such costs, charges, and expenses to be reckoned, stated, and paid as between attorney and client.

Mr. Pemberton and Mr. Heathfield, for the plaintiff, contended that the trustees were only entitled to their costs out of pocket; they cited Robinson v. Pett (1), and New v. Jones, in the Exchequer, before Lord Lyndhurst, on the 9th of August, 1833 (2).

Mr. Willcock, for the defendant Frowd, contended that the trustees were entitled to have their professional allowed.

Mr. Bickersteth and Mr. Wright, for Bond.

Mr. Tinney and Mr. Bird, for Palmer.

charges

Mr. Bethell, for the assignee of Elkington, who had become bankrupt.

Mr. Pemberton, in reply.

THE LORD CHANCELLOR (after disposing of other questions in the cause) said:

The next and the most important point is, as to the claim by the plaintiff, to have disallowed all the defendants' bills of costs, except money out of pocket.

It

appears that the four trustees were all solicitors, and the bill alleges that Mr. Frowd's two bills amounted to 7901. 5s. 2d., the joint bill of Elkington and Palmer to 680l. 15s. 3d., and Bond's bill to 238l. 18. 7d., making, altogether, 1,709l. 2s. That all these bills are to be examined and taxed is not disputed; but the question is, whether such taxation is to be a taxation of a solicitor's bill, in the usual course, between solicitor and client, or whether the Master is to be directed to allow only costs out of pocket, properly expended.

*

The first question is, whether the deed of trust disposes of this question; because the parties may, by contract, make a rule for themselves, and agree that a trustee, being a solicitor, shall have some benefit beyond that which, without such contract, the law (1) 3 P. Wms, 249, (2) An unreported case; see Lewin on Trusts,

would have allowed; but, in such a case, the agreement must be distinct, and in its terms explain to the client the effect of the arrangement; and the more particularly, when the solicitor for the client, becoming himself a trustee, has an interest, personal to himself, adverse to that of the client. It is not easy, in such a case, to conceive how, consistently with the established rules respecting contracts between solicitors and their clients, a solicitor could maintain such a contract, made with his client, for his own benefit, the client having no other professional adviser, and in the absence of all evidence, and of any probability, of the client (a woman, too) having been aware of her rights, or of the rule of law, or of the effect of the contract: but the necessity for following up these considerations does not arise in this case, unless the deed contains a distinct agreement for this purpose.

There are two parts of the deed applicable to this point; first, that part in which the trusts are declared, wherein it is provided that all costs, charges, and expenses of the deed, and all expenses, disbursements, and charges already or hereafter to be incurred, sustained, or borne by the trustees, or any of them, either in professional business, journeys or otherwise, for the purpose of negotiating or performing the agreements, trusts, and purposes before mentioned, and all costs, charges, and expenses of persons to be employed by them as surveyors, &c., and all other expenses of carrying the *trusts into execution, shall be paid, in the first place, out of the produce of the intended sales.

Now the costs in question being the ordinary remunerations of a solicitor, as distinguished from the costs out of pocket, cannot be considered as charges and expenses incurred, sustained, or borne by the trustees; but such expressions in terms apply to payments made or liabilities incurred.

The next provision is more specific; it provides that each trustee is to be at liberty to retain and reimburse himself all such reasonable costs, charges, and expenses as he may sustain or be put unto, such costs, charges, and expenses, to be reckoned, stated, and paid as between attorney and client; but this provision does no more than the rule of law would have done, a trustee's costs being taxed as between attorney and client. And what are the costs so to be taxed? Costs which the

trustee may sustain or be put unto; terms wholly inapplicable to sums claimed as remuneration.

There is nothing in either of these provisions which is peculiarly applicable to the case of the solicitor being also trustee. It cannot, therefore, be assumed that the intention was to provide for some other mode of dealing with that union of characters, than what the law would have enforced; and still less that, under such provision, a solicitor dealing with his client can be permitted to claim that which, without, at least, a specific contract with the client, and proof that the client was fully cognizant of her legal rights independently of such contract, and of the effect and legal consequences of the act upon such legal rights, he would not be entitled to claim.

It remains, therefore, to be seen what is the rule of law in cases in which no specific contract regulates the rights of the parties. It is clear that if an attorney be allowed to make profit, by means of professional business, of his office of trustee, it will constitute an exception to a rule well known and established in all other cases: Robinson v. Pett (1). A factor acting as executor is not so entitled: Scattergood v. Harrison (2); nor a commission agent: Sheriff v. Axe (3). Why is the case of a solicitor to constitute an exception to the rule? What is the reason given for the rule? It is, I think, well stated in Robinson v. Pett, "The reason seems to be, for that on these pretences, if allowed, the trust estate might be loaded, and rendered of little value." It is not because the trust estate is in any particular case charged with more than it might otherwise have to bear; but that the principle, if allowed, would lead to such consequences in general. In the case of the factor or agent, if the executors had employed other persons in those capacities, they would probably have been allowed the expenses; but if they are to perform those duties themselves, and to charge a profit upon such employments, what protection can the plaintiff have against extravagant charges? Do not these reasons apply to the case of solicitors? Does not this very case strongly exemplify the danger, and illustrate the merit of the rule which would avert (3) 4 Russ. 33.

(1) 3 P. Wms. 249. (2) Moseley, 128.

R.R.-VOL. XLV.

14

MOORE v.

FROWD.

[*51]

it? If, therefore, it had been necessary for me to come to a conclusion upon this point, without the aid of previous decisions. directly applicable, I should not have felt much difficulty in the performance of that duty; but still, I am glad to be relieved from that necessity, and to find my own opinion confirmed by that of Lord LYNDHURST, in the case of *New v. Jones (1), in which that question was deliberately considered, and decided conformably to the opinion I have expressed.

It was, indeed, said that a contrary decision had taken place in the case of Daniel v. Goldson (2), but I do not find that the point was there raised or decided. The Master, indeed, may have allowed such costs; but I do not find any judgment of the Court upon it.

In Lord LYNDHURST's judgment I entirely concur, and must, therefore, in this case, direct that, in taking the accounts. against the trustees, they should be allowed only the costs out of pocket.

The Master, in taking the accounts of the trustees, is not to allow to them any professional charges, or charges for loss of time, or other emoluments, but to allow only such charges and expenses actually paid by them out of pocket as he shall find to have been properly incurred and paid by them.

1836. Nor.

1837. Nov. 15.

Lord COTTENHAM,

L.C.

[52]

[58]

MALCOLM v. O'CALLAGHAN (3).

(3 My. & Cr. 52–63; S. C. 1 Jur. 838.)

Principles and practice of the Court with respect to allowances made to receivers for extraordinary services.

Unauthorized and unprofitable expenditure disallowed.

[IN this case the LORD CHANCELLOR (in reference to the point mentioned in the head-note) said:]

What are the ordinary duties of a receiver authorized to sue for a particular part of the estate supposed to be outstanding, when he exercises his own discretion without any other specific authority or direction from the Court? It has not, and cannot (1) See ante, p. 207. report of this case.

(2) Before the Vice-Chancellor in 1853. No reference is given to any

(3) Harris v. Sleep [1897]2 Ch. 80, 66 L. J. Ch. 596, 76 L. T. 670, C. A.

be contended that his ordinary duty would justify him in incurring the expenses of journeys to, and of residence in, a foreign country, whilst prosecuting in that country a suit which he had been authorized to commence. [His Lordship here referred to the proceedings to show that certain special orders which had been made authorizing the receiver to attend certain proceedings in Paris did not include the particular visits here in question.] A country solicitor is not, in general, allowed his costs of attending a suit in London, although his client may have requested him so to do. If, indeed, success had attended the exertions of the receiver, and he could have shown that such success had arisen from his presence in Paris, it might have been thought inequitable for the parties to take the benefit of such exertions without defraying the expenses which had attended them, although no previous authority for incurring them had been given. But the present is the case of an unauthorized and unprofitable expenditure. In the case of In re Montgomery (1), which was cited in the *course of the argument, the receiver of a lunatic's estate instituted proceedings which, being wrong in form, he abandoned, and having afterwards taken other proper proceedings, he was successful for the estate. The COURT there refused to allow him the costs of the abandoned proceedings, although the Master reported that the receiver acted bona fide, and ought to be allowed the costs. It is not easy to conceive a case in which such a claim, not founded upon the general practice of the Court, or upon any special order, and not sanctioned by success, could be maintained against the estate.

[The remainder of the judgment is occupied with an investigation of the special facts, showing that the expenditure was unprofitable as well as unauthorized.]

(1) 1 Molloy, 419.

MALCOLM

v.

O'CAL

LAGHAN.

[ *59 ]