England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF CHANCERY

		17, 18, 19, 25 July 1844

The bill was filed by Jacob, a natural son of the testator, Ellis Fletcher, for the payment, by the Defendants, his executors, out of the assets, of a sum of £60,000, with interest thereon, from the expiration of twelve months from the decease of the testator. The claim was founded upon a voluntary deed, executed by the testator, between four and five years before his death, which was thenceforward retained by the testator in his own possession, without having been communicated either to the trustees appointed in the deed, or, so far as it appeared to the Plaintiff or the other parties interested under it, and which was ultimately discovered some years after the death of the testator, by a person the executors employed to make a schedule of his papers, by whom it was found, wrapped together with an examined copy of the same deed in a brown paper parcel.

The indenture in question was expressed to be made the 1st day of September 1829, between Ellis Fletcher of the one part, and five trustees therein named of the other part; and it recited that Ellis Fletcher, being desirous of making provision for his two natural sons, John, then of the age of eleven years, and Jacob (the Plaintiff), then of the age of six years, had proposed and agreed to enter into the covenant and declaration of trust thereinafter contained; and it was thereby witnessed that, in consideration of the premises and of the natural love and affection which Ellis Fletcher bore towards his said sons, John and Jacob, he, the said Ellis Fletcher, did, for himself, his heirs, executors and administrators, covenant and agree with and to the said trustees, their heirs, executors, administrators and assigns, that in case the said John and Jacob, or either of them, should survive the said Ellis Fletcher, then and in such case the heirs, executors or administrators of him, the said Ellis Fletcher, should and would, within twelve calendar months next after his decease, well and fully pay, or cause to be paid, unto the said trustees, their executors, administrators and assigns, the sum of £60,000. And it was thereby expressed to be agreed and declared, and particularly the said Ellis Fletcher did thereby declare, that the said trustees, and the survivor of them, and the executors, administrators and assigns of such survivor, should stand and be possessed of and interested in the said sum of £60,000 when and as the same should come to their or his hands, upon trust for the said John and Jacob, or such one of them as should attain the age of twenty-one years and should be living at the decease of the said Ellis Fletcher, and their or his executors, administrators and assigns; and, if both of them should attain that age, and be then living, then the same to be divided between them in equal shares as tenants in common. And it was thereby expressed to be further agreed and declared that in case neither of them, the said John and Jacob, having survived the said Ellis Fletcher, should attain the age of twenty-one years, then the said sum of £60,000 should remain and be in trust for Ellis Fletcher, his executors, administrators and assigns, and be deemed part of his personal estate. And it was declared that if, on the decease of the said Ellis Fletcher, the said John and Jacob, or either of them, should be under the age of twenty-one years, then the trustees or trustee for the time being should invest in their or his names or name the said sum of £60,000, or so much thereof as should not be absolutely vested or payable under the trust therein mentioned, and should stand and be possessed of the said stocks, funds and securities upon trust to pay and apply the whole or a competent part of the interest or dividends of the said sum of £60,000 unto or for the maintenance or education of the said John and Jacob during their minorities, with power to raise and apply sums, not exceeding £10,000 each, for their preferment or advancement.. And it was further agreed and declared that, after the decease of the said Ellis Fletcher, the trustees or trustee for the time being, until the said trust monies should vest absolutely in some person or persons, under the trusts thereinbefore expressed, should receive and accumulate the interest, dividends and annual produce thereof, or so much thereof as should be unapplied and undisposed of under the said trusts; and that the said interest, dividends and accumulations should belong to and be in trust for the person or persons who, under the trusts thereinbefore declared, should ultimately become entitled to the fund or funds from which such accumulations should have proceeded. And the deed contained the usual clauses enabling the trustees to give receipts and for indemnifying them.

The testator, by his will, dated the 11th of January 1834, after revoking all previous testamentary dispositions which he might have made, gave and devised all his real and personal estate to the trustees and executors therein named, upon certain trusts, for the benefit of his wife, his said sons, John and Jacob, and his three legitimate children, who were infants.

The testator died on the 26th of April 1834. John, one of his said sons, died in 1836, an infant. The Plaintiff Jacob, the other son, attained twenty-one in September 1843.

The Plaintiff, by his bill, claimed to have become solely entitled to the £60,000, and interest, under the indenture of covenant of September 1829, upon the death of John, his brother, under twenty-one; and the bill prayed that the said indenture might, if necessary, be established; and that it might be declared that by virtue thereof the Plaintiff was entitled to have the sum of £60,000 and interest, in addition to any benefit given to him by the testator's will; and that the Defendants, the executors, might be decreed to-pay to the Plaintiff what should be due to him in respect of the same.

The executors admitted assets. The surviving trustees named in the indenture of covenant of September 1829, by their answer, said that they had not accepted or acted in the trusts of the indenture; and they declined to accept or act in such trusts, unless the Court should be of opinion that they were bound so to act; they also declined to take proceedings either at law or in equity, or to permit their names to be used for the purpose of recovering the said sum of £60,000, except under the order and upon being indemnified by the decree of the Court; and they declined to receive the said sum, or to hold it upon the trusts of the indenture, unless under such decree; but they stated that they were willing to act as the Court should direct.

Mr. Romilly and Mr. Webster, for the Plaintiff, submitted, first, that the deed, though voluntary, was yet complete, and effectually created a trust for the objects of it; leaving nothing for the Court to perfect. On this part of the argument the cases of McFadden v. Jenkyns (1 Hare, 458; S. C. Phill. 153) and Meek v. Kettlewell (Id. 464), and most of the cases there mentioned, were cited. Secondly, that, where the Court is not called upon to complete a transaction for which there is no consideration, but is only called upon to give to the transaction its legal effect, the circumstance that it is voluntary is, as against legatees and other parties equally voluntary, no objection: Williamson v. Codrington (1 Ves. 511), Bill v. Cureton (2 Myl. & K. 503), Jefferys v. Jefferys (Cr. & Ph. 138), Beard v. Nutthall (1 Vern. 427). That the voluntary deed, therefore, was paramount to the will: Jones v. Powell (1 Eq. Ca. Ab. 84), Peck v. Parrot (1 Ves. 236), Bolton v. Bolton (3 Swans. 414), Clough v. Lambert (10 Sim. 174), Boughton v. Boughton (1 Atk. 625), Villers v. Beaumont (1 Vern. 100). The circumstance that the deed was retained by the covenantor, in his own possession, did not affect its validity, or make it less binding: Doe d. Garnons v. Knight (5 B. & C. 671), Exton v. Scott (6 Sim. 31), Dillon v. Coppin (4 Myl. & Cr. 647), Hall v. Palmer (3 Hare, 532). An action of covenant might be maintained at law upon the deed: Tufnell v. Constable (7 Ad. & El. 798), Jones v. Waite (5 Bing. N. C. 341), and Stephens v. Trueman (1 Ves. 74, per Lord Hardwicke). There being no doubt of the legal force of the instrument, and, therefore, no necessity for a trial at law, the Court "will not send it to law to make two suits out of one" (per Lord Hardwicke, 1 Ves. 515): Pearce v. Creswicke (2 Hare, 286), Vernon v. Vernon (2 P. Wms. 594). The trust, being complete, would not be allowed to fail from the want of an efficient trustee; and the forbearance of the trustee to sue would not be allowed to affect the right of the cestui que trust: Lechmere v. Earl of Carlisle (3 P. Wms. 211, 215).

Mr. Tinney and Mr. Follett, for the infant children of the testator, contended that the deed amounted merely to a contract between two persons for the benefit of a third, who was not a party; and it was therefore within the principle of Wallwyn v. Coutts (3 Mer. 707), Colyear v. Countess of Mulgrave (2 Keen, 81), and cases of that class: that it was at the utmost executory, and, being founded on no valuable consideration, this Court would not interfere to give effect to the instrument. In support of this view they referred to the first class of cases mentioned in the foregoing note of the argument for the Plaintiff. And, lastly, they submitted that the instrument was of a testamentary character, and, as such, was incapable of being sustained until it had been proved as a will; and that, looking at it as a will, it was clearly revoked by the subsequent will of the testator, which had been duly proved: Rigden v. Vallier (2 Ves. 252), Cecil v. Butcher (2 J. & W. 565, 573), Brackenbury v. Brackenbury (2 J. & W. 391), Woodbridge v. Spooner (3 B. & A. 233, 236), Ward v. Turner (2 Ves. 431), In re Evans (2 Cro. Mees. & Ros. 206).

Mr. James Parker and Mr. Selwyn, for the surviving trustees of the voluntary deed.

Mr. Spence and Mr. Bazalgette, for the executors.

July 19. THE VICE-CHANOELLOR [Sir James Wigram]. It is not denied that, if the Plaintiff in this case had brought an action in the name of the trustees, he might have recovered the money; and it is not suggested that, if the trustees had simply allowed their name to be used in the action, their conduct could have been impeached. There are two classes of cases, one of which is in favour of, and the other, if applicable, against, the Plaintiff's claim. The question is to which of the two classes it belongs.

In trying the equitable question I shall assume the validity of the instrument at law. If there was any doubt of that it would be reasonable to allow the Plaintiff to try the right by suing in the name of the surviving trustee. The first proposition relied upon against the claim in equity was that equity will not interfere in favour of a volunteer. That proposition, though true in many eases, has been too largely stated. A Court of Equity, for example, will not, in favour of a volunteer, enforce the performance of a contract in specie. That it will, however, sometimes act in favour of a volunteer is proved by the common case of a volunteer on a bond who may prove his bond against the assets. Again, where the relation of trustee and cestui que trust is constituted, as where property is transferred from the author of the trust into the name of a trustee, so that he has lost all power of disposition over it, and the transaction is complete as regards him, the trustee, having accepted the trust, cannot say he holds it, except for the purposes of the trust; and the Court will enforce the trust at the suit of a volunteer. According to the authorities I cannot, I admit, do anything to perfect the liability of the author of the trust, if it is not already perfect. This covenant, however, is already perfect. The covenantor is liable at law, and the Court is not called upon to do any act to perfect it. One question made in argument has been whether there can be a trust of a covenant the benefit of which shall belong to a third party; but I cannot think there is any difficulty in that. Suppose, in the case of a personal covenant to pay a certain annual sum for the benefit of a third person, the trustee were to bring an action against the covenantor; would he be afterwards allowed to say he was not a trustee? If he cannot do so after once acknowledging the trust, then there is a case in which there is a trust of a covenant for another. In the case of Clough v. Lambert (10 Sim. 174) the question arose; the point does not appear to have been taken during the argument, but the Vice-Chancellor of England was of opinion that the covenant bound the party; that the cestui que trust was entitled to the benefit of it; and that the mere intervention of a trustee made no difference. The proposition, therefore, that in no case can there be a trust of a covenant is clearly too large, and the real question is whether the relation of trustee and cestui que trust is established in the present case.

There is another class of cases: Brackenbury v. Brackenbury (2 J. & W. 391), Cecil v. Batcher (Id. 565), and others, in which it was doubted whether, if the author of a voluntary deed retains it in his possession, the Court will interfere in favour of the volunteer to have it delivered up; but these are cases which I think hardly affect the present question.

It was then said that this was an agreement by A. and B. for the benefit of C., a stranger to both; and that, according to the cases of which Colyear v. Lady Mulgrave (2 Keen, 81) is an example, C., the stranger, could not enforce the agreement. But where the transaction is of such a nature that there is no doubt of the intention of A., while dealing with his own property, to constitute B. a trustee for C., and B. has accepted the trust, may not C. be in a condition to compel B. to enforce the legal right which the trust deed confers upon him? If the trustees have in this case accepted the trust I think the decision in Clough v. Lambert applies; and if they have not accepted the trust I scarcely think that fact can make a difference. It is an extraordinary proposition that, nothing being wanted to perfect the liability of the estate to pay the debt, the Plaintiff has no right in equity to obtain the benefit of the trust.

July 25. THE VICE-CHANCELLOR [Sir James Wigram]. The objections made to the relief sought by the Plaintiff under the covenant in the trust deed of September 1829 were three: first, that the covenant was voluntary; secondly, that it was executory; and, thirdly, that it was testamentary, and had not been proved as a will. For the purpose of considering these objections I shall first assume that the surviving trustee of the deed of September 1829 might recover upon the covenant at law; and upon that assumption the only questions will be, first, whether I shall assist the Plaintiff in this suit so far as to allow him the use of the name of the surviving trustee, upon the latter being indemnified, a course which the trustee does not object to if the Court shall direct it; and, secondly, whether I shall further facilitate the Plaintiff's proceeding at law by ordering the production of the deed of covenant for the purposes of the trial.

Now, with regard to the first objection, for the reasons which I mentioned at the close of the argument, I think the proposition insisted upon, that because the covenant was voluntary therefore the Plaintiff could not recover in equity, was too broadly stated. I referred to the case of a volunteer by specialty claiming payment out of assets, and to the case of one claiming under a voluntary trust, where a fund has been transferred. The rule against relief to volunteers cannot, I conceive, in a case like that before me, be stated higher than this, that a Court of Equity will not, in favour of a volunteer, give to a deed any effect beyond what the law will give to it. But if the author of the deed has subjected himself to a liability at law, and the legal liability comes regularly to be enforced in equity, as in the cases before referred to, the observation that the claimant is a volunteer is of no value in favour of those who represent the author of the deed. If, therefore, the Plaintiff himself were the covenantee, so that he could bring the action in his own name, it follows, from what I have said, that in my opinion he might enforce payment out of the assets of the covenantor in this case. Then, does the interposition of the trustee of this covenant make any difference? I think it does not. Upon this part of the case I have asked myself the question, proposed by Vice-Chancellor Knight Bruce, in Davenport v. Bishopp (2 Y. & C. C. C. 451), whether, if the surviving trustee chose to sue, there would be any equity on the part of the estate to restrain him from doing so; or, which is the same question, in principle, whether in a case in which the auth or of the deed has conferred no discretion on the trustees (upon which supposition the estate is liable at law) the right of the Plaintiff is to depend upon the caprice of the trustee, and to be kept in suspense until the Statute of Limitations might become a bar to an action by the trustee? Or, in the case of new trustees being appointed (perhaps by the Plaintiff himself, there being a power to appoint new trustees), supposing his own nominees to be willing to sue, the other trustees might refuse to sue? I think the answer to these and like questions must be in the negative. The testator has bound himself absolutely. There is a debt created and existing. I give no assistance against the testator. I only deal with him as he has dealt by himself, and, if in such a case the trustee will not sue without the sanction of the Court, I think it is right to allow the cestui que trust to sue for himself, in the name of the trustee, either at law, or in this Court, as the case may require. The rights of the parties cannot depend upon mere accident and caprice. Having come to this conclusion upon abstract reasoning, it was satisfactory to me to find that this view of the case is not only consistent with, but is supported by, the cases of Clough v. Lambert (10 Sim. 174) and Williamson v. Codrington (1 Ves. sen. 511). If the case, therefore, depended simply upon the covenant being voluntary my opinion is that the Plaintiff would be entitled to use the name of the trustee at law, or to recover the money in this Court, if it were unnecessary to have the right decided at law, and, where the legal right is clear, to have the use of the deed, if that use is material.

The second question is whether, taking the covenant to be executory, the title of the Plaintiff to relief is affected by that circumstance? The question is answered by what I have already said. Its being executory makes no difference, whether the party seeks to recover at law in the name of the trustee, or against the assets in this Court.

The third question is whether the Plaintiff is precluded from relief in this Court, on the ground suggested that this is a testamentary paper. I may observe that this objection goes also to the right to sue at law-a right which I have assumed in the observations I have already made. I have read the cases cited by Mr. Follett, as to the instrument being testamentary, and I have also referred to many other cases upon the same point. (See 1 Williams's Tr. on Executors, p. 75, ed. 3.) I certainly was not prepared to find that the cases had gone so far as they have upon the subject. Those cases, however, are very distinguishable from the one before me. This is not a case where there is a general power of revocation reserved-a general power to dispose by will notwithstanding the execution of the instrument. In the cases referred to there has been a general reservation, or something like a reservation, of the party's right to deal with the property, notwithstanding the instrument; and the Courts have held that, in such cases the instrument being one which was not to have effect until the death of the party, or rather, I would say, to use the language of Sir John Nicholl in one of the cases in which, until the death of the party, the instrument itself was not consummated, until then no conclusive effect could be given to it. If that does not occur the instrument is not to be considered as testamentary. In this case the party clearly was bound, and there is, therefore, no ground for the argument that the interest is testamentary.

The only other question arises from the circumstance of the instrument having been kept in the possession of the party-does that affect its legal validity? In the case of Dillon v. Coppin (see 4 Myl. & Cr. 660) I had occasion to consider that subject, and I took pains to collect the cases upon it. The case of Doe v. Knight (Doe d. Garnons v. Knight, 5 B. & C. 671) shews that, if an instrument is sealed and delivered, the retainer of it by the party in his possession does not prevent it from taking effect. No doubt the intention of the parties is often disappointed by holding them to be bound by deeds which they have kept back, but such unquestionably is the law.

As to taking the deed out of the possession of the trustees of the testator's will, I was referred to Cecil v. Butcher (2 J. & W. 565) and Brackenbury v. Brackenbury (Id. 391), where a debt is suggested whether the Court would take the deed out of the possession of the party. The doubt in those cases was founded on the fact that the instrument was, for illegal purposes, concerted by both parties; but, where the instrument is free from all objection in that respect, the cases are clear that such instrument is binding at law, and, if binding, it ought to be produced. Unless, therefore, there is some reason for trying the case at law I think the decree must be for payment upon the admission of assets.

Declare that the deed of the 1st September 1829 constitutes a debt at law, and decree payment of the principal and interest on the same to the Plaintiff out of the assets of the testator, deducting thereout as in part payment thereof any sums which have been applied for his maintenance during his minority.