Trust – Powers and Duties of Trustees – Bank Stock
A truster directed her trustees to pay the interest of two sums of pounds 2000 to each of two legatees, and thereafter to divide the residue among certain persons. She empowered her trustees to continue to hold any or all of such shares or stocks as should belong to her estate, ‘with power to lend out on such security or securities, heritable or moveable, as they shall consider advantageous, the foresaid legacies of pounds 2000 and pounds 2000 respectively.’ Held (1) that the terms of the deed authorised the retention of certain bank stock as part of the capital, to be set apart for payment of one of the said legacies, and that the trustees, although of opinion that such an investment was not suitable for trust funds, did not act in breach of duty by continuing to hold the bank stock after consulting with the beneficiary and obtaining her approval; but (2) ( rev. judgment of the Court of Session) that the trustees having allocated and appropriated certain investments to each of the two capital funds from which the legacies were to be paid, and having held the funds as separate and distinct, were not entitled to recoup themselves for calls paid by them upon the bank stock belonging to one of these funds out of the other capital fund.
Judges:
Lord Chancellor Selborne, Lord Blackburn, and Lord Watson
Citations:
[1881] UKHL 740, 18 SLR 740
Links:
Jurisdiction:
Scotland
Trusts
Updated: 28 June 2022; Ref: scu.636799