In an earlier article it was suggested that fiduciary relationships could be classified under four heads, in accordance with the different principles which govern each class. It would, of course, be pedantic to insist that these rules, necessarily among the most flexible in equity, should be regarded as rigidly codified and invariably applied strictly and to the letter; but for some purposes it is important to keep the differences between the categories clearly in mind. This is particularly the case with the classes which were referred to in the previous article as categories I and II: in the first group the beneficiary has the advantage of all the proprietary equitable remedies against a trustee, and the fiduciary has comparable duties, while in the second, the beneficiary's remedies (apart from the remission of contracts) are based on equitable obligation only. We shall now examine in more detail the principles governing fiduciaries in these two categories.
The jubilee of the Journal happens to coincide with the centenary of Head v. Tattersall, the well-known but troublesome case in which the buyer of a horse was allowed to exercise a contractual right to return it (for failure to answer a warranty that it “had been hunted with the Bicester hounds”), despite the fact that it had been accidentally injured in the meantime and could be restored to the seller only in a damaged state. Most contract textbooks cite this as the classic instance of the condition subsequent, by virtue of which a contract or obligation, although initially effective, ceases to operate on the occurence of a specified event. It is apparent, however, on closer analysis that it was not the contract or any aspect of it which was terminated because the horse failed to meet the warranty, but the buyer's title: in other words, the property in the horse passed to the buyer immediately, but defeasibly, so that when he rejected the horse he divested himself of the title and revested it in the seller. Even this explanation leaves on one side the question of the damage sustained by the horse. In the language of the law of sale, it would be most natural to regard this issue as one of risk, and to say that the court held in effect, and indeed perhaps expressly, that the horse was at the seller's risk during the period allowed for its return.
The branch of equity which deals with fiduciary relationships does not receive a great deal of attention in legal works, and what has been written is not usually very full or very precise. It is proposed, therefore, in this article, first, to explore something of the background and development of this topic, secondly, to discuss the problem of defining a fiduciary situation and, thirdly, to suggest, in outline at least, a classification of the relationships and the principles which apply to each class.
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