RESERVATION OR SALE OF MINERALS. 281 or administrator.* This provision relieves trustees from much embarrassment and danger; for before it passed, a trustee paying without knowledge of the death might have been compelled to repay the money; but this remedy does not affect the right of the party entitled to the money against the person who receives it. The Legislature have thought fit to give validity to dispositions by trustees, with powers to dispose of land by sale, exchange, partition, or enfranchisement, where they have excepted or reserved the minerals, or have disposed of the minerals separately from the residue of the land, such disposition not being expressly authorised nor forbidden by the instrument creating the power; but this does not extend to sales already declared to be invalid, or to proceedings then pending; and power is given to the trustees to except or reserve the minerals upon disposing of the land, or to dispose of the minerals separately from the land. But this does not extend to cases where the act is forbidden by the instrument creating the power, and the previous sanction of the Court of Chancery is required to such dispositions. The Act does not extend to Ireland or Scotland. Where a pecuniary or residuary legatee is abroad, an executor or administrator may pay the legacy or residue, after deducting the duty, into the Bank, with the privity of the Accountant-General of the Court of Chancery, by whom it will be invested in the 3 per cents for the legatee, who may obtain it upon a summary application to the Court of Chancery. Or a receipt for it may be signed abroad, and stamped, within twenty-one days after it is received in this country,§ and can then be acted upon by arrangement between the parties. Although the instrument creating the trust may not * 22 & 23 Vict., c. 35, s. 26. +25 & 26 Vict., c. 108. 282 TRUSTEES' INDEMNITY. contain the usual clauses for the indemnity and reimbursement of trustees, yet the late Act now supplies the omission, and indeed renders it unnecessary, if not improper, to introduce such clauses in a deed or will. * * 22 & 23 Vict. c. 53 s. 31. See 24 & 25 Vict., c. 84, as to gratuitous trustees in Scotland. PUNISHMENT OF FRAUDULENT TRUSTEES. 283 LETTER XXVI. I HAVE already told you that a legislative power has been given to our criminal courts to punish fraudulent trustees. The enactment is, "that if any person, being a trustee for the benefit, either wholly or partially, of some other person, or for any public or charitable purpose, shall, with intent to defraud, convert or appropriate the same, or any part thereof, to or for his own use or purposes, or shall, with intent aforesaid, otherwise dispose of or destroy such property, or any part thereof, he shall be guilty of a misdemeanour;" but no prosecution for the offence is to be commenced without the sanction of the Attorney-General, or, if the office be vacant, of the Solicitor-General.* If any civil proceeding shall have been first taken against the trustee, then no person who shall have taken such civil proceeding can commence any prosecution under the Act without the sanction of the court or judge before whom it has been laid or shall be pending. This provision applies only to a trustee on some express trust created by some deed, will, or instrument in writing; but it includes the heir and personal representative of any such trustee, and also all executors and administrators, liquidators under the Joint Stock Companies Act, and all assignees in bankruptcy and insol vency. The property protected by the Act includes every This seems to be the meaning of the statute, but it is obscurely worded. 20 & 21 Vict., c. 54. See 22 & 23 Vict., c. 35, s. 24, as to fraudulent concealments by sellors or mortgagors, or their solicitors or agents, Letter 5, supra. 284 PUNISHMENT OF FRAUDULENT TRUSTEES. description of real and personal property, goods, raw or other materials, money, debts, and legacies, and all deeds and instruments relating to the right to any property, or giving a right to receive any money or goods; and also includes not only such real and personal property as may have been the original subject of a trust, but also any real or personal property into which the same may have been converted or exchanged, and the proceeds thereof, and anything acquired by such proceeds. The same guilt is attached to any banker, merchant, broker, or agent intrusted for safe custody with the property of any other person, who shall, with intent to defraud, sell, negotiate, transfer, pledge, or in any manner convert or appropriate to or for his own use such property, or any part thereof. In like manner, any person intrusted with any power of attorney for the sale or transfer of any property, who shall fraudulently sell or transfer, or otherwise convert such property, or any part thereof, to his own use or benefit, will be guilty of a misdemeanour. And any person receiving any chattel, money, or valuable security, which shall have been so fraudulently disposed of, as to render the party disposing thereof guilty of a misdemeanour under the Act, knowing the same to have been so fraudulently disposed of, will be guilty of a misdemeanour. The punishment of a guilty person is at the discretion of the Court-penal servitude for three years, or such other punishment by imprisonment for not more than two years, with or without hard labour, or by fine, as the Court shall award. Persons are bound in all civil courts to answer fully, and make a complete discovery; but their answers cannot be used against them in proceedings to punish them under the Act. No legal or equitable remedies against PAYMENT OF FUND INTO COURT. 285 the wrongdoer are to be impeached by his conviction, or any proceeding under the Act; but his conviction. cannot be received in any action or suit against him; nor will any agreement by, or security given by any trustee, having for its object the restoration or repayment of any trust-property misappropriated, be prejudiced by the Act. This important statute cannot be too generally circulated. Whilst it inflicts a severe punishment on a fraudulent trustee, it guards against a malicious or unfounded prosecution, and enables all men to prosecute any banker, merchant, broker, attorney, or agent who shall act fraudulently with regard to trust property. There are other important provisions, relating principally to directors, &c. of corporations and public companies, over which they would do well "to ponder and pause," but which are not pertinent to the objects of this correspondence.* On the other hand, Parliament has provided for the relief of trustees where they are desirous of being relieved from the responsibility of administering their trust *Yet they ought to be generally known. It is made a misdemeanour to be guilty of any of the following offences,-1, Any director, member, or public officer of any corporation or public company fraudulently appropriating any of their property; 2, Any director, public officer, or manager receiving any of their money or other property otherwise than in payment of a debt, and, with intent to defraud, omitting to make, or causing to be made, a true entry thereof in the books; 3, Any director, manager, public officer, or member, with intent to defraud, destroying, altering, &c. any of the books, papers, writings, or securities, or making or concurring in making any false entry or any material omission in any book of account, or other document; 4, Any director, manager, or public officer making, circulating, or publishing, or concurring therein, any untrue statement or account, which he shall know to be false in any material particular, with intent to deceive or defraud any member, shareholder, or creditor of such body corporate or public company, or with intent to induce any person to become a shareholder or partner therein, or to intrust or advance any money or property to such corporation or company, or to enter into security for the benefit thereof. 20 & 21 Vict., c. 54, ss. 5, 6, 7, 8, 10. |