Robert Murray, - Appellant; Edward Pinkett and Others, - Respondents
| Jurisdiction | England & Wales |
| Judgment Date | 13 August 1846 |
| Date | 13 August 1846 |
| Court | House of Lords |
English Reports Citation: 8 E.R. 1612
House of Lords
Mews' Dig. i. 864; ii. 888, 889; iii. 1540; xiv. 896, 908; S.C. sub nom. Pinkett v. Wright, 2 Hare, 120; 12 L.J. Ch. 119; 6 Jur. 1102. Adopted in Socit Gnrale v. Tramways Union Co., 1884, 14 Q.B.D. 447; Aberaman Ironworks v. Wickens, 1868, L.R. 5, Eq. 517; and cf. Athenaeum Life Assurance Society v. Pooley, 1858, 3 De G. and J. 294. See also Lindley on Companies, 5th ed., p. 456.
Trusts - Notice - Trustee's Acts - Preference.
[764] ROBERT MURRAY,-Appellant; EDWARD PINKETT and Others,- Respondents [Feb. 20, 27; Aug. 13, 1846]. [Mews' Dig. i. 864; ii. 888, 889; iii. 1540; xiv. 896, 908; S.C. sub nom. Pinkett v. Wright, 2 Hare, 120 ; 12 L.J. Ch. 119 ; 6 Jur. 1102. Adopted in Societe Generate v. Tramways Union Co., 1884, 14 Q.B.D. 447 ; Aberaman Ironworks v. Wickens, 1868, L.R. 5, Eq. 517 ; and cf. Athenaeum Life Assurance Society v. Pooley, 1858,. 3 De G. and J. 294. See also Lindley on Companies, 5th ed., p. 456.] Trusts-Notice-Trustee's Acts-Preference. Trust-funds were invested in the purchase of transferable shares in a banking company in the name of one of the trustees, who was also a holder of shares in his own right in the same company, and afterwards made various sales and purchases of shares therein. There was no distinguishing mark by which the-shares could be traced, the same being in the nature of capital, expressed by 1612 MURRAY V. PINKETT [1846] XII CLARK & FINNELLT, 765 quantity. The trustee agreed to assign some of the shares standing in his name to the banking company, as security for repayment of advances which had been made to him, but no transfer was made. He afterwards became bankrupt, without having shares sufficient to satisfy the trusts, and his agreement to assign: Held, 1st, that the banking company had no lien on any of the shares which had been held in trust. :2d. That although the shares held in trust might have been changed by sale and repurchase, the trustee must still be considered as holding, for the purposes of the trust, the same number of shares out of a larger number that were standing in his name at the time of his bankruptcy. 3d. That as no shares were transferred in pursuance of the agreement, no question as to whether the bank directors were purchasers with or without notice could arise; and of the two equities, for the cestuis que trust and for the bank, the former must be preferred. This appeal was brought against two decrees of Vice Chancellor Sir J. Wigram, thereinafter stated. The appellant is the registered public officer of the Provincial Bank of Ireland, a copartnership formed in 1825 for carrying on the business of bankers, under the provisions of acts of parliament passed in the fifth and [765] sixth years of Geo. IV.; with a capital of 2,000,000, in 20,000 shares of 100 each, of which 25 only were paid up. The shares were not distinguishable by any marks, but were in the nature of 'capital expressed by quantity only. The capital was increased, in 1836, by 20,000 additional shares of 10 each, resembling the original shares in all respects except the amount. John Wright, who carried on the business of a banker, in partnership with Henry Robinson and others, under the firm of Wright and Co., was an original proprietor and director in the Provincial Bank of Ireland, and continued to be so until his bankruptcy in 1840. By a deed of settlement, dated the 3d of April, 1828, Francis Johnson vested certain French stocks in John Wright and Henry Robinson, upon trusts, under which the said Edward Pinkett, and others of the respondents, became beneficially interested. The French stocks were sold by Wright and Robinson, at Johnson's request, in March 1830, and in the month of April following the produce was applied in the purchase of 21,000 English consols, which were transferred to Wright and Robinson. They, in May 1830, at the instance of Johnson, sold out 5000 consols, part of the 21,000, and Johnson, who was himself a broker, with the proceeds of the sale, and 82 5s. added by himself, purchased 160 shares of 100 each, in the capital of the Provincial Bank of Ireland, in the name of John Wright alone, the bank rules requiring that shares should stand in the name of on person only. The certificates of the shares were delivered to Wright with this indorsement on one of them:-" 160 Irish Provincial Bank shares certificates-Name of John Wright, Esq., in trust for F. Johnson." 'These certificates were afterwards deposited with, and remained in the possession of one of the cestuis que trust. In July 1830, Johnson, Wright, and Robinson executed a deed poll, indorsed on the settlement of April 1828, declaring that Wright [766] and Robinson, as to the sum of 16,000 consols, residue of the 21,000 consols, and Wright, as to the said 160 shares in the Provincial Bank of Ireland, were trustees upon the trusts of the said settlement. Francis Johnson died in 1833, and his two daughters, Caroline and Louisa, and a Mr. Reynolds, became his personal representatives. Caroline afterwards married the respondent, Edward Pinkett, and Louisa married Charles Plumley. These and their children are the only parties interested under the trusts of the settlement of April 1828, and the dividends on the shares were paid to their use by Wright from the time of Johnson's death to the time of his own bankrutey. From the time when the 160 shares in the Provincial Bank of Ireland were purchased, down to October 1837, the number of original shares standing in Wright's name from time to time, varied from 750 to 225,* but no change appeared to have * It appeared that 125 of these 225 had been transferred to a Mr. Muspratt in 1836, and were by him re-transferred in 1837. (See the Master's Report, infra, p. 769-70.) 1613 XII CLARK & FINNELLY, 767 MURRAY V. PINKETT [1846] been made in the latter number after 1837. On the creation of the additional shares in 1836, one of these was allotted as a bonus to every holder of five original shares, so that Wright, as holder of the 160 shares declared to be held by him in trust, would be likewise entitled to 32 of the additional shares; it appeared that 55 additional shares were standing in his name in 1840. In February 1840, Wright, being indebted to the Provincial Bank of Ireland, wrote a letter to the directors, as follows : - " sirs-As collateral security for the loan of 4000 from the Provincial Bank of Ireland, I hereby oblige myself to transfer unto the name of any one of your number, whenever you shall require me, one hundred of [767] the shares of 100 each, of the stock of the Provincial Bank of Ireland, now standing in my name. " john wright." In November 1840, after Wright and Co. had stopped payment, the solicitor of Edward Pinkett gave the Provincial Bank notice, that the parties interested under the settlement of April 1828, claimed 160 original and 32 additional shares, and that the same were held by Wright in trust. The solicitors for the bank replied, that part of the shares held by Wright were pledged to the bank as a security for money they had advanced to him, and the remainder the directors considered themselves entitled to retain, to cover the balance due to them from Wright and Co., who were their bankers in London, adding that the directors had no previous intimation of any claim on Wright's shares:, except by themselves, or that any part of them were held in trust by him. In December 1840, Wright, Robinson, and their copartners, were declared bankrupts. In January 1841, a notice, on behalf of Walter Blount, was served on the Provincial Bank, claiming twenty shares of 100 each, and four shares of 10 each, of those standing in Wright's name in the Bank register. The grounds of this claim were, that, in 1825, Wright and Co., being Blount's bankers, purchased the said twenty shares with his money, by his directions, and thereby became a trustee thereof for him, and afterwards regularly gave him credit for the dividends on such shares in his banking accounts. The assignees of Wright and Co., under their bankruptcy, claimed all the shares that stood in Wright's name at the time of his bankruptcy, as being in his power and disposition within the bankrupt laws, and part of his estate, distributable among his general creditors. In January 1841, a bill was filed by Edward Pinkett, and other parties interested under the settlement of 1828, against Wright and Kobinson, as trustees thereof, [768] against the appellant, as representing the Provincial Bank of Ireland, and against the other claimants to the shares in that Bank standing in Wright's name. The bill prayed that Wright and Robinson might be removed, and new trustees of the said settlement appointed ; and that the said 160 and 32 shares standing in Wright's name, might be transferred to them (subject to the provisions contained in the deed under which the Provincial Bank was constituted), and...
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