THE FRAUDS IN CHANCERY. any rule of law opposed to
this could possibly be allowed to prevail. The Chancery Division could not be allowed, as it often
does, to order sums of money to be paid into Court, and when
those sums were paid, refuse to be responsible for their safe keep- ing. When, then, the Solicitor-General admitted " the liability of the Crown to repay the fund if the documents under which
the money had been obtained were strictly proved to be forgeries," he was not acting with any special or extraordinary
generosity. If it is possible to stand in a fiduciary relation towards any one, surely the Chancery Division of the High Court of Justice, which forces its trusteeship on unwilling owners of property, must stand in that relation to its suitors, and be liable to have its duties enforced in the very strictest sense.
The facts in the case of "Sister v. Slater" are, shortly, these. In 1861, there died at Little Bolton, in Lancashire, a certain
Mr. John Slater, who devised his property to the issue of his daughter, Mrs. Maxwell. In 1864, the property was, in the popular phrase, thrown into Chancery, and the money paid into Court. Mrs. Maxwell had only one daughter, Miss Rose Maud Maxwell, who thus, on attaining the age of twenty- one (which she did on December 24th, 1886), became entitled to have the whole property paid out of Court into her hands. In April of last year, she applied to the Court for the payment of this fund, which ought, with accumulations, to have amounted to about £5,000. Instead, she received some £400 worth of Consols. On her making inquiries as to what had become of the residue of the fund, the following curious story came to light :—It was discovered that on January 28th, 1884, an order of the Court had been made paying out the whole of Miss Maxwell's fortune, then in the hands of the Court, nominally to her, though she was, of course, then a minor, but actually into those of a certain solicitor named Lidiard. The manner in which this order was obtained is dis- creditable to the officials of the Chancery Division. In the employ of the firm of solicitors engaged in managing the administration action in the course of which Miss Maxwell's property had found its way into Court, was a certain managing Chancery clerk, William Bowden. Bowden, who, of course, was conversant with all the matters connected with the money to which Miss Maxwell was entitled, one day informed a young solicitor of his acquaintance named Lidiard, that he, Bowden, had found out that in a Chancery action in his employer's office, a sum of money had been placed to the credit of a young lady who could not be discovered. Bowden, how- ever, went on to say that he had found out that she was a nursery-governess at Boston, in Lincolnshire, and asked Lidiard to act professionally in the matter, stating at the same time that, as the young lady was poor, it would be best to arrange that Lidiard should take a share of the money, granted that she was able to make her claim good. To this Lidiard agreed, and it was finally settled that one-sixth of the whole sum recovered should be divided between the two. A few days later, Bowden told Lidiard that he had obtained from the young lady a formal authorisation of the employment of Lidiard to act for her as solicitor. The next step was the taking out of a summons for the payment out of Court of the money standing in Miss Maxwell's name, or, more strictly, in that of the "issue or children" of Mrs. Maxwell. A summons, it may be remarked, is the form of procedure under which application is made to the Court to pay out money in its possession which has become due. The summons purported to be issued by Lidiard, as solicitor for Miss Maxwell. Bowden, however, attended before the Chief Clerk—because, as he told Lidiard, "he knew all about it "—and obtained the neces- sary order on January 28th, 1884. The evidence by which the Chief Clerk was induced to make the order was, though unknown to Lidiard, forged from beginning to end by Bowden. He had never held any communication with Miss Maxwell, and the whole of his documents were fictitious. Bowden's next step was to forge a power of attorney, purporting to be made by Miss Maxwell, which authorised Lidiard first to receive the fund, and then hand it over to Bowden. This trans- action Lidiard carried out, reserving from the proceeds £350 as his share of the money. It should be men- tioned that Bowden completed his forgeries by finally handing to Lidiard a receipt which he professed to have ob- tained from Miss Maxwell. Bowden, having thus possessed him- self of 024,000, waited in England for a short time, and finally absconded to the United States. Mr. Justice Kay, in giving judgment in Miss Maxwell's action, which in effect was an ap- plication to have the money paid to her by the Court, notwith- standing that it had already been given away to the forger,
seems to have adopted the admission of the Solicitor-General that the Crown in the end would be liable to make good the loss. Accordingly, he discharged the old order of January 28th, 1884, under which the money was wrongfully paid out, and made a new order "for transfer and payment by the Pay- master-General to the petitioner of the fund as it stood at the date of that order, and also of the dividends and interest which would have accrued thereon since that date had it been now in Court." The Court, however, did not stop here. It proceeded to make an order on Lidiard to refund the money paid to him by the Paymaster-General. Lidiard received the money wrongfully. It was therefore necessary to order Lidiard to repay, without entering into the question of the means by which he was induced to part with the money when he had obtained it. The Court would not impute any 'nu/a/ides to Lidiard; it simply asked him for the money paid him by mistake. If he had parted with that money owing to the same fraudulent representations with which he, or those acting in his name, had induced the Chancery Division to part with the estate, that was his misfortune, but not the business of the Court.
Such a solution of the question may be good law. We have little doubt that it is. We cannot, however, accept Mr. Justice Kay's assurance that the official system of the Chancery Division was not in any way to blame. It seems to us that somewhere or other there was serious negligence. An application is made to the Court to pay out the money due to a person who has just come of age. Doubtless the Court could not have been able to tell, on the face of them, whether the docu- ments were forgeries ; but at least it might have been able to ascertain whether the claimant was really of age. It can hardly be supposed that the papers in the administration action would not have shown that Miss Maxwell, at the time of Bowden's fictitious application, was under age. Yet no doubt as to the truth of the fact as stated by Bowden seems to have crossed the minds of the officials till 1886, when the Chief Clerk who had in 1884 accepted the forged affidavit which stated that Miss Maxwell came of age on December 24th, 1883, actually certified that she was born on December 24th, 1865. If the facts as stated in the Times are correct, the Court seems to have been willing to accept the true and the false version of her age with complete indifference. Mr. Justice Kay, in his judgment, talks of the impossibility of detecting forgery if the forger is only bold enough and un- scrupulous enough. No doubt, when purely documentary evidence is relied on, the danger of forgery is very great. But Mr. Justice Kay seemed to argue that the mistake was due not to the carelessness of the officials, but to the nature of the business, and that it would be impossible to devise any better method of managing the business. We can hardly accept this. We do not think that it is seeking too much to ask that in cases where minors are concerned, the Court should keep a record of the earliest date at which sums of money can be paid out in respect of those minors. Again, surely an official of the Court should have a personal interview with the minor whenever that is possible, in order to verify the claims put in on the minor's behalf. Had either of these precautions been taken in the present case, when Bowden produced his forged affidavit, he would have been detected. The Court, of course, cannot know Miss Maxwell's hand writing by sight, and so may be easily deceived in that respect by a forger. It ought not to be deceived by documents which, if carefully considered, bear internal evidence of their own falsity. If the facts of the case have been correctly stated in the newspapers, the forged documents bore such evidence. It is greatly to be feared that the officials trust too much to the honour of the solicitors' clerks who are before them. No doubt, in some cases it may be wise to do so, and the custom expedites business immensely ; still, it cannot be right that money should be paid out of the Chancery Division, as seems to be the case, with fewer pre- cautions for security against fraud than those practised by a Railway Company. It would not be fair to leave the considera- tion of the case without stating that it is not the conduct of the officials themselves which has been shown to be faulty, but the system under which they work.