Rochefoucauld v Boustead
| Jurisdiction | England & Wales |
| Date | 1897 |
| Year | 1897 |
| Court | Chancery Division |
Statute of Frauds (29 Car. 2, c. 3), s. 7 - Parol Evidence - Purchase as Trustee - Express Trust - Statutes of Limitations -
Prior to 1873 the plaintiff, a married woman, was owner of certain estates in Ceylon subject to a considerable mortgage. In 1873 the mortgagees sold and conveyed the estates to the defendant, who, without the privity of the plaintiff, raised large sums by mortgage of them, and afterwards became bankrupt in 1879, and obtained his discharge in 1880. The estates were afterwards sold by the mortgagees. The plaintiff's case was that the defendant had purchased the estates as trustee for her subject to a lien for his advances. In 1880 the defendant's trustee in bankruptcy repudiated the plaintiff's title. The defendant never expressly did so, and the plaintiff never gave either of them to understand that she had given up her claim; but she took no active steps to assert it till 1894, when she commenced an action against the defendant asking for a declaration that the defendant purchased as a trustee for her, and for an account of his dealings with the property, and payment of what should be found due from him. The defendant pleaded — (1.) that the estates were conveyed to him as beneficial owner; (2.) that the trust alleged by the plaintiff was not evidenced by any writing signed by the defendant, and that the Statute of Frauds was a defence; (3.) that the plaintiff's claim, if proved, was barred (a) by the defendant's bankruptcy; (b) by the Statutes of Limitations; (c) by laches and delay. Kekewich J. held that no trust was proved, and dismissed the action on the first ground. The Court of Appeal, being of opinion that the evidence, which partly consisted of letters signed by the defendant, completely proved that the defendant purchased as a trustee for the plaintiff, and held the estates as such trustee subject to a lien for his expenditure:—
Held, that even if the letters signed by the defendant did not contain enough to satisfy s. 7 of the Statute of Frauds, parol evidence was admissible; and as the whole of the evidence taken together established that the defendant had purchased as a trustee, the plaintiff was entitled to a decree.
The Statute of Frauds does not prevent proof of a fraud, and it is a fraud for a person to whom land is conveyed as a trustee, and who knows it was so conveyed, to deny the trust and claim the land as his own. Therefore a person claiming land conveyed to another may prove by parol evidence that it was so conveyed on trust for the claimant, and may obtain a declaration that the grantee is a trustee for him.
A trust thus established is an express trust within the definition given in Soar v. Ashwell, [
The defendant knew that land held by the defendant was claimed by the plaintiff as having been conveyed to the defendant as a trustee for her; and in the correspondence between them he never denied her title, though he never expressly admitted it. The plaintiff took no proceedings for twelve years after the correspondence between them had ceased:—
Held, that as she had done nothing actively to lead the defendant to suppose that she had given up her claim, there was nothing against her but the lapse of time; and that the mere lapse of time in a case of express trust was not a bar.
A very difficult account directed to be taken by an official referee instead of in chambers, on account of the great saving of time which would thus be effected.
THIS was an appeal by the plaintiff from a decision of Kekewich J., who dismissed the action.
The following is a brief outline of the facts of the case. In 1868 the plaintiff, Comtesse de la Rochefoucauld, was the registered owner of the Delmar estates in Ceylon, subject to a mortgage for 25,000l. and further advances, created by a former owner, which had become vested in a Dutch company, and to some smaller subsequent charges. The Comtesse was divorced from her first husband on July 31, 1868, and by an order of the Divorce Court he obtained an interest in the Delmar estates. The Dutch company wished to call in the mortgage, and the Comtesse not being in a position to find the money, and fearing that he might seek to obtain a transfer of the mortgage and foreclose, entered into an arrangement with a Mr. Duff and the defendant, who were anxious to help her, for them to take a transfer of the mortgage. To obviate some difficulties which arose, it was proposed that the Dutch company should sell the estates by auction, and that Mr. Duff and the defendant should enter into an agreement with the company to purchase the estates, if no higher bidder intervened, at a price sufficient to cover their mortgage debt and expenses. An agreement to this effect was signed, but Mr. Duff withdrew from it. The estates were ultimately put up to auction in Ceylon and sold to the defendant for 57,942&., an amount sufficient to cover the debt, interest, and costs of the Dutch company. They were conveyed to him as absolute owner on May 27, 1873, and he was entered on the register.
The case of the Comtesse was that the purchase was made on her behalf, the arrangement with the Dutch company being carried on by the defendant alone after Duff's retirement, and that the defendant was a trustee for her subject to a charge in his favour in respect of all sums advanced by him in order to obtain the estates from the Dutch company, and of all sums which might be advanced by him to work the estates as coffee plantations.
After the sale had been completed the defendant managed the estates, and remitted to the Comtesse from time to time various sums — amounting in the whole to 5884l. — out of the profits. These payments went on till July, 1879, when the firm of which the defendant was a member went into liquidation. In May, 1880, the defendant obtained his order of discharge.
In 1876, 1877, and 1878 the defendant had, without the knowledge of the Comtesse, mortgaged different parts of the estates for large sums of money, amounting in the whole to more than 70,000l.
On August 9, 1880, the Comtesse by her then solicitor wrote to Mr. Cooper, the trustee of the defendant's separate estate in the bankruptcy, asserting her title to the estates. Mr. Cooper, on October 29, 1880, wrote to the solicitor, wholly repudiating the claim of the Comtesse, and asserting that the estates belonged to the defendant's creditors, the defendant, as he stated, having bought them with his own money, and mortgaged and dealt with them as his own. No further correspondence ensued, and no steps were taken by the Comtesse to assert her title.
On November 25, 1882, the defendant, in answer to a letter from the Comtesse, wrote to her as follows:—
“I have received your letter of the 16th, and deeply regret that I have nothing encouraging to report to you; and for this you will no doubt be prepared, as the continued depression in Ceylon estates has been now common talk for the last three years.
“It is true I said in 1879 we need not despair; but I could not then foresee that the terrible blight of leaf disease would so extend throughout Ceylon as in effect to utterly destroy the coffee enterprise, and reduce the annual yield from the 50,000 tons at which it once stood to 14,000 tons estimated for the coming year.
“As regards my own affairs, nothing has been done this year by Mr. Cooper in reporting progress to the creditors for the reason that he and the committee of inspection have been engaged for some months in seeing what can be done to accomplish a favourable arrangement with two or three of the most important mortgagees.
“Unfortunately the estates have all been cultivated at a considerable loss both in 1881 and 1882, and several of them have seriously deteriorated as coffee properties.” (After some further remarks as to the prospects of properties in Ceylon, he continued:—)
“When Mr. Cooper and the committee have concluded their negotiation, I presume the result will be made known at a general meeting whether favourable or unfavourable, and some new resolution arrived at for the working or abandonment of the estates. As coffee properties they have no value, and the difficulty is where is the new capital to come from to develop a new enterprise.”
Again, on December 14, 1882, the defendant wrote to the Comtesse:—
“I have been compelled to delay replying to your letter of 28th ulto. owing to the absence of Mr. Cooper. There are no very recent particulars of the estates and the development of the cinchona and other cultivations. Except that the yield of the coffee trees has ceased, and that the cinchona is so much older and to that extent proportionately more valuable, I think you may consider the returns that were sent to you when a negotiation was opened with Mr. Cassel fairly represent the present position — at any rate, they should suffice to lay before any friend you may be able to interest. As the estates are virtually Mr. Cooper's it would save time if the negotiation for an advance were made with him. The papers I have referred to above give all particulars of mortgages and mortgage interest, and unhappily through the entire collapse of the coffee no change has been possible in...
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