Norris v Wright
| Jurisdiction | England & Wales |
| Judgment Date | 29 July 1851 |
| Date | 29 July 1851 |
| Court | High Court of Chancery |
English Reports Citation: 51 E.R. 298
ROLLS COURT
E291! norris 0. wright. July 23, 24, 29, 1851. It is the duty of a trustee who executes a power to shew that he has complied with the exigencies required by it. So where he varies the investment of the trust fund, the burden of proof lies on him to shew that it is a fit and proper investment. Lynch's Act (4 & 5 W. 4, c. 29) only relieves a trustee from any liability in respect of an investment in Ireland instead of England, and therefore where, upon petition under the Act, the Court sanctioned an investment which was made without proper evidence of value, and without the consent of the necessary parties, and there was a loss, the trustees were held liable for the breach of trust. Pending a suit to make trustees liable for the improper -investment of trust monies on an Irish estate, the property was put up for sale under the Encumbered Estates Act, and an order was made giving the trustees liberty to buy, which they did. Held, that this order did not relieve the trustees from any liability in the cause, although it was not expressed to be made " without prejudice." Whether a trustee is justified in lending trust money on a second mortgage, without obtaining the legal estate, quce.re. An estate of the value of 80,000 was subject to a first mortgage of 40,000 and to two others, for 11,000 and 6800, and between the 2d and 3d there was a dispute as to priority. A trustee advanced 1908 trust money on the security of an assignment of an equal amount of the 6800. Held, that this was a breach of trust. In a suit to make trustees liable for a breach of trust. Held, that the assignees of two bankrupt trustees were not indispensable parties, as the case fell within the 32d General Order of August 1841. This suit was instituted in November 1849, by Mrs. William T. Norris and her children, to make trustees liable for an improper investment of trust monies in which they were interested. It appeared that in January 1838 the Plaintiff, then Margaretta Havers, married William T. Norris, and, [292] that under the will of her father, a sum of 6111 was (1) Uttesron v. Mair, 2 Ves. jun. 95 ; Beckley v. Dmrington, cited 6 Ves. 749 ; Pearse v. Hewitt, 1 Simons, 471 ; Lancaster v. Evors, 4 Beavan, 158. 14BEAV.293. NORRIS V. WEIGHT 299 then vested in John Wright and Thomas Norris, upon trust for her for life, for her separate use without power of anticipation, with remainder to her children. The trustees were directed, by the will, to lay out and invest the trust monies in the purchase of Parliamentary stocks or funds of Great Britain, " or at interest upon Government securities or real security in England," and to alter and vary the same, " yet so that during the life of Margaretta Havers every such laying out, investment, sale, alteration or transposition be made with her consent in writing." Margaretta Havers was also, at the time of her marriage, entitled to a sum of .3190, which was, by her marriage settlement, vested in John Wright, Thomas Norris, and Edmund Jerningham, in trust for the separate use of Margaretta Norris for life, without power of anticipation, with remainder to her husband and children. The trustees were directed by the settlement to lay out this fund in the names of the trustees, in the Parliamentary stocks or public funds of Great Britain, " or at interest upon real security in England, Wales or Ireland," but with the assent of William T. Norris and wife. The first transactions complained of by thia bill related to the investment of a sum of 5000 upon an Irish security. As to this, it appeared that in 1838 Mr. Thomas Norris, the trustee, who was a practising solicitor, proposed to William T. Norris and his wife, to invest 4500, part of the trust monies settled by the testator's will, upon mortgage of an estate in Ireland. He accordingly, with their consent, presented a petition [293] in their names, under Lynch's Act,(l) to obtain the sanction of the Court to the advance. By an order of this Court, dated the 6th of November 1838, it was referred to the Master to inquire and certify whether it would be/or the benefit of W. T. Nwris and his wife, that the sum of 4500 should be invested as proposed. The Master proceeded in the inquiry, and an opinion of counsel as to the title was laid before him; but no evidence was given of the consent in writing of Mr. and Mrs. W. T. Norris, as required by the power. As to the value, an affidavit of the proposed mortgagor and of his land agent was produced before him, shewing the annual value of the property (part of which was occupied by the mortgagor1) to be 616 and of the fee-[294]-simple to be 12,338. The Master certified that it would be/or the benefit of W. T. Norris and his wife,, that the 4500 should be invested by the trustees on the security of a mortgage of the property. The report was confirmed on the 1st of March 1839, and the 4500, part of the "will money," and 500, part of the "settlement money," were advanced on the mortgage. The interest having fallen greatly into arrear, and the mortgagor having taken the benefit of the Insolvent Act, the trustees instituted a suit in Ireland for the recovery of the money, and a decree had been made for a sale, but no purchaser could be found. The arrears of interest had, in 1850, increased to 1630. (1) By the 4 & 5 W. 4, c. 29 (Lynch's Act), it is enacted that it shall be lawful for any person who, under any trust or power is authorised to lend money "on real securities in England, Wales, or Great Britain " to lend the same " at interest on real securities in Ireland." The second section provides "that all loans of money on real securities in Ireland under this Act, in which any minor or unborn child or person of unsound mind is or may be interested, shall 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." The 4th section provides, " that every such loan shall be made with the consent of the person or persons, if any, whose consent may be required as to the investment of such money upon real securities in England, Wales, or Great Britain, testified in the manner required by such direction, trust, or power." And the 6th section is as follows: " Provided always, and be it further enacted that nothing contained in this Act shall relieve or be construed to relieve any person or persons intrusted or clothed with such direction, trust, or power as aforesaid, from any responsibility as to title, security, or otherwise, either at law or in equity, save that having lent and advanced such money as aforesaid on real securities in Ireland instead of having invested such money on real securities in England, Wales, or Great Britain." 300 NORRIS V. WRIGHT MBEAV.29S. A peremptory order having been made under the Encumbered Estates Act for a. sale of the Irish estate, the Plaintiffs in this suit, under some arrangement between the parties, presented a petition in May 1850, praying a reference to ascertain whether it would be for the benefit of the Plaintiffs that the trustees should, upon the sale, agree to allow part of the purchase-money to remain on mortgage, and whether the trustees should have liberty to bid for the purchase of the estate. By an order made on the 25th of May 1850 upon this petition, leave was given to the trustees to bid to the extent of the incumbrance, and to agree with any other bidder to allow 3000 to remain upon the security of the estate. The trustees purchased the estate, but it was clearly insufficient to pay...
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