[equity, statute of limitations - trusts - account of profits - statute of limitations, equity - Eagar, Edward]

Eagar v. Hall

Supreme Court of New South Wales

Willis J., 7 January 1840

Source: Australian, 11 January 1840

SUPREME COURT IN EQUITY

            Before Mr. Justice Wills. - Geoffrey Eagar and another, complaints; Edward Smith Hall and others, defendants.

This was a suit at the instance of two of the younger children of Mr. Edward Eagar(formerly ment of certain trust property from Messrs. E.S. Hall and W.S. Bell, into whose possession (in the respective capacities of trustee and agent) the trust property had come. The facts, as they appear on complainant’s bill, are as follows:-

In 1821, Mr. Edward Eagar executed a trust deed, by which he assigned to Messrs. Hall and Redfern a herd of cattle, in number fifty eight head of various sexes and ages, in trust for his children, Richard Edward, Geoffrey, Frances, and Edward Eagar the younger, and for such other children as he might subsequently have share and share alike, and for their sole use and benefit. Hall, in the same year, duly received these cattle into his possession. A short time after the execution of the deed Mr. Eagar left the colony, and has not since returned. Redfern, Hall’s co trustee, also left the colony at the same time, and died abroad, without ever having acted or interfered in the management of the trust. The trust stock continued in Hall’s uncontroulled custody and possession until the year 1827, when he made an agreement (as acting trustee for the children of Edward and Jemima Eager) with Mr. William Sims Bell, of Hunter’s River, to agist a portion of the trust stock on thirds, Mr. Bell binding himself to furnish Mr. Hall with faithful and accurate accounts and returns every six months, and agreeing to make good all losses occasioned by the neglect or carelessness of servants. Under this agreement Mr. Bell, in the same year, received into his possession two hundred and twenty-three head of the trust cattle, but made no returns from the year 1827 until the year 1835. In this last-named year returns were made, for the first time, in a lump; which returns were obviously incorrect, the increase to 1833 amounting only to five hundred and ninety head, while such increase (according to a letter of Hall’s, dated 27th March, 1833, and produced in evidence) should have amounted, at that period, to upwards of eight hundred head, besides a large number of bullocks. Complainants’ bill further states, that Hall had only delivered over a portion of the trust stock to Bell, and that he had retained on his own farm, at Lake Bathurst, one hundred head of cattle, for which no accounts had been rendered - that Bell had rendered no accounts whatever of the trust property under his charge since the year 1835, although there must now be a very large amount of cattle in the hands of both parties - that these accounts had been frequently and ineffectually applied for - that Hall and Bell had made improper and unauthorised deliveries of the trust cattle, in their charge, to persons wholly unconnected with the trust - that, in particular, a large number had been delivered over to Mr. William Pendray, in payment of a debt of £791, alleged to have been contracted by the minors; and that part of this number had been delivered by Bell, in opposition to the orders of Hall.

The relief sought by complainants, on these facts, was the appointment of a new trustee in Hall’s stead, empowered, under the direction of the Court, to take the accounts of the defendants.

Hall, in his answer, denies the trusteeship, but admit the receipt of the cattle in 1821, and affirms that he was the mere agent or agister of Mr. Eagar, which agency had been determined by his giving over a portion of the cattle to Bell, and the rest, subsequently, to the bailiff of George Bunn, under the directions of Mrs. Eagar, who held a power of attorney from her husband, and he pleads a bill filed against him by the minors, (by W.C. Wentworth as next friend), in 1828, for a like purpose as the present, in bar, as a suit still pending.

Bell, in his answer, admits the agreement of lst May, 1827, and that he received under that agreement about three hundred head of horned cattle, and that he knew the same to be trust property, but he affirms that he had settled all disputes with Hall in 1836, by means of an arbitration, and pleads in bar to the present suit, that he is not answerable to complainants, but merely to Hall as his principal.

Complainants, in support of their claim, produced and proved the trust deed of 21st October, 1821. The original agreement between Hall and Bell, of lst May, 1827, was not forthcoming and appears to have been lost; but, complainants proved its contents by secondary evidence, and in particular that it was a specific contract between Hall, as acting trustee for the children of Edward and Jemima Eager, on the one part, and defendant Bell on the other. A letter of Hall’s to Mr. James Norton, (at that time, solicitor to complainant’s mother), of dated 27th March, 1833, was also produced and proved, in which letter Hall acknowledges the trust in the fullest manner, and after stating that the equity proceedings of 1828 were instituted by Mr. Wentworth at his own particular request, and from instructions supplied by himself, for the express purpose of legally divesting him (Hall) of the trusteeship; he goes on to say that he is most willing to call or assist in calling Bell to account, making it appear that Bell had never accounted, or been called to account from the date of his agreement, lst May 1827, up to the date of Hall’s letter, viz: 27 March, 1833. Complainants also produced and proved Bell’s returns, purporting to show the increase, &c. of the cattle from 1827 to 1833, and headed “Returns of horned cattle, the property of Mr. E. S. Hall as acting trustee for the children of Edward and Jemima Eagar in charge of Mr. W. S. Bell, at Hunter River.” These returns, which defendant Bell, in his answer, alleges to be performance of his contract of lst May, 1827, were in reality sent to the trustee in a lump in 1836, and instead of showing the increase of the stock at intervals of six months, profess to show such increase at intervals of time, varying from give to sixteen months. Three returns also recited deliveries to improper and unauthorized parties, and among the rest to Pendray on the orders of the ceste qui trust.

Complainants rested their case on the above proofs, and after the examination of one witness for the defence, whose evidence merely went to show that proprietors of stock frequently put out sheep and cattle on thirds, which meant a third of the increase only, arguments of counsel on various points arising out of the case were heard, at the close of which Mr. Justice Willis said, that he was most anxious to do substantial justice to all the parties concerned, and would therefore defer judgment until he had maturely considered the case.

The hearing occupied the entire day.

Counsel for complainants, Messrs. Foster and Donnelly; for defendant, Messrs. à Beckett and Broadhurst.

Willis J., 10 January 1840

Source: Sydney Herald, 22 January 1840[1]

SUPREME COURT. - (In Equity.)

            Friday, January 10th. - Before Mr. Justice Willis.

            Eagar and another v. Hall and others. - This was an application to the Court praying that the defendants might be decreed to render an account respecting certain cattle and their increase which had been delivered to the defendant Hall in trust for the plaintiffs.  The case was argued at considerable length on a previous occasion when his Honor took time to consider his judgment, which he delivered this morning.  He said - All perhaps which my duty strictly requires on the present occasion, is to order the bill to be dismissed with costs against Bell; and to refer it to the master to take an account of the trust property, which on the - of September, 1828, was, and which after making all just allowances, now is, or without wilful neglect or default might have been, in the possession, custody or power of the defendant Hall, reserving all further directions and costs.  It may be more satisfactory however to give some little explanation of the circumstance, which induce me to make this order, With regard to the defendant Bell; when I find it stated in the bill, “that Hall solely acted in the trusts,” and that it is expressly charged “that Hall is answerable for the value and proceeds of the stock that may have been sold or delivered over by Bell, or have been in any wise sold, disposed of, or made away with by Bell,” I think it would be very inconsistent with the case which the plaintiff himself puts on the pleadings to exempt Hall from this liability by transfering it (as contended for at the bar) to Bell.  Bell dealt with Hall alone, and was his agent only; Bell does not appear to have had any authority from the Plaintiffs or indeed, to have had any communication with them so as by possibility to be considered on any occasion as a substituted trustee, as agent for, or in any wise directly connected with the cestuique trust, in the course of these transactions.  This case therefore, seems clearly distinguishable from those of Myler v. Fitzpatrick, 6 Mad. Rep. 360, (which is in fact, and authority against the defendant,) and that of Macdonnel v. Harding, 7 Sim. 178.  But the case of Twyford v. Trial, 7 Sim. 92, according to the note of it which I have seen seems in principle, precisely in point.  It is as follows:- A. a partner in a house of agency in India, died having by his will directed his estate to be called in and invested on certain trusts, and appointed two of his co-partners his executors: they however, suffered his share of the partnership to remain in the house.  After A.’s death, B. and C. were admitted as partners, and they knew that A.’s share was in the house, and that it was subject to the trusts of his will.  They afterwards retired, and other partners were admitted - the house ultimately failed.  It was held that B. and C. were not responsible for the breach of trust committed by their co-partners, the executors.  With reference to the defendant Hall, I can have no doubt of his being accountable to the children of Edward Eagar, but it is admitted that the account now sought is for transactions subsequent to the decretal order in the former suit, wherefore that suit could not be for the same matter; but as an account of the trust property might have been taken at the time that order was made (had the suit been properly conducted), the utmost, I think, that can be done on the present occasion, is, to direct an account from that period.  There are cases, especially with reference to the statute of limitations, in which Courts of Equity have limited an account to six years, and in others even to filing of the bill.  In this case, however, I see no reason for any other limitation than that which I have fixed upon.  I will merely add, with respect to the words “all just allowances,” that what may or may not be embraced in these terms, is properly matter for future determination.  But it may be well to notice, that even without the usual stipulation in a trust deed, trustees should reimburse themselves all costs, charges, and expenses, incurred in the execution of the trust; a trustee is entitled to all these allowances, in all cases unattended with mismanagement or breach of trust, and that such allowances (should the nature of the trust, or circumstances of the case require it), will also include, without any express declaration, the expense of employing a bailiff, an accountant, or an attorney.