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PETER HENRY SCHANDORF AND ANOTHER
V.
CHRISTIAN MENSAH HOLM AND ANOTHER
THE WEST AFRICAN COURT OF APPEAL HOLDEN AT ACCRA, GOLD COAST
28TH DAY OF JUNE, 1943
2PLR/1943/46 (WACA)
OTHER CITATION(S)
2PLR/1943/46 (WACA)
(1943) IX WACA PP. 173 – 180
LEX (1943) – WACA PP. 173 – 180
BEFORE THEIR LORDSHIPS:
DONALD KINGDON, C.J., NIGERIA
PETRIDES, C.J., GOLD COAST
GRAHAM PAUL, C.J., SIERRA LEONE
BETWEEN:
1. PETER HENRY SCHANDORF
2. PHILIP EUGENE SCHANDORF — Plaintiffs-Respondents
AND
1. CHRISTIAN MENSAH HOLM
2. CHRISTIAN WILLIAM NORMAN — Defendants-Appellants
REPRESENTATION
E. C. Quist with J. Quist Therson — for Appellants
A. W. Kojo Thompson — for Respondents
ISSUE(S) FROM THE CAUSE(S) OF ACTION
ESTATE ADMINISTRATION AND PLANNING:- Will — Executors-Administration — Claim for payment of profits of trust estate and possession — Continuing charges — Bequest of residue to Executors-Intestacy
PRACTICE AND PROCEDURE ISSUES
PLEADING:- Non-joinder of parties — Action by two of several cestuis qui trustent — Claim against executors for accounts, balance due on account, and possession — Finding of devastavit and mal-administration
CASE SUMMARY
Plaintiffs, two of several children of the deceased, sued his Executors, claiming as beneficiaries under his will,
(1) an account of the personal estate of the deceased coming to their hands or which should properly have come to their hands as Executors,
(2) an account of its administration,
(3) possession of the real estate,
(4) payment of such rents and profits of the real and personal estate as should be found due.
The plaintiffs took no steps to join the other beneficiaries.
The deceased’s real estate consisted of a house in Kumasi, which he devised to his children charged with the payment of £72 a year out of the rents to his wife for her own and the children’s maintenance and the education and training of his children not yet out of school. At the date of the writ at least one child was still at school.
As regards the personal estate, deceased bequeathed “the residue of all I am worth” to the Executors without further direction as to its application.
The defendants produced their accounts and later both parties agreed that an account should be taken by a referee. The referee having submitted his report, the trial Court heard arguments and gave judgment, finding that there had been a devastavit by the executors and that they were liable for waste by maladministration and negligence, and awarding the plaintiffs the balance due under the referee’s report and possession of the real estate.
DECISION(S) OF THE WEST AFRICAN COURT OF APPEAL
Held (allowing the Appeal):
(i) It was not competent for the trial Court on the basis of the accounts and the referee’s report to deal with and make charges of defendant and maladministration which had not been alleged in the writ.
(ii) Plaintiffs, as two only of deceased’s children and not suing in any representative capacity, were not entitled to judgment for the whole amount found due.
(iii) As plaintiffs had failed to show that there was any balance of profits of the real estate after meeting the charges thereon, there was no case made out for any payment of such profits to the children of the deceased, much less to two only of them.
(iv) The residue of the personal estate was held by the Executors in trust for the persons entitled to share in the estate under an intestacy and not for the beneficiaries under the will.
(v) Neither the plaintiffs, nor all deceased’s children had they been joined as plaintiffs, were entitled to an order for possession of the real estate which would make it impossible for the Executors to carry out the trusts declared as to the rents.
MAIN JUDGMENT
The following joint judgment was delivered:- per KINGDON, C.J., NIGERIA, PETRIDES, C.J., GOLD COAST AND GRAHAM PAUL, C.J., SIERRA LEONE.
GRAHAM PAUL, C.J., SIERRA LEONE (DELIVERING THE LEAD JUDGMENT)
The respondents who are two of the children of the deceased Peter Henry Schandorf sued the appellants, who are the Executors under the Will of the said deceased in the Divisional Court at Accra. The claim in the writ of Summons is as follows:-
”The plaintiffs claim as beneficiaries under the Will of Peter Henry Schandorf (deceased) dated 16th day of April, 1926, Probate of which was granted on the 9th day of October, 1926, to the above named defendants.
“1. To have an account taken of the personal estate of the said Peter Henry Schandorf (deceased) coming to the hands of the defendants as Executors under the said Will or which should properly have come to their hands as such Executors.
“2. An account as such Executors administration of the Personal Estate of the said Peter Henry Schandorf (deceased),
“3. Possession of the said Real Estate.
“4. Payment of such rents and profits of the said Real and Personal Estate as shall be found due.”
The appellants did not contest liability to account to these two children of the deceased in spite of the fact that there were other children with a like interest in the account and in the result of it whom the respondents had taken no steps to bring into the suit as parties or to notify of the existence of the suit.
It was clearly the duty of the respondents to have taken that step, as is indicated in the two following passages from Daniell’s Chancery Practice (8th Edition) Volume I at page 151:-
“Any person coming to the Court for relief should bring before the Court all such persons as are necessary to enable it to do complete justice; and should so far bind the rights of all persons interested in the subject as to render the performance of the judgment which he claims safe to the party called upon to perform it, by preventing his being sued or molested again respecting the same matter, and should for this purpose, subject to the provisions mentioned in the first section of this chapter, bring before the Court, either as co-plaintiffs with himself, or as defendants, or by serving them with notice of the judgment, all persons so circumstanced that, unless their rights were bound by the judgment of the Court, they might cause future molestation or inconvenience to the party against whom the relief was sought.”
and at page 166:-
“The rule which requires that all persons having concurrent interests with the plaintiff should be parties to the action applies to all cases in which an account is sought against a defendant. One person cannot bring an action against an accounting party without bringing before the Court all persons who are interested in having the account taken, or in the result of it; otherwise, the defendant might be harassed by as many actions as there are parties interested in the account.”
On the return day of the writ of Summons the appellants produced their accounts and served them on the respondents’ solicitor in Court whereupon the Court adjourned the suit in the hope of an amicable settlement, which did not materialise.
On the suit again coming before the Court both parties agreed that “an account be taken by Mr Robert Bannerman” and the Court appointed Mr. Robert Bannerman to take an account. No formal order of reference was drawn up but the referee and the parties proceeded with the reference, appellants’ counsel lodging a copy of his clients’ account and respondents’ counsel particulars of the items which he disputed, later elaborated by particulars of surcharge. The referee proceeded to take evidence on the appellants’ accounts and the respondents particulars of surcharge and thereon made a report to the Court dated 8th June, 1942. On 22nd June the Court made an order for each party to file and serve any objections to the report and this was done by both parties. The Court then heard arguments of counsel on the report and the objections and gave judgment upon the whole case. From that judgment the appellants have appealed to this Court.
In the course of his judgment, the learned Judge in the Court below said:-
“The matter is governed purely by English law and local custom has no bearing on the transactions under the Will and the disposition of the Testator’s property. There has been a devastavit by the Executors and they are liable for waste due to maladministration and negligence. It was their duty not only to take care of the estate and administer it with prudence and due regard to the beneficiaries’ interests, but also to keep proper and regular accounts. This they had failed to do. They only compiled an account after the filing of the suit and they admitted that they had not kept regular and systematic accounts.”
In this important passage of his judgment it appears to us that the learned Judge seriously misdirected himself. In plain English, all that was asked for by the respondents under paragraphs (1) and (2) of the writ of Summons was an account showing –
(1) what personal estate of the deceased had come or should properly have come into the hands of the appellants as Executors, and
(2) what they had done with such personal estate.
The appellants filed and served accounts on that basis and the Referee took evidence and made his report on these accounts. There were in the Writ of Summons no allegations against the appellants of devastavit or waste due to maladministration and negligence. If the accounts disclosed grounds for such allegations appropriate proceedings could have been taken by the respondent in respect of such devastavit or waste due to mal-administration and negligence and in meeting any such proceedings the appellants would of course have been entitled to full particulars of the charges against them. It was not competent for the Court to deal with and make findings upon such charges on the accounts and the Referee’s Report thereon.
The judgment of the learned Judge proceeded as follows: –
“The amount found due by the referee is £178 7s 4d, plus the value of two sovereigns which, in the absence of other evidence, “I place at £4, totalling £182 7s 4d less £23 8s accounted for, making a total due on the referee’s report of £168 9s.”
In this there is an obvious mistake in arithmetic. The correct arithmetic is as follows:-
£ s d
Amount found due by referee 178 7 4
Value of 2 sovereigns … 4 0 0
£182 7 4
Less amount accounted for 23 8 0
£158 19 4
The correctness or otherwise of that finding as to the accounts will be dealt with later.
The judgment then went on to give “judgment for the plaintiffs for that amount” plus certain additions. The additions will be dealt with later, but before coming to the additions, it is necessary to point out that the plaintiffs (now the respondents) were certainly not entitled, as only two of the testator’s children, and not suing in any representative capacity, to judgment for the whole amount found due by the executors to the estate. All that the plaintiffs claimed payment of was “such rents and profits of the said Real and Personal Estate as shall be found due” and the question what, if anything, was due to the plaintiffs will require further consideration.
It will be convenient to consider that question at this stage, and first as regards “profits of the Real Estate”. The only Real Estate to be considered is the house at Prospect Road, Kumasi, and it is necessary to quote the parts of the Will dealing with that property. They are as follows:-
“(1) I give to my children my House on Prospect Road at Kumasi in Ashanti.”
“(2) I leave the residue of all I am worth in the hands of the Executors of this my Will and I direct that the sum of eighteen pounds (£18) a quarter be paid to my wife Eugenia Emma for the maintenance of my children and herself from the rents accruing from my house on Prospect Road at Coomassie.”
“(3) Although I have given my house on Prospect Road Coomassie to all my children, rents accruing from it should and must be utilised first for the maintenance, education and training of my children who are not yet out of school in a manner to be decided by the Executors of this my Will.”
“(4) Whenever the term ‘my children’ is used it means my children whether lawful children or otherwise.”
It is quite clear from these excerpts from the Will that the first charges on the profits of the real estate are –
(1) £18 a quarter to the deceased’s widow, who is still alive (“for the maintenance of my children and herself”), and
(2) the maintenance and training of those of the deceased’s children “who are not yet out of school”.
At the date of the Writ in this case it is admitted that at least one child of the deceased was not yet out of school –
“It is clear upon the evidence – that the plaintiffs have failed to show that after meeting the said £72 a year for the widow and the maintenance and training of the deceased’s child still in school at the date of the Writ there was any balance left under the heading profits of real estate”.
Furthermore, if there were any balance it would go, not to the two plaintiffs, but to all the children of the deceased and would of course be subject to any expenses of upkeep of the house, not only actually incurred but prudently to be anticipated. Because of the trust in favour of the widow, the Executors had to hold this real property in trust and it is obvious that in addition to meeting the explicit trust charge of £72 a year on this property they had to contemplate the ordinary expenses connected with the property, repairs, rates, ground rents, etc. It is abundantly clear that as regards the profits of the real property no case whatever was made out for any payments being made to the children as a whole, much less to only two of them, as the respondents are.
As regards the “profits of the personal estate” the position under the Will requires consideration. There is no specific provision in the Will as to what is to be done with the personal estate or the profits of the personal estate except certain specific bequests of money legacies and the following provisions:-
“I leave my personal effects to all my children. These should be distributed to them as soon as possible after my death.
“I leave my cattle to all my children. My Rickshaw should be retained for use of the family.”
”Personal effects” in the context in which it appears, namely the whole provisions of the Will, clearly was not intended to include the residue of the money left in the estate after meeting the specific money legacies. That residue is dealt with as follows:-
“I leave the residue of all I am worth in the hands of the Executors of this my Will”.
There is no provision or direction as to how that residue is to be applied and the result in law is that the Executors must hold that residue in trust, not for any beneficiaries under the Will but for the persons entitled to share in the estate of the deceased if he had died intestate. The respondents by their Writ claimed not as persons entitled to share in such part of the deceased’s estate as fell into intestacy but “as beneficiaries under the Will of Peter Henry Schandorf (deceased)”. As beneficiaries under that Will, they are not entitled to any payment out of the “Profits of the personal estate” of the deceased, and their claim therefore failed in that respect.
It follows that as to the fourth paragraph of the claim there should have been judgment for the defendants.
Before passing to the details of the accounting it will be convenient to deal very shortly with the third paragraph of the claim in the Writ:- “Possession of the said Real Estate”. The learned Judge in the Court below gave judgment for the plaintiffs “for possession of the real estate”. This is obviously wrong in view of the trust with which under the Will the Executors are so definitely charged by the Will to which we have already referred. Even if all the children had been plaintiffs in the suit, which they are not, they would not have been entitled to an order for possession which would make it impossible for the Executors to carry out the trust specifically placed upon them as to the rents of the real estate. There should have been judgment for the defendants on paragraph (3) of the claim.
There remain to be considered the particular findings of the learned Judge as to disputed items in the accounts. These may be taken in the order and by the numbers as they appear in the judgment.
Item (1) £13 18s 6d.— This item is admitted by the appellants and no more need be said about it.
Items (2) to (6).— These all fall within the same category for the purpose of determining the appellants’ liability in an accounting with the estate. The persons who benefited by these items are persons who are likely to be entitled to receive some share in the ultimate distribution of the deceased’s estate. There is however no authority in the Will for the Executors to give these benefits. The position therefore is that in a strict accounting with the Estate the Executors must be debited with all these items. It may be that in some, or all, of these items the Executors may be able, when the time for the ultimate distribution of the estate arrives, to escape having to pay out of their own pockets by being able to treat them as debits against the respective shares of the persons who benefited, but as a matter of pure accounting it is right to say at present that these amounts should be regarded as due by the Executors to the estate. The total of these items (Nos. 2 to 6) is £87 7s 7d.
Item (7) £24 10s 0d.– The referee dealt with this item in his report and after hearing the evidence on the subject he found as a matter of fact that the evidence of Norkor the mother of the children concerned was sufficient proof of the payment. No reason appears why the Court below should have rejected this finding of fact by the referee and we cannot agree with the Court below on this point.
Item (8) 10s.-The respondents’ counsel did not press this item and we see no reason why the appellants should be found liable.
Item (9) £54 0s 0d.— There was no allegation and no evidence whatever that the appellants had been wilfully negligent in failing to realise and get in this asset “. The referee found in favour of the appellants on this item and we see no reason why the learned Judge should have reversed that finding.
Item. (10) £10 14s 0d.— The same remarks apply as in the previous item, and we see no reason why the learned Judge should not have accepted the referee’s finding of fact as regards this item.
Next come the items in regard to which the referee found that the appellants were liable to the estate and to which the appellants objected in the Court below. They are as follows:-
(i) £4 2s 8d.— We think that the decision of the appellants not to sue for this amount was a reasonable exercise of their discretion and that the appellants’ objection should be upheld.
(ii) £4 0s Od.— Liability to the estate for this item was admitted by the appellants before the referee and we uphold the decision of the Court below to that effect.
(iii) £46 9s 0d, (iv) £41 7s 6d and (v) £15 0s 0d.— We uphold the decision of the Court below. The appellants had no authority to make these loans and in an accounting with the estate they must be debited with these amounts though when the time of ultimate distribution comes they may escape having to pay them out of their own pockets if they can effectively set them off against the respective shares in distribution falling to the persons concerned.
(vi) £44 0s 0d.— This is a similar item. It may be that on ultimate distribution the appellants may be able to set off this item against the share of the residue falling to the deceased’s uterine relatives in intestacy by native custom under section 74 of the Marriage Ordinance but in the meantime in an account between the appellants and the estate it must be debited to the appellants.
We agree with the learned Judge that the appellants are not entitled to any remuneration as executors.
For the reasons we have given we allow the appeal, The judgment of the Court below is set aside including the order as to costs and any costs paid thereunder must be refunded. It is ordered that in lieu thereof the following judgment be entered:-
“Under paragraphs (1) and (2) of the claim in the Writ it is found that in an accounting with the estate of the deceased the defendants’ liability to the estate is as follows:-
£ s d
“Arithmetically corrected amount as found by referee 158 19 4
“Less Item (1) of defendants’ objections 4 2 8
£154 16 8
“Plus the following items of the Surcharges made by the Court below upon the amount found by the referee:-
£ s d
“Item (1) 13 18 6
“Items (2) to (6) 87 7 7
101 6 1
Total . . . £256 2 9
“The claims contained in paragraphs (a) and (4) of the Writ are dismissed.”
As regards costs, the appellants are awarded costs in the Court below including the costs of the proceedings before the Referee for the following reasons:-
(1) There was no evidence that the respondents asked for an account before action taken.
(2) The respondents sought to surcharge the accounts as filed to an amount in cash and kind of about £800 and except as to £256 2s 9d the appellants have succeeded on that issue – i.e. approximately to a two-thirds extent.
(a) The appellant have succeeded completely on the issues raised in paragraphs (3) and (4) of the Writ of Summons.
The appellant’s costs in the Court below are to be assessed as to Counsel’s fees and taxed as to other costs in the Court below.
The appellants are awarded costs of the appeal in this Court assessed at £89 8s 6d.