298
4.
Further correspondence took place after calls had been made by the liquidator on the Plaintiff as already stated but the Defendant refused to indemnify the Plaintiff and this action was commenced.
It appears from the evidence as it stands that the Defendant became in October 1892 the sole beneficial owner of these shares the legal title to which was vested in the Plaintiff. Assuming this to be established their Lordships are at a loss to understand what more was required to create the relation of trustee and cestui que trust between the Plaintiff and the Defendant. The facts that they never stood în the relation of vendor and purchaser, that there was no contract between them, that the Defendant never requested the Plaintiff become his trustee are quite immaterial. All that is necessary to establish the relation of trustee and cestui que trust is to prove that the legal title was in the Plaintiff and the equitable title in the Defendant. This might be proved in many ways. The mode of proof is quite immaterial. Being proved, no matter how, the relation of trustee and cestui que trust thereby established.
to
was
No one can be made the beneficial owner of shares against his will. Any attempt to make him so can be defeated by disclaimer. But the moment the Defendant accepted the beneficial ownership of these shares he became the Plaintiff's cestui que trust and the Plaintiff had no option in the maiter.
The next step is to consider on what principle an absolute beneficial owner of trust property can throw upon his trustee the burdens inci- dental to its ownership. The plainest principles of justice require that the cestui que trust who
gets all the benefit of the property should bear its burdeus unless he can show some good
5
reason why his trustee should bear them himself. The obligation is equitable and not legal and the legal decisions negativing it unless there is some contract or custom imposing the obligation are wholly irrelevant and beside the mark. Even where trust property is settled on tenants for life and children the right of their trustee to be indemnified out of the whole trust estate against any liabilities arising out of any part of it is clear and indisputable; although if that which was once one large trust estate has been converted by the trustees into several smaller distinct trust estates the liabilities incidental to one of them cannot be thrown on the beneficial owners of the others. This was decided in Fraser v. Murdoch L. R. 6 A. C. 855 which was referred que to in argument. But where the only cestni trust is a person sui juris the right of the trustee to indemnity by him against liabilities incurred by the trustee by his retention of the trust pro- perty has never been limited to the trust property; it extends further and imposes upon the cestni que trust a personal obligation enforceable in This is no new equity to indemnify his trustee. principle but is as old as trusts themselves.
In Balsh v. Hyham 2 P. W. 453 the trustee sought indemnity in equity not against a liability incidental to the ownership of the trust property but against a liability incurred by him by bor- rowing money at the request and for the benefit of his cestui que trust. The Court decided that the Plaintiff was entitled in equity to the relief which he sought on the broad ground "that a cestui que "trust ought to save his trustee harmless as to all "damages relating to the trust." This language (although open to criticism if applied to cestuis
que trustent who are not sui juris and also sole beneficial owners) shows plainly enough that it was taken for granted as well settled that speaking generally absolute beneficial owners of property
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India.