeds of the sale of the said house, premises, and stores, provided that until such son of my said daughter shall attain the age of twenty-one years, my said daughter shall receive the rents of the said property, or the interest of the proceeds thereof, if sold as aforesaid. And I declare that the second son or such other younger son of my said daughter as shall take my name shall be entitled to the amount of a certain policy effected with the Alliance Life and Fire Assurance Company, London, upon my life for the sum of three thousand pounds, executed in the year one thousand eight hundred and fifty, with the interest which shall have accrued thereon from my death when he shall have attained the age of twenty-one years. And in case there shall be no such son the same shall fall into and become part of my general estate. And I declare that my said executors shall be entitled to administer the said house, premises, and stores in Heeren Gracht and Castle Street, or the proceeds thereof, until the same shall devolve upon my grandchildren, and shall also administer the amount of the said policy of insurance and accumulations, until my grandson herein mentioned shall become entitled thereto, or until the same shall fall into my general estate.”
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