a thesis - Institute of Advanced Legal Studies

114 IMPLIED TRUSTS.
the authority of A. or B., D. draws a cheque on the trust account
for the amount, X. and Y. apply the cheque in discharge of the
bill. They know that the 7701. is trust money. X. and T. must
repay the 750/. to the trust account. Bridgman v. Gill (1857),
24 Beav. 302.
3. A. and B., trustees, employ X., a solicitor, to receive the proceeds
of part of the trust estate from a purchaser. X. pays the
money to A. alone, without B.'s authority or receipt. A. misappropriates
it and dies insolvent. X. is a constructive trustee, and
must make good the loss to the trust estate. Lee v. Sankey (1872),
L. E. 15 Eq. 204.
B.— Cases in which Agent held not liable as Trustee.
1. A. and B., trustees, employ X. and Y., bankers, to collect
assets forming part of the trust fund. X. and Y. receive the assets
and apply them in payment of bills drawn on them by A. and B.
In drawing the bills A. and B. in fact commit a breach of trust,
but X. and Y. are unaware of this. X. and Y. are not liable as
constructive trustees. Ream v. Robarts (1819), 4 Madd. 332.
2. A., a sole surviving trustee, desires to retire and appoint B.
in his place. He instructs X., a solicitor, to prepare the necessary
documents. X. advises A. against appointing B. as sole trustee,
but A. insists, and X. prepares a deed of appointment of B. as sole
trustee and a deed of indemnity. Y., another solicitor, approves
the deeds on behalf of C., the ccstni que trust, after having pointed
out to 0. the risk of loss of the trust fund, and obtained C.'s
express instructions to carry out the arrangement. B. misappropriates
the trust fund. Neither X. nor Y. ever has control of the
trust fund, nor have they any apprehension of any fraudulent
design on the part of A. or B. Neither X. nor Y. is liable as a
constructive trustee. Barnes v. Addy (1874), L. E. 9 Ch. 244.
3. A. is a sole trustee. It is arranged that A. shall not be
entitled to draw on the trust account at the bank without the concurrence
of B. and 0., who are to initial her cheques. A. draws
and B. and 0. initial cheques on the account, for purposes which,
as B. and C. are aware, are a breach of the trust. B. and 0. do
not thereby become constructive trustees. In re Barney, (1892)
2 Ch. 265.