It is a general rule in equity that every person coming into possession of trust property, with notice of the trust, is to be considered as a trustee, and therefore bound, with respect to that property, to execute the trust (m).

Although the rules of equity, with regard to trusts, are not essentially such as regulate the decisions of a court of law, yet in the construction of words, whereby trusts of real or personal estates are limited, whether by deed or will, equity has generally followed the law in regard to the creation and limitation of legal estates (n).

Where a trust estate is created, either by will or deed, it will be subject to the cognizance of a court of Equity; but where a conveyance or devise is of a legal estate, it must be determined upon by the jurisdiction of a court of common law (0).

Previous to the passing of the statute 3 & 4 W. 4, commonly called the Dower Act, a widow was not dowable out of a trust estate one of the effects of that statute, however, was to give her the same right out of a trust estate as she has out of a legal estate; and the cestui que trust has the like power over the trust estate as the owner of a legal estate possesses; for the trustee possesses no power whatever over the trust estate, but what is connected with the benefit of the cestui que trust.

It is a rule of a court of Equity that where a trust is once created it shall never fail for want of a trustee; therefore, if there be a devise of real estate in trust, but no person named who shall act as trustee, the court will constitute the heir at

(m) Daniels v. Davison, 16 Ves. 249; Adair v. Shaw, 1 Sch. & Lefr. 262. (n) Duke of Norfolk's case, 3 Ch. Cas. 48; Bale v. Colman, 1 P. Wms.

143.

(0)

Madd. 452.

law a trustee; and in the case of a bequest of personalty it will consider the personal representative as a trustee (p); and where trustees disclaim or refuse to act, the execution of the trust will devolve on the court.

It may be further observed that, whenever the legal and equitable estate unite together in the same person, the equitable estate will merge in that of the legal, and will no longer be subject to a court of Equity; for a man cannot be trustee for himself.

Trustees will be held accountable to their cestui que trust for any breach of trust arising from negligence, malfeasance, or a gross misapplication of the trust property: the court will also charge the representatives of trustees with the consequences of an abuse of trust, although they may have derived no benefit from it, and notwithstanding they had paid all his debts, of which they had any knowledge, out of the assets, and had distributed the whole surplus among his residuary legatees many years before, and at a time when they had no notice of the breach of trust or of any claim in respect of it (q); but where there has been no mala fides on the part of the trustee, the court will not deal severely with him upon slight grounds, and will, therefore, in such a case, endeavour to discharge a trustee from any mischief that may arise from a misapplication of the trust money (r).

Where an executor passes his accounts in the court of Chancery he is discharged from further liability, and the creditor is left to his remedy against the legatees; but if he

(p) White v. White, 1 Bro. C. C. 12.

(q) Knatchbull ". Fearnhead, Myl. & Cra. V. 3. 122; see Wedderburn *. Wedderburn, 2 Keen, 749, S. C. on appeal, 4 Myl. & Cr. 52. (r) Trafford v. Boehm, 3 Atk. 444.

pay away the residue without passing his accounts in court, he does it at his own risk (s).

Also, if an executor retain assets in his hands, and apply them for his own purposes, he will be held to pay interest thereon at 4 per cent (†).

It was stated by lord Mansfield, in a certain case (u), that the statute of limitations does not destroy a debt, but only takes away the remedy; therefore, where a testator by his will devises his real and personal estates charged with the payment of his debts, such a declaration will, upon the principles of equity, have the effect of reviving a debt barred by the statute previous to the commencement of the suit, (v) though it would not have that result where the statute had fully operated against the debt before the testator's decease (w) But it has been lately decided in the house of lords, in Scott v. Jones, upon appeal, that a debt, although not barred at the time of the testator's decease, may, nevertheless, become so afterwards as to the executors and legatees, notwithstanding a charge by the testator of his debts upon his personal estate, 4 Cla. & Fin. 4, 382; this case reversed that of Jones v. Scott cited in the margin, and was followed by Lord Cottenham in Freake v. Cranfeldt, 3 My. and Cr. 499.

Where the trustee makes use of the trust property on his own account, the cestui que trust may compel him to refund the same with interest, or account to him for whatever profits

(s) Knatchbull v. Fearnhead, Myl. & Cra. V. 3. 126.

(t) Hall v. Hallett, 1 Cox. 134.

(u) Quantock v. England, 5 Burr. 2628. 2 Bl. Rep. S. C.

(v) Stackhouse v. Barnston, 10 Ves. 453. Jones v. Scott, 1 Russ. & My. 255.

(w) Burke v. Jones, 2 V. & B. 275.

he may have made.

But should the speculations of the trustee turn out unfortunate, he is still liable to the cestui que trust for interest on the trust fund (x). So, if a trustee invests the trust money in a fund which the court does not adopt, and there happen to be a fall in the stocks, he must make good the deficiency (y); if, on the contrary, there arise any profit, it belongs to the cestui que trust; and it has been determined, upon the same principle, that if a trustee mixes trust funds with his private moneys, and employs them both in an advantage of his own, the cestui que trust may, if he think fit, insist upon having a proportionate share of the profits instead of interest on the amount of the trust fund so employed (2). But the trustee may relieve himself from all liability by laying out the trust money in the reduced bank annuities, or 3 per cent. consols, which is the fund the court adopts (a). A trustee should, therefore, for his own security, endeavour to adhere to the tenor of his trust as closely as possible; for as the office of a trustee, as well as an executor or administrator, is considered honorary, they are allowed no remuneration for care and trouble, unless it be especially provided for in the deed or will creating the trust; and it has been determined that an executor will receive no allowance for his management, time, and labour, expended in carrying on a business after a testator's death (b); but persons holding the situation of trustees will be allowed all fair and honest expenses incurred in executing the purposes of the trust (c).

(x) 3 Bro. C. C. 198; Massey v. Davis, 2 Ves. Jun. 320.
(y) Phayre v. Perce, House of Lords, 3 Dow. 128.

(z) Docker v. Somes, 2 My. & K.

(a) Holland v. Hughes, 16 Ves. 111.
(b) Burden v. Burden, 160 Ves. 170.
(c) Burge v. Brutton, 2 Hare, 373.

The court will, for the sake of the public, extend its full protection to trustees in the exercise of every reasonable precaution, and requiring full proof of the title of parties urging their claims under the trust. But if, after having received full evidence of such title, a trustee shall perseveringly persist in withholding the fund from the party to whom it really belongs, upon grounds which wholly fail, and especially where a part of those grounds is a claim in which that trustee is himself interested, the court will not, upon the same rules, allow the trustee so to conduct himself, without paying the costs of such a mode of proceeding (d).

If the creditor of a trustee take the property or goods which form the subject of trust into execution, the court will convert such creditor himself into a trustee (e).

There is a difference between the amount of liability of executors and trustees in respect of their joint receipts; for it has been said that, if two executors join in giving a discharge for money, they are both accountable, though only one actually received it (ƒ). But if two trustees join in a receipt or conveyance, and one receive the money, only the receiving trustee shall be charged, because the other joined purely for the sake of conformity (g); whereas, in the case of executors, as one executor alone might give a discharge, the joining of the other is an unnecessary act, with which he might refuse to comply. Indeed, Lord C. Harcourt held that two executors joining in a receipt, and one only receiving the money, are both liable in the case of a creditor, but not to

(d) Froste v. Hamilton, V. C. Knt. Bruce's Court, May 3, 1842. (e) Foley v. Burnell, & Anr. 1 Bro. C. C. 274.

(f) Ex Parte Belcher; Ex Parte Parson; Amb. 219. (g) Fellowes v. Mitchell, 1 P. Wms. 81.