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A trustee's handook.

3 1924 018 769 202

Cornell University Library

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A TRUSTEE'S HANDBOOK.

BOSTON: LITTLE. _LOPJNG.. 1898. OF THE SUFFOLK BAR.TEUSTEE'S HANDBOOK. BY AUGUSTUS PEABODY A..B. HART. AND COMPANY. . BROWN.B. LL.

Loking. SEtuiJttsttg Press S. John Wilson and Son. . A. Cambridge. By Augustus P. All rights reserved. U.: Copyright.

PREFACE... Edward A. especially where dependent on I statute. Howes. The lack of a Handbook of this kind has led me to complete and publish what were originally notes for personal use merely. trust estates. the citations proach to completeness only where the law ful or conflicting. wish to acknowledge my obligation to the writers of the many admirable which I text books which bear on my subject. with an apis readers. and to which have referred often for a fuller discussion of prin- ciples and this I and a more complete citation of authorities have to thank Mr. This little book is meant to state. doubt- But pains has been taken to notice the peculiarities of local State law. all of I have used freely. As the book is for general as well as professional are illustrative. for press. simply and conof cisely. his valuable assistance in digesting cases and passing volume through the AUGUSTUS PEABODY LOSING. the rules which govern the management and the relationship existing between the trustee and beneficiary. . Jr.

" Flint. cited as " Underhill. 9th Eng. ed.. Trusts is and Trustees. The citations : abbreviated — of the following text books are thus Lewin on Trusts. 4th Amer.. ed." Underhill on Trusts and Trustees." Perry on Trusts. is cited as " Perry. is cited as " Flint. Amer.NOTE. 2 vols.." . ed. Wislizenus. is cited as "Lewin.

.1 2 2 Is restricted in his dealings with the heneficiary — compensation Disclaimer Acceptance necessary ... THE TRUSTEE AS AN INDIVIDUAL..... Doing any act to execute trust Not disclaiming in reasonable time 5 6 . 2-4 2 2 3 3 is No form of disclaimer is necessary It should he affirmative and decided By deed. may disclaim But dry trust may vest in representatives of sole trustee . Vests in other trustees 4 4 Joint power lost by III.CONTENTS. . . 1-2 Because he Cannot come in competition with trust estate Cannot delegate the management Cannot render expert services freely His only reward II. 1 1 . Acceptance Should he formal 4-6 4 5 5 What is construed as an acceptance Presenting will . 3 4 4 Effect of disclaimer . . Table op Cases xix PAET I.... . Pages The Office of Trustee is not always Desirable . In Probate Court when instrument Must disclaim whole trust special a will 3 3 3 May disclaim executorship or trusteeship May Exceptions disclaim one of two separate trusts title ... . I.

Pages 6-11 6 IV. Appointment No trust fails for want of a trustee Temporary trustee may be appointed Appointment under terms of trust instrument . 9 9 .. . office vests in successor . Appointment op Trustee Maker may choose whom he will Donee of power must choose honestly and reasonably Courts will only appoint proper persons Or such person as all agree on Public trustees in Colorado 15 16-16 15 16 VIII...5 6 7 Vlll CONTENTS. when donee of power does not act 7 What court will have jurisdiction 8-9 Appointment not complete without title to property May vest by terms of trust instrumeut May vest in new trustee by statute Decree may order conveyances Appointees of court must give bond Without sureties when . 1 17 1 If sole trustee dies or is removed. ... 14 14-1 15 15 . . Who Any 13-15 person of legal capacity to hold property and exercise 13 13 can be a Trustee power Such person may be a corporation Who cannot be a trustee 13 13 Lunatic and infant may be Trustee should be " capable " and " fit " Bankrupt.10 10 10 10-11 11 Amount V. . or beneficiary unfit Relationship objectionable 13-14 . . . VII.. .. Devestment op Office 16-17 By By extinguishment of trust or completion of duties death or disability office vests in survivors . 11 12 12 VI. required Who Any is Trustee 11-12 person intermeddling with trust property An executor investing and performing duties of trustee Where a second set of trustees appointed under power . . . bad character. 6 6-7 6-7 7 the Trustee is Appointed Must be ratified by court when Court will appoint when there is no adequate the instrument How provision in 7 . .

.9 CONTENTS. Cannot abandon trust Resignation Must be accepted either by all interested IX Pages 17 17-18 17 17 Who are interested for this purpose Where Removal there is Or by court. unless prejudiced or unreasonable For technical breach of trust Por breach of trust through mistake 21 PART II. . . . INCIDENTS OP THE TRUST ESTATE.. The legal and equitable estate in every trust. 18 19-21 19 must resign both unless devisable Matter is addressed to discretion of court Probate Court has statutory jurisdiction . 1 Any court of equity in absence of statute . Ownership op Tkust Property absolute in Trustee Incidents of ownership fall to trustee Suing and being sued No right of action if trustee barred Is stockholder in corporation Is personally bound by contracts and criminally Is liable to taxation Is liable in tort 22-26 23 23-24 24 24 24 25 26 .. THE INDIVIDUAL AS TRUSTEE.. . more than one What trust in court 17 same instrument. I. 19 19 All interested in trust are parties Removed for Waste and mismanagement Wilful breach of trust Property insecure Unreasonable prejudice Unreasonable disagreement 19-21 19 20 20 20 20 20 20 21 21 Will not remove Por poverty Caprice of beneficiary Unpleasant relations with beneficiary Por non-exercise of or manner of exercise of discre- tionary powers.

Effect of conveyance Purchaser for value without notice. extent .. .. . Alienation Inter vivos. cannot he severed Transmission op the Trustee's Estate.X CONTENTS. if equitable 42 42 43 Passes to successor Forfeiture On.. What is . death of trustee Vests in survivor how On death of sole trustee vests in General devisee when Heir or personal representatives 43 43 43 44 when 44 44 . and is holder of power only Is entitled to possession at law . 37 37 . Pages Ownership not Beneficial Can take nothing but established compensation Cannot Cannot Cannot Cannot Cannot set off debts in equity 26-29 27 27 27 27 use the property May in buy the trust property borrow trust property buy up claims at discount some States render estate expert services for for 28 28 hire.38 Possession of beneficiary is that of trustee Estate is joint . . . . Commissions allowed in various States 29-30 29-30 30-33 33-36 Trustee's Estate In real estate ... no title. . in others not Must account any benefit received 28 29 Ownership should not be a Burden Can charge legitimate expenses. .. is 39-45 39—44 39 39-40 40 41 41 41 May convey at will. • Title passes to' remainderman even . Entitled to reasonable What are compensation.. only what is needed In personal absolute In Code States. 37 38 38 .. . 37-38 . who is and Title will not pass under general assignment Cannot be taken for trustee's individual debts Subject to execution for trust debts To what Set-off not .. .

Vest in all trustees jointly Pass to successors and survivors when General powers Special powers . What powers treated What Powers a Trustee has As incidental Granted by court or statute Granted by maker of trust 44 44 45-47 45 46 Vesting of Powers When powers do not vest in trustee . . Consent. POWERS. Pages In General. XI II.CONTENTS. etc Control of Court over Execution Will control obligatory powers Will ratify when Will not control discretionary powers Will not inquire reasons 51 51 51-52 52 52 May Will consider reasons if given set aside for fraud 52-53 53 53 53 53-54 Extinction of Powers By death of person having discretion trust Expiration or accomplishment of Exhausted by what . 46 46 46 46-47 47 47 Execution of Powers The essential part of a power Joint execution necessary 47-48 47 Exception about collecting money 48 48 48-49 48-49 49 49-51 50 50 50 50 51 Delegation Cannot delegate essentials Can delegate non-essentials Partial or defective Execution Defective execution aided for purchaser Substantial execution of essentials confirmed Literal execution of prescribed non-essentials necessary .

. PARTICULAR POWERS. Purchaser takes risk of what Purchaser must see to application of purchase money when 59 Pledge or Mortgage Not a general power When given by statute Court will not order 60-61 .... III.Xll CONTENTS. Pages Power of Sale Not a general power Usual power in trust instruments Usual power under statutes Court of equity 54-60 54 54 55-56 57 may decree sale Execution of Powek Must be accurate Defective aided when.. mortgage 60 60 60 60 61 61 Power to sell does not include May give power of sale Partition and Exchange Leasing What What leases trustee can make leases are binding 61-63 61-62 61-62 62 63 63 Special power to lease Liabilityon covenants To Sue and Defend May May incur expense 63 64 64 64 All trustees must join What admissions bind compromise To Contract Express contracts bind estate when Trustee personally bound by contracts Signing as "trustee" 64-65 64 65 65 Maintenance and Support General power when Special power how exercised Mainly discretional General power how exercised Discretion as to . 65-69 65 65 65 65 amount 67 . 58 58 Under statutes By court 58 58 59 .

Must be loyal to its and the beneficiary's interests Must not aid adverse claimants Must not come in competition Must consider interests of trust exclusively in its management Must prosecute suits Must not release securities . . 77 77 77 78 79 Account in court Account between parties Expense of accounting 79-80 80 80 May get instructions of court where duties doubtful . Discretion as to Discretion as to o X1U Paoes amount reviewed when apportionment when more than one 67 beneficiary 68 68 69 69 Miscellaneous Revocation Appoint successor IV.. DUTIES. 69 Duties to the Beneficiary owing to Status To unable to care for self When others have duty to support Beneficiary is not a stranger in matters outside of trust Contracts with beneficiary Must not take advantage of position Such transaction may be set aside support if 69 70 . 71 71 71 72 72 72 72 73 73 May accept employment from beneficiary Duties in Exercise op Office Must exercise utmost good faith in execution of trust .....CONTENTS. 81 . 73 73 73 74 74 Duty to exercise Trust personally Cannot delegate to co-trustee or agent May employ agent where there is necessity May employ agent to perform ministerial acts 74 76 76 77 77 Duty to Account Must keep separate and accurate accounts Books open to inspection of beneficiary Must settle accounts periodically Entitled to settlement of account Eorm of account Effect of account '. ....

. Pases Where May the Tkustee is in Doubt as to his Duty . . .. Should require tenant to attorn or take possession 86 86 Personal property. 89-90 90 90 90 90 91 . Trust chattels Money Non-negotiable securities 87 Negotiable securities 88 88 89-91 89 Conversion Usually necessary to some extent What should be converted 89-90 Business. partnership. 82 82-85 84 83 84 84 85 85 85 85 .XIV CONTENTS.. undivided.. ... Place title in joint names Take Personal property. Cake and Custody 86-88 Eeal estate. .. unproductive.. . 81-82 81 81 notify beneficiary Cannot get instructions to enlighten ignorance Proper form of raising questions V. Transfer of stocks necessary Notice in case of equitable claims Should sue on all claims . 82 MANAGEMENT OF FUND.. possession of May Receipt for to settlor not come into possession at once Must examine predecessor's account . What may be trust property Must take Steps to secure Property at once Real estate. or generally property not trust securities Liability for delay What need not be converted Maker's reasonable investments Securities at a premium Property to be enjoyed in specie . Conversion op Real into Personal or the Reverse 91 91 May not convert without What is a conversion Authorized by statute Authorized by court authority 91-92 92 92 92 92 Cy pres Infant's estate Implied authority 93 . speculative.

Investments Must keep funds invested XV Pages 93-104 93 93 . 107 108 108 108 109 109 Farming Dividends. Ordinary Betterment and extraordinary . at all times Liable for simple interest Liable for compound interest when 93 Change investments when Must invest securely and to get current return Trust investments.CONTENTS. generally 109-110 109-111 112 112 112-113 112 113 income May require apportionment Bonds bought at premium Apportionment at end of life estate Payments Discharge of encumbrances Alterations and repairs When principal and when income On newly acquired property 113-117 113 114-115 114 115 115 115 Taxes. 99 99 99 Proportion in one security Investments allowed in various States 100-103 104-113 104 104 104 106 107 107 Pbincipal and Income Need of dividing Receipts. 94 95 96 96 96 96 97-98 Must Determined by court exercise a sound discretion What is sound discretion Determined by condition of affairs Margin of security at time of investing ..... The estate paid in is principal Proceeds of conversion of securities Damages Gain and loss recovered in value Advance or depreciation Timber and gravel Chattels . stock Accumulated income Current On wasting investment Extra dividend Stock dividend Rents Interest... . what are Determined by statute ..

. To Strangers. 122 Por crimes of strangers where there and default of co-trustee neglect .128 j28 .. Care of property Brokers' charges Legal expenses 116 117 117 117 Distribution 117-119 117 118 118 118 119 119 At risk of trustee have decree of distribution Who bound by decree Should not be by fictitious account Payment to an attorney Compensation for May VI. Premiums 11 5-1 1 Proceeds of policy Expenses. See Incidents of Ownership.6 XVI CONTENTS.. 120-121 120-121 To Beneficiaries Are joint and several Each transaction stands alone Por neglect of duty Whether damage is directly or Not for act 121-129 121 121 121 indirectly the result is . discretion Otherwise where discretionary power Compound when required to replace property Liability terminated May be By death Release . Pages Insurance. . 122 Unless one joined in the breach of trust Or contributed by neglect Or gave joint bond Contribution from co-trustee 122 122 122-123 122 124 125-127 125 125 125 126 127 127 127-128 ]28 For errors of judgment In investing Paying to wrong person Must use average Measure of damage Interest simple.. supra Criminally for embezzlement . TRUSTEES' LIABILITIES.

Rights op Beneficiary against Trustee .. . THE BENEFICIARY. 140-147 140 140-141 141 Where enforced How enforced Can compel what Damages for breach Special rights of trust 142 142-147 143 Right to Right to Right to Right to Right to Rights lost information income support conveyance possession 143-144 144 145-146 147 147-149 148 148-149 149 • By Release Assent Acquiescence Statute limitations • 149 . Who mat Who is II. be a Beneficiary 130 131 the beneficiary . III.. Pages 128 128 128 128-129 Insolvency Successor's taking over property PART I.CONTENTS. 135 Restraint on alienation 136 136 136 137-138 138 139 Tendency of modern jurisprudence Exception as to married women Rules in various States Spendthrift trust made by cesser Support of family Condition over on alienation III. May be alienated What Notice Priority 132-140 132 133 1 33 133 134 134 . The Estate op the Beneficiary Incidents of the equitable estate Will descend like other property Dower and curtesy estate passes . Account and apportionment of successor Statute of limitations XV11 ... 139-140 ..

. 149-150 150 151 151-152 152 152 153 .. What is notice of trust Rights where disturbed in possession V.. . Non-resident trustees Foreign investments Taxation 155 155 155 155 156 157 157-158 Index 159 . . INTERSTATE LAW.. Rights against Strangeks To constitute transferee of property trustee May follow as long as can identify Money may be followed Must elect whether to hold trustee or follow Rights to pursue stranger aiding breach of trust 149-153 .. Trust invalid in jurisdiction where sought to be enforced Trust can be enforced ...XV1U CONTENTS. Pages IV. 155 Where Where Where trustee is is property trust is established by judicial decree . Liabilities 153-154 PART IV...

Lowell 80 Anderson v. 34 Bartlett v. Briggs Gleg Landerfield Proprietors. L. Underhill 123 Bayard «. Mercantile Ins. Bahin Hughes Bailey. Wainewright 109 Barker v. Lloyd v. 13 150 33 52 148 v. Green 99. 152 23. Alford v. 57 Anthony v. Pace 56. Mather 92 Ansley v. Co. Wyndham 26 Benjamin v. v. Brown Arnould v. Pet'r v. Hooper 104. 24 Barker's Trusts. Grinstead Atkins v. Bartlett 133 Barton's Trusts. Bacon Badger v. 154 Bateman v. Caswell 25 Arguello. 157 a. Tibbetta 26 Barclay v. Ins. Parsons 103 Barrell v. In re 14 Barnes v. Badger Babcock Baer's Appeal Bagshaw v. etc. 151 v. Aldrich 67 Allen v. Adams 6.TABLE OF CASES. 38 Beach Beach v. Gillette 27 Alleys. Co. Joy 30. In re 87 Abell Adair v. Armstrong 122 v. 48 124 47 135 v. 40 134. Spencer 103 37 76 134 v. Pages Abbott. Scudder 87 Amory v. Hubbard Bacon v. McWhorter 137 Baker v. Colley 149 Bergengren v. Ailing 71 Ames v. Brady Brimmer Adams v. N. Barker 142. 57 v. Mut. Albree Attorney Gen. Granger 80 Bate v. Pet'r ics' Bank v. 34 Foots v. 153 Bailie v. Lawrence 50 Ailing v. v. 27 95 111 93 56 38. Davis 50 Bates v. Adm'r. Lorillard 56. Arnold u. In re 52 Benett v. City of Baltimore 152 Aldrich v. McKinley 111 v. Belknap . Farmers' & Mechanv. Dow 137 Barney v. In re 110 Bassett v. 47. Ex parte Belknap Belmont v. Gill 73 Bennett v. v. O'Brien 46 Beloved Wilkes' Charity. Eng. Aldrich 62 Belchier. 154 33. 1 48 113 Albert v.

. In re Bouch. 124 Blauvelt v. 63 57 Blacklow v. 121. o. Rollins Bostick v. Bobbins Boston Safe Dep. Bogle 18 Bohlen's Estate 55 Borel v. Andrews Fane v. 53 122 64 55 70 81 o. Gallatly Biddle's Appeal 31. 90 36 91 Bradbury v. Morehead Broadway Bank ». Boys 48 30. 122. Thorndike Braswell v. Boston v. Bradshaw Bradstreet v. 80. I. Laws Blake v. Mixter Bostwick. Ackermann 77 Bogle v. Bowen v. Rail153 road Black v. 49 Berger v. 30 81. 74. Jackson Brought v. 32. v. In re Sproule . Pegram 31. Whitchurch Bradlee v. Evans Bowes v. Fidelity Co.141 67 61 Butterfield Brandenburg v. Adams Broeck v.XX Duff TABLE OP CASES. Birchmore Bradby v. In re Bosworth. Brown v. Banuelos v. Floyer 61 49. ' Bouch Savage Bowditeh v. v. Seeger Bowker v. 110 38 18 Boursot 10. 15. Penny 120 151 Bowers v. Brooks v. 71. Chicago. Pet'r Desmond French 116 110 140 99 . & F. Winton Bostock v. 48. Oglesby Boys v. 32 92 Billington's Appeal Bird v. 131 146 108 137 34 32 Higgins Brown. Pierce Boyd v. Ligon 62.

TABLE OP CASES. XXI Beers . Clark v.

107 52 93 51.XX11 TABLE OP CASES. Everett Drew 23. 70. Ellis v.. 151 John v. Heard Sparrell Ellig ». Emery Evans Batcheldei' 18 31 101 2 Evans's Estate v. 110. Naglee Barker Boston. 91 Ervine's Appeal . 111 Eldredge Eliott v. v. H. 64 Frazer v. v. Western 106. 65 56. 75. road u. 73 & E. Rail4. Ellis v. 9. Wellesley Earl Cowley Earp's Appeal v.

TABLE OF CASES. XX111 .

.XXIV TABLE OP CASES.

141 Onslow v. Acton McPherson v. Crawford 30. Henderson 24. Coal Co. Holmes Feinour v. 132. Hibbard 94. 150 Ochiltree v. Phelps 41 108 Nugent v. Appellant 72. 107. Winslow 82 Molton v. Noel Morrill v. 47. 123 Morgan v. Kansas Pacific Rail12 Olney v: Balch road 12 23. 91 Coates 103 37 National Bank v. 44 Owens v. v. 152 Norcum v. Farquhar 137. 127. Hyer 78 94 34 Nance Nash v. West Kansas Land Norling v. 31 Nickels v. v. Evans 96 Neyland v. 68 Mortlock Morville v. Fowle MoCann v. Wallis v. 69 Nelson ?'. Traphagan M'Clanahan v. Hill 27. Poor 141 124 73 103 150 Munroe Murray v. Hassam Adams Universalist 41 Meyers v. Morrill 78 Ormiston v. 148. 94. Matter of Dyett 65 v. 115 62 v. 56 150 North Merriam v. Cloon v. 68. Zanesville 96 127 McKim v. Clymer 55. Fisher Moore v. 66. Cox 20 Nichols. Walsh 67. 68 17. Moore 58. Calkins 58. Bennett Soc. Olcott 99. 59 16. v. Wright 48 Monell v. May XXV Pages v. 88. Prescott a. 121. Thompson 90 Nyce's Estate 98 Mitchell v. Bendy 73. 89. 42 63. 79. 34. 128. 139 v. Gleason McCoy v. Walker 135 v. D'Oench 47 Mercier v. Norton 37 50 Minot v. Schuyler McLeod v. Philips 103 24 Nobles v. McCartin v. Allee 26. 58 Norris v. Millen v. Randall 8. v. Nance McDonald v. 146 McNeillie v. Duncombe New Eng. v. 128 Newcomb v. Guerrard 18 Miller. Henderson MoCloskey v. 16 v. May v. 109. Keteltas 153 McKnight v. Ireland 67. Anstruther 137 142. Tappan 46 v. Kneeland Mclntire'sAdm'rsw. 149 Overman's Appeal Mortimer v. 42 Ord v. Court More v. Buller 59 38. 70 Newhall v. Doane 90. Guedalla 48. 106. Monell 92 87. Muscogee Co. Ouseley v. Fitch 6 110 North Amer. Wheeler 134 151 New York Co. v. Trust Co. Eaton 21 Meeker v. Eaton 82. Eure 102 Old South Soc. Blake . 148 61 McQueen v. Hogg Meeks v.TABLE OF CASES. Crocker 57 32 Oliver v. Olpherts Mendes v. v. 154 Co. Insurance Co. Redwine 60 Norton v. Irvine 87. 123 Oeslager v. 74 Mayer Galluchat 28 v. 81. 157 94 Morse v.

Palmer Parcher v. 115 Cox 137 135 Poindexter v. Rogers 6 31 Pitney sary v. Bickerton 100 148 14 Salmon. Sherwood Peckham v. Devereux v. Head 60 Reed v. Pace Pierce v. 95. Whitney Reid v. Dimdas Pearson v. Porter 56 64 Ryder v. Clemson v. 113. v. v. Whitney 63 34 38 148 Pusey v. Jamison Peck Pell v. Perkins's Appeal Perkins Perrine v. Harrison Pope v. Premier Steel Co. Land Co. Johnson Stevens Person Warren Philippe Philips Philbrick's Settlement Philippi Philips Pierce v. 52 55 36 20 133 Quackbnboss Quin's Estate Southwiek Parsons Paschal Winslow Aeklin v. Heyer Purdie v. Converse v. Deffell v. i>. 114. Couch 108 Russell v. 154 Rhoads ». v. 30 126 13 Richardson Riddle v. Piety Pinckard's Pinckard's Adm'r 137 12 Robertson v. Ames v. 38 Powcey Presley v. Haughton 108 . 79 32 16 106 14 105. Windram 135. 148 Hubhell 110 Randolph v. E. 136 Stribling Packard Marshall Paddock v. Bussell Parker v. Richardson Boston Treeland v. Plympton Everson v. Wheelwright 136 115 28 Rogers v. 137 37. v. Bowen v. 155 124 48 116 103 15] Kaby Band Kidehalgh 124. Whitehill Ridgley Roberts v. Blackburn Pool v. Bank v. 115 Prevost v. Grinnell 1 46 130 Ryan v. v. Shackford Potter v. Robinson 93. Eames Roxburghe 113. Ray v. 42 20 Johnson Moore v. Sargent 12 139 Saunders v. Rhoads v. Porter v. 125 v. Birmingham v. Samuel 139 51 Sargent v. 129 98 Samuel v. Collier 1 08 149 v. v. v. Pages Pace Pace a. Gratz Proctor v. Yandes Pacific Bank v. 92 Dill 33 v. Johnston 137 134 Robinson v. JFarnsworth v. In re 83. Newton De Winton v. Doughty Reed v. Pass v. v. 100 47 109 133 73 145 25 110 149 48 Pennell Mullins v.XXVI TABLE OP CASES. 28 12 29. 99. v. Boston Dispen- Rome Exchange v. Bank of Rutland "Woodruff Portsmouth v. v. Burroughs Stace Distributees v. Chase 40 «/. People Townsend Moore Newell 26.

XXV11 .TABLE OF CASES.

Urann v. 106. Roche 31 Utica Ins. 137 133 139 28 122 Treadwell Trull v. Bradford Coggeshall v. In re 82 98 49. Sheldon Tryon. v. 64 Vandever's Appeal Van Doren v. Gilmore v. 124. Finch v. Olden Van Vechten v. S. TABLE OF CASES. Co. v.xxvm Thomas v. Matter . Tolles Wood v. Foster of 72 23 110 121 "Wadsworth. Pomeroy Tnrner v. 126 35 23. v. v. In 52 47. 52. v. Kobinson 99. Murphy v. Townend Townley Co. Lynch re 93 Vanderbilt. State Tucker Turnbull v. Eastman Vaughton Vetterlein v. Coates TJ. Pages 18 121. v. 137 40 Tillinghast o. 128 Peake v. 113 Noble Barnes Vinton's Appeal v. Vyse v. Maule Tuttle v. Terry Van Vronker v. Trull Trust Co. 82 4 101 102 28. 111 23 106. Higham Thompson v. Townend Sherburne Salisbury Mfg. 60 Trust Co. 31 7 Tucker v.

TABLE OE CASES. . Womack Austin XXIX v.

.

but it is — a relationship. 2 Infra. pp. THE TRUSTEE AS AN INDIVIDUAL. or at least looked on with suspicion. involving many duties and liabilities. Office mere contract Trusteeship is not not always Desirable. 74. It is not always desirable to be a trustee. others . PAKT I. 1 T>. He and what his duties and liabilities should also examine the property to see that his personal interests will not conflict with his duties as trustee. 82. Lloyd. Infra. or he might buy from the estate or sell property to it. in Hallows v. p.A TKUSTEE'S HANDBOOK. p. as broker or counsel for the trust estate. but trustee such services will be unpaid in if he is the some jurisdictions. 74. he is put in such i Keckiwith. J. 39 Ch. Moreover. 8 Infra. but also the absence of conflicting personal interests. to manage property for another. 72. and often the sacrifice of personal convenience and chance of profit. I.. but as trustee he is deprived of these privileges. 2 An individual may be willing to trust the whole or some part of the management of his personal affairs to but a trustee must manage the trust affairs him3 The individual might have important employment self. The duties of a trustee to his beneficiaryrequire not only the highest good faith in their execution. and before undertaking any trust the individual should make a careful examination of the trust instrument to ascertain 1 its particular provisions will be. . 691.

3 To counterbalance these possible disadvantages the trustee is entitled in America to compensation. 10. Litt. & La. even though the trustee were nominated under his promise of acceptance. 6 7 8 2 Infra. and a limited trust to transfer the estate to the new trustee. Disclaimer. Ga. the trustee assumes all the liabilities involved in the ownership of property. If the office is to be disclaimed it must be disclaimed at once and unequivocally. 2 a trustee's handbook. Infra. . p. . 4 He is absolutely prohibited from taking any other benefit from the trust. 35. 9 Wise v "Wise. 2 be required to give bonds with sureties for the faithful performance of his duties. as otherwise an acceptance may be implied. p. 4 Infra. 8 Infra. 2 Jon. and is for neglect or errors in judgment in its management. 7 II. 71. p. even where the trust property not in question. § 3190. generally to the same extent as an agent or factor who manages the affairs of others.. . John. 30. 45. 6 He may No one need be a trustee against his an acceptance of the office is necessary 6 and the office may be refused or disclaimed at any time before acceptance. 5 Infra. when appointed. p. 27. Code (1895). — will. 9 1 Infra. 1 In addition to the complications that may arise from the relationship to the beneficiary. any profit- confidential relationship to his beneficiary that able business dealings which he has with the beneficiary are subject to suspicion. Evans v. 26. 403. p. Co. 4 Beav. 9 a. since It is true that a trust estate 8 may vest in the heir or rep- resentatives of a deceased trustee without possibility of disclaimer takes only the but in such case the heir or representative title to the property. p. and if he is the personal representative to settle th& ac- counts of the deceased trustee.

Stat. § 3 Rev. § But the refusal to give bond is treated as a ground for removal. and recorded where the settlement is recorded and if the settlement is not recorded. then addressed and delivered to whomever has the custody of the instrument that person being in most cases one of the beneficiaries. not as a disclaimer. 328. such a disclaimer would be unwise in most cases. In general the disclaimer should be in writing. in Dorr v. 420. Laws Vt. (1889). If the trust instrument is a deed. Wainwright. J. 2608. 110 Mass. 4 and if an executor have the management of real estate given him. he cannot separate his duties and accept part and . .. C. he may disclaim either office and accept the other. (1896). Rev. although the failure to qualify or give bond in court is usually construed as a disclaimer by statute 2 but such a disclaimer cannot be set up by a person other than one for whose security the bond is given until some action is taken by the court. § 4155. See Shaw. in some States. 1 If the trust instrument is a will. 298. Stat. Ohio (1890). 331. Howe 4 5 Ray. ch. § 5983. 207. p. then the disclaimer should be by deed. 3 No particular form of disclaimer is necessary but it should be affirmative and decided.. p. Stat. n. and vesting of the estate though in practice it would not probably be so construed. ITnderhill. however. (1888). as trusts are not divisible. and probably difficult of proof after a considerable period had elapsed. Stat. § 3420 . 13 Pick. 6 trustee under the Where. § 8689 . . v. Rev. Conn. Code 2 . Mo. Code Ala. 68. unless there appears to be an inteni Lewin. . Rev. . (1894). Gen. Although a simple verbal refusal to undertake the trust is sufficient. 8 trust must be disclaimed wholly. A disclaim the other. (1883). In New Jersey trusts are divisible. Va. but not in the form of a reconveyance which presupposes an acceptance. or the other administration of property in which he acts the part of a trustee as well as executor. 8 (1887). a disclaimer filed in the Probate Court is appropriate. Me. a person is appointed executor and same will. §490. THE TBUSTEE AS AN INDIVIDUAL.

» In re Cunard's Trusts. 289. An acceptance should be made formally according to the provisions of the trust instrument 9 but if no manner is therein specified. 107 Mass. 1 when two trusts are created by the same 2 both must be disclaimed or accepted.. Carruth v. the disclaimer of one will destrojr the power. but the instrument better view seems to be. Pub. Laws (1888). 8 is to vest the whole estate in and relates back to the time of the gift. White. his costs. Carrnth. 5 s 7 Ellis v. 93. by the disclaimer. if the settlement — Daggett v. 496. R. (N. Gen.) 192. Boston. § 12. 8 9 Lewin. Railroad. 2 Eq. 4 Generally and by statute in Md. and the result is the same as though the individual 6 As to the legal disclaiming had never been appointed. Code (1895). Ga. 7 Beav. 418. 4 tion a trustee's handbook. testator that he should accept both on the part of the or neither. Lewin. 214. and if a gift or legacy is attached to the office it will be lost by a disclaimer ' but a gift which is not attached to the office or conditional on its acceptance will not be affected by a disclaimer of the office. 4 the trustees who title the exact effect is less clear. If the individual were not consulted about the appointment. end. L.. 208. 48 L. Slaney v. 6 on however. H. § 264. the trust instrument bestowed any power the trustees nominated. p. 2 1 §§ 288. 398. Acceptance. but nevertheless it is held to be devested If. Perry. and no intention appears that both or neither shall be accepted. "Watney. . 8 III. The effect of a disclaimer accept. he may have the expense of consulting counsel and all . Art. §3190. 1. p. 431. J. one may be accepted It is said that and the other disclaimed. S. that where they are wholly separate trusts not interdependent. In re Tryon. 128 Mass. 148 Mass. & E.

1 If an individual be named both executor and trustee.. 3 An acceptance will be implied if the individual intermeddles with the trust property. he will be construed to accept both offices if he presents the will for probate without disclaiming either. ch. 3. until the disclaimer has for- mally been made since such assumption or interference be construed as an acceptance. H. Sneyd. prove that the act from which an acceptance would be implied was done as agent. and a new trustee may be appointed. and not executors. 413.. p. but in other States they will. And a trustee who has acted as such cannot disclaim. . 2 Grant's Cases. In some jurisdictions the sureties on the executors' bond will not be liable for his acts as trustee. 186. although in practice they often qualify as executors only. p. 4 Hence. 5 He may. or was merely 6 to protect the property until a trustee could be appointed. then by joining in the deed. and by statute a person not so qualifying is held to have disclaimed.. 3. 2 Flint. 141. either as volunteer or agent. 2 In absence of statute the executor or administrator accepts the decedent's trusts. Pub. if a disclaimer is contemplated. however. § 18. Stat. . p. In such cases the executors act as and really are trustees to that extent. 432. 12. then if 5 the trust be the probate by qualifying in court. or established by will. and should be qualified as trustees as well as executors. and cannot disclaim them but by statute the law is usually the reverse. or voluntary interference with the trust estate. 12 N. * Kilbee v. be by deed. will readily Mass. It is not unusual for a will to provide that the executors shall manage certain estates. 1 5 6 Supra. even though the deed needed his signature and he has not signed. or performs any act to carry out the trust. Clinton Co. Knowles. care should be taken to avoid any assumption of authority. Smith v. Flint v. § 157. and hold them in trust for certain purposes. Supra. 8 Infra. 2 Molloy. THE TEUSTEE AS AN INDIVIDUAL.

142. v. Pa. the property will be held by whoever may have the title until a proper trustee can be if — No trust appointed. an acceptance will be implied and the burden will fall on the appointee to show that he had no reasonable opportunity to disclaim. Fitch. 12 Pick.. 8 Gray. and in that case disclaim . Adams. estate vests in a transferee subject to disclaimer. (1894). Civil Code Cal. want of a trustee. 185. 1 therefore if an appointment be known of and not disclaimed it will The within a reasonable time. 4 The power to the circumstances make an appointment will arise whenever make it necessary. Rogers v. R. or that he acted in some other capacity than that of trustee. Y. 3 In case of need the court will appoint a temporary and rnaj' in certain contingencies administer the trust itself. p. 228. Dak. Laws Dak. or whenever the provisions of the trust instrument prescribe it. 21 Wall. As when the number of trustees sinks below the prescribed number. (1885). Rogers. § 4302. p. L. Infra. 421 Dodkin v. either in the nature of things. (1887). though such a course is very unusual. But the power of appointment under the trust instrument will only arise under the exact terms specified therein. Mass. Appointment. 6 a trustee's handbook. " . and 1 Adams v. or if all the trustees die. . or as it may be otherwise provided in the instruments. 111 N. but the burden of proving be on him. . or when the safety of the fund or the proper administration of the trust requires an additional trustee. North Adams Universalist Soc. . 445. Brunt. 2 and will be allowed to fail for conveyance is made to one that cannot act. or if those who have been nominated disclaim. (1895). IV. as in the case of the death or disclaimer of all the trustees. Amory. § 3959 Code No. § 18. Gen. 6 Eq. 6 or a trustee becomes disqualified by going abroad. Hosp. 580. 8 4 5 Brightly's Dig. v. trustee or a receiver. § 2289 Comp. 2030.

the court has no jurisdiction iu the case. the Probate Court has jurisand the appointment. . its jurisdiction. but usually to the court. 68. Stat. 8 Infra. ch.* The same is true if the trust be under the jurisdiction of and a letter issued. p. § 15. §§ 15. 2. If the trust instrument adequately provides a method to be pursued in making the appointment of a trustee. 2 vision that a trustee shall be How the Trustee is appointed. Me. Underhill. Pickett. and he died without executing them. 7 not arise under similar terms as. the power is wholly lost. In Maine a trust may be confirmed by court. 761. 16. the power did not arise.THE TRUSTEE AS AN INDIVIDUAL. eh. even if made will. or convenience of the beneficiaries. If the trust is diction of the estate under a will. 1 or in the case where the power to appoint arose on the refusal and neglect of the original trustee to execute the trusts. 68. 1 2 Turner v. Stat. or for the security of the fund. aud the appointment must be made by the court. and the method prescribed must be carefully followed but if it becomes impossible to follow the method prescribed. 8 As a matter of precaution. 6 the court for any reason. under the terms of the statutory law. and not the court. 77 . for instance. either to If for any fill a vacancy." will not give rise to a power to appoint when one becomes bankrupt and therefore "unfit" but still "capable". and in others to the surviving trustee. (1883). according to the prevailing court. will . Maule. 4 court in 5 The appointment of any voluntary trustee may be confirmed by Maine Rev. 42 Miss. (1883). p. reason. 50. an appointment made under a power in a settlement should be recorded with the settlement. Guion v. must be confirmed by a decree of the although the trustee's powers in such cases come from the settlement. and thus come under Rev. 15 Jur. — by statute to the beneficiaiy. n. a proappointed on one of the trustees becoming "incapable. 400. In some States the power to appoint the trustee is given .

Art. the court will appoint a trustee upon the application of any person interested in the trust. 60 Barb. 147 Mass. within its jurisdiction. § 6 6 Randall. 293. Laws Md. the appointment of a trustee is desirable. and the trust instrument does not contain an adequate provision for appointing the trustee. Statutes exist in some jurisdictions which authorize trus- 1 2 8 4 Statutory provisions in most jurisdictions. 147 Mass. p. 12 Allen. Col. The operation of the statute is to confiscate the title of the person out of the jurisdiction. or if the person holding the power to appoint a trustee unreasonably refuses or neglects to act. Paine. Smith. § 112. 2535 Gen. and the court is powerless. J. v. (1888). 5 It is held that the court having original jurisdiction of a testamentary trust may make a subsequent appointment. 394. 1 though it would not take any notice of the application of a stranger. Shaw v. 9. McCann McCann Curtis v. and vest it in the appointee of the court. All persons in interest must be parties to the suit. Gen. 2 but 3 less parties are required in some jurisdictions by statute. Randall. 6 but it is hard to see what effect the decree can have unless the trustee be aided by statute or be reappointed in the jurisdiction where the property lies. jurisdiction in these matters is conferred on the Probate Court by statute . HO. N. or if the property itself is its jurisdiction and there of the jurisdiction. Annot.8 a trustee's handbook. (1895). Stat. v. although the property and holder of the title are both out is among The its ordinary powers. (1891). . § 212. 16. 81. Stat. p. . 4 In the absence of such statute there is no way of vesting the title. Pub. 81. whether in possession or remainder. See infra. but in the absence of stat- ute any court of chancery or equity will have jurisdiction court will have jurisdiction and can appoint a trustee if the person who holds the title to the property is within a statute by which the title will vest in the new trustee appointed. Ordinarily.

& Erie Railroad. Code Ala.. The original trustees under a deed will have the prop- erty vested in them by the conveyance. as the consequences of administering a trust under a defective appointment may be serious. 9 tees appointed in other States to recover trust property in the State where the statute exists. N. (1896). (1894). p. H. § 4. § 2630. §§ 4709. ordinarily vests in later appointees by express provisions of the trust instrument. since the matter is one of practice. and the incoming trustee is acting wrongfully as trustee. usually after a considerable interval. all the prescribed conditions concerning 4 the appointment must have been accurately fulfilled. Cogswell. 3685. Ellis v. but do not get title to the personal title to estate until it is turned over by the executors. the court may same appoint a trustee . 4711 . 49 Mo. 2 No attempt will be made to state the rules of procedure in such cases. 1 Ky. Stat. and may incur heavy liabilities without any right to indemnity out of the trust estate. (1887). Bumgarner Boston. Gen. The original trustees under a will get title to the real estate from that instrument itself. though simple. since the outgoing trustee is not relieved and is still liable for the trust.. J. where the sole beneficiary has moved into a State and wishes the property there also. . 259. Stat. not complete until the the trust property is vested in him. § 4200. (1895). 1. requiring care and professional advice. 107 Masa. 2 8 4 Code Va. 680. 1 So too by statute. p. v. but this case seems open to the criticism as the foregoing. Code W. — The Appointment not Complete without appointment of a trustee is Title to Property. (1891). § 9. Va. which commonly provides that on the appointment of a new trustee he shall 3 become entitled to and vested with the trust property The property but in order that the title shall pass under the terms of the instrument. THE TRUSTEE AS AN INDIVIDUAL.

Gen. Brightly's Dig. Stat. any written Loring v. 10 a trustee's handbook. . 2030. Stat. Conn. § 4297 Annot. § 26: Rev. Wis. Eldridge. Gen. N. Stat! (1889). (1894). (1888). Rev. 95 ch. ch. (1883). Pub. the appointment being that of the individual and not of the 8 court. 1878. 2 . (1889). § 6. § 7168. Trustees under wills. 125 Mass. § 1. 44. Gen. (1888). Salisbury Mills. v. Stat. Laws (1896) Del. (1889). § 8684. 16. are required to give bond to the court for the faithful performance of their trust. § 4. 220. amended by Stat. 709. or unless all parties in interest join in requesting the exemption. Minn. 115 Mass. infra. 254. § 208.. Laws Vt. Mass. i s c. 43. so as to vest title in appointees under instrument. Laws Md. conve3 ance must be made by whoever holds the title 4 and where the court appoints. 7. 6. Art. p. 6 7 For further discussion see pp. R I Mo. (1894). p. Stat. 250. 6 trustee by statutory provision T Trustees' Bonds. Stat. 1 Gray. Gen. 138 141 Rev. 424. § 4. 3684. §§ 6. Gen. the title will not pass under the statute. n. Kan. 208. (1893). Pub. Stat. (1894). unless the testator has expressly excused the trustee from furnishing them. § 2094 Webster Bank v. . . In many jurisdictions the property will vest in the new 1 but this vesting of title is appointees of the court 2 and even usually confined to where the donee of the power is the Judge of Probate. 709. Stat. Where there is no adequate provision in the trust instrument and no statute applicable. 68. Stat. 6 — and the court may require an appointee under a power in the instrument to give bond if the circumstances require it. a well drawn decree will contain an order for the necessary conveyance. (1882). 7 In testamentary trusts these bonds are required to be with sureties. § 284. Pa. . § 492 (1895). 141. Bowditch Banuelos. Me. and usually trustees appointed bj' the court. p. J. and p. . Statutes in nearly all jurisdictions. ch. In such cases " all persons beneficially interested" refer only to persons in being and who have a present vested interest i Perry. § 2612. ch. ch.

256. and bondsmen are difficult to collect from. on application of any one in interest. Lambert's Adm'r. arises. Who is who Trustee. vol. V. 8 1 2 8 Cottingr. and. preciation be sure that the security remains sufficient and that no deis occurring. . furnished sureties may be rea later time the court. 74 Va. and cases cited. 92. or an executor administrator who meddles with the real estate of the deceased. especially if he be a man of standing. to decline a trust where he is required to fur- nish security and the wiser course seems to be to select the trustees with care. 1. trustee A who has not if at quired to do so.THE TRUSTEE AS AN INDIVIDUAL. Dexter Brown v. 11 in the estate. v. Perry. §§ 245-247. "When the court orders a narily order the trustee to sale of real estate file it will ordi- a bond sufficient to cover the price received. the executor or administrator of a deceased trustee. and is accountable as such to the same extent as though he were duly appointed. The amount of the bond required is sufficient to cover with a margin of fifty per cent the personal property in the trustee's hands. 1 It is not unusual for a trustee. 3 As. and not to persons unascertained and not in being. since continual watchfulness is required to . if there is a power of sale of real estate in the settlement. considers it necessary for the safety of the fund. 149 Mass. sufficient to cover the value of the real estate also. — The question of who is the trus- tee and is to administer the trusts not unfrequently Any person who intermeddles with the trust property is a trustee de son tort. and trust to the carefulness of the selection. for instance. if such a bond has not already been given. rather than to take a less desirable individual with security.

. 84. 52 Pa. will carry out the trust. 17 Me. 16 Ala. Sargent. the second set of trustees in point of time will not necessarily administer the trust 6 but if the property be given to the second set to convert. 513. 395 Perkins v. 98. 91. Ch. Balch. Price. Moore. . 2 but the rule is otherwise elsewhere. Massachusetts. if in and not an executor. Carson. 16. R. not the trustees. Ditson. they will take the property. as for instance the payment of an annuity out of part of the estate. Sheets's Estate. 12 a executor trustee's handbook. 7 Philbrick's Settlement. 168 Mass. 6 Onslow v. 8 Where the same person is appointed executor and trustee under a will. * Crocker v. Olney v. Buggies. 6 Ames. 318. the duties of a trustee conferred An who has on him by the will. even though he qualifies as executor only. 34 L. 1 Hall & Twell. Aldam. or done some other notorious act of transfer. 4 Where a power of appointment is given by the trust instrument and the donee appoints new trustees. 351 Groton v. Hall v. L. Perry. has in regard to that property the powers he would have if he qualified as trustee. 154 Mass. p. 1 Wheeler v. though the trustee calls himself an executor. and Maine the sureties on his bond as executor are liable for his acts as trustee. 1 That is to say. Y. Wallis. p. 368. 420. 6 and it is immaterial whether the trusts can be carried out or not. 7 Where a general power of appointment is exercised by will. 307 . 9 Pick.. 257. 397 . 137 Cushing. 8 Drake t. J. n. Dillon. and where the power is special the same rule should prevail unless the appointment is directly to the objects of the bounty and was not meant to pass through the executor's hands. 5 N. Busk v. 430. 133 Mass. crediting himself with any funds which he holds as trustee. 8 Sargent v. 140 Mass. . 19 Eq. Carson v. 2 White v. 9. the executors of the will. H. 6 Allen. St. . 460. 18 N. he holds the property as executor until he has settled his account in the Probate Court as executor. 8 fact he acts as trustee he is a trustee. . or their discretion is relied on. In Alabama. in the eyes of the law. See infra.

38 N. a person in . 7 Having no discretion. but will be removable. 'Who can be a Trustee. (1895). but she may be now in most jurisdictions under convey by the statutory rules." that is to say. Gen. Paul Co. p. 4 Ves. 343. . 3683. whose Attorney General v. action by the other two is barred. 8 and if one of three trustees is an infant or lunatic. 147. Jr. 488. Thus the trustee should be a person of full age and sound discretion. * Briggs v. 11 Allen. 577. 157. I. . J. §§ 2. Swartwout v. Stat. 179. Landerfield. v. and may be a trustee. Schluter 1 Hem. Pa. Bellord. § 16 7 Ex parte Sergison. .THE TBUSTEE AS AN INDIVIDUAL. 9 At common law a wife could not be a trustee for her husband. Bowery Savings Banks. 26 Minn. * Winona Co. N. 117 N. 495. & M. ch.. Y. Infra. 4 The they trust estate 6 may vest in a lunatic or infant. 617. 9 10 King v. v. Light Boat. 6 Irvine v. 8 until the property is convej'ed to some one amenable to the jurisdiction of the court. 9 Wall. St. 3. and the right to exercise the powers. 283. H. Irvine. 8 Person v. (1896). they cannot act in trust affairs any more than they can in their own affairs. 208. Warren. 48. An infant may be compelled to and so long as infants or lunatics hold the property the trust will be administered by the court through them or their guardians. 286 Dublin Case. Burr." that is to say. (1894). 6 Brightly's Dig. 125. 6 statute. 13 that has — Any person the capacity to hold the title to the property. 2033. 10 trustee should be " capable. Boys. 1 Barb. 2 King v. 3 Dyer. p. A its charter powers corporation having such capacity and rights among 1 is such a person. p. 9 Mod. 14 Barb. a person having the legal and actual capacity to hold the title to A the trust property and exercise the powers. may be a trustee. An alien enemy or an alien in a jurisdiction where he cannot hold property could not be a trustee. 2 The sovereign may be trustee. § 46 Gen. VI. He 1 should be " fit. but the beneficiary cannot enforce the trust except by petition. Laws E.

Ex parte Conybeare's Settlement. Jencks v. 1 Ch. 19 Vt. . and a drunkard or person of dishonest or of bad character is unfit. A for his debts. is not a "fit" person. 240. Livingston. 537. as being unsuccessful in his own affairs he is not likely to be successful in those of others. Lanford. Bank of Rutland. Dean v. 410. Moore.. 6 and the maker of the trust may make such an appointment. court will not appoint a husband trustee for his wife. 4 8 v. But where a husband is trustee for his wife. 1 and who will be impar- Thus a bankrupt the administration of his trust. 222 Parker v. and moreover such especially where a parent or older relation is a connection. So too a life would not be safe in his hands. 7 Shirley v. 363. Bolder. Livingston 2 Johns. 9 Rich. whether he be a tenant or remainderman. Eq. and may be attached . 25 N. since he will naturally be since the property beneficiary is and for similar reasons a near relation is objectionable. an unfit person. 43. 423. The fact of near relationship makes the trustee less able to withstand 8 the importunities of their beneficiaries. 9 Paige. 228. 458. Wilding v. 6 Porter v. 21 Beav. Eq. 7 1 2 8 In re Barker's Trusts. II Paige. Ch. 14 A trustee's handbook. D. 4 and there is no resulting trust between husband and wife 5 but there is nothing in the relationship of husband and wife absolutely preventing the appointment. J. will hands the property tial in be safe. which is the only safeguard Deviation from the rules of strict acof trust estates. countability only too often leads to speculation and the loss of the property. her equitable estate is supposed to be reduced to possession. 619. trustee for a child. Shirley. Alexander. although in this country they are more often appointed than strangers. is too often made an excuse for lax partial to his own interests 2 management. . 1 Weekly Rep. and the knowledge that a breach of trust is likely to be condoned not infrequently leads to disregard of strictly legal management.

. 1 The donee of a power to appoint may also use his discretion in determining the fitness and actual capacity of the appointee. 338. L. 487. § 39 Jur. 2 8 J. Perry. in Bowditch v. 2. the power. Appointment Trustee. See Perry. vol. 220. THE TRUSTEE AS AN INDIVIDUAL. and within its jurisdiction the maker of the trust have due regard to the wishes of 5 if they can be discovered. to a considerable extent do away with the element of personal . 408. Eq. Stat. will appoint only a i Wetmore Shaw. . and may appoint a person actually incapable or unfit.. § 1289 b. (1894).. 1 Ch. but the power is not an arbitrary one. ». 231. 485. and his appointee will be removed for cause only. of VII. 1 Gray. If the holder of the power be himself a trustee. § 297. R. . risk attaching to an individual trustee but they lack the These companies advantages of personal management. § 3410. C. and lacks the great advantages often secured by the able personal trustees. it them . Story. cannot be exercised without the assent of the court. oversight of individual trust in maker of the bound only by the consideration of the legal capacity of the individual. * Rev. trustee. he should consult his beneficiaries and appoint some one agreeable to s and should the matter of the appointment become a matter of litigation. 5 In re Tempest. T. 51 N. In this connection it 15 may be panies. which have of late years said that the trust combecome so numerous. and as a rule the lack of personal manage- ment results in securing the minimum return only on the amount invested. Truslow. Ind. person who is actually and legally 4 but it will capable and fit. 11th ed. though discretionary. — The is making his appointment and if the appointment be of an unfit or incapable person 2 the court may review it. p. Where the court is called upon to appoint a. Underhill. sometimes fail from improper management as utterly as individuals do. Banuelos.

16 a trustee's handbook. even though he be a beneficiary or otherwise unfit. (1891). § 3955 . but the statutes have been held unconstitutional. 7 The trustee's office may come to an end by the extinc- This may come to pass either by the completion of the purposes of the trust. Young. 1 2 8 statute. Code N. 5 Gray. 11 3 4 6 6 7 250. (1895). Stat. on the remarriage of the widow. Rev. Annot. § 2282. (4) by consent of the beneficiaries. 336. 3 Doane. . 5 The regularity of the appointment in by the court cannot be questioned any VIII. 3 Gray. (2) by completion of his duties. Rep. §4298. (1) — A trustee is discharged by extinction of the trust. who will be appointed whenever the beneficiary shows that his trustee is absent from the country or refuses to collateral proceeding. p. Civ. Laws Dak. (5) by judgment of a competent court. 857." act. (1894). Fox v. 10 or by the legal title and beneficial title merging 1 2 in one person. §§ 4557-4559. estate in the remainderman. 499. 2039. Ames. v. 319. § 3410. will appoint a non-resident where is out of its jurisIn some jurisdictions it is forbidden to do so by diction. 265. v. (3) by such means as the instrument contemplates. 9 or in the case of a trust to enable a widow to support her children. Ind. parte Stone. C. Brightly's Dig. 138 Mass. Devestment of Office. Glink v. Comp. If all the beneficiaries agree on a person. 8 as. Rev. 52 Fed. 9 10 Morgan Moore. the court will the beneficiaries or part of the property In some cases the court nearly always appoint him. (1887). n. Col. 476. La Fayette. on the death of the life tenant and the vesting of the tion of the trust. . Young v. McKim v. Stat. 4 The laws of some States provide for a public trustee. Code Cal. 11 Parker Converse. for instance. 137 Mass. Storrs. 195. 4 Cranch C. § 84. 75 Ala. Pa. (1894). Dak. Ex (1885).

THE TRUSTEE AS AN INDIVIDUAL.
If the trust itself continues
disability, or

17

and the trustee dies, or is one created by the trust instrument, if there be more than one trustee, the office will vest in the surviving or remaining trustees, even though there be a provision in the instrument for keeping up the
under a natural

number of the
If he
is

trustees. 1

disabled, the title will remain in him until a

is appointed, and the powers will be suspended or vested in the court. If a sole trustee dies, then in absence of statute his

new trustee

executor or administrator accepts his trusts and at common law cannot disclaim them, though in some States he may disclaim by statutory provision. In many States the statute provides that the executor or administrator dots not succeed to the decedent's trusts, and in such cases the office vests in the court, or is in abeyance, and will vest the person in whom the in a successor when appointed
;

title

to the property has vested in the meanwhile, not hav-

ing the office of trustee in anything but a limited extent, namely, to preserve the property and act in an emergency to prevent a loss, and finally convey to the new trustee

when appointed. 2
It is the duty of the executor or administrator of a deceased trustee to settle the decedent's trust accounts, and his estate is liable for breaches of trust committed in his
lifetime. 8

The guardian of an insane person would stand
same
position as the executor of a deceased trustee.
trust,
still

in the

The trustee cannot abandon his conveys away the property he will 6 trustee 4 but he may resign.
;

and even if he remain liable as

1

2
8

Warburton v. Sandys, 14 Sim. Mortimer v. Ireland, 11 Jurist,

622.

721

;

Ames,
;

510, n.

Infra, p. 45.

Dodd

*
6

Wilkinson, 41 N. J. Eq. 566 Perry, § 344. Webster v. Vandeventer, 6 Gray, 428.
v.

Mass. Pub. Stat. (1882), ch. 141, § 2

10.

; ;

18
Resignation.

a

trustee's handbook.

— The resignation in most jurisdictions may

be at pleasure, 1 and in any jurisdiction for good reason. 2 To be effective, the resignation must be made either according to an express provision of the trust instrument, or with the assent of all the beneficiaries or the court. 8 The assent of the beneficiaries must be unanimous hence, if some are under age, unascertained, unborn, or incompetent, a valid assent cannot be given by the beneficiaries, and resort must be had to the court. The mere resignation and acceptance thereof will not convey the title to the property, but the trustee should then devest himself of the property by suitable conveyances, and complete his duties, and until he does so he will remain liable as trustee. 4 Even where all persons in interest assent, it has been suggested that the resignation is not complete without the action of the court, 6 but it is, to say the least, doubtful and especially as all persons who are likely to raise the question are concluded by their assent. The resignation need not be in writing, and where a trustee has conveyed the trust property to a successor appointed by the court, there being no evidence of any direct resignation, one would be presumed. 6 Ordinarily courts of probate have jurisdiction in these matters but where it is not specially given to them, a court of equity will have the power to accept a resignation among its ordinary powers, and generally has concurrent jurisdiction where the probate court has the power. 7
;

The
1

court will not accept a resignation until the retiring
v.
;

Bogle
1

107 Mass.
2

Craig

v.

Bogle, 3 Allen, 158 ; Ellis v. Boston, H., & E. Railroad, Statutes, passim. Craig, 3 Barb. Ch. 76 ; Dean v. Lanford, 9 Rich. Eq.
Halliday, 11 Paige, 314.

(S. C.) 423.
8

Cruger

».

* Ibid. 5 6
7

Thomas

Matter of Miller, 15 Abb. Pr. 277. v. Higham, 1 Bail. Eq. 222. Bowditch v. Banuelos, 1 Gray, 220.

;

THE TRUSTEE AS AN INDIVIDUAL.
trustee has settled his account, 1

19

and returned any benefit and in some jurisdictions they will require a successor to be provided for. 8 Where there is more than one trust in the same instrument, the rule for resignation is the same as for acceptconnected with the
office,
2

ance

;

viz. unless

the trusts are divisible,

all

or neither

must be resigned. 4

The court may remove a trustee for good but the application is addressed to the reasonable discretion of the court, 6 and each case, therefore, stands on its own merits. 7 The power is among the ordinary powers of a court of equity, 8 but jurisdiction in such cases is generally given to the probate courts by statute, and action should always be taken in the court having original jurisdiction of the trust. 9 All persons interested in the trust must be made parties in a suit for a removal. 10 Ordinarily a trustee will be removed who refuses to give bond, 11 or who has been guilty of a wilful breach of trust, or who wastes or mismanages the trust property, or who refuses to account, 12 or who is a minor, lunatic, 13
Removal.
B
;

cause

1 2 8

Statutes, passim.

Craig
Civ.

v.

Craig, 3 Barb. Ch. 76.
(1887), § 3942

Code Cal. (1885), § 2260; Corap. Laws Dak. Eev. Code N. D. (1895), § 4285.
* 6

Carruth

v.

Carruth, 148 Mass. 431.

Statutes exist in most jurisdictions giving courts of probate jurisdiction to act in these matters.
6 7 8

Scott

v.

Eand, 118 Mass. 215.
v.

A number of examples in Underhill, p. 393, n.
Dodkin
Brunt, L. E. 6 Eq. 580.

As

to

who

are interested, see

infra, p. 131.
9
10

Howard v. Gilbert, 39 Ala. 726. Infra, p. 140. Shaw v. Paine, 12 Allen, 293. As to who are interested,
See supra, p. 3, note 2. Stated to be the only causes in

see infra,

p. 131.
11

12

Webb

v.

Dietrich, 7

Watts

&

Sar.

401.
18

Generally, but in some States expressly by statute.

Eev.

Stat.

;

;

20

a

trustee's handbook.

drunkard, 1 or a person of such bad habits that the propz and the fact that he is is in danger in his hands the testator's son and has a discretionary power of paying the income will not protect him if he mingles the funds with his own and refuses to account. 8 So too they will remove a trustee who denies the trust
erty
4 is unfriendly to it, who unreasonably or corruptly disagrees with his co-trustee, 6 or who, having a discretionary power over payments to his beneficiaries, has an unreason-

or

able prejudice or dislike to him which is likely to defeat the purposes of the settlement, 6 or favors one beneficiary
to the prejudice of the others.'
trustee

sometimes, though not necessarily, remove a or goes to reside permanently without the jurisdiction of the court 9 but the court will not remove a trustee simply because he is
It will

who becomes a bankrupt, 8

poor,

10

or to satisfy the caprice of a beneficiary
is

;

u or beto

cause he

prejudiced against or dislikes a beneficiaiy

where he has no discretionary power over the payments
N.
J. (1895), p. 3684, §
; ;

4 Gen. Stat. Conn. (1888), § 611 Rev. Stat. Me. Pub. Stat. N. H. (1891), ch. 198, § 8 Vt. Stat. (1894), § 2610; Pub. Stat. Mass. (1882), ch. 141, § 9. 1 Generally but in some States expressly "by statute. Rev. Stat. Ohio (1890), §§ 6472, 6334; Brigbtley's Dig. Pa. (1894), p. 2035,
(1883), ch. 68, § 4;
;
;

§§ 59-61.
2

The

statutes

existing in nearly all jurisdictions generally ex-

pressly cover one or
to in each case.
8

more

of the above cases.

They should be

refeired

Sparhawk
Irvine
v.

v.

*

Dunham,

Sparhawk, 114 Mass. 356. 111 TJ. S. 327; Quackenhoss

v.

Southwick, 41

N. Y. 117.
6

Infra, p. 47.

6

McPherson

v.

Cox, 96 U.

S.

404

;

Wilson

v.

Wilson, 145 Mass.

490.
7

8 9

Scott v. Rand, 118 Mass. 215. Paddock v. Palmer, 6 How. Pr.

215.
;

Culp's Est., 5 Pa. C. C. R. 582 Brightly's Dig. Pa. (1894), p. 2037, § 70; Hughes v. Chicago Co., 47 N. Y. Sup. Ct. 531. 10 Jones v. McPhillips, 77 Ala. 314.
11

McPherson

v.

Cox, 96 U.

S. 404.

and Underbill. 2 Perry. §§ 275 to 287. 4 DeG.. Philips. a discretionary power. n. Nor will a trustee be removed for a technical breach of trust. or one made unintentionally or through mistake. P. 732 . 2 1 Nickels v.. Davies. 133.THE TRUSTEE AS AN INDIVIDUAL. 393. 1 of. & J. for other instances. Forster p. . provided he is honest and reasonable in the use or non-use of his discretion. v. 18 Fla. 21 Nor will a trustee be removed for the non-exercise or the manner in which he exercises. him.

These two estates are separate although bound together and travelling on parallel lines. 130. merge legal and equitable rights. 42. Statutes that reduce the legal estate to a mere power. II. . 8 and for courts of law to act on equitable principles. 6 and is accountable to no one in the world but the is 1 2 8 4 6 By Infra. statutory enactments in most Infra. 32 Iowa. but not in an}' estate in the property itself. and that of the beneficiary or the equitable estate. and the refusal of a court of law to allow trust property to be sold on execution. and may eject even the beneficiary from the premises. Transfer of Stock. In every trust there are two estates. 2 and the beneficiar3''s in his right in a court of equity to compel the trustee to carry out the provisions of the trust. Hendershott. INCIDENTS OF TRUST ESTATE. and the beneficiary's estate later on. 192. Devin v. that of the trustee or the legal estate. 1 The trustee's estate consists in the ownership of the property itself. Code States. — the trustee's estate here. Lowell. p.PART I. as in New York and other Code States. THE INDIVIDUAL AS TRUSTEE. Ownership. 4 Nevertheless a trustee in either a court of law or equity the absolute owner of the trust property as to the whole world. p. and they will be treated separately in this treatise . are examples of these tendencies that might be in is The tendency America to largely multiplied. § 37.

6 Vetterlein v. 197. 92 U. S. As Owner ship fall of the Property. 11 Cush. 261 u. p. rights. and his interests are adequately represented by the trustee 6 but in foreclosure a beneficiary has the right to raise mone}'. but expressly by statute See infra. Wetmore v. New York. in jurisdictions. 8 Ames. he 1 2 8 4 may sue for an injury to his possession to the same v. 124 U. beneficiaries are by statute necessary parties. 2 Johns. 129 Mass. and so must be joined. 41 Hun. K Beach Morgan v. 21 Blatch. Brown. Beach. Davis r. 14 Vt. Co.THE INDIVIDUAL AS TRUSTEE. beneficiaries for his use of the ownership. 1 23 The popular merely the agent of the beneficiary expresses an entirely erroneous and mischievous conception of the trustee's relationship to the property and his beneficiary. 4 damage it. but a claim In the case of an agency the person with whom the agent contracts may sue his principals on the contract he has no such rights against the beneficiaries in a trust. acts in his own name. 7 U. P. 6 Carey v. 506. K. and the beneficiaiy has no property against the trustee only. 150. a. 134. — All Owner- actions against strangers to or loss of the prop- either in law or equity for erty. 171. 8 . 64. 6 where the relations between the trustee and beneficiary are not in question. Charles River Branch Ed. Vac Vechten v. And the trustee may sue and be sued without any joinder of the beneficiaries. as Alabama. S. Generally. Porter. Trust Co. . trust the trustee owns the property. If the beneficiary is in the possession of trust property and all actions to protect or recover . and South 8 Carolina. Drew.. Terry. 28. Everett v. Ch. and the agent acts in his name and place in a error that the trustee is . Ed. 7 In some jurisdictions. many Contra. Barnes. 92 Y. 169. Roche. 549. S. 76. must be brought in the name of the trustee. all the Incidents of to the Trustee. 2 In a case of agency the principal owns the property..

Laws Md. N. v. 2172. Code (1896). § 66 unless he voluntarily invested in it. § 3431 ch. Rev. § 54 Ind. . Lowell. Davis. 6 By statute in most States. Co. 6 corporations. 42 Am. Annot. 8 Pub. 3 P. §608. § 2661 Mont. 23.' but his liability is generally limited by statute to the extent of the trust estate. §516. 46. 6 Wend. 279. a 2 Wych Meeks v. and if he is not bound nobody is bound. Marshall. Wms. Pub. 444 and note. S. S. H. (1896). 111. ch. 30. Civil Code (1895). 509 Lowell. 6 Barker v. p. Stat. Mercantile Ins. . N. . . 110 U. 1026. . §23. p.. 62 Ala. Dec. is entitled to vote stockholder in not. Stat. 149. (1888). 150. Stat. Fla. ch. p. and the beneficiary In the absence of statute to the contrary. 32.. 6 and the trustee. Gen. 4 Molton v. Me. N. Cooley's Dig. Y. § 27 Herron v. § 130. Art. Laws N. Henderson. Stat. §3419... §26. Rev. Rev. . 330. (1896). Stat. 9 and this fact emphasizes the difference between a person acting as trustee who binds 1 As to his rights. (1887). see infra. Wy. §§ 2132. Stat. 252. p. Stat. 119. 426. § 495. 7 Ames. §37. . Minn. (1894). Comp. 4 The as trustee. 564. Stat. 9 Taylor i. §85. Annot. M. § 1500. Stat. 8 and the beneficiary equally barred and has no other rights which he can enforce against the property or a stranger. (1882). as an owner of stock. Olpherts. 100 U. Pub. ch. Col. the trustee is personally liable as stockholder even beyond the extent of the trust property. Stat. n. Gen. cl. 8 The trustee is personally liable on the contracts which he makes in respect to the trust property. East India Co. (1884). I. the right is absolutely lost.-. the trustee's right to possession is absolute. Stat. Rev. But not personally on contract in Mutual Ins. Transfer of Stock. Wash. 24 A trustee's handbook. 309. (1894). . (1883). S. Y. (1891). Laws R. (1893). § 28 Lewin. (1891). §20. (1896). (1892). and not the is eligible beneficiary. is as a director. 180. If the trustee's right of action of limitations. D. Co. extent as any other bailee of property 1 but as against all the world other than the beneficiary. C. C. Mass. eh. 2 or if is is barred by the statute he lose his right of action in any manner. (1892). . Transfer of Stock. Eev. 1 . § 206. 162. ch. and cannot be questioned.

Boston. . 165 Mass. — The trustee is personally liable for taxation. 65. 159. Perry. and on land where the land lies 4 but statutes are not unusual making the personal tax payable where who is entitled to the income. and in others he may do so. 4 R. the personal property is not taxable to any one. 313. Boston. whether he signs as trustee or not and it is important in this connection to bear in mind that there is an implied covenant for quiet enjoyment on behalf of the lessor in every lease. p. and one acting as agent principal. ." or " as trustee. 287. and the property In many jurisdictions a list A . Ames. et al. the contract will bind the trust effects in his hands and those of his successor. on the personal property where he resides. 279. et al. 4 Richardson v. p. Greene v. 15 R. 2 So. 6 within the State. 5 statute making the property taxable where the benethe beneficiary resides When A ficiary lives. Mumford I. when neither the trustee nor the property are constitutional. It is erroneous to liability 25 binds his who suppose that the trustee limits his by signing his he has the power if he properly describes himself as trustee. although recourse will be had to him in the first instance. although his liability to the extent of the trust estates name " trustee. 63. Hunt v. both the trustee and beneficiary are non-resident. 6 Dorr v. 131. I. and Taxation. . is it is the trustee's duty to bring in of the trust property for taxation.. p. THE INDIVIDUAL AS TRUSTEE. trustee who neglects his duty would be personally liable for the penalty of his neglect and where he neglects his opportunity to file a list. a trustee will be personally liable on the covenants in a deed or lease. 6 Anthony Caswell. 65. 508 6 Gray. only himself." 1 may be limited by appropiate words but if to contract for the benefit of the trust. 2 Infra. v. In the absence of statute.. 1 Infra. 3 Infra. 148 Mass. 8 . too. n.

and it is 5 immaterial that he described in the writ as "trustee. 3 Hill. 162 Mass. Civil . 13 N. Cleveland. a trustee be criminally liable for a nuisance on the trust property. . and owing to bis neglect the over assessment cannot be recovered. Benett v. Code N. for instance. Allee. 1 As. 7 6 Cal. he is liable to a person injured by snow from the roof of a building.. Tibbetts. (1895). 479. § 3922. Code (1885). or for a negligent use of the property which causes damage. Personally liable as Owner of Property. 3 he will have no right to indem- may by a nity. 468. may The Trustee's Ownership the trustee is is not Beneficial. Supp. § 2229 Comp. too. ¥. 259.. § 4265. (1887). he can take no benefit from his ownership. 26 is a tbustee's handbook. — A trustee is personally liable as owner of property in actions for a nuisance. he would probably not be able to charge the over assessment to the trust. 458. 28 Hun. Baker v. Dak. Underhill. as where a person was injured falling limb from a tree. 4 DeG. but the liability be incurred without fault of the trustee. he charge the property. and he may not deal with the estate for his own profit. he will be personally liable. § 3183 . Eev. Korling v. — Although the absolute owner of the property. 160 Mass. irrespective of his right to indemnity from the trust property. or in failing to keep the sidewalk in repair. 7 All the benefits belong to the ben- * » Schwab v. (1895). 791. 6 or may be liable to indictment under liquor or gambling laws. Creamer. & J. and if the damage is greater than the value of the trust propertj'. 496. Laws Dak. Y. 4 6 Shepard People v. or causing water to overflow if . over assessed. or for any purpose uncon- nected with the 1 trust. Townsend. although the trustee had exercised all due care in having the wood cut 2 but if the trustee was in fault. v." So. Wyndham. n. Code of Ga. 4 tion is is The ac- against him personally. 426.

2 He cannot set off bis own debts in equity against one who sues him as trustee. except the regular compensation allowed by law. Law. Fritts. Nor can he pur- chase them directly or indirectly at public or private sale. Brown. 60. 96. Wilkinson. 5 Morse v. 57 N. but two judges dissented. 136 Mass. Brown. 5 or at a judicial sale which he does not control in any manner. he must account to the trust for it. v. Allen v. 42. 34 N. Hill. as security for his debts. Eq. Ch. Fanning. S. s Denholm v. and if he take a present or be paid a bonus or commission of any kind in a trust transaction by a stranger. and may be set aside by the beneficiary. In Lingke v. p. 8 but no stranger to the estate can 9 question the transaction. speculate with the trust funds under the He cannot 1 Arnold v. Y. 127 U. 2 Infra. All his skill and labor must be directed interests of his benficiaries. Y. there being no scheme to repurchase. and the principle is very doubtful. 445. 5 Pick. (N. Infra. p. 434. S. v.THE INDIVIDUAL AS TRUSTEE.) 252. » Davoue Ch. Morse Amer. . 67. 142. If however the property be honestly sold to a third person. the trustee is 10 not disabled from buying it subsequently. 134. w Creveling v. Fanning. 4 except by arrangement with all the beneficiaries. it was held that a trustee might sell to his son. McKay. 7 even though the other be a beneIt is immaterial that the price paid is a fair one. & Eng. » Infra. 27. 6 Nor can a husband or wife being trustee sell to the other. Dayoue v.) 252. 589. 519. vol. p. Gillette. 9 Harrington v. 1 to the He may advancement of the take no benefit directly or indirectly from the estate or his office. 60. Latham. 136 Mass. 27 and the trustee has no more right to any of them than he has to the property of a stranger. p. 2 Johns. 148 Mass. or pledge any of the property. 143 U. 553. 89. Y. Encyc. 24 Pick. (N. 28. 197. The transaction is a breach of trust. * 6 Hill. ficiary. 8 He cannot use the real estate or chattels. J. eficiaries. 2 Johns. Hoyt v. or under leave of court.

He cannot borrow the trust funds on any security. 111.28 a trustee's handbook. he may render it himself and receive reasonable compensation for his services as. Lowrie's Appeal. Collier v. Cushman. 108 Pa. 31. and in some States he cannot take any compensation. can take none in New York. 7 In practice the matter is a delicate one. Ch. He cannot come in competition with the trust estate. if he could have given such employment legitimately to another. 6 make a profit out of Where the English rule prevails which refuses compen- sation to a trustee. 6 Rich. Pomeroy. 143 . for example. Barnetfc. contra. 1 Perkins's Appeal. 118. 59 Mo. . 117. St. 1 guise of a loan to himself. . Missouri. v. all the profit if 2 the profit does not equal must pay interest. (1895). Grant. 585 Mayer Galluchat. etc. 1 Giff. Y. Rev. or 1 Brown Piety Slade v. broker or agent to collect. Stace. partner to render expert services to the estate. 201. as it is conceded that he can collect other expenses. nor the trust estate in any other manner. 6 Turnbull . (1887). and it is a bet. he should not employ himself or if his he does he may receive no compensation therefor. or South Carolina. and he should not lend them to his family or associates on any terms." But the law is not uniform. 1. 21 King v. Munn. Rickets. 11 Paige. 2 8 4 6 v. namely. 620. that a trustee cannot deal with himself. 4 Johns. § 2263. Townend v. 41 N. Perry. and interest he if he does. 41 Comp. By statute in some jurisdictions he cannot enforce a claim against the estate acquired. 8 He cannot swell his personal credit by keeping a large balance of the trust funds at his bankers. Civ. § 3945. Eq. Jr. Gamble v. § 432. Townend. Code N. Code Cal. directly or indirectly. § v. 4288. Van Vechten. (1885). will belong to the trust. The reason assigned in some of the cases. 373 7 He v. 314. nor make a profit by buying up claims against the estate 4 at a discount. 17 Ala. Kyle«. But in most other jurisdictions. Laws Dak. 4 Ves. 303 . . where he acts as counsel. 306. Gibson. Dak. 140 Mass. is manifestly unsound.

§ 432. 117. (1883). Whitney v. Lowrie's Appeal. Newell. 58 Perry. Rev. b the cost of justifiable litigation. stranger . 8 Infra. L. Stat. Infra. 140 Mass. 6 Porward v. 3 Sim. or for resigning the trust. Corbitt. 497 Teague Ala. 69. 513. & Gift. . Eq. 1 Grant. 9 As to apportionment of charges between income el seq. see infra. Crossland. 529. J. the trusteeship should not be a burden. 8 May have Expenses from Trust Fund. ch. Stats. 6 Rev. 6 and and expense of consulting counsel when there is if he be not at fault judgments recovered against him as owner of the property. repairs. together with the regular commission. § 910. 4 Ch. where the employment is reasonable and usual. ch. 9 1 Turnbull v. (1883). 32. the expense of brokers or agents. Perkins's Appeal. Sugden v. Pomeroy. Smith. 314. 63. contra. 57 7 Supra. 108 Pa. 7 or. 4 as travelling expenses. such as taxes. 2 but he need not account for the profit which he receives from other business that he receives owing to the fact that he is trustee. R. 494. 1 He must pay over to the trust estate any bonus he re- ceives in the performance of his duties. p. § 32. 6 Allen. as for instance having him declared insane and placed under guardianship " and in some States the premium paid a surety company on his official bond . incurs as owner. 63.THE INDIVIDUAL AS TRUSTEE. and insurance. i Perrine v. v. Me. p. the charge for expert services. 26. 104 . St. App. Forward. and the trustee may pay from the estate all the expenses which he. pp. On the other hand. 373. 118. 49 N. ter rule to avoid the difficulty altogether 29 by employing a but where such employment is allowed. Perry. — reasonable cause. Me. § 32. and he may charge the estate irrespective of the provisions of the settlement with all the legitimate expenses of management. and principal. p. 192. should not amount to more than reasonable compensation for all the services rendered. or the expense of looking after the beneficiary. may be charged to the estate. 2 * .

and ranges from five to ten per cent. or is in default. Newell. of the compensation and is usually gross income collected. 58. and may reimburse himself out of income or hold possession of the corpus of the estate until he is paid. Piatt.30 a trustee's handbook. has been guilty of a breach of trust. Eq. 7 The trustee ma}' agree as to amount of commis. 136 111. 202. Morrison. 569 Dodds v. are included in the ordinary allowance made as compensation. . 7 Barrell v. the expense of accounting. 16 Mass. 221. " Bowker v. The court usually allows the highest amount paid agents. act. * Perrine v. Birchmore. 1 2 Little. (N. 4 Harring. 4 Woodard v. In England and in Illinois 6 and Delaware 6 the trustee cannot charge for services. in the sound dis- sion with the beneficiary. for performing similar services. 5 Eedf. factors. 154. Little v. 161 Meeker v. Bradbury Mass. 6 Buckingham v. and he has a all right to his costs prior to charges. Div. J. 617. Joy.* Compensation. Wright. Ordinarily. 6 State v. 8 there Before incurring expense he may require security if is doubt about his being reimbursed. 49 N. Pierce. 262. 82 Cal. 8 Although the amount to be allowed rests. but in all the other States he is — entitled to reasonable compensation. and the like. 130 Mass. and clerk hire and office rent. in the absence of statute. 437. but not if he has exceeded his powers. 188. is fixed by statute or by way of commission on the The amount rule of court. 1 and so it are not charged to the trust. if the beneficiary Mass. is competent to and no undue advantage is taken and the court should take the agreement into consideration in fixing the amount of compensation. v. He has a lien on the estate for his expenses. Tuke. but where is necessary to keep a clerk exclusively for a particular trust it would be 2 the ground for an extra charge.) 450. 117 . 25 Ch. Crawford. not including court expenses. Y.

) 452. . 95 N. 1 Infra. 117 Mass. such as guardian and trustee. J. but the commissions. 79 v. 178 Pitney v. a charge on principal will be allowed. p. 9 Meeker v. A Jenkins v. (N. 62 Md. ' it is a case of extraordinary trouble entitling the trustee an extra charge. 616. 2 and in such cases an extra charge will be allowed 3 and in cases where valuable service has been rendered to the principal fund over and above what is covered by the ordinary commission. Blake v. 109 Mass. 62 Md. 117. 592 May v. as it is against its polic}' to encourage frequent changes and excessive expento but the sale and conversion of real estate. The court disallowed a commission of five per cent for warranting a title. Y. * Ellis v. must not amount in all vices. May. as for instance a commission in two capacities. 41. 420. 427. 6 Jenkins v. Whyte. Coates. Brightly's Purdon's Dig. 83 Pa. 140 Mass. . 1 In many cases a commission on income will not amount to reasonable compensation. 367. Biddle's Appeal. . p. 252. Pegram. 15 Stew.' In some jurisdictions the diture . § 239 Crawford. 340. (N. . Ellis. Whyte. 361. or the settlement of a large claim. 427. v. 31 cretion of the court. 9 un10 less there was a complete separation of duties. 2 Met. 2 Dixon Homer. Lawrence. 6 Blake v. p. 101 Mass. 4 The ordinary changing of investments is not such a service. are usually considered extra services. 28. w Johnson 592.) . in these cases. 8 cumulative commission is never allowed. 8 Supra. Pa. 7 Urannw. (1894). 101 Mass. Y.THE INDIVIDtrAIi AS TRUSTEE. 6 and even where . the court will not allow compensation by way of commission. 5 Eedf. 12 Pick. however and on whatever charged. 6 difficult trustee will be allowed compensation for professional ser- but in other jurisdictions he will not. St. 154 . 8 Turnbull v. or for collecting and disbursing the funds. Pegram. the judgment is not conclusive on persons not properly parties to the case. from the management of the same fund. Everson. Pomeroy.

Parker v. p. St. and not in a lump on the termination of the trust. More §§ 3484-3489 . 1 The commission should be deducted from the moneys paid from time to time to the beneficiaries. Biddle's Appeal. N. 2 Met. 2 It is usual to charge a half to one per cent for the responsibility distributing an estate . 101 Mass. g. 4 Dixon Brooks v. and impliedly in almost all. J. 384 Gen. (1887). 8 1 " 8 Blake v. Stat. 121 Mass. . v. 6 'But under a statute allowing specified commissions. pp. 441 . 6 . 508. Ames. § 2552. . 220. Calkins.32 to A TRUSTEE S HANDBOOK. Manual of Wills. 83 Pa. 95 Cal. 121. for instance. § 3950. Homer. " commission of from two and one and services of but in spite of custom it would seem that the charge should in all cases be only reasonable compensation. it has been held that the court has no power to withhold a commission for unfaithfulness. mismanaged his compensation may be withheld 5 but even in such cases it may be allowed to the extent that the estate has benefited by his services. 7 In re Fitzgerald. 420. 592. 10 Pick. Ames. 125 Mass. as the statutes. 8 E." the amount will not be confined to . Mass. although no exact sum is specified. 435. provide that the provisions of the instrument shall govern and this. Tucker. Compiled Laws Dak. Hapgood. 220. expressly in many cases. Stat. (1895). Ga. and Statutes passim Parker v. 2385. 121 Mass. 4 If the trustee has been unfaithful or trust. Pegram. if the instrument provides for "reasonable compensation. 6 Jennison v. the statutory rate. Jackson. Code (1895).• . and Crocker's Notes on Pub. As. the rate prescribed by the trust instrument will govern. 307. 57 Wis. 340. § 125. and therefore not necessarily arrived at by percentage. No commission is allowable on assuming the trust. v. 7 Where the matter of commission is regulated by statute. more than reasonable compensation for all the services rendered. 77. 120.

(1886). 284. Civil Code § Code of Procedure. 5888.000 to $20. cent. § v. § 134. As to executors. §§ 3949. California.000 4 per cent. n. Alabama.000. § 1212. is given below. . $20. §§ 2273. 486 5 per cent allowed in Pinckard's Distributees v. $10.000. able.000 4 per cent between and $5. Digest of . and such further allowance for extra services as court may allow. 437. $50.000. 56 Conn. No authority as to executors and administrators. v. Colorado. Rate provided in settlement. . Rep. Civil — See . see Supplement Civil Code (1889). Piatt. Pinckard's Adm'r. of Probate 1 may make allowance for extraordinary services. § 1700. . accounted for. 282 Babcock Dakota. see Perry. Prin56 Ala. 23 Ark. — No authority.000 . Statutes (1891). 2274. for other authorities on the 3 subject in general.000. . and %\ per cent above $5. 250. 30 Conn. Annotated 4805. § 918. . Arkansas. and enough to make reasonable compensation Briscoe v. Revised Statutes (1887). in the absence of actual knowledge of a definite practice recognized and followed in the lower it is usually safe to follow the rules laid down for executors and administrators. 3 per 2 per cent. Brady. Statutes (1894). — Reasonable compensation. p. — — . 1 per cent. Connecticut.THE INDIVIDUAL AS TRUSTEE. 24 Ala. 592 as to executors and administrators. not exceeding one half amount allowed by statute.000 5 per cent from $1. 3950. Arizona. Trustee under a will. — Compiled Laws (1887). On the amount of estate .000 to $50.000.000 All over $100. Reasonable compensation Griffin v. 817. The rule in each jurisdiction. mutatis mutandis? courts.000 to $100. . State. Clark Hubbard.000 to $10. Abell v. and 1618. 5 per cent on collections up to $1. so far as it is 33 determined by a reported decision or statute. 28 Atl. such compensation as court deems reasonAnd may establish a yearly allowance. Where no authority exists. 7 per cent up to $1. Judge $1. — gle.

Morrison. Joy.000. Statutes (1887). Reasonable compensation. Statutes (1894). Rep. Executors and Administrators. 18 Fla. 109 Mass. Trustees appointed by Probate Court. — — of Delaware (1893). . Georgia. § 2552. Code (1895). same as administrator. No authority. 817. 63.. — In absence of stipulation or contract or proIdaho. — — — . § 3883. § 6805. allowed 1 J per cent yearly on amount of principal Ten Broeck v. Buckingham v. Barrell v. ch. Kentucky. Muscogee Co. 698. 16 Mass. Brady. 10 per cent on proceeds of land worked § 3489. 221 May v. Hyer. and extra in discretion of court. Administrator on all personal estate and proceeds of real estate sold. 437 (1891). 6 Bush. vision of settlement. the — No authority. 798. 252 . Indiana. Wilson. p. Discretion of court general rule. Rep. Maryland.. — Reasonable Florida. Premier Steel Co. Fleming v. v.— Annotated Statutes (1882). Same commissions as guardian § 3484. no compensation. § 5959. and extras earned. § 32 5 per cent and expenses. 1\ per cent on both income and payments § 3487. Yandes. 712. 136 — 111. on paying . over. —Public Statutes (1882). — Massachusetts. 61 N. Fidelity Co.. Reasonable compensation. Abell v. 10 S. 144. 610. Rep. court. W. not to exceed 5 per cent on amounts received and distributed. Maine. compensation in discretion of v. 307. . § Illinois. 975. . First $1. same compensation as administrators. W. — . 28 Atl. eh. § 3168. 5 per cent on income. . extra in discretion of court. Michigan. Kansas. Revised Statutes (1883). 139 Ind. May. 5 per cent on income. a Laws trustee's handbook. In re Gloyd's Est. Iowa. § 7. and 1£ per cent on investments. Reasonable Commissions. allowed 5 per cent on income. 5586. 34 Delaware.

000 to $5. piled Statutes Neb. New Hampshire. . above. Code (1895). §§ 1404. same as North Dakota. per cent. 1 per cent. For executors. 4 per cent.000. tee allowed 1 per cent on principal. Shattuck. tors.000. 7 per cent.000 to $10.THE INDIVIDUAL AS TRUSTEE. 2802. $1. New York. App. (1895). 2£ per cent. Civil — Montana.000. §§ 109.000. 22 Mo. H. § 4724. 5 per cent $5. 118. Reasonable compensation. Revised Code (1895). 1445.000. and guardians are allowed. 8 N. 2890. Shuford. . For executors. Allowed 5 per cent up to $1. Foster. For executors. Shirley v. p. 104.000 and $20. — Kemp v. rate of income being 6 per cent. 13. see — — Compiled Laws (1884). §§ 2730. 5 per cent. Missouri. for all above $11. § 2798. West. 444. and presumably reasonable such compensation as court decrees Statutes Minn.000 to executors. New Mexico. ty percent. Code of Procedure (1895). 2380. Robinson. Mississippi. 2402. § 204. Minnesota. all above $20. reasonable com- For first $1. Actual value.000 $1. 5 per cent. All above. § 3031. General Statutes (1895). see General — No — § authority. — . by statute. p. § 2776. ing 5 per cent Sherrill v. administratrustees. 1 35 all $1. — Gordon v. 33 N. § 4293.000. H. — No authority — . between $1. 28 Miss. just. 2 per cent extra not to exceed amount allowed pensation. trus. 6 Tred.000.000. No authority. 110. 228. No authority. New Jersey. 643. (1894). Eq. but executors. Reasonable Compensation. Code all Civil Procedure. — — .000. 2\ per cent. 4 per cent. Nevada. . § 6492 for first $1.000 and $10. Reasonable compensation not exceeding 5 per cent on income. between $10. see Com- Statutes (1885). Nebraska. Reasonable commission not exceedNorth Carolina. Practice is 5 per cent on income Tuttle v.

— Reasonable compensation Fisher. 9 Serg. v. — No authority. 12 W. to executors. § 8. as (1892). 539. reasonable compensation . St. 6333. Usually 5 per cent. Tennessee. 2695. Code (1897). §§ 3929. v. 23 Gratt. Annotated Statutes (1889). executors allowed not Court has no discretion. Revised Statutes (1895). Cobb § — Same § as clerks 6388. — No authority. Hammond. § Oglesby. compensation. Washington. 484. Clemson. 36 S. — Code (1887). Hoke. 25 Vt. not exceeding 5 per cent. No authority. 2069. Executors. —Revised Statutes (1890). No authority. defined. same as executors v. — Revised . able compensation. 100 Pa. § 29 . Reasonable commisVirginia. Usual 5 per cent. 1. 17. 3993. 427. Laws (1896). Executors entitled to 5 per Laws — 4223^225. Pusey v. 1. Carolina. Code (1896). Boyd § 6314. South § — No authority. — No authority. 10 per cent allowed for extraordinary serShepherd v. reasonable Oklahoma. — Wyoming. Rhode Island. Hoke v. Executors. § 2245. §§ Hubbard Vermont. — Brightly's Purdon's Digest (1894). Va. 2031. 674. & K. — On personal estate distributed or real . and masters. § sion on receipts or otherwise. . 3 W. p. Annotated Laws Pennsylvania. Statutes (1893). Coicpiled Utah. ch. exceeding 10 per cent. 5 per cent reason. Statutes (1893). Executors. ch. able. Va. § 3525. Sayles. vol. General 219. — Code (1891). Executors. Fant. 2099. § 1410. 204 Davis's Appeal.36 a trustee's handbook. 688. Clerks and masters' fees Texas. C. cent. Oregon. vices. § 1180. 87. 201. (1888). Wisconsin. § Ohio. — No authority: Executors. ReasonWest Virginia.

32 Mo. 9 Cush. Nash o. Bev. (1896). $1. §§ 56. 393. for instance. 4 wood 6 Norton v. THE INDIVIDUAL AS TRUSTEE. 2 Cleveland Ala. § N. 403 . Michigan. 57 Stat. estate. 86. Dak. 67 .000. Civ. a life estate being sufficient to support an annuity. Brown. no larger estate will be implied. Y. 2 Sand. takes an absolute but in real estate he will take a large enough estate to administer the trusts and no larger. § 4285 Annot. See infra. p. Coleman. Welch v. 8 since without a fee he could not exercise his power but no larger estate is given than is absolutely necessary. C. . he comes of age irrespectis and there often statutory pro- vision that the estate of the trustee shall terminate on the completion of the purposes of the trust. Bagshaw v. (1882). 150. as e.Code 6 (1895). Hallett. Comp.. 2\ per cent for all over $5. Stat. . (1894). Wise. Minn. . he will take an estate in fee instead of a mere life estate. Wisconsin. Norton. 34 Ves. § 2803. (1895). 147. viz. 34 Ala. and Dakota. Greenwood Parker. to $5. § 3191 Greenv. 1801. & Adol. Rev. but a estate is granted without words of limi- power of sale is given to the trustee. 49 v. § 2084 . . 37 up to $1. 1 per cent. (1896). Spencer. p. or the technical phraseology of the trust instrument. Minn. 7 a trust is cut down to a mere power by statute and no 1 title vests in the trustee. 150. Y. Allen. 176 . Sen. entirely irrespective of the use or absence of words of limitation. Mich. v. estate sold for debts. 3 B. 3 King v. Pierce. New York. 4 Although a fee be given to the trustee to support a less . (1887). Cal. — The trustee Thus where the tation. § 5577 . N. 71.000. Minnesota. 7 Annot. 839 . Wise. Stat. Coates.000 . Stat. 296.000. for the benefit of A until B comes of age. Code Ga. 6 In some Code States. 5 per cent.. 6 Cush. 142 . 2 estate in personal property 1 The Trustee's Estate. Ga. the estate will vest in ive of the trustee's fee B when 6 . 1797. 1 Mo. Coleman. 21 Wend. p. Stat. g. Slevin v. Mich. § 3191. Pace v. Laws Dak.. as. (1889).

6 Infra. 8 Gray. Gen. 9 Co. Stat. 8 eject the beneficiary. 48 N. Pirst Univ.. 453. § 3342 . . 6 Frierson v. takes a modified title. Perry. J. All the trustees are equalty seised. 4 but the beneficiary may have an equitable right to possession will technically He and will receive it under those circumstances. 8 Paige. Gleg. R. 356 Rev. as such trusts are not within the scope of this treatise. Clark. 2 title if nor can the beneficiary deny the trustee's he is his equally entitled to the possession of the personal property. 109 but see contra. § 334. (that is. 1 and landlord. v. 24 Miss. Stat. p. 513. (1895). 393 . Pierce. Western Rd. L. — At law the trustee may is is entitled to the pos- session of the real estate. Y. Welton. 86. Morville v. 6 though even then at law his possession buys in a tax title. 14 Vt. Soc. Beach. & 2 Eq. 543 . and the grantee does not take an undivided estate in the premises no title the others the conveyance passes. Powle. — Trustees. 113 . 6 is Trustee's Estate partition. 1 Atk. and Boursot v. Nolan. 3 Dev. Rev. Ames. v. 9 provision in the trust instrument for keeping up the number of the 1 2 8 * A Clark v. Possession. p. A passive trustee naked collect the rents) a trustee who merely holds a to permit another to do something. 346. N. 3685. where there are more than one. 49 Mo. 8 Chapin v. 144 Mass. n. Co.. v. take a joint estate which is not subject to If one trustee conveys his part without joining is void. (1894. Albertson. 241. Stribling. . 349 Sinclair v. 8 Cow. 134. . as e. g. 153 Beach Presley v. 7 Joint. 7 Atty. be the possession of the trustee. about which we need not concern ourselves. 527. Learned v. Savage. v. 8 . and on the death of one the whole estate vests in the survivors. 40 Cal. 38 A title trustee's handbook. 28. 30 Ark. If he he cannot hold it against the trustee. White Pace v. Jackson. Ind. 580 . . Branch. Lit. § 7.

N. § 5572. 2 Transmission of the Trustee's Estate. Ala. Eev. Stat. Ames. 382. N. Mich. §§ 217 et seq. u. may make conveyance. Annot. 653 . Stat. § 856 N. § 3392. ch.. Mich. §§ 64. § 5583 § 2091 . § 3387 Eev. n. 1799. Stat. Rev. Stat. (1882). (1889). (1895). § 2810. Daws Dak. p. the conveyance would be simply void. 7 Ired. § 3400 Comp. the purchaser will acquire the title discharged of the trust. and would be bound by the trusts his grantor was bound by. Wise. Shook. 19 Barb. Code (1896). See also infra. p. Stat. Stat. Y. has a full discussion of authorities. (1889). Code (1895). Ind. 150. THE INDIVIDUAL AS TEUSTEE. (1896). § 3773. § 12 (1894). Stat. 1799. Minn. Co. but a power merely. vision in Indiana. Stat. 7 Mass. Annot. 6 This 6 is universal law. being the legal owner. Civil Code Calif. . Wise. Homer. Stat. 65 (1882). . Gen. (1894). . § 3395. 73. Troutman. Civ. Me. 4 Alienation. in common do not apply to trus- tees' estates. Stat. § 7163 N. 155. and no estate would pass and there is a similar statutory pro. 8 But if the trustee had feree — no power given him to convey. trustees will not prevent survivorship 1 39 common and the statutes in States providing that joint tenancies shall be construed as tenancies. (1896). Stat. 141. 12 Cush. and his transferee will stand at law entitled in his place. The trustee. Gen. (1889). If the trustee transfers his estate to a purchaser for value without notice of the trust. Eev. 286. Stat. . Stat. §4283. Kan. (1889). § 3761 (1885). 6 Perry. (1894). § 65. (1893). (1893). 6 Eev. Kan. § 3. (1887). but is often enacted by statute. Dixon v. Dak. his transwould take no larger title than the trustee conveyed. Stat. 41. § 7160. . . § 2080. — 1 Shook v. Ind. In some jurisdictions an attaching creditor is on the same footing as a purchaser for value ' but if the property . . 2 8 * Underbill. § 1042. Stat.state. Annot. Y. (1882). (1883). Okla. Annot.. Canoy v.. Dak. In the Code States the trustee having no e. p. Stat. § 4294. ch. Pub. (1894). . Minn. Okla.

580. 1 Starkie. 56 N. Ct. is and the word " trustee" not a purchaser without notice occurring on the face of the deed or certificate is sufficient to put him to his inquiry as to the trustee's power to title. Supra. 393. Raikes v. . n. and fails to make proper inquiries. p. 138. 17 S. Wormeley. his transferee power good title . Adm'r. 4 Doe d. p. Pet'r. Fausset v. he is . . 45 Rogers v. it was said that the it legal title would pass sub- ject to the execution of the trusts. Ames. will be sufficient notice of fraud to invalidate the title. 1 If a purchaser has once acquired a good transfer a he may de- good title to any one but the person first who frauded the trust in the If the trustee have the will take a place. 2 Dow & 6 6 Clark. Abbott. were transferred to secure a pre-existing debt. Cir. 51 1 Shaw v. v. as the trustee will not be supposed to intend to commit a breach of trust. 6 If the creditor levies with notice of the trust. 4 pass to the trustee's assignee in bankruptcy or insolvency 5 nor can the trust property be taken for the title will . 1 Brock U. . 2 Wormeley v. to transfer. Carpenter. he will 1 Smith v. 14. No trustee's private debt. 8 Where the trustee was one of the beneficiaries as well as trustee. 382 Third Nat. the transferee is not a purchaser for value. or that it goes elsewhere than to the trust estate. 55 Me. . E. 155 . 150. W. 537 . Bk. Infra. 2 No title to trust property will pass by a general assignment. Burgess. and the deed will not be so construed as to make him do so. If the purchaser has reason to believe that the property held in trust. Chase. trans- fer the property. unless he knows that the transfer is a breach of trust and the fact that the consideration is inadequate. 51 Md. Peake. but the better opinion seems to be that will not. Anderson. 133 Mass. Spencer. S.40 A trustee's handbook. Lange. 8 Thomson v. 330. 232. 100 Mass.

mechanic's lien will attach to a trust estate only where the trustee has the power to contract for the labor for which recovery is sought. 15 Arner. Div. §3185.. in most jurisdictions the creditakes only by subrogation through the trustee. . Collins. Taylor. 62 . . Wylly v. 5 6 Fairland v. 54 Miss. . he -will if he attaches in some stand in the position of a bona fide purchaser. 9 Ga. 131 111. Symona. 8 and is not forbidden to encum9 ber the estate by the trust instrument. n. 217. 74 Me. insol- vent. 245 Ames. 223 . Ireland. 39. 54 Miss. 449 . 2 The trust property may be taken on execution for debts incurred by the trustee in the execution of bis trusts. less the default. take title 41 subject to the trust x but States without any notice. or out of the court's jurisdiction. Ala. v. the liability would bind the trust estate to the but even then it is held that the extent of his authority — - — . Phelps. . Y. Code Percy. 7 that where the trustee is provided by dead. Pomeroy. for instanoe. 29 Me. if the trustee were in default. Mason v. Phelps. where he is authorized to carrj on the testator's business. 376. the trustee were given the powers of a genas. for eral agent by statute or by the trust instrument. (1896). § 4183. 590. is liable as. Ga. 467 (1895). 467. Davenport. Norton v. R. Houghton ». 26 Ch. THE INDIVIDUAL AS TRUSTEE. A 1 Warren Supra. 7 Stat. 151 Mass. 164. 2 3 p. & Div. Norton v.). 1 Law Rev. Bennett. 13 Pa. 8 Meyers v. his tor and in some without regard to claim. 7 Daly (N. in all jurisdictions to the extent to which the trustee is entitled to reimbursement. 6 and it is statute in Alabama. 3 Prob. the creditor would only take the amount due. however. 4 If. L. 8 That is to say. 6 The court has held in Mississippi. instance. Mander- son's Appeal. the creditor may proceed against the trust property direct. 471. 1 Strickland v. 423. 631. and so to all the set-offs which the trustee would be . 9 -Franklin Savings. creditor must come against the trustee first. Bank v.

8 Nat. 174. 125 Masj3. and is generally entitled to such set-off as an equitable plea. Bk. 270. but see Walker v. v. § 4260. 4 In equity the defendant may set off a debt due a third person as trustee for the defendant. (1883). creditor of the beneficiary may set off his debt in equity or in au action at law by the trustee as an equitable bar in most jurisdictions. 6 Stats. S. 125 Mass. a convej'ance by the trustee under such cir- cumstances 1 2 s 4 is necessary. even though he have an equitable estate only. § 2343 Annot. n. when the purposes of the trust are accomplished.. But in the absence of statute. Mass. Stat. Brooks. Ames. 8 The trustee can only set off such debts as his beneficiary could set off. Pub... in which case he be enjoined from doing so in equity 1 but if he were ignorant of the trust relationship. M. at the time of its was a trust claim. v. u. Supra. 54. bankruptcy. 3 Gray. 241 Rev. 319. School Dist. Mich. the trust estate will pass out of the trustee's hands.42 Set-off. Comp. 301. ch. 2 The trustee's private creditor has no set-off in equity. unless he knew . or insolvency. A trustee's hakdbook. Stat. Marshall. Ins. Co. to a — Where Remainderman though statute. §§ 11. Packard v. and vest in the remainderman. &c. (1884). 241.' 104 XJ. 138 Mass. Moore. (1889). Stat. 102 Mass. (1882). Laws N. Me. Y. Ames. 168. 7 8 Wise. n. . Walker v. Morgan . . ch. 59. 6 or his Estate is be the trustee's estate reduced mere power by where a life estate only was necessary to execute the trusts. § 63 5 . Brooks. and in equity can set off the debts of the creation that the claim will A beneficiary. trustee's private creditor — The might set off his debt in a suit at law. in N. where the trustee took a fee. 6 Title passes to only Equitable. 82. and the intervention of the trustee will not be necessary to perfect the 7 title. 14. p. First Bank. Wise. 270. . he may keep his set-off.

10. 4 As to survival of office. for instance. see survival of powers. it is generally provided by statute that the property and office shall vest in his successor in the trust. 38: Shook v. In the absence of such statute there is no way of divesting the outgoing trustee's title save by act. as the estate taken is not beneficial to the trustee. although the Crown took subject to the trust 2 but now there is no forfeiture in equity. Forfeiture. In such case the property will descend to the heir as unde. 43 title On the resignation or disability of a trustee the to vest in the successor by conveyance of the outgoing trustee. 5 Barn. and it is generally provided by statute that there shall be neither forfeiture nor escheat. 1 2 3 Supra. THE IKDIVIDUAIj AS TRUSTEE. of the legislature. 254. or otherwise incapable or unfit. if he be beyond the jurisdiction.. or where there is a statute authorizthe property may ing it the court may appoint a person to convey the estates. — Transmission on Death of Trustee. where the general devisee is a class of persons. on the death of a sole trustee testate the property will pass to his general devisee in the absence heirs of intent to confine the disposition of property to that in but it will not pass to beneficial interest a general devisee where such an intention would be neg- which he had a . Shook. 1 Transmission. 19 Barb. or where the general devisee is a minor. infra. Mildmay. King v. . Such acts are not unconstitutional. Supra. — and personal representatives. 46. p. Forfeiture of the trustee's property formerly carried with it a forfeiture of the trust property. p. p. the title in the meanwhile remaining in the court or his eral trustees dies. both the office . 4 Aside from statute. & Ad. When one of sevand the title to the estate vest in his co-trustees by survivorship 8 and when a sole trustee dies. vised estate. atived by the circumstances as. 653.

§ 25. ch. 183. 873 . N. If the sole trustee dies intestate. but to the only. Ferrers. Ireland. 11 Jurist. and in many jurisdictions no estate. 8 Or in some . 4 New York. 10 it is ex- pressly provided that he takes II. whether they are to be exercised over the trust property or elsewhere. (1895). 10 Perry. p. (1882). (1888). § 24. and make up an entirely inappropriate for him to attempt on the trust. Infra. and Missouri . 6 In some jurisdictions they may disclaim. But otherwise West . Schenck. Code (1891 ). It does not come within the scope of this treatise to consider the powers which a trustee may have collateral to the trust estate. p. where personal representatives succeed Va. J. §§ 321. § 1044. 174. 6 When the title to an estate vests in the devisee. or personal representative of a trustee. J. over to the new trustee. Perry. 6 Pub. in to trust. 322.44 A tktjstee's handbook. ' he does not succeed to the office. ch. 8 Mortimer v. S. § 125 Perry. the property will descend to his representative 1 but a widow has no dower. As. §341. to carry It is 9 is necessary to preserve it. (1896). Stat. § 6. § 344. — 1 2 a Schenck . 721. POWERS. § 344. 13. 46. 1 Stevens v. 8 and he has power to exe- cute the trust only so far as and to make it account. 16 N. Michigan. Cowdrey. some States. Gen. § 11. for instance. 7 Jur. the devisee or personal representative only holds the title until such time as a successor may be appointed title . jurisdictions the title to real estate vests in the court 4 or eldest son by statute. N. 1280. Of Powers in General. 46. Mass. Alabama. Austen. Art. Eq. 11 Paige. 141. Pub. 109 Mass. Gen. heir. 132. a power to distribute the trust property among v. 6 Perry. 2 and a husband no curtesy in a trust estate. Code Ala. Stat. Harlow v. Laws Md. Flint. 9 DePeyster v. Wisconsin.

. or ordinarily does have. and to convert real into personal estate and vice versa. a Trustee has. . such as children or charities. or against him as trustee to disburse and dis. as the office has more and more become. At common law a trusbeing the absolute legal owner of the property. to protect the beneficiary. in connection with the management of the trust property. but in a court of equity the rights of the beneficiary are paramount. tribute the property tain . but are special. and consequently a trustee will be restrained from exercising any power inconsistent with the beneficiary's rights hence a trustee may be said to have only those powers which he will not be restrained from using. and sue for the trust property or any income accruing on it to invest the funds and lease the real estate to take proper measures to keep the real estate repaired and insured. are usually bestowed on the trustee by the legislature or court. The trustee retains in equity as incidental to his office certain of the powers which are his at law as . and not general and incidental to the office. owner of the property he has also those additional powers which are conferred by the legislature or the court. 45 a certain class of persons. What Powers — tee. The general powers to incidental to the office are limited and comprise all those that are necessary to the performance of his duties. and apportion the Bhares among beneficiaries. and to defend suits against him in respect to the property. or main- him if The powers incapable of maintaining himself. receive.THE INDIVIDUAL AS TRUSTEE. such as power to demand. since the original conception of a trustee was some one to be trusted with the title to the property. and those powers which are conferred by the trust instrument. . . and not a sort of business manager. to sell the trust property. could exercise all the ordinary powers which an absolute owner might. We need only concern ourselves with those powers which the trustee must. and to change investments.

O'Brien. Infra. such as a power of revocation of the trust. 117 Mass. 46 a trustee's handbook. "Webster v. may. confer powers which the court and legislature giye and it usually enlarges the general powers incidental In addition it frequently gives other powers to the office. Vandeventer. Infra. 6 Gray. In such cases the owner will be a trustee. There are some cases in which the powers incidental to the office do not vest in the holder of the title. and usually does. p. Cloon. he may give a mortgage containing a power of sale. 428 Belmont v. but will not have the usual incidental powers to manage the estate but only such . For instance. 61. 55. 1 As. and. where a trustee is to borrow money on mortgage. 46. for instance. 2 or where he is to keep the estate safely invested he will have implied . of a discretionary character. 12 N. Statutes in many jurisdic4 . where the ownership vests in the heir or personal representative of a sole trustee. . 394. Vesting of Powers. The general powers vivor. — powers as are necessary to preserve the property until it can be conveyed to a properly constituted trustee. and neglects and in every to give expressly the powers to perform it such case the trustee will take by implication all the powers necessary to execute his duty. in express terms the . will pass to the survivors or sur4 and will vest in the successors in the trust and this notwithstanding a provision for the 1 keeping up of the 2 8 Supra. if there is more than one trustee. 219. or in a stranger by a conveyance not properly authorized. p. Y. 8 The powers will vest in a trustee properly appointed. Implied powers are also often given by the trust instrument where it places a duty on the trustee. p. Nugent v. power to sell hazardous investments left by the maker of the trust. in all the trustees jointly.. or a power of appointment as to distribution of The trust instrument itself income. tions to same effect.

4 Blackf. Ch. 8 Hammond Hibbard v. p. 1 Atk. 31 L. 2 Lamb. as the settlor evidently meant to trust the discretion of any two or more. even though a majority. Contra. 17 Mo. the limitation is heirs a personal confidence to the trustees by name. 484 . Pet'r. unless the conduct of the trustee has been factious and unreasonable. 47 number of the trustees. 527. J. Supra. 159 Mass. Franklin v. v. . 14 309. 2 Barb. 356 Morville v. 6 Hence is void. 7 Swale v. Granger. Doughty. 8 Norcum v. which the court will not do. Johns. the powers will pass to their successors. 584. 8 Watts & S. Pet'r. 128 Mass. 22 Beav. 98. but not of one trustee. 71 111. 5 Stott v.THE INDIVIDUAL AS TEUSTEE. The essential part of the exepower is the exercise of the discretion vested As this discretion vests in them jointly. however. — moted by corrupt or 1 selfish motives. 426. 381. however. If. 5 in the trustees. v. Swale. 6 Atty. and their and assigns. Lord. 15 B. . Osgood. 1 If. Amb. 391 Eay v. Powle. Gen. 134 Mass. 115. 405. the only remedy is to have a trustee removed and a new one appointed. 8 * Wemyss Warneeke v. 144 Mass. In the Matter of Wadsworth. I. 2 Special powers conferred by the trust instrument upon the trustees in that capacity will pass to survivors or successors ° but if they are a personal confidence in the . Ch. D'Oench. individuals who are nominated trustees they can only be exercised by the individuals named. 60. 109 Vanderer's Appeal. 13. the powers are limited to " my trustees.' and where the trustees disagree." they have been held not to pass to a single survivor. 4 Execution of Powers. Lembca. Bailey. 272. Gleg. Schouler. p. Supra. the insanity or refusal to concur of one trustee can block all action. 91. and so will not survive or pass to successors. or procution of a . unless provided for by the instrument. but not to their personal representatives. White. it can only be executed by tbe joint action of all tbe trustees and an execution by part. : . 21. v.

). Trustees are joint tenants at law. . 1 McLean (Ken. v. Sankey. Infra. interest. Ridgley Johnson. & Hem. Gen. 1 Nor can one trustee bind 5 Conversely. u. 8 Infra. 8 in its essential receive or have the custody of the property is a different question and is Delegation. Pearson v. 15 Eq. . Infra. 2 He cannot.. or if he has been warned to pay to all the trustees only. Lord. Queensland N. 122 et seg. Ch. 87. See article in 12 Central L. 37 Ch. 336. Ch. Stott v. 3 nor could he collect a judgment. or any other income accruing and he may receive a simple debt or discharge a mortgage. 259 . 385. 87. receipt. p. 197. rents. Ledsam. alone. Jamison. 6 In equity a joint receipt is required hence if the debtor knows that the trustee is committing a breach of trust in receiving the money. as he may collect it all by a compromise. however. J. 31 L. hence one of them may give a debtor a good discharge if he pays his debt into his hand 1 hence one trustee may collect dividends. Ochiltree Wright. & J. Atty. 527. 3 i 2 8 Bowes v. Bk. . p. 7 The liability of one trustee for allowing his co-trustee to treated below. Guedalla. 266-270. 7 Lee v. 2 Johns. 64. 391. J. Must be Joint. 1 K.. as all the trustees must act in a sale or assignment of the trust property. Div. 204 Magnus v. 466 Wehb v. .. so one trustee may pay out income. & S. — . assign a mortgage. 1 Dev. pp. 11 Barh. he will not be protected by his single . p. Gleg. 8 Watts v. 48 a trustee's handbook. Seeger. 356 Berger v. 88. — The execution of a power part cannot be delegated either to a stranger or by one of Nor can the trustees divest themselves of their discretion by asking the advice of the the trustees to another. L. 1 Atk. 4 6 6 Infra. & Bat. but in dealing with matters of principal all should join. 4 Johns. Duff. 222. Mendes v. R. as all the trustees must join in the suit. 75. 368. Eq.

and has delegated his discretion to his general his discretion. Sheldon. and if it be only partially executed. James. 29 111. as the evident implication is that the trustee has not passed on this particular case. or any other matter not requiring the exercise of discretion. James. Smith. unless the trust instrument requires his personal execution of these unessential matters. or the need of repair. Bostock v. 79-85. or the appropriateness of the security selected for investment. 3d Amer. v. 76. Sugden on Powers. Floyer.THE INDIVIDUAL AS TRUSTEE court. 487. ubi supra. i. Hawley v. Weed. namely.. Woddrop Gillespie v. Berger v. A power need not be executed at one time. as his attorney a special . 26. 6 Hence a trustee. may give and convey the property or in the case of a sale of stocks may sign a special power of attorney in blank to transfer the stock. Duff. 8 J — 2 8 * 6 6 7 8 Trust Co. 7 Partial or Defective Execution. v. the exercise of his discretion in determining the selling or letting prices. 374. the execution may be completed at a later date. 1 49 Thus a trustee cannot appoint an agent to sell the property 2 or to manage the real estate. 473. 307. 6 such as the delivery or execution of a deed or lease. power to carry out the sale there is nothing to suggest that the trustee has delegated But an attempt to reach the same results under a general power would be otherwise. attorney. Infra. ed. § 76 Hawley v. 4 . pp. Lowell. 4 This does not prevent the trustee from intrusting the unessentials to an agent. or hand the funds to a solicitor to invest. . Transfer of Stock. having fixed the terms of sale. 3 because by doing so he delegates the essential part of his power. L. 5 Paige. St. 1 Eq. A convenient mode of action in such cases is to authorize the agent to contract subject to the assent of the trustee. 58. R. and the transferee will not be put on his inquiry. 59 Vt. 154 Pa. ubi supra. 318.

. ch. and the assent was no longer necessary to its execution. and it was held that. i. Encyc. p. v. 3 Mad. 299. is to be executed by deed. the condition must be proved and may be traversed. . the power had become unconditional. 300. 495. Minot v. 98. (1882). 4 is If the consent of a beneficiary a condition precedent. the power will be 6 but in a case where the consent of a class of benelost was required to protect their own interests. ed.. it Thus. the court might act in his place. If the execution is defective. but if in nonessentials prescribed by the trust instrument there has been an error. Stat. Prescott. Leeds Ex'r v. 514. ed. § 2. 14 Mass. the court will confirm the execution. 3d Amer. Lawrence. g. Sugden on Powers. 373. Pub. if the power will tion by parol was held that no power of sale arose. 1 If in essential matters the power is substantially ex- 2 ecuted. 1 2 Gray. where there proved to be plenty of personalty. Alley i. or if it is to be executed by deed witnessed by two men. 6 the subsequent ratification will not be sufficient. 50 A TRUSTEE S HANDBOOK. 142. e. Amer. where a trustee was to sell land to support the bene-flciary. 8 4 5 6 7 « Sugden on Powers. the court will compel the trustee to complete the execution in favor of a purchaser for value. Law. "Wakefield. 18. cution of the power. and if any party die whose consent is necessary. but it will not aid a volunteer. 7 And in some jurisdictions it is provided by statute that where the person has died whose consent was necessary to the exeficiaries they all died. Bateman v. 3d Amer vol.. or one having a meritorious claim. an execube ineffective. 10 Gray. 927. Mass. Davis. & Eng. 391 . the execution is absolutely void. 8 If the validity of a special power be dependent on a condition. 8 1 2 See page 58. and the court will not interfere. as there were no interests to be protected. a deed witnessed by a man and a woman will not do.

423 . Naglee. The Control of Court over Discretionary Powers. but this is not quite true. 55. 81. the court will treat him with indulgence. . p. dental to his —A . Control of Court over Powers that Duty to Exercise. or which are conferred on him by the and he is answerable to the court for a failure to perform his duty. 46 N. Y. H. Sbackford. p. 1 Only those interested can object to the execution of the power. his best course is to ask the instruction of 4 the court before he acts. . 72 Mo. since a court will not ratify an unauthorized conversion. 56. 92 N. Infra. if a trustee has any doubt as to his duty. Young. it is the Trustee's trustee is bound to use a sound discretion in the execution of those powers which are incioffice. 683 Perry. Hence the court will inquire into the manner in which he has executed such duties. that the court will ratify anything which it would order to be done. and will hold him responsible if he has not used sound discretion but if he has acted in good faith. since the maker of the trust meant to 6 trust to the conscience of the trustee and not of the court 1 — Infra. Hurck. motive. and espe2 cially if he act under advice of counsel. court will not interfere with the trustee's action where he has a discretionary power. 9 Cal. since a court ma}' not look at the matters hence. So too a decree of the court acting by is 51 statute authority invalid which does not conform to the statute authorizit . . and it is It is said 8 just as the trustee does not quite safe. Portsmouth 253. as it is where it acts on its own equitable jurisdiction. Haydel v. Crabb v. and is power given it not itself the party creating the right. THE INDIVIDUAL AS TRUSTEE. without any selfish legislature or court . ing since the court can only execute the by statute. " 8 * 6 Eilig v.. § 476. v.

525. 122 Mass. § 2269. Costabadie. Bacon. by con- They will not compel an execution. Div. the court ficient may review them. 106 Mass. Eldredge v. 9 Tabor v. 410. 646. 59 Vt. . and only to the extent. and he is under no legal obligation to do either. 1 2 . 150 Mass. Code (1885). 8 Comp. the court claimed the right to interfere. 3948. the holder can only exercise it with the court's approval. (1887). 273. since he and not the court is the tribunal trustee gives his reasons. 374 Proctor v. and if it finds them insuf- may reverse his action." he cannot act the court will interfere where he refuses to act as a reasonable man.. . 8 It will not inquire into his reasons for acting or not act4 but if the ing. Heard. 4 Ee Vanderbilt. 185. 7 It is provided by statute. the execution of the power becomes a matter of litigation. 3 McN. 9 If the trustee exercises the power in such a manner as Trust Co. 20 Hun (N. Cal. Bull. 2 If. Bull. Laws Dak. in two jurisdictions. Bacon v. and judgment. 490. of compelling an honest and bona fide exercise of the power. that discretionary power is presumed to be subject to the control of the court if not reasonably exercised. & 6. his discretion and a trustee cannot divest himself of 1 sulting the court. 10 Ch. since it is a mere matter of choice with the trustee whether he will or will not act. or is brought into court for execution. which he cannot be compelled to do. 8 In Cromie v. 6 Ee Beloved Wilkes' Charity. p. Civ. 21. Heyer. Sheldon. rather than a request to the court to change his determinations. but is influenced b}' hostility to the person to be 6 but the proper remedy in benefited or by selfish interest If the discretion given the trustee such cases is the removal of the hostile trustee. 8 Conn. Y. 6 Hare. 55 Vt. Garvey. Wilson. 440. v. 145 Mass. Brooks. § 511. however. The court seems to extend its control to the extent. 579. Costabadie v. 243. 6 Garvey v.). 52 A tetjstee's handbook. but did not exercise it. 520. 6 is to act on his " good upon his mere will or caprice. 8 Bull v. 1 Wilson v. 81 Ky. Supra. 47 Perry. . however. 448.

where a power or become impossible was given died. 240. he pays the whole amount over at one time for the purpose of revoking the trust. for instance. 4 Edw. 47. (N. 7 to sell and convert into cash for A. 69. Thus where a trustee appointed a double portion to his 4 son to avoid a lawsuit. 524. 16. and not because it has jurisdiction to review the exercise of the power. 8 Lovett v. 1. 613 Lessee of "Ward 2 Ohio St. Hogan. for instance. See infra. if under a power to use the principal for the support of the beneficiary. Ch. Re p. 1 Barb. or out of spite or revenge. be a fraud. 169 Mass. 5 Jones Eq. Farnham. 241. Winton. p. 220.. 1 Sneed (Tenn. 30 W. 6 after the trust has expired. Ch. Bostick v. t Slocura v. the execution will be set aside. exercise an unlimited power for his own it gain. Supra. 6 . pp. — A power cannot be exercised . 99. Extinction of Powers. though not injurious to others. See supra. Western. Frazer v. or to get an advantage for himself or his family. 2 If he exercise a power in such a way as to defeat the purposes of the trust. as. 46. the execution was set aside. 53 to be a fraud. or the purposes for which it was given have been fulfilled as.). A power may become extinct by the death or disclaimer of one of those to whom it is given 6 . the court can on that ground set it aside. Slocum. * Holt v. Barrows. THE INDIVIDUAL AS TRUSTEE. And accordingly the person attacking the exercise of a power on the ground of fraud must prove his case affirmatively. 8 If he exercise a power for corrupt motives. R. 1 — If the trustee will What amounts to Fraud in the Execution of a Power. 6 v. and A had A power will not 1 2 be exhausted by an exercise of part Brittlebank.) 82. . it will be a fraud. C. 4. having the usual jurisdiction to remedy a fraud.

304 Code Ga. p. 208. As. ed. .54 a trustee's handbook. § 3172 . it may be later date . § 2356. The tage.& S. Jr. 1 III. Gen. policy of the the fullest power to modern trust is to give manage the estate to the the trustees best advan- and hence a power of sale is a feature of all well drawn trust instruments. Jones Atch.. 80. is — — is it not a general power incidental to his office. 391. 17 Ves. PARTICULAR POWERS. 4 R. persons unfitted for business and the care of large . v. § 12 Ky. (1896). Laws (1896). it for the benefit of others not or to settle property so that it possessed of such ability may form a family fund to descend in the family as long as it can be tied up. 5 since the original theory of a trust did not contemplate a trustee's doing anything but holding and taking care of the propert}'. Ky. and so that the property may not be dissipated by the improvidence or bad management of the persons to be benefited who usually are. Although a power to sell one of the most important powers a trustee may have. the object of a trust then being to avoid feudal clues 3 and forfeitures. Stat. exercised again. Transfer of Stock. 49 . I. § 4707. Hall. 8 Lowell. Sugden on Powers. In New York power of sale to pay collateral inheritance tax. estates. for instance. Top. Fe' Ed. § 5. . (1895). Stat. Power of Sale. (1894). p. . 3d Amer. Stat.. in part at least. 150 Mass.. Rev. Sale. 2 Wheats v. At the present day the usual object of a trust is to settle property in the hands of persons of good business ability to manage . § 62. (1894). but where the court gives the power it may be otherwise. if part of a tract of land be sold under power of sale at one time. ch. 4 1 Supra. p.. In some jurisdictions there is a statutory provision that every will shall be construed to give the trustees power to change all trust investments. 2857. the balance may be sold at a or if a power of appointment fail.

Berry. 7 and such statutes are held to be constitutional. Atch. (1883). and then the income to B. ch. Whitney. 198. p. 1799. the trustees have an implied power to sell.. § 2617. 8 How. 1 Gray. In most jurisdictions power is given to the probate court by statute to give the trustees a license to sell. Clymer. court thinks notice to all may order a sale if the necessary or expedient.. §§ 2616-2622. (1894). Vt. H. 6 Sale under Statutes. 25.22. Stat. where the trust was to pay the settlor's debts. 567. 159 Mass. 2 or where the trustees were to invest or reinvest in safe securities. 9 Williamson v. (1889). v. Me. 1 Mass. 531. § 11 Pnb. Code Va. 8 Purdie v. (1894). 6 Bohlen's Est. 2 Pa.THE INDIVIDUAL AS TRUSTEE. N. 304. 55 it will In many cases where the power is not expressly given. 1 .. Ind. 721 Code Ga.. 20 Pick. 114. 8 Norris v. 4 or to invest as seems prudent. Wise. & S. § 10 Stat. Rev. (1887). Stat. 46 Jones v. ch. Stat. 304. . §§ 3411. §§20. too. Weld. and provide for persons in interest. § 3172 Rev. p. Annot. where the maker of the trust leaves illegal and improper investments.Pub. 779. (1888) §§494. 1 As. for instance. Mixter. . F4 Ed. p. (1893). and the decree of the court must conform to the statute. 150 Mass. Conn. all minors or persons unascertained or not Supra. 100. Stat. (1895). on the application of any one interested. St. 495. 141. Stat. N. 75 Pa. 146 Mass. ch. (1891). §§ 2100a. Rev. § 65. and the appointment of it guardians for in being. (1896). 4 Harvard College v. 6 Boston Safe Deposit Oo. 4030. Proctor. 8 — In such cases the power given the court is subject to the same general rules as other powers. Top. Stat. 3415. 68. Gen. and not exceed it. be implied from the fact that the trustee is given a duty which cannot be performed without a power of sale. 6 So. St. 9 The statutes generally provide that the court. Goodrich v. 8 or where they were given the power to manage and invest. 277. (1882). Laws of Del. Stat. 2 . Y.

Colt. 2 Pa. 119. 14 Allen. but even a sale under special act of the legislature in direct controversion of the settlement has been held void in Pennsylvania 4 but elsewhere a special act for a sale. Hayes. Gen. 7 and the trust passes from the property sold to the fund received in its if all and parties in interest place. 150 Mass. 403. 256. (1882). v. were parties to the suit. 7 Baker v. St. ch. 277. 9 and providing for the appointment of guardians to represent sales. 9 Gray. Hunter. 9 Mass. 16 Pa. 127. § 19. I. v. though contrary to the testator's intentions. Pet'r. has been held constitutional. Y. 164 Mass. 19 N. persons who are unascertained or not in being. the court without an act of the legislature trine. 106. 445. Moreover. St. Atty. Briggs. 2 « * 6 Davis. 56 A trustee's handbook. 120. and the fact that the income 2 will be increased is not a sufficient reason to decree a sale. 8 Cowman v. where adequate provision is made to protect the interests of all persons 6 interested in the trust. Lorillard. Leggett v. 8 Beav. Colquhoun. Pub. 426.. Clarke v. 68 Ga. as a change of investment. 561. Clymer. Ervine's Appeal. Such statutes do not give the court power to act in disre1 gard of the testator's wishes. Morris 6 . Laws R. 5 Wall. Stat. 60 Md. (1896). 233. Porter. and often does so. 6 may order a sale on the cy pres docit is difficult or represented by guardian. If such persons are not represented. Gen. 377. ch. 24. Pace. Baber. Ryan v. the legislature may 8 authorize a sale by special act. Where there is no general statute. 201. Weeks v. 4 Comst. Stanley v. § 18. 61 Tex. where it is impossible to use the property so as to carry out the testator's wishes. . the sale 1 is of no Johnstone v. to see what remedy they would possess at a later time. 8 There are statutes authorizing the court to order such and sales of estates which are subject to contingent remainders or executory devises in some jurisdictions. Hobson. 257 Ansley v.

1. . and a minor or person unascertained might object on becoming sui juris or vested with is .. 8 Blacklow v. The management of the and hence cannot be delegated. or his agent may arrange them subject to sale requires discretion. 68 Ga.do so as one of its ordinary powers 2 but where such a statute exists. even though the sale is at auction. It is said that a court will not confirm sale even . Lorillard. It is settled — law in Missouri spot. Ansjey v. 40. Where no statute giving any court power to decree a sale. v. or where a sale is necessary to preserve the property s that such a sale would be beneficial to all concerned is not sufficient ground of action. the court would undoubtedly ratify it as the trustee had power to make it ex necessitate. Where the trustee sells at private sale he must arrange the terms himself. Power — the estate. THE INDIVIDUAL AS TRUSTEE. he should attend in person to decide tion arising 1 on the any quessuch as an adjournment or the Baker v. 70 6a. a court of equity or any court having the power to regulate trusts maj. 4 Baker v. where it was decided that persons unascertained and not in being are not necessary parties but in this case a special power was given by the will to the court. . and the sale was necessary to preserve the property. Schley r. 119 Mass. ubi supra . Pace. that. and so the parties were immaterial. ubi supra. effect. 4 an unauthorized though it would have authorized it had it been consulted but if there was no time to get leave of court. Laws. But see. his approval. 64. should they afterwards entitled. 1 become there of Court of Equity to decree a Sale. Crocker. 403. Execution of the Power. the court would only act under and to the extent of the statute. 57 so far as they are concerned. 2 Hare. Where there is no statute. contra. a court of equity will decree a sale only where the trust cannot otherwise be carried out. Lorillard. 2 Old South Soc. Brown.

473. King. 9 amounts to a fraud. 7 Mass. § 18. Jenks. shall of a purchaser from a licensee of a competent court. p. such as an immaterial error . so that it fraud. Noel. See supra. 9 Infra. 2 For instance. Mercier v. 1 but the usual practice is not so strict most jurisdictions. 8 Price.58 A trustee's handbook. a partial interest such as a life interest. the court will affirm the sale. Spaulding. 4 If every essential requisite has been substantially fulfilled. and it may be disaffirmed. 142. even though there may have been some irregularity. who has given bond and due notice of the not be set aside for irregularity in the proceedings. a sale for credit cannot be made. The sale must be carried out in the manner prescribed in the trust is derived . 488. Knox v.. p. 8 but in money must be refunded. (1882). 72 Mo. or a right to mine or cut timber could not be sold but an authority to sell the whole estate will not prevent a sale by lots. instrument or decree from which the authority and any error or omission will vitiate the sale. 8 and if the power be to sell the whole estate. 5 or appearance of a party. 165. 10 2 8 4 6 R 7 8 Graham v. 50 Mo. 438. 142. 425. 22. 27. Waterman v. ch. 7 Mass. but he himself be- comes the purchaser the that case the purchase If there is an}' sale may be disaffirmed. 10 Court. the sale 1 may be disaffirmed. 7 The trustee cannot purchase directly or indirectly either if for himself or another at the sale. in the description or advertisement. Ord v. or if the selling price is wholly inadequate. . 127. 5 Madd. such as inadequate notice. Mass. if the power be to sell for cash. Once having successfully attended to the details. Pub. 6 And in some jurisdictions there are statutory protitle visions providing that the sale. Jenks. he need not deliver the deed in person if he takes proper precautions to secure the purchase money. 51 111. West Kansas Land Co. Knox v. Stat. Oliver v. 488. in acceptance of a bid.

6 the purchaser need not see to the application of the purchase money. Supra. — i Cassell v. v. 51 Md. § 798. White Cuddon. If the sale is by order of court. Jr. Application of the Purchase Money. p. and if conditions are attached to the power he must see that they are properly performed. " Third Nat. Third Nat. Bank 2 8 Lange. (Va. Wheat. v. Transfer of Stock. Ross. 49. that where the settlor or court has intrusted the funds to the trustee. Where the sale is a breach of trust. * 6 6 Mortlock Buller. Jordan. 3 but he may get damages at law from the trustee individually for the breach of the contract. Lange. 1 and that it has been properly carried out. 51 Md. Bank v. 284 Wilson 384. as. 10 Ves. 138. where the trustee took a note and discounted it for his own benefit. Noel. Wormley Wormley. 5 Madd. § 77. & 8 Fin. but also for damages and he cannot compel the trustee to carry out a contract that is a breach of trust. for instance. since equity would not compel the trustee to do wrong. 438 . as for instance where the investment requires time and discretion. 8 rule . He will be liable if he have notice that the trustee has not exercised a personal discretion. THE INDIVIDUAL AS TRUSTEE. 292. for instance. 4 . Lowell. CI. the purchaser will be liable not only for the purchase price. 766. . but has delegated his duty to an agent. he will be liable if he neglects seeing that they are properly applied.) . 244 .. Ord v. 59 The purchaser must ascertain at his peril that the power of sale arose. 33 HI. 7 Coombs v. if he purchase from an agent under a general power of attorney 2 but the determination of the court that a sale is proper will protect him. 421.412. 8 v. 6 or if he has a general power of sale. v. Dayisson. as. or if he knows that the trustee intends to misapply them. 138. he need not see to the application of the purchase money unless required to do so bj' the decree 7 but if the funds are to be applied in a particular manner at a definite time. v. 2 Rob. Perry. The general is. 3 Bland.

& J. Pub. 1 Whole subject treated in 8 Code Ala. (1889). 7 and it is said that where a trustee has a power of sale. and the power has not been usually given him by the settlement or bjr the legislature this . and many of our States. § 5584. C. (1882). U. Stat. Lowell. 60 A TRUSTEE S HANDBOOK. ch. 41 Hun (N. he will have an implied power of mortgage. Stat. 2 De Winton. Robarts. S. he is liable for it. Civ. (1896). Roche. 4 In the absence of statute. Stat. Kan. (1896). C. — but of late years power has been more frequently given to enable the trustee to improve the real estate. (1894).. Rev. Wise. 1801. Stat. Code Cal. Stat. S. p. 421. Loring !. N. Mich. Code N. (1895). Underbill. N. (1894). § 4277. (1889). § 8691. Waterman v. §2244. 75 Ga. (1889). If the trustee has power to "sell and dispose of" the property. Annot. Ind. the court will not order a pledge or mortgage unless it is essential to carry out the purposes of the trust. § 23 . 4 Mass. 1 he is not liable but where he pays in an improper manner. 332. 4 Madd. Rev. Minn. § 66. v. 13 . Transfer of Stock. (1894). Y. (1885). § 2092 Rev. 5 and in such cases the authority is 6 really an implied one given by the instrument. Baldwin. pledge or mortgage the trust property incidental to his office. 9 1 Keane Pell v. Gen. 549. § 4846. . 453. Stat. (1882). n. 6 6 7 8 9 Trust Co. 8 Wheat. §1039. Stat. 356. 356. C. § 3399. he will 8 but the better opinion also have the power to pledge seems to be that a mere power of sale does not confer the power to pledge. 141. § 75. Ky. Rev. § 4295. Brodie. v. 134 Mass. Brock. p. 2 DeG. 68 Iowa. Stat. (1896). Annot. so that he has notice of 2 the contemplated breach of trust. Wormeley. 255. Wormeley v. § 7167. v. The trustee has no power to Fledge or Mortgage. . U. Stat. Dak. he is exempted by 3 statute from seeing to the application of the funds. If the purchaser has paid in such manner that the funds might be properly invested. Miller . § 65. Redwine. 130. Y). 1799. Y. In England. Mo. 330. S. Stat.

491. 11 Ves. although he has form. Bridges o. 8 Partition and Exchange. 30 Cal. Eq. 4 although a power of sale and a power to sell and exchange do not include a partition.be indirectly effected under an ordinary power of sale and reinvestment. 24 Bear. 467. Borel v. and he will take by implication the power to give a merchantable mortgage. 3 Drew. Longman. 8 These leases are binding on the estate for their whole term. Jr. Y. pp. the partition or exchange could not be made' in this way. the power of sale is restricted to sales for cash. Greason v. Kent's Commentaries. 8 4 5 6 7 Lewin. 569. R. the pledgee will be holden to more care than a purchaser. 1 If the trustee have a power to mortgage. Greason v. 16 Ohio St. . p. or one in the usual power of sale mortgage.. 6 If. . except that. v. Rollins. ubi supra . he may give a no power to sell 2 since without such a power of sale the mortgage would be unmerchantable. 8 L. however. and the remainderman is bound by them 9 but if the trust must terminate at a given time. 408. 106-108. A partition or exchange can be made by express authority in the instrument. as this power is more unusual. 17 N. State Bank. for such it is his duty to get the customary return from the property. 6 or the reinvestment is restricted. THE INDIVIDtrAL AS TRUSTEE. Re Chawner's Will. 61 The same remarks that apply to the execution of a power of sale apply to this power. even though the trust may terminate during the term of the lease. as. Fane. 236. 27 . or they maj. Transfer of Stock. 8 9 Earquhar. Keteltas. vol. 7 — Leasing. 472. Cleveland v. § 75. since i 2 Lowell. — The trustee has the estate as a general power to lease the real power incidental to his office. 534. Keteltas. iv. McQueen Bradshaw v. terms as are customary.

There is one case where a lease of ninety-nine years was approved. 8 4 v. 4 A trustee may make a building lease. al- though such leases may be in one sense of the word customary. 19 Barb. but are paid for by the life tenant by the use of the property at a less rent during his life.62 a tktjstee's handbook. v. Jackson. . 259. 608. 8 Twenty years has been considered a reasonable term for business property. part of the rent is the consideration of the tenant's improving the property. because. becoming of age. and it is determine what is a customary a question of fact in each case to be ascer- tained by careful inquiry. and farming property is often let on even a longer term. 1 nor to bind the estate by a covenant of renewal which will extend the whole term beyond the term for which he has power to lease. and any lease made by a trustee beyond his power will terminate with his estate. Bergengren v. Ligon. Harp. but may make reasonable covenants of renewal to the same extent as he might for instance. Keteltas. but the circumstances not were peculiar. Keteltas. 543. 608. they do not fall within the class of leases which are covered by the power incidental to the office. 139 Mass. A trustee has no power to make a lease to begin at a future day. 205. Aldrich. 2 Newcomb Neweomb Black v. 8 Cow. 2 It is often difficult to term. All these rules may be modified by the provisions of the trust instrument. and must necessarily differ somewhat according to the location and the character of the property let. 19 Barb. In a building lease. giving the trustee a special 1 power to lease Sinclair v. and these improvements. on A's lease. accrue entirely to the remainderman. the trustee has no power to make a lease extending beyond that time. Eq. 581. which do not benefit the lessor until the end of the term. and will not bind the remainderman.

The trustee has the duty of gathering in and protecting the trust property . 1 Ch. 382. Bowen. 5 and to employ counsel and incur all necessary expenses at the expense of the trust fund. hence he has power to sue for it or for any damage to it. they will not be heard to object but this is merely a matter of remedy against them. DuDcombe. and received the rents for a long time.. p. an}' term less will be a good execution of the power. p. G. 3 M. Supra. & S. but also where the trustee has acted with reasonably good faith in attempting to protect the beneficiary himself. 23. Harp. . 4 5 & Supra. 4 DeG. supra. and to defend suits in which it is involved.. 24. 4 To Sue and Defend.THE INDIVIDUAL AS TRUSTEE. . 798 . 29 . or make building leases or leases of unusual length. Ligon. the matter of what risks he assumes should be . 205. unless he has been improvident or unwise. 4 Kent Com. whether successful or not in the litigation. 211. p. 6 1 2 8 — Isherwood v. 9 Beav. M. or in which he is involved as trustee. 6 Chester v. 107 Black v. 23. where he has attempted though unsuccessfully to have him adjudged insane. as. Rolfe. 2 If the beneficiaries have acquiesced in an improper lease. Nelson v. as the beneficiary has no right to make or unmake leases. 63 power he has by virtue of his so that it may be lawful for the trustee to grant covenants of renewal. Powcey v. and does not make the lease valid if invalid. and if the trustee be given a power to lease for a specified number of years. Ca. Eq. and as a covenant of quiet enjoyment is implied in every lease. g. carefully considered. in addition to the general office. e. These expenses are allowed. not only in cases directly affecting the property. 3 The trustee will be personally liable on the covenants in a lease unless there be an express provision to the contrary. Oldknow. 1 and if he exceed that term the lease will be good to the extent of the authority.

3 Ch. 2 trustee is sufficient. 10 Ames. Bouverie. . A estate. 350. Stat. will bind his co-trustees or the estate. J. 126 Mass. 23. 683. Clarke v. Gen. The trustee should never compromise a suit unless it is decidedly for the benefit of the trust estate. 70 Pa. 9 and unless his right is doubtful. St. Boston v. Chadbourn. Such statutes held constitutional. Stat. Infra. 9 Allen. 142. I. p. 173. Conn. 6 the beneficiary will not defeat the The trustee may compromise and in or submit doubtful cases to arbitration. (1895). Supra. CodeGa. ch. and the result of litigation dubious. §595. p.' powered by statute to some jurisdictions trustees are emcompromise or submit to arbitration with the approval of the court. Chadbourn v. 9 Cal. § 12. 405. suit hostile to their title. Laws R. 31 L. 208. 6 The admissions of trustee's title. 391 . 8 nor the erroneous representations of one 4 of several trustees. 409. Scott v. 1891. (1896). D. 5 Gray. (1883). Stat. 466. Lord. § 10.3430. Devereux. Cordis. but the bene1 ficiaries need not. Low v. 85. 8 court of equity would have the same power where there is no statute. 4 Allen. Me.64 a trustee's handbook. 68. 18 . as to duties in such matters. p. 384. he may require indemnity. (1882). All the trustees must join or be joined. Pub. 494. If the trust fund is insufficient. Mass. §§ 13. but expressly by statute in many jurisdictions. (1888). and in compromising a claim he should show a strong probability that it could not be recovered in full. n. and notice to one but neither the admissions of one of several trustees. 8 Watts & S. Naglee. ch. 82. 6 7 8 Pope v. Coates. unless they are not adequately represented by the trustees but they should be notified of a . Ch. Vanderer's Appeal. ch. 10 1 A Generally. 2 3 * 6 Mackey's Adm'r v. trustees will not bind the compromise of one of several The demand of one is trustee sufficient. §§ 3429. Gen. 9 Ellig v. Rev. Bobbins.

Laws Dak. Dyett. and not a claim against the bene8 and this would probably hold true even in those States where the trustee has the powers of a general agent. he will have power to bind the estate by his contracts in carrying on tee the business. 8 Thus. In such case he would bind the estate by any contract which he made as trustee within his powers. p. 2 8 4 Luscomb v. 7 Paige. but even the general trust assets. § 3946. 660. § 2267. Taylor. 403. fied ficiaries . Code Cal. Coal Co.THE INDIVIDUAL AS TRUSTEE. where a trustee has power to carry on the testator's business. on the estate since he has and a contract would be imestate is merely the right by law to pay for them. North Amer. Dak. 5 Gray. To Contract. 129 Mass. Rev. 154. Bushong v. whether he signs as trustee or as an individual only. 65 The trustee has no power to bind the by an express contract when one would not be implied by law. (1887). b. 10 Pick. Drew. 150. (1885). § 4289. Comp. . if at all. Civ. Code N. and generally he may make any contract and bind the trust estate thereby. 7 So a contract for repairs to the trust property will be binding the power to plied make repairs. or to bind it upon one different from that which would be implied. 2 whether he adds the word "trustee "to his signature or not. and not his successor in the trust. 8 but if he contracts within his powers the estate will be bound. 167 Mass. Perry. 6 Hapgood v. 120. 5 (1895). § 437. Infra. 5 and he may have such power by the terms of the trust instrument. 82 Mo. 1 Durkin v. Langley. 577. Everett v. Ballard. 6 7 8 9. 4 In some States the trustee is given the power of a general agent. But the right to hold the to be subrogated to the trustee's claim to be indemni- out of the estate. not only the assets in the business. v. if he has power to do the act as trusestate — which he contracts to do. Houghton. 1 The trustee binds himself personally.

will have. 145 Mass. and not to revise his acts. Maintenance and Support. 69. pp. 490. 6 but it will only interfere to remove a trustee who acts from caprice or mere will. beneficiary. a power is often expressly given to apply such part of the principal as either the trustee. May. the court will not inquire into his motives or revise his acts. 4 2 Infra. the object being to enable the beneficiary to enjoy — the property in spite of his creditors. . Wilson v. instead of discretion and judgment. too. 4 In such trusts the court considers that the power should be exercised primarily for the support of the beneficiary. 2 this kind can be granted treated This special power persons to it is usually discretionary to the fullest extent. 1 He very commonly also has a special power given him to apply the income of the property to the maintenance and support of the beneficiary. 6 So. 109 Mass. the trustees being given the power to select the whom the income is to be paid or to accumulate in their discretion. Wilson. 6 6 May v. 145 Mass. or has is entitled 8 any real interest in the trust and so long as the trustee applies the income within the limits assigned. 490. p. The extent is to which a valid power of later. the power. 252. instead of paying it to him directly. or from improper and selfish motives. v. 8 But see below. 66 a trustee's handbook. he is prejudiced and cannot fairly exercise his office of trustee. however. 492. 136 et scq. Wilson Wilson. In such a case none of the possible recipients to anything. or in many 1 Infra. If.. The trustee has a general power incidental to his office to maintain and support his The power is coextensive with the duty. he may be removed from and he this is the only remedy the beneficiary and is interested to that extent. which is treated farther on.

where the question arises as to spending any part of the principal. Farnham. 67 may deem necessary for his comand support. 2 Del. Putnam. 283. and having a due regard for the purposes for which the power was given. J. Ch. 10 R. 141. 28. 12 R. Walsh. Eq. The amount spent by whoever has the power of deciding what is needed " must be founded on a reasonable judgment. 7 The interest of the beneficiary. and the court held that the trustees must exercise a sound discretion in paying her such reasonable amounts as she could spend for that purpose. Code (1895). 6. Smith. The general power to support a beneficiary incapable of acting for himself is also in a large measure discretionary in its execution. 324 I. 50. 6 6 i Collins v. 289 . Smith. and where exercised reasonably will not be reviewed by the court. Ga. at all. . 23 N. and void. Serverson. Eq. Hills v. cases as the beneficiary. . J. 6 In the case of an infant. 123 Greene v. 2 Stroh. Walker. Williams v.. Aldrich. 1. 1. 137 Mass. .THE INDIVIDUAL AS TRUSTEE. I. - Lovett v. McKnight v. 152 Mass. 17 R. s although in some jurisdictions the court claims the power to review the trustee's action. 8 Bradlee v. 136. § 3185. it is more prudent to take the direction of the court as although it may authorize an expenditure of principal it is said that it will not ratify one 6 but in those jurisdictions where the courts give the trustee a large discretion it would probably ratify an} expense it would have authorized. dealing with existing facts and reasonable anticipations of the future. * Owens v. 1 Barker. 280. . 4 and it will interfere where the trustee makes no payments fort . and not the accumulation of income for the benefit of the remainderman is the chief . Aldrich v. in 2 Same case. In this last case income was payable to a woman " for her use " as support. and cases cited. Andrews. 169 Mass. and also for the rights of those whose interests are injuriously affected by its exercise " * and an exercise of such a power to draw all the funds out of the trust so as to effect 2 a revocation is not a good exercise of the power.

443. 3 Allen. 137 Mass. by setting aside for those individuals a sufficient sum to bring the amount distributed to them up to the largest amount expended. or whether the trustee maj' apportion is settled on a certain class of persons. Tribe. 68 consideration. and he is capable of enjoj'ing as. for instance. and one beneficiary needs if If the income a larger expenditure than the others. however. and accumulate the whole balance. Foote. Langton . J. there is an express or implied intention to give the trustee the power to expend the income according to the needs of the several beneficiaries. 18 Beav.. 39 Ch. he must ascertain those needs. making a home for his father or mother 2 keeping a horse 3 or providing expensive farm buildings or gifts to charity where the fortune is ample. Owens v. 2 Strob. 270 Jones v. 136. special — mon pecially as the 1 mode of execution is generally carefully May 2 8 4 5 May. . v. Bradley. 4 If there are more beneficiaries than one entitled to sup. If. Brackenbury. Eq. among them according to their needs. Eq. 446. Harte v. the trustee should take the largest amount actually expended and make up to those whose needs are not so great. . . McKnight v. and the trustee may provide such comforts and luxuries as are suitable to the condition in life of the benefieiar}-. v. and compowers above treated. 543 Jackman v. expend accordingly. es- Miscellaneous. If there is sufficient income. 289. 109 Mass. 5 the amount expended must be equal. 215. 252. or an equal division of property in general was intended. Williams v. 1 a trustee's handbook. 23 N. 147 Mass. trust instruments often contain other special powers too numerous to treat. port. and only the balance will be added to principal. "Walsh. is to be determined by the intention of the maker of the trust as gathered from the instrument. 6 Besides the general powers. the question whether they are entitled to equal support. D. 300. Nelson. 2 Colly. 6 In re Coleman. Walker.

and he is bound to treat them all with equal justice. A IV. v. 9 Beav. Support. the trustee is the absolute owner of the property. 45. His duties are to all the beneficiaries collectively.THE INDIVIDUAL AS TRUSTEE. except in so far as his ownership is modified by his duties to the benficiaries. 2 Keyes Supra. If the beneficiary is under a disability. 69 provided for by the instrument. 1 even where the special motive for creating the trust has disappeared. Nelson Carleton. Duncombe. — 1 Taylor v. 211. but an individual in assuming the character of a fiduciary or trustee for another immediately enters into a status with respect to that other which modifies their re- lationship as individuals. number of duties to his beneficiary outside of and places on the trustee a large and beyond the questions affecting the trust property. so as to effect a revocation of the trust. and also because they are governed by the general principles set forth above. 141 Mass. 165 Mass. v. These duties are not limited to the disposition of the property for his benefit. 547. it is his duty to have him declared so port. . it is the trustee's duty to see that he has proper care and sup4 If insane. Buttrick. 63. DUTIES. Supra. In England a power of revocation will be inserted in a voluntary settlement. As we have already seen. First. 67. and its absence is ground to set it aside but such is not the law in America. and if incapable for any reason to maintain and support . . 8 * p. p. we will treat of the duties his beneficiary aside which a trustee owes from the management of the property. 2 power of drawing the principal as needed for support will not authorize the drawing of all the principal. 8 Powers to appoint a successor in office or to terminate the trust are not infrequent.

He cannot 1 use funds the person would not be entitled to otherwise. 350. a is given to trustees to use in their discretion for the support of an insane person. 152 Mass. 4 Johns. but now in England by statute support to an infant contingently interested (Re George. settlement be on the father as trustee to support his child. where on estate becoming vested he would be entitled to 1 Lee v. and accumulate any balance not needed. § 190. the trustee should not contribute except under order of court * if the parent cannot furnish sufficient support.70 a trustee's handbook. taking sources together. 837). 362. Hills v. in The support in . Thus. . § 612 Lewin. J. him out of the funds which he would otherwise pay over to him. may advance 5 Brown. however. contribute sufficient to all make reasonable if support. 100. Underhill. 4 McKnight v. which case the trustee is excused. p. 2 is to be taken wholly from income except a case where the property is absolutely vested in the beneficiary. D. 653 . Putnam. Where. " 6 2 . Flint. 256. 66. he may take the whole support from the trust funds irrespective of his own ability and if the income is to be paid to a father or mother for the support of a child. Jr. In re Bostwick. Ch. in which case the court may make an allowance from principal but the trustee should not do so 8 without an order from the court. Perry. 16 Pa. 4 Ves. Eq. C. Ervine'a Appeal. St. Supra. . the trustee should . the settlement being in a certain sense for the benefit of the father. 123. 23 N. 136 . if the parent be alive and able to furnish support adequate to the minor's condition and fortune. The matter of support is often complicated by the fact that others may have a duty to support the beneficiary. the accumulations. and an act of the legislature authorizing him to use the principal for the support of the life tenant is unconstitu- tional and void. Walsh. they may take all his support from that fund irrespective of his other means 6 and if the from fund . and thej' there are two funds to be drawn should be taxed ratably.

to support a minor child who is not taken from his or her care but a stepfather or a mother under coverture has no such duty. but the court will see that they do so. and that he. or the transaction may be disaffirmed. 547. as e. Eq. Where the beneficiary is of full legal capacity. 27 Atl. g. v. 100 Mass. advantage of his peculiar knowledge or position but if he gains any advantage in the transaction he will be under the burden of showing that the beneficiary was fully informed and thoroughly understood the matter. the trustee. It is the duty of the trustee to handle the funds himself.THE INDIVIDUAL AS TRUSTEE. 67. except husbands. 2 Ailing v. 8 Flint. 342. * Taylor v. Loring. J. 3 women. 92. 2 Allen. 4 and the trustee has no peculiar duty to them except in preventing the husband from reducing his wife's property to possession. 2 husband must support his wife. 101 Loring v. See Greene v. 136 . Supra. 3. Smith. 655 52 N. 262. Von Zedlitz. and not delegate the management of the funds for support to another. he must not delegate the duty to the . A father. . 71 they are entitled to it so long as they support the child. any transaction with a beneficiary in which the trustee Chase. Rep.' 6 Bowker v. . Pierce. 28. p. in which case he should protect her rights. the existing statute law married in their relations with their Under Contracts with Beneficiary. 165 Mass. 6 In other words. 130 Mass. says he may exercise sound discretion in paying to parent or guardian. even 'concerning the trust propertj'. or a mother not under coverture. 340. generally have the same status as other individuals. Buttrick. the trustee may deal with and make binding contracts with him. — He cannot. § 191 but Perry. take . n. and the same rule applies in payments to the beneficiary himself. as in dealing with a stranger. Jackson Mass. has taken no advantage of his position or influence. 1 It is the duty of a father. I. 1 7 R. § 620. Ailing. 1 Chase v. .

§ 3921. there seems to be Good good Faith. 28. Comp. . Comp. Civ. Vaughton v. for instance. 2 The trustee may accept professional employment from if the beneficiary. Nichols. and afterwards induces his beneficiary. to allow him to buy in the property on foreclosure to pre- vent loss. § 3928. (1887). § 4271. 72 a tktjstee's handbook. transactions. his the trust. § 434. the beneficiary maj disaffirm the purchase and r require the trustee to take the property money. 34. as that of attorney. a trustee sells to the trust fund a mortgage for more than the property is worth. or counsel in other than trust matters. 157 Mass. and the otherwise falls on him. L. Dak. Code N. Rev. p. Civ. 2 8 * 6 6 (1885). see supra. — A trustee all is bound to exercise the utmost it 6 faith in all the concerns of the trust. especially if of small value. and loyalty to 1 acts His fealty is to must be governed by strict 6 it and the Code interests of the beneficiaries and Cal. L. Appellant. receives a benefit is burden of proving The rule is presumed to be fraudulent. if and refund the he acts as soon as he discovers the misrepre- sentations. § 2235 (1895). relying on his representations. whether be in dealing with the trust property itself. Code (1885). § 2228. Cal. should not be given and accepted. Dak. broker.. 30 Beav. are better wholly omitted. 3 It is said that his position to obtain the a trustee may not receive a gift from a beneficiary. If. 4 but with the limitations specified as to other no reason why a spontaneous present. or with the beneficiary in matters concerning the trust. 1 the same whether the transaction concerns it the trust proper or property outside of the trust. 20. Perry. Dak. Still such transactions. As to professional employment in trust matters. Noble. being subject to suspicion. . (1887). but he takes compensation must show that he has not used employment.

84. 5 DeG. Law. 155-157. 6 If be accidentally acquire an adverse interest which he intends to assert. Ray. vol. 10 It is not his duty to appeal from an adverse decision. 9 His Duty is the fund. E. 2 8 4 5 Neyland v. 2 A. Gill. even where the trustee honestly believes that the intention of the maker of the trust was otherwise. 104 Bendy. M'Clanahan 45 6a. Amer. 7 and if he have demands both as an individual and trustee 8 against the same person. Marsh. Civ. Laws Dak. he must resign the trust. Bowman. 6 He must not come in competition with the trust estate. (1887). v. 7 Supra. 344. Dec. He must not divulge a defect in the title. he must appropriate any sum he collects ratably between the two claims. Barker. (Ky. p. 7 Ch. 69 Tex. Mullins. he cannot set it up against the trust. 48 Mo. nor admit the adverse claim of another. Scott v. In the management of is wholly to his trust and he . 27. Thomas v. 30 111.. . and claim all exceptions. any act which 73 is pot in the interest of the beneficiaries is a breach of trust. Henderson. 12 Am. 110.) 388. Code Cal. Encyc. 18 Pick. Comp. (1885). he must do nothing to prejudice the interest of his beneficiaries. pp. unless it is evident that nothing can be gained. Thus. — must do of all that can be honestly done for the furtherance its interests. 711. or accept an adverse employment. 8 » 10 & G. M. 6 Stone v. In defending suits he should take all good ground that he has. K. § 2230. & Eng. adverse interest. 3 nor set up an adverse claim 4 If he buys an himself.THE INDIVIDUAL AS TRUSTEE. 360. 28. unless the beneficiaries are informed and consent to his retention of the office. 1 and in a suit for a conveyance he cannot set up a superior 2 title. Eeid v. the trustee's duty All to the Trust. . 1 Ellis v. L. 412. Benjamin v. 76. In the case of a demand he must press it by suit. § 3925. Godfrey.

he must not release it. pp. 9 10 Guilford. 186. p. 2 Gratt. 65. and neither will be liable for the loss of funds or neglect of the . 1 and he should not compromise unless it is clearly for the benefit of the trust 2 and if he have security. 109. that is to say. without adequate consideration. Austin. L. 513. the beneficiary has a right to himself. Graham v. Supra. 2 8 * 6 6 7 Lewin. v. 500. 122. 18 Ohio. Eloyer. p. 64. 2 Molloy. one was held liable for the half lost by the 8 other. King. 74 A trustee's handbook. sound discretion and under good advice but if a decision in his favor is appealed from. v. active i it is usual for one trustee to assume the the property. 7 Thus. B. Attorney General. 4 where the trustees of a fund for the support of a museum at Harvard College were refused leave to turn the fund over to the general fund of the College. 143. or part of it. as to conduct of suits. Bostock v. p. Infra. 26 Jones's Appeal. —A trust is a personal confidence. 666. 9 In practice. Jones's Appeal. 8 Watts & S. 128 Mass. 50 Mo. Trust cannot be Delegated. 8 "Watts . Supra. the income to be accounted for to them. 22. Kilbee Sneyd. 273. See also Morville v. 258. & S. 6 and if he permits another to act in his place he does so at his peril. But where the duties cannot be jointly exercised they may make a reasonable apportionment of them. 6 Paige. 10 but the law does not management of v. 144 Mass. 48. 8 . 143. though he may do so in exercise of a. . 1 Eq. Wood Burnham. compel the individual who is trustee to perform the trusts The trustee cannot turn over the whole trust to another. 8 Graham State v. he must maintain the suit. other. where two trustees divided the trust and each managed a half. 6 Nor can the trustee his duty is to delegate any part of his duties or powers exercise the powers and discretion himself. as is exemplified in the case of Winthrop v.. Fowle.

48). but in absence of such knowledge they are justified in permitting one of their number to exercise his powers. i 8 . 123. 2 hence. in his hands. Infra. the trustees may prevent one of their number from collecting money by notifying the debtor to pay to all the trustees only and it is their duty to do so. Code N. (1885). § 3941 Rev. to allow one trustee to collect and disburse the former. Supra. p. p. (1895). if they know their co-trustee to be unreliable or likely to commit a breach of trust. Infra. Guilford. 6 As noted above (p. 6 though it would still remain their duty to keep a general oversight of his doings. D. 7 . § 4284. Code Cal. Perry. rents or dividends. § 3170. as in collecting . Infra. p. and probably justifiable. 48. 8 Paige. 8 Each trustee must exercise at least a general supervision of the trust affairs. (1887). 49. . still the prop- erty should not be placed in his exclusive possession and wholly beyond the reasonable control of all the trustees. 8 Watts & S. Jones's Appeal. 470. 4 Comp. p. 6 Supra. Evans's Estate. (1895). Code Ga. and not leave funds an unreasonable time in his hands. but not the latter and a trustee who allowed his co-trustee to collect a large amount of principal and let it lie uninvested distinction . A principal it . 2 Ashmead.. 18 Ohio. 2 Supra. although the management must usually be confided to a certain extent to one trustee. 500. 2259. Clark. 123. Clark v. p. Laws Dak. would be held liable for its loss. § 409. 75 recognize a pass^ trustee 1 and he cannot delegate his powers. 153. It is not a delegation of the trust to permit the managing trustee or an agent to perform any ministerial acts not re9 Thus the quiring the exercise of discretion or judgment. 8 6 7 8 8 State v. THE INDIVIDUAL AS TRUSTEE. 143. except in so far as one trustee can act for all. §§ 2258. 123. should be drawn between income and being customary. and "fulfil the purposes of the trust with ordinary care and diligence " 4 and a managing trustee stands on the same footing as any other agent. 48. p.

6 Graham King. own he overlooked. Supra. Parkin. and whether it was better or not to sell or adjourn the sale to one of the trustees. which transfer. Gaunt. of business would employ an agent for example. Speight v. is a delegation of the trust in the latter case they are employing an agent to make a their power to sell. and paying for them through him. determining the price. Ex parte Belchier. 57. the trustees could not give an agent or one of their number a general power of attorney to sell stocks but they might give a special power to transfer a particu- — — lar stock. Ex parte Belchier. 4 219. . Lewin. but only for his care in selecting him 8 as again. ordinarily prudent in his man as. 727 . 22. after they had determined the matter of the sale. p. managing trustee or an agent may be allowed to collect dividends and rents. and keep the books. employing a stockbroker to purchase stocks.. 76 A trustee's handbook. Contra. Again. 6 but they might authorize one of the trustees to execute and deliver the deed for them. The difference between a delegation of the trust itself and the performance of a ministerial act by an attorney may be illustrated in the case of a sale of land. p. . 49. 4 The employment of one of the trustees or an agent in such cases is not a delegation of the trust. . p. 22 Ch. Hopgood v. and in general act for the trustees wherever there is a moral or legal neces1 Such a necessity exists where the sity to employ an agent. TJnderhill. 267. a trustee who has employed a good conveyancer is not responsible for a flaw in the title which affairs. 22 Ch. 727. Gaunt. 11 Eq. 6 Amb. 2 In such cases the trustee will not be liable for the default of the agent. 1 which is a purely ministerial act. Supra. for instance. 50 Mo. 219. But see criticism on this « case. D. 300. 74. but is the lawful act of the trustees by the hand of another. D. v. terms. In the first instance the trustees are delegating . 2 8 Speight v. § 8. n. Amb. The trustees could not delegate the matter of making the sale that is.

All the trustees must join. under the trustee's relief act. Scott. 4 6 and passim. L. 110 HI.. and if one trustee allows another to render a fraudulent account. J. Pub. 1 If the account is inaccurate or obscure. § 15. 1 2 Hopkinson v. 8 is but as a general rule the jurisdiction courts by statute. the trustee is the loser. Burghley. any trustee can account and pay money into court B but in the absence of statute in America there seems to be no general jurisdiction in the court to compel the beneficiary to come in discharge or settlement in court. 77 a testanientary one. In re Wright's Trusts. THE INDIYIDUAL AS TRUSTEE. but he and settle his account. (1882). 447. 7 Provided for by statute in most States. vals. & 6 Infra. trustee must keep accurate and separate accounts of the trust. Landis v. 23 N. 124. Infra. St. 495. If the trustee does not hold under appointment of court. 7 and the beneficiary must come into court to settle. 308. Mass. 32 Pa. 495 . 1 Drew. J. 146. which should be always open to the inspection of the beneficiary. 6 If the trustee holds by appointment of the court. ch. he is liable as a party to it. E. even if kept in a book with other accounts. 119. he will be required to settle his account in court at stated interIn such cases he need not render any other account. Blauvelt v. 421. 2 A court of A equity may compel any trustee to account. given to probate testamentary trustee is entitled to a periodical settle- ment of accounts with his beneficiaries. Ackermann. Stat. and to a formal is not entitled to a release under seal. 4 In England. 419. 144. p. 3 Weaver King v. Accounts. Mullins. the an inventory (by statute in practically all the States) soon after his appointment. 3 K. since everything will be taken against the trust is — If trustee will be required to file A him. Eisher. p. 2 Ch. Eq. v. .

and does not involve the trustee's personal account with the remainderman or with other trusts. or the rents from real estate which lies in another jurisdiction. Infra. show the condition of the — trustee's account is intended estate. Winship. . 109. and on the credit side. accounts yearly. Blackington. expended.: . 2 The account must show every transaction in detail. income received. He must charge himself with each item received. 110 Mass. Clarke Morrill. 1 Allen. beginning with any balance of cash on hand. If a trustee dies. the survivors will settle the account and if may do a sole trustee dies. 8 but only the surplus brought into the jurisdiction of the court. . and include a list of property in the hands of the trustee. viz. If there has been any gain to the principal. as by income The changes side all the . 157. or as often as the settle "his settlement requires. Morrill v. 4 The court in which the account is settled will prescribe but in every the form in which the account will be made trust account there should be at least six schedules. p. or paid out. v. 1 2 8 1 Mnnroe v. and credit himself with every item lost. Dodd v. The income received should contain all the sums to which the life beneficiary is entitled. 369. and ask to be allowed for the same. deductions from principal. Holmes. 359. Form to The of Account. income paid. 78 he should a trustee's handbook. although he does not succeed him in the trust. and changes in investments consisting of debtor and creditor sides. in investment should contain on the debtor amounts received as principal for the remainderman. principal on hand. 132. his exeeutor or administrator 1 so. 13 Allen. additions to principal. and the income paid all the charges against him. In accounting to a court he need not include in his account real estate. all the amounts paid out as principal and these two accounts should balance. 133 Mass.

67 Jenkins v. Foster. after adding the schedule of additions and deducting the schedule . it should appear in the schedule of additions to principal. but in some States the schedules of changes and additions and deductions are not put in. The acquiescence of a guardian ad litem does not preclude his ward. 148 Mass. The schedule of deductions from principal will be made of similar items of loss and of any charges against the remainderman. 29 Mass. Stat. Winship. § 9. and its correctness cannot be questioned in a collateral proceeding in equity 4 or in a court of law. . Bussell. 144. either actual or appraised. McKay. 434. 134 Mass. 427. 144 Mass. 1 2 . 8 Dodd v. 11 Cush. — Stetson v. Pub. or the recovery of an amount not shown in the inventory or previous accounts. 136 Mass. 461. of deductions. The form of account above given is that used in the courts of many States. 4 Cush. 26. 4 Sever v. An account settled in the probate court is final. 5 Parcher v. or sale of a security above its cost. The schedule of principal on hand should enumerate each item of the trust property with its cost. 9 Pick.THE INDIVIDUAL AS TRUSTEE. Denholm v. 79 added. carried out and the schedule of the current year will always equal that of the previous year. 513. Russell. 6 Morse v. and all amounts paid out of principal are credited. Hill. ch. (1882). 5 The account has no effect on the rights of a person not party to the proceedings. . 107. 120. 62 Md. Whyte. 6 . and the difference in amount between these two schedules will be the difference between the schedule of the current and preceding year. Foster v. but all amounts received as principal are charged. and a minor or a person unborn or a person unascertained must be represented by a guardian ad litem in order to be concluded. 1 as to all questions heard and determined between the parties 2 it cannot be reopened ex8 cept to correct a mistake or fraud. Bass. Effect of an Account. 60.

even after so long a period as twelve years. 148 . 128 Mass. p. may be reopened by the court in its discretion.. 8 DeG. 541. & G. the fund would bear the expense of v. Pegram. Lowell. ubi supra. 5 but in so far as fairly made is binding on all who take part in it even though it cover a breach of trust. Lowell. although there is no statute of limitations to bar him. 109 Mass. 291. Infra. and for the appointment of guardians. Amory v. 6 A The Expense of Accounting. In England. Amory v. 532. 558. reopen his accounts. unless the trustee was at to . and may be reopened even by them to correct mistakes of fraud. yet as the state of the funds may be affected by his act. and where the trustee acts without compensation. but any court charges will be borne by the trust estate. but not on the ground that the former determination was erroneous 2 but if the beneficiary had an estate in possession and has assented to the account. 2 8 * 5 Cummings v. Pegram. 541 . the court will not help him. 109 Mass. 183. It is the trustee's duty make up an account therefore ordinary compensation covers the making up of the account. 8 or has neglected for a long period to enforce his rights. 149. M. 80 A trustee's handbook. the successor's duty may require him to investigate his predecessor's acts. 4 If the account is not settled in court. successor in a trust is not accountable for the faults of his predecessor. Ex parte Geaves. in which case he may be ordered by 1 the court to pay the costs. . 1 An account simply allowed by the court without making all persons interested parties. 265.. to correct a mistake or fraud. the settlement is final in so far as the account is assented to by persons interested and able to act for themselves. p. 104 Mass. 7 Blake v. 7 Blake v. — fault in not accounting. In many States there are statutes providing for notice to such persons. and recover from him or his estate. Granger. 140 Mass. Cummings. 6 Bassett Tnfi-a.

H. W. the court will not interfere since he the accounting. a stock dividend or the apportionment of the expense of cereficiary of his intended action.. (1882). 142. THE INDIVIDUAL AS TRUSTEE. J. Perry. however. i Life Association of Scotland v. 313 Underbill. 81. 6 . i Wheeler v. compromise. for instance. 2 but generally this mode of procedure will only protect the trustee against the life beneficiaries. 74. p. Where. Mumford. 152 Mass. he may refer the matter to the court and will be protected by He may ask its instructions as to a its determination. 6 sale or investment of the trust property. § 12. If therefore there is a doubt as to what the trustee's duties are. * Greene v. Stat. Pub. although there is no obligation on him to do so. Pub. Putnam. Whitchurch. N. 436. & J. ch. 2 Bradby v. 173. 432. 58 L. Ch. Chadbourn. 124. the court may tell him to take advice. and so is incomplete. § 10. I. 7 or on such a question as the apportionment of a fund between the life tenant and remainderman. Stat. or a determination between conflicting claims 6 is necessary. 4 and if he involves the estate in unnecessary litigaBut where a question tion he may have to pay costs. n. 1868. notify the ben- and if he does not object he will not be heard to do so at a later date 1 and where the beneficiaries are of full capacity. N. ch. 5 Hills v. 58. 198. § 6202. arises as to the proper construction of the settlement. he can and should apply to the court s for instructions but he cannot consult the court simply because he is ignorant and does not know his duty or what the law is. — When in doubt as to his duty. Stat. Siddal. 4 R. Where a trustee the Trustee is is 81 in Doubt as to his Duty. but the expense of furnishing an unnecessary account must be borne by the person requiring it. 307. . Re Bosworth. but by statute sometimes. as. 9 Allen. tain repairs. In such case. 8 Generally. 3 DeG. 6 Mass. (1891). Eev. he may . yet it is undoubtedly a prudent plan for the trustee to consult his beneficiaries before taking any important step. Ohio (1890). F. H. 18 N. Chadbourn v. he is given a discretionary power in is the matter.

as. 59 Vt. and not to such things as the performance of an act. Watts. 133 Mass. 532. use this method of de- termining a question at law. Winship. 359 New Eng. and trial An is account not for the of disputed claims. as the emploj-ment of a particular person as attorney or agent. Greene v. but trusts only extend to property. 4 the existence of the The proper way structions. 532. 10 Taking Possession. . Chandler. §§ 67. or any inter- whether vested or contingent. What may be est. 5 Lincoln v.82 forum and not a it. 148. Trust Property. for instance. 7 even though it be real estate outside of the jurisdiction of the court. 342. 8 Treadwell v. Foster v. 2 Story. 140 Mass. Trust Co. to raise the question is by a bill for inis and not by a fictitious account. Elsley. MANAGEMENT OF FUND. Salisbury Mfg. 313.. Co. 1 Nor could he . which can be assigned. 6 Dodd v. 630. trustee's handbook. 141 Mass. 6 Cranch. 2 . Sheldon. I. Mitchell v. Massie v. Mumford. 8 or something not actually in existence. 68. what is his 2 or what his powers and liability to a creditor or for a tax contemplated reorganization of a duties will be under a corporation. v. 7 9 10 8 Perry. — On accepting a trust. Div. 160. Hence a question as will who be entitled in remainder cannot be asked during life estate. 9 or trade secret or patent right. 393. Eaton. Aldrich. 6 meant to show the state of the estate. 374. 19 Ch. 8 No to practical one application will be considered until the question is a and must be decided. may be the subject of a trust. in possession or reversion. — Any sort of property. it is the trustee's duty to inquire into the nature of the property Trust Co. 149 Mass. 6 V. real or personal. Winslow. 4 R. 1 v. 4 Bullard v. 518. 7 Gray.

691 Underhill. the will or settlement will vest the title of the real estate in the trustee. in which case he must see that he is duly appointed or his appointment recorded in each jurisdiction where the land lies. Div. which will involve the examination of his pre- decessor's accounts so far as they are open. Hext v. & G. 1 If the real estate is let he should 2 8 4 6 6 Hallows v. 219. Div. p. 4 Meal Estate. 6 or if there is no provision in the instrument. — If the appointment is an original one. the estate may vest in him by the terms of the trust instrument or by statute. and he must see that the instrument is recorded in every jurisdiction where there is any land. but may insist on having them converted into cash. Loring v. rule applies where he takes the estate from an it. he need only take the securities at their actual value and then should collect the balance from the outgoing trustee. p. and he is not appointed hj a decree of court vesting the property in him. 80. He must take immediate steps to secure the trust property and properly invest He will have an equitable action against a transferee of the legal title made before he became trustee. then he must take a conveyance and record it in each jurisdiction. he will be responsible lor them at that price. 6 If the trustee comes in the place of a former trustee. 232. 125 Mass. . at any rate. Having acquired title he should at once take possession. 450. Lloyd. . 2 He is not bound to take the securities tendered him if they are improper investments. 39 Ch. .. The same executor. M.THE INDIVIDUAL AS TRUSTEE. Salisbury Mills. 138. Ex parte Geaves. Kinsey. 686. 42 Ch. or. 77 Va. Supra. Porcher. 291. Cogbffl v. Boyd. 1 If he succeeds a former trustee. 170. Eq. actual or constructive. 351 Thayer v. In He Salmon. 1 Strobh. 8 DeG. he must ascertain that he receives all the property that belongs to the estate. 8 If he takes the securities at their inventory value. 83 and trust documents. 162 Mass.

Supra. See supra. to any person acting on the faith of his receipt. in Sheffield v. If the beneficiary is in possession under the terms of the trust he need do nothing. as until the executors have administered the estate they are entitled to hold it and where the same persons are trustees and executors. . D. 133 Mass. 2 he may not be entitled to the personal property at once. as the beneficiary's possession is constructively the possession of the trustee. the personal property will probably be in the hands of the settlor. Bouverie. 330. or if there is no tenant he should take actual possession of the land.. 3 Ch. 158 Mass. Knowlton. 1 — If the trustee is appointed under a will. it shall constitute the trust There must be some act of appropriation which transfers it to the trust fund and gives the beneficiaries right to have it held for them. until they terminate the executorship by filing ." 4 1 2 8 Low * v. take constructive possession by compelling the tenant to attorn. an account crediting themselves as executors with the trust property. 332. If the trustee is an original appointee under a deed. 12. Dillon. something more must be done by the executor in order to impress the trust on particular property than to hold the utors is and will not hold as trustees. he will be liable for it as though he had received it. p. should be delivered to the trustee when the settlement is made. 9. or acknowledge him as his landlord and agree to pay rent to him. J. or the evidences of it. If the trustee joins in a deed acknowledging the receipt of the property. to be created property with the intention that fund. p. they will still some other definite remain liable as exec- 8 " When a trust fund by an executor out of the assets of an estate. [1891] 82. Personal Property. and it. 91. and qualify as trustees or do act showing a transfer. Crocker v. and does not as a matter of fact receive it. Parker. See infra.84 a trustee's handbook. 120. p.

1 Although the provisions of the trust instrument or decree of the court may have the force of a written transfer. n. Daniels. as it is not apparent to what fund the stock belongs. p. to have a written transfer from the former owner. If there is a chose in action or equity. 85 In the case of an incoming trustee it is his duty to examine the executor's accounts and ascertain that he obtains all the estate that he is entitled to. so that there can be no question as to its identity. 8 a payment of the claim or other novation of the security to the previous holder before notice 4 will discharge the debtor. All claims which are due should be called in. Infra. Registered bonds. and certificates of stock should stand in the names of all the trustees. he. the obligor should be notified at once 2 as for instance a bank account. The transfer should be made without delay on a note by indorsement. is is desirable where the property : . 8 Thayer v. 129. THE INDIVIDUAL AS TRUSTEE. . 327. "Where there is no decree of the court. unitself or it of the evidence of it is essential. p. 1 Infra. and no well advised purchaser will take a transfer of such a stock without farther assurance. an assignment by the holder of the title is indispensable. unless they are such as to constitute a proper trust investment and if necessary the trustee should sue without delay. for although notice is not necessary to complete the title in some jurisdictions. and not the former owner. or no provision of the trust instrument vesting title. But where the property is vested in the new trustee by force of statute or provision of the trust instrument. is the proper person to transfer. and should specify the trust under which they are held on their face. yet in the case of personal property a delivery of the property and in every case such as not to pass by delivery simply. and on a stock or registered bond by indorsement and transfer on the books of the company. 134. 121. 113 Mass. notes. To describe the holders as " trustees " merely is not sufficient. 2 * Ames..

— of it. McEwen.. he must be careful not to convert the personal property of the estate from personal to real estate without authority in doing so. their next duty is to take proper care that the trustees have got titles. J. 3 fenced. Encyc. n. and in and pay the taxes on it. Loring v. C. and there- must keep the property insured. but. Baldw. 125 Mass. Lewin. 514. and Perry. & Am. 1 not only for these. as by spending any cash that may be on hand or the proceeds of the sale of securities. where every prudent man does insure his own risks. But Davis. in a condition to be let. 1 2 or de- Ames. — The it trustee should immediately insure it if the real estate for a reasonable amount. and put after he repair. 27. is he can show that more to be gained by forbear- ance.86 less a trustee's handbook. 3 Burr v. If the property is unimproved he may improve it so as to secure a tenant. all say that a trustee may insure hut under modern conditions. v. § 487. 163. of which the legal title has passed to a third person by a breach of his predecessor in 2 the trust. 314. and he is usually required to do so by well drawn trust instruments. 1. and he will have an equitable suit for property. turned over to him. although unsupported by the cases cited. which states that the trustee must insure. — Trust chattels are usually beneficiary. 154. in Insurance Co. vol. should fence necessary. to be enjoyed in specie by the meant and may be lets. C. but for any of the trust property which he cannot obtain on demand. in the absence of special power from the trust instrument or court to do so. of Law. it would seem that a trustee must insure. p. and Eng. 509. 5 Wall. and the property properly into their hands. p. and if he uses them up. Chase. Assuming Care and Custody of the Trust Property. Salisbury Mills. Personal Property. 138. 494. Meal Estate. . and the cases in general and the English statute. .

Dixon. in which case the trustee Where must keep the actual possession. 2 a . Nobbs. and as several persons cannot conveniently hold them they may be left in the hands of one trustee.4 And while it is customary and probably justifiable to permit one trustee to draw checks alone against an account which consists wholly of income. L. Sneyd. § 4272. McDonald ». § 3929 . Code Cal. . 6 7 Kilbee v. 97 Cal. (1887). 196 Ames. they should not permit large amounts of principal to lie in the bank subject to the draft of one of their number. dividual names. as by a failure of the bank or All the trustees are responsible if they leave money for more than temporary purpose in the name of one. 591 Clough v. 168.THE INDIVIDUAL AS TRUSTEE. 6 But one trustee may be allowed to draw checks against income. D. Money should be deposited in a good bank in the joint names of all the trustees and if it is deposited in the in. 7 that the trustees were entitled each to hold half and pay interest was held i Dorr v. 8 Ch. the use of the chattels is not given to the benethey should be converted into money. 119 In re Arguello. 594. Civ. B. 48. p. . Ames v. Corya. the trustees will be liable if it is lost. 13 Pick. As to when a conversion is proper. ficiary. 2 Moll. D. § 2236. Corya v. 298. 112. 328 . 484. 3 fault. 101. 8 C. . Scudder. 89. since it is not unreasonable to allow one trustee to collect It it. * Monell v. Comp. (1895). 593. 5 Johns. though without their otherwise. Ch. 2 unless they were to be held unconverted. . 87 stroys them. 11 Mo. Bev. p. Irvine. Dak. Supra. Code N. and consequently the funds could not be invested. Laws Dak. n. 6 in a case where there was a dispute. 8 Sim. Monell. . 283 9 Amer. see infra. 5 Lewis v. 186. (1885). App. the trustee will not be liable but the trustee should require him to sign an inventory when they are delivered. Wainwright. Dec. Ind.

was not thereon. Nobbs. . as the question still remains whether allowing one trustee access alone is reasonable care. only postpones the question. Kekewich in a late case 4 expresses his own opinion strongly that negotiable securities should not be got at without the consent of the whole body but V. v. Where a bond could be registered. deeds. that the trustee box alone. 4 5 6 Eield. banker's in a separate box. 591. Lewis. 6 Beav. and one becoming insolvent the other held liable. C. 594. registered if he gives his co-trustee separate access to the securities. J. Non-negotiable stocks. cannot be considered as authoritatively deter- mined. J. 6 said that it was too much to say that ordinary prudence requires a box with three keys. may be left in the custody of one trustee. & Hem. but it is somewhat doubtful whether this rule can be safely followed it would seem more appropriate to deposit the money in a safe place in the joint names. registered bonds. in the joint names of all the The question of how far the trustees are justi- fied in allowing one of their number to have access to the rule. The general must use reason- able care. 259. or stocks with a stockbroker who is negotiating a sale but if negotiable securities be left in the hands of an agent unnecessarily . or such as registered coupon bonds. 1 &c. 240. 88 A tettstee's handbook.. L. Guedalla. 124. 2 " Matthews v. v. R. L. 239. 8 Ch. Brise. 2 Ves. v. E. or in case 2 as for of necessity or propriety in the hands of an agent instance deeds could be left with a solicitor. in a leading earlier case. 51 N. Sen. 8 Negotiable securities. 2 Johns. notes. and partially negotiable securities in a safe deposit vault. Mr. 1 Ch. 278. . D. it would appear to be the trustee's duty to have it . should be deposited where none is convenient at a trustees. Eq. the trustees would undoubtedly be liable. Mendes Lewis v. 425. Wood. 6 In that case the coupons only remain 1 Dyer Jones Field v. Eiley. and this latter dictum seems to accord more nearly with the general usage in this country. as most bonds may be. 1894.

2 or examine the securities. or in the speculative value. 239. as for instance who should confide them to his co- trustee in an unusual manner. in a part- management of his property for the purposes of gain. Guedalla. Brown v. and rarely in this country has his property permanently invested without some regard to nership. he must immediately and without delay proceed to convert all such property into investments authorized by the terms of the trust. 6 Beav. Ames. 8 would be liable. Thus where the maker of a trust transfers a partnership. and will have the implied power to do so. 1 There is no question that a trustee who should neglect for a long time to for four years. App. 4 1 Supra. to a trustee. lie 89 and as one trustee may collect income alone. business risk. speculative or unproductive property. it would seem a wise precaution to register bonds where possible. . In general a trustee is bound to take the same care of the trust property which any bailee is bound to take of the property put in his charge. Conversion. 751. 4 Kinmouth v. 277. not adapted to trust purposes but is generally more adapted to the needs of the individual than to the requisites of successive estates. 270. 8 Matthews v. An individual may be engaged in business. or such care as a prudent man would take of his own. uU supra. Mendes v. or in fact any property which the trustee would not be authorized to invest in under the terms of the instrument or prevailing law. could be reasonably allowed separate control of these. — The form . Gallatly. 2 491. n. in part at least. Brigham. Brise. negotiable. 48. in which the property usually is exists at the formation of the trust. 5 Allen. p. . In any event.THE INDIVIDUAL AS TRUSTEE. 2 Ch. but the trustee is not bound to do so where it is not customary with prudent men to do so in caring for their own securities.

90 a trustee's handbook. should be converted into trust investments. § 496. 446. unless the investments are such as he is forbidden to make by the terms of the settlement or by law. 8 Bowker v. No conversion can be made of property which the settlor 1 2 8 Minot v. 4 which therefore yield a very small return on the money invested. 9 Pick. Pierce. 532. 583. he will be liable for any loss of the property but where the time within which the conversion is to be made is expressly left to his discretion. Stat. ments. 462. the trustee need not sell and reinvest. the trustee should not convert it. Conn. 1 and all wasting invest. All undivided estates should be converted. and the settlor has impliedly authorized these . should be converted. Thompson. Eng. such as stocks in land companies and mines. which afterwards became worthless. not with a view to speculation. since the trustee has not the absolute leaseholds. 106 Mass. even have a large prospective value. Harvard College v. 2 since he is entitled to put confidence where the settlor did. or the holding of his securities. Trust Co. On the other hand. since trust property should yield the usual income to the life tenant. &c. if it Vacant land. Nor will he be held responsible for not selling a stock at par. 140 Mass. v. but the distinction N. or if he has left his property prudently and permanently invested. in which the principal is being consumed in dividends to the life tenant. 6 if he used a reasonable discretion in the matter. if the settlor has provided for the continuation of his business. Amory. investments. 3 Thus. . 130 Mass. Perry. (1888). control over them If the trustee delay beyond a reasonable time. Gen. where the testator has left bonds that will sell for a large premium. and in some jurisdictions the trustee must go so far as to get an order of court to change the property from the form in which the testator left it. is doubted. * Eaton. 262. § 465. he will be protected in a reasonable use of his discretion.

for the beneficiary to live in. Eq. Cooper. the trustee must not sell real estate and invest in bonds. it loses its character as real estate. So. 8 Ch. 6 Perry. meant to be enjoyed in specie ... Snowhill.. 256. 6 Ired. 142. Mass. 6 Thus. . ed. as the general rule is that all property is to be converted. 2 Green's Ch. Eq. for instance. THE INDIVIDUAL AS TRUSTEE. unless they are the proceeds of a sale of real estate for where real estate is sold by an administrator or guardian under order of court. also. Boys v. 101. Boys. McDonald 4 6 7 Irvine. See pages 108 and 147. J. 8 Snowhill v. 4 which the beneficiary to have the rents for the right to use the property is but otherwise where the real estate is to have the dividends on the property. If the sale is 1 2 8 Ervine's Appeal. ch. . 91 a house as. or property to be sold at the end of the life estate. 28 Beav. . 21 N. § 9 Fidler v. 8 tee. . 16 Barb. Higgins. 138 March v. . 1 or household goods and chattels meant for family use. 2 but such intention must be shown affirmatively. . or buy real estate with uninvested funds. C. 296 Perry. 5th D. 112. St. 524 Shumway v. Pub. — . Lord Dartmouth. v. 3 Where is specific real estate is left of life. 6 Conversion of Real into Personal Property and Vice Unless the power be given by the trust instrument. Howe v. 2 White & Tudor L. Stat. where the beneficiary specified. or vice versa. the reason of which seems to have originally depended on the different way in which real estate and personal property descend or could be disposed of by will. the trustee may not convert the real property into personal. §451. § 605. 556. 436. 16 Pa. enjoyment in specie is not implied. Berrier. unless the property yielding the dividends is in specie is implied not specified. the proceeds will be treated as real estate and not as personal ' but where the estate is sold and converted into personalty under order of court by a trusVersa. 20.

8 How. however. Dary. is an authorized conversion. 2 8 May by statute in Pa. under a power in the trust instrument. 1 Evidently the trustee cannot use the personal property of the estate to improve the real estate. Williamson v. Weeks Rogers Hobson. Rogers v. 44 N. the trust is for an infant. 154 Mass. it has become impossible to carry out estate. the proceeds of land will not be treated as real 6 But the court will not order a conversion where 7 it is contrary to the wishes of the testator nor will it ratify an unauthorized one. Berry. 7. Dill. 2 Pa. court. and by equity jurisdiction may order a conversion. 16 Ala. the court it has been denied that the court has the power to do so in the absence of statute. Perry. a court many States. 3 Rawle. 50 Mass. Fisher. Y.. 1 By it statute in in others. v. 415 . and 1 Hovey v. 92 a trustee's handbook. Where. 9 If an unauthorized conversion be made. § 49. Ex parte Jewett. . 2 and where the testator left an insurance policy on a building which was subsequently burned. Snowhill. § 458. 1 . the testator's wishes. rebuilding with the insurance money was held to be a conversion " but buying in land to protect a debt from great loss. 415. the intention of the maker will govern as to whether the proceeds shall be considered as real estate or converted into personalty by his authorhy. p. (1894). 8 Where. v. Mather. 5 and where does so. Rowe. 377. 48. however. 20. 22. but such statutes exist in nearly all jurisdictions. 409. it is Hassard v. the infant will not usually authorize a conversion. 11 Barb. 467. 2 Green's Ch. 55. Oeslager v. 249 6 Hill. St. 495. says a conversion. Brightly's Dig. which amounts to decreeing that the wishes of the testator shall be carried out in the nearest possible way. 4 6 6 7 8 9 not Anderson Snowhill v. Dill. and one that will be ratified by the . 6 Hill. the court will authorize a conversion on the cy pres doctrine. Billington's Appeal. and seems to rest on his implied authority. 2034. v. although a conversion.

11 Beav. So. 44 N. since it was his duty to have invested the interest as it accrued. Infra. and under the general language used in most modern settlements the power is generally im- Where a trustee pliedly given. if the property was invested in trade. 9 1 Robinson v. too. Watts & Sar. Alford. 131. Infra. M. 2 What is an unreasonable delay is a question of fact depending on all the circumstances. Cann v. c. if not expressly so. Co. 371 . . or but the better authority seems to be that the court has the Wood v. to order a sale. — It is the trustee's duty to keep all the trust funds at all times fully invested. 22 Iowa. Utica Ins. Investments. if the fund is for accumulation he will be charged with compound interest. . misbehavior. Gen. 4 6 v.. 4 DeG. power . since . Crawford. or to sell 93 elect to take the property or the proceeds at his is given the power to invest and reinand manage the property. 127. & G. but in if and some cases the interest. p. 249. 1 vest. 127. e Atty. 4 trustee will be chargeable with compound For instance. 6 is for actual profits or simple In some jurisdictions the trustee will be charged compound interest as punishment for fraud. 8 Simple interest will be ordinarily computed. 473 s. he neglects doing so he will be liable for interest for the period of any unreasonable delay. Robinson. v. 520. Cann. a power to convert will be implied. 114 Mass. 404. Mather.. Sparrell. v. 3 Robinson. gives numerous examples. may majority. 11 Paige. Lynch. Eiiott v. p. 851 . 38 Barb. Kaufman v. Ex parte Jewett. since the profits will be presumed to have amounted to that 6 but in this case the trustee may show that the actual profits were less. 33 Weekly Perry.THE INDIVIDUAL AS TRUSTEE. § 462. the claim of the beneficiary interest. 2 Robinson Rep. affirmed on appeal. 16 Ala. 843. 409. 40. p. 427 531 . Y.

94 A trustee's handbook. or universally followed. The true principle would seem to be "that the trustee is accountable for all interest and profits actually received by him from the trust fund. § 472. v. Eaton. 537. v. an investment has become insecure and the remainderman is likely to suffer loss. or fund. o. Ch. which would be attended with dangerous results to the trust fund " 6 but . or because it has for instance. the investments should not be changed without a good reason 6 such as. 77. Ouseley v. Cruce v. 418. if it has acquired a speculative value much above its value as an investment. . 456. Ch. readily be pressed so far as to sanction a practice of trading and trafficking in trust securities. Tr. . 422. 418 Ward v. 1 McKim v. Kitchen. 31. 142 Mass. N. . Eng. 676. J. Cruce. that become unproductive and the life tenant is suffering loss. Eng. 140 Mass. 10 Pick. and will do so for good reason i and where an emergency exists and there is no opportunity to get a decree. Co. and for all which he might have obtained by due diligence and reasonable skill. The mere fact that the property has increased in value is not a sufficient reason to sell for " the doctrine can . Co. Hapgood. Eaton." 2 If he was directed to invest in a particular stock or elect to take simple interest. 532. Eq. Anstruther. 81 Mo. The property being once well invested. the investment should be changed so that the life tenant may receive the increase of income he is entitled to. . 6 N. 30 N. 2 Md. 1 for disobeying the orders of court but this doctrine is not general or commendable on principle. K . the court can authorize a change. 140 Mass. 8 If the trustee has no express power under the trust instrument to change investments. Hibbard. will ratify a change made by the trustee without authority. Jennison v. 2 8 Perry.. Feinour. Tr. 4 Murray v. 533 Murray 2 Md. the beneficiary may the number of shares the money would have purchased with the dividends. 10 Beav. 453. Feinour. end . 532.

6 there is a change in the firm. 453 5 6 . 1 The trust instrument may. Arnould v. Talbot. namely. nor should the amount shall death. & Lat. Cummins. 4 Harris. and must not sacrifice the interest of either beneficiary and the popular idea that security is the only con. 155 Denike v. evenly. 76. "Wadsworth. 89. . Austin. 64. 159 Mass. A "at dis- and does not enlarge his powers. Y. prescribe the kind or class of property in which the trustee may invest. Robinson v. . 19. testator not infrequently provides that his business A be carried on by his trustees for a period after his In such case it is their duty to do so but if the matter is permissive. 106 Mass. the class will not be held to cover a bond 4 but a house for secured by a mortgage of a railroad the occupation of the beneficiary has been held to be an 6 investment in productive real estate. Grinstead. so that they shall be preserved intact for the remainderman. 421 . but see Knight v. 1 2 Kinmouth v. sideration is erroneous. 5 Allen. and can- not sacrifice his interests to those of the remainderman. 3 Jo. 1 So. 371 King v. Brigham. Y. 84 N. . as the trustee life is equally bound to get the customary income for the tenant. 551. 11 Beav. THE INDIVIDUAL AS TRUSTEE. general authority to the trustee to invest 3 cretion " does not specify any kind of property. 50 Barb. 40 N. . 21 Weekly Reporter. Schaffer v. 8 King v. and where it does so its provisions will supersede 2 but being special powers those of the court or legislature they must be complied with strictty. 270. so that they shall yield the current rate of He must hold the scales interest to the life tenant. If the trustee is authorized to invest in real securities or mortgages. to invest them securely. they should not continue it against A partnership cannot be continued after their judgment. Ca.. Talbot. Womack v. and dissenting opinion. Boston. and ordinarily does. Cummins r. Robinson. and to invest them productively. The trustee's 95 is duty in investing the funds a double one. .

* 6 6 Worrell's Appeal. 352. Supra. 1 although he might be justified in not converting unspecified securities. xiv. and are determined in some by statute and in others by rule of court. 96 a tkustee's handbook. 1 "Where it is impossible to invested in it be increased. 76. Mat- tocks . St. 545 . recourse must be had to the court for directions.. called the affairs. but in regard to the their funds. Y. J. v. 5 Where there is no statute or decision of the highest court fixing the class of securities in which a trustee may invest. he can safely follow the rule prescribed for the investment of the funds of savings banks. 23 Pa. which is in general terms that " a trustee must observe how men of prudence.' . § 4. 44. 9 Pick. Talbot. gave rise of necessita- American rule. In England the only kind of investments formerly allowed were in the government funds ° but in America the total absence of such securities in early times. Now under the Trustees Belief Acts a large field is opened. Zanesville. 461 Moulton. 446. considering the probable income. discretion. 40 N. King v. i 2 8 McNeillie v. 744. 7 ch. 61 Conn. 17 Ohio St. p. their relative scarcity in later times. Amory. Statutes in some jurisdictions are construed to be for the protection of the trustee merely.3 What classes or kinds of investments are trust invest- ments vary in different jurisdictions. Harvard College v. 87. . M. 84 Me. if he took them from the testator. Lewin. and intelligence manage their own te a different rule. and . comply with the investments required by the trust instrument. as well as the probable safety of the capital to be invested. permanent disposition of not in regard to speculation. Clark v. a trustee would be imprudent if he invested in other than the specified securities.. 4 DeG. Acton. Putnam. & G." The courts and legislatures in various jurisdictions have. and not as forbidding other investments than those specified by law 8 yet where such a statute exists. Mclntire's Adm'rs v. 90. Beers.

515. 4 C. 7 . and the terms of the investment do not contemplate that it ever 2 but that the ideal man will be returned to the trustees " would invest in real estate. and principal securities. banks. 8 and in notes of individuals secured by the stock of such companies. . Talbot. any temptation to make extraordinary profits. THE INDIVIDUAL AS TRUSTEE. Y. lays down and explains the Massachusetts rule in allowed in business corporations. care. Appellant. Woodruff. in addition to the class of York. . or railroad stock. corporations. On the other hand. The amount of funds seeking investment is very large the demand for securities which are safe as is possible in "A trustee in the affairs of this world securities is small.. 1 saving that "The moment a fund is invested in a bank. or insurance. Harvard College v. A trustee. first mortgage bonds of . railroads. 76. and the hazard or risk of loss is no longer dependent upon their skill. the court de- ciding in New York that a prudent man would not invest in the stocks of railroads. and the amount of such money to when compared with the amount of be invested. ought not to hazard the safety of the fund under . part as follows difficult to : New — this Commonwealth undoubtedly finds it make satisfactory investments of trust property. i 2 8 4 King v. J. or discretion in its custody or management. manufacturing or insur- ance companies. 446. at p. 141 Mass. whose duty is to keep the trust fund safely invested in productive property. and certificates of deposit of good banks. the courts of Massachusetts hold that a prudent securities man may invest. Field. . evolved very different results. J. 187. ubi supra. 9 Pick. is great . in Dickinson's Appeal.... from 97 this rule. . it has left the control of the trustees its safety. Hunt. in the stocks of good such as banks. Amory. in King v. manufacturing and insurance companies. 184. Talbot. 152 Mass. bonds of individuals secured by first mortgages of real estate. 40 N.

leasehold security. 296. 13 Allen. a. 545. . 292. and unfortunately trustees are too often appointed from considerations of friendship. 407 Ames. . since the mortgage may be foreclosed . See note to Nyce's Estate. 6 however large the margin. by reason of the amount of their property and the prudent management of their affairs. c. 1 Perry. and a large majority of their discretion. 498. 36 N. show that trustees in this cases. Gontrum. investments. . Com- monwealth are permitted in dividend to invest portions of trust funds paying stocks and interest bearing bonds of when the corporations have acquired. viz. 4 Gen. second mortgages 4 and mortgages on unproductive real estate. . loans on personal security merely 2 investin unincorporated business ventures. 98 a "Our tkustee's handbook. . since it gives him a larger opportunitj' to use his skill and ability as a financier for the advantage of his beneficiaries but undoubtedly the English rule. 2 Holmes ». Trull. 1 Hunt v. 174 Ames. 107 Ind. or the New York rule. partnership." In the hands of a good trustee the Massachusetts rule undoubtedly superior. 485. Woodruff. 80 Md.. is better adapted to inexperienced or ignorant trustees. following kinds of investments are everywhere dis- approved. such a reputation that cautious and intelligent persons commonly invest their own money in such stocks and bonds as permanent private business corporations. 40 Amer. 64. 471. 1 The The ment rule prevailing in each of various States briefly stated at the end of this chapter. however. Dec. 8 Trull v. and not from consideration of their discretion or business ability. The laws of the various States give a preponderance in favor of the Massachusetts rule. 2 Cox Eq. Stat. § 456. Conn. as much less is left to is . 6 Slauter v. opines to the contrary. carefully drawn trust instruments give the trustees the is larger discretion. J. Porter v. Favorite. Moulton. 84 Me. Dring. (1888). n. : and patent rights first 8 . § 495 Mattocks v. Eq.

339. extend the class of investments in which he may invest. Investments without the jurisdiction of the trustee are not usually approved. . 446. 152 Mass. any memorandum of the inducements made at the time may be discretion 6 The question of whether will . 40 N. 42 Ch. the trustee must exercise a sound discretion in selecting investments within the authorized class. or may be forgotten. . Amory v. 184. 99 and all investments of' an untried * or speculative nature. Where the class of investments allowed been held imprudent to invest more than a estate in one investment. 5 there was a sound exercise of be determined according to the state of facts as they existed when the investment was made.. but. 33 Ch. So. Olcott. Div. In re Salmon. . Y. 410. 351 Harv. 413 Austin. THE INDIVIDUAL AS TRUSTEE. Olcott. 13 Allen. 9 Pick. 42 Ch. or by statute at one half. H. 617 Brown v. 1 8 Gilmore. he must exercise the same degree of intelligence and diligence that a man of average ability would exercise in making bis own investments 4 and a provision of the settlement giving him unlimited discretion does not alter his duty to use care. n. 347. of service in refreshing the recollection. if they are in conformity with the purposes of the trust. Div. although it maj-. will be sanctioned. Green. v. 2 Having ascertained the kind of investments he may make. Eq. 350 4 5 6 Ormiston v. Dickinson's Appeal. Y. J. 1 . 31 N. and not in the light of later developments but as these are sometimes difficult to reproduce. but will not necessarily. French. In re Salmon. 125 Mass. 486. but the amount of margin required also depends on the nature of the estate. 36 N. Ca. 3 Womack . 76. i Kimball v. 84 N. 421 . Keding. a less margin. Amory. it has fifth part of the The margin of security required on a mortgage loan is 8 generally fixed either by decision. v. Tuttle v. Ormiston v. Talbot. 8 That is to say. 351. say one third. . 84 N. Re Whiteley. King v. Div. Coll.' is large. Y. 339. 2 Ames. 352.

but there is a rigid responsibility for other investments. no decisions. 4 Del. the settlement provided that the trustee should not be liable for loss on account of taking insufficient securit}-. See Randolph v. Delaware. Where. Constitution forbids any law authorizing trustees to invest in bonds or stocks of private corporation. California. §§ 1936 and 2095. Florida. however. 80. § 4174. Stat. Rev. 274. Statutes (1891). being required where the values are more stable. or year notes secured by same. n. 87. 2095. Beers. See Alabama. Clark v. 288. Bank stocks. (1888). — . 100 A TRUSTEE'S HANDBOOK. § 495. — Alabama. Investments Allowed in various States. 1892. town. rule. rule. Dakota. United in securities of State or Code (1896). § 2189. and savings bank securities. Stat. — English Arkansas. §§ 2094.. — By statute may invest States. 104 Ala. (1892).. Birmingham Land Co. 3 Swanst. § 359. In England farming lands were considered the most stable. Ch. Mortgages and United Ryder v. 61 Conn. Constitution. § 2261 Cal. State. English rule laid down. rule. authorities. American v. — Code (1887). Massey Stout. Connecticut. but in America business property in a city would probably be so considered. he was not excused for making an unauthorized loan to a person unsecured. Statute not mandatory. First mortgages to fifty per cent of value United States. 1 Stat. E. . 355. statute not alluded to. Bick&rton. 441. — Massachusetts Civil § 3943. or city bonds. 1 since the loss was on account of going outside of the class and not because the investment was poor of its kind. 111 Colorado.— Rev. State warrants. Civil Code (1885). but — No — American In re Consins's Estate. rule. United States securities.

(1894). 90 Ind. — No — Stat. or . Favorite. others ordered by court. — — No — Under direction of authorities. No authorities. Maryland. Brown v. — . Any other investment must be made under order of court. Stat. Convention of Prot. — Mortgage Idaho. . 90 Ky. 35 Atl. . directions. Gontrum. 84 Me. or other securities issued by State. ubi supra. and mortgages at fifty per cent of value. 64 (semble). ILouisiana. 271. authorities. 96. Hunt v. (1894). s. Sholty v. v. §§ 3415. and not expressly to trustees. Moulton. § 3180. gages. Massachusetts rule. 136 but in Tucker v. Massachusetts Massachusetts. Code (1895). which are free of taxation. — 111. Ch. municipal securities that have not defaulted within ten Substantially Massachuyears. Code (1897). 3416. Georgia. 111. Iowa. 292. Wright. 78 Me. 107 Ind. sale. securities allowed on . 409. 242. 80 Md. . Mattocks v. bonds. Stocks and bonds of United States and State. appointed by court should get its v. New York rule approved. Massachusetts rule approved in Slauter v. Rep. 62 82 Sherman Indiana. Sholty. Fidelity Co. State. § 364. rule. 545 Emery v. Rep. — No — Massachusetts White. 296 Shuey v. mort§ 4706. Batchelder. Maine. or loans secured b} But not in railroads unless operated ten years without defaulting. THE INDIVIDUAL AS TRUSTEE. — Real estate. authority. 83 Md. § 4284. court. stocks and bonds.. 14 So. c. 101 States or State securities. . 72 Ind. Rev. 355. Minnesota. Kansas. but trustees would be safe in following the same rules. Glover. 233. App. 140 v. c. Illinois. Kentucky. In stocks. Latta. Ep. W. Statute not mandatory. 87 s. — — English rule. 39 Ga. Lowe Trustee. rule. or These statutes refer to executors and guardians. Michigan.. (1894). 243 setts rule. Stat.

Rev. Stat. in savings banks. 101 N. 192 Halsted v. sachusetts rule approved. ch. (1890). 197. In notes secured by mortgage of real estate worth at least double. Eq. — No authority. ch. Bramlitt. Reasonable security and interest. Code (1883). . §§ 196. 127 Mo. Tucker. p. (1895). 194. 59 Missouri. In North Carolina.102 a trustee's handbook. 85. 144. New York. p. . Statute not mandatory. (1891). — ' — — thorities. J. Certificate of indebtedness of State or United States. Eq. 136 Tucker v. . New Jersey. Lathrop v.— Pub. ch. Ohio. 270. 2747. American rule. 18 N. (1895). J. 422 Coffin v. or as approved by court. Gamble v. 9 Mo. city. mortgages of State or United States. Massachusetts rule. rate of interest not less than five per cent. Reasonable New Hampshire. 178. § 11. 65. Taylor v. Rev. etc. Rep. Stat. Hite. Authorizes investments in bonds of New York cities. — Code (1895). s. Priest. E. bonds. Allows mortgage fifty per cent.— Rev. Eure. No au9. 23 N. North Dakota. 61 Mo. not over six per cent. or bonds and loans of State. Gibson. Rule of court English rule. town. (1896). 42 Miss. 2401. and in State bonds. Crane. — — . Mississipipi. security and interest. 142. 471 (N. Oregon. J. Smyth v. 7 So. Eq. and in no other way. App. Burns. Mo. Sm alley's Es'rs. C). § Stat. § 6413. — No authority. Meeker's Ex'rs. Nevada. Gen. New York rule. Stat. § 4286. Massachusetts rule. 33 N. c. C. 235. or of the United States. 25 Miss. §§ 1594 and 3596. United States bonds or any bonds guaranteed by United States. Codes. or count}' of New Hampshire. Dak. — No authorities. — . Code N. MasMoore v. 11. Nebraska. Montana. 198. 585. Drake v. 106 Garesche v. ubi supra. Civil § 3013.

and report to countj" court. § 2617. Court may authorize investments in debt of United States. Baker. court in ground rents or other real estate. 21 Gratt. Wyoming — No . Massachusetts rule. Bhode Island. No bonds or stocks of business corporation. Massachusetts rule. St. Oliver. Rep. Car. 103 Pennsylvania. v. Davis v. Revised Laws (1894). Nance. c. Texas. Wisconsin. 208. and 36 So. 23 Atl. Lowndes. Brightly 's Purdon's Dig. Hogg. South Carolina. p. Semble. Simmons v. § 5434.. 184. datory. or Philadelphia. 56. Finlay v. rule. State. Vermont. 9 So. (1889). should loan on good security. 465 Nobles v. Parsons. Const. Virginia. — Statute manHemphill's Appeal. 56 Vt. or by leave of . § 12. Car. 594. 1 So. 17 R. § 69. practice. 322. Stat. Car. 18 Pa. securities. — — — Massachusetts in no auWest Virginia. 360. 123. Va. English Key Hughes. . 209 Singleton v. THE INDIVIDUAL AS TRUSTEE. Code (1896). rule Harman. 127 Pa. 201. Semble. — followed. thority. 54 Vt. 321 Grinnell v. Art. In real estate.. 194. . §§ 121. 15 So. ch. Gen. p. but should invest under order of court. Peckham Newton. 911 s. 359. Should loan on mortgage if possible if not. Semble. In public stocks and bonds of United States. 122. 39 . — Semble. 15 R. 1. Massachusetts rule. — — Tex. — . Massachusetts rule. I. rule. or such other manner as court directs. v. and real securities bonds or certificates of debt of school districts. Merriman. Nance v. Barney v. 3. authority. 633. 303 Baer's Appeal. 189. Gleason. 32 W. Laws (1896). Tennessee. gives Massachusetts rule trustees full power and discretion. . (1894). 264.41. — English Real estate or government Washington. 74 Wise. St. 623 (1882) McCloskey v. or as court directs. Rep. municipal corporations of State. . E.

the conversion of the estate. and the erroneous determination of the question may make the trustee liable for a large — — amount . . 154. This would always be the case where the property comes into the trustee's hands without delay and invested in proper trust securities but if there is a deferred receipt on . Brigham. 1 and which even if he have the right he may not be able to recover back owing to the beneficiary's want of financial responsibility. Nickerson. Eq. 25 Beav. as. Fyler. 8 . 120 Mass. 54. In fact. 5 Allen. where he has paid the life tenant sums of money which belonged to principal. life tenant. the question will usually arise after the death of the into possession. v. Receipts. the rule is different. sons are entitled to the principal and income of the trust fund. J. and these he has no right to recover back in most cases. at the time the estate comes into the trushands it is all principal. 338 Dowries v. the fund when realized must be so apportioned that the life tenant will get the usual rate of interest from the beginning of the trust. Piatt. 62. As different perPrincipal and Income. and infra. 1 Bate v. Langdale. and the remainder will be the principal fund. 563. 3 Beav. Hooper. 343. and all yearly increase thereafter is income. Bullock. Fyler v. 410. and should have been invested. 8 Eq. p. . Where for any reason property does not come into the hands of the trustee for some time after the beginning of the trust. L. 48 N. R. 550. 59. M. Cox v. when it is the remainderman comes and when too late to recoup from the income. for striking example. in whatever condition it may happen to be. 206 8 v. for instance.104 A trustee's handbook. 2 Kinmouth . See L. Cox. the determination of whether a receipt or charge shall belong to principal or income is of great importance. 270 Hagan Westcott v. and in the meanwhile the life tenant has no benefit from it. & G. 2 This may is other fund be the case where the amount of a legacy or not immediately received or not received in full. tee's In general. 5 DeG.

257. The tenant for life got $1. 410. the amount of the original estate was $30. E. . C. 73 Westcott v. income in specie. v. 16 Mass. 361 . Eq. Maclaren v. Nickerson. his intention will preand the whole profits will be paid to the life tenant as income. The .. and the interest is the income payable to the immediate beneficiary. that sum is to be found which at the current rate of interest for the period from the beginning of the trust to the time of conversion will yield the amount realized. shall enjoy the vail. The rule is the same whether the property be converted because it is unproductive. or on a wasting investment such as a land stock where the dividends will ultimately exhaust the security.000.742. Lord Dartmouth. 2 White & Tudor L. e.THE INDIVIDUAL AS TRUSTEE.50. Stainton. 296 Code 120 Mass. i. but where the return is excessive. 2 1 Parsons u. namely. if a definite intention on the part of the maker of the trust can be shown that the life beneficiary shall have all the proceeds. 11 Eq. or a defaulted note or obligation on which the whole amount is not recovered. a bottomry bond or similar security where the principal and income are included in one sum. For instance.50. Winslow. 47 N. in a case where a trustee who had wasted the estate was removed and only part of the estate was recovered by his successor. 6th Am. 382. or where an obligation is in default and the security has been realized on or whether it be converted because the earnings are greatly in excess of interest. Eq. In either case the rule is the same. as for instance vacant land. Monkhouse. 2 ed. which is the interest at six per cent on 1 $24. v. L. and the whole amount recovered after one year and two months was $26. sum so ascertained is the principal.. J. Howe . . the new capital for one year and two months .000. as in the case of a business or partnership. 105 or where the property being an unsuitable investment is sold for conversion at an interval after the trust went into effect.

64 Pa. 7 Met. as the fund invested will 2 and the amount recovered will bear yield an income. St. The general rule is that any gain Gain and Loss. And in Van Doren v. falls The amount recovered taking under the same rule. Johnson.450. e. 176. 109 Mass. other than the usual yearly income. so as 1 an adequate return. 368. 4 2 » Heard v. Eng. Eaton. 532. as damages for an injury or a need not be apportioned. sold the subscription at a premium. — Thus real estate or securities may advance largely in value without any corresponding increase in income. Trust Co. And in Earp's Appeal. the court decided that the premium was a product of the stock and belonged to the life beneficiary. In re Gerry. 37 N. 256. In Wiltbank's Appeal. and sent the case to a master to determine how much they were. 366. 103 N.106 A 1 TKTJSTEE S HANDBOOK. Eastman. * The learned editor of the 4th edition of Perry on Trusts very justly suggests that some doubt has been thrown on this question. 140 Mass. 28 Pa.. v. fall to the principal of the fund. and whether the same was income or principal although the language of the decisions seems to cover this point as well as the question of accu. and the life tenant will get no benefit from the increase. the payment of a betterment or removal of an involuntary encumbrance. St. i. 258. J. the Chancellor decided that all accumulations since the purchase of the stock belonged to the life tenant. Parker v. to yield unless he be in a position to insist on a sale and reinvest- ment of the property. in a few jurisdictions by the principles laid down by the courts in their decisions in collateral 445. n. N. . Y. interest from the time of the taking. Van Vronker v. The converse proposition. It is to be noticed that in none of these cases was the exact question raised as to whom the appreciation in value of stock belonged. the court seemed to imply that any increase in value of stock from accumulated profits belongs to the life beneficiary. where the trustee subscribed for new stock given as a bonus. Eq. Eldredge. Perry. J. and 3 the whole gain will belong to the principal of the fund. Olden. 19 N. 1. Eq. 157. § 545. and any loss other than the usual yearly charges. so far as it concerns the gain in value of stocks. Gain on foreclosure : matters.

1 Underbill. remaindermen. The premium realized by the sale of the stock is no better criterion. even in these jurisdictions. 250. it would seem that trustees may act safely. and credit all gains in value in stocks as well as real estate to principal. Hemmenway not raised in these cases. Hemmenway. As the principal question was . other timber principal. Wellesley. In such questions the practical solution is the determination of the matter by the directors. 1 Eq. since the experience of every business man fluctuations in the prices of stock are chiefly show him that the governed by the state of will little business and many other considerations. 446. v. timber cut for thinning will be income. how much of their savings are properly set aside as a necessary fund to carry on the business. but probably not to such an extent as to be waste. 2 and the loss of one year will be made up out of the profit of the next . it is ordinarily all the income will go to the life beneficiary. Littig. and as carrying out their reasoning to its logical conclusion would involve such anomalous results. 3 mulations of income. See New England Trust Co. 8 Earl Cowley v. 2 Heighe v. Eaton. and are affected very by v. but it is wholly a question of intention to be deter- mined by the construction of the trust instrument. and it has been held that gravel sold will be income. in which case all sums added to the funds of the company become part of the principal and the property of the . 134 Mass. the amount of accumulated income in the treasury. R. 657. If the trust estate consists of country real estate. 1 but where the business is conducted under direction of the trust instrument.THE INDIVIDUAL AS TKCSTEE. 140 Mass. in the case of any corporation. 63 Md. 532. on the rule above stated. L. . I am not aware that it has been seriously contended that a different rule should be applied to the increase in value of stocks from that applied to the increase in value of real estate yet these cases do seem to indicate that in those jurisdictions any accumulations of profits belong to income and not principal which throws the whole question into doubt. since it is impossible to tell infallibly. and in other jurisdictions this principle is established beyond a doubt. and how much of the funds are excess of profit which might be properly distributed. 301. or reserves against depreciation. Gain or 107 loss in continuing a business temporarily until converted is to be apportioned.

the stock is left with a farm. Poindexter v. . Dec. even though it be replaced If the propert}. Davis. 217 Lewis v. life tenant and not converted into cash and may wear them out in ordinary and need not replace them. supra. The life tenant cannot sell it. 507. C). 4 Dem. Ch. Hunt v. 586. will lose its character as income and become a gain to principal. 3 Mo. 147. 93 Ga. furniture. Franklin. the use. 78 Ky. Leonard Owen. Burch. 6 Saunders o. Hill Eq. Dec. 160. 1 .108 a trustee's handbook. Furgeson. 133. 2 unless intended to be used in specie. 91 . Sullivan. 127 Mass. and that will wear out in use. v. Woods v. v. cattle. 57 Am. Swan's. they cannot be replaced . 5 Watts (Pa. the trustee may withhold some of the yearly income to make a sinking fund for that purpose. . 190. as. 124. and only . 370 (S. for instance. Herndon. 6 Calhoun v. 286 Braswell v. 581. . 7 Re Housman. 53 325. 8 unprofitable. Eq. and there is an intention expressed or implied that the farm shall be kept up. 6 the excess to income. so much of the increase as is necessary to keep up the herd will belong to principal. it is necessary to replace chattels which are wearing out in use. however. to him. but the beneficiary for life may use them up.consists of farming stock by other kind of stock where cows are by horses. p.). Tappan. Major v. Morehead. 1 Humph. Implements. p. Haughton. Robertson . But see Elowers v. 1 See infra. Watkins. 8 And where 1 Wootten v.) 498. v. If the trust property consists in part of chattels. 2 Md. 1 it should be converted. Eq. 57 Am. Haughton. and need not replace them when they die * and the natui-al increase will belong b Where. which are intended to be used invested. 8 Minot v. in fact all property must be bought out of income. 7 Any income which is rightfully accumulated and added to the principal. Collier. Blackburn. 3 Rich. Eq. 111. 265 life tenant was to keep up farm increase held to go to remainderman. 2 3 Burnett Lester. 1 Ired. 8 Ired. . n. Saunders v. 333. 404. 678. 4 (Tenn.

which is all he is entitled to.THE INDIVIDUAL AS TRUSTEE. 52 N. and therefore to be converted. n. Eaton. because he will receive the dividends on the new investments to the same amount which was originally invested. . Perry. all the dividends will go to principal. 6 Allen. 6 but recent it is decisions are to the effect that 1 immaterial whether the N. § 545 and n. p. which is presumably worth the price paid. 105. 532. 2 When the excess of the dividends has thus entirely wiped out the cost of the investment. Eng. 4 Subject treated. 89. and any gain or loss in price is the gain or loss of the principal. Wainewright. or a definite share in a property or business. Ladd. p. See note. however. 77. though an apparent loser.. The current dividends on stocks belong wholly to income. p. Underhill. 8 Supra. 5 Barclay v. The rule has already been explained as to the receipts from an investment. of the settlement. the tenant for life will be entitled to receive only the current rate of interest on the inventory or cost value of the investment. H. 174. even when the stock has been bought at a premium. 66 . 109 Dividends. which is not a proper trust investment. the investment is a wasting one. and the amount which he is entitled to receive will be calculated each year on the new principal made by the credits of the preceding — dividends. Trust Co. in Lord » Brooks. dictions as to — The law is not uniform in all juris- whom extra dividends belong. and the life tenant. down was that cash dividends and stock dividends principal. 72. v. 140 Mass. 106. J. since the premium is only a part of the price paid for an investment. 14 Ves. 1 If. such as a mining or land stock. Such investments should ordinarily be converted. 4 The rule originally laid are income. is not. and the balance will be applied to reduce the valuation. Head. 226. Supra. 8 Extra Dividends. p. Or the life tenant may be entitled to the full dividend by the terms Reed v. Jun. 2 .

1 Leland . 5 By the English rule followed in Massachusetts. the court did not go beyond deciding the case in hand. St. will mainderman. 6 Heard v. that. 115 Mass. ReBouch. it if plus earnings. the vote ordering the dividend is the best or only guide as to whether the distribution is one of the company's surplus earnings or of its principal It follows. . Eldredge. or the granting of a valuable 1 right to take new stock. 371. the distribution be part of the surbe income and the property of the life beneficiary. 570. I. 258. L. 8 and the United States Supreme Court. 7 Georgia. . ubi supra. and it would not be safe to assume ihat in another case under similar circumrate. 29 Ch. 4 a distribution of stock was held to be principal. Huhbell. 3 and Rhode Island. S. 11 In Pennsylvania the question has been otherwise deEarp's Appeal. 618. 5 Eq. " In re Barton's Trusts. 75 Me. 550. but in those cases. 98 Mass. 461. is dividend fund. 28 Brown. 9 stances they would not follow the English rule. 109 Mass. Richardson. 11 In re Barton's Trusts.110 A trustee's handbook. and if in it good faith add life does so the beneficiary cannot complain. money. Y. I. 104 N. . dividend be in stock. 8 Ga. . Bouch. Maine. R. 238. but if it be a distribution of part of the company's capital. 136 U. Sproule v. they evidently disapprove the At any Pennsylvania rule. . 284. 28 Pa. 67 Ga. 50 Conn.Brinley v. 8 Eichardson v. 462. and especially in Brown's Petition. St. 66. 549. * Greene v. Mahon. 10 Granger v. 7 Kernochan's Case. Hayden. 99 Pa. 14 R. it will belong to the principal or reit is well settled that. 102 Mass. part of its profits That the company may to its capital. Pet'r. Gron. Bassett. 434. as he will get the benefit of the increased efficiency. 10 therefore. 17 R. 2 In Connecticut. Guerrard. 635 Rand v. D. 6 New York. in determining whether a income or principal. 9 Gihbons v. 542. Smith. 368 Vinton's Appeal. Code (1895). v. § 3091 Millen v.

12 Allen. 52 N. § 545 Granger v. company's property belongs to a stockholder until it is separated and declared as a dividend hence a dividend is an independent debt payable to the stockholders of a certain day. which would seem to be. 7 Perry. Dec. J. and is always pay. and remains principal until separated from the 9 other funds and declared payable to the stockholders. 19 N. p. and therefore is never apportionable. the court going lations of the life TBTJSTEE. 226. a master should ascertain yearly what the company's profits had been. n. Albree. 106. 359. Brooks. 1 and this view of the case has been followed in New Jersej-. 98 Mass. 72. . which result is certainly impracticable if logical conclusion less of nothing else. § 545 8 See Underhill. 368. 2 New Hampshire. 8 No part of a Ordinary Dividends not Apportioned. C. 176 * Lord p. Bates v. Bassett. Fant. v. 56 S. Olden. regardany act of the corporation. 280. 97 Amer. 9 Lowell. St. 1. all Ill the accumu- on the principle that company during his lifetime belong to the beneficiary. H. 8 and South Carolina. 4 and that a master is to be appointed to ascertain the amount. . but see supra. that. Eq. 7 stock was given. whether they be declared in the form of dividends or not. 31 Bear. § 52. note 4. 650. — Earp's Appeal. and in case of loss he should make it up to the remainderman. 6 Atkins v. . McKinley. in Massachusetts and it scarcely seems possible to carry the cases to their . 1. 256. authorities Perry. where a valuable right to subscribe to new 6 it was held to be prin6 cipal and in Pennsylvania income. n. . 28 Pa. St. 3. Transfer of Stock. The Pennsylvania rule has been repeatedly criticised. 2 i Van Doren . * Cobb v. learned note by Frank Parsons. 64 Pa. Accordingly. 462. « Wiltbank's Appeal.THE INDIVIDUAL AS tided. and that an equivalent amount should be paid to the life beneficiary.

or upon the termination of the life estate. and the balance belonging to. p 126. 7 Dexter Phillips. 143 Mass. 19 Beav. i>. 443. 14 Gray. 6 Cordis. since a bond purchased at a premium is a wasting security. 1 ' Interest sometimes Apportioned. since there is no obligation to convert the bond. v. 3 matter not subject to any In some States. . Contra. Kay. A teustee's handbook. erally — All rents is and gen- the whole amount received as this interest is income. if a sufficient of the interest bond is purchased at a premium.7 The interest accruing up to the date of sale or death being income. Johnson v. and the English rule in exception. 134 Mass. which would otherwise. 450. to the stockholder entitled . Hemenway. 6 Hemenway Shaw v. Clive. Co. 295. Infra. 2 8 Londesborough Somerville. nor can the loss on one investment be set off against the gain on another. even though it be worth more than par. 600. the time specified in the vote * but if the trustee sold a stock just before the dividend day to defraud the life ten- ant or buy land according to the terms of the trust instrument. v. and being part of. is not sound. to balance those bought at a premium.. 4 Ibid. must be set aside yearly to wipe out the premium at the maturity of the obligation. 446. have to be converted 4 but it follows that no part of the interest on a bond which is part of the property originally set. the security 1 Clive v. Bridgewater Mfg. but is more often one of securitj'. the life beneficiary would be entitled to so much of the proceeds as would equal the dividend lost by the sale. 6 Interest accrues from day to day. 6 The practice of buying bonds which sell at a discount. 121 Mass. and will therefore be apportioned upon a sale of the security on which it accrues. as the difference of price is not simply a question of interest. tled need be credited to principal.112 able. 274. at no matter when paid. out of justice to the remainderman. 178.

Eastman. 6 A . such as a betterment assessment 8 or judgment. 2 are apportioned. § 25. 544. where the trustees are compelled to discharge an involuntary encumbrance. if at once discharged it is paid from the remainder. which are governed by the common law. 583. 113 turned over. 7 Similarly. and a loss occasioned by a breach of trust stands on the same footing. and deducted from the estate of the remainderman. 4 This statute does not apply to settlements made by deed. Pub. E. Phillips. 3 In some jurisdictions there are statutes apportioning and coupons on the termination of a life estate settled by will. Parsons v. which might be detached and sold and would then be a separate bond. Plympton v. 589. Winslow. and there is no apportionment but where the statute exists. separately. 8 betterment assessment is a tax. 6 Van Vronker v. a on the — — the settlement.. 139 Mass. Stat. 361. 106 Mass. 16 Mass. 178. Adams. is otherwise. 121 Mass.THE INDIVIDUAL AS TRUSTEE. 1 But where the interest is payable by a coupon. 449. Mass. And this is the rule even where the debt is secured by a bond or mortgage. 20 Wall. 157. as. Any loss to the fund by depreciation of the market value of the property belongs to principal. ch. 7 Met. 2 8 * Iowa City. even coupons in the absence of statute. v. the cost is apportioned between income The whole amount is charged to principal and principal. and 1 Dexter Clark v. 5 — Discharge of Encumbrance. for instance. and the principal to the corpus of the fund. . 7 Maclaren v. Stainton. rents Payments. and as between life tenant and remainderman is treated as an encumbrance. 11 Eq. and this is true even when the estate is not charged until a long period say ten years after estate. — If there is an encumbrance mortgage. 382. (1882). the rule. Boston Dispensary. but not an ordinary one. 136. L. but if carried 6 the interest is chargeable to income. Adams .

Brown. Little. states that in the absence of express provision in the settlement. of the trust funds. 644. 345. The English cases have arisen almost exclusively where the property was in the possession of the equitable life tenant. 250. 3 Sohier v. and a trustee should charge necessary current repairs to income. charged interest thereon yearly. 2 It is often a a difficult question of fact to decide whether a specified expenditure is an addition to the property or a but the rule may be stated that. 6 Pennsylvania. 188. 16 Mass. the addition of an elevator to a building which previously had none will be charged to principal. 188.114 the income est is A trustee's handbook. the equitable life tenant is not bound to repair. Caldecott v. Parsons v. 345 . 1 but the repairs or expenditures which are necessaiy to maintain the property in proper condition are chargeable to income. Eldredge. . 103 Mass. 642. 8 For instance. to real estate Alterations and additions whereby the usefulness or rental value is in- — creased are chargeable to principal. Little. 161 Mass. * Little v. 103 Mass. pp. or the interlife may be funded and charged in a lump . 2 Bradf. pp. (N. and so all repairs should be made under order of court and apportioned by it. 251. the principal is paid out of the corpus. 144. where recurrent repair pairs improve the property to the extent of their cost. Hepburn. Little v. and the life tenant loses interest and the remainderman the principal. Y. text. and is then chargeable to principal only to the extent to which it benefits the property and 6 in some States there are statutes allowing an apportion- So also . or if the tenant and remainderman are beneficiaries of the same funds. « 1 Sohier v. Alterations and Repairs. they are chargeable to principal. 3 TJnderhill.) 74. and are a judicious investment . and not being managed as an investment by the trustees as is general in AmerLewin. In America the rule is as stated in the ica. 361 . Eldredge. Winslow. Hepburn v. while putting in a new elevator in the place of an old one will be a repair chargeable to income. 2 Hare. 4 an expenditure may be in the nature of both an addition and a repair. 161 Mass.

151 Mass. sa}'s income means net income after deducting taxes. 478. repairs. 246 n. Shaw. Howard. 544. p. 485. 7 Plympton Dispensary. 8 extensive job. ment 115 in such cases. 151 Mass. except those assessed on vacant land. it is well to get the instructions of the court before undertaking an if charged wholly to the income. etc. — sewer taxes. 16 Mass. Littlefield. v. Eng. v. N. Eaton. Taxes. . Brown. and chargeable to principal. Underhill. C. Burroughs. All annual taxes. whether they are in the nature of repairs or additions. 2 All ordinary current expenses are charged to income. fencing in land or reable to principal. including taxes. Dispensary. 2 Hare. although chargeable to income at other times. Littlefield. are chargeFor instance. 7 Met. 361 140 Mass. These expenses. 6 Special assessments. are charged to income. Winslow. — Insurance premiums are expressly chargeby the terms of most carefully able to income drawn is trust in instruments. 7 Insurance. v. 1 made Caldecott 2 . Parsons v. pairing n house to obtain a tenant. Trust Co. H. are chargeable to principal. 8 Watts v. " 5 " Plympton Stone Pierce v. 106 Mass. 302 . and ordinary current expenses. 485. 532. are chargeable to principal or are ap- portioned as specified. 106 Mass. J. 144. which. on the acquisition of a new estate will be considered as so much additional purchase money.. and where no express provision v.THE INDIVIDUAL AS TRUSTEE. And in any case of doubt. 58 N. 1 All expenditures on newly acquired property which are necessary to put it in condition to let or to hold. Stone v. v. but his whole income might be used in preserving the property of the remainderman. 4 As vacant land gives no return to the life tenant. such as betterment assessments. 544.. 5 all charges against it. might be very burdensome.

says that. 2 Gratt. Re Housman. 382. and the ordinary practice of charging the premiums to income is entirely consonant with the theories of law. 288). that the Peck v. 408. the life tenant gave bond to invest money and pay over on death of life tenant. In that case. 404. J. the funds recovered would be used in repairing.) of which insurance is now like repairs and taxes. 2 Brough v. Probably because in early times and in England insurance was not considered a necessary precaution of an ordinarily cautious man. 482. Pepper. Y. 116 a trustee's hMtobook. (see Shaw. 4 Dem. there being no obligation to iusure. 5 But where a trustee insures the instrument the general practice 1 There is singularly little authority on the question. 288. the premium should not be charged to the life tenant without his consent. as in such case the policy was a personal asset at the outset. Watts v. Wilmarth. Howard. and because failure to insure by a life tenant is not permissive waste (Harrison v. 2 In case of a total loss. and will retain its character as real estate. 56 N. 1893. 8 Ired. v. Eq. in a carefully considered opinion. 8 and could be used in rebuilding if such an investment is authorized. the fund should be invested. one of the ordinary and necessary incidents of maintaining real estate. the court decides. is to charge them to income. Pepper. Croft. 615 (in premiums are apportionable accord- ing to the respective interests of the life tenant and remaindermen. Ch. and Perry. in Darcy v. 7 Met. . 166 Mass. 8 Lerow 4 6 Harrison v. The fund recovered does not represent or stand in the place of the building destroyed. which is that the income is chargeable with all the ordinary annual expenses of maintaining the property. C. and unfortunately what authority there is is conflicting. 536. 478. 166 Mass. 19. hence had no right to convert. 10 Leigh. Higgins. the remainderman has no claim on the fund recovered. the opinion. § 487.. Haxall's Ex'rs v. On the other hand. 1 In case of a partial loss. Shippen.. 99. the contract of insurance being merely to indemnify the individual for his loss. and with the law as now enacted by statute in England. 9 Ir. the court expresses case. on the authority of which no reason is stated). Trustees Act. 4 If the life tenant insures the property. 9 Allen. In Graham v. and in the New York Roberts. the cost of insuring the life of the annuitant was held chargeable to income. although it may be otherwise where the insurance existed at the time of the will. Sherwood. § 18. and this case seems to state the true reason.

536 2 8 Graham ». or may be apportioned equitably. of protecting the property. where such charges were held to he the ordinary charges Underhill. 444. 1 for Expenses. and so is generally charged to principal. Eq. Roberts. but the legal expenses of collecting the income. Legal expenses of settling the interpretation of the trust instrument or appointment of new trustees are borne by the principal. 109 Mass. the building. 108 Mass. Howland v. v. Green.THE IND:n#>UAL AS TRUSTEE. Eldredge. 10 Gordon v. 404. 8 N. p. 2 — The charges of the trustees way managing the propertj'. or pays it to the wrong person. West. As to what expenses are allowed. 4 but in a purchase or sale of real estate the brokers' commission is in practice considered as part of the price of the property. he will insure to the claim of both life 117 is all his interest which subject tenant and remainderman. fall naturally to income. . 8 Ired. which are by the of a commission on income. are charged to income. n. So also the legal expenses of protecting the property. and in such case the fund recovered would stand in the place of the property destroyed as the property of the remainder- man of which the life tenant has the use. and if must distribute he distributes the wrong amount. see supra. 99 HaxalTs Ex'rs Re Housman. 6 and so also the expenses of recovering the fund or paj-ing it out. H. 29. Shippen. 335. or of determining the matter of payments chargeable to income. Extra charges for services which are beneficial to the fund. 246. 3 Brokers' commissions on change of investment are charged to income. p. * 5 Heard v. and so charged to income. are charged to principal. The trustee The Distribution of the Trust Fund. the trust fund properly at his peril. must bear the lossi — Leigh. . 21 Pa. But see Spangler's Estate. 283. and would probably be allowed so generally. St. 4 Dem. 258. .

as. but care must be taken to make all parties interested parties to the suit. 118 A fact that trustee's h^tdbook. 2 If the court had jurisdiction and proper notices be given. 2 . Winslow. tected if. On There is a common practice of making a final account showing a distribution of the fund. if an improper share has been paid to a beneficiary it cannot be recovered back. he has been diligent or has taken advice The will not save him. Div.' (1887). there being an overt act. for instance. (1893). 1 4 Hilliard v. in the place of a decree of distribution but it is . §2940. Ohio (1890). but not if he was outside or under a statute of limitations disability. § 370 Comp. 4 Frere v. He may pay the fund into court. 8 Gen. Stat. but where no statute exists a court of equity would act under its ordinary powers. Stat. and this by statute in some States. Div. Conn. the trustee may require the payees to give security to reimburse against any claims that may or the}' will not be concluded. in others get less. and asking the court to allow it. better to get a decree. 249. Annot. as some of the questions cannot be properly raised and concluded in the form of an account. 1 Ordinarily the Probate Court is given authority to make decrees of distribution by statute. (1887). 389. Rev. and his only protection is to obtain a But he will be propaying one beneficiary whose share becomes due before the others. the would run against a person within the jurisdiction.. § 5592. he pays him on a fair valuation of the estate. although the securities depreciate so that the decree of distribution from the court. § 445. . Stat. Stat. the trustee will be protected by the decree 8 . Code Iowa (1897). Stat. (1888). § 235 Rev. Okla. If there be any doubt as to whether arise. Fulford. § Wy. 4149. 45 Ch. a decree of distribution. all interested have been made parties. Mont. 4 Ch.

Buell. 1 but He must not pay a minor's share to himself or his parent or guardian without an order of court. usually vest in the distributees by the provisions of the instrument. The trustee 119 must pay the distributive shares at his peril The fact that he pays on a forged order. Now. Mass.THE IKDr^UAL AS TRUSTEE. 3 filed in court. 2 or he may be re- quired to pay him again when he conies of age. 77. He may perpetuate the evidence of his payments by an account court. How v. and he cannot refuse to pay until he gets a receipt. will not protect him. 281. 5 As ally allowed. § 624. p. compensation is generand is usually two and a half or one per cent on the amount turned over. (1882). The trustee may retain the funds in his hands until the account is settled and he has been paid his charges. 41. . ch. but which has in fact been revoked. ested. or on a power of attorney which he supposes to be good. a trustee payto the proper distributees. or under statutoiy law. 144. 9 Vt. 2 Coll. by statute in England. is protected. p. v. 4 If the trust tate.' 1 2 8 4 5 6 7 Underhill. and allowed after notice to all interby filing the vouchers in is The former course preferable. Stat. Perry. 160. Foster Bailey. 137. § 12. Supra. But see Sparhawk v. real estate will conveyance necessary . Chadwick v. 157 Mass. these duties are so onerous. Waldron. as all parties to the suit are forever barred by the suit. 32. 365. p. Supra. a was " to convejis *' or " divide " the real esotherwise. Pub. 98 Mass. and he cannot de- mand a receipt or discharge where he simply follows out the distribution according to the terms of the trust. ing in good faith under a revoked order the law is not so in America. Heatley. 6 In some jurisdictions the amount is regulated by statute.

shall not He is accuracy. if he should have special knowledge of their worded so that his liability. 3 Ch. . 2 Jur. 65. n. Dak. whether he signs as trustee or as individual merely. 2 8 p. 6 Supra. (1895). Code Tenn. Ohio (1890). 1 unless the contract is specially limits of the trust property.120 a trustee's handbook. " . 8 makes an erroneous representation is not liable He and is liable personally as stockholder in a corporation.) 706. (1896). he will be liable for the price. Mass. 7 1 Bowen Lewin. trustee is liable To Strangers. Supra. and if he . VI. Low v. (1882). innocently therefor. owing to defective appointment. p. p. extend beyond the also liable on the covenants in a deed or lease. 6 Supra. § 6842. 76 Ga. LIABILITIES. S. Pub. Stat. Supra. p. 6 He will be liable personally where he assumes to. 84. 6 In all these cases he has a right of indemnity from the trust fund only so far as he has acted strictly within his powers. 21 1. 24. when as a matter of fact. Gape.be a trustee. he is not a trustee. v. He is liable criminally for embezzlement if he misappropriates the trust funds. Supra. 82. Bouverie. 203. and will have no right to indemnity from the trust property. 4 . § 46 Rev. Laws Oregon (1892). even though under the pretence of a loan to himself. Penny. (N. and also for damages. —A personally to a stranger on his contracts. if any. Story v. 25. Code N. Annot. and the stranger gets no title. § 7464. § 1800. 4 for taxes. 743. p. 2 He whom is the beneficiary not bound to give information to strangers with is negotiating a loan. ch. He is liable personally in tort as owner of the property on which there is a nuisance. Kev. and on the recitals in a deed. 26. If he exceeds his powers. 1891. Stat. p. § 6592. as for instance in selling or leasing to a stranger.

Greenwell. 1 Mad. the loss on a building built to make the rest more readily salable is part of the whole transaction. 6 to fall in arrears. 109 Mass. Eq. n. one transaction cannot be picked apart to show gains and losses. 10 Beav. Pegram. p. Ditson. 93 . 83. and not a separate loss. As to his duty. 412. if he neglects to insure where it is his duty to do he will be liable for the loss. 3. Tebbs v. in developing real estate.the trustee's hence the gain on one All the gains belong to the trust estate. hence they do not belong to him to set against his liabilities . 323. 318. 8 He is liable not only for a loss directly due to his neg- Thus. Supra. either. the trust property arising from his neglect of dut}'. Foster. 4 The trustee is liable to his beneficiary for any loss of As. 351. 1 is 121 cannot change himself from a trustee of the funds a lawyer. 1 2 Thompson v. and his estate is liable only for the acts during . Wiles v. and not to the trustee.. 2 Drew. 140 Mass. 560. 43 N. See supra. White v. 8 4 6 6 7 8 McCartin v. Carpenter. Vyse v. He into a debtor without the consent of the beneficiary. THE IHDrVTDTJAL AS TRUSTEE. Finch. or inexcusably allows rents transaction stands off the loss itself. so. Traphagen. M. Fenwick v. for instance. J. G. and a decree may 2 be enforced against fault. and he neglects to 6 collect or secure the property. he will be liable for interest. If a defaulting trustee a cause for disbarment. not the one actually at and irrespective of liability liability among themselves but this joint lifetime. his breach of trust is Liability to Beneficiaries. their beneficiaries are joint — The and even if liabilities of trustees to several. p. 291. R. L. 7 or if he neglects to invest. ° but in administering a fund as a whole. for instance. . ends with the trustee's death. & . p. where the trust is created. see supra. as. L. 86. Gresham. 7 H. 541. Each by cannot set on another. 8 DeG. 258 Blake v.

.' or joining in a fraudulent account. 4 6 Code Cal. . A trustee's handbook. Comp. § 2236. (1885). (1887). 26. or looked on at a breach of trust a as. 8 He will be liable where he has handed the funds to his co-trustee. 6th Am. 4 or of his cotrustee. See supra. for instance. 15. for instance. Laws Dak. or negligently permits it . Laws Dak.. where the but also where as.. 7 8 Ames 9 v. 504. 194 Hinson v. destroyed. which he but he can easily make himself so by giving a need never do. ed. ° joint bond. 2 Ves.. 2 yet if lie has been remiss in his duty he will be liable for any loss s as. Comp. allowed him to receive them. 3 White & Tudor Civ. 541. Eq. Floyer. R. Stowe v. Pegram. C. 8 Civ. 1 Eq. 82. 109 Mass. Armstrong. Jones v. (1885). 180. Williamson. 87. they would not be liable unless they were careless in selecting the depositary. for his — As a general only. each trustee having a right to give his separate bond. Townley Notes. 6 v. p. Brocklehurst. 29 Beav. he will be liable for the loss by the failure of the bank while if the property were deposited in the names of the trustees. if property is properly deposited and then stolen. as. 240. Sherburne. for instance. § 2239 et seq. 106 Mass. L. 195. § 3929. own acts and neglects and is rule he is liable not liable for the act or default of his predecessor in the trust. (1887). Code Cal. Sen. it is only indirectly due to his neglect he leaves the property improperly in the hands of his co-trustee or an agent. or stolen. by join1 2 Bostock v. Blake v. 80. . pp. for instance. Liability for Co-trustee. 116. . if he has done his duty in taking care of the property. Hogg. § 3932. L. 3 Giff. if he has that may occur in any manner mingled the trust money with his own funds in the bank. Bowen. . Supra. 6 unless he joins in the breach of trust. 1 be liable for the acts and crimes of strangers through which the property is lost. and it is misThough he will not appropriated. Wilkins v. 964. 99 Mass. 122 lect. 74 Ala. Horton v. Lewis.

too. § 2239. pp. Civ. 8 Paige. 283.) 365. which all the must sign. Civ. 378. 3 and to do alone what ought to have been done jointly or by standing by and allowing his co-trustee to commit a breach of trust. Code (1885). Hearn. Supra. where property was left in trust to the widow and brother of the testator. 26 N. 89. § 3932. and the widow managed the trust and the brother never did anything about it. contains a receipt for the consideration. 7 securities insolvent. 127. as for instance where each of two trustees took half the it . 5 He may not rely on the representations of his co-trustee as to the status of the property. Cal.property and invested 1 in his respective business and trustees 2 s be noticed that the ordinary form of a deed. Eq. 5 Johns. THE INDIVIDUAL AS TRUSTEE. 87. Oliver Court. Code (1887). It is to v. for the benefit of the widow for life and then for others. and the widow wasted the property and died was held liable for the whole loss. See supra. 153. 75. 6 6 ' 8 Supra. 166. p. (N. p. 1 though show affirmatively that there was a necessity to join in the receipt and leave the funds in the hands of the co-trustee afterwards. 8 Price.. Monell v. ably leaves the trust property in the exclusive control of and it is lost. Underhill. . Monell. 89. and one trustee was allowed to draw them out. 6 his co-trustee Thus. 8 So. Bates v. the brother So. 3 Redf. for distinction between leaving income and principal in the hands of one trustee. T. Supra. 123 ing in a reoeipt for the money on a sale of securities and afterwards leaving the property with his co-trustee. Ch. 88. Clark. p. as to collection of in- come. each will be liable for the other. Dak. Clark v. where the were deposited with a banker without inspection for four years. 4 Crane v. J. if he can or by neglecting his duty and allowing his co-trustee to act improperly as his agent. where the trustees improperly divide the management of the trust. too. 4 So also the trustee will be liable if he puts or unjustifi. but must ascertain it himself. he will escape liability 2 in that case.

M. . note to Brice v. 1 or unfair account. 104. 6 Dundas. provision in the trust instrument that one trustee shall not be liable for the acts or defaults of the other does not he joins in a fraudulent or in a receipt for money which is if A relieve him of liability in such cases. 6th Am. Y. 2 s Blake v. nity to waste the estate but the clause may be drawn so as to exempt him. Pinch. & G. Stockes. 323 Sherman v. 7 . has a right not only to contribution but to full indemnit}' from his co-trustee. Pass 6 Underhill. 7 who has had the benefit Or he may recover indemnity of the beneficiary trust induced 1 who has received the benefit of a breach of by him. 109 Mass. J. of the misappropriation. Thompson Bahin v. (1892). M. C. Sneyd. is entitled to contribution from his co-trustees but where there has been a joint fraud the court will not help him against his partner in wrong. 390 McCartin v. 8 DeG. Hughes. ed. as for instance in leaving money in the hands of A. 2 Gratt. and then one So. Graham v. but who has been deceived by his co-trustees 6 as to the state of the funds. and under statutes even from a married woman without power of anticipation. Pegram. . where the instrument says he may do so. Eq. and so gives the co-trustee the opportu. 116 White .. Griffith v. who has made good a loss occasioned by a breach of trust not amounting to a fraud. too. 479.. 8 Austin. Wilkins v. Traphagen. 43 N.124 A trustee's handbook. 2 Moll. or who has made good a loss caused by his co- A . 8 Raby v.. 53 N. 541. v. Parish. the other was held make up the loss. 29 W. i Kilbee v. 6 A trustee who has been guilty of no fraud himself. 105. 332. trustee's fraud. 7 DeG. 31 Ch. Ridehalgh. R. 1029. Hughes. 483. Div. but because he neglects his own duties. 200. 2 paid interest on to it. afterwards misapplied. p. Eq. 4 trustee. & G. failed. 186. 1030. 560. 3 Ch. 3 GifE. as he is made liable. Hogg. 273. L.. not because the other is at fault. & Tudor v." and he will not be liable if the loss occurred by following out the directions of the trust instrument.

without order of court. Y. 11 Beav.THE INDIVIDUAL AS TRUSTEE. . he was held liable. § 2238. 1 Or where he invests in securities in which he has no power to invest. with the same intelligence that a reasonable man would use in the transaction of his The own affairs He must stance. ed. he is liable if he pays the wrong person. Cal. or vice The (unless trustee is liable for his in errors expressly exempted) the in judgment performance of his duties. Liability for Errors. 290 see as to distribution. being the duty of the trustee to invest the trust . 2d Eng. 82 N. Or. 1 2 8 4 it the fact that he is incompetent is no excuse. Code Ga. 6 that is to say. (1895). 51 . 7 For inbe at the pains to learn his duties. (1887). . Laws Dak. and there is notice among the papers. (1885). 5 trustee is held to perform his duties with reasonable discretion. 2259. Code Cal. p. Code (1885). where. . § 3170 . supra. 6 Supra. is liable any loss caused by his exceeding his powers as. 8 as e. 180. Cary. p. 117. § 4274. 2 So. p. §§ 2258. which should be principal to the versa. See Underhill. Dagley v. Laws Dak. 65. p. « " Ordinary care and diligence. he will be liable as. but not in the exercise of his discretionary powers. where the trustee was authorized to invest in real security. the infant could demand the sum on coming of age. too. (1887). for instance. Code N. even though honestlj'. where he paid a sum due an infant to his father. and held railroad bonds believing them to be authorized. Robinson v. g. Comp. he may be compelled to replace it in kind or make good its increase in value. 285 Simpson on Infants. Civ. 1 P. § 3931 . Rev. 371. Civ. under a misapprehension. 4 Or where a beneficiary has encumbered his estate. Dak. 142. Infra. 125 for — The trustee . t Hun v. § 3941. p. (1895). Tolferry. he has paid sums . if he convert the trust property without having the power. Robinson. for instance." Comp. life tenant. Wms.

102. for instance. 2 Drew. Vreeland. if A or trustee's handbook. he invests too large a proportion in certain secuif he uses poor judgment in investing. Supra. p. 441. Eq. Gilmore.) 25. Perrine v. 617. J. Crabb v. and give the doubt. Hogg. 2 especially sel. 8 him the benefit of if he is acting under advice of coun- though This shows that he used due diligence. if he have a power of sale. 33 N. 6 He cannot set off the gain on another investment against the loss on any injudicious investment. the court will not inquire whether he has used good judgment or not. rities. and the loss on an improper investment is a personal liability. 1 and honestly. irrespective of his honesty. Y. since all gains belong to the trust fund. he will be proand even where he has acted in good faith only the tected .* liability may be restricted by the terms of the trust instrument and a clause making a trustee liable for his wilful and intentional breaches of trust only is a common provision in trust instruments.126 funds. and where he has acted with that amount of discretion which an ordinarily prudent man uses in his own affairs. 710. (N. Gresham. 8 Jur. Wilkins v. the court will not since this fact it is not in itself . 5 trustee who knowingly or carelessly hazards the trust funds. Tuttle v. 7 But if he have a discretionary power to do any act. 25 Ch. 111 Cal. 92 N. and fails in his duty where reasonable inquiry would have made him safe. provided he has been honest in its exercise as. and the fact that the trust fund has largely profited by the good management of the trustee does not affect his liability to make good any error of judgment. YouDg. . Stott v. J. court will treat him leniently. Eq. 1 2 8 « 6 » 7 In re Cousins's Estate. D. he will be liable for the loss. . 36 N. Milne. . 56. 121 Wiles v. S. 258. and will be given But this clause does not excuse a effect by the courts. an excuse. But he is not supposed to be infallible.

inquire into the price unless it 127 be so grossly inadequate as to suggest a fraud. p. § 844 . or where he has a power to support. as to the amount of support. . but with an allowance for taxes and commissions. * McKim v. but rendered accounts as though he still held the securities. 67. since the settlement was on the theory that the account was made 1 Supra. the beneficiary may alent elect to have the money and interest. 593. p. if he exceeds his powers in selling real estate or stocks. 93. priated the proceeds to his Where and the amount of dividends payable up to that time. 139 Mass. 498.THE INDIVIDUAL AS TRUSTEE. as that amount will be supposed to be realized. . 373 Lewin. the}' can be held by the beneficiary as against his assignee in insolvency. n. he in the may be . A trustee who has caused loss must make the fund good. honestly exercised. 10 Pick. Freeman v. 175. 6 a trustee had sold the trust property and approown use. 8 If the trustee fails to perform a specified duty. 4 Similarly. Blake. McKim Infra. or wilful misconduct in the management of to his trust — the trust. Measure of will be final. 6 Ired. Eq. and will be charged with interest if any would have been earned. to invest in specified stock. or an equivamount Of stock and the dividends declared in the meanwhile. Interest is simple in most cases. 2 but compound interest is allowed if the trust was for accumulation. 1 Damages. 142 Mass. 142. Hapgood. v. required to replace them by like real if estate or stocks and he sell trust stock and have shares same company in his own estate. Jennison v. p. or as a punishment for disobeying the order of the court. for instance. 422. Hibbard. Ames. Stone. 4 8 77. . 370. or if the funds have been used in trade. Supra. he was charged with the market value of the securities at the date of the event. Cook. p. as. 6 Draper v. the discretion of the trustee. Perry. 71 Me.

. he will be allowed for Liability Terminated. v. 422. the trustee. Svpra. 142 Mass. Clark v. Thayer 118. 369. faith. he make good any he sell to 4 loss in price incurred at reselling. 60. 560. however. . 427. 7 and im- — The liability of the trustee may be ended by ting a release limitations. . 8 DeG.128 A trustee's handbook. 8 or get- settling his accounts. has laid out money in good proved the estate.. the court may confirm the sale. v. 136 Mass. must Or if a bonajide purchaser before the sale is disafhe must account for any profit. inventory is chargeable with at least the If a trustee buj-s the trust property at a sale. Finch. 147. M. Fanning. 6 If. ubi supra. Hill. Ch. Ibid. 4 6 6 7 8 3 ib . 232. difference of the value interest. at an inadequate price. 11 If. at the time of purchase. p. Thompson v. 10 or by the statute of If his successor in the trust takes over the property with- out objection at its inventory valuation. the 1 McKim Davoue v. 110 Mass. supposing that he has acquired a good title. 162 Mass. 149. 1 Had the stock fallen in value. 5 And if the property has depreciated in value. he must make up the firmed. 2 Johns. the beneficiary might have claimed the price at which it actually sold and interest. d 425 Fanning. Morse v. & G. Blackington. Hibbard. up as though the trust had been property administered. 3 In the absence of evidence of the actual price received. Also Davoue v. and retains it for a considerable time unconverted. 9 10 11 Infra. it. Y. requiring him to pay the difference to make the full market value. with If he purchased the property himself. 10 9 his passing through insolvency. (N.) 252.. Kinsey. infra. p. . 2 the trustee value. p. 2 Ibid. however. he cannot subsequently charge his predecessor with any loss.

. J. or he can object to taking the property at more than its real is value. he may claim the loss. 566. 41 N. Wilkinson. but not liable for the doings in the trust subsequent to an action against him for a breach of trust survives in equity. 232.THE INDIVIDUAL AS TRUSTEE. 42 Ch. 351 Thayer Dodd v. 1 He his death. Div. v. 129 successor seasonably converts the property. . Kinsey. 162 Mass. Eq. 2 1 2 In re Salmon.

8 Parrots. A further clause might be added.. Underhill. Almost any person be a beneficiary. since the Attorney General will appear to enforce them. could not hold it through the instrumentality of a trustee..PAET I. the property should go to the next of kin. the residue to go to the trustee. may 1 2 8 — Pool v. For statutes against aliens holding land p. THE BENEFICIARY. Bequests to unspecified charities stand on another footing. see Coleman v. . n. 1 an alien enemy a beneficiary. might be the objects of trusts. Harrison. Who may be a Beneficiary. Trusts for "things. 49 Cal. as they are not "persons. if properly drawn. or a corporation 2 that could not hold property in its own name in the jurisdiction. 18 Ala. and in former times slaves. a slave. 514. 95. horses. and dogs. but the carrying of them out must depend on the honor of the trustee." and therefore cannot appear in court to enforce the trust. but a person who could not legally hold property within the jurisdiction cannot be entitled as As. that. So. will not be interfered with by the court. Kailroad Co. etc. 517. in sundry States. That is to say. but they could not be true beneficiaries. for instance. if the trustee failed to support the animals properly. the gift may be to a trustee to expend so much as he thinks fit in maintaining certain horses and dogs." such as pets. III.

v. Supra. Hawley Western Railroad Co. 4 — Persons having a mere possibility. either in law or equity hence he cannot sue to recover. Hartman's Appeal. Butterfield. 172. 2 Persons to whom income is payable at the discretion of the trustee are not beneficiaries under the above definition. v. 490. Nolan. 92. 145 Mass. Y. Cotting. persons not ascertained or not in being are not parties interested. although his creditors will take the estate. 90 Pa.THE BENEFICIARY. 8 and 66 . Div. v. 149 Mass. 4 Bradstreet . 6 Nor is the holder of a general power of apif pointment a beneficiary. or a person to whom a beneficiary has given an order on the trustee. trustee. Deveaux. 6 All the property rights are in the . p. 1 S. 518. 203 5 6 Dexter v. Wilson Wilson. 135. since they have no claim they can enforce or assign. 513. 339. 129 Mass. 7 Ross. 8 In the absence of statute ordering the appointment of a guardian ad litem. 1 Who is the Beneficiary? Any person who has a claim against the trustee for any of the benefit of the trust property is a beneficiary. Statutes in Code Supra. C. v. . and protect the fund or recover damages for an injury to it. the direction to 131 employ a particular person as an attorney or agent by a testator does not create a trust or make the person designated a beneficiary. too. pp. p. 19 Ch. St. a contingent interest beingsuch a claim. infra. is against the trustee onty. States and several others. 7 2 8 Foster Clarke Elsley. although they are interested in the trust and may intervene to have a proper trustee. The claim need not be vested. 103. are not beneficiaries. he exercise the power The claim of the beneficiary is not to any part of the property itself. 7 Paige. v. 22. 48 N. although they have property that may be assigned. i and the claim v.

and a majority has no greater rights than a minority. 161 Mass. Earle. . although it is not such an ownership of things as would. however. if their interests cannot be separated the court will proceed in the best interests of all the beneficiaries and order an avoidance for all. beneficiaries is not joint. v. for instance. a trustee's handbook. 1 Eden. Where. . even eficiaries entitled to — The estate of the though there be several ben- equal and similar interests in the trust. 4 Each beneficiary may act independently of the others. Wheate. qualify a voter where a property qualification is required. 110 U. 710. p. which are attributes of the but his legal estate and consequently belong to the trustee equitable estate is property. and have invested his equitable estate with many of the same incidents and qualities pertaining to legal ownership in a ficiary — court of law. S. or damages for all. 23 and see Lewin. 6 is Or where an account one. The estate of the beneEstate of the Beneficiary. 247. p. 8 . Underhill. 177. 640. Little. Hill. 463. 136 Mass. all will corrected at the instance of be entitled to participate in the benefit of the correction. Morse v. 1 As has been hereinbefore pointed out. 251. 189. 6 Little v. and the beneficiaries do not agree in desiring a reconveyance. and he may treat it in general much as the legal owner of property may treat his. there has been a breach of trust in the sale of trust property. recognize the beneficiary's absolute right in this respect. 6 1 2 8 4 6 Freedman's Co. Lewin. p. Incidents of the Equitable Estate. or than even an individual.132 II. as it thinks best. they regard him as the true owner of the property. may be described as his right to force the trustee As courts of equity to carry out the terms of the trust. 60. 2 the beneficiary is not clothed with the privileges and burdens incidental to the ownership of the propertj-. Burgess v. Supra. p.

6 Beneficial estates in lands have been held not liable to forfeiture or escheat. 2d edit. Restraints on Alienation. 7 Gray. 436. 9 In Ga. 523. I. Code (1895). Reed v. § 3188. 10 Forbes v.. 1827. Wheate. 2 Tillinghast v.THE BENEFICIARY. the beneficial estate may be alienated as freely as any other property. 8 Reed a. 10 it will pass to dis- He may Annot. 7 estate is The beneficial subject to disseisin where a trustee repudiates the trust. the estate must be in possession. 9 — The beneficiary his assignee 1 may convey it away and under a general assignment. Bartlett. 137 Mass. as Massachusetts and Maine. and claims the property so that the statute of limitations begins to run. . . 137 Mass. 6 but under the statutes in the United States on real or personal. Bl. 533. 141 1 . 7 R. Code Miss. may sell to any person except husband and trustee. (1896). § 21 Bartlett v. (1893). Dunn. 350. 123. Burgess v. 4 although there are some jurisdictions where there is no dower. 19 Me. failure of heirs the trust property. In the absence of restraint by the terms of the settlement or statute. § 3202. when it will attach although limited to the wife's heirs. 7 Gray. 8 Alienation. whether would pass to the State. 156. §323. Perry. Whitney. Y. Laws of Del. 1 So. 6 6 7 8 Hamlin v. 149. § 275 b. and is now usually liable to the incidents of curtesy and dower. Whitney. Perry. § 1 . 144 Pa. Lothrop. it usually is. ch. (1892). W. 2 estate. by statute. Car. Stat. Rev. 133 The equitable estate may descend or be devised. p. Infra. §§ 327. p. Quin's Estate. 8 In early times dower was not an incident of a trust but now. 1 That curtesy may attach. Coggeshall. 85. Gray. 383. 444: Dunn v. § 1546. N. Hamlin. 4 See Stimpson. In Pennsylvania and South Carolina a married woman can convey only in the manner provided in the settlement. 533. but the wife is compensated in other waj's.

Alienation. or. §§ 170-174. v. and the assignees accordingly take gets no better right. This equitj' or claim against the trustee is subject to all like the — the counter claims of the trustees. Bridge 152 Mass. 612. Co. Co. What Estate passes. unowner. debts. he may hold the property both in law and equity. 2d edit. v. his assignee will take subject to making good the default.. 5 Allen. 6 or a new In obligation from the trustee to him direct. P. 554. 6 N. By creditor's bill for equitable execution. as they are called. if the beneficiary was indebted to the trustee. his equity. 8 4 Belknap Philips v. Dodd v. but not if it be in autre droit. being also a defaulting trustee. trustee's handbook. Belknap. Drake v. Searls. such as title in the order of their assignments. 333 . 20 Johns. Schuyler. 410 Chase v. 133 Mass. 7 all jurisdictions the assignment of estate is complete when assignor an equity in real and assignee have Gray. 6 a judgment. The beneficiary. & J. As for instance where the counter claim is individual. 4 If however a later assignee acting in good faith fortifies his equity by a legal payment of the claim. Rice. the it according to everywhere. 146 Mass. Conn. and it may be taken by his creditors for manner in which it is reached varying local law * but there is some way of reaching . 3 It follows from the nature of the estate. 30. 1 tion. 2 Infra. assigns. 468. Thus. 328. . being a claim instead of property. Life Ins. 208. 4 DeG.134 pose of his it a by will. 34 N. 154. 2 Or if the beneficiary. 17 How. Spader. Winship. v. 7 Ames. Philips. 511. his equity will pass to his transferee subject to the trustee's counter claim. Corcoran. 359.. Y. that the assignor can only transfer what rights he has. 45 N. 6 Judson v. and a purchaser for value than a volunteer. 343. All he has are his rights. p. Abbott v. Restraints on Alienation. . H. has no property to alien. 130 Mass.. Y. On execuHadden v. Poote.

v. who has 7 makes a general power of appointment and the property assets of his estate for creditors. and West Virginia. assented . 175-177. 30. 718 Fairbanks v. Cockrell. since he should have appointed to them instead of to volunteers. his notice will not . 3 Ch. help him. The policy of the law is well set forth by Morton. the person giving notice but if the person giving the notice first will have priority was aware of the previous assignment. Manton. 2 Kay & J. If the power of appointment be special. 3 Foster v. New York. 330 Cowx v. 496. 520. . A person exercises it. 5 Knowledge is notice. but if he be assignee _ . 3 CI. 527. 13 W. 4 and notice to one of several trustees or other joint obligors is notice to all. Howlett. 352 Clarke v. 104 N. & Fin. Daniels. 6 6 ' 8 Perry. Wiley. 135 * and the same rule is true of personal property in Massachusetts. Y. Kneeland. 113 Mass. 133 Mass. 108. . 8 Notice to be good must be given to the trustee after his appointment. Clapp 328. in those jurisdictions where notice is necessary to complete the transaction. 20. n. Lloyd. Cox. C. J. Wallston v. Minnesota. Va. Hogeman. . There is a lack of direct Ames. 22 Ohio St. Indiana. knowledge is notice. the creditors could not take unless the settlor and the donee of the power were the same. D. 488. 8 in which case qucere? 9 But a person to whom income is payable at the pleasure of the trustee has no estate that can be assigned or taken 1 2 White v. 9 cific decisions. Foster. 5 Russ. 6 Accordingly. Copeland v. 531. .THE BENEFICIARY. 14 Ind. Supra. McDonald . 2 but in other jurisdictions notice to the is trustee necessary to complete the assignment of an equity in personal property. 5 Minn. Windram.. Banks. 137 * Koxburghe v. . § 438. Braswell. p. 129 v. 126 Mass. in PaBank v. 1 Jones Eq. 456. 398. if obtained in such a manner as would affect a reasonable man but if the assignor is the trustee his knowledge is not notice. Lee v. Sargent. 200. end. Lloyd v. Ingraham. 17 Ch. . Bailey v. & Hem. Thayer v. 1 Johns.

5 Ibid.136 for a his debts. * Ibid. such a restraint on the alienation of the income is valid. Wheelwright. Restraint on Alienation. Stanley. 271 . the creditors have lien by statute even where some States the power is not exercised. In such cases it is usual to insert a provision in the trust instrument that the beneficiary shall not take his income by way of anticipation. 2 As a general rule in America. where she cannot settle property on herself without power of alienation during coverture. Restraints on Alienation. 268. p. his assignees or creditors must take 1 In through him and he has no rights that he can enforce. §§ 269-277 a. 6 This restraint in the case of a married woman cannot be removed by any one. 6 ' Robinson v.. 133 Mass. Windram. 2d ed. D. 268 6. Fletcher v. 8 1 2 Infra. ed..D. by John Chipman Gray. 136 Mass. 2d ed.. §§ 134-213. See supra. 342. Von Zedlitz. § 167 j. 175. 66. instead of giving outright.. See note to Underhill.. 8 while in England and in other States (there being several where the question is not determined) such a restriction is inoperative except in the case of a beneficiary who is a married woman. 6 and cannot be set aside to relieve against her fraud or breach of trust. 8 Gray. 589. and that it and the principal shall not be assigned. 8 Gray. and the policy involved. 4 who is excepted everywhere except in Massachusetts and Pennsylvania. 426. 7 Ch. Jackson v. . 1895. § Stanley v. not even by the court. p. 377 Pacific Bank v.' nor will acquiescence by the married woman excuse a trustee for disregarding it. but is invalid as regards the principal fund. 214. LL. is — One of the ordinary motives it for giving property in trust.. Greene. are thoroughly discussed in Restraints on the Alienation of Property. The decisions on this subject. the desire of donors to secure to the beneficiaries the its enjoyment of benefits irrespective of their improvidence or extravagance. or be liable to be taken for his debts. 2d 33 Beav. p. . 21 Beav. as trustee's handbook. 138. Restraints on Alienation.

183. 1» Pace v. 21 Alabama. 87 Va.' Missouri.. 91 U. Harrison. 758. I. 419. v. Dow. Bk. § 178. 36 Ala. 297. S. 325. 17 i6 Tillinghast . 88 Pa. 111 247. 21 Heath v. 84 Me. 281.THE BENEFICIARY. Garland. Garland v. 8 io v. Bishop. 205. Indiana. 170. 716. Massengill. 135. Gray. 6 6 7 Roberts v. Jourolman Tenn. Pace. Nichols v. 24 and i Civ. Code (1896). 6 Mississippi. p. North Carolina. E. 5 R. 19 South Carolina. 14 the settlor may settle the life estate without power of alienation on any one but himself as beneficiary. 69 Md. Stevens. "Whitehead. 81. Bep. Ch. Code California (1885). 78 Ky. Restraints on Alienation. Laws Dakota (1887). Barnes v. 20 Mo. 4 Abb. 86 11 12 18 l* i6 Gray v. Eq. 111. 28 Kentucky. Corbit. 4 Maine. 240 h to 249 6. Eaton. C. 2 Massachusetts. Bradford. but changed by statute. 2d 1094. Restraints on Alienation. 137 In most States the restraint on alienation can be made only by the terms of the trust instrument. 276. 23 Hobhs v.. App. and it cannot be taken for his debts. 133 Mass. § 867. There are some States. 21 Bailie v. § 2808. Ct. 46. Smith v. 69 Miss. 11 and Virginia. Lampert v. Gray. Comp. 24 Knefler v. 73 N. 530. See note 4. 616. 16 Such restraints are adjudged bad 16 in Rhode Island. McWhorter. §§ 6091-6093. 9 Tenn. Adams. 1 notably those having codes. Murphy. v. 15 Ohio St. ed. 77. 4 Rich. 2d ed. Shreve. 138 infra. In Pennsylvania. 6 Maryland. Broadway Bank Steib v. Thompson v. 8 Illinois. 22 Ohio. 12 and in the Federal courts 18 and Vermont. 83. 2 8 * Overman's Appeal. App. 923. 37 N. 119. 59 Vt. 23 Robertson v. Towers. 17 New York (aside from statute 18). 4 Del. Johnston. where such restraint is provided for by statute. Leigh v. §§ 177 a. v. Delaware. 56 Ga. also p. Haydel. 18 Rome Exch. 197. Eames. 8 and probably Tennes9 10 see. Smith. 20 Georgia.

N. D. the estate vests in him trust is established. Pub. Hutchinson. (1895). N. Stat. §§ 857. 516. Code (1883). § 3398 Gen. Stat. J. C. ch. because the beneficiary has no right to any 7 and therefore specific income which he can enforce. Minn.. 2808 Annot. or accumulate so In such a case. or that can be taken for his as they think much debts . Harrison. and in those States w. if at the creation of the trust his debts do not exceed five hundred dollars. 133. § 63 Annot. Y. Lickorish. Indiana. 274 Rev. J. Hahn v. in Connecticut the dicta are con- and there are no decisions. California. Gray. Ch. 1798. (1894). Rev. (1896). In re Bullock Good v. 1 . Stat. § 3394 . 8 New Jersey. Gray. in But and no spendthrift England. 140 N.138 a trustee's handbook. Laws Dak. § 195. Stat. Stat. yet the same result is practically reached by what is commonly known as a spendthrift trust. nothing that he can alien. Kan. 60 L. Minnesota. § 4292. (1882). 2800. Mich. 2d ed. § 2089 (1894). Civ. and in North Carolina 6 it may be Under New so settled on a relative. the creditors of the beneficiary cannot take the income. . but not the gross sum. 4 Rev. that is to say. will pay the income beneficiary. 5 6 ' 8 Rev. where a restraint on alienation cannot be successfully attached to a settlement where the gift is absolute to the beneficiary. (1889). (1887). the beneficiary may be restrained from alienating the rents and profits. Cal. . probably in Arkansas flicting. 302. § 4. N. Schell. Ind. Code . § 1335. . 867. § 296. p. Michigan.' (1897). Although there are jurisdictions. p. Ariz." 1 absolutely. §§ 2798. § 3252. (1885). (1887). if the beneficiary is also trustee. but in such cases. as appears above. 159 Pa. Code N. Stat. 341. Laws (1880). 113. . Lindsay * . Y. by leaving it to the pleasure of the trustees to the whether they it fit. Comp. and North and South Dakota. 8 Cochrane v. 4 In Arizona 5 he may settle on his children without power of alienation. 8 Ark. St. use a part of for his support. . . Wise. Kansas. § 5581 Stat. 2 the statutory provisions of York. 859. Wisconsin. Restraints on Alienation.

he has an absolute right which he can alien or which can be taken. . 616 but in Illinois the statute curiously cuts out the creditor. . or if the beneficiary become bankthis condition rupt. 6 but this exception does not apply to a married woman under coverture. the provision be to pay all the income to him or appty it all to his support. Restraints on Alienation. the trustee must account to the creditor for any income which he pays to or expends for the beneficiary after notice of his assignment. 2d ed. S.. § 296. 1 Johns. § 292. See supra. Potter vCouch. 342. * Re Levy's Trust. 6 Samuel v. Supra. 141 IT. Restraints on Alienation. p 136. Gray. § 167 g. & Hem. 1 although if he pays or expends it for others the creditor has no claim. 199. D. but in others. 3 The settlor may attach a condition to the gift of income. that will if it be alienated. Carew. 2d ed. Re Coleman. S. 8 A similar condition attached to a gift of the principal 1 Gray. Statute Law. § 46. . 99 N. 4 and be valid in any case. 716.. 119. D. D. . Wood. 139 following the English rule. If. 296. see Stimpson. 8 7 Cliye v. so much as is left after reasonable support may be taken or alienated. 39 Ch.. 12 Ch. where married women have the same status as other individuals. in most jurisdictions none of the income can be taken. Von Zedlitz. the income shall pass to others. even though the person to is whom the income passes the wife of the original beneficiary. Nichols v. Eaton. 7 except in Pennsylvania and Massachusetts. 443. 2 For the statutes. n. . 401. 152 Gray. Tolles v. 6 except only where the income is settled on the settlor himself. 8 Gray. Samuel. Restraints on Alienation. 237 straints on Alienation. 2d ed.THE BENEFICIARY. 6 Jackson v. and allows the beneficiary to alienate. Ames. notably where the matter is regulated by statute.. give no power of voluntary alienation to the beneficiary. 2 and this amount is sometimes fixed by the statute but the statutes only protect the creditor. 136 Mass. 2d ed. If the provision be to pay him or support his family. 91 U. and . note 4. 138. p. Y. Rep. 30 Ch. however.

Fisher v. Watts. 60 Barb. the courts of that State have jurisdiction to regulate the trust. 154 Pa. 2 Allen. 6 Cranch. 1 Vernon. unless ancillary trusteeship be also taken out in the ju- where suit is brought. 6 Massie v. 155 7 Chase v. 3 4 Brown v. 8 then the 1 2 v. 101 Curtis v. Cooley v. McDonell. . Smith. and there is a statute vesting the property in a trustee appointed by the court. Smith. Mandlebaum St. 267 Kildare v. 6 Jenkins v. 78. Rights against Trustee. 2d ed. Wister. 2 A limitation of the income to the sole and separate use of a married woman. of the fund is valid so long as the estate remains contingent. 4 irrespective of the situation of the trust property. . 6 And where the trust is established by the decree of a court of one State. 131 Mass. Infra. then the gift over becomes void. Scarlett. in which case the trustee can onry be sued there. 405. Gray. 65 . Lester. Foster v. is not a restraint on alienation. Desmond. Forbes v. Hooper.. since they can remove the trustee and appoint one to act in his place. 3 As the whole estate of III. 160. he is considered to be peculiarly — under the care of the court. Chase. 100 Mass. although both the trustee and beneficiary are out of the jurisdiction. 38 111. — The beneficiary may have a sub- poena against the trustee wherever he can find him. 29 Mich. 355. Marshall. 379.140 a trustee's handbook. 1 A provision attached to a gift that so shall much as shall not be used or alienated go to another is void. 316. 148. Eustace. 137 Mass. . J. 156 Mass. C. 7 So also. 119 Mass. but the trust property is within the jurisdiction of the court. 5 unless the trust be created by the decree of a court of another State. 8 Felch v. the beneficiary consists of his right to compel the trustee to carry out the trust. if the trustee is not risdiction within the jurisdiction. 523. Lothrop. p. Where Enforced. 9. §§ 57-74. 52. but if the estate vests. Restraints on Alienation.

p. 7 Paige. Ins. p. where it instrument. the trustees will hold the property on a resulting trust for the heirs. the court is powerless. 147 Mass. unless it have jurisdiction over the trustee in whom the title is vested. 141 court can appoint a trustee to execute the trusts. Smith. he remedy against the trustee should the acmay therefore. Co. is governed by the general rules He can have the trustee enjoined from committing a 1 2 8 McCann v. 1 it is If the trust is illegal in the jurisdiction where sought to be enforced. 3 Bradby v. it applicable to such powers. W. 120. 21 Blatch. pp. 58. 6 and 4 « 6 Morgan v.THE BENEFICIARY. it is better tion be injudicious to leave the full responsibility on the trustee. 81 . James.. 2 The beneficiary is entitled to have proper persons and a proper number of trustees. there is no statute to transfer the title to the property. Supra. for costs. and indemnified . Randall. Life Ass'n Scotland v. and infra. St. DeG. Whitchurch. 8. & J. 1868. even though the interest is contingent on the mere possibility of receiving a payment at the discretion of the trustee. See supra. may apply to the court in the matter of removing or appointing a trustee. Kansas Pacific Railroad. 5 The beneficiary has no right to advise or direct his trustee unless the right be expressly conferred by the trust if his advice be asked and followed. 74. 134. 155. and if the trustee refuses to sue or defend. 81. 6 If an express power be given by the trust instrument. belongs. If. 8 Can Compel What. and lose his . 213. the beneficiary may sue or defend in the but the trustee's name by getting leave of court to do so 4 trustee must be shown to be in default. — The beneficiary can compel the trustee to perform his duties. however. Siddel. p. and any person interested in the trust. Hawley v. 8. P. . 11 Pa. N. on the whole. v.

2 3 TJnderhill. § 2237. Laws Dak. 10 Ga. 131 . may sue on the damage or loss. the damage recoverable is the amount of the loss for the remainderman. He may have a receiver appointed to hold the property if it is imperilled by remaining in the hands of the trustee. Hill. 3184. the beneficiary may elect whether he will take the property into which amount taken with But he must choose. Perry. 1 Ames. and 440. 2 In England he may have the estate administered court. p. pp. with simple interest for the life tenant but compound interest is allowed when the income was to be added to the principal periodically. but such receivership suits are not in by the vogue in this country in trust estates. or voting against his wishes 1 would cause him irreparable injury. p. § 4273 . Rev. Jones 276. 13 Allen. or erty consideration in absence of fraud. 4 . 127. Supra. contemplated breach of trust. 7 In general. Dak. Barker. 2. 6. liabilities to beneficiary. See trustee's 127. and pending his removal and the appointment of a new if it trustee. or bond given to the If the trustee has been guilty of a breach of trust in investing or using the funds of the trust. 4 5 Supra. Comp. he must return the the funds have been converted. or the interest. Morse v. supra. and cannot pursue both remedies 6 and if he disaffirms a sale. §§3183. 6 and . 8 If the trustee commits a breach of trust. . Barker Code 6 ' Yeackel Litchfield. Cal. 366 Dougherty. 136 Mass. § 470 (3). 14 Wis. (1895). 273. (1895). v. he may . the benefi- ciary may either sue in equity for his in testamentary trusts court. v. CodeGa. Code N. (1885).142 A trustee's handbook. §3930. 60. v. If he follows the propprove his claim for balance but if the beneficiaries are not agreed. Civ. p. it is insufficient. n. the court will order whichever remedy it thinks best under the circumstances. (1887). 417.

Howard. Barnes. for instance. 77. or the breach was wilful. He can examsulted ine the books of accounts and securities at times.THE BENEFICIARY. usually once a year. and he may require the trustee to give him a power of attorney to collect it for himself. and make the necessary deductions before paying it over. v. 6 So the trustee is entitled to collect it. where A holds property in trust to permit B to enjoy the income. 1 Eq. where there is 143 a presumption that more was earned. 8 * 8 « As As to accounts. what . all reasonable and is entitled to an accounting at reasonable inter- vals. 2 but. 1 full Right to Information. Adm. Ames. Watts. 104 et seq. It. 127. and may not examine them to establish an interest.. pp. 470. p. as a condition precedent. 8 assist But he has no right to demand that the trustee shall him in encumbering his interest by answering the how his interest is already encumbered. to Bourerie. 65 . he must show his interest. He can examine the deeds or opinions of counsel con- — by the trustee in respect to the trust affairs. 8 In a simple trust. the net income can only be ascertained yearly. income means net income after deducting the taxes and repairs and ordinary current expenses attending the estate. is income. as. and therefore would seem to be payable only on 1 — 2 Smith Supra. n. In such cases. L. 478. 82. 7 Met. the income as it accrues belongs to B immediately. The beneficiary has a right to information about the concerns of the trust at all reasonable times. see supra. but in the case of an ordinary trust. 1891. p. Low v. 3 Ch. D. Adm. see supra. 4 inquiries as to Right to Income. p. nor can a stranger acting under his authority require the trustee to answer. v.

6 Paige.144 A TKUSTEE'S HANDBOOK. by statute the life beneficiary is entitled to the income on the fund given for his use from the date of the testator's death. but as the income belongs to the beneficiary. and where the whole or a part of the fund does not produce income. Keith v. 134. and the decisions have been classified by Mr. 138 Mass. 3 The trustee may withhold income to reimburse himself for money erroneously paid to the beneficiary. 6 1 2 8 may con- * 6 6 Lewin. pp. 1 In Massachusetts. Williamson. on the conversion of the property the proceeds are divided into income and principal so as to give the tions. 65 and 69. (1895). p. see pages 1 04 et seq. the settlement of the yearly account which provision would govern in all cases. — The question right to support has been treated alread}-. Williamson v. express or implied. Lewin. Copeland. pp. Right to Support. there is income as explained. but cannot reimburse himself in this manner for an individual loan made before he became trustee. Code of Ga. § 3187. Supra. 321 et seq. 2 but the intention of the settlement. p. the latter tract debts binding the trust property. that where the trustee fails to support the beneficiary. . . if it can be discovered. 6 of the beneficiary's In Georgia an unusual statutory provision. in the life beneficiary the usual rate of In other jurisdicabsence of statute the beneficiary only gets the actual income that accrues on the fund. There has been much discussion in England as to the beneficiary's share of the first year's income. 298.4 As to what constitutes income. supra. Most trust instruments have an express provision that the net income shall be paid quarterly or semiannually. the court would probably not allow a large amount to lie in the hands of the trustee for such a long period if the beneficiary needed it. infra. Supra. 303. will govern. page 105. 154.

p. or if the purposes of the trust have been accomplished. . Ibid. . all the beneficiaries. the court sever the trust. he cannot call for a conveyance if it would defeat the intention of the settlor. 10 . 89 N. . 774. THE BENEFICIARY.. 96. Walker Goodson v. 6 Thus. Vautier. 452. Khoads. Hutchison's App. J. 1 dis- Though by If. desire the trust may be terminated or modified in any waj'. 239. in statute in New York the court may in its cretion refuse to order a conveyance. Claflin v. Gunn v. Howard. Eq. he may call for a conveyance if he be sui juris . 15 Phila. v. Claflin. ubi supra. 3 Russell. and it. . 63 Md. Gibbs. the trustee may say may that he will convey all or none. while under the American rule the trust continues until he becomes 7 though it is not definitely decided that thirty years old the estate might not be taken by a creditor. Bhoads it. 19. Y. 2 such case. that. if — If the trust A is given property continued. although the beneficiary be sui juris. 4 Bear. which also prevails in some of the States. Claflin. Wetraore. as in such a case the purpose of the trust has not been accomplished. Right to a Conveyance. Henderson's Est. and order the shares of the others to be conveyed 3 but as a general rule. n. 5 but the American rule prevailing in most States is. 106 Mass. Brown. 82 Pa. 43 111. Beal. 239 . 583 Lent v. 169. 132 Mass.. the beneficial estate having vested abso- and entirely in the beneficiary. 149 Mass. 598. Ames. 509. 1 2 3 * Goodson v. f » Seamans Claflin v. 26 N. 4 The English lutely rule. one of the beneficiaries objects. where property is left in trust for A until he reaches the age of thirty years.. Ellisson. and there is no reason why it should be trust. 8 still it would seem that he would have no greater right than his debtor . 145 is merely a dry simply to hold in trust for B. v. 19. is that. 5 6 Saunders v. 109 Ellisson. 18. Zabriskie v. 149 Mass. under the English rule A may call for a conveyance on becoming of age. being sui juris. and have the whole estate. 115 Lewin. that is to say.

v. all the beneficiaries and the trustee agree to terminate the trusts in such a case.). 1 unqualified in the beneficiary . nor can the beneficiary it buy in a tax 1 title and hold v. McComas. by making a small provision for some person unascertained. the beneficiary may have a conveyance by securing the annuity properly. Choate. Grinnell. 153. 711. Therefore. and he desires it. he claims. 332. 425.146 through lute A whom and tbtjstee's handbook. 5 And a beneficiary who has a life estate. such as the payment of an annuity. the trust can be determined without a decree. v. Brandenburg v. against the estate. with power of disposition by will. 105 Mass. Russell v. 48. 9 Young Sears 2 8 4 6 v. if there are contingent or unascertained interests there can be no agreement. or for the trustee himself. 69 Tex. and there is no one who can object even under the American rule. v. Rep. 102. 4 than the whole of an absolute estate will a conveyance. 164 Mass. however. Neyland Supra. the interest of the beneficiary is vested subject merely to some simple duty. The trustee cannot set up superior title in a suit for a conveyance. . B. 139 Mass. 287. as no one else is interested. ubi supra. 8 but if the aid of the court is sought it will not be given. he may have a conveyance. Bendy. however. 2 If. even under the English rule. title if he is his landlord. But obviously the maker of the trust can prevent the beneficiary's calling for a conveyance even under the English rule. "Willard. Sise v. has not such an absolute estate as entitles him to a conveyance 6 nor could he call for one if the trustee has discretion as to the application of the income. 6 7 8 23 N. 38. or taken for his But where the estate is absoand can be alienated debts. Snow. 9 p. Walton Lemen Young Snow. Follansbee (111. Thorndike. 167 Mass. 7 If. 63 Md. 395. 146 Mass. v. 8 Nor can the beneficiary deny the trustee's Nothing less entitle the beneficiary to .

768. married woman is sui juris. But where the personal property is likely to be injured or lost in his possession. The Beneficiary may lose by — 1 2 8 Dorr v. n. 4 The certain estates. Lewin. but a married woman Fyler v. without power of anticipation cannot release. Ames. 19 Yes. he will be entitled to possession. 563. Fyler. such as the tools on a farm or the furniture of a furnished house. the trustee will be justified in putting the beneficiary in posses- an sion of a dwelling-house or farm as a ficiary home but the benecannot compel him to buy him a residence. and may "Walker v. 13 Pick. 147 Right to Possession. 3 Bear. where he is intended to reside in a house and use the furniture. 387. 38 and 86. . Supra. Ordinarily in America the right of possession of the real estate and chattels belongs to the trustee x but if the instrument intends that the beneficiary is to enjoy them in specie. 91. release as to her separate estate. 108 Schaffer v. p. 8 Where the instrument has no specific directions. pp. tee his Rights against the TrusRelease. he may be required to give security for it. beneficiary has trust securities specific but where he stocks. the beneficiary has no such right. and has a full knowledge and appreand fully informed. Supra. 106 Mass. Shore. and neither he nor the trustee will be required to replace it and unless they are heirlooms or the appurtenances of . 550. and by statute in England the right of possession is in the beneficiary. Wainwright. and the Running of the 6 If the beneficiary is sui juris. so.THE BENEFICIARY. . Statute of Limitations. 328. . — estate. for instance. 2. 2 As. Jr. If he is given the use of personal property he may wear it out. he may use them wherever he pleases. Acquiescence. though . * 5 A Wadsworth. the trustee may do . no right to the possession of the is given the dividends on or the rents of certain specific he can require the trustee to give him a power of attorney to collect but where the trustee has the duty to manage the estate and pay over the net income. 467. pp. . 19.

10 : Denholm . 136 Mass. 15 Beav. Appellant. 311 Iverson v. 6 6 7 Mant v. Hill. and neglects to make any claim. such as an improper investment. 524 . 6 Wheat. Farnsworth. also. as his inexperience may form a ground to invalidate his Nor will a beneficiary be bound bj' his release if action. 6 even though the transaction has been set forth in an account settled in court. he release of may make a valid and binding any claim he has against the trustee for a breach of trust or otherwise. 60.. St. but by statute in England Adair v. 148 a trustee's handbook. accident. if he was fully informed but the assent to one improper investment will not authorize a If the beneficiary . McKay. ciation of the facts. 74 N. 7 So. Hughes. he cannot subsequently recover the loss. second of the same character. Nichols. 377. Leith. 319. 481. there was fraud. 148 Mass. . 434. 20. p. See supra. Generally. 2 Perry. Badger v. 2 Wall. Brice v. 8 even though the beneficiary be a married woman without power of anticipation. 87. and so cannot complain but time will not deprive a beneficiary of his remedy unless he has been guilty of laches 10 a remainderman will . or mistake. Speidel v. 104. 8 4 Raby v. 8 9 Morse v. 3 Ch. 124. Henrici. 52 Pa. 498. J. 539. Stokes. Story. and he may disaffirm the transaction on learning the truth. 6 If he has been misled by the trustee his assent will not conclude him.. the beneficiary has come of age lately. 441. 105. Ridehalgh. 1 If. v. § 922. if the beneficiary who is sui juris knows of a breach of trust. 2 If the beneficiary knew and urged a breach of trust. 4 who is sui juris assents to a breach of trust. 120 U. 65 Ga. Saulsbury. 325. M. transfer of shares after 60 years held barred Halsey v. 339 . 146 Mass. 11 Ves. he not only cannot recover. v. 9 he will be taken to have assented. 8 or does not make it for an unreasonable time. 157 Mass. Prevost v. but is liable to contribution. S. Badger. Tate. D. Brimmer. Gratz. 724. Y. Jr. however. & G. he should be advised by counsel. . 1892. see Griffith p. 7 DeG. 1 Pope v.

6 he may take the benefit of the statute and the time will run from the date when he brought his adverse claim distinctly to the beneficiary's notice but the statute will not begin to run against the remainderman until his nor will it begin to run so long estate vests in possession as the beneficiary is under the control of the trustee. . Speidel Philippi . 8 stocks and bonds. . no claim to the property itself. 6 since the possession of the trustee is in the interest of the beneficiary but if the trustee takes an adverse position. 7 but he may constitute any person into whose hands it has come wrongfully a trustee As. Coburn. Henrici. 8 But a beneficiary who has delayed electing whether or not to confirm a sale. 6 377 7 8 v. 66. 105. 5 Sim. p. but as a general rule mere lapse of time itself will not bar the beneficiary where the position of others has not been changed. 2 What constitutes laches depends on the circumstances of each case. v. 151 . Phillippe. & K. repudiates the trust. 120 U. WhitehiU. Y. Stimpson. 143 TJ. Preceding page. . a bank which has received for him. 135 U. v. 136 Mass. which it knows to belong to the trust i — Bennett v. and brings the matter home to the beneficiary so that he is compelled to take action. . 14 Beav. 4 Ordinarily the statute of limitations will not run against the beneficiary. S. . 128 Mass. Third National Bank v. for instance. 115 U. Morse v. Rights against Strangers. 51 Md. v. Hoyt v. 53 N. 237. 621. 2 Myl. 1 But a minor may cut himself off by inducing the trustee to act by fraud. . 225 . Hill. Medbury. cannot elect at a later time. Davis Hubbell v. S. 181 n. S. but see Browne 2 8 4 6 Cross. Latham. 60. 98. Colley. S. The beneficiary has IV.THE BENEFICIAKY. 3. Am. 377 Riddle v. 553. Statute Law. Lange. 149 not be bound until his estate falls into possession. in order to see whether the property will rise or fall. S. 138. 65. C.

it as trustee.150 a trustee's handbook. 39. p. as security for a personal loan to the trustee.. 1 Ohio St. period of adverse possession ciary. 3 Gray. Y. p. 1 A . and will not be compelled to hold the stocks and bonds in trust for the beneficiaries. W. . 134 Masa. Porter. 1 2 8 4 Loring Supra. 7 etc. v. Ditto. See purchaser for value. 453. 12 S. Henderson. v. Hassam. 111 Ind. First Presb. from the discovery of the fraud. supra. and so he may keep his legal title. 197. although he claims under the trustee. if the transferee bought the estate for value. v. 1. . . 471 Hall v. Harvey. 5 6 McCoy Poor. 14 Allen. without notice of the trust. Gen. Proprietors.) Merriam v. 92 N. Soc. 39. . or when it might have been discovered with reasonable diligence 6 and the usual title. 24. if he denies can avail himself of statute. . estate. 2 disseisor will not be held a trustee since he claims the property by a title which supersedes that of the trustee 8 and a purchaser for value without notice takes the property free of trust. . v. Wetmore Brodie. 4 A purchaser with the beneficiary's will notice from the trustee. 941 (Ky. Molton v. p. and the court will not help the beneficial against him. and it begin to run from the time when the beneficiary is in possession and not under disability and in case of fraud. the defendant cannot set up the defence that the trustee was a joint wrongdoer in pari delicto. that is to say. Supra. 6 is good against the benefi- Aside from those who claim by a superior or adverse the beneficiary may follow the property as long as it can be identified ' and if it can be clearly shown that other property has been substituted for the trust property. 426 Williams v. 478 Rep. 516. . 56 Md. 520 Atty. then he in a court of equity is equally meritorious with the beneficiary. Where the title. 62 Ala. . . holds Although the beneficiary must sue in the name of the trustee. Ward v. the substituted property can be followed. 76.

131 Hodges v. . He may claim all that the trustee cannot identify. 11 stituted property. 8 McLeod v. . s Pennell v. 1 Money is said to have no ear-mark. . 3d ed. but generally a beneficiary has no preference on account of the nature of his claim. I. 9 The beneficiary is not bound to follow the trust funds if be prefers to hold the trustee 10 but he may elect which he he cannot however hold both remedies. 151 Mass. D. 6 Howard v. Code (1895). Law. Deffell. Underhill. 4 Md. 6 Lewin. . Hallett. 372.. supra. p. Evans. Encyc. « Re Hallett. C. nor is a repayment to him on the eve of bankruptcy a fraudulent preference 6 but a person who receives property from an unfaithful trustee cannot be held to be trustee of property which cannot be connected with the trust fund. 2 P. Wins. . Y. 595. See Amer. 1 Important cases on tracing unmingled funds contra. 27. 2 Deg v. 109 Cavin v. 24 S. M. and will pursue must elect one of them. 7 Ga.. 14 Wis. Deg. 414. Knatchbull v. & G. § 590. 133. 381. Wayman v. Ch. he is preferred in Georgia 7 and Wisconsin 8 next to funeral expenses. . 470 . 696.. See Morse on Banks and Banking. 4 DeG. § 3189. Gleason. 151 trust funds form only part of the consideration of the sub- may be enforced to the exten of the trust property. 500 Clark v. and Pennell «. 411. 66 "Wis. 526. Evans. 138 Mass. 1025. 592. . vol. 2 so if it becomes mingled with other money it cannot be followed 8 but the mere deposit of trust money with other money does not destroy its identity if the trust funds can be clearly shown as a sum added to another sum 4 and in such a case a beneficiary does not become a general creditor of the trustee who has mingled the trust funds with his own. 9 Little v. 71 Wis. 256. Deffell. Chadwick. 13 Ch. 2 Ashmead. 401 see Bowers v. 105 N. Bullock. 458 n. Wright. Jones. THE BENEFICIARY. 10 Evans's Estate. . 11 Barker v. Barker. p. the trust . 15 R. 257. 104. and Eng. Pay. 6 Where the beneficiary has become a simple creditor.

259. Barnardston. 2 8 1 . Stoneham. L. 8 Shaw v. 382 Bayard v.. 7 Shaw v. 68 L. 159 Stockdale v. Farmers & Mechanics' Bank. Dixon v. 382. . 232. 1 Right against Stranger aiding in Breach of Trust. Div. 138 Bayard v. E. 37 L. . Transfer of Stock. beneficiary has an equitable suit against a person who aids in a breach of trust as for instance against a person to whom the trustee has made a wrongful payment in distributing the estate. Bk. 466. The fact that there is a usage to make transfers 8 is not an excuse nor can they rely on the power of sale which accom- — The . 18 Ch. Supra. . p. 6 Lowell. . So too he has a direct claim where a banker delivered up to one trustee the bonds * or money 4 which were confided to him by three trustees. § 69. 100 Mass. ' ' . E. St. 2 Md. 152 a tettstee's handbook. 125 Mass. although the mere occurrence of the word trustee " has been held not to be notice ° but the general rule seems to be that the word " trustee " alone is a sufficient notice of a trust to put the purchaser or corporation on its inquiry as to the trustee's right to transfer 7 they must ascertain the right of the trustee to make the proposed transfer at their peril. City of Baltimore. Cowper v. pp. Queensland N. South Sea Co. 100 Mass. * Magnus . Gnedella. § 66 Loring v. T. that is to say. Spencer.. or where a corporation transferred stock improperly. Salisbury Mills. 40.. Supra. In such cases they will have notice T>f the trust if it is described on the face of the certificate. 2 Johns. Supra. Albert v. in a manner which B it knew to be a violation of the trust. E 9 Mendes v. Div. & Hem. Dixon. Ch. or have it converted and charge the trustee with loss. Farmers & Mechanics' Bank. h Lowell. 127 and 142. . 88. Spencer. ubi supra. p. v. 52 Pa. If he elect to follow the property he may choose whether he take the trust property as it is. 363. Transfer of Stock. or a tenant for life to whom he has paid or loaned part of the corpus of the estate. 587. 2 and this irrespective of the trustee's right to recover the payment.

9 w Western Railroad Co. but in the absence of a by-law or statute requir- ing a deposit of the documents. 10 Met. 125 Mass. 189. restrain the assessors 9 10 from taxing the estate. unless it be for taxation. or some one claiming under him. 513. Palmer. As this under the title of executor. 7 Mass. trustee. it may the require the trustee making the transfer to supply the docuhis right to ments or other evidence showing make transfer. and he must sue in the trustee. . i Lowell. Stearns v. Wheeler. 141. 149. 5 and in Pennsylvania he might maintain an action for its recovery. 8 Supra. I v. duty is placed upon the corporation. Loring v. — The beneficiary incurs no liabilities through his beneficial ownership. 32. Ins. Transfer of Stock.THE BENEFICIARY. 7 courts.. 113 Pa. 1 but must ascertain if he has If they know that the executor is acting in fact as it. 317. 196. Mut. 114 Mass. Bailey v. Eng. Liabilities. Zufall. owing to lack of equity privileges.. § 73. 8 If the beneficiary is actually in possession of the trust property. 177. 428. can set up his title against the beneficiary. Miller v. 6 where. 2 Ibid. 138. 137 Mass. Bird v. 8 is the pos- name of the He cannot protect the property in equity any more than and could not. L. Nolan. Salisbury Mills. N. Railroad. Co. V. 8 * » 6 i & N. Seibert. 153 panies the office of executor. Newhall Fernstler v. St. p. St. for instance. 114 Pa. 4 he may maintain any action for the property which any other bailee might maintain and no one but . . § 72. v. T. at law. 2 they are liable. nor sue in tort for an injury to it. it can only insist on inspection of them. and not on the filing of copies. Chicago. the "possession of the beneficiary session of the trustee. the beneficiary has unusual Ordinarily. 48 N. the trustee.

p. . Pub. 6 but the court will not order him personally to refund a payment made by the trustee and dis- allowed in the trustee's account. 7 The trustee cannot withhold the income as against an assignee of the beneficiary's estate to reimburse himself for money lent the beneficiary before he was appointed trustee. Crocker v. 247. Abbott v. & G. 91. 10 N. p. 3 not liable to indictment for a nuisance on the trust He does not become liable as a stockholder. supra. and which the beneficiaiy took innocently. 168. People v. 97. M. and. He may be liable for taxes where the trustee is a nonand such a tax is constitutional. Dillon. (1882). Norling v. cannot be sued for an accident caused by the blowing over of a resident. but he becomes acts as an individual. Supra. 3 Hill. 25. but his liability is not affected by the liable fact that he is a beneficiary. 338. 146 Mass. ch. p.. Poote. p. 152. the trustee may withhold his income to make up the deficit. Y. 2 He is property. If he obtains a wrongful advance of the principal. 154 a trustee's handbook. 4 beneficiary who induces a trustee to commit breach A of trust is liable to the other beneficiaries. fence. nor where a property qualification is needed does he gain a vote by his ownership. 133 Mass. 8 If he litigates unnecessarily. 134. 333. 5 DeG. Lewin. In such cases the trustee's remedy does not go farther than the right to recoup out of the income 6 but his co-beneficiary may have a right to recover from him personally. Sup. Hooper. Allee. § 15. and may be by his liable to the trustee. he may be liable for costs. 1 2 8 i 6 6 7 8 Supra. Townsend. Mass. Bate v. Stat. for instance. 479. 1 He is not liable as an owner.

148. 140. Mass. (1895). N. Eq. 173. p. since the court can commit the trustee for contempt if he refuses to obey its decree.' but a court Jersey if i 2 8 i Paschal v. p. Stat. 11th . Supra. it will not be enforced by the courts of another State unless it concern real estate in that other State.. Thus a trust of land for a beneficiary in a jurisdiction where the beneficiary cannot hold land himself is invalid. §§ 1291 6 355 6 1 . C. 2 8 or wherever personal service can be got on the trustee. Supra. 6 Cranch. Juris. is established may regulate the trust. 38 111. 140. Massie v. Or in New 6 a resident beneficiary desires it. . 160 Cooley v. 8. p. (1882). C. Supra. trust is invalid if it is contrary to the law or policy of the jurisdiction where it is sought to enforce it. J. and p.. ch. p. 316 . The courts of a State by whose decree a trust. . § 28 Jenkins v. PART A IV. Gen. 27 Tex. Smith. 8. Story. Acklin. or can appoint a trustee in his place to execute it 4 but if the trust is established by the judicial decree of one State. Lester. § 112. although both the trustees and beneficiaries reside in other States. 140. Pub. ed. Stat. 537. Curtis v. 5 and trusteeship be taken out there. Scarlett. 1 A trust can be enforced wherever the property is itself. INTERSTATE LAW. p. 131 Mass. 394. 141.. Supra. even though it concern land in another jurisdiction. 6 Blatch. Watts.

. the court may appoint a co-trustee for estate in the a non-resident trustee. 6 sell The court can give a foreign trustee leave to land. p. —When the trustee removes from the State or remains out of the jurisdiction. a conveyance must be obtained from the former trustee. 9. 680. Dig. 5 6 7 * Brightly's A singular remedy. 2034. CodeW. since Supra. but if there is no personal service on the absent trustee and the property is with him.. Stat. 16. the court will not appoint a non-resident trustee. . §4. 65. Supra. See supra. Me. they will appoint a foreign trustee. joint action of the trustees is indispensable. ch. p. § 5990. can appoint a trustee to carry out the trusts established by a foreign will if it has the trust property in its jurisdiction. Supra. and remove the proceeds to the jurisdiction of his original appointment. p. Rev. and in some jurisdictions they are forbidden to do so 5 but in others. he may be removed. 2031. Ohio (1890). and the new trustee can sue him wherever he can find him. the court can order personal property 8 to be conveyed to a non-resident trustee where the beneficiaries 1 2 3 Rev. p. So. Va. 2 If the property is within the jurisdiction and there is a statute vesting the estate in a new trustee. Stat. (1 894 ). (1891). the court can in trustee. p. or if there is no statute vesting the new appointee. (1894). 8 Brightly's Dig. S 2630. 4 As a rule. where the beneficiary is a foreigner. § 39 Code of Va. 156 A trustee's handbook. 1 Non-resident Trustee. If a non-resident trustee holds land and neglects his duty. some States by statute appoint a and order the land sold. the matter will be terminated . § 30. 140. 20. (1887). as in the case of personal property. Pa. p. too. 8 In Pennsylvania. p. § 52. Pa. (1883).

2032. Stat. As a general rule. 1 Mass Pnb. (1882). and out of the jurisdiction. (1895). Greene. ch. §§ 4709-4711 §§ 3. 2 Where a trustee takes out ancillary trusteeship. he must settle his account in the principal jurisdiction for any surplus funds in his hands after settling his account in the subsidiary jurisdiction. 4 need not inventory or account for foreign real it. § 40. . p. p. 141. Y. Gen.INTERSTATE LAW. Foreign Investments. Annot. . 99 Orniston v. mortgages or real estate This rule has. Code W. Stat Conn. 78. (1888). Pub. . . . §§ 4-6. Amorv v. 110 Mass. § 2632 . § 4179 (1894). p. 6 and if he sells by order of court it must be by the order of the court where the land lies. 1 and where they are satisfied that a proper bond has been given. as. 144. 6 trustees. 13 Allen. Supra. N. §§ 467. (1882). live 157 out of the State. been more observed in the breach than in the compliance by control. (1894). Va. 2 KV. (1887). Brightly's Dig. and Mass. Blackington. 339. 369. only come into the jurisdiction of the trust to account. for instance. 468 Code Ala. 680. p. 84 N. 413. 25. or the rents of in the jurisdiction of his appoint- In order to control the land. § Supra. There may be good reason why a foreign investment would be authorized. p. where the beneficiary resides out of the State and needs a home 7 or where both trustee and beneficiary reside in another jurisdiction. Mich. Code Va. Stat. 8 Gen. Olcott. for instance. J. (1896). Supra. Pa. (1891 ). § 17. Generally. 8 — The trustee will be taxed on real estate ch. he must be appointed in the jurisdiction where the land lies. 10. 4 6 « " 8 Clark v. Stat. (1882). §5831. p. 7. and . however. a court will not authorize foreign investments beyond its jurisdiction — As. Taxation. 3685. Stat. estate. 8 A trustee ment. Stat.

. if the beneficiary resides in another State.158 a trustee's handbook. the latter may also be liable to an additional tax. p. Such laws are not unconstitutional. and may be compelled to pay a tax on the income in his home State. and. Supra. 287. where the land lies. and the principle only 1 2 is stated. 154. 2 The statutes are too numerous and varied to cite. Hunt v. Perry. 165 Mass. 1 The trustee may be liable to taxation on the personal property where he resides.

become principal. need not accept trust. liable for joining in false account. ACCOUNT. expense of charged to whom. 128. how made. must keep accurate and separate. beneficiary entitled to. trustee cannot abandon trust. implied from meddling in trust. 85. . trustee's lien until settled. duty to examine predecessors'. § iii. 14. ACCEPTANCE OF TRUST. 77 to 80. 82. 82. open to inspection of beneficiary. does not take place of decree of distribution. 19. 119.3. form of. 29. 108. 77. fictitious 29. 78. 77. 80. 148. ends liability. settlement in court. 83. 4. 79-80. 6. See Table op Contents. account not proper method of getting instructions of court. 17. corrected by one beneficiary all get benefit. 4. ACCUMULATIONS OF INCOME. 79. should be settled periodically. vii. 5. duty to investigate trust deeds and property. 124. p. refusal to is cause for removal. in breach of trust estops beneficiary. effect of. implied from not disclaiming seasonably.INDEX. generally. ABANDON. 118. 2. 77. must account for any benefit received. 132. 83. 122. ACQUIESCENCE.

. 38. APPEAL. ADDITIONS. viii. beneficiary no right to AGENT. 48. ANCILLIARY TRUSTEESHIP. attachment and execution. 130. 74. ANTICIPATION. provisions against. who administers estate. trustee of counsel excuses what. 41. See Table op Con- § iv. 74. ADMINISTRATOR. may disclaim trust. may be employed when. 42. See Alterations. ADVERSE INTEREST. APPOINTMENT OF TRUSTEE. 146. 13. 118. 141. 134. beneficiary. charge on principal. See Executor. APPLICATION OF PURCHASE MONEY. may ask court. 73. ALIEN. by by one trustee. what passes. 73. or exercise of general makes estate assets. See Restraint on Alienation. 64. 40.160 INDEX. APPOINTMENT. what title passes. 130. of equitable estate. ACTIVE TRUSTEE. ALIENATION BY TRUSTEE. 39. 76. See Managing Trustee. under general special power. he acquires. ALIENATION BY BENEFICIARY. 39. 136-139. See Restraint effect of on Alienation. give. 157. ALTERATIONS. ADVICE. ANIMALS. conveyance. as trustee. as beneficiary. set off. duty to maintain. 126. Accumulations. 59-60. ADMISSIONS. restraint on. effect of. 64. 135. 12. must resign if trustee cannot have. 136. tents. p. APPOINTEE. See Suits. 114. cannot exercise trustee's powers. 134. trusts for. 73. 2. 39-45. beneficiary cannot acquire. 81. ACTIONS.

may act by when. by beneficiary to breach ASSIGNMENT. assignment does not pass may be assigned. regularity not questioned in collateral proceedings. wrong person. 133. 152.INDEX. may be appointed where property trustee. 145. 15. of trust property for trust debts. 148. 41. to. 29. power of. 119. 113. 9. APPOINTMENT OF TRUSTEE. 6. made in what place. 40. 141. 6-7. 8. APPRECIATION OF PROPERTY. 140. is ATTACHING CREDITOR 39. 156. ATTORNEY. BANKRUPT TRUSTEE. not necessarily removed. 16. 16. who are proper persons. 14. 140. end of life estate. 13-15. is unfit to be trustee. ATTACHMENT. ASSENT. of trust property for trustee's debts. 134. beneficial estate belongs to principal. 161 13. incomplete without title to the property. 134.. 28. sometimes purchaser for value. made when necessary or proper. ARBITRATION. of beneficiary's estate. what court has jurisdiction. 41. at none of dividends. of trust. 113. liable for delivering securities to BANKRUPT. AUGMENTATION. 20. 111. ATTORNEY OR AGENT. who may be appointed foreign appointment. trustee may be for beneficiary. temporary trustee may be appointed. trustee's general trust estate. is. expense charged to trust fund. 14. rule as to employing self as. See Gain and Loss. 64. 16. 107. 136 et seg. 7. 11 . 156. 112. how made. 72. 6. trustee 8. 9. of coupons. 9. 156. BANKER. APPORTIONMENT. made by court when. 7. trustee payment 49. on conversion of security. of interest. 104.

152. 38. cannot acquire tax title. 133. 131. 151. right to account. 71. must elect whether to hold trustee or follow property. BANKRUPTCY OF TRUSTEE. 38. 132. el. beneficial estate passes BANKRUPTCY OF BENEFICIARY. in possession of property may sue. cannot deny trustee's title as landlord. not usually necessary parties to suit. 138. 77. 40. 141. seq. 130. 156. no claim on trust property. 69. 72. 140 23. does not affect trust estate. restraint admissions by do not bind trust. can compel trustee to perform interests not joint. may be compelled to act jointly. 131. contracts with trustee. 133. 77. 147. on alienation of estate. 132. 64. enforced where. 86. 145. support apportioned where several. 139. maintenance and support of. 138. 140. right to conveyance. . 68. right to support. 65. alienation of estate of. 63. 143. 146. expense of suit to protect. is not stockholder in corporation. 23-24. rights against trustee. 131. who may who is a.162 INDEX. discharges his liabilities. to assignee. 38. 128. allowed. in spendthrift trust. 149. be. trust. 66. 146. right to income. 146. 153. BENEFICIARY. right to possession of trust property. right to follow property. 134. valid. estate of will descend like other property. 132. 144. gift over on. stranger aiding in breach of trust liable to. person who may receive income at trustee's pleasure not. 23. 143. rights as creditor. right to information. his estate. 24. 151. 136. 132. 66. 66.

72. BETTERMENTS. 88. loss of rights. 149. BONUS.INDEX. 77. 90. discharge trustee. gifts to trustee. may may is choose damages or property. 29. 97. trustee's liabilities to. . BONDSMEN. open to beneficiaries' inspection. 82.16. 81. but not if merely technical. BENEFIT. See Sureties. to advise trustee. care of. 10. charged to whom. BOOKS OF ACCOUNT. may be notified of proposed action. BONDS. unfit to be trustee. may be required. 118. need not refund payment. See Commission. 148. 147. 163 BENEFICIARY — continued. 147. 98. 154. 95. . 19. on executor's bonds liable for his acts as trustee. 12. not apportioned. need not be converted. liable for co-trustee if joint bond given. 115. railroad bonds not real securities. 122. 153. interest apportioned when. 14S. selling at premium. 112. 11. refusal to give cause for removal. BONDS. 142. 154. is cause for removal. amount sureties required. 19. 21. BILL FOR INSTRUCTIONS. not mortgage bonds. when sureties required of trustees. liable. expense of Surety Co. 106. payment no right of share to before end of trust. liabilities. 124. may disaffirm transaction. 21. 27. trustee can take none from trust. 112. 14. 121. charged to what. 10. BREACH OF TRUST. 95. purchase of bonds at discount to balance ones at premium improper. 141. or accidental. AS INVESTMENTS. causing breach of trust liable for fraud.

117. of. See Incapable. has right to possession 108. 96. 152. 52. CAPITAL. See Beneficiary. damages for. 88. CHOSE IN ACTION. 85. not discretion. See Expenses. where parent living. CAPABLE. 125. 147. CARE OF TRUST PROPERTY. not converted when. 94. trustee's lien for. commissions as between principal and income. 119. 20. 71. draw. 130. CESTUI QUE TRUST. CHECKS. BREACH OF TRUST — continued. court will appoint only capable trustee. 121. when made. trustee should be. 72. 91. CHANGE OF INVESTMENTS. 124. trustee may be for beneficiary. with personal property conversion. commissions charged to trust fund. CESSER. 95. 149. may elect to follow property or trustee. 113. 148. 119. 13. 127.164 INDEX. See Principal is and Income. who may support of. remedy for lost how. trusts for animals. BUSINESS. who CHILD. CHARGES. of testator carried on sometimes. joint and several. loss by breach falls on principal. payment to father for. CAPRICE. BUSINESS RISKS. BUILDING. 29. 151. BROKER. should be converted. CAPRICE OF BENEFICIARY. 87. 15. stranger aiding in liable. CHATTELS. 86. 62. contribution beneficiary among those liable. 70. liability for. 139. See Custody. should notify obligor. . trustee not removed CAPRICIOUS TRUSTS. for. 147. effect of notice. 28. BUILDING LEASES. 89. See Notice. 92. rule as to employing self as. gift over of beneficiaries' estate on condition valid.

30. 141. in appoint- CONTINGENT REMAINDER. for sale not specifically enforced when breach of trust. COMPETITION. CONFLICT OF LAWS. sale of. when on which income to cease valid. 150-151. 30. COLLECTION. trustee cannot beneficiary cannot CLERK. rule for various States. COMPOUND INTEREST. trustee's lien for. proper. what are allowed. COMPLETION OF DUTIES. trustee entitled what. COMPROMISE OP CONDITION. 31. 71. 28. 74. . 119. 50. 64. power dependent on. 127. beneficiary has none to trust property. 33-36. See Compensation. 56. for expert services. 24. 120. 25. 139. from what fund paid. CONSENT. 59. but trustee liable for breach of. 146. buy up. 32. 30. between trustee and beneficiary. buy up. 29. of beneficiaries. as to compensation valid. on termination of trust. signing as "trustee " makes no difference. 65. be returned where sale disaffirmed. extra on principal. CONSIDERATION. for distribution of estate. 16. COMPENSATION. at law. trustee can take no commission from strangers. expense of charged to whom. discharges trustee. charged when. 64. 93. sufficient to intervene ment of trustee. 59. 94. with beneficiary may be set aside. 65. must 142. from debtor to trust and self. must account for any received. See Inteu-Statk law.INDEX. 31. 72. to what extent the trustee can bind the estate. of beneficiary as a condition. 27. 119. discharges trustee. 16. purchaser must see that they are fulfilled. but may follow it in hands of stranger. trustee binds himself personally. 28. 72. CONTRACT. 38. 50. CONTINGENT INTEREST. 73. 142. SUIT. rule as to. 59. apportioned. 23. 31-32. 32. trustee cannot come in. 73. 120. COMMISSIONS. 165 CLAIM.

and income. 119. improper. 92. into trust investments. 43. 39. 29 rule as to employing self as. 24. 24. beneficiary. to remainderman. 130. may be for beneficiary. 145.166 INDEX. 152-153. 154. liability for transfers of stock. of real into personal may be authorized by court. 91. implied authority. 28. 124. 124. trustee liable as stockholder. CONVERSION OF FUND. trustee cannot delegate trust to. is beneficiary not. CONVERSION OF SECURITIES. . 13. securities at premium not necessarily converted. 146. what title passes to volun- to purchaser for value. trustee is stockholder in. beneficiaries' right to. See set-off. CONVEYANCE. 124. CONVEYANCE BY TRUSTEE. COUNTER CLAIM. 90. CONTRIBUTION FOR MAKING GOOD BREACH OF TRUST. to successor. COUNSEL. CO-TRUSTEE. 92. 105. 93. 41. on cy pres doctrine. 90. contribution from. 91-92. 123. 124. 39-40. liability for acts of. none of property meant to be enjoyed in specie. apportionment between principal CONVERSION OF REAL INTO PERSONAL PROPERTY. 40. on execution. from from co-trustee. 89. be a trustee. necessary when. CORPORATION. to assignee. not of testator's good investments. 42. CONVEYANCE TO REMAINDERMEN. 92. 38. by one trustee void. 91. 74. expenses charged to trust fund. 72. of infant's estate. may trusts for. 122. teer. 24. 90.

on trust property. trustee liable controls execution of powers when. 41. may order sale of trust property. estate. 92. will not remove when. 147. 82. power See also Probate Courts. 25. his rights may set off debt in equity. against equitable beneficiary's rights as. trustee. conversion under. of beneficiary in spendthrift trust. 26.INDEX. 44. See Settlor. exercise its discretion in removing a trustee. 155. 63. on in lease. cannot give to co-trustee. CY PRES. 8. will appoint trustees when. 19-20. 57. 108. of negotiable securities. DAMAGES FOR BREACH OF TRUST. 133. 19. 88. in equitable estate. 86. COVENANTS. what court has jurisdiction to appoint trustees. 127. 140. 127. CURTESY IN TRUST ESTATE. usually measure of. to appoint trustee what court has jurisdiction to remove will remove trustee when. 19. CREDITOR OF BENEFICIARY. of non-negotiable securities. 151. 52. degree of care required. 135. 6. 41. CREDITOR. 51. 42. may may itself administer trust. 123. CUSTODY OF TRUST PROPERTY. 134-140. 88. 20-21. CREATOR OF TRUST. 81. sometimes replace property and earnings. 6. 87. 139. 167 COURT. trustee. CREDITOR OF TRUST. will instruct trustee when. when. 127. of trust chattels. . 56. or deed. 120. sale under. 8. 156. 120. remedy against remedy against for nuisance trust property. for taking trust funds. amount of loss and interest. CRIMINAL LIABILITY. 89. of person exercising general power of appointment takes.

DELEGATE. 113. when of sale must conform to statute. 133. from individual and trust debtor apportioned. payment of one generally loss of principal. 17. trustee liable for delay in investing. 63. 48. 2. DECREE. 149. destroys power. by removal. 90. 43. liable on recitals. of equitable estate. 90. 43. 128. 64. of equitable estate. of legal estate. after DEMAND. trustee cannot delegate powers. 121. DEVISE. 55. DAMAGES RECOVERED. what become of office and title. 75. 133. office and title pass to survivor. 44. trustee is liable on covenants. DEATH OF SOLE TRUSTEE. passes to successor. 76. beneficiary. 46. not apportioned. DEFEND. 25. 10. by death of trustee. 43. DEVESTMENT OF OFFICE. 118. liability ends at. title.168 INDEX. title passes to title how whom. DESCENT. general power to defend actions. 76. 44. 2. collected 73. 74. of one trustee sufficient. new trustee 53. DEPRECIATION OF PROPERTY. . DELAY. 44. 120. 129. by 16. 16. 107. beneficiary may lose lights by. 106. 46. 17. trust ending. set off. 43. appointing trustee should order transfer of DEED. 17. See Disclaimer. 42. in converting. cannot delegate trust. 19-21. 49. ministerial acts may be delegated. by resignation. 17. may employ agent where there is necessity. DEATH OF HOLDER OF POWER. of legal estate. 6. 120. may be appointed.. 49. 17. what can be DECLINE. DEBT. ends trusteeship. DEATH OF TRUSTEE.

effect of. 97. 3. 48. 96. beneficiary can disaffirm transaction led. 148. if unreasonable cause for removal. 4. 49. 3. 125. amount necessary. 98. to give bond. in managing trust. DISBARMENT. 169 DILIGENCE. cannot be delegated to agent or co-trustee. 21. what is sound in investing. 99. heir or representative of deceased trustee cannot always. bond purchased DISCRETION. court may exercise in removing trustee. one of several trusts in same instrument. 66. 20. is eligible DIRECTOR. 24. 95. 90. 72. " in his discretion " means little. 47. 125. 99. 75. 19. 58. 21. whole trust must be refused. with other trustees. where mis- can disaffirm sale by trustee to self. 2. cannot be exercised by any one but trustee. unreasonable or prejudiced exercise is cause for removal. as to support of family. 3. honest exercise of not cause of removal. trustee cannot profit by. of trustee as to support of beneficiary. 48. in spendthrift trusts. DISCLAIMER. 51-52. 51. 71. 28. execution not controlled by . defaulting trustee liable to. 3. 20. •with beneficiary. not cause for trustee's removal.INDEX. form of. 67. beneficiary is not. if of one trustee blocks all action. 52. 138. DISAFFIRM. controlled by court when. the court. by refusing effect of. 4. DISABILITY OF TRUSTEE. DISCRETIONARY POWERS. amount required in investing. 47. 17. 2. trust may be refused. 85. required. cannot be exercised by court. 121. mium. at discount does not balance one at pre112. 87. DISCOUNT. 47. personal exercise of essential to execution of power. 138. DISAGREEMENT. how made. trustee as stockholder in corporation. 24. 48.

147. 118. 118. DOWER. to 74. 118. 16. 109. 44. by fictitious account improper. where trustee is in doubt. reasons for execution need not be given. 73. See Devestment of Office. 126. by beneficiary. cost apportioned. in equitable estate. not liable for use of. in various ways. 109. to exercise utmost good faith. 69. may have decree for. unfit trustee. 72. 82. 4. 133. payment of part. ignorance of no excuse.170 INDEX. DISCRETIONARY POWERS — continued. 111. 82. 73. cannot accept part. 125. DISTRIBUTION. 52. 118. 119. 133. of property. 113. 3. may get instructions of court. office. to exercise the trust personally. 83. DUTY. trustee may be. 117. by end of trust. ordinary are income. whom. 52. DIVIDENDS. extra or stock belong to not apportioned. 81. DISCHARGE OF ENCUMBRANCE. 109-110. paying whole fund fraud. 14. DISSEISOR. of trust fund at trustee's risk. ou wasting investments. not to come in competition. examine trust property and documents. execution set aside for fraud. 119. DRUNKARD. may notify beneficiary of in- tended action. See Neglect. not to aid adverse claimants. payment of shares at different times. compensation for. 128-129. DIVISION OF TRUST. not trustee. 73. 81. DISCHARGE OF TRUSTEE. 20. cannot disclaim part. DISCHARGE OF TRUSTEE. . 150. 1. 148. be removed from neglect of. 53. is all to the trust. conveyance to remainderman necessary when. may in trust estate.

alienation of. cannot be severed. 69. by by receipting for securities. 37. of disclaimer. ENCUMBRANCE. is joint. ESTATE OF BENEFICIARY. 4. 93. to keep accounts. 95. 84. 86. 16. 82-83. 96-100. 120. 125. 122. 140. See Estate op Beneficiary. 16. ERRORS. to take possession of property. to prosecute suits. ELECT. trusteeship 82. in code states no title. ENFORCED. 134. how ended. 151. 73. EMBEZZLEMENT. to fence. 38. 85. to examine predecessor's accounts. or trustee. to insure. in real estate what is needed. 37. trust may be where. 37.INDEX. 142. beneficiary may elect to pursue property may elect damages or property. not affected by statutes making tenants in common. 113. ESTATE OF TRUSTEE. 171 DUTY — continued. ESTOPPEL. . to support beneficiary. discharge of apportioned. of a person is not trust property. 77. liability for. of equitable estate. 86. to convert into trust investments. in investing is what. 89-90. 132. EFFECT. to pay taxes. 121. EQUITABLE ESTATE. incidents. 43. 149. to repair. 39. to invest. 22. as to class of investments. as to testator's business. passes to survivor. 86. 38. in personal property absolute. laches. 86. 145. 155. 95. ESCHEAT. EMPLOYMENT. END. 39. of trust discharges trustee. 132. 133.

30. 3. 12. Personal Property. 53. EXTINCTION OF TRUST. may inherit trust. duty to. FOLLOWING. of suit allowed. does not take trust powers. fit court ordinarily will only appoint a trustee. 15. 56. 117. of power must be accurate. sale of. 10. equitable estate may be taken on. 128. EXECUTOR OF TRUSTEE. 29. a trustee should be fit. by settlement. 108. 17. his duty as to testator's trusts. 80. 86. duty as to trust estate. 2. FARMING STOCK. bondsmen for acts as trustee. 61. principal. 63. 16. power to. 41. increase usually income. FARMING IMPLEMENTS. 151. ends executorship and becomes trustee how. levy of does not affect trust estate. 108. 41. see Parent. . the trust property into hands of stranger. what are chargeable to income and to trust fund. power to disclaim testator's trusts. discharges See trustee. 84. cost charged to what. 5. 134. FIT. 11-12. 12. when he becomes a trustee. 46. 14. 115. what may be charged of accounting. need not accept trusts in same will. End op Trust. EXECUTOR. EXECUTION. may be a trustee liability of in fact. EXECUTORY EXEMPTION. from DEVISE. 150. See See Chattels. 29-30. may be used by whom. 5. of protecting beneficiary. 50. EXCHANGE.172 INDEX. 63. liability EXPENSES. EXTINCTION OF POWER. 17. 2. 46. FATHER. 5. FENCE. 5. from furnishing sureties on bond. See Unfit. trust property may be taken for trust debts.

FOREIGN SECURITIES. 119. on separate transactions not usually principal. 154. GUARDIAN. 79. of equitable estates. GENERAL ASSIGNMENT. 67. FOREIGN REAL ESTATE. 156. FORFEITURE FRAUD. HEIR OF TRUSTEE. improper investments. 78. 106. 157. replaced from income. title to trust estate. 46. See Chattels. 44. 72. . 27. when income. in account. trusteeship neces- need not be inventoried. 126. 173 FOREIGN INVESTMENTS. GRAVEL. of lunatic or infant trustee. to trustee. 108. 2. 157. 108. may be forced to contribute. 53. payment required of trustee. to guardian. use of position fraud. presumption of fraud if trustee gets any advantage. 156. 16. 99. 126. 112. 78. appointment of. 99. HONESTY. 133. GOOD FAITH. FOREIGN TRUSTEE. ancillary sary. 72. 107. 124. contribution among parties to. 126. 124. in execution of power. may have not enough alone. at once draw whole fund needed. GAIN AND LOSS. is under power to use principal if what is in sale.INDEX. rents from not part of account. does not take trustee's powers. 124. effect of. 157. 29. 71. 72. See Assignment. 157. 157. removal of. 58. protects when. set off. beneficiary liable for. 43. 121. 20. 13. 17. may be used up when. 73. to of trustee's estate. in contract between trustee and beneficiary. GIFTS. FURNITURE. 1.

See Restraint on Alienation. 141. 155. may be collected by one trustee. 125. " INCOMPETENCY. 132. no excuse. 119. strangers not entitled to. INFANT. 144. 13. investment should produce. See Support. 95. 108. INCAPABLE TRUSTEE. beneficiary is entitled to. is net. no conversion in trust right to support. 108. may be withheld to reimburse trustee. 64. 147. becomes principal. IGNORANCE. INDEMNITY. 120. 75.174 INDEX. INCOME. of infant's being trustee. Purchaser for Value. payable when. trustee in place of. 31. 13. accumulated. 22. 125. may be used by whom. INJUNCTION. beneficiaries' right to use. INFORMATION. of legal estate. ILLEGAL TRUST. of duties. may HUSBAND. beneficiary's right to. 120. anticipation of. of beneficial estate. need not give to stranger at beneficiary's request. what See Principal and Income. be trustee for wife. may be removed. payments to. breach of trust INNOCENT PURCHASER. 13. 139. for. INSANE. 143. commissions on. 14. 14. IMPLEMENTS. 144. not proper trustee for wife. 143. may effect infant trustee be a trustee. 144. See may be enjoined. cannot be enforced. 143. 92. 115. 63. 81. 141. when new INCIDENTS. expense of suit to establish allowed. 23. trustee may require. no excuse. 70. for first year. See Chattels. HOUSE. court will instruct when. 125. of ownership fall to trustee. . may be on condition. 7.

112. to 86. fictitious account. 121. 82. in discretion of trustee means what. 95. 100 to 103. 116. proceeds. 96. 118. 82. 131. IRREGULAR SALE. INSTRUCTIONS. sound discretion must be used in. duty to make. what are proper. aided when. 115. .INDEX. INSOLVENCY. on bonds bought at premium apportioned when. 93. 94. 135. INSURANCE. gain on one does not balance loss on another. 99. soundness determined by facts at time of investing. improper ones. bill for lies when. of testator. may get when. holders of general power of appointment not. should be changed when. must produce income and be safe. not always to be converted. for breach of trust. 131. See Lunatic. for not investing. should not be sought by trustee See Support. English rule. 93. American rule. 66. liable for neglect of. 98. INVALID TRUSTS. INTERESTED. INTER-STATE LAW. 66. proportion in one security. 175 INSANE PERSON. 10. 126. investments. See Bankruptcy. INSANE PERSON. 95. charged. 99. 98-99. 142. 131. INTEREST ON INVESTMENTS. who are. 93. 138. person may have trustee appointed. INVESTMENT. 82. 81. allowed in various States. as to distribution. 97. 96. 99. purchaser takes risk of. 59. 127. premiums charged whom. person who may receive income at trustee's pleasure not. 141. 131. 112. right to support. duty to insure. 121. 142. 58. 155. apportioned how. INTEREST. apportioned. potential payee in spendthrift trust. simple and compound. persons having possibility not. 141. 112. 155. 90-91.

for co-trustee. for neglect of duty. execution of powers necessary. See Estate op Trustee. LET. See Real Estate. deny trustee's title as land- LANDLORD. 48. joint 117. improper investments. LEASE. LACHES. LAND. 155. 63. beneficiary cannot lord. of JOINDER. and several. taxes on charged to principal. trustees are. makes trustees liable JOINT TENANTS. 64. 122. 23. 29. 93. for not investing in particular stock. 122. rights of beneficiary lost by. 124. 47. 61. 83. trustee is liable on covenants. liable for co-trustees. 48. beneficiaries are not. 122. LEGAL EXPENSES. 61-62. 132. what court may remove a trustee. trust jointly. courts 126. LEGAL ESTATE. 90. 38. 121. must exercise must sue survivorship. 121-129. 46. 43. charged to trust fund.176 INDEX. 124. for acts of predecessor. where trust can be enforced. whom as parties. LIABILITIES. 121. 155. 126. 148. building lease. when right to contribution. office. jointly. 25. 121. JURISDICTION. See Lease. 19. 64. trustee must use good. for allowing rent to fall in arrears. 146. should be converted. LEASEHOLDS. 48. 80. 94. to beneficiary. excused from by trust instrument. 123. JOINT BOND. 149. what may appoint trustees. 115. may be forced to act jointly. liability joint and several. 46. 38. 38. 123. for acts of co-trustee. power is what bind the general and incidental to estate. JOINT TRUSTEES. 140. JOINT. 140. 122. 98. 121 to 128. 8. VACANT. . 121. 62. 132. JUDGMENT.

24. 88. 126. 25. trustee's for expenses. LIABILITIES. 25. 95. for errors. 24. 30. trustee is liable as owner of property. 118. 125. terminated. 120. 26. 120-124. LIEN". See Criminal Liability. trustee is liable on covenants in deed. 98. 150. 27-28. 119. ends on death. for misrepresentations. for for payment of share to beneficiary. barred by statute there is no rem- edy. LOAN. criminally. for fraud. statute runs after decree of distribution. 154. to strangers. 117. discharges trustee's liabilities. 63. trustee's duty to in investing. 28. on contract. 87. AND REMAINDERMAN. 84. 69. trustee is liable as stockholder in corporation.INDEX. 128. 120. trustee on covenants in lease. when statute runs for trustee. inducing breach of trust. 128. 133. beneficiaries on trust property. 120. 153. statute of. for distribution of fund. criminal. 177 LIABILITIES continued. cannot loan trust funds to self. 120. LIMITATIONS. 41. on personal security not proper investment. 154. 120. trustee's for his charges. 120. if trustee for respective See Principal and Income. . — for use of discretionary power. for taxes. 118. LIFE TENANT rights. 26. statute runs for breach of trust when. 125. for care of securities. OF BENEFICIARY. 59. 121. 149. 149. 149. 124. 89. mechanic's lien attaches when. 128. trustee liable on contract of sale not enforceable in equity. 12 or to relative or partner. 154. payment to wrong person.

xvi. 147. 13. . 151. 60. can be followed. by LUNATIC. cannot exercise settlement on 74. 125. 61. 70. beneficiary. powers. 125. MISTAKE. liability for. MINOR. of sale does not include. status of. See Damages. LUXURIES. MISMANAGEMENT. MISREPRESENTATION. duty to. MEASURE OF DAMAGES. See Support. 140. care single trustee may collect. 74. See Settlor. 19. power power 60. 60. MAINTENANCE. is cause for removal. self. 13. by breach of rights liability for. 75. 41. power of. See Table of Contents. of trust. trustee.178 LOSS. effect of lunatic's being trustee. of. all pp. liability for. 19. MANAGEMENT OF TRUST PROPERTY. 84. if honest. 21. expense of declaring. 113. See Infant. xiv. 120. 13. 82. 79. Gain and Loss. account may be re-opened for. allowed when. xv. 68. 76. restriction as to income. 60. MANAGING TRUSTEE. power implied. 75. court will not order. 71. attaches to trust property when. MARRIED WOMAN. may be a may be removed. MORTGAGE OF TRUST PROPERTY. 139. See INDEX. 124. not a cause for removal. principal. 149. 29. 69. liability for. 87. 125. MECHANIC'S LIEN. 136. of sale mortgage implied. MAKER OF TRUST. MONEY. not general power.

154. expense of charged to whom. 122. 98. will not be appointed when. to trustee. may NOTICE. railroad bonds not investment in. 27. 143. 23. 60. MOTHER. 89. second not proper investment. on is. 149. 6. to claim rights estops beneficiary. 40. NUISANCE. 22. ONE TRUSTEE. NEGLECT. 26. 179 MORTGAGES. considered to be in beneficiary. margin of bonds may not be. 132. See Trusteeship. 131-132. to disclaim implies acceptance. to examine. OFFICE. effect to obligor of chose. See Parent. 95.INDEX. 16. trustee is liable for nuisance on trust property. drawing whole fund at once a fraud. NET INCOME. . 22. care of. See Single Trustee. 95. not beneficial to trustee. trustee liable for. OFFICE OF TRUSTEE. 68. OWNERSHIP. NOTICE OF TRUST. what 135. 152. 150. security. what is. should be given when." 40. 67-68. 135. what is. in equity. NON RESIDENT TRUSTEES. court will not control discretion as to. 85. 115. 69. beneficiary not liable for. or See Foreign Trustees. trustee. priorities in equitable estate. word " purchaser with. may not be removed. 135. of prior equity. required when. 152. 134. ascertained when. NEED. NEGOTIABLE SECURITIES. 20. defined. 121. of trust property does not belong to beneficiary. of trust property belongs incidents of fall to trustee. 30. trust securities. 26. 99-100. 88.

180

INDEX.
unfit trustee, 14.
child, 70.

PARENT, is
payment

duty to support
support of child

may

include parent, 68, 70.

to for child, 70, 71, 119, 125.

PARTIES TO SUIT,
are sometimes, 23.

-who are necessary, 64.

beneficiaries generally not necessary parties, 23.
to suit for removal, 19. to suit for

appointment of

trustee, 8.

PARTITION,
power

estate of trustees is not subject to, 38.

to, 61.

PARTNERSHIP,

improper investment,

98.

should be converted, 89. may be authorized investment, 95.
profits partly principal

when, 105.
of, 38.

PASSIVE TRUSTEE,

duty

none at law, 74-75. PAYMENT, by debtor, to single trustee, 75. of share to beneficiary before end of trust, 118. by mistake beneficiary not required to refund, 154.
to infant, 70, 119, 125.

to attorney, 119.

wrong person, 117, 119, 125. wrong person, beneficiary may recover, 152. PERSON, of bad habits may be removed from office, 20. PERSONS, who are beneficially interested. See Interested.
to

to

PERSONAL,

PERSONAL LIABILITY. PERSONAL PROPERTY,
147.

a personal confidence, 74. See Liability. conversion into real, 91, 92. not converted when meant to be enjoyed in specie, 91, 108,
a trust
is

taking possession

of, 84, 85.

who

entitled to possession, 38, 86, 91, 108, 147.

PERSONAL REPRESENTATIVES OF SOLE TRUSTEE,
of deceased trustee

cannot disclaim decedent's trusts, 2, 17. may be invested with trust
43-44.

estate, 2, 17,

of deceased trustee does not succeed to trust powers, 17, 46. of deceased trustee, duty as to trust estate, 17, 46.

PLEDGE. See Mortgage. POSSESSION, of beneficiary

is

that of trustee, 38, 153.

INDEX.

181

POSSESSION OF PERSONAL PROPERTY,
the taking of, 84-85. who has right to, 38, 86, 147.

POSSESSION OF REAL ESTATE,
who has
right to, 38, 147.

taken how, 83.
trustee is entitled

POSSESSION OF TRUST PROPERTY,

to at law, 38. beneficiary may be entitled to in equity, 38. should be taken at once, 82-83.

POSSIBLE PAYEE,
66, 141.

interested in appointment of trustee, 10,
trust, 66, 131, 135, 138.

but has no interest in

POVERTY OF TRUSTEE, not always
POWERS,

cause for removal, 20.

general principles, 44. incidental to the office of trustee, 45-47. the court can grant, 45. the legislature can grant, 45. specially given by the instrument, 46. general and special, vesting when and when not, 46-47. must be exercised by all jointly, 47, 48. when lost by disclaimer of one trustee, 4. exercise of discretion is essential part of, 47.

execution must be joint, 48. exception as to collecting money, 48. to act by agent or attorney, 49. execution must be exact, 50. partial execution may not exhaust, 49. but may sometimes, 53-54. defective execution aided for purchaser, 50. defective sale confirmed, 58. substantial execution aided, 50. literal execution necessary when, 50. court controls execution when, 51, 52.

execution set aside for fraud, 52, 53.
of single trustee, 75.

pass to successors, 46. and survivors when, 46-47. of sole trustee, vest in successor not in heirs, 46.

fraud in execution of, 53. exhausted how, 53, 54.
extinction
of, 53.

182

INDEX.

POWERS — continued.
cease

when

trust

is

accomplished, 53.

liability for exceeding, 125.

not liable for use of discretionary, 126. of sale are not incidental, 45. of sale, 55. See Sale. of support, 65-66.
to contract, 64.

of compromise, 64.

of revocation, 69. of arbitration, 64.
to lease, 61.

of partition, 61.
to

mortgage or pledge,

60,

'61.

of exchange, 61.

to convert real into personal property, etc., 91, 92. to appoint new trustee when, 6, 7.
to appoint trustee in

whom,

7, 12.

POWER OF APPOINTMENT,
ciary, 131.
if

holder of

is

not a benefi-

general power exercised creditors of holder take, 135. otherwise where power is special, 135. who administers estate where general or special, 12.

POWER OF ATTORNEY, payment on invalid power,
trustee cannot give a general one, 49, 76. may give special power, 49, 76.

119.

PREJUDICED TRUSTEE, may be removed,

20.

PREMIUM ON BOND,
bond

reduced by sinking fund, 112.

selling at not necessarily converted, 90. purchase of bonds selling at premium and discount to balance improper, 112.

PREMIUMS. See Insurance. PRINCIPAL AND INCOME, what

is,

104-113.

importance of distinguishing, 104. gain and loss on securities, 106, 113. discharge of encumbrance, 113. accumulated income, 109. timber and gravel are what, 107. farming stock, 108. dividends are what, 109-111.
extra dividends, 109.

INDEX.

183

PRINCIPAL AND INCOME— continued.
stock dividends, 109-111.
interest apportioned interest
repairs, 114.

when, 112. on bonds bought at premium, 112.

alterations
taxes, 115.

and

additions, 114.

betterments, 115.
insurance, 115.

expenses, 117. broker's charges, 117. legal expenses, 117.

support of beneficiary, 66, 70.

apportionment on conversion, 104. apportionment at end of life estate, 113.
right of single trustee to handle, 48, 75, 87.

PRIORITY, among transferees PROBATE COURTS, proper
will, 3.

of equitable estate, 134.

place to
will, 7.

file

disclaimer under

appointment of trustee under

PROFIT, trustee cannot make PROMISE, to accept trust not

profit

from
2.

trust, 28.

binding,

PROPERTY,

what may be

trustee should examine, 1, 82, 83. trust property, 82.
9, 83, 84.

vests in trustee how,

the trustee's estate in, 37. trustee cannot take any benefit from, 27. ownership of trust property belongs to trustee not beneficiary, 22.
* no claim on, 131. follow into hands of stranger, 151. unproductive should be converted, 89-90.

beneficiary

may

but not property to be used in

specie, 91.

beneficiary's right to possession of, 38, 86, 91, 108, 147.

beneficiary's right to conveyance of, 145-146. passes to successor how, 43.

passes to remainderman how, 42. trustee cannot use trust property, 27.
care

and custody

of, 86.

of trust

may be

taken for trust debts, 41.

replaced when, 127.

58. REAL SECURITIES. trustee title takes only necessary should stand in joint names. 39-40. 154. rights of. 123. 150. 95. unproductive improper investment. bound by when. foreign. 60. 60. not REIMBURSEMENT. alterations and additions charged to principal. •who entitled to possession. 89. 86. 58. See Disclaimer. payment to beneficiary. from beneficiary. repairs charged to what. 142. 88. 27. . REFUND. 128. 80. 16. 84. deed should bfe recorded. 63. must see to application of purchase money when. of one trustee. 95. 59. 157. 59. purchaser must see to when. 91-92. for expenses of accounting. REAL ESTATE. 144. 114. beneficiary disaffirming sale must refund consideration. 90. appointed when. 78. trustee cannot buy trust property. 59. unproductive should be converted. taking possession of. PURCHASER. RECEIVER. 38. 38. liability for joining in. 48. sufficient when. conversion into personal. 147. 39. REFUSAL OF TRUST. 134. 114. 29.184 INDEX. care and custody of. must be trustee what are. RECEIPT. PURCHASER FOR VALUE WITHOUT NOTICE. REGISTERING BONDS. 122. for expenses of suit. who is and is not. 98. joint in equity. 142. railroad bonds not. 48. questioned when. beneficiary need not. duty to improve. 6. 83. 86. RECORD. when proper. 37. PURCHASE MONEY. for 29. REGULARITY OF TRUSTEE'S APPOINTMENT. title in. 83. takes risks of regularity. 30.

REPAIR. REMOVAL. by beneficiary. 137. 2. of absentee trustee. not in America. 148. 128. 114. 71. by using discretion to draw whole fund fraud. 84. SALE of contingent remainders and executory devises. 113. 69. of one trustee not binding. 20. what. 136-139. 156. apportioned when. title vests in 1. 112. 120. by spendthrift Office. power usually specially given. 67. 86. power of inserted See Devestment of in settlement in England 69. conveyance to when. 55. trust. 138. liability for misrepresentation.INDEX. 54. 18. 13. . 14. power of implied from a given duty. 147. SAFETY. 19-20. 119. is not a fit trustee. duty to. will will is without conveyance. lunatic trustee may be removed. 54. 18. RELATIONSHIP. between trustee and beneficiary. not valid in others. infant trustee may be removed. valid in on alienation. 56. liable for allowing to fall in arrears. REMAINDERMAN. RESIGNATION. in discretion of court. 20-21. 19. remove for what. 136. RETIREMENT OF TRUSTEE. 121. charged to REPRESENTATION. 95. 18. 64. is income. some States. power of not incidental to office. 19. RELEASE. RENT. not remove for what. 185 RELATION. REVOCATION. or by the court. REPAIRS. discharges liabilities. married women. 138. 42. 13. may resign independent trusts under same instrument. 18. must be accepted by all. a necessary feature of investment. RESTRAINT. must resign whole trust.

beneficiary duty to convert into trust investments. to trustee. by order of court. cannot restrain self from alienation. SETTLEMENT. peculiarities of. trustees' set off against beneficiary. be entrusted with securities when. on death of title whom. 55. 25. may be a trustee. 44. 88. 13. SETTLOR. 75. SOVEREIGN. power under statutes. for SINKING FUND. care of negotiable and non negotiable. purchaser's responsibility for purchase money. self. 27. 74. passes to 44. SOLE TRUSTEE. 76. trustee cannot purchase at. may be ordered by special law. 88. 48. management irregular. on should examine. 56. 57. cannot sell to relative or partner. 87. 46. SALE — continued. SIGNATURE " AS TRUSTEE. handle income not principal. bonds purchased at premium. 27. 128. 128. 147. disaffirmed consideration must be returned. 58. 75. 143. 87. . SERVICES. 154. 139. 134. 75. 59. debts against credi- by whom and when. SINGLE TRUSTEE. 135. See Compensation. right to possession of. may may may collect money. of. must not release. 43. 87. may appoint unfit trustee. 56. 1. 142. 139. 58. 57. 58. may do what alone. SET OFF. 59. 43. 46. 64. SECURITIES. under cy prh doctrine. representation of not binding. 89. 42. 112. on death of trust vests in successor. damages. may examine. trustee can not set off private tor of trust. unauthorized confirmed when." effect of. 57. 64. 27. 65. 60. 15. 2. 83.186 INDEX. purchaser takes risk of regularity of. 120. demand of sufficient.

110. 129. 151. 66. trustee has general press. 55. 99. 138. sale under. beneficiary is not. 43. 23-24. 85. SUCCESSOR. not liable for acts of predecessor. against trustee. 89-90. 138. 73. 109. STATUTE. See Farming Stock. SPENDTHRIFT TRUSTS. 131. SPECULATION. 24. 23. provide for sale of trust property. 83. 27. 64. 187 SPECIAL LAW. 24. See Limitations. 90. aiding in breach of trust liable. compromise of. SUBPOENA. 64. in what jurisdiction. 66. SUIT. 141. 98. 150. what are speculative investments. 153. 98. 153. not. of limitations. 140. 131. STRANGER. 85. beneficiaries' rights in actions. 63. interest of possible payees. 155. 154. admissions in are binding when. expense of allowed. may . beneficiary is trustee is. duty to necessary parties to. may sue or defend in trustee's name. . 149. STOCK. 153. 23. 154. not bound to receive property tendered. where had. dividends of belong to whom. beneficiary concerning trust property. 24. 85. gets title how. 122. 89. trustee is liable as. STOCKHOLDER IN CORPORATION. 56. should indicate trust on their face. effect of taking the property. investments improper. 153. cannot require information from trustee. 24. 155. 63. STOCK. See Liabilities. 152. 56. 152. should examine predecessor's accounts. property followed into hands of. as an investment.INDEX. with trust funds improper. 10. SPECULATIVE. 83. 64. certificate should stand in joint names. investments should be converted. 143. 140. 128. 150. liability for transfer of. 74. trustee's liability to. power to sue and defend. 85. 97.

16. duty to pay. from principal and income. TERMINATION OF TRUST. 83. 12. liable for acts as trustee when. vests in others. 43. possible recipient not interested in trust. by conveyance to beneficiary. SURETIES. power and duty to support beneficiary. 32. trustee takes principal. trustee is personally liable. appointed when. 61. 66. 67. how apportioned among special power often given. 38. on death of trustee. 66. office 5. 146. 158. of lease trustee may grant. 69. beneficiary may be liable how apportioned. 69. 66. 85. 62. TIMBER. 37. 130. 38. principal or income. 63. 119. 83. trusts for. SURVIVING TRUSTEE.188 INDEX. trustees are not. 115. may vest by provisions of settlement. 4. what estate is necessary in real estate. 25. 25. commissions on. 67. on disclaimer of one. to property should stand in joint names. 144. TENANTS IN COMMON. decree for conveyance to new trustee. 37. 138. when court will review discretion. trustee takes absolute to personal property. 107. when income or TITLE. TENANT. expense of surety company allowed. . 9. trustee takes to property necessary to complete appointment. 70. 68. of beneficiary or family in spendthrift trusts. when others have duty. 154. 84. where taxes are payable. TERM. should attorn to new trustee. 37. 65. beneficiaries. THINGS. 10. none in code States. 10. 29. usually discretionary. for. 68. takes title passes to survivors. 145. 66. may be required on trustee's bond. trustee's discretion as to quantity. 9. on bonds of executor. TEMPORARY TRUSTEE. 86. 6. TAXES. 67. SUPPORT.

See Alienation." agency. 146. 13. trust property into hands of stranger. 76. TRANSFER OF TRUST PROPERTY. executor performing such duties is a trustee. See Removal. 6. 145. right to possession of property. See Resignation. should be capable. 16. temporary trustee may be appointed. differs from may be refused. is owner of trust property. any person intermeddling is trustee. " on death of trustee. cannot abandon trust. TRANSFER OF STOCK. See Disclaim. TRUST PROPERTY. 49.INDEX. to TRANSFER OF PROPERTY. may resign. liability for. 15. of trustee. 14. who is unfit to be. 13. 42. 26-27. 74. 13-15. 152. enforced where. Remainderman. TRUST. managing and passive trustees. 119. may be a trustee. 11. 10. is entitled 11. 140. the estate of. 155. 120. See Possession. 74. TRUST COMPANY. See to new trustee. remainderman. must exercise trust himself. beneficiary not liable in. appointment of. TRUSTEE. TORT. how it passes to successor. passes to remainderman how. can take no benefit from ownership. may vest in to property. 9. 10. who of two sets of trustees who can be. can refuse. 26. See Death. 154. want cannot be delegated. 23. 153. 10. trustee liable in tort. 17. advantages and disadvantages of. 43. 150. removal of. 22-23. 48. 84. See Estate and Title. will not fail for See Disclaimer. TRACING. . See Property. new trustee by statute. See Appointment. 151. 12. to act. 74-75. TRANSMISSION OF ESTATE. 189 TITLE — continued. 6. TRUST TERMINATED.

65. should be converted. 72. . 1. See Single Trustee. TRUSTEE. attorney or broker when. may lose UNFIT TRUSTEE. 18. cannot be abandoned. confirmed when. 72. is a personal confidence. 25. TRUSTEE — continued. when new compensation. pp. 20. See Table of Contents. 58. may do what. gifts from beneficiary. powers. xii. 14. may be ended how. See Fraud. 28. may be removed. compensation. p. trustee in place of. See Compensation. 1. 152. discharged how. xiii to xvi. 15. See Expenses. signature " as trustee " effect. single trustee is death of. 57. be appointed by creator of trust. 72. duties. must keep accounts. 19-21. a relationship. 74. 145. 17.190 INDEX. 73. cannot purchase at sale. TRUSTEESHIP. . 90. cannot have adverse interest. his expenses. 19-21. 40. See Accounts. 1. 72. 71. 32." on certificate is notice. See Death and Executor. may get instructions of court. UNDIVIDED PROPERTY. UNFRIENDLY TRUSTEE. See Delegate. See Successor and Death. TRUSTEE. See Liabilities also Table of Contents. removal from when. UNAUTHORIZED SALE. 17. may act as counsel. passes to whom. pp. xvi. xi. liabilities. may be resigned. not always desirable. good faith required. 73. 27. unfit to be a trustee. 7. 16-21. 69. who may is UNFAITHFUL TRUSTEE. See Instructions. not an agency. when and how. 128. UNDUE INFLUENCE. contracts with beneficiary. " is 120. See Table of Contents. 23.

VOTE. WASTING INVESTMENT. is partly income. 108. 109. 38. 90. 24. 115. See Title.INDEX. 132. 14. 86. trustee enjoined 142. VESTING OF TITLE TO PROPERTY. 19. 27. 105. converted. 91. beneficiary not qualified to as owner. 147. chargeable. from voting against beneficiary's interest. taxes on how should be converted. VACANT LAND. should be converted. beneficiary's right to use trust property. may be trustee for husband. 90. UNPRODUCTIVE PROPERTY. 89-90. cause for removal of trustee. USE. 191 should be converted. trustee votes as stockholder. dividends on apportioned. trustee cannot use. WASTE. WILFUL BREACH OF TRUST. . 19. WIFE. cause for removal.

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