Where they are not bound, 1 Vern. 261, 3 Bro. R. 96, 6 Ves. 654.n. on government securities. And in such case, the pur. chaser will not be answerable for any non-application (after such investing of the money) of any monies which may arise by the dividends or interest, or by any disposition of such funds, stocks, or securities: it not being possible that the testator should expect, from any purchaser, any further degree of care or circumspection, than during the time that the transaction for the purchase was carrying on, And therefore the testator must be supposed to place his sole confidence in the trustees. And this is the settled practice in these cases. And I have often advised so much, and no more, to be done; and particularly in the case of the trustees under the Duchess of Marlborough's will." Mr. Wilbraham is said to have been of the same opinion. 22. On the other hand, it has long been fully established, that where lands are vested in trustees to be sold, for payment of debts generally, without any specification of such debts, a purchaser is not bound to see to the application of his purchase money. 23. It is the same where lands are charged with the payment of debts generally. Lord Eldon has said, 7323. that a charge is a devise of the estate, in substance and effect, pro tanto, upon trust to pay the debts. And in another case he said, it had been long settled, that where a man by deed or will charges, or orders an estate to be sold, for payment of debts generally, and then makes specific dispositions, the purchaser is not bound to see to the application. 24. It has been stated that a purchaser is bound to see to the payment of legacies. But where a trust is created for the payment of debts and legacies, a purchaser is not bound to see that his money is applied in payment of the legacies, 25. A person devised his real estates to trustees, Rogers v. Skillicorne, upon trust to sell the same, and out of the money Amb. 188. arising from such sale to pay his own and his father's debts and legacies. Lord Hardwicke said-" The subjecting the estate to the payment of legacies, will not make the purchaser answerable for the disposition of the money; because the legacies cannot be paid without the debts: and they are not specified." Jebb. v. 26. In a modern case Lord Thurlow said, that where debts and legacies are charged on lands, the purchaser will hold free from the claim of the lega- 186.n.2d ed. tees; for not being bound to see to the discharge of debts, he cannot be expected to see to the discharge of legacies; which cannot be paid till after the debts. 27. Where a person devised his real estates to his executors, to be sold for payment of debts, in case Culpeper v. Ca 115. Aston, 2 Cha. Vide Fearn's contra. his personal estate should prove deficient; it was held that a purchaser was not bound to inquire Opin. 121. whether there was a deficiency of the personal estate or not. For if the personal estate was sufficient, yet he should hold the lands purchased, against the heir; and the heir should have his remedy against the executor. But if there be a lis pendens between the heir and executor, to have an account; it is sufficient notice in law, without actual notice of the suit; so that a purchaser takes it at his peril. 28. It has been long settled, that where lands are 1 Vern. 303, conveyed to trustees, in trust to sell and pay debts, if more is sold than is sufficient to pay the debts, that shall not turn to the prejudice of the purchaser, for he is not obliged to enter into the account; and the trustees cannot sell just as much as is sufficient to pay the debts. Lutwych v. 2 Bro. R. 248. Where the Receipt of the Trustee is sufficient. Anon. 29. In a case where lands were directed by will to be sold for payment of debts; and a decree made in Chancery, that the estate should be sold for that purpose; a purchaser under the decree refused to complete his purchase, because more of the estate was sold than was necessary. Lord Thurlow said"If the Master, in selling the whole, has consulted the convenience of the estate; he has acted right. The power given to the trustees was to sell the whole, or such part as might be expedient. The Court has decreed in the same way; and the Master, with the consent of the parties interested, has sold the whole. A purchaser cannot come in to object to it." The objection was over-ruled. 30. An opinion has long prevailed, that in all cases where land is vested in a trustee to be sold, the trustee is competent to give a discharge for the purchase money that the rule affecting a purchaser with misapplication of the trust money, only applies where there is no hand appointed to receive it. As in the case of a specific charge on the lands, in the hands of the heir or devisee; there a purchaser dealing with such heir or devisee, is bound to see that such charge is satisfied. This opinion is founded on the following authorities. 31. A person limited an estate to trustees, for pay1 Salk. 153. ment of debts and legacies. The trustees raised the whole money; and the heir prayed to have the land. This was opposed, because the trustees had not applied the money, but converted it to their own use; so that the debts and legacies remained unpaid. It was determined by the House of Lords, that the heir should have the land discharged; and the legatees should take their remedy against the trustees. For the estate was debtor for the debts and legacies, but not for the faults of the trustees: therefore was only liable so long as the debts and legacies might be paid. Where the land had once borne its burthen, and the money was raised, it was discharged; and the trustees liable. Baker, Trin. 378. 3d ed. 32. A purchaser objected to the title to an estate Cuthbert v. which was vested in a trustee, in trust to sell, and 1790. to divide the money amongst the children of certain Sugd. Vend. persons; on the ground that he would be liable to encounter the inconveniences of seeing to the application of his purchase money. Lord Thurlow decreed a specific performance of the agreement; and refused to give the purchaser his costs. Balfour v. Welland, 16 Ves. 151. 33. Lord Kenyon, when Master of the Rolls, in- 4 Ves 99, clined strongly to the opinion, that where trustees have power to sell, they must have the power incident to the character, namely, the power to give a discharge for the purchase money. And in a late case, where a purchaser objected to a title, on the ground that he was bound to see to the application of the money, Sir W. Grant over-ruled the objection upon another ground. But said "I think the doctrine upon that point has been carried farther than any sound equitable principle will warrant. Where the act is a breach of duty in the trustee, it is very fit that those who deal with him should be affected by an act tending to defeat the trust of which they have notice. But where the sale is made by the trustee in performance of his duty, it seems extraordinary that he should not be able to do what one should think incidental to the right exercise of his power: that is, to give a valid discharge for the purchase money. 34. It is the usual practice to insert a clause in all deeds and wills, by which trustees are enabled to Crewe v. Dicken, 4 Ves. 97. Trustees have equal Power, &c. Fellows v. Mitchell. sell lands, declaring that their receipts shall be a sufficient discharge to the purchasers; who shall not be answerable or accountable for the misapplication or non-application of the purchase money. And it is fully settled, that where a clause of this kind is inserted in a deed or will, by which trusts are created, trustees may make a good title to a purchaser. But in a case of this kind, all the trustees must join in the receipt. 35. Mrs. Crewe conveyed an estate to the use of herself for life, remainder to three persons, their heirs and assigns, in trust to sell; with a proviso that the receipts of those three persons should be a sufficient discharge to the purchasers. One of the trustees died; another refusing to act, conveyed his interest to the remaining trustee, who sold the estate. The purchaser refused to take the title, unless the trustee who had conveyed his interest would join in the receipt for the purchase money, which he declined. Lord Rosslyn said, he must allow the objection: if the trustee had renounced, he might dissent; for then the whole estate would have been in the remaining trustee. But according to the way they had managed it, he had accepted the trust, and conveyed away the estate. That part of the trust that consisted in the application of the money, he could not convey away. The purchaser taking the title with the knowledge of the trust, would be bound to see to the application of the money. 36. Trustees have all equal power, interest, and authority; they cannot act separately, but must all 1P.Wms.81. join, both in conveyances and receipts. But although two trustees join in a receipt, where the money is in fact paid to one of them only, yet the trustee who Vide Treat. of Eq. B. 2. c. 7. § 5. |