166 Indemnity of Trustees for Acting on Advice.

parish into pauperism. If the trust be clear, and the purpose be legal, it is useless to attempt to show in the Court of Chancery that the funds might be more beneficially employed, or that the consequences of a strict fulfilment of the intentions of the founder would be pernicious. It may be clear, that no abuse could produce greater evil than an obedience to the decree. Court can give no relief. The purpose is lawful trust is explicit. It must be performed whatever be the consequences."1

"The

the

There are numerous matters of detail in which the Charities need the administrative aid of a responsible power, or to be guided by counsel authorising proceedings which trustees are incompetent to perform, but for obedience to which advice they might have indemnity, until appeal should be made.

For all such functions, the Court of Chancery is incapacitated by the vast expense with which a concurrence of circumstances loads all suitors at its bar. Those who are competent, by great experience, to give opinions on the causes in which this expensiveness originates attribute it to "the3 excessive centralization" of the Court. "Every matter referred to it must be heard in London. The first consequence is, that every inquiry, unless it be

1 Edin. Review. Senior, "Administration of Charitable Trusts."

2 The Select Committee of the House of Commons, which sat in 1835, report that "proceedings were not, in all cases, certified to the AttorneyGeneral" by the Commissioners of Inquiry, "by reason of the smallness of the sum to be recovered, compared with the costs attendant on the necessary suit, and also by the consideration, that, in the event of the proceedings being unsuccessful, there was no protection to the defendants, as no costs are ever paid by the Crown." The Committee further report "the prejudicial delay and destructive costs incident" to proceedings in the Court of Chancery, and state that "the requisite correction" of abuses "consumes, under the present mode, from five to ten years of time, and can only be effected at a ruinous sacrifice of the funds of the Charity, while many aggravated abuses are tolerated and continue unredressed, from the apprehension entertained of the serious consequences to disinterested parties in attempting a remedy. It is in evidence that the mode of taking accounts before the Master in Chancery is peculiarly dilatory and expensive, and that the costs of a fresh trust-deed not unfrequently exhaust the funds of a Charity for several years." Page vii.

3 Edinburgh Review. Senior, "Administration of Charitable Trusts."

Causes of Ruinous Expense in Charity Suits. 167

a mere London question, must be managed by four sets of solicitors." "Thus four sets of expenses are incurred." "In the next place, either the whole evidence must be written, or the witnesses must travel to London, and remain there until their evidence is wanted. Matters that might be investigated and disposed of in five or six days, by a Judge on the spot, last through as many years, and cost as many hundreds, when the inquiry takes place two hundred miles off, and is managed by persons who, as they always urge in excuse of their ig norance of facts, are mere agents, and must constantly refer for information and instructions to their country correspondents."

When such proceedings have been instituted, they are often so languidly conducted that they are protracted over years. As they have originated often in motives in which the benefit of the Charity forms the smallest part, so they are often at length compromised at the expense of the Charity estate, if not by its ruin1, and without any beneficial result. Yet the Court of Chancery has no power to prevent enormities occasion

"In the case of the Attorney-General v. Nethercoat, the income of a Charity property worth about 30007., had been misapplied in payment of poor-rates and church-rates. An information was filed in the Court of Chancery, and a long litigation ensued; the expense of which, from time to time, was partially defrayed by sales of portions of the property. At length, a final decree was made, which declared that the income of the charity ought in future to be applied for the benefit of the poor not receiving relief from the rates- removed the existing trustees and directed the further costs to be raised by sale or mortgage, and a scheme to be framed for the application of the residuary income."

"The property now remaining was an estate producing 1057. a year. The unsatisfied costs amounted to 2000l. That sum was raised by mortgage at 4 per cent. There remains therefore, for the purposes of the charity, 157. a year, being about one tenth of the original income!"

"In another case, an information was filed to ascertain, among other things, the boundaries of some charity lands. A hedge had been grubbed up, and the land taken in by a neighbouring occupier. The site of the hedge was worth about 201. Two hundred pounds were spent in ascertaining whether it belonged to the charity or to the owner of the adjoining freehold." Edinburgh Review. Senior, "Administration of Charitable Trusts."

168

The Act of the 43 Elizabeth, c. 4.

"An1

ing so profuse a waste of charitable funds. effectual control over the institution of such proceedings, and a superintendence of them during their progress, are imperatively required."

The Court of Chancery formerly exercised an authority created in 1601, by the Act of the 43 Elizabeth, c. 4., which was intended, at that early period, to provide a remedy for evils arising from "frauds, breaches of trust, or negligence of those who should employ the same." Under this Act the Lord Chancellor issued commissions, under which three or four Commissioners, aided by a jury, could make local investigation respecting charity estates, and "the abuses, breaches of trust, negligences, misemployments, not employing, concealing, defrauding, misconverting, or misgovernment" of such property. The Commissioners, after due inquiry, could make orders and decrees for the better management of the property, which were to have full effect and authority, unless overruled upon appeal by the Lord Chancellor. The decrees were enforced by the same process as that of the Court of Chancery, and were filed in an office of the Court, called the "Petty Bag." More than 1000 such commissions were issued, between the passing of the Act and 1760; the greater part of which were executed in the reigns of Charles I. and Charles II. Though no such commissions have been issued since the reign of George III., it is clear that this Act originated in an effort to diminish the expensiveness of such proceedings, which was frustrated by the power of appeal to the Court; to give greater vigour to investigation into abuses, and accuracy to the result; and to secure the advantage of a peculiar administrative as well as judicial authority, which should originate and conduct the inquiry, as well as issue the decree. Divested of the expensiveness of an appeal and with Commissions judicially constituted, local courts might have been created which would have

1 Hine on Endowed Public Charities, p. 7.

Chancery Suits ruin Small Charities.

169

struck the most direct blow at suits originating in political or social strife, or conducted for the sake of the costs without reference to the interests of the charity; would have prevented the waste of dilatory litigation, and the injustice of fraudulent compromises at the expense of the endowment. But as the Commissions were constituted, they were found1 useless, and discontinued.

The immediate consequence of the overwhelming expensiveness of the Court of Chancery is a denial of justice to all the smaller charities.

"As a general rule, it may be laid down, that the instant a charity not exceeding 30l. a year becomes the subject of a suit, it is gone. One of 60l. a year is reduced one half; one of 100l. a year, one third. The prudent friends of such a charity, will submit to see it mismanaged to any extent short of the destruction of all its utility, rather than risk its utter annihilation by the ruinous protection of the Court." But the small charities are so numerous, as to render this complaint an insuperable obstacle to the continuance of even their judicial control in the Court of Chancery.

Their number, and the intimate connection of a very large proportion of these small charities with elementary education, must be my excuse for setting forth at some length the dangers to which they are liable-some of which they have to encounter in common with the larger endowments, but many of which are peculiar to them.

The Commissioners appointed by Her Majesty, in September 1849, to inquire into those cases of public charitable endowments which were investigated by and reported upon by the Charity Commissioners, but not certified to the Attorney-General in their First Report3, 'Sir F. Thesiger's Speech on Charitable Trusts Bill. Hansard, vol. cxx.

p. 21v.

2 Edin. Review. Senior, "Administration of Charitable Trusts." Mr. Goulburn, in the debate on Lord Cottenham's bill, made a similar statement.

3 Presented to both Houses of Parliament by command of her Majesty, June, 1850.

170 The number of small Charities is very great.

classify the whole of the 28,840 charities reported upon by the Commission of Inquiry, into groups according to their income. The numbers in each class are reported by them to be as follows:

Charities1, the incomes of which do not amount to

51. per annum

13,331

1 I am indebted to Mr. Fearon for the following Table of Charities* having incomes of 107. per annum and upwards †, classed according to the amount of their incomes, showing the number of such charities, the aggregate income of the several classes:

* Calculated from the Analytical Digest presented to both Houses of Parliament in 1842.

†There were also about 17,972 Charities under 107. per annum, with an aggregate income of about 58,1871.