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statute (1). The advance of money on the security of a deposit of title-deeds creates only a simple contract debt, and therefore the remedy against the debtor personally, irrespective of the charge on the land, is within the statue of James (2). An action of debt against a sheriff for money levied by him under a fi. fa. on a judgment obtained by the plaintiff is a debt founded on record, and therefore not within the statute (3). An action of debt on an award made by an arbitrator under his seal was held not to be within this statute (4). But by 3 & 4 Wm. IV. c. 42, s. 3, actions of debt upon any award when the submission is not by specialty, are required to be brought within six years (5). Where simple contract debts were recited in a deed which contained a covenant by the creditor not to sue for a certain time, but there was no covenant by the debtor for payment of the debts, it was held that the debts were not made specialty debts by the deed so as to be excluded from the statute (6). Where a debtor executed a warrant of attorney in favour of a creditor to secure a debt, but no judgment was entered
for the amount, it was held that the case was not taken out of the statute of James, as the warrant of attorney does not create a specialty debt until judgment is entered up in pursuance of it (7).
Where two join in a bond, and one pays the whole debt, the liability of the co-debtor to the one who pays the whole debt was, before the Mercantile Law Amendment Act, 1856, a liability by simple contract, and therefore within the statute of James (8). But now by the 5th section of the Mercantile Law Amendment Act,
(1) Alliance Bank of Simla v. Carey, 5 C. P. D. 429.
(3) Cockram v. Welby, 2 Show. 79; 2 Mod. 212.
1856 (1), when one joint obligor pays the whole debt, he stands in the place of the creditor, and may sue in his
Actions by cestuis que trustent against trustees.
The statute of James applies to an action founded on a devastavit against an executor personally (2). Such an action is barred at the expiration of six years from the devastavit, but the defence of the statute can only be set up when the executor is sued personally ; when he is sued as executor he cannot set up a devastavit by way of defence so as to bring himself within the protection of the statute (3).
The statute of James does not apply to actions brought by cestuis que trustent against their trustees on an express trust. By the Judicature Act, 1873 (4), s. 25, subs. 2, “No claim of a cestui que trust against his trustee for any property held on an express trust or in respect of any breach of such trust shall be held to be barred by any Statute of Limitations.” This is a statutory enactment of that which has always been recognised in Courts of Equity (5). Some exceptions have been engrafted on the rule by the Trustee Act, 1888 (6), the provisions of which will be more conveniently discussed hereafter (7).
The decisions, with reference to the statute, defining who are and who are not trustees, have given rise to some nice distinctions. A banker and his customer do not stand in the relation of trustee and cestui que trust, but only of debtor and creditor by simple contract, and an agreement to pay interest makes no difference in this respect (8). Where, however, trustees had an account with
(1) 19 & 20 Vict. c. 97.
(2) Thorne v. Kerr, 2 K. & J. 54. In re Gale. Blake v. Gale, 22 Ch. D. 820.
(3) In re Mursden. Bowden v. Layland, 26 Ch. D. 783. In re Hyatt. Bowles v. Hyatt, 38 Ch. D. 609. (4) 36 & 37 Vict. c. 66. (5) In re Cross. Harston v. Tenison, 20 Ch. D. 121. (6) 51 & 52 Vict. c. 59. s. 8. (7) See p. 12 and post, Part IV. Chap. II. (8) Foley v. Hill and cases cited, 1 Phill. 399-404; 2 H. L. C. 28; Pott v. Clegg, 16 M. & W. 321.
Who are trustees.
bankers who had notice that it was a trust account, and the bankers, upon a cheque being drawn on the account at their suggestion by the husband of the tenant for life of the trust fund, applied the cheque in discharge of a debt due to them from him, it was held in a bill filed by the trustees against the bankers that the Statute of Limitations did not apply (1). The liability of a solicitor to account for money of his clients received in the ordinary way of business is a liability by simple contract, and the statute runs in his favour (2). Where a solicitor is employed to invest his client's money in a particular security, the relation of trustee and cestui que trust does not exist between the solicitor and his client; and where a solicitor is employed to find securities to be approved by the client and then to invest, the solicitor is not a trustee if the client approves of the investment (3). But when a solicitor or agent has general authority to invest money in his hands on sufficient security, the employment is fiduciary, and the statute will not run (4). Where an agent is employed to sell real estate and collect personal estate and invest the proceeds in land or funds as he should think fit, with power to vary the securities and to deal with the fund just as if the principal were himself dealing with it, such an agent is a trustee, and the Statute of Limitations does not apply (5). So where one person is left in entire management of the affairs of another person with power to act as he should think most advantageous to the owner, the relation of a trustee and cestui que trust exists (6). The statute does not run between partners, but begins to run
(1) Bridgman v. Gill, 24 Beav. 302. See Ex parte Gowers, 3 Mont. & A. 172.
(2) In re Hindmarsh, 1 Dr. & Sm. 129; Watson v. Woodman, L. R. 20 Eq. 721, at p. 731.
(3) Dooby v. Watson, 39 Ch. D. 178.
as soon as the partnership is determined (1). A surviving partner is not a trustee for the representatives of the deceased partner, and the statute runs in favour of a surviving partner (2). Where a person, who had during the lifetime of an intestate received the rents of the property of the intestate as her agent and paid them to a separate account at his bank, continued after the death of the intestate to receive the rents and pay them into his bank as before, stating that he was acting as agent for the true heir whoever he might be, it was held on his being sued by an assignee of the heir that he had made himself trustee of the accumulated rents, and that the claim for these rents was not barred by statute (3). Where a fund was established for granting pensions and annuities to members and their widows and children, and certain persons were appointed managers
and declared to be trustees of the fund, and the property was vested in them, it was held that they were trustees for the persons who had a right to have a certain portion of the fund appropriated to them, and that a defence of the statute could not be set up against a claimant on the fund (4). A receiver appointed under an order of the Court is a trustee, and cannot avail himself of the statute (5). The statute does not apply to a claim against directors of a company for breach of trust or to a proceeding under sect. 165 of the Companies Act, 1862 (C). An auditor of accounts is not a trustee, and the statute runs in his favour (7); so too of the secretary of a company (8).
(1) Barton v. North Staffordshire Railway Co., 38 Ch. D. 458, 463.
(6) 25 & 26 Vict. c. 89. In re Exchange Banking Co. Hitcroft's Case, 21 Ch. D. 519. In re Shurpe. In re Bennett. Masonic and General Life Assurance Co. v. Sharpe (1892), 1 Ch. 154. Municipal, &c., Co. v. Pollington, 63 L. T. 238.
(7) Leeds Estate Building and Investment Co. v. Shepherd, 36 Ch. D. 787.
(8) Municipal, 6c., Co. v. Pollington, ubi supra.
Now by sect. 8 of the Trustee Act, 1888 (1), a trustee or any person claiming through him may avail himself of the statute in all cases except where the claim is founded Trustee
. upon fraud or fraudulent breach of trust to which the Act, 1884. trustee was party or privy, or where the claim is to recover trust property or the proceeds thereof still retained by the trustee or previously received by the trustee and converted to his use (2).
The right which simple contract creditors now have Right of by statute (3) against the real estate of their deceased simple debtors is within the equity of the statute of James (4); debtors
against so also was the right of marshalling, which before real assets. 3 & 4 Wm. IV. c. 104, was the only means whereby simple contract creditors could get at the real estate of a deceased debtor (5).
There was no statute which limited the time for apply. Action for ing for a writ of mandamus under the Common Law Procedure Act, 1854 (6), s. 68. Consequently, in an action against a local board for money due from the board claiming a mandamus to the board to levy a rate to pay the debt, a plea averring that the cause of action did not accrue within six years was held bad on demurrer (7). The 68th section of the Common Law Procedure Act has been repealed (8), and the procedure is now regulated by R. S. C., 1883, 0. LIII. rr. 1-4 (9); but it seems that the case cited still holds good, and that no Statute of Limitations applies to a claim for a mandamus in an action. But in such an action a defence that the debt for which the rate was to be levied
(1) 51 & 52 Vict. c. 59.
(2) See Moore v. Knight (1891), 1 Ch. 547; re Bowden, Andrew v. Cooper, 45 Ch. D. 444; re Gurney, (1893), 1 Ch. 590.
(3) 3 & 4 Wm. IV. c. 101.