In a marriage settlement, the first defendant, a solicitor, advised the persons who were acting as trustees, though not yet formally appointed as such. He suggested a series improper of investments for the trust funds. The money was to be lent on speculative building, and the margin was unsatisfactory. The money was lost. Lord Herschell considered that, if the claimants had charged him with negligence as a solicitor and brought the action in time, they might well have succeeded, in which case both he and his partner would have been liable. But any such action was barred by the Statute of Limitations. Accordingly the claimants alleged that HB had intermeddled with the trust and was liable as a trustee de son tort. They alleged that he had laid out the trust moneys at a time when there were no trustees, and therefore must be taken to have acted as a principal in the matter and not as a mere agent for the trustees. Such a claim was not statute-barred.
Held: It is not within the scope of the implied authority of a partner in a firm of solicitors that he should act to make himself a constructive trustee, and thereby subject his partner to liability. ‘it is not within the scope of the implied authority of a partner in . . [a solicitor’s] business that he should so act as to make himself a constructive trustee, and thereby subject his partner to the same liability’.
Judges:
Lord Herschell, A L Smith LJ, Rigby LJ
Citations:
[1896] 1 Ch 199, [1895] UKLawRpCh 191
Links:
Jurisdiction:
England and Wales
Cited by:
Cited – Dubai Aluminium Company Limited v Salaam and Others HL 5-Dec-2002
Partners Liable for Dishonest Act of Solicitor
A solicitor had been alleged to have acted dishonestly, having assisted in a fraudulent breach of trust by drafting certain documents. Contributions to the damages were sought from his partners.
Held: The acts complained of were so close to . .
Cited – Paragon Finance Plc (Formerly Known As National Home Loans Corporation Plc v D B Thakerar and Co (a Firm); Ranga and Co (a Firm) and Sterling Financial Services Limited CA 21-Jul-1998
Where an action had been begun on basis of allegations of negligence and breach of trust, new allegations of fraud where quite separate new causes of claim, and went beyond amendments and were disallowed outside the relevant limitation period. . .
Lists of cited by and citing cases may be incomplete.
Vicarious Liability, Legal Professions, Trusts
Updated: 25 November 2022; Ref: scu.193863