Equitable Relief for Unpaid Cestui Que Trust: Extension to Inter Vivos Settlements, Summaries of Law

Download Equitable Relief for Unpaid Cestui Que Trust: Extension to Inter Vivos Settlements and more Summaries Law in PDF only on Docsity! RE DIPLOCK-A REAPPRAISAL. In the years that have elapsed since the decision of the Court of Appeal in Re Diplock1 and, with regard to the action in personam, its affirmation by the House of Lords in Ministry of Health v. Simp- son,2 the rules laid down therein appear to have been accepted with more resignation than criticism. The purpose of this article is to examine two questions. In the first place, when considering the rights of the unpaid beneficiaries to trace the trust property in rem, did the Court of Appeal apply the equitable tracing rules correctly? Secondly, in view of the fact that the House of Lords may be considered to have confined its decision, as to the action in personam, to trusts arising out of the administration of the estates of deceased persons,5 is there any principle either of law or of equity that precludes the extension of that equitable relief to an unpaid cestui que trust, who derives his equitable interest from a settlement made inter vivos? It is, perhaps, one of the major defects of a legal system, which is largely dependent upon its judiciary for the enunciation of its legal principles, that on occasions historical origins tend to become confused with and at times substituted for legal principles.' The likelihood of such confusion increases where there is not a periodical restatement and reappraisal of legal principles. The judiciary, as such, has every reason for refusing to lay down principles in any wider terms than are necessary for the determination of the precise issue it is called u p n to decide, because the whole validity of the doctrine of precedent depends upon a thorough presentation and argument of the case by counsel. In this field of restatement and reappraisal the American RESTATEMENT^ and CORPUS JURIS SECUNDUM have made enormous contributions and provide an aid that cannot be ignored by the Australian lawyer, be he practitioner or academic. The former work, in particular, had anticipated many of the problems that had to be considered in Re Diplock. Its advantage over the reported case lies in the fact that it not only states the principles involved but goes on to explain the application of those principles to a variety of situa- tions of which it gives simple examples. 1 119481 Ch. 465. 2 [1951] A.C. 251. 3 Ibid., at 266, 273-274. 4 See MARC BLOCH; METIER D'HISTORIEN, at 7, "A quelque activit6 humaine que 1'Btude s'attache, la m6me erreur guette les chercheun d'origine: de confondre une filiation avec une explication." Where the transmission of knowledge either of facts or principles depends upon verbal communication, there is always a risk that some fact or some principle may become distorted in the process. This risk will be increased in proportion to the number of persons employed as links in the chain of transmission. It is proposed, therefore, before proceeding to an examination of the actual decision in Re Diplock to consider the nature of the right that was sought to be enforced and the objects of the remedies invoked for its enforcement in that case. The Nature of the Right. I t would be a mistake to assume that, because it is said that equity in its origin acted in personam, equitable rights are mere personal rights, in the sense of not being rights in property or pro- prietary rights. To make such an assumption is to confuse the right with the remedies available for its enforcement. In the case of equi- table interests in land at least, although the old Court of Chancery may have proceeded by way of personal pressure upon a trustee, the equitable remedy resulted in the restoration of the trust land to the purposes of his trust. Hence, it can be said of an equitable interest in land that it is a proprietary interest, which can be asserted against the whole world, with the one exception of a bona fide purchaser of a legal estate for value who has had no notice of an equitable interest. Because land is indestructible, its identification for the purpose of restoration presents little difficulty. On the other hand chattels, by their very nature, are destructible, if at times only in the sense that they can be made physically unidenti- fiable by mingling them with similar chattels. However, it would not be correct to assume that the destruction, in this or any other sense, of a chattel necessarily destroys an equitable interest in it. The fact is that the equitable interest continues to exist and all that has been lost is the right to enforce it by a recaption of the chattel and its restoration to the purposes of the trust. When dealing with equitable interests arising out of trusts of personal property, the old Court of Chancery took the view that it mattered little whether a chattel was restored to the trust in specie or whether restitution was effected in some other manner, such as the payment of money. It follows that, although the continued existence 5 References are to the sections of the Second Edition of the RESTATEMENT OF TRUSTS (hereinafter referred to as the RESTATEMENT) promulgated in May 1959, but these do not differ from the relevant provisions of the First Edition promulgated in 1935. ministrations and not directly from the equity jurisdiction over trusts of personal property. Once it is realised that the true function of the equitable rules lies in their application to situations where there is a mixed fund which is insufficient to meet all the claims on it in full and to deter- mine whether trust funds were improperly introduced into that fund, it will be appreciated that the nature and the situation of the mixed fund have no relevance. The interpolation of such considera- tions only serves to confuse the issue and to distort the rules. In fact it was the irrelevant consideration of the fact that the funds had been mingled in the trustee's bank account that led to the first distortion of the equitable rule which gives the deprived beneficiary an equitable charge over the whole and over each and every part of a fund in which trust property has been mixed with non-trust property.1° In Re Hallett's Estate," an agent had paid moneys due to his principal, to whom he owed a fiduciary duty, into the agent's banking account where they became mixed with the agent's own moneys. Before his death the agent made various withdrawals from the account and applied them for his own purposes. However, although the balance remaining in the account was insufficient to pay all of the deceased agent's creditors in full, it was more than sufficient to cover a restitution d the trust funds that had been paid into it. Clearly all that was necessary was to give the deprived beneficiary a charge upon the account enabling her to rank as a secured creditor in the administration of the deceased's estate. However, because a banking account was involved and because counsel argued that the rules relating to such accounts were applicable, Sir George Jessell M.R. was trapped into a consideration of those rules. In this context the rule in Clayton's Case12 had been evolved to determine a dispute between a banker and his customer, whose only relationship, either in law or in equity, was the common law relationship of debtor and creditor.l3 Starting with the common law rule that, where several debts existed between the same debtor and creditor, the creditor, and in certain circumstances the debtor, could 10 See this statement of the rule in Sinclair v. Brougham, infra, note 19. 11 (1879) 13 Ch. D. 696. 12 Devaynes v. Noble, Clayton's Case, (1816) 1 Mer. 572, 35 E.R. 781. 13 This is merely the primary nature of the relationship. There may be cases where the banker, by his conduct, has placed himself under a fiduciary duty to his customer, as, for example, in Woods v. .Martin's Bank. [I9591 1 Q.B. 55. appropriate any individual payment made to the reduction or ex- tinction of any one of the debts, Sir William Grant treated the bank account as constituting a series of debts owing from the banker to the customer. On this principle he held that where there had been no express appropriation by either party, the banker's books of account provided evidence of the banker's election to appropriate. The entries had, as is usual, been made in chronological order, therefore, the banker was held to have elected to appropriate each withdrawal by the customer to the reduction and extinction of each deposit, in turn, in the order in which they were entered in his books. Quite properly the learned Master of the Rolls refused to apply this rule to the case before him where the dispute was not between banker and customer but between the customer and a claimant to whom he owed a fiduciary relationship. However, instead of restating the established equitable rule, although that was what he purported to do,"' he stated a rule which, because it was based on a theory of implied appropriation, bears more resemblance to the rule in Clayton's Case than it does to the true equitable rule. I t is to the effect that where a person occupying a fiduciary position mixes the money of the person to whom he owes the fiduciary duty in a banking account with his own money, he must be deemed to have appropriated his subsequent withdrawals primarily to that part of the account which represents the deposits of his own money.15 This rule works well enough in cases where the balance remaining in the account is suffi- cient to discharge the fiduciary obligations but it raises quite unneces- sary problems where that balance is inadequate. A strict application of this erroneous rule would mean that where the balance of the account is reduced to below what is required to discharge the fiduciary obligation, the beneficiary would only be able to trace in equity those withdrawals that had been made subsequently to the exhaustion of the fiduciary's interest in the mixed account. This in fact was the situation that had to be dealt with in Re Oatway. In Re Oatway16 a trustee had deposited trust funds in hi own 14 (1879) 13 Ch. D. 696, at 709, ". . . where a trustee has mixed the money with his own, there is this distinction, that the cestui que trust, or bene- ficial owner, can no longer elect to take the property, because it is no longer bought with the trust-money simple and purely, but with a mixed fund. He is, however, still entitled to a charge on the property purchased, for the amount of the trust-money laid out in the purchase; and that charge is quite independent of the fact of the amount laid out by the trustee. . . . That is the modern doctrine of equity." 16 Zbid., at 727. 16 [i9031 2 ch . 356. banking account in which his own moneys had already been de- posited. The trustee made several withdrawals from the account before his own contributions to it were exhausted and with one of those withdrawals, amounting to £2,137, he purchased shares in his own name alone and not in the joint names of himself and his co- trustee. His subsequent withdrawals depleted the account below what was necessary for the restitution of the trust moneys. Now, under the rule enunciated in Hallett's Case, the moneys withdrawn and invested in the purchase of the shares must be deemed to have been the trustee's own money. Furthermore, even if the shares purchased had been of a class expressly authorized by the terms of the trust, any theory of implied appropriation to the purposes of the trust is faced by the indisputable fact that the shares were not purchased in the names of both trustees. Although Joyce J. purported to follow Re Hallett's Estate,17 he in fact gave the deprived beneficiary a charge on the shares purchased by the defaulting trustee and supported this decision by an enuncia- tion of the true rule and not of the erroneous rule laid down in that case. He said, "To this I answer that he was never entitled to with- draw the ~422,137 from the account, or, at all events that he could not be entitled to take that sum from the account and hold it or the investment made therewith, freed from the charge in favour of the trust, unless or until the trust money paid into the account had been first restored, and the trust reinstated by due investment of the money in the joint names of the proper trustees, which was never done."l8 The correct rule then is that, if a trustee improperly creates a mixed fund, consisting in part of trust property and in part of hi own property and whether or not that mixed fund is located in a banking account, his cestui que trust, will be given an equitable charge over the whole and over each and every part of the amalgam. The true effect of the decision in Hallett's Case was to extend the applica- tion of this rule to every case where property which is subject to a fiduciary duty is mixed with the property of the person who is under that duty. If authority is required for this statement of the rule it is to be found in no less than three of the four speeches delivered in the House of Lords in Sinclair v. Brougham. In Sinclair v Broughamle Viscount Haldane, referring to 17 Zbid., at 360. 18 Ibid., at 361. His Lordship also said at 360-361: "The order of priority in which the various withdrawals and investments may have been respectively made is wholly material." 19 [I9141 A.C. 398, at 422, 438, and 442. Lord Sumner agreed that Hallett's equities in a mixed fund representing the society's assets. Then, having decided that the equities of the only two classes of claimants on the mixed fund were equal, the House of Lords decided that they were entitled to a charge upon that fund pari pass^.^^ Because the mixed fund was insufficient to meet the claims of both classes in full, it is beyond dispute that the expression pari passu was used to indicate that the rival claimants were to share in the mixed fund in the pro- portions that the contributions of each class of claimants bore to the total contributions of both classes.26 This charge was expressed to be in addition to the right of any individual claimant to trace his own particular contribution in equity. In Re Diplock, at a very early stage in the judgment of the Court of Appeal, it was said that the decision in Sinclair v. Brougham was of fundamental importance,le and it was upon the principles stated therein that the Court of Appeal decided that the unpaid beneficiaries and the volunteers had equal equities in the banking accounts into which the volunteers had paid their own and the trust moneys. Then, having held that there was no fiduciary duty owed to the unpaid beneficiaries by the volunteers, it was decided that the erroneous rule as stated in Re Hallett's Estate had no application and, therefore, that, in spite of the fact that the volunteers had used the money with- drawn for their own purposes, they could not be deemed to have elected to appropriate their withdrawals from the fund to their own interest in the fund. Worse was to come. It was decided that the rule in Clayton's Case must be applied to determine to whom the balance in the accounts belongeda7 Now, even if the question had been one of presumed appropria- tion, there are two objections to the application of Clayton's Case and it is submitted that they are fatal to it. In the first place, that case decided that in the absence of an express appropriation by either the customer or the banker, the manner in which the banker kept his books is the best evidence of his intention to appropriate in that manner. It is difficult to see how the actions of the banker, carried out without reference to the customer, can be evidence of the customeis intention to appropriate. Secondly, even if the banker's 24 See Lord Greene's analysis in Re Diplock of Lord Parker's judgment in Sinclair v. Brougham, especially at 526-527. 25 [I9481 Ch. 465, at 528 this interpretation was adopted. 26 Ibid., at 518. 27 Ibid. The supplementary judgment at 559-563, dealing with the claim in rem against the National Institute for the Deaf, deals in detail with this aspect. books are admissible in evidence, where he is not a claimant, it is difficult to see how they can rebut the evidence of the admitted fact that the withdrawals were actually applied to the purposes of the volunteers and not to those of the beneficiarie~.~~ I t was because the purposes underlying the equitable tracing rules were ignored that the Court of Appeal led itself to this extra- ordinary conclusion. However, right or wrong, its decision is binding until it is overruled by the House of Lords, unless it can be shown that it is already contrary to an existing decision of that tribunal. In Re Diplock a large part of the judgment in rem was devoted to a careful analysis of what was said in Sinclair v. Brougham but in its conclusions the Court of Appeal completely ignored what the House of Lords had eventually decided. In that case the House of Lords having laid down the equitable principles upon which the equal equities of the rival claimants to the mixed funds were based, proceeded to make an order that they should have a charge pmi passu on the mixed fund. Now, as we have already observed the balance of the fund was not sufficient to meet the claims in full and, therefore, there must have been some withdrawals from the fund after the depositors and shareholders had made their respective contributions. However, it was at no time suggested that the rule in Clayton's Case should be applied to determine the respective rights of the rival claimants to the balance of the mixed fund. On the contrary, it was decided that they should share the balance r a t e a b l ~ . ~ ~ It is true that it was said in Re Diplock that where the equities of the contributors to a mixed fund are equal, they will have a charge upon it pdri passu but, if this charge is confined, as it was in that case, to cases where there have been no withdrawals from the mixed fund after the trust funds were deposited in it, it involves giving a different interpretation to the expression pari passu from the one placed upon it in Sinclair v . Brougham. If there have been no with- drawals there can be no question of a rateable disposition of the mixed fund because each of the claimants will be fully reimbursed. 2s It is arguable, in view of the provisions of aec. 17 (3) of the Partnership Act, 1890 that the problem raised by the facts of Clayton's Case should now be treated as a question of novation, that is to say whether or not the customer had agreed to accept the liability of the Surviving partners in discharge of the liability of the deceased partner's estate. As was said by Lord Eldon, in Ex parte Williams, (1816-1820) Buck's Cases in Bankruptcy, a very little will do to make out an assent by the creditor to the agreement. 29 Clayton's Case is only mentioned on one occasion by the House of Lords in Sinclair v. Brougham and then only to observe that it had been held not to apply in Hallett's Case. (See Viscount Haldane at 421). Exceptionally, if there were an overdraft at a time when the account owners' money and the trust money were deposited simultaneously in the account there would be a proportionate disposition of the balance wen though the principles in Re Diplock were to be applied. It would only be in such an unlikely combination of events that the principles laid down in Re Diplock can possibly produce the same result as the decision in Sinclair v. Brougham. It is submitted that in so far as Re Diplock decided that the rule in Clayton's Case is to be applied to the determination of the respec- tive rights of claimants to the balance of a mixed fund, when the equitable rights of the claimants are equal, it was contrary to the e x p m decision of the House of Lords in Sinclair v. Brougham that in such circumstances the balance is to be shared rateably. Even if by some process of juggling with the ratio decidendi of the House of Lords' unanimous decision it can be distinguished from Re Diplock or that case from it, the difficulty of justifying an application of Clayton's Case is that it was based upon a presumed intention to appropriate. How can it be presumed that the volunteers in Re Dip- lock intended to appropriate their withdrawals as a debit against the interests of the unpaid beneficiaries when they in fact were not aware of their existence and did in fact spend the money for their own and not the beneficiaries' purposes? Having cut down the unpaid beneficiaries' rights -in the mixed banking accounts the Courts of Appeal proceeded to enunciate a new restriction upon their equitable rights to trace the withdrawals, which, on its interpretation, were to be regarded as the beneficiaries' moneys. I t was held that where such withdrawals had been applied to the making of improvements to the existing properties of the volunteers they had become unidentifiable in equity and therefore the beneficiaries' equitable interest in the moneys so withdrawn had been extingui~hed.~~ Now, in the absence of direct authority contrary to this aspect of the judgment it cannot be said with certainty that it was wrong. However, if the reasons given in support of it are invalid, there is a strong probability that it was wrong. In the first place, it was said that, where the recipients had mixed the trust moneys not with their own moneys but with their own land, the trust moneys had lost their identityF1 This means that where money is applied to making improvements to land, equity is powerless. But is this really so? If trust land were to be conveyed in 80 [I9481 Ch. 465, at 546 et seq. 81 Ibid., at 547. he had notice of the breach of trust.87 Furthermore, it explains that, where the trust property transferred to him is not money and if he has disposed of it before receiving notice of the breach of trust, he will be liable, at his option, either to surrender the proceeds of sale or to pay the value of the property at the time. In either event the donee can set-off sums expended by him out of his own money on the improvement of the trust property prior to his having received notice of the breach.88 It is submitted that these provisions of the RESTATEMENT provide valid answers to the objections of the Court of Appeal in Re Diplock to the granting of an equitable charge in favour of the unpaid beneficiaries over those properties of the volunteers which had been improved by the expenditure of the trust moneys. ( 4 ) . Where a volunteer recipient of trust funds mixes them with his own. The RESTATEMENT makes no specific provisions for this situation but in view of the personal liability imposed by the mere receipt of the trust funds, under (3) above, such provisions are unnecessary where, as in Re Diplock, the volunteer recipients are solvent. Where the recipients are insolvent, it is submitted that the solution of the proportionate charge will in many cases produce an equitable dis- position as between the volunteers' creditors and the unpaid benefi- ciaries. On the other hand the application of the rule in Clayton's Case will give one class a purely accidental advantage based upon the mere fact that his money was paid into the mixed fund at a date later than that of the other class. There is one other possible solution to the problem and this solution will only be valid if the situation can be viewed as caustz primue impressionis, on the basis that Re Diplock was wrongly decided and that Sinclair v . Brougham is not an authority to the contrary, because it was not concerned with an account within the control of either claimant. However, starting with Sinclair v . Brougham, it is authority for the proposition that where the claimants have equal equities they have rateable charges on the fund but where one of the claimants has control of the fund it is submitted that different con- 87 Zbid., comment i . 3s Zbid., comments h & d . It is also interesting to note that by relieving the volunteer from liability where he has disposed of the trust property by way of gift and imposing liability on his donee alone, the RFSTATEMENT (corn- ment i.) underlines the distinction between equitable liability in personam and common law liability in conversion. siderations apply. The clear fact is that withdrawals made by the controlling claimant are actually applied for his own purposes and not those of the other claimant, of whose claim, ex hypothesi, the controller has no knowledge. Accordingly there appears to be no reason in principle why those withdrawals should not diminish the controller's interest in the mixed fund and his proportionate charge over it. The Judgment in Personam. Before proceeding to an exhaustive historical and jurisprudential analysis of the right of an unpaid beneficiary to recover from an improperly paid donee by means of a direct action in personam, the Court of Appeal said that, if such a right of action were to be justified, it must be shown to have an ancestry founded in history and in the practice and precedents of the courts administering equity jurisdic- tionFB In holding that the unpaid beneficiaries were entitled to main- tain such an action, it cannot be questioned that the Court of Appeal had more than justified its decision on a purely historical basis. Indeed, even if it had felt that there was some doubt as to the equi- table basis of such an action, it may well have justified its decision on the basis that it was subject to binding precedents. However, when this aspect of the case came to be considered by the House of Lords, in Ministry of Health v. Sirnp~on;'~ that tribunal was subject to no binding precedent and could have rejected a purely historical basis for its decision. Nevertheless, it has been suggested that the decision is to be explained on the basis of the rivalry between the old Court of Chan- cery and the ecclesiastical courts seised of testamentary matters, and the desire of the former to provide a remedy which would excel in efficacy that afforded by the latter in requiring a first paid legatee to give security.41 To leave such a statement unamplified is to suggest that the decision cannot be supported upon any principle of equity and that as a result historical accident must be substituted for principle. It is submitted, with respect, that the Court of Appeal did nothing of the sort, but in fact clearly set out the equitable basis of the action. 39 [I9481 Ch. 465, at 481-482. It is to be regretted that the possible application of sec. 28 of the Administration of Estates Act 1925 was not considered. 40 [1951] A.C. 251. 41 Dennis Lloyd in (1948) 26 CAN. BAR. REV. 1356, at 1367 appears to take this view: Cf. Marc Bloch, op. cit. supra note 4, at 6: "Dans le vocabulaire courant, les origines sont un commencement qui explique. Pis encore: qui suffit B expliquer. Lh est l'ambiguit6, 1 eat le danger." Although the Court of Appeal had previously stated that it did not think it necessary or desirable that it should attempt an exhaustive formulation of the equity invoked which would be applicable to every class of it did in fact base its decision upon an equitable prin- ciple that is not incapable of justifying the proposition that unpaid beneficiaries, deriving their equitable interests from settlements made inter vivos, may very well have a similar right of action. I t stated this principle when it said, "And as regards the conscience of the defendant upon which in this as in other jurisdictions equity is said to act, it is prima facie at least a sufficient circumstance that the defendant, as events have proved, has received some share of the estate to which he was not entitled."*8 It is submitted that the qualification, prima facie, means nothing more than that if the unpaid beneficiary establishes that the defendant received trust property to which the defendant had no title the onus passes to the defendant to prove that there are special circumstances which would make it inequitable for him to be compelled to make restitution, as for example, where he can show that the beneficiary in some way contributed to the breach of trust or, perhaps, as envisaged in the RESTATEMENT:^ where the defendant has made some extra- ordinary expenditure which he would not have made had he not received the trust property. With regard to this aspect of the decision what the Court of Appeal was saying, in effect, was, although the old Court of Chancery may well have invented a form of action in its desire to oust the ecclesiastical courts from jurisdiction over the administration of de- ceased persons, it, nevertheless, insisted that the cause of action must be the infraction of an equitable interest based on an equitable prin- ciple. Furthermore, although a court of equity in the year 1948 may have felt that it was precluded from enunciating a new equitable principle, it could not hold that Lord Nottingham was similarly restricted in the year 1682 when he decided Noel v. Robin~on.'~ SO to hold would be to ignore the basic historical fact that, although the courts of common law at one time considered that they merely declared what had always been the law, the old Court of Chancery, at any rate prior to the time of Lord Eldon, never advanced that fiction in support of its principle^?^ 42 [I9481 Ch. 465, at 502. 48 Zbid., at 503. a Supm, note 37. 45 1 Vern. 90, 23 E.R. 334. 46 Re Hallett's Estate, (1879) 13 Ch. D. 696, at 710, per J-1 M.R. which the Court of Appeal based its decision that would, of itself, exclude the extension of the right of action. However, it may be that in the case of an inter vivos trust there are equitable defences open to the volunteer recipient that would not be available in the case of a testamentary trust. In point of fact, without any pretension to omniscience, it is difficult to visualize more than two defences to such an action and they appear to be equally applicable to either kind of trust. In the first place, there is the defence of change of the recipient's position, as set out in the RESTATEMENT and that is merely a variation upon the well established equitable defence of hardship.54 Both the RESTATE- M E N T ~ ~ and the English cases make it abundantly clear that the mere fact of having to repay after the trust money has been spent does not amount to hardship in this context. Something more than mere ex- penditure of the trust property must be shown even though the ex- penditure was occasioned by the receipt of the trust funds. It is submitted that what must be shown is that, but for the receipt of the money, some expenditure of a kind, which would not otherwise have been incurred, was in fact made. Secondly, it would be an equitable defence to show that the unpaid beneficiary had by his conduct induced the volunteer recipient to treat the trust property as his own. For example, where the bene- ficiary with full knowledge of his own rights has either concurred in the improper transfer of the trust property or had unduly delayed his assertion of his rights. Although there may be no English authority for the extension of this right of action, the implications of such an extension have caused no apprehension in the United States of America, where the RESTATE- MENT, with certain limitations on the amount to be recovered, en- visages the right of action as being available to any beneficiary, regardless of how he acquired his beneficial interest. M h (1949) 65 L.Q. REV. at 49, Lord Denning ventured the opinion that 'equitable estoppel' may be a defence open to the volunteer. Whilst this may be valid as against the trustee, it is difficult to appreciate why it should succeed against the unpaid beneficiary who had no knowledge of a breach of trust. Cf. Gareth H. Jones, Change of Circumstances in Quasi- Contract, (1957) 73 L.Q. REV. at 49-53. 55 S 292, comments d, e, j, g, h, i, and k . It is respectfully submitted that neither Lord Denning nor Mr. Gareth Jones presents the whole American viewpoint, because each has chosen to consider the general provisions in the RESTATEMENT as to Restitution in Equity and to ignore the specific provisions dealing with the beneficiary's rights against third parties. In his detailed analysis of the decisions on the right of action in personam, Lord Greene found it to have originated in the case of Noel v . Robin~on,"~ which had been decided by Lord Nottingham. NO one was more concerned than Lord Nottingham to refute Selden's observations with regard to the variations in the length of the feet of different ChancellorsK7 and he would be disagreeably surprised to learn that the length of the modem Chancellor's foot increases when it is in the grave and decreases when it is amongst the living.K8 66 (1682) 1 Vern 90, 23 E.R. 334. 67 "One Chancellor has a long foot another a short foot a third an indifferent foot; tis ye same thing in ye Chancellors Conscience." TABLE TALK OF JOHN SELDEN, (Pollock ed. 1927) at 43. Cf. the observations of Lord Nottingham in Cook v. Fountain, (1676) 3 Swanst. 585, at 600, 36 E.R. 984, at 990, and those of Lord Eldon in Gee v. Pritchard, (1818) 2 Swanst. 402, at 414, 36 E.R. 670, at 674. 68 The author is indebted to Mr. D. A. McConville for the assistance he has derived from the article Tracing and the Rule in Clayton's Case, (1963) 79 L.Q. REV. 388. LL.B. (London); Solicitor of the Supreme Court (England); Reader in Law in the University of Tasmania.