300
this case.
S
feature of the case was strongly relied upon by the Defendant's Counsel as distinguishing it from those abore mentioned and reliance was placed on what Lord Blackburn said in Fraser v. Murdoch L.R. 6 A.C. about makers of trusts (see p. 872) and trusts to carry on business with particular funds (see p. 875). But their Lord- ships can find nothing in Lord Blackburn's judgment which is inconsistent with the prin- ciples which in their Lordships' opinion govern The fact that the Defendant did not create the trust on which the Plaintiff held the shares when they were first placed in his name affords the Defendant uo defence to this action. Although the Defendant did not create the trust he accepted a transfer of the beneficial ownership in the shares first as mortgagee and afterwards as sole beneficial owner with full knowledge of the fact that they were registered in the Plaintiff's name as trustee for their original purchasers and their assigns whoever they might be. By this acceptance the Defendant beenine the Plaintiff's cestui que trust; and the Plaintiff could not prevent it or effectually dispute his trusteeship for the Defendant. By this acceptance the Defen- dant created the trust for himself. Having done so the Defendant as the beneficial owner of the shares demanded from the Plaintiff and obtained dividends declared in respect of them. The upon them Defendant also paid calls made although he attempted to protect himself from any admission of liability by entering these payments in his books as made on behalf of the Plaintiff. Lastly when asked by the Plaintiff to procure a transfer of the shares out of the Plaintiff's name the Defendant refused to do so
and thereby compelled the Plaintiff to continue It is idle after this to hold them as his trustee.
to rely on the fact that the Defendant did not create the trust in the first instance; and idle to talk of renunciation or disclaimer of
y
He cannot
these shares by the Defendant. now get rid of the trust for himself which he created by becoming beneficial owner of the shares and which trust he has recognised since as subsisting.
It is quite unnecessary to consider in this case the difficulties which would arise if these shares were held by the Plaintiff on trust for tenants for life or for infants or upon special trusts limiting the right to indemnity. In those cases there is
no beneficiary who can be justly expected or required personally to indemnify the trustee against the whole of the burdens incident to his legal ownership; and the trustee accepts the trust knowing that under such circumstances and
in the absence of special contract, his right to indemnity cannot extend beyond the trust estate, ie., beyond the respective interests of his costuis que trustent. In this case their Lordships have only to deal with a person sui juris beneficially entitled to shares which he cannot disclaim. The obligation of such a person to indemnify
his trustee against calls upon them appears to their Lordships indisputable in a Court of Equity unless of course there is some contract or other circumstance which excludes such obligation. Here there is none. Whether the Plaintiff in this case could sue Benjamin and Kelly on any promise by them to indemnify him need not be discussed. Such a right if it exists in no way affects the obligation of the Defendant as the Plaintiff's cestui que trust. But it is obvious that any payment to the Plaintiff by Benjamin and Kelly or by the Defendant in respect of the calls would reduce the amount which the Plaintiff could recover from the Defendant or from them as the case might be.
For these reasons their Lordships will advise Her Majesty to allow the Appeal and to re- verse the judgments appealed from with costs;
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