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THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES
SCHOOL OF LAW
A TRUSTEE'S HANDBOOK.
.. . OF THE SUFFOLK BAB THIRD EDITION BOSTON LITTLE. AND COMPANY 1907 . HARV. BROWN.I. I.B..H.TRUSTEE'S HANDBOOK BY AUGUSTUS PEABODY n LORING A.
1907 Br AUGUSTUS P.Copyright. BOSTON. U. LOBING All rights reserved 8. 1898. . A. PAKKBILL & Co.. 8. J. 1900.
1907.PREFACE TO THIRD EDITION. It has been found necessary to 366 additional P. decisions concerning the matters covered in this Handbook since the last edition have it necessary to rewrite and enlarge many parts particularly those parts treating the trustee's liabilities to strangers. THE numerous made of it. cases. 735227 . August 12. LORING. AUGUSTUS BOSTON. extra dividends. and interstate cite law.
.. Edward A. and this I his valuable assistance in digesting cases have to thank Mr. simply and con- cisely. I wish to acknowledge my obligation to the writers of the many admirable text books which bear on my subject. Jr.PREFACE TO FIRST EDITION. is for general as well as professional the citations are illustrative. with an apreaders. THIS little book is meant to state. proach to completeness only where the law is doubt- As the book But pains has been taken to notice the peculiarities of local State law. and to which have referred often for a fuller discussion of principles and a more complete citation of authorities . especially where ful or conflicting. volume through the AUGUSTUS PEABODY LORING. The lack of a Handbook of this kind has led me to complete and publish what were originally notes for personal use merely. and the relationship existing between the trustee and beneficiary. Howes. dependent on statute. all of I which I have used freely. for and passing press. the rules which govern the management of trust estates.
ed. ed. 2 vols." " Perry.." is cited as " Flint. THE citations : of the following text books are thus abbreviated Lewin on Trusts." Perry on Trusts. is cited as Underhill on Trusts and Trustees. Amer. ed. .NOTE.. 4th Amer. Wislizeuus." Flint.is cited as " Underhill. is cited as " Lewin. 9th Eng.. Trusts and Trustees.
form of disclaimer is necessary It should be affirmative and decided By deed. w MH* i xxiii PART I. . may disclaim But dry trust may vest in representatives of sole .CONTENTS EMI TABLE OF CASES . I. THE TRUSTEE AS AN INDIVIDUAL.. 3-5 3 trustee . 2 Cannot come in competition with trust estate Cannot delegate the management Cannot render expert services freely His only reward II.. .. In Probate Court when instrument special No 3 3 3 is a 4 4 4 4 5 5 5 5 will Must disclaim whole May trust disclaim executorship or trusteeship Exceptions May disclaim one of two separate trusts Effect of disclaimer Vests title in other trustees Joint power lost by . THE OFFICE OF TRUSTEE Because he is NOT ALWAYS DESIRABLE . 2 2 2 2 3 compensation DlSCLAIMEB Acceptance necessary. The terms of the trust instrument govern the trust It is therefore important to know and follow them . . Is restricted in his dealings with the beneficiary . Preliminary. 1 1 .
.X ACCEPTANCE Should be formal CONTENTS PAOB III. or beneficiary unfit 16-17 Relationship objectionable . -. .. An person intermeddling with trust property executor investing and performing duties of set of trustees 13 14 trustee Where a second power VI.. 7 7 8 How THE TBUSTEE ratified is APPOINTED . bad character. Must be by court when is 8-9 8-9 . . appointed under 15 Any 15-17 CAN BE A TBUSTEE person of legal capacity to hold property and 15 exercise power 15 Such person may be a corporation 15 Who cannot be a trustee 15 Lunatic and infant may be " " " " .- - fl v ... WHO . ...... 6-7 5 6 6 6 7 7-13 .. 16-17 Trustee should be capable and fit 16 . . APPOINTMENT . 13-15 . trust fails for want of a trustee Temporary trustee may be appointed Appointment under terms of trust instrument No . What is construed as an acceptance Presenting will Doing any act to execute trust Not disclaiming in reasonable time IV. required : 13 WHO Any is TBUSTEE .. . Court will appoint when there no adequate pro9 vision in the instrument when donee of power does not 9 act 9-10 court will have jurisdiction 11 Appointment not complete without title to property What vest by terms of trust instrument vest in new trustee by statute Decree may order conveyances Appointees of court must give bond Without sureties when May May 11 11 12 12 12 Amount V. Bankrupt.
unless prejudiced or unreasonable For technical breach of trust For breach of trust through mistake Caprice of beneficiary 24 24 24 24 24 24 . 19-24 trust or completion of duties office vests in survivors If sole trustee dies or is removed. in. must resign both unless devisable 20 20 20-22 21 21 21 ..... . . 19 19 Resignation Must be accepted either by all interested Who are interested for this purpose Or by court.. . For non-exercise of or manner of exercise of discretionary powers.. 22 Probate Court has statutory jurisdiction . What court Where there is more than one trust in same strument. .... office vests in successor Cannot abandon trust By extinguishment of By death or disability . .. 18 18 18-19 19 19 DEVESTMENT OF OFFICE . Removal 22 22-24 Matter is addressed to discretion of court ... 22 22 Any court of equity in absence of statute . Xl turn 18 VII....CONTENTS APPOINTMENT OF 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 VIII... All interested in trust are parties 22 Removed for Waste and mismanagement Wilful breach of trust Property insecure Unreasonable prejudice Unreasonable disagreement Will not remove 23 23 23 23 23 For poverty Unpleasant relations with beneficiary .
CONTENTS PART I.. What Commissions allowed in various States 35-36 35-36 36-44 39-44 TRUSTEE'S ESTATE 44-52 In real estate. use the property buy the trust property borrow trust property buy up claims at discount May in some States render estate expert services for hire.. 44 In personal.... only what is needed ... absolute 44 In Code States. cannot be severed 45-46 . no title. Entitled to reasonable compensation. and is holder of power only 44 Is entitled to possession at law 45 Possession of beneficiary is that of trustee 45 Estate is joint... . THE INDIVIDUAL AS TRUSTEE.. INCIDENTS OF THE TRUST ESTATE. in others not Must account for any benefit received . . 25 25-26 26 26 27 27 28 29 30 31 The legal and equitable estate in every trust OWNEBSHIP OF TRUST PROPERTY ABSOLUTE IN TRUSTEE Incidents of ownership fall to trustee .. is . .. 32-35 32 32 32 32 33 34 34 35 OWNERSHIP SHOULD NOT BE A BURDEN Can charge legitimate expenses. Suing and being sued . No right of action if trustee barred Is stockholder in corporation Is personally bound by contracts Is liable to taxation Liable as owner of property Is liable in tort and criminally OWNERSHIP NOT BENEFICIAL Can take nothing but established compensation Cannot Cannot Cannot Cannot Cannot set off debts in equity . . . What are .. II..
. Special powers 54 54 54 54 54 55 55 55 55-56 56 EXECUTION OF POWEBS The essential part of a power . ...... . WHAT POWEBS As A TRUSTEE HAS incidental Granted by court or statute Granted by maker of trust 52-53 53 53 53-54 VESTING OF POWEBS When powers do not vest in trustee Vest in all trustees jointly Pass to successors and survivors when General powers .... .. IN GENEBAL.... Forfeiture On death of trustee Vests in survivor On death of sole trustee vests in General devisee when Heir or personal representatives when II. . .. who is and is 46-47 not 47 Title will not pass under general assignment . . essentials 56-57 57 57 Can delegate non-essentials ... What powers treated 52 . . Effect of conveyance Purchaser for value without notice. Alienation Inter vivos .. . Xlll PAOB convey at will.CONTENTS TRANSMISSION OF THE TBUSTEE'S ESTATE.. ..... 51 51 51 51-52 51 52 POWERS. -. how May 46-52 46-51 46 . . 48 Cannot be taken for trustee's individual debts 48 Subject to execution for trust debts 49 To what extent 49 Set-off 50 Title passes to remainderman even if equitable 50 Passes to successor. Joint execution necessary Exception about collecting money DELEGATION Cannot delegate ..... .
................. 58-59 58 ............... Will set aside for fraud .... Under statutes By when PLEDGE OB MOBTGAGE Not a general power When given by statute Court will not order court Purchaser takes risk of what Purchaser must see to application of purchase money 70 71 71-72 71 72 72 Power to May does not include give power of sale mortgage sell 72 72 ................. 64-73 64 65 66 68 68-70 69 69 69 POWEB OF SALE Not a general power Usual power in trust instruments Usual power under statutes Court of equity may decree sale EXECUTION OF POWEB Must be accurate Defective aided when.........XIV CONTENTS PARTIAL OB DEFECTIVE EXECUTION ........ 60-63 Will not inquire reasons ........ sary Consent.. 64 64 64 III... 59 Will control obligatory powers .................. PARTICULAR POWERS........ 58 ............. 59-60 Will ratify when . ... 61 61 May consider reasons given . 60 Extent of control of discretionary powers ..... ............... 58-59 CONTBOL OF COUBT OVEB EXECUTION . 63 64 EXTINCTION OF POWEBS ...... 63 Practically require reasonable exercise .............. ....... 58 By death of person having discretion Expiration or accomplishment of trust Exhausted by what .......... etc if Defective execution aided for purchaser Substantial execution of essentials confirmed Literal execution of prescribed non-essentials neces- ..
. one beneficiary 81-82 82 82 83 MISCELLANEOUS Revocation Appoint successor IV. DUTIES. DUTIES TO THE BENEFICIARY OWING TO STATUS 83 unable to care for self 83-84 When others have duty to support 84 Beneficiary is not a stranger in matters outside of 85 trust Contracts with beneficiary 85 Must not take advantage of position 85 Such transaction may be set aside 86 86 May accept employment from beneficiary To support if ..CONTENTS PARTITION AND EXCHANGE XV PAOI 73 LEASING leases are binding Special power to lease Liability on covenants What What leases trustee can make 73-75 73 73 74 75 To SUE AND DEFEND 75-76 75 75 76 76 May incur expense All trustees must join What admissions bind May compromise To CONTEACT Express contracts bind estate when Trustee personally bound by contracts Signing as " 77-78 77 77 How trustee trust estate is reached " 78 78 MAINTENANCE AND SUPPORT General power when Special power how exercised Mainly discretional General power exercised Discretion as to amount Discretion as to amount reviewed when Discretion as to apportionment when more than 79-82 79 79 how 79-80 80 81 81 ..
. . . Distinction between handling income and principal . 96 96 97 V. Must not aid adverse claimants Must not come in competition Must consider interests of trust management Must prosecute suits Must not release securities 86 86 87 87 87 87 88 88 exclusively in its 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 . MANAGEMENT OF FUND. WHERE THE TRUSTEE is IN DOUBT AS TO HIS DUTY 96-98 96 May notify beneficiary May get instructions of court where duties are doubtful Cannot get instructions to enlighten ignorance Proper form of raising questions . . What may be trust property MUST TAKE STEPS TO SECURE PROPERTY AT ONCE Real estate.. Receipt for to settlor May not come into possession at once Must examine predecessor's account ..XVI CONTENTS PAG* DUTIES IN EXEBCISE OF OFFICE Must exercise utmost good faith in execution of trust Must be loyal to its and the beneficiary's interests .. Place title in joint names Take possession of 98 98-102 99 99-100 100 100 101 Personal property. 88 88 89 90 89 DUTY TO ACCOUNT Must keep separate and Must 91-95 accurate accounts 91 91 91 91 Books open to inspection of beneficiary settle accounts periodically Entitled to settlement of account Form of account Effect of account Account in court 92-93 94 94 95 95 .. Account between parties Expense of accounting .
. . what are Determined by statute Determined by court Classes of investment disapproved . CONVEBSION OF REAL INTO PERSONAL OB THE REVERSE convert without authority a conversion Authorized by statute Authorized by court .CONTENTS Transfer of stocks necessary Notice in case of equitable claims Should sue on all claims PAOB 101 101 102 CASE AND CUSTODY Real estate. .. possession 102-105 Should require tenant to attorn or take 102 Personal property. 109 110 110 110-111 . .. ft .. . . INVESTMENTS 109-124 invested at all times Must keep funds Liable for simple interest Liable for compound interest when Change investments when Must invest securely and to get current return Trust investments. . speculative. partnership. . Trust chattels 102 103 104 104-105 Money Non-negotiable securities Negotiable securities CONVEBSION Usually necessary to some extent What should be converted 105-109 105 106-107 Business. unproductive.. undivided. May not What is Cy pres Infant's estate Implied authority . or generally property not 106-107 trust securities Liability for delay What need not be converted Maker's reasonable investments Securities at a premium Property to be enjoyed in specie 106 107 107 107 107 107 108 108 108-109 109 109 109 109 . 115 . 113 113-115 . . . Ill 112 .
Xviii CONTENTS PAU exercise a sound discretion What is sound discretion Must 116 116 Determined by condition of vesting affairs at time of in- of security Proportion in one security Investments allowed in various States Margin 116 116 116 117-121 121-142 121 122 123 PRINCIPAL AND INCOME Need of dividing Receipts. The estate paid in is principal Proceeds of conversion of securities . ... 142-145 142 . generally income require apportionment Bonds bought at premium Apportionment at end of life estate May PAYMENTS Discharge of encumbrances Alterations and repairs When principal and when income On newly acquired property Taxes. Care of property Brokers' charges 137-145 137 138 138 138 139 140 140-141 141 141 142 142 Legal expenses DISTBIBUTION At risk of trustee . Damages recovered Grain 123-124 124 124-127 125 125 125 126 126-135 126 127-134 128-129 135 135 136 136 136 136 and loss Advance or depreciation Timber and gravel Chattels in value Farming stock Accumulated income Dividends.. On wasting Current investment Extra dividend Stock dividend Delayed dividends Rents Interest. Premiums Proceeds of policy Expenses. Ordinary Betterment and extraordinary Insurance.
145-147 147 To STBANGEBS.) Criminally for embezzlement To BENEFICIABIES Are joint and several Each transaction stands alone For neglect of duty Whether damage is directly or indirectly the result 147-156 147 147 147 For crimes of strangers where there Not for act and default of co-trustee is neglect Unless one joined in the breach of trust . .CONTENTS x'lX have decree of distribution Who bound by decree Should not be by fictitious account Payment to an attorney May ..-. TRUSTEES' LIABILITIES. . Or contributed by neglect Or gave joint bond Contribution from co-trustee For errors of judgment In investing Paying to wrong person Must use average discretion Otherwise where discretionary power May be limited by terms of trust Measure of damage Interest simple.. supra. (See Incidents of Ownership. PAOE 143 143 144 144 Compensation for ... : ..> ... Compound when be required to replace property Liability terminated May By death Release Account and apportionment of successor Statute of limitations Insolvency Successor's taking over property ..... ... . . . . . . 1 . 148 148 148 149 149-150 149 151 151-154 152 152 152 153 153 154 154 154 155 155 155 155 156 156 155 . . 145 VI..
. PAOI WHO MAT Who is BE A BENEFICIARY the beneficiary 157 158 II. THE ESTATE OF THE BENEFICIARY Incidents of the equitable estate Will descend like other property 158-168 159 160 160 160 161 Dower and curtesy May be alienated What estate passes Priority Notice Restraint on alienation of modern jurisprudence Exception as to married women Rules in various States Tendency Spendthrift trust made by cesser Support of family Condition over on alienation III.XX CONTENTS PART I. THE BENEFICIARY. 171-172 173 173-175 175-176 176-179 176 177 177-178 178 RIGHTS AGAINST STRANGERS To constitute transferee of property trustee May follow as long as can identify Money may be followed . Where enforced 168-179 168-169 169 How enforced of trust . . Can compel what Damages for breach Special rights Right to information Right to income Right to support Right to conveyance Right to possession 169-170 170-171 171-176 171 Rights lost By release Assent Acquiescence Statute limitations IV. III. RIGHTS OF BENEFICIARY AGAINST TRUSTEE . 179-184 179-182 180 180 . . . 161-162 162 163 163 164 164-166 166 167 167-168 . . . .
CONTENTS BAM Must elect is whether to hold trustee or follow . . The construction of the settlement The execution of the trust Where the trust exists the trustee is appointed by the settlor the trustee is appointed by judicial decree Non-resident trustee . What notice of trust Rights where disturbed in possession V. . Foreign investments Taxation . INTERSTATE LAW. . When When . Rights to pursue stranger aiding breach of trust . 186 187 188 188 189 191 193 193 . LIABILITIES 182 182 182 183 184 PART IV.
Hubbard Bacon v. Granger v. Mercantile Insurance Co. v. 140 169 108 7. 40 62 177 95 183 Bate v. 185 Bateman v. Abbott. Dunning 55 87 Benjamin v. 6. 63 v. v. Cummings 56. Hallett 126 Ball v. Bennett 174 v. 193 94. In re v. Foote Bailey. . Woodward Benedict v. Breeding 118 Aydelott 189 Ayres v. Bacon Badger v. Ex parte v. Willing 145 Baring Barker's Trusts.Allis' Estate v. 57 v. McKinlay 132. 45 150 Beatty's Estate Beck Lumber Co. Joy 36. 182 v. Hooper 121. Briggs 67 v. v. Hughes L. Slebel & Co. Alston. Amory v. Belknap 161 Belknap Belmont v. Ansley Noble Pace Caswell Anthony Arguello. Rupp 48 90 Belchier. Colley 178 v. Lorillard 67. 185 39. Baltimore Aldrich v. Aldrich Barton Allen v. Babcock v. In re Arnold v. Dow 165 121 Barney v. Spencer Bahin v. 62. 85 121. Albree 134 Gen. Gill Bennett v. 13. Gillette Alley v. 68 29 103 11 40 v. Daley v. 95. Fidelity & Deposit Co. 135 v. Safe Deposit & Trust Co. 136 123 149 103 115. Gilbert 60 Arnould v. Forman 71 Bartlett v. AJden Angus 14 67. v. Grimstead 111 106 Atkins.TABLE OF CASES PAOI PAGE Baer's Appeal A. In re v. In re Ames Armstrong Scudder v. 67 Barbour v. v. Davis 58 Bates v. Bartlett 160 Bassett v. Green v. Co. Bagshaw 47 50. New England Mut. Barker 170. Underbill 150 Bayard v. Hartley 37. v. Landerfield 15 v. In re Armory Board. Farmers' & Mechanics' Bank 182. Parsons Barrell v. 183 Beach v. Pet'r Brady Adair v. 27 Barnes v. Peirce 94. Gleg 45. 87 B. Adams Albert v. 55. Beach 26. Ailing . 160 v. 85 Bailey's Trustee Bailie v. 183 174 165 Baker v. 41 Barrett v. Brown 32 v. 177 137 182 62-81 94 32 59 84. Badger 61. v. 68 v. Brimmer v. Tibbetts 30 Balch v. Mather v. In re 61 154 Bemmerly v. Pct'r v. O'Brien 54 Beloved Wilkes' Charity. v. Batchelder Central Bank . Abell Lloyd 120 44 151 54 163 Adams v. Lawrence Ailing v. Alford 110 Att'y v. 41 v. Bailey McWhorter Barroll v. In re 16 Barker v. Proprietors of Old South 180 Meeting House Aubert's Appeal 186 119 Avery. Lowell Anderson v. Ins. 95.
181 v. 84 v. King 188.XXIV Bennett v. PAM Bradshaw 73 158 175 Brandenburg v. Bradfleld 85 Brice v. Oglesby 136 Boyer's Estate v. Briscoe v. Walker 118 Bullard v. 161 72 Bridges v. Seeger 56 Bowker v. Doyle 7. Lester 125 Burnham v. 126 Board of Charities v. Carson 4. Savage 45 187 Bovey v. 49 Bradby v. State 40 63 Brittlebank. Ldckhard 167 20 Bogle v Bogle Bohlen's Estate 66 Boon v. Wright 118 Browne v. Louis Sheet Metal Co. Longman 15 Briggs v. Broughton 34 Broughton Brown v. Co. 134 122 Billings v. Boys 107 Boys Bradbury v. Boston v. Jackson 39 141 Brough v. Hall 72. Warren 108 Billington's Appeal 187 Bingham's Appeal Bircher v. Gallatly 106 v. Thorndike Brander v. 55 . Mercantile Trust Co. Winton 63 Bostock v. Brander 126 Braswell v. Chicago. 160 Burnett v. Butterfleld Traders' Nat'l Bank 13. Cook Carruth v. Higgins v. 38. Beard 153 Bourquin v. 139 Calhoun v. 88. 179. Wyndham Bentley v. Taylor Busk v. Grou 134 Brimley 128. Rohbins Boston Safe Deposit & Trust Co. Cann Canoy v. In re Bosworth. Laws Blair v. Macgill 164 v. Brown 138. Bourquin 87. In re Broadway Nat'l Bank v. St. Lambert's Adm'r 14 v. 75 68 Blacklow v. & N. Cross 178 Bull v. Ackerman 91 BIythe v. Birchmore 36. Bridge Bridge 139. 85. 150 Black v. Brown Carney v. Caldecott v. Ricketts 33 v. Aldrich Berger v. Chandler 97 166 Bullock. Desmond 168. 170 Bradford v. I. 182 Blauvelt v. Ligon 74. Banuelos 12. Pierce 37. 141 v. 79. Walther 181 Bird v. 38. Andrews 180 Bradley v. French 116 v. Whitchurch 96. Mixter Bostwick. Bradstreet v. Abraham 60. Stokes 151. McGrath v. v. Sproule 128 Boulton v. Evans 181 Bowes v. Morehead 125 Bresee v. In re 76 66 84 96 Bouch v. 61 Biddle's Appeal 37. 178. Penny 145 Bowers v. Byron Carpenter v. Mandeville's Ex'or 78 77 Bushong v. v. Floyer 148 57. Fane 14 74 57 60 Bethel v. Earth 181 102 Burr v. Wilcox 147. 21 Bowen v. Chesebrough 0. Polk TABLE OP CASES PAOB 31 6. Thompson 33 Brooks v. Connecticut Life Ins. Wheate 159. Ferguson Campbell v. Berry 80. In re 11 Bumgarner v. 190 80 Bradlee v. 147. Miller Cann v. Cogswell Burgess v. 149. 18. Carruth Carson v. 22 14 . 169 Boursot v.Adams 164 Bronson v. Dixon Bergengren v. Rollins 73 Bostick v. 107 43 Boyd v. 95. Troutman Carey v. 189 v. 82 v. Green 61. 125 118 109 46 26 174 58 5. 176 v. Light Boat v. Pegram 37. Aldam 15 180 Byrne v. Duff Bertron v. 96. McEwen Burwell v. Smith Bowditch v. 150 v. Railroad 183 Birmingham v. 108 Borel v. Bull 61 v. Cargill 185 Blake v.
Deveaux 162 v. Boyd 89 Colburn v. Daggett v. 62. XXV PAOB 81 Collins v. Dixon Cobb v. Gates 99 Cogblll v. Jordan 162 123 In re 34 103 Corya v. Corya 61 Costabadle v. 88. Carew 135 v. Cone Conger v. 189 Cooley v. Manton Monkhouse Corsellls. Claflln 162 Clapp v. 117 v. Chase 62. Platt 182 v. Fassltt 56. 150 67 v. Conger Connally v. Johnson 41 Chadbourn v. 189. 157 32 Colgate v. Hogemann 143 Cleaveland v. Cutcheon 70 Cassell v. 190 v. Appellant (Massachusetts) 63. 22 Craig v. 62. Wright 76 Clarke v. Smith 10. Hallett 73 v. Hearn Crawford County Commis180 sioners v.TABLE OP CASES 174 Gary v. Patterson 33 Creveling v. Bull 62. Hayes 136 v. 112. Janes Davis' Appeal (Pennsylvania) 43 Davis. Cordla 158 v. Goodwin Copeland Corle v. v. In re Cherry t\ Richardson Chester v. Stoneham 163 Cowx v. Bramlitt 184 Coffman v. Lyons 62 9 78. Hammersley 96. 188. Heatley Chambersburg Ins. Fritts v. Snell 186 Codman v. 161 Cheyney v. v. Blacklngton 155. 63. Foster 122 Cox v. In re 16 168. In re Chestnut Nat'l Bank v. United States Trust 186 Co. Wellesley 67 Cowman v. Geary Chlsholm v. Scarlett 71 Coombs v. 100. Chadbourn 7(5. 146 132 Connolly's Estate Conybeare's Settlement. Gleason Central Trust Co. White Dagley v. 184 Cromle t. Wright Daland v. In re 82. Grant Coleman. Clark 45. Iowa City 40 V. Cllve 103 Clough v. 62. Croft 50 Davidson v. 116 67 Pet'r . 131. 153 125 Cowley v. 133 165 Cochrane v. Ross 144 Cathaway v. Serverson Colllster v. Krell 119 Coffin v. Craig 149 Crane v. San Rafael Turnpike Road Co. Tolferry 4 152 38 Dally v. v. In re 178 Curtis v. Colquhoun 182 Cowper v. Colgate Collier v. 21 Cruger v. Cox Crabb v. 190. 63 Cross v. Searls v. Dillon Crocker 14. Munn 34 161 77 72 50 75 172 . Colton Cone v. 192 v. Rolfe Chesterman. & Trust Co. Slead 65 Casey v. First Unlversallst 45 Society Chase v. Bowles 62 Catherwood's Appeal 11 Cauhape v. 153 20. 166 v. Osborne 136 130. Cummins 5 Cunard's Trusts. 97 145 Chadwlck v. 169 Smith Chapin v. 169. Noonan 140 Darcy v. Costabadle 59 Courtier. Halllday 24 Estate Gulp's 112 Cummins v. In re Cousins' Estate 117. D. 190.. 92. Beers Clark 113. Ingraham v. 169. Young 60. Barnes 181 Cavin v. Canavan 118 Casparl v. Draper 44 Cleveland v. Chatham Rowland Chawner's Will. Williams 130 174 Danahy v. 142 173 Claflln v. State Bank 168 Cllve v. 80 Colton v. Fidel82 ity Ins. 191 181 Cushman v. Fant 43. 84. Lakin v. v. Co.
Pendleton 175 Faussett v. Denholm v. 130. Phillips v. Naglee 60. 62. McKay DePeyster v. 83. Drew Dillingham v. Dunn 160 v. Harris 26 178 121 130 145 33. Boston v. 76 Ellis v. Wilbur 104 Dyer v. Diamond Wheeler 28. 132. Ashley In re 48 Doe d. v. 155 17. Nat'l Broadway Bank 188 First Nat'l v. PAOI Earp's Appeal Charles River Branch Railroad v. Rice 161 Fidelity Co. 156 Fairbanks v. 129. Nel33 son Dry Goods Co. v. Bank of Carlisle Lee v. 134. Dickinson's Appeal Dickinson cuit Co. Leeds 29 Dorr v. Merriman 181 182 3 36 26. Somes Dodd v. Deg DeKoven v. Tarns Davoue v. 144.XXVI Davis TABLE OF CASES PAGE v. Kuhl 181 Ellig v. 94. Raikes v. 26 158 136 146 134 134 60. Hartford & Erie Railroad 5. 116 Bis66. 103. Higgins 162 Field v. Langley 77 v. Ellis 37 re 94. Tuke 36. 78. 177 52 12. 133 v. Hendershot Dexter v. Schoe89. Wilkinson 20. Anderson v. Batchelder 190. Martin 23 Disbrow v. Wainwright 4. In 72 v. 70 Evans v. Mclntyre 187 Enohin v. Dixon v. 134 Elting. v. Eakle v. Haven 187. Seibert v. Natick Deg v. Percy Dodds v. Cotting v. Dover v. 128. 98 Fairland v. Winship 50. Sargent v. 49 Fanning v. Walker Denike v. 135 68 111 33. Fanning Dean v. Lake Street Elevated 129 Railroad D'Ooge v. 181 Fidelity Insurance Co. 192 187 English v. Middlesex Banking Co. Bullock 121 Felch v. 11. Lanford Dedham v.. Hooper Dowse v. . 48. Greenwell v. Pike Ely 118. Wylie Ervine's Appeal 67. Turner Drake v. Gorton 31. 37. John Weatherhead 55 Everett v. Wellesley 174 125 177 79 120 Bank v. Carpenter v. Jackson Davison v. 22 65 Dodson v. Edwards 97. Disbrow 182 Dixon v. Brunt Farmers' Loan & Trust Co. Field Dunglison's Estate Dunn v. Mortimer 167 First Nat'l v. Coburn Harman v. Fisher Wister 125 168 . Durkin v. Emery v. Stone Draper 154. 78 Feltham v. New York 114. 39. Price 14 Fernstler v. Riley Finlay v. 77 162 49 172 147 22 191 48 190 169 62 148 183 118 190 108 104 85. v. Alsop Denegre v. Boston. Heard 124. Crane 119 Fenwick v. 20 84 180 Edwards Kidman v. 76. Bowman Eisnew's Appeal Eldredge v. 92. Glover v. Ingraham Earl Cowley v. Barker 87 v. Denne 89 Fay v. 122. Gideon Dublin Case 15 Fidler v. 46 33 Docker v. 107 Evangelical Synod neich Evans' Estate v. v. E. 63 110 Eliott v. 140 97. 20 v. Main Dodkin v. Ferrers Devin v. 131. Homer F. 7. Sparrell Ellicott v. Downes v.
v. Is! Fleming Flowers Foil v. Elsley v. Foster v.TABLE OF CASES PAOK Fitzgerald. Fletcher v. Paine In re Carmine Gisborne Gillesple v. Cotting Forbes v. Cockrell v. Garland Garvey v. v. Garvey Gasquet v. Tuttle Gisborne v. Bailey t. v. Cook Frellnghuysen v. In re Gibbons Gilford v. Earle Freeman v. Eat parte George. Pollock Geaves. Branch Fritz v. In re Gerry. Turner Furness v. merit Co. Town stead Foster v. Western Freedman's Co. Franklin v. v. . Priest Garland v. Brown Forster v. Gamble Gibson Garesche v. Osgood Franklin Savings Taylor Frazer v. City Trust Co. Wilson Greene Franklin Newsome Foote v. Mahon Thompson Gllkey Gill. Fyler G. Clinton Co. Smith Storrs Fox v. Flint v. Winslow Frierson v. Nugent French v. Fryberger v. v. Forward v. Smith Gil more v.. Davies Forward Fosdick v. Garesch6 v. Leupp Fyler v. Trust Co. Lothrop Ford v. In re v. XXV11 Rhode tal v. Levering v. Westgate Frere v.
XXV111 TABLE OP CASES PAGE .
114. Somerville 135 33 Kyle v. Mildmay 51 v. 160 112 Knight v. 133 Lor ing v. Sankey Judson v. Law ton 112 v. 144 Lever v. Jenks 69 v. Prescott 144. 182. Brodle 17S) 72. Barrows 64 Kendall v. 187 v. Welton v. v. Todd 08 Klmball v. Robarts 71 Lent v. Pierce 92 Kemble's Estate 48. Hewlett 164 162 v. 89. 188. 103. Harrison Leland v. Linton v. Patton 85 v. Bellord Lincoln v. 138. 134 Lerow v. Nobbs 103. 187. Bernard 55 Lev! v. Crawford 109 Lemen v. Scott 91 Jones' Estate v. Eustace 168. 135 Jones v. Lawrence's Estate 178 Lawrence v. Jones 187 186. Morrison 180 v. 89 178 XXIX PAGE 164 143 Landis v. 148 Learned v. In re 33 Lord v. Perry 186. Home Savings Bank 187 145. Livingston Knox v. DeForest 94. Lawrence 82 Laws v. Harrison v. 163 Keeney v. Knowles .. Sneyd 6. Russell 94 Kennard v. 105 Klldare v. Lawrence Jobnstone v. 188 Leonard v. Lang Santa Fe" Railroad 65 Langton v. Copeland 172 v. Williams v. Corcoran 161 56 59 Leeds. 99. Hayden 130 Kane v. Smith 188 Kaufman v. Foote 82 Law's Estate 120 v. Lewis 45 104. Foster Lessee of Ward v. Boys 15 v. Ladd v. Wilkinson KInmonth v. Talbot 112. Carleton Lewis v. Davis 125 Kllbee v. Keyes v. Cushman 34 v. Aldrich 97 v. Sidv. 191 Lawton v. Salisbury Mills Lafferty's Estate 12. Ladd 13 v. McPhllllps 24 Lebanon Bank's Estate 181 Jordan v. Kane's Adm'r 154 v. Mullins 91 Lindlngton 165 Lindsay v. Dougherty v. Youmans 177 102. Jordan 83 139. 159 Lenz v. Topeka & 133 Lang's Ex'ors v. Parker 44 v. 191 122 Little v. Lang's Ex'ors Lang 133. 95. Shreve 165 v. Wakefield 67 Leggett v. Brooks 131. Blanchard 62 Llbby Life Ass'n of Scotland v. Massenglll v. 187. Loring 84 16 v. Banks 162 Krebs' Estate 174 Lloyd Londesborough v. McComas 175 Keane v. Little 35. 116 33 Lingke v. Hunter 164 Leigh v. Hughes In re 167 82 Levy's Trusts. Barnett Long Island Loan & Trust Co. Boston 17 Livingston v. Atchison. Brown Jourolman v. 113. Knefler v. Lamberton v. Chadwick 181 180. Fletcher 187 v. Brigham 106 111. Gardner 159 121 Key v. 141. 189 v. 151 v. Brackenbury 81 170 Lanius v.TABLE OF CASES Johnson v. 190. 142 Lee v. Reding 115 dal 170 96. Ex'or. Shaw 190. Howard 173 Keeler v. 184 Lamport v. Kirk 38 v. Morse 186. Owen 125 Keith v. Lauer 60. Wilmarth 141 41 Kemp v. Jobnstone Jones' Appeal PAGE 38 67 88. 16 King v. Haydel Lamson v.
Carrolton Bank 69 v. Railroad Co. Llnehan v. 117 187. Henderson McCloskey v. 118 v. Roman v. 181 Louis. 137 Magnus v. Paine 128. 182 Mercantile Trust Co. TABLE OP CASES PAOK PAOB Steinemann 94. 186 v. 155 McKnight v. Mclntlre's Adm'rs 171 Lowe v. v. Convocation of Prot. Bennett Milbank v. Pownall 36. 38 Meeks v. Amory Stout 98. 126. 48. Irvine 103. v. 186 Merry v. Olpherts 27 186 Me"gret. Farnham Bouverie 172 63. 48. 133 v. 150 Mandlebaum v. Prescott 58 v. Crawford 36. Britton 128 v. 100. Guedalla 56.XXX Loring v. Purcell 77 Mannhardt v. 77 McCallum's Estate McCaun v. Moulton 113. 76 Mackey's Adm'r v. Buchanan 130. Poor 36 190 151 87 121 180 112 148 McKeen's Appeal 135 McKlm v. Hibbard 110. Walsh 81. Devlin 47. Gleason McCoy v. 41. 105. 169. Cllsby Mason v. Matter of v. 168. Episc. 129 v. 123 Meldrlm v. Redwlne 72 v. 55 Mercler v. Mills 126 Milner v. Hassam 180 Merrill v. 77. Cortles 62. Evans 181 McLouth v. Trustees of Trinity Church 135 Memphis Savings Bank v. 146 v. Galluchat Moritz 34 31. Purrington 94. 60. 182 125 Major v. Pomeroy 31. Jones 62 v. 80. 80 76. Zufall 183 Mills v. Randall 10. Watts Matthews Mattocks Brlce 189 105 115. Tappan 126 v. Jones Lowrle's Appeal 181 34 v. Cox 23. Crane 9. Hunt 133 McNeillle v. Mclntlre vllle Kneeland v. McDonnell 168 Manderson's Appeal 48 Mannix v. 146. Mercer v. v. Wilkinson Marsh Read pital v. Stainton 123. Mansfield v. 69 Merrlam v. Thompson 106 Mitchell v. Queensland Bank 56. Kraak 50 v. St. Caldwell 56. 106 v. Herndon Mallon's Estate 89. Henderson 180 27. Farquhar Meeker v. v. 49 49 Meyers v. Acton 112 McPherson v. Church 97. 24 73 McQueen v. Doane 19 v. Lelth March v. In re Meldon v. 181 171 Marx v. Farmers' Loan & Trust Co. In re . West Kansas Land Co. Safe Deposit & Trust Co. . Guerrard 128 21 Miller. Whitlock 78. Proctor 60 Minot v. 104. 130 Lowry M. 8 Massey Massle v. Wardlow Mant v. Coates Maclaren v. 154. Preston 186 Merritt v. 188. McCartln v. Gardner 64 Molton v. 84 70 McLenegan v. Pratt Lyman 128. 143 McDonald v. v. 189 Mendes v. Winslow 98 Moll v. 79 Massachusetts General Hosers v. Traphagen 147. 72 177 108 22 Marquette Fire Commission181 74 Marshall v. Blake 154 v. 20 Millen v. 143 v. 37. Yelser McLeod v. 98. Houchens 188. v. Marshall 147. Berrler . etc. 78. Illinois Staats55. 162 13 Zanes- Low v. 118 May v. McClanahan v.81 Mayer Mayo v. Mclntyre. 107 Lovett Thompson v. 61 Zeltung Co. 104. May v. v.
Dyett 77. Hogg 56 Norcum v. Stevens 50 44 24 190 . v. 155. 111. 181 National Exchange Bank v. v. Gerth New England Trust Co. Newhall v. Cloon 115 Nyce's Estate O. Schuy87. Pace 44. Balch Olson v. 50. Cockhlll Bank Morse v. v. Clymer 66. Clark 181 106 Northington. 52 70 Mortlock v. 177 v. Bendy 161 175 Paddock Paget v. Co. Pacific 26. Court 70. 83 61 Nettlefold. 94. Monell Montefiore v. 116. 92 181 Morrison Lincoln Sayings 32. Olcott 115. Murray v. XXXI 86. Sands New York Life Ins. 78. Kansas Railroad Moore v. Hartford R. Anstruther 164 Overman's Appeal 111 Ovey v. Fisher Old South Society v. 193 Osborne v. Wallis 15 Ord v. 78 108 Oeslager v. v. Crocker 68 149 Oliver v. 167 120 175 38 Morgan v. 120 44 v. Hall 46 North Adams Universallst Nice's Appeal Nickels v. In re 44 Norton v. Smillie 77. R. Fowle 45. 139 183 139 136 Pace v. 124 Nelson v. Ovey Owens v. Coates National Co. Norton v. 146 Munroe v. D'Oench 184 Norling v. v. Tuttle 122 Mudge v. 78. v. 107. Monell v. Baker New ler P. v. Keteltas 74 15 42 30 Onslow v. 126. Mulford 112 Muller v. Gordon 62 110 Ouseley v. Feinour 110. 178 Mortimer v. Hancock 84 Neel's Estate 122. & Trust Co. Noel 69. 67 Norris v. NIcoll 77 Newcomb v. 111 Co. 146 ram Packard v. Sutton 62 National Valley Bank v. Lamb O'Malley v.TABLE OP CASES Monday Vance PAGE 164 103. Ireland 20. Union Trust Co. 70 Ormiston v. Hyer 40 Muscogee 23 Myer's Estate North American Coal Co. 49 54 Nugent v. Guedalla Moore's Estate Moore v Eure v. Eaton 98. Van Horn 164. Parker Mulford v. Appellant v. Bank Insurance 49. N. Rhodes 60 Owings Olney v. Duncombe 75. 169 19. 177. Philips Nickerson v. Hill Society v. 78 Northern Dakota Elevator Co. Buller 96 Morton's Estate 88 Morville v. Allee Norris v. Wheeler New York Life Ins. Klngman Palmer York. 133 24 59 v. 145 Morrlll Merrill v. Wright 56 Odd Fellows' Hall Ass'n v. 186 Mount v. 165. Fitch 7 171. In re New v. McAllister 30. Dows 189 Mulrein v. v. Wind163. Phelps 48. Co. New Haven & v. 166 120 Nobles v. Calkins . 164 77. Walker 81 v. Neyland v. Nance Nash v. Marshall Old Colony Railroad v. 159. Holmes 92 68 Murphy v. v. v. Ochiltree v. 55. Sinnott More v. Eaton 165. Nance v. 149 18 174 Nichols. 124. Pierce Pacific Nat'l 165 45 Bank v.
Pell v. Dalby 140 Reed v. Waterman Pooley. Price. Newton v. Sherwood 140 Proctor v. Mullins 87 v. 152 Ray v. Brewer 43 9. Hubbell 130 Philippi v. Boroughs ham Land Co. Nashville Trust v. Lucas 30. 31 Pearson v.XXX11 Palmer TABLE OP CASES PAOB Porter v. Boston 29 Pope v. 61 Parker v. 134 Peck v. In re 15 Raikes. Boston Dispen180 sary 137. Stribling 45 138 Prevost v. Boston Safe Deposit Potter v. 133 Perrine v. 184 Quin's Estate Perkins' Appeal 34 Quinn v. Bowen 75 124 Pratt v. 139. Vreeland 153 Perrins v. 160 People v. 14 151. Doughty 33 Read v. Metropolitan Q. Hodgman 72 95. 63.. Doe d. Devereux 76 Richardson v. Smith 190 Quackenboss v. Johnson 132 v. Parsons v. 153 Person v. Harrison 157 Rhode Island Hospital Trust 36 Co. Whitney 160 Reese v. Moore 17 Premier Steel Co. Head 126 Pitney. Prendegast 60. Anderson 48 178 Rand v. 138. 140 Reeves v. Whitney 66 Penn v. 128. v. Wlnslow 123. Philippe v. Everson 37 v. 31 23 Rhoads v. 131. 187 120 Peckham v. Heyer 61 97. Blackburn 125 Reid v. 190 Pusey v. Whitney 144. Safe Deposit & Trust Perkins v. Barstow 31 Presley v. Haydel 180 Pritchett v. Farnsworth 176 v. 39 Pothonier. Gratz In re 178 Parr. Prescott 55 143. 163 Parcher v. Shackford Paris v. 187 Pass v. Richardson 128 v. Rhoads 174 Polk v. v. Linthicum Pool v. Krasnoff 26 186. Pratt v. Seeley 145 Prendegast v. Couch 167 & Trust Co. Bellamy 151. Bank of Rutland 17 94 v. Jamison 57 Co. 140 v. Russell Paris . 63 Parmenter v. Museum 109 v. In re v. 177 v. Henderson 26 Penneld v. Warren 16 Peters v. In re v. Bain 181 Philbin v. In re 30. Burroughs 133 Paschal v. Folger 14 Pyle v. 177 Philbrick's Settlement. In re 37. In re 186 139 v. PinkCo. 137. De Thuisey 61 Reade v. East BirmingPhilips Pierce v. 117 134. Ames 105 38. Townsend 31. Thurn Raby v. v. Deffell 180 Pennington v. DeWinton 71 Purdie v. Southwick 23 188. Meetze 38 Plympton v. Acklln v. 80 ard's Adm'r 174 39 Rector v. Moore 14 Co. Yandes 41 v. Buswell 77 Reybould. Woodruff 115 126 Portsmouth v. 141 v. Continental Trust Pinkard's Distributees v. Tower 187 Pennell v. Converse 19 Powcey v. Clark 186. Clemson v. Stace Pink v. Dundas 151 Prinz v. Ridehalgh 6. Patterson 59 Piety v. v. Newell 35. Liebert 33. 36 Quirk v. 116 v. Pierce Poindexter v. Philips 161 Randolph r.
152 164 v. Burgess 47 v. 61 55 16 Sewall v. Barnes 171 v. v. 78 118 Sholty v. Simonds 160 Sinclair v. 257) 14 (215 Pa. Mortgage 33 106 174 174 6. Haughton v. Ruggles Russell Watson v. Rutland Trust Co. Brown Schluter v. Paul Trust Strong Salmon. Petitioner Schwab v. McAvoy 167 Seymour Shaw v. 130. 183 Sheets' Estate (52 Pa. Cleveland 30 Schwartz v. Van Vechten 34 v. Shuford 42 41 Shirley v. 112. Wilmer 186. St. Barnes v. v. 33. 73 120 Singleton v. Whltehlll Rldgley v. Shirley 17 Shoe & Leather Nat'l Bank v. Farmers' Loan & Trust Co. 77. Rand 22. 23 87 Ray Sargent Satterthwalte's Estate Saunders v. Grlnnell v. Wlllard 175 178 Skelding v. Favorite 115. 118 Slevln v. Porter Bicker ton 67 117 S. White 118 Sherrlll v. Dix 28. Bonaparte v. v. Taft 122 Slade v. Chase v. Skuse 167 v. McDonald Second Universalist v. 186. Paine 9. Hammond 43 Shepherd Sherman v. Humphrey 13 v. Cook Schaffer v. Lowndes Slse v. In re Saint Co. Rua v. Creamer v. Samuel 167 Houston Guano 48 Sargent 15 15 125 174 178 Sawyer v. Sholty Shook v. Cordis 136 v. Parker 100 30 Shepard v. 61. 77. Stevens Robertson v. Calloway 9. 51 Shower's Estate 174 118 Shuey v. Shook 46. 162 Seidelbach v. St.TABLE OP CASES PAOB Riddle v. Ex parte . 154 99. First Bank 49 54 Schouler. Van Allen Rowe. Slocum 64 Smith's Estate 132. 187 72. 78 164 125 18. Ayer 78 v. 164) 4. 190 Sellew's Appeal Sells v. Hale v. Jackson 45. 64. Cox Royce v. 131 Seger v. Schenck 51 68 Schley v. Bowery Savings Bank 16 School District v. Shattuck v. 14 Sheffield v. De Brulatour Seamans Sears v. School District 181 47 Rogers v. Wheelwright Rockwood v. Latta v. 133 v. 97 Ryan Ryder v. 133 Smith. In re Roxburghe v. Gerhardt 188. 156 Samuel Sanders Co. Collier v. Knaggs 45 Rome Exchange Bank Eames Roosevelt v. Vautler . Wadsworth 176 112. 6. In re 55. Parish 151 v. Dean Skinner v. Oriental Mills 180 Slauter v. 68 175 Sheldon 57. Tupper Glbbs Choate v. 116. Delgado Sergison. 22 v. 190 v. Tyson v. Robb v. Brown 44 Sloan's Estate 171 Slocum v. Watney 5 Slaney Slater v. 165 38 33 162 7 47 58. Johnson XXX111 PAOK 178 56 Jeffer- Scottish-American Co. Johnston 165 126 Robinson v. v. 14 Church Colgrove 129. Rogers 7 son College Roberts v. Spencer 47. 165 Schenck v. Dill 109 v. Seattle v. Cooper 108 Shumway Slmonds v. Washington & Sculthorp Clowney v. 126. 191 Scott v. Adams v. 187. v. v. 106 v. Robinson 109.
Allen 186 v. Henrici Speight v. Lansing 38 Sugden v. v. v. Jernillo 70. Dana v. 71. 162 v. Kinsey Staats v. 42 Sterling 94 Tolles v. Salisbury Mfg. Colt 164 Third Nat'l Bank v. Foley Stenfelds v. & Q. 38 41 Spencer v. Fidelity Co. Ferguson 50. Milne 153 125 Stowe v. 82. Higham 21 21 Stearns v. Leatherbury v. Sparhawk 23 Tebbs v. In re 18 Speidel v. Watson 165 Stephenson v. Austen 188. 78. Townend 33 v. 151. 131 188. Gregg 36 v. Stedman v. Sherburne 149 Stewart v. In re 101. Phelps 182 Treadwell v. 146 v. Stockdale v. v. Conrad's Adm'r 133 Townsend v. v. Platt 132. Wood 167 Stetson v. Stevens. Sterling 38. Eldredge 155 97. Donnelly 123. 85 Taylor 82. Bowman State v. 133 v. Gaunt 59. Smith Trust Co. Bowen 149 138 Strickland v. Bouch v. 179 89 Thomas v. 32 Starkweather v. 109 v. Snyder 51 9. Steinway Steinway 178 183 Thome v. 190 163 Townend v. R. Swale v. Coggeshall 160 98 87 Todd. Brooks Safe Deposit & 61 Snyder 55 Taft v. State 118 Story v. 185 Swale v. Towers 164 119 Smyth v. 136 Toronto General Trust Co. Hite 141 119 Spangler's Estate 144 Teague v. Godfrey 66 Trull v. 155 v. Carpenter 148 178 Tempest. Knowles 7 Sturges. 46 67 Thiebaud v. 90 Temple v. Burr 15 i?. Palmer 178 Townley v. Finch 147. Storm 99. Bradford v. Buell v. 156 45. v. B. Trull 115 v. Gape Davis 128. Nones 142 Sullivan v. 129. Lange v. Crossland 35 v. Farnham 87 140 v. Buttrick Southern Railway Co. Stanley 47. 19 97 Ex parte Stone. Spencer 69 Thayer v. 190 Sohier v. 115 Talbot v. Ashley 128 v. v. Peake 47 v. Corbett 35 Sparhawk v. v. Treadwell 112 177 v. Dufour 186 Stanley v. Murphy 164 164 Steib v. Guilford 87 v.XXXIV Smith v. Proctor 44 Swartwout v. Burns T. 145 Ten Broeck v. Clay 39 Trenton Trust Co. Perry 55 50. Remsen 181 169 Steinway's Estate 35 Thomson v. Dewey 128 115 Sproule v. 145. R. TABLE OP CASES PAGE PAGI Stott v. Tillinghast v. Co. Snowhill 108. Daniels Sprague. Morris 61. 138 Tallant v. 56. Davis Glenn's Ex'or 39 28. v. 125. v. 77. Smith 174 v. Babcock 187 v. Whitehead v. 76 Hooper Keteltas j . Snowhill v. In re 1 v. Symons 48 v. Palmer v. Tabor v. Kahle 140 Tryon. In re 5 v. 52 v. In re v. Praleigh 183 Thompson v. 191 Lord 55. Littlefleld 146 Tucker v. Miller 33 v. In re C. 62. Bass 124. South Sea Co.
Hobson Weir v. 123 Westerfleld. Brooks 49 v. Eastman Vaughton v. Eldridge Wedderburn. Weld v. Nolan 45. 153 Western Railroad Co. Roche Urann v. White Westcott v. Michel Foster v. 133 181 67. Austin Wood v. Spaulding 69 Watts v. Bradley 82 v. Ireland 48 Waterman v. Baldwin 72 v. Beal 173 r. Noble Vetterlein v. 98 Walker v. Lembca . Harvey 180 v. 177 55 77. Goodhue Wiggin v. First Presbyterian Society 180 32 81 66. Coates Utica Insurance Co. Rogers 5 Wilkin. v. Wade Lobdell Wadsworth. Sandys 19 Ward v. Cuddon Ditson Van Vechten v. Woolwortb 37 8 179 72. Albertson 45 v. 97 White v. Saint Paul Co. 153 42 97 34. 153 Williams v. O'Brien 180 Wetmore v. Ledsam 23 56 20. v. Allen Polley 44 Weld v. Barnes Vlnton's Appeal Vohmann Vyse v. Nickerson 122. Klymer 93 Wilson v. Howard 139. 132. Wise v. U. 131. 79. Matter of v. Turnbull v. Shore 60. v. 179 v. 134 Winona Co. Weed 3 57 111. 184 Wetherell v. Williamson v. 181 26. Arnold Wiess v. 140. Attorney General 88 Scott Smith Williamson v. Woddrop v. 80. Barrows 64 v. Vanderbllt. Kitchen 111 55 Warnecke v. 192 Cllman v. Adams v. v. Swett Wilding v. Weeks v. Young 184 Winthrop v. Alden 130 v. v. v. Gilmore Robinson v. 15 Winslow v. 109 73 190. 70 148 162 116 35 77 27 140 17 147. Gresham Wilkes v. v. Fisher Dietrich r. Maule Tuttle v. Jones 182 Wayman v. Berry v. 26 124. Webb v. 68 7 Wells. Vandeventer Webster Bank v. In re . Hall 65 Wheeler v. In re 72 37 Lynch 110 61 55. Vandever's Appeal Van Doren v. Warren v. 168. 174 v. 116 Womack v. Walsh 54 Wemyss v. 54 Webster v. Pease 11. In re Wllkins v. 151. v. 176 Wallston v. Porter 26.TABLE OP CASES PAOB XXXV turn 91 Pomeroy Turner v. 12 111 67. 78 Wagnon v. V. 158 Wiltbank's Appeal 124. 172 v. Weaver v. In re 150. Wilson 23. First Nat'l Bank v. 153 84 14. 158. Hogg 149. Fargo & Co. v. Barker Welch v. Perry 14. v. Braswell 162 Walton v. Terry Van Vronker v. Bolder Wiles v. Follansbee 175 v. Truslow 18 Wheate v. In re Whitney Whittier Smith Child W. Davisson 71 v. Olden 76 124. Cameron United States Nat'l Bank Weatherby United States Trust Co. 109 172 Willis v. 116. Burnham Mather 88 109 . 137 86 26 132 160 147 Wiley v. Whiteley. Wise v. Braden 189 v. Ketchum 27 Warburton v.
77. 175 C. 71 113 Worrell's Appeal 91 Wright's Trusts. Richards 125 125 47. Burch Wormeley v.XXXVI Wood v. TABLE OP CASES PAOB Travis v. C. Collins 148 v. Wormeley 9 187 49 36. Litchfleld v. Wetmore v. Patterson Wyman Snow Young v. Young (4 Cranch v. Y. Wright Woodhouse v. In re 27 Wych v. 499) z. 19 Zabriskie v. East India Co. 30. 171 174. 48. 79 Wylly v. Zimmerman Makepeace 174 169 . Sullivan Wootten v. Wood Woodard v. Yeakel Yerkes v. Crandall Woods v.
clearly expressed in the trust instrument. to instrument does not make special provisions. Probably no settlement was ever drawn expressly covering all a trustee's and liabilities. powers. The maker of the trust can make any provision not class of trusts treated in this trusts THE contrary to public policy as to the management of the trust property or the duties and liabilities of the trustee. and these provisions.PART I. AND THEREAFTER TO FOLLOW THEM OUT IMPLICITLY.UTY OF THE TRUSduties. of primary importance for the trustee make himself thoroughly familiar with the trust instrument. THE TRUSTEE AS AN INDIVIDUAL. or where those provisions are contrary to public policy. handbook are those which are expressly created by deed or will. hence the necessity of a of the general laws governing trust estates. IS TO STUDY AND BECOME THOROUGHLY FAMILIAR WITH THE PROVISIONS OF THE TRUST INSTRUMENT. therefore. and to follow its directions carefully and It is only in those cases where the trust accurately. It is. TEE 1 . will supersede the general provisions of law applicable to trustees and trust estates. PRELIMINARY. knowledge BUT THE FIRST AND MOST IMPORTANT D. that he must be guided by the general law.
. Trusteeship is not mere contract to manage property for another.. 98. p. 2 An individual may be willing to trust the whole or of the management of his personal affairs to but a trustee must manage the trust affairs himothers. 151. but it is a relationship. 6 To 1 counterbalance these possible disadvantages the J. Infra. 6 He may be required to give bonds with sureties for the faithful performance of his duties. or he might buy from the estate or sell property to it. 12.2 TRUSTEESHIP OFTEN A BURDEN I. but if he is the trustee such services will be unpaid in some jurisdictions. Lloyd. pp. 87. in Hallows 5 v. The individual might have important employment as broker or counsel for the trust estate. interests will not conflict with his The duties of a trustee to his beneficiary require not only the highest good faith in their execution. Infra. pp. 85. and before undertaking any trust the individual should make a careful examination of the trust instrument to ascertain its particular provisions and what his duties and liabilities 1 He should also examine the property to see will be. It is not always desirable to be a trustee. that his personal duties as trustee. 29. p. or at least looked on with suspicion. and often the sacrifice of personal convenience and chance of profit. Infra. he is put in some part such confidential relationship to his beneficiary that any profitable business dealings which he has with the beneficiary are subject to suspicion. Kekewich. Moreover. 88. 691. 39 Ch. In addition to the complications that may arise from the relationship to the beneficiary. but also the absence of conflicting personal interests. Infra. 85. but as trustee he is deprived of these privileges. p. involving many duties and liabilities. pp. and for neglect or errors in judgment in its management. 8 2 4 Infra. Office not always desirable. D. the trustee assumes all the liabilities involved in the ownership of property. 8 self. even where the trust 4 property is not in question. Infra. 85.
it must be disclaimed at once and unequivocally. and if the settlement is not recorded. Code (1895). Although a simple verbal refusal to undertake the trust is sufficient. generally same extent as an agent or factor who manages the 1 He is absolutely prohibited from tak2 He is not ordinaing any other benefit from the trust. p. Infra. that person being in most cases one of the beneficiaries. a * Infra. settle the If the office is to l 8 Infra. since . 6 Wise v. lasts. & La. then addressed and delivered to whomsoever has the custody of the instrument. Wise. 35. but it should be affirmative and decided. and with some rily protected by exceptions remains liable for his mistakes and misaffairs of others. John. even though the trustee were nominated under his promise of acceptance. . 4 Disclaimer. 32. It is true that a trust estate may vest in the heir or representatives of a deceased trustee without possibility of disclaimer 5 but in such case the heir or represent. Litt. as otherwise an acceptance 6 may be implied. and probably difficult of proof after a considerable period had elapsed. 4 Beav. ative takes only the title to the property. No particular form of disclaimer is necessary . Evans v. Co. such a disclaimer would be unwise in most cases. No one need be a trustee against his an acceptance of the office is necessary 8 and the office may be refused or disclaimed at any time before acceptance. 51. statutes of limitations. In general the disclaimer should be in writing. when appointed. and a limited trust to transfer the estate to the new trustee. be disclaimed. 36. and if he is the personal representative to accounts of the deceased trustee. 2 Jon. 403. 3190. p. 9 a. p. Ga. will. and recorded where the settlement is recorded .DISCLAIMER trustee is entitled in 3 to the America to compensation. deeds as long as the trust II.
(1903). 1 If the trust instrument is a will. 6 7 8 Carruth v. and if an executor have the management of set given him. 214. 4586 Bev. p. 298. 1 but the Lewin. construed. Mo.. 128 Mass. 7 It is said that when two trusts are created by the same 8 instrument both must be disclaimed or accepted . 148 Mass. Stat.4 DISCLAIMER If the trust instrument is a deed. Carrnth. Perry. White. In re * . Gen. 13 Pick. he cannot separate his duties and accept part and disclaim the other. Rev. 328. he may disclaim one and accept the other. not aa a disclaimer. Stat. he may disclaim either office and accept the other. . 3 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 . (1899). n. however. . unless there appears to be an intention on the part of the testator that he should accept both real estate property in or neither. 420. * In New Jersey trusts are divisible. 248. end. Stat. a person is appointed executor and trustee under the same will. 70. Ray. . in Dorr v. Wainwright. 164. 207. 110 Mass. or the other administration of which he acts the part of a trustee as well as executor. Me. but not in the form of a reconveyance which presupposes an acceptance and vesting of the estate though in practice it would not probably be so . 8 A trust must be disclaimed wholly. (Revision of 1902). ch. separate trusts are made for the real eptate and personal property. (1896). p. 398. Conn. Underbill. v. St. 6 Where. (1904). 264. 2608. 6 See Shaw. J. But the refusal to give bond is treated as a ground for removal. as trusts are not 4 divisible. (1894). in some States. (1906). . 331 . C. Sheets' Estate. then the disclaimer should be by deed. however. up by a person other than one for whose security the bond is given until some action is taken by the court. 8 Howe v. 4155. a disclaimer filed in the Probate Court is appropriate. p. 12. Daggett Lewin. Laws Vt. 215 Pa. Bates' Annotated Revised Statutes Ohio 3420 Code Ala. 431. 5983 Code Va. 6 If.
7 III. 208. but nevertheless it is held to be devested by the disclaimer. J. then by joining in the deed. 2 Eq. 7 Beav. one may be ac1 cepted and the other disclaimed.DISCLAIMER ACCEPTANCE 5 better view seems to be. Code (1895). Art. legal title the exact effect is less clear. Carruth 148 Mass. Watney. . remedied by statute in New York. 6 In re Wilkin. 8 Ga. 6 Slaney v. 8 Ellis v. If the individual were not consulted about the appointment. The effect of a disclaimer is to vest the whole estate in who accept. (N. formally according to the provisions of the trust instru8 ment. 294.) 324. * 293. Gen. and by statute a person not so qualifying 1 In re Canard's Trusts. 5 and if a gift or legacy is attached to the office it will be lost by a disclaimer. 93. but if no manner is therein specified. 48 L. that where they are wholly separate trusts. p. 8 As to the the trustees the gift. 370. 2 Generally and by statute in Maryland. p. he may have the expense of consulting counsel and If. R. & E. the disclaimer of one will destroy the power.. (N. and no intention appears that both or neither shall be accepted. Y. 7 In re Tryon. 107 Mass. H. Boston. if the settlement be by deed. 3190. An acceptance should be made Acceptance. L. 9 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. power on his costs. not interdependent. 496. 1903.) 192. Pub. 732. Railroad.* however. 55. Can-nth v. Laws (1904). or if the trust be established by will. 1. 90 App. then by qualifying in the Probate Court. the trust instrument bestowed a special all the trustees nominated. Div. Lewin. S. p. c. 418. 431. Infra. 2 and relates back to the time of and the result is the same as though the individual disclaiming had never been appointed.
and a 1 new trustee may be named both executor and trustee. p. 2 Molloy. and should be qualified as trustees as well as execualthough in practice they often qualify as executors 8 In some jurisdictions the sureties on the execuonly. 6 Kilbee v. . is unsupported by authority elsewhere. if a disclaimer is conbe taken to avoid any assumption templated. In re Sheets' Estate. and hold them in trust for certain purposes. 60 N. 26 Wash. J. he will be construed to accept both offices if he presents the will for probate without disclaiming either. holds that the office is really that of an executor. 103 Md. . but tors. n. 186. An acceptance will be implied if the individual inter- 4 meddles with the trust property. care should of authority. either as volunteer or agent. Infra. 2 In absence of statute the executor or administrator accepts the decedent's trusts. trine v. 4. b. 14. until the disclaimer has formally been made. Bentley Dixon. tor's bond will not be liable for his acts as trustee. Flint. attle v. . and not executors. Infra. 98 . p. in other States they will. If an individual be In such cases the executors act as and really are trustees to that extent. c. 215 Pa. 4. Hence. Noble. even though the deed needed his signature and he has not 1 2 Supra. and so charged the surety on the bond of the administrator d. Thurn. a. but by statute the law is usually the reverse. and cannot disclaim them. It is not unusual for a will to provide that the executors shall manage certain estates. Eq. 73 Conn. This doc- 8 157. 56 City of SePhilbin v. 353 Angus v. the distribution being delayed. St. p. Sneyd. 342.6 is ACCEPTANCE held to have disclaimed. p. McDonald. t. since such assumption or interfer- And ence will readily be construed as an acceptance. or performs any act 5 to carry out the trust. appointed. 164. a trustee who has acted as such cannot disclaim. or voluntary interference with the trust estate. 14. Supra.
v. 59 N. . . IV. an ance will be implied and the burden will fall appointee to show that he had no reasonable therefore . though such a course is very for unusual. S. No trust will be allowed to fail want of a trustee. 184 Mass. Knowles. or was merely to protect the property until a trustee could be . 12 N. either in the nature of things.appointed. . where the class of persons specified no longer exist. the court will appoint trustees from a similar class. L. the property will be held by whoever may have the title until a 8 proper trustee can be appointed. Walsh. 8 Gray. 88 Wis. (1894). 534. p. and in that case disclaim but the burden of proving it will be on Mm. 4302. 2 or that he acted in some other capacity than that of trustee. however. as in the case of the death or dis1 Flint v. Y. the contrary In re Sturges. of and accepton the oppor- tunity to disclaim. estate 8 vests if in a transferee subject to dis- an appointment be known not disclaimed within a reasonable time. 21 WalL 185. v. 6 and may in certain contingencies administer the trust itself. 7 The power to make an appointment will arise when- ever the circumstances make it necessary. v. 2 8 4 Smith Clinton Co.. H. or if those who have been nominated disclaim. prove that the act from which an acceptance would be implied was done as agent. 402! Wells. Rogers. North Adams Universalist Soc. Rogers v. R. Doyle. 6 Eq. Brunt. 421 Dodkin v. Appointment. Fitch. Pa. Dak. 123 N. Y. (1895). (1903). Infra. Adams v. 2289 Revised Civil Code Cal. 783. In case of need the court will appoint a temporary trustee or a receiver. p. 1 APPOINTMENT 7 He may. . . Adams. 413. 170. 228 Royce v. . 2 Grant's Cases. 1 11 N. Adams. 432. also. 1655 Code No. 6 7 Brightly's Dig.the trustees die. 4 and if conveyance is made to one that cannot act. 580 Civil Code So. Boston v. See to . (1903). Dak. Fargo & Co. The claimer. 18. or if all . 2030. 373. Y.ACCEPTANCE signed. 6 So.
n. Sackett. ber of trustees sinks below the prescribed number. But the power of appointment under the trust instrument will only arise under the exact terms specified therein. If the trust is under a 1 will. Griswold v. a provision that a trustee shall be appointed on one of the trustees becoming "incapable. and the appointment must be made by the court." will not give rise to a power to appoint when one becomes bank"2 " unfit" but still " or in rupt and therefore' capable. or as it otherwise provided in the instruments. the court has no jurisdiction in the case. 210. the Probate Court has 2 8 4 Mass. and the method prescribed must be carefully followed. I. and he died without executing them. Gen. but usually to the court. . p. as. but if it becomes impossible to follow the method prescribed. See statutes. 1 or a trustee becomes disqualified by going abroad. 761. Maule. for may be instance. 445. 58. v. an appointment made under a power in a settlement should be recorded with the settle- ment. In some States the power to appoint the trustee is given by statute to the beneficiary. 4 As a matter of precaution. Turner v. Pickett. p. . IIosp. and will not arise under similar terms. Infra.8 APPOINTMENT claimer of all the trustees. 77 Underbill. the case where the power to appoint arose on the refusal and neglect of the original trustee to execute the trusts. the power did not arise. Amory. 42 Miss. and in others to the surviving trustee. Guion v. the power is wholly lost. If the trust instru- ment adequately provides a method to be pursued in making the appointment of a trustee. 400. 21 R. 12 Pick. 15 Jur. or whenever the provisions As when the numof the trust instrument prescribe it. 8 How the Trustee is appointed. or when the safety of the fund or the proper administration of the trust requires an additional trustee. 2.
S. Gulick v. 6 All persons in interest must be parties to the suit. and thus come under 13-15. 199 Pa. Pub. Cone. Smith v. Co. (1903). 113. v. 1 ment. 8 the court will appoint a trustee upon the application of any person interested in the trust. 8 * 6 The appointment Cone v. 293. Guarantee Trust Fund. must be confirmed by a decree of the court. jurisdiction. jurisdiction in these matters is conferred on the Probate Court by statute. 16. 230. its of any voluntary trustee may be confirmed by 13. the appointment of a trustee is desirable. The same is true if the trust be under the jurisdictrustee's tion of the court for If 8 any reason. J. Y. even if made under the terms of the will. Stat. Snyder. Scott.) 354. Stat. or for the security of the fund. either to fill a vacancy. Penn v. 60. ch. and for vision the trust instrument does not contain an adequate profor appointing the trustee. whether in possession or remainder. 471. according to the prevailing statutory law. and a letter issued. Brewer. Art. and the appointment.3 AtL R. Calloway. etc. In New York the proceeding was considered as being in rem and valid without any parties. although the powers in such cases come from the settleand not the court.* though it would not take any notice of the application of a stranger. Milbank v. 54 N. * In Maine a trust may be confirmed by court. Creditors or even transferees of stock may apply to have a trustee appointed. (1904). Ch. 25 How. v. Me. any reason.APPOINTMENT 9 jurisdiction of the estate. Crane.86. C. Wood v. Gnlick. 512. St. 12 Gill& J. Prac. * . Travis. 1 Md. Snyder 295 . Shaw w.. 7 Blackf. 12 Allen. Paine. 193 . Rev. but in the ab1 court in Maine. 61 S. or if the person holding the power to appoint a trustee unreasonably refuses or neglects to act. 70. Gen. 8 but less parties are required in some jurisdictions by statute. Statutory provisions in most jurisdictions. Rev. 70. 7 Ordinarily. ch. (1903). (N. Laws Md. or convenience of the beneficiaries.
and cannot be controlled by another court. Ky. p. where the sole beneficiary has moved into a State and wishes the property there also. Randall. but this case seems 8 open to the same criticism as the foregoing. * Annot. (1899). p. Gen. 6 Blatchf. 9 . J.* So too by statute. since the matter is one of prac- * McCann v. 4711 2630 Code Code Ala. 537. 81. Stat. Stat. It is held that the court having original jurisdiction of a testamentary trust may make a subsequent appointment. p. 4709. (1904). some jurisdictions which authorize trustees appointed in other States to recover trust property in the State to see what trustee be where the statute exists. 394. or if its jurisdiction and there is the property itself is within a statute by which the title will vest in the new trustee appointed. . 4200. (1906). 1 In the absence of such statute there is no way of vesting the title. Gen. 3249. The operation of the statute is to confiscate the title of the person out of the jurisdicand vest it tion. although the property and holder of the 8 but it is hard title are both out of the jurisdiction. . N. 2535 . 2 trustee is responsible to the court in which he is appointed. 3685. 166. effect the decree can have unless the aided by statute or be reappointed in the Statutes exist in jurisdiction where the property lies. 6 Smith. Randall. The nor can his appointment be attacked collaterally. Va. 147 Mass.10 APPOINTMENT sence of statute any court of chancery or equity will have jurisdiction among its ordinary powers. 2 McCanu v. 81. W. (1895). J. No attempt will be made to state the rules of procedure in such cases. 147 Mass. (1896). 112. in the appointee of the court. 8 Curtis v. Stat. See infra. . Col. (1895). and the court is powerless. Stat. The court will have jurisdiction and can appoint a trustee if the person who holds the title to the property is within its jurisdiction. the court may appoint a trustee. (1891). N. Code Va.
(1893). 104 Ga. Stat. Conn. 6. ch. 250. 417. Gen. all the prescribed conditions concerning the appointment must have been accurately . 11 though simple. Brightly's Dig. The original under a deed will have the property vested in them by the conveyance. 26. 259. 4. Pa. Stat. 1 Appointment not Complete without Title to Property. p. The appointment of a trustee is not complete until the title to the trust property is vested in him. 2030. as the consequences of administering a trust under a defective appointment may be serious. (1902). Boston. usually trustees after a considerable interval. since the outgoing trustee is not relieved and is still liable for the trust. Laws 284. and the incoming trustee is acting wrongfully as trustee. (1899). H. Stat. ch. and may be estopped to deny the regularity of the appointment. and p. J. 6. but do not get title to the personal estate until it is turned over by the executors. Mass. 8 new 1 In many jurisdictions the property will vest in the trustee by statutory provision * but this vesting . Laws (1902). 95 . Pease. 250 . ch. Wagnon v. The original trustees under a will get title to the real estate from that instrument itself. a Ellis 8 v. N. Rev. (1895). and may incur heavy liabilities without any right to indemnity out of the trust estate. Cogswell. 4 . Gen. Rev. Bumgarner v. * . 208. Mo. 107. Cauhape v. Del. ch. 147. 1. p. 49 Mo. 709.TITLE NECESSARY TO COMPLETE APPOINTMENT tice. The property ordinarily vests in later appointees by express provisions of the trust instrument. I. 4581 . fulfilled. Gen. 135 Cal. 3684. 709. requiring care and professional advice. R. Barnes. (1896). Perry. p. Stat. 107 Mass. (1894). which commonly provides that on the appointment of a new trustee he shall become entitled to and vested with the trust 2 but in order that the title shall pass under the property terms of the instrument. n. & Erie Railroad.
or unless all parties in interest join in requesting the exemption. 8 Loring v. Stat. 5. 2612. Laws Md. 141. 254. Eldridge. Banuelos. 4 Trustees under wills. 115 Mass. to decline a trust where he is required 1 7 (1899). 226. v. and usually appointed by the court. Salisbury Mills. amended by Stat. (1904). It is not unusual for a trustee. 92. 2 there is no adequate provision in the trust instrument and no statute applicable. so as to vest title in appointees under any written instrument. 16. Pub. For further discussion see pp. Gen. Wis. the title will not pass under the statute.192. Kan. In such cases "all persons beneficially interested" refer only to persons in being and who have a present vested interest in the estate. and the court may require an appointee under a power in the instrument to give bond if the circumTrustees' Bonds. Bowditcb v. the appointment being that of the individual and not of the court. infra. Dexter r.12 of title is TRUSTEE'S BOND usually confined to appointees of the court * . Annot. Rev. Rev. . and not to persons unascertained and not in being. Stat. Where the necessary conveyance. (1898). ch. 7528. and even where the donee of the power is the judge of probate. 424. 149 Mass. 6 Statutes in 6 7 (1903). 2 c. 220. trustees stances require it. nearly all jurisdictions. Gen. especially if he be a man of standing. Cotting. 1878. 70. Art. Laws Vt. (1894). 1. 125 Mass. Stat. 6 In testamentary trusts these bonds are required to be with sureties. 138. 3262. a well-drawn decree will contain an order for . 2094. Webster Bank 4 Rev. conveyance must be made by whoever holds the title 8 and where the court appoints. are required to give bond to the court for the faithful performance of their 6 trust. unless the testator has expressly excused the trustee from furnishing them. Me. 191. (1905). 1 Gray. Laws Minn.
or for a debt which the trustee owes the estate when he accepts office. and bondsmen are difficult to collect from. V. considers it necessary for the safety of the fund. but even for his failure to account for funds received prior to the date of the bond. 397 and he is not protected by the statutes of position. . Bassett v. 96 Me.TRUSTEE'S BOND to furnish security. Blake v. Any person who intermeddles with the trust property is a trustee de son tort. trustee. When the court orders a sale of real estate it will ordinarily order the trustee to file a bond sufficient to cover the price received. limitation a any more than the v. 263. 210. if there is a power of sale of real estate in the settlement. Shaw v. 13. 145 Mass. and. and is accountable as such to the trustee's bond occupies a particularly disagreeable not only liable for all the trustee's defaults while he is regularly in office. sufficient to cover the value of the real estate also. but the need of security must appear 2 affirmatively. 1 The surety on a He is . Linehan. Ladd Ladd. since continual watchfulness is required to be sure that the security remains sufficient and that no depreciation is occurring. Humphrey. on application of any one in interest. Who is Trustee. if at a later time the court.. 135. 178 Mass. He may be denied the privilege of appearing in a case which may result in charging him on the bond. 13 select the trustees with care. 125 Ala. Mclntire v. is to trustee and who The question of who is the administer the trusts not unfre- quently arises. 184 Mass. Fidelity & Deposit Co. 1 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. rather than to take a less desirable individual with security. Traders' Nat'l Bank. and the wiser course seems to be to and trust to the carefulness of the selection. A trustee who has not furnished sureties may be required to do so. if such a bond has not already been given. since he is adequately represented by the trustee.
the sec1 Brown 111. 430. 17 Me. 5 White v. in the eyes of the law. Eq. 353. 98. crediting himself with any funds which he holds as trustee. v. or done some other notorious act of Where the same person will. 182 8 Wheeler Perry.Y. Cushing. 73 Conn. Drake Price. the executor or administrator of a deceased trustee. Y. vol. 100. 351 . 164. (N. setts. Carson y. 26 Wash.) . 2 Perry. Noble. 342. 5 but the rule is otherwise will. tee under a transfer. has in regard to that property the 8 That powers he would have if he qualified as trustee. 397 Schmidt. Lambert's Adm'r. and Maine the sureties on his bond as executor are liable for his acts as trustee. to qualify as trustee. . Massachuecutor. Penn v. Div. 5 N. Ditson. v. which denies the executor's right in such cases Philbin v. . J. An executor who has the duties of a trustee conferred payment of an annuity out of part of the estate. Perkins v. Thurn. v. p. 56 . 137. though the trustee calls himself an executor. Angus . Hall 6 7 is contrary to the general trend of authority. Folger. McDonald. City of Seattle v. 140 Mass. v. H. 60 N. The case of In re Sheets's Estate. 9 Pick. v. 83 App. St. 18 N. St. v. 16 Ala. and cases cited. 91. 6 Allen. 1 instance. if in fact he acts as trustee he is a trustee. 9. Groton v. 215 Pa. 257 276. foi same extent as though he were duly appointed. 76. 74 Va. 98 and may be enjoined from performing trustee's duties if he fails to do so.14 WHO IS TRUSTEE As. and not an ex4 In Alabama. Carson. Sheets's Estate. 1. 52 Pa. even though he qualifies as executor only. Moore. * Jewett v. 395 . Dixon. 6 is appointed executor and trushe holds the property as executor until he has settled his account in the Probate Court as executor. 307 . 103 Md. Bentley v. Crocker Dillon. He should qualify as trustee. 256. Ruggles. 7 Where a power of appointment is given by the trust instrument and the donee appoints new trustees. 133 Mass. as for instance the on him by the elsewhere. is to say. 245-247. See infra. or an executor or administrator who meddles with 2 the real estate of the deceased.
Dublin Case. King 17. Ch. 9 Mod. 26 Minn. Irviiie. 8 until the property is conveyed to some one amenable to the juris- diction of the court. 9 The trust estate may vest in a lunatic or infant. 617 . but 10 An infant may be compelled to they will be removable. the executors of the will. 34 L. . 179. 157. not the trustees. Who can be a Trustee. Eq. Aldam. p. 227 (N. 2 8 Onslow 1 Hall & Twells. provided it gives bond with domestic sureties and agrees to submit to the jurisdiction of the its charter 5 trustee. 368 . Attorney General v. Balch. 577. Any person that has the capacity to hold the title to the property. 1900). Olney v. 7 The sovereign may be trustee. 11 Allen. 19 Eq. 38 N.. 6 An alien enemy or an alien in a jurisdiction where he cannot hold property could not be a trustee. Busk v. 283. 513. 3 Dyer. L. 1 but if the property be given to the second set to convert. will carry out the trust. 1 460. VI. 47 AtL Rep. Ames. Burr. and it is immaterial whether the trusts can be carried out or not. J. Paul Co. J. Co. 16. v. Landerfield. corporation having such capacity and rights among A powers is such a person. 495. St. 2 they will take the property. but the beneficiary cannot enforce the trust except by petition. Wallis. Sargent. 286 . 4 6 Sargent v. n. and may be a even in a jurisdiction where it has not the right to do business. 318. 168 Mass. Boys. and the right to exercise the powers. R. 154 Mass. may be a trustee. 6 7 Satterthwaite's Estate. 226. . 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 4 through the executor's hands. H.WHO CAN BE TRUSTEE ond 15 set of trustees in point of time will not necessarily administer the trust. Winona v. 8 Where a general power of appointment is exercised by will. court. Phil brick's Settlement. Swartwout v. or their discretion is relied on. 420. v. Light Boat. 1 Barb. 8 9 10 Briggs Irvine v. 9 Wall.
(1895). court in Pennsylvania refused to appoint a son co-trustee with his father where three trustees were required. He should be " fit. 3. a person in whose hands the property will be safe. 1 Weekly Rep. action by the other two is barred. parte Conybeare's Settlement. 343. whether he life tenant or remainderman. Thus a not a "fit" person. 1 * 6 6 7 King v. 4 At common law a wife could not be a trustee for her husband. reasons a near relation this is 8 objectionable. and so long as infants or lunatics hold the property' the trust will be administered by 2 the court through them or their guardians. Bowery Savings Banks. 8 Person v. Gen. p. Gen. Schluter v. 147. 117 N. Warren. Infra. J. 125. In re Barker's Trusts. p. Stat. be a ilar irt So too a beneficiary is an unfit person. but she may be now in most jurisdictions under the statutory rules. although country they are more often appointed than Laws R. 2 ' 46. as being unsuccessful in Lis own affairs he is not likely to be successful in those of others. 16 . a A person having the legal and actual capacity to hold the title to the trust property and exercise the powers. 43." that is to say. 458. as he would naturally be dominated by his father. ch. 6 trustee should be "capable. (1894). D. and a drunkard or person of dishonest or of bankrupt bad character is unfit. Brightly's Dig. Hem. & M. Bellord. since he will nat7 and for simurally be partial to his own interests. N. 55. Having no discretion. 6 and who will be impartial in is the administration of his trust. Y.16 convey by WHO CAN BE TRUSTEE 1 statute. 2. 208. they cannot act in trust affairs any more than 8 they can in their own affairs." that is to say. since the property would not be safe in his hands. Thus the trustee should be a person of full age and sound discretion. 2033. 198 Pa St. p. and thus there would be but two trustees.l'(1896). and if one of three trus- tees is an infant or lunatic. 3683. 1 Ch. 433. Ex parte Sergison. But the court was divided. . Pa. Jr. 8 Ex The Lafferty's Estate. 4 Yes. 14 Barb. 488.
to a considerable extent do away with the element of personal risk attaching to an individual trustee. 222 . 1 Wilding t>. and the knowledge that a breach of trust is likely to be condoned not infrequently leads to disregard of strictly legal management. 423. trustee less able to withstand the importunities of the 1 and moreover such a connection. 363. and as a rule the lack of fail personal management results in securing the minimum return only on the amount invested. In this connection it may be said that the trust companies. Bolder. Dean v. 8 8 v.WHO CAN BE TRUSTEE 17 The fact of near relationship makes the strangers. Livingston 2 Johns. 9 Rich. her equitable estate is supposed to be reduced to posses6 sion. 228. J. Jencks v. 25 N. 21 Beav. is too often made an excuse for lax management. 9 Paige. and the maker of the trust may make such an ap- pointment. which have of late years become so numerous. Eq. 19 Vt. 240. 410. . and lacks the great advantages often secured by the able personal oversight of individual trustees. and may be attached for his debts. 537. Deviation from the rules of beneficiaries. Bank of Rutland. which is the only safeguard of trust estates. but they lack the advantages of personal management. Alexander. strict accountability only too often leads to speculation and the loss of the property. Eq. companies sometimes These from improper management as utterly as individuals do. Ch. 8 but there is nothing in the relationship 2 A of husband and wife absolutely preventing the appoint4 ment. court will not appoint a husband trustee for his wife. Livingston 6 Shirley v. 619. Shirley. 4 Porter v. But where a husband is trustee for his wife. 11 Paige. Moore. and there is no resulting trust between husband and wife. Parker v. espewhere a parent or older relation is trustee for cially a child. Lanford.
(1903). Eq. L. 2. . L. 338. 1 Ch. Jur. * Perry. Y. p. 2039. Guedalla. and 2 his appointee will be removed for cause only. R. 9 Glink w. Ind. . 3410. it If the holder of the will appoint only a person who is actually and legally 6 capable and fit. In re Tempest. 6 .18 VII. As a rule he should not appoint himself. 8 power be himself a trustee. Stat.. 723. Stat. in Bowditch v. La Fayette. 857. and if the appointment be of an unfit or incapable person the . and 1 may appoint a person actually incapable or unfit. 84. 8 Shaw. if he is specially fit. but may do so. 52 Fed. 39 1289 b Underbill. Montefiore v. vol. Rev.. p. Ind. See Perry.. 901. 250 n. Wetmore v. 220. 8 Rev.902. is Appointment of Trustee. 3410. he should consult his beneficiaries and appoint some one 4 agreeable to them.) 882. (1901). 231. and should the matter of the appointment become a matter of litigation. (1894). llth ed. Div. and within its jurisdiction. 9 De Brulatour. (N. 51 N. R. (1901). 2 Ch. Banuelos. cannot be exercised without the assent of the court. court may review it. 485. trust in APPOINTMENT FITNESS bound only by the consideration of the legal capacity of the individual. 487. 297. C. Story. 408. 111 App. Trnslow. 7 Ames. 6 . 8 but the statutes have been held un- constitutional. the power. 1 Gray. but it will of the maker of the trust have due regard to the wishes 6 if they can be discovered. Brightly's Dig. In some cases the court will appoint a non-resident where the beneficiaries or part of the property is out of its jurisdiction. making his appointment The maker of the The donee of a power to appoint may also use his dis- cretion in determining the fitness and actual capacity of the appointee but the power is not an arbitrary one. Pa. 7 In some jurisdictions it is forbidden to do so by statute. Where the court is called upon to appoint a trustee. Y. J. Rep. 1 2 Robertson v. though discretionary.
or one created by the trust instrument. or by the legal title and benefi8 cial title merging in one person. 3 Gray.DEVESTMENT OP OFFICE If 19 all the beneficiaries agree on a person. 499. if there be more than one trustee. Morgan v. 4 Cranch C. This may come to pass either by the VIII. 319. Moore. 51-58. even though he be a 1 beneficiary or otherwise unfit. 9 Young v. 1651. (1) completion of the purposes of the trust. even though there be a provision in the instrument for keeping up the 1 8 number of the trustees. 6 or in the case of a trust to enable a widow to support her children. 336. 195. the court nearly always appoint him. (1903). 9 Warburton Converse. 137 Mass. (2) by completion of his duties. Code Cal. (3) by such means as the instrument contemplates. on the remar7 riage of the widow. Young. the office will vest in the surviving or remaining trustees. will The laws of some States provide for a public trustee. 6 6 7 8 Parker v. If the trust itself continues and the trustee dies. (1903). Doane. Code N. Rev. on the death of the life tenant and the vesting of the estate in the remainderman. Rev. C. Ex parte Stone. 75 Ala. for instance. (5) by judgment of a competent court. Dak (1895). or is under a natural disability. 4 The trustee's office may come to an end by the extinction of the trust. 4298. 14 Sim. Fox v. . 2-1 7. 2282. v. Storrs. pp. Civ. McKim v. 265. 5 Gray. (4) by consent of the beneficiaries. Code So. Civ. 2 regularity of the appointment by the court cannot be questioned in any collateral preceding. | * 8 4 Colorado Laws of 1894. 8 The Devestment of Office. Sandys. Dak. 476. 622. who will be appointed whenever the beneficiary shows that his trustee is absent from the country or refuses to act. A trustee is discharged by extinction of the trust. 138 Mass. as.
. 1 will vest in a successor when appointed. 3 Barb. Bogle v. 158. to preserve the property and act in an emergency trustee to prevent a loss. If a sole trustee dies.) 423. . 6 and in any jurisdiction for good reason. still remain liable as The resignation in most jurisdictions may 1 2 8 be at pleasure. 3 Allen. C. and the powers will be suspended or vested in the court. Mortimer v. J. ch. v. p. not having the office of trustee in anything but a limited extent. Dean v. Prac. Bogle. Ireland. 41 N. Rev. Railroad. Resignation. 344. and the person in whom the title to the property has vested in the mean- while. The trustee cannot abandon his trust. & E. 193. 510. 147. Boston.20 DEVESTMENT OP OFFICE RESIGNATION If he is disabled. H. 7 Milbank v. and his estate is liable for breaches of trust committed in his lifetime. 12. 1 . 54. then in absence of statute his executor or administrator accepts his trusts and at common law cannot disclaim them. Wilkinson. Laws (1902). Crane. 6 Gray. Lanford. the title will remain in him until a new trustee is appointed. namely. Eq. Infra. Mass. 11 Jurist. 107 Mass.* but he may resign. 25 How. or is in abeyance. 7 Craig v. though in some States he may disclaim by statutory provision. statutes passim. 9 Rich. Craig. 566 . and in such cases the office vests in the court. In many States the statute provides that the executor or administrator does not succeed to the decedent's trusts. and even if he conveys away the property he will 6 trustee. 428. Vandeventer. 8 The guardian of an insane person would stand in the same position as the executor of a deceased trustee. Eq. 2 It is the duty of the executor or administrator of a deceased trustee to settle the decedent's trust accounts. Perry. n. and finally convey to the new when appointed. Ch. 76 . Dodd (S. 721 Ames. 4 Webster v. Ellis v.
a court of equity will have the power to accept a resignation among its ordinary powers. Even where all persons in interest assent. Statutes passim. .) 190. 222. or incompetent. if some are under age.RESIGNATION OF TRUSTEE 21 To be effective. 1 Gray. 6 Ordinarily courts of probate have jurisdiction in these matters. In re Olmstead. unborn. The mere resignation and acceptance thereof will not convey the title to the property. 24 App. and where a trustee has conveyed the trust property to a successor appointed by the court. the resignation must be made either according to an express provision of the trust instru1 ment. Thomas . 2 The assent of the beneficiaries must be unanimous. 11 Paige. Div. 7 Matter of Miller. or with the assent of all the beneficiaries or the court. 603. there being no evidence of any direct resignation. 1 Bail. but the trustee should then devest himself of the property by suitable conveyances. Bowditch v. one would be presumed. and generally has concurrent jurisdiction where the Probate Court has the power. y. 15 Abb. Pr. The resignation need not be in writing. and until he does so he 8 will remain liable as trustee. 4 but it is. to say the least. but where it is not specially given to them. Eq. v. Y. and complete his duties. unascertained. Cruger Ibid. Halliday. doubtful and especially as all persons who are likely to raise the question are concluded by their assent. Banuelos. 314. 277. hence. Higham. 39 Fla. (N. a valid assent cannot be given by the beneficiaries. 6 will not accept a resignation until the retir7 ing trustee has settled his account. 220. Fraleigh. and returned any The court Stearns v. and resort must be had to the court. it has been suggested that the resignation is not complete without the action of the court.
and in some
benefit connected with the office, 1
tions they will require a successor to be provided for. 2 Where there is more than one trust in the same in-
strument, the rule for resignation is the same as for acceptance; namely, unless the trusts are divisible, all or neither must be resigned. 3
expressly given them by the settlement,* but this power is usually only given in railroad mortgages and the like. The court may remove a trustee for 5 good cause; but the application is addressed to the reasonable discretion of the court, 6 and each case, therefore,
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 par10 ties in a suit for a removal. Cut this is not required
where the parties are very numerous,
a railroad mortgage. 11
as, for instance, in
Craig, 3 Barb. Ch. 76.
2260; Rev. Civ. Code So. Dak. (1903),
Carruth, 118 Mass. 431. 116 Fed. Rep. 355, Circ. Ct. App. Statutes exist in most jurisdictions giving courts of probate juris-
diction to act in these matters.
Rand, 118 Mass. 215.
A number of examples in
Underbill, p. 393, n. Brunt, L. R. 6 Eq. 580. As to who are interested, see
infra, p. 158.
Howard v. Gilbert, 39 Ala. 726. Supra, p. 8 infra, p. 189. Shaw v. Paine, 12 Allen, 293. All the trustees, and all former Hamiltrustees who have not been discharged, are interested parties. ton v. Faber, 33 Misc. Rep. (N. Y.) 144. As to other parties inter10
ested, see infra, p. 158.
Street Elevated Railroad
REMOVAL FROM OFFICE
Ordinarily a trustee will be removed who refuses to 1 give bond, or who has been guilty of a wilful breach of trust, or who wastes or mismanages the trust property, or who refuses to account, 2 or who is a minor, lunatic, 8
4 drunkard, or a person of such bad habits that the prop6 and the fact that he is is in danger in his hands; erty 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. 6 So too a trustee will be removed who denies the trust 7 unfriendly to it, who unreasonably or corruptly with his co-trustee, 8 or who, having a discredisagrees tionary power, exercises it in an arbitrary and capricious 9 manner, or, having a discretionary power over pay-
ments to his beneficiary, has an unreasonable prejudice him which is likely to defeat the purposes of the settlement, 10 or favors one beneficiary to the prejudice of the others, 11 or whose relations with his co-trustee
or dislike to or the beneficiaries are such as to interfere with the proper 12 management of the estate.
See supra, p. 4, note 2. Stated to be the only causes in
Generally, but in some States expressly by statute. Rev. Stat. 371 ; Rev. Stat. 4; Gen. Stat. Conn. (1902), p. 3684, Me. (1903), ch. 70, 4 Pub. Stat. N. H. (1901) ch. 198, 8 ; Vt. Stat. 2610 ; Rev. Laws Mass. (1902), ch. 147, 11. (1894),
N. J. (1895),
Generally, but in some States expressly by statute. Bates's Annot. Stat. (1905), 6334 Brightly 's Dig. Pa. (1894), p. 2035, 59-61. The statutes existing in nearly all jurisdictions generally expressly cover one or more of the above cases. They should be referred
to in each case.
Sparhawk, 114 Mass. 356. 111 U. S. 327 ; Quackenboss
Linthicnm, 100 Md. 615.
N. Y. 117; Polk
Infra, p. 55.
Infra, p. 60.
Cox, 96 U.
Wilson, 145 Mass.
Infra, p. 61. Scott v. Rand, 118 Mass. 215.
Disbrow, 46 App. Div. (N. Y.) Ill; In re Myer's
Estate, 205 Pa. St. 413.
REMOVAL FROM OFFICE
The court will sometimes, though not necessarily, move a trustee who becomes a bankrupt, 1 or goes to
side permanently without its jurisdiction 2 but it will not remove a trustee simply because he is poor, 8 or to 4 or because he is satisfy the caprice of a beneficiary;
prejudiced against or dislikes a beneficiary where he has no discretionary power over the payments to him. 5 Nor will a trustee be removed for the non-exercise of, or the manner in which he exercises, a discretionary power,
provided he is honest and reasonable in the use or nonuse of his discretion. Nor will a trustee be removed for a technical breach of trust, or one made unintentionally or through mistake. 6
v. Palmer, 6 How. Pr. 215. Gulp's Estate, 5 Pa. C. C. B. 582 Brightly's Dig. Pa. (1894), p. 2037, 70; Hughes v. Chicago Co., 47 N. Y. Sup. Ct. 531. 8 Jones v. McPhillips, 77 Ala. 314.
Cox, 96 U.
Philips, 18 Fla. 732
Davies, 4 DeG., F.
77 Conn. 247
and see Perry,
275 to 287, and
Underbill, p. 393,
for other instances.
THE INDIVIDUAL AS TRUSTEE.
INCIDENTS OF TRUST ESTATE.
In every trust there are two estates, Ownership. that of the trustee or the legal estate, and that of the beneficiary or the equitable estate.
These two estates are separate although bound together and travelling on parallel lines, and they will be
treated separately in this treatise; the trustee's estate 1 here, and the beneficiary's estate later on.
The trustee's estate consists in the ownership of the 2 property itself, and the beneficiary's in his right in a court of equity to compel the trustee to carry out the provisions of the trust, but not in any estate in the
in America is to merge legal and equitable rights, 8 and for courts of law to act on equitable Statutes that reduce the legal estate to a principles. mere power, as in New York and other Code States, and
the refusal of a court of law to allow trust property to be sold on execution, are examples of these tendencies that might be largely multiplied. 4
Nevertheless a trustee in either a court of law or equity is the absolute owner of the trust property as to the whole world, and may eject even the beneficiary from
/n/ro, p. 157.
statutory enactments in most Code States. 37. Lowell, Transfer of Stock,
Infra, p. 49.
OWNERSHIP OP PROPERTY
the premises, 1 and is accountable to no one in the world but the beneficiaries for his use of the ownership. 2 The
popular error that the trustee is merely the agent of the beneficiary expresses an entirely erroneous and mischievous conception of the trustee's relationship to the 8 In a case of agency the property and his beneficiary.
owns the property, and the agent acts in his place in a trust the trustee owns the property,
acts in his
the beneficiary has no propbut a claim against the trustee only. erty rights, 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. *
own name, and
of the Property, all the Incidents of
All actions against strangers either at law or in equity for damage to or loss of the prop5 and all actions to protect or recover it must be erty,
to the Trustee.
brought in the name of the trustee. And the trustee may sue and be sued without any joinder of the beneficiaries, 6 where the relations between the trustee and beneficiary are not in question, and his interests are adequately 7 It was held in a foreclosure represented by the trustee. suit that the beneficiary had the right to raise money and should therefore be joined, 8 but the weight of authority is otherwise. 9 In some jurisdictions, as Alabama, New
Hendershott, 32 Iowa, 192. v. Porter, 92 N. Y. 76. 8 Beach v. Beach, 14 Vt. 28. * Everett v. Drew, 129 Mass. 150. 6 Davis v. Charles River Branch Rd., 11 Cosh. 506; Morgan v. K. P. Rd. Co., 21 Blatch. 134. 6 Carey v. Brown, 92 U. S. 171. Generally, but expressly by
infra, p. 75.
Barnes, 124 U. S. 169. 8 U. S. Trust Co. v. Roche, 41 Hun, 549. 9 Van Vechten Price Terry, 2 Johns. Ch. 1 97 60 S. C. 172; Pyle v. Henderson, 55 W. Va. 122.
274. Minn. M.INCIDENTS OF OWNERSHIP 27 York. 4268. (1903) 26 . ciary is is not. Stat. Cogley's Dig. . is entitled to vote 6 as stockholder in corporations. ch. . n. 62 Ala. Ind. . . 23 Stat. 279. beneficiaries are by statute 1 necessary parties. Ketchum. Lowell. 54 Burns's Annot. 1843. (1896). 252. 608. (1902). As to his rights. Transfer of Stock. 564. v. 150. . H. 2657. If the trustee's right of action is barred by the statute of limitations. Civil Code (1895). East India Co. Co. Mercantile Tns. ch. 180. 147 Mo.. . 19 Gen. Stat. but his liability is generally limited 9 by statute to the extent of the trust estate. 20. 2 but as against all the world olher than the beneficiary. 3050 Code S. 261. 209 * 6 v. Mont. Wy. . Rev. Fla. Comp. N. and South Carolina. Goodhne. (1899). Code (1897). (1901). 7 is eligible as a director. Laws R. Wms. (1901 ). (1897). 158. the trustee personally liable as stockholder even beyond the ex8 tent of the trust property. Transfer of Herron v. Me. 100 U. 8 Ames. 13O. 9 Pub. the right is absolutely lost. and the benefi- In the absence of statute to the contrary. Walton v. 28 Lewin. Dec. N. (1905) ch. 27 Stock. 309 Wiess v. Marshall. 2700 D. and the trustee. . 444 and note. n. 162. cl. 84 Gen. 3431 Rev. S. 509 Lowell.. . (1892). 6 Wend. is in the possession of trust prophe may sue for an injury to his possession to the erty same extent as any other bailee of property. HI. 3 P. Laws N. Qh. p. 8 or if he lose his right of action in any 4 manner. Rev. 42 Am. Stat. C. . (1901). Stat. 3419 Wash. 98 Tex. and cannot be If the beneficiary questioned. . I. Rev. Wych Meeks Molton Barker v. . Stat. 1422.. Olpherts. (1894). as an owner of stock. Henderson. Whether he himself has a right to be reimbursed by the 1 2 8 Ames. pp. . 47. p. see infra. 7 By statute in most States. Stat. . Stat. 426. 6 v. C. p. and not the beneficiary. . the trustee's right to possession is absolute. 168. The trustee. 32. Y. (1906). and the beneficiary is equally barred and has no other rights which he can 6 enforce against the property or a stranger.
74 unless he voluntarily invested in it. the contract will bind the trust effects in his hands and those of his suc- 430. 1 Hampton v. 158. and if he 2 and this fact emphais not bound nobody is bound. Gen. 6 Shoe & Leather Nat'l Bank v. 1 The trustee is personally liable on the contracts which he makes in respect to the trust property.28 INCIDENTS OF OWNERSHIP trust estate. Foster. 185 Mass. 148. 2 Taylor v. Stat. Y. 148 Hnssey v. and one acting as agent who binds his principal. Hussey v. (N. 127 Fed. 123 Mass. 8 Gill v. Wheeler. 110 U. since the contract is the personal contract of the trustee making it. sizes the difference between a person acting as trustee who binds only himself. 40. Pub. Art. 148 Taylor v. 6 name with the word " trustee" or " as trustee" Unless he is expressly exempted from liability by the contract itself he will be personally liable even on a con6 If he has the tract made under order of the court. Davis. New York. 202. Dix. as the ultimate liability of the trust estate cannot be settled in a suit at law. Dix. 185 Mass. Rev. 495. Annot. . . 437 b. p. ch. 339 Glenn v. 23. Leather Nat'l Bank v. Arnold. power to contract for the benefit of the trust. Div. Mass. Dix. Col. 80 App. . 330 Perry. Shoe & Leather Nat'l Bank v. is immaterial to the action. Davis. S. 55 Md. 468. Laws (1902). or whether the creditor can pursue the trust assets. S. 30. But not personally on contract in mutual insurance companies. 527. Laws Md. 145. Infra. (1904). 8 By using appropriate expressions the trustee can exempt himself altogether from personal liability or limit his liability to the extent of the trust estate. Even his co-trustee need not be joined in the action. p. 202. 123 Mass. . (1891). ch. Allison. 123 Mass. 110 U. * 8 Diamond Shoe & . . 58 Md. Infra. 4 but it is erroneous to suppose that he does so by describing himself or sign- ing his added. 118. v. 330. and if he properly describes himself as trustee. Carmine. Arnold.) 58.
77. 313. 4 al. 2 Taxation. et al. So. the trustee's duty to bring and in others trustee who neglects his duty would be may do so. . Boston. Mumford Anthony Caswell. . Personally liable as is Owner personally liable as 1 owner of the of Property. 508 4 R. . The trustee is personally liable for taxIn the absence of statute. n. L 159. When both the trustee and beneficiary are non-resi4 dent. ation. The trustee trust property in the Infra. he would probably A not be able to charge the over assessment to the trust. v. 279. 75. Boston. 468. although recourse will be 1 instance. 5 In he many jurisdictions in a list of the trust property for taxation. and on land where the land lies . at Dorr v.. personally liable for the penalty of his neglect. 287. constitutional. but statutes are not unusual making the personal tax payable where the beneficiary resides who is entitled to the income. 8 Gray. I. too. and the property is over assessed. pp. 78. Hampton 2 8 v. and where he neglects his opportunity to file a list. and owing to his neglect the over assessment cannot be recovered. 131 Ames. Foster. Infra. on the personal prop8 erty where he resides. statute making the property taxable where the bene- A ficiary lives. Greene v. 15 R. 127 Fed. p. 165 Mass. Hunt v. whether he signs as trustee or not. * Richardson v. Perry. 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. when neither the is it is trustee nor the property are within the State. 148 Mass. the personal property is not taxable to any one. a trustee will be personally liable on the covenants in a deed or lease.LIABILITY AS OWNER had to him in the 29 first cessor.
2 or for snow falling from the roof of a 8 So. p. Shepard v. he is building belonging to the trust estate. Shepard v. Odd Fellows Hall Ass'n v. 67 N. 6 Creamer. Foster. p. In re Reybould. 620. 162 Mass. Prinz v. 292. McAllister. Tibbetts. ul . 27. Law. Gerth. 1 for a defective coal hole or sidewalk. Collins. 468. 28 Hun. Creamer. 8 Hampton v. a nuisance on the trust premises. 199. 7 O'Malley v. J. 127 Fed. 160 Mass. too. 458. 152 Mass. 6 This liability as owner is entirely irrespective of the trustee's right to be indemnified by the trust estate. and it is now pretty generally held that where the trustee has a right of indemnity against the trust estate he may be sued as trustee and execution will issue against the trust prop- erty. which has already been referred to. 223. 468. the v. was held to be surjudgment was entered against him individually and execution issued against his own goods and not those of the trust. Hence describing " the trustee in the writ " as trustee 7 plusage. which it was consistently held could not be adjudicated in a legal action in a court of law. St.30 LIABILITY AS to the OWNER the same way and for property individually. 9 Wylly v. Lucas. 5 His liability as stockholder in a corporation has been already noticed. 9 Ga. has modified this doctrine. but if the trust property is insufficient to satisfy the execution the balance can be collected from him per9 sonally. same extent as if he owned Thus he is personally liable personally liable if through operations on the trust property his neighbor's building is unlawfully let down or his land flooded. 610. 297. 1 In other words. (1900). 1 Ch. Baker v. supra. 210 Pa. 8 The tendency of courts of law to adopt equitable principles in dealing with trust estates. 2 8 * 5 Supra. 4 If the trustee employs servants about the trust business he will be personally liable for their torts equally as if he had employed them for his own affairs. 496. plaintiff is subrogated to Schwab Cleveland.
164. 536 Mayo v. The law does not allow the trust estate to be diminished by the estate 2 trustee's neglect or default. subrogating This indi- might go against the rect himself to the trustee's right to indemnity. 151 Mass. or where the carefully. as the trust estate is not infrequently larger than the trustee's. although the trustee 8 is using due care in having the wood cut. Reasoning from the analogy of the trustee's responsibility for debts. right of indemnity from the trust estate. 8 Bennett v. 22 R. 40 Ch. * Prinz v. for instance. he trust estate in equity. 620. and may be indicted under liquor or gambling laws. 4 DeG. trustee has no right to indemnity from the trust where his neglect causes the accident. who is lawfully carrying on the testator's business. however. 151 Mass. where the plaintiff is injured by a falling limb. F. 1. right to hold even in those jurisdictions that deny his the trust estate in an action at law. 1 7 People v. Dowse v. 258. and the plaintiff was allowed to recover -against him as trustee. 1 Ch. p. remedy would seem to have the disadvantage of mak- 6 ing him subject to all set-offs against the trustee. 6 In re Reybold. The trustee as owner of the property is liable crimi7 nally for a nuisance on it. Townsend. 552. Wyndham. the trustee has been conducting the trust business reasonably and The have a right to be indemnified for judgments recovered against him.. St. & J. In re Johnson. 48. Div. which is convenient for him.LIABILITY AS OWNER 31 1 the trustee's right of indemnity. 429. Where. Parmenter v. . 481. p. he will plaintiff is injured by the careless driving of a servant of a trustee. As. (1900) 199. Barstow. Gorton. 548. 1 5 Ch. Pomeroy. Moritz.* or where the plaintiff's buildings are let down by mining operations carefully conducted on the trust prop5 In all these cases the trustee was held to have a erty. Infra. Lucas. 6 Mason v. 2 . D. 245. 210 Pa. 3 Hill.
8 He cannot set off his own debts in equity against one who sues him as trustee. 6 372. (1895). 8 Allen 348. 188 Mass. S. E. Code So. p. 383. 136 Mass. 60. Jernillo. Hoyt v. (1903). Starkweather v. Civ. 4265. 6 but he may purchase under leave of court. Law. as the burden is on him to show affirmatively that the beneficiaries were all sui juris. Arnold v. he can take no benefit from his ownership. p. 1 Cal. . 6 Williams v. Nor can he purchase them directly or indirectly at public or private 6 sale. 8 C. Eng. vol. 553. Code of Ga. Gillette. (1895). 589 . Code N. Amer. 3183. 67 Colgate v. and he may not deal with the estate for his own profit. p. informed of all the facts. 1 All the benefits belong to the beneficiaries. 70.32 THE TRUSTEE'S OWNERSHIP is NOT BENEFICIAL the trustee is the absolute The Trustee's Ownership is not Beneficial. Hill. S. Rev. 60. or for any purpose unconnected with the trust. Rev. & Eng. Colgate. . In which case he does not get a merchantable title. as security for his debts. Green. Infra. C. . p. 1618. 4 He cannot use the real estate or chattels. 2 8 * 2229. 511 and cases cited. Infra. 7 or at a judicial sale which he does not 8 Nor can a husband or wife becontrol in any manner. p. 2 He may take no benefit directly or indirectly from the estate or his office. Dak. All his skill and labor must be directed to the advancement of the interests of his beneficiaries. v. and dealt at arm's length. Encyc. Brown. except by arrangement with all the beneficiaries. Dak. 136 Mass. 7 Morse v. 24 Pick. 143 U. Morse v. App. and the trustee has no more right to any of them than he has to the property of a stranger. Hill. 89. Civil Code (1903). 49. Cases. 27. Infra. Scott (1900). 127 U. 197 Hayes v. Although owner of the property. or pledge any of the property. and if he take a present or be paid a bonus or commission of any kind in a trust transaction by a stranger. D. Latham. Hall. except the regular compensation allowed by law. 27 App. he must account to the trust for it. 499. 35. 96.
Y. (N. 5 Pick. D. and he should not lend them to his family or associates on . 2 but no stranger to the estate to the other. 535. 655. C. 70 S. 9 Barnett. Townend v. 155. one. Div. Strong. 2 Johns. Somes.) 172. Y. 85 Minn. 1 Giff. Bronson r. 188 Mass/510. 17 Ala. The transaction is a breach of trust. 229 Hayes Davoue v. 34 N. 620. v. (N. it was held that a trustee might sell to his son. Jr. 4 Johns. 394. because he Rowe. Miller. v. J. and the principle is very Scottish . He cannot swell his personal credit by keeping a large balance of the trust funds at his banker's. . 3 is a stock- . Ch. App. 1 St. 80 Mo. 201. 2 Johns. C. 306. In Lingke v. 12 App. all the profit will guise of a loan to himself belong to the trust. 519 . v. and may be set aside by the beneficiary.) 252. 8 He cannot borrow the trust funds on any security. 77 Conn. 57 N. Y. Ch. 134 Dry Goods Co. Clowney. 609. 6 Re Long Island Loan & Trust Co. Brown. 6 Brown v. Y. McKay. Rep. Paul Trust Co. p. there being no scheme to repurchase. Townend. 303. Ricketts. 7 If there is a loss he must stand it.THE TRUSTEE'S OWNERSHIP ing trustee sell is NOT BENEFICIAL 33 beneficiary. Quirk v. Stace. 8 Harrington v. (N. Amer. 148 Mass.) 252. . however. the trustee 4 is not disabled from buying it subsequently. Fanning. 42 Misc. 8 Docker Kyle v. 98 Va. Y. Mortgage Co. 9 any terms. Wilkinson. Similarly 6 he cannot sell any property to the trust. He cannot speculate with the trust funds under the 6 if he does. but two judges dissented. Eq. 92 N. 4 Ves. Smith v. Gideon. 2 Denholm v. Hall. 214. 8 If. Fritts. App. Fanning. Liebert. . 4 Creveling v. This does not go so far as to prohibit his lending to In re holder. 1 even though the other be a It is immaterial that the price paid is a fair can question the transaction. Infra. v. doubtful. a corporation in good standing. 1. 445. 1 v. 7 Piety v.. 2 Mylne & Keen. and if the profit does not equal interest he must pay interest. 434 Davoue v. the property be honestly sold to a third person. Ch. Thompson.
or South Carolina. as 1 Broughton. p. broker. Lowrie's Appeal. Grant. 4 But the law is not uniform. Eq. St. contra. 585 Mayer v. 8 In re Corsellis. (1903). and it is a bet- ter rule to avoid the difficulty altogether by employing a stranger. if he could have given such employment legitimately to another. . 373. 4 Turnbull v. 1641 Rev. Galluchat. v. 6 2 Slade v. for example. nor make a profit by buying up claims against the estate at a discount. But this reason is not wholly it is conceded that he can collect other expenses. can take none in New York. Van Vechten. 432. 31. 160. 34 Ch. 6 Turnbull v.34 THE TRUSTEE'S OWNERSHIP is NOT BENEFICIAL He cannot come in competition with the trust estate. 108 Pa. Missouri. Infra. Gibson. 140 Mass. Lowrie's Appeal. The reason assigned in some of the cases is. he may render it himself and receive reasonable compensation for his services as. Cushman. In practice the matter is a delicate one. where he acts as counsel. 140 Mass. St. should not amount to more than reasonable compensation for 1 all the services rendered. & G. 118. M. Pomeroy. 5 contra. Munn. . 143 Gamble v. 11 Paige. that a trustee cannot fix his own compensation. . Dak. the charge for expert services. 6 Rich. p. nor make a profit out of the trust estate in any other manner. 5 DeG. 21 King v. satisfactory. Perry. (1895). or agent to collect. Y. and in some States he cannot take any compensation.. 36. Civ. 8 But in most other jurisdictions. 117. . 1. . directly or indirectly. (1903). See Lord Cranworth in Broughton He Collier v. Perry. because he will have in that case to deal with himself. Civ. Code N. 675. he should not employ himself or his partner to render expert services to the estate. 41 N. 41 HI. 2 Where the English rule prevails which refuses compensation to a trustee. 118. 5 . or if he does he may receive no compensation therefor. 1 By statute in some jurisdictions he cannot enforce a claim against the estate acquired. Code So Dak. 4288. 314 Grant. but where such employment is allowed. Rev. 314. etc. 373 432. Perkins's Appeal. 59 Mo. Perkins's Appeal. i 2263. 108 Pa. Pomeroy. Code Cal. . 117. Div. together with the regular commission. .
and insurance. 9 As to apportionment of charges between income and principal. Rev. Stat. 112 App. Newell. & Giff. 2 May have Expenses from Trust Fund. p. w . App. as for instance having him declared insane and placed under guardianship 8 and in some States the premium paid a surety company on his . 4 the cost of jusand expense of consulting counsel reasonable cause. 57 Ala. official bond may be charged to the estate. (1903). 3 Sim. Forward. 494. Steinway Steinway. Smith. . On the other hand. 513. Crossland.MAY HAVE He must pay EXPENSES FROM TRUST FUND 35 over to the trust estate any bonus he re- ceives in the performance of his duties. and the trustee may pay from the estate all the expenses which he incurs as owner. 37. Me. the expense of brokers or agents. p. not including court expenses. 1 but he need not account for the profit which he receives from other business owing to the fact that he is a trustee. and he may charge the estate irrespective of the provisions of the settlement with all the legitimate expenses of management. 37. are included in the ordinary allowance made as compensation. J. 83. Corbitt. Little. Div. 192. 65. or the expense of looktifiable 6 litigation. is when there ing after the beneficiary. maintaining the validity of the trusts. the expense of accounting. pp. . 10 and so are not charged to the trust but where it is neces. 30. or. 49 N. 137 et seq. 58 Perry. 188. ch. Y. L. and clerk hire and office rent. Me. 9 Ordinarily. where the employment is reasonable and usual. 65. ch. 6 Forward v. 4 Perrine v. Rev. 4 Ch. the trusteeship should not be a burden. R. such as taxes. 8 For instance. 6 and if he be not at fault judgments recovered against him as owner of the prop7 erty. see infra. Eq. repairs. 8 as travelling expenses. 529. (N. or for resigning the trust. 8 Infra. 7 Supra. Stats. 161 Mass. 6 Allen. (1903).) 18. 910. v. 1 2 Sugden v. Whitney v. Little v. 497 Teague v.
v. Joy. if the beneficiary is competent to act. In re McCallum's Estate. State Hazard Platt. 58. 10 factors. Coyle. 9 and ranges from five to ten per cent. The trustee may agree as to amount of commission with is fixed and is usually by way of the beneficiary. 2 but not if he has exceeded his powers. Clark. 1 Merry v. 8 Perrine v. Pownall. 394. Bradbury v. 40 Ch. The court usually allows the highest amount paid agents. 4 Harring. sence of these in England and Delaware 7 the trustee cannot charge for services but in all the other States he is entitled to reasonable compensation. it would be the ground for an extra charge. Div. 211 Pa. 145. Crawford. I. 617. Div. and may reimburse himself out of income or hold possession of the corpus of the estate until he is paid. (1898). 162. 49 N. 361. Y. 117 Mass. Tuke. 202. 16 Mass. 205. commission 8 on the gross income collected. 6 In re Pooley. 39. of the compensation by statute or rule of court. * Hanna v. 1 . 4 Before incurring expense he may require security if there is doubt about his being reimbursed. 5 Redf.36 COMPENSATION sary to keep a clerk exclusively for a particular trust. Eq. 26 R. The amount . and he has a 6 right to his costs prior to all charges. 569. A trustee cannot recover for services on a quantum meruit. J. 82 Cal. Newell. I. 67 L. 24 R. Even though the trust itself is invalid. Barrell u. . St. 1 Ch. 154. 10 Taxes paid by the tenant form part of the gross income on which is entitled to charge. (N. or is in default.) 450. J. 306. 6 in the absubject to the provisions of the settlement . p. Birchmore. or has denied the trust and involved the estate in litigation. Weatherhead. 7 8 2 Meeker v. 1 He has a lien on the estate for his expenses. Infra. Wright. Dodds v. 8 Woodard v. has been guilty of a breach of 3 trust. and the like for performing similar services. 25 Ch. The whole matter of compensation is Compensation. 9 the trustee St. 204 Pa. Evans v. v. 221. Ch.
83 Pa. as it is way of commission. Hartley 2 L. 252. but in 10 other jurisdictions he will not. 140 Mass. 427. and even where it is a case of extraordinary trouble entitling the trustee to an extra charge. (N. 12 Pick. 41. the judgment is not conclusive on persons not properly parties to the case. Whyte. are usually considered extra services. 10 Supra. Ellis. v. B. Jenkins v. Dixon v. But see Barrett v. 2 8 4 Jenkins v. Turnbull v. Rhode Blake v. 34. 23 R. 789. and in such cases an extra 4 and in cases where valuable sercharge will be allowed vice has been rendered to the principal fund over and above what is covered by the ordinary commission. 1 Although the amount to be allowed rests. 117 Mass. 342. 178. Waterman. 427. 109 Mass. be allowed compensation for professional services. Trust Co. and the court should take the agreement into consideration in fixing the amount of compensation. Whyte. Homer. Pomeroy. in the sound discretion of the court. St. 62 Md. 9 Urann Island Hosp. 367 6 7 8 Biddle's Appeal. Coates. changing of investments is not usually considered to be 7 such a service. . 262.) 361. * Ellis v. court disallowed a commission of five per cent for war9 In some jurisdictions the trustee will ranting a title. 130 Mass. Pegram. 2 In many cases a commission on income will not amount 8 to reasonable compensation. p. allow compensation by cases. as for in- A 1 Bowker v. 94. J.COMPENSATION 37 and no undue advantage is taken. v. p. 62 Md. Pitney v. Infra. Everson. a 5 The ordinary charge on principal will be allowed. 2 Met. cumulative commission is never allowed. in the absence of provision by the settlement or statute. May. in these changes and against policy to encourage frequent excessive expenditure. 420. I. Eq. 15 Stew. the court will not . 117. Pierce. 8 but the sale and its conversion of real estate. 6 but sometimes a commission is allowed. or the difficult settlement of a The large claim. . 340. May v. 101 Mass. 592.
Pa. J. In re Gill. 7 narily allowed on turning over the estate to a successor or on real estate which vests in the remainderman by the force of the original instrument. Tucker. . Car. Conger. a trustee who owned a large 592. Y. for the management of the same fund. Spencer. p. of a trust.38 COMPENSATION stance a commission in two capacities. 706. aff'd 185 N. 105 App. (N. S. 7 In re Todd. 121 Biddle's Appeal. 120. Y. . 9 Spencer v. Spencer. p. 435. Lansing. 441 Ga.) 435. 5 A commission of one to two and one half per cent on the personal property is usually allowed on paying out or 6 No commission is ordidistributing the trust estate. . 2385. Spencer v. must not amount in all to more than reasonable compensation for all the ser8 vices. . Lawrence. however. Stat. The commission should be deducted from current payments. 5 Redf. . 95 Cal. (N.) 1. (N. 616. 1 un- was a complete separation of duties. collecting however and on whatever charged. Div. 94 Md. Manual of Wills. Y. Blake v. 154.) 403 In re Haskin. and 3484-3489 Crocker's Notes on Rev. S. 9 No comless there . Pegram. Pegram. 554. Van Allen. 592. Y. S. amount of stock in a corporation took a large salary as treasurer of the company and also charged a commission on dividends. (N. such as guardian and trustee. (N. Y. 8 Roosevelt v. (N. Pa. N. 4 Parker v. More v. . (1894). v. But this rule is not invariable. In Daily v. . 1 239 Meeker Brightly's Pardon's Dig. 101 Mass. 64 App. 633 . not the beginning. Div. Y. 269. 31 App. Y. See Lindsay v. 220. 926 Conger v. (1895). St. 83. Y. 38 App. Y. Div. 125. 8 Blake v. 51 So. Div. 2552. Div. 50. Ames. 333. 483 Gen. Wright. 2 Johnson v. a large amount of the personal has been rightly converted into real estate by payment for improvements on it. Crawford. Laws Mass. Calkins. 121 Mass. pp. Kirk. Y. 38 App. .) 452. and it was held not to be a double charge.) 403. 95 N. . 6 Reese v. 47 N. Code (1895). 2 or for and disbursing the funds but the commissions. 95 Md. 98 N. 101 Mass. Meetze.) 589. . Y. 8 When. a commission may be allowed on that amount. and not in a lump on the termination of the trust * but the claim for a commission is barred by limitation from the end. 53 N. 340 Smith v.
tributees v. 6 In re Fitzgerald. 121 Mass. No authority. 204 Pa." the amount will not be confined to the statutory rate. courts. Hanna v.COMPENSATION 39 mission is allowed on assuming the trust. Prin56 Ala. 2 Met. and statutes passim. 1646. see Code of Civil 869. 79 Md. No authority. compensation may be withheld. Arizona. as to executors and admin1853. 8 Brooks v. has denied 2 or mismanaged his 8 trust. Stone v. 5 per cent allowed in Pinckard's Disgle. Co. Hapgood. (1903). Where no authority exists. Alabama. the rate prescribed by the trust instrument 6 will govern. St.. 7 E. 1 If the trustee has been unfaithful. Dak. the court disclaimed power to withhold a commission for unfaithfulness. 6 Southern Ry. 125 Mass. and impliedly in almost all. or allowed only to the extent that the estate has benefited by his ser4 vices. 7 The rule in each jurisdiction. Homer. 227 . 6 Where the matter of commission is regulated by statute. or the court. expressly in many cases. 94. Ames. Procedure (1900). Alaska. Parker v. I. Jackson. 24 Ala. 22 R. Reasonable compensation. n. Civ. 98 Va. 145. g. so far as it is determined by a reported decision or statute. and this. provide that the provisions of the instrument shall govern. Griffin v. 309. Brady. 8 Abell v. although no exact sum is specified. Clark. v. 57 Wis. 250. . is given below. 918. see Perry. istrators. Executors. Farnham. if the in" reasonable strument provides for compensation. as the statutes. 420. 220. Code So. v. Pinckard's Adm'r. 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 8 executors and administrators. 4 Jennison v. 508. For other authorities on the subject 1 Dixon 2 in general. As. 307. Revised Statutes (1901). 486. Glenn's Ex'or. 10 Pick. 77. for instance. But under a statute allowing specified commissions. mutatis mutandis.
Rate provided in settlement, and enough Arkansas. make reasonable compensation, Briscoe v. State, 23 Ark. 592; as to executors and administrators, Digest
of Statutes (1894),
See Civil Code (1903), 2273, 2274, and Supplement to Code of Civil Procedure, 1618, as amended in 1905. On the amount of estate accounted
per cent up to $1,000; 5 per cent from $1,000 to $10,000, 4 per cent, $10,000 to $20,000; 3 per cent, $20,000 to $50,000 2 per cent, $50,000 to $100,000. All over $100,000, one half of one per cent, and such further allowance for extra services as court may allow, not exceeding one half amount allowed by statute.
Trustee under a will, see Code of Civil Procedure 1700, such compensation as court deems reason(1903),
And may establish a yearly allowance. No authority. As to executors, Annotated
Reasonable compensation. Clark v. Platt, 30 Conn. 282 Babcock v. Hubbard, 56 Conn. 284. Reasonable compensation in discretion Delaware. Laws of Delaware (1893), p. 712. of court Florida. Reasonable compensation. Muscogee Co.
Statutes (1905), Connecticut.
Hyer, 18 Fla. 698.
3484, 2| per cent on both income and 3487, 10 per cent on proceeds of land payments; 2552, on worked; 3489, extra in discretion of court; paying over, the same as administrator.
Georgia. as guardian;
5 Hawaiian, 196, 200. Idaho. No authority.
Executors and administra-
5586. tors, Statutes (1887), Illinois. Reasonable compensation.
136. And this applies to trusts es(1905), ch. 3, tablished before the act. Arnold v* Alden, 173 111.
Reasonable compensation. Premier Steel Yandes, 139 Ind. 307. Iowa. Reasonable commissions. In re Gloyd's Est., 93 Iowa, 303. Kansas. No authority. Statutes (1894), 3883, not to exceed 5 Kentucky. per cent on amounts received and distributed, and extra in discretion of court Fleming v. Wilson, 6 Bush, 610, allowed 1| per cent yearly on amount of principal; Ten Broeck v. Fidelity Co., 88 Ky. 242, allowed 5 per cent on income, and \\ per cent on investments. 1 Maine. Revised Statutes (1903), ch. 65, 37; 5 per cent and expenses. 5 per cent on income. Abell v. Brady, Maryland.
14. Massachusetts. Revised Laws (1902), ch. 150, Discretion of court; general rule, 5 per cent on income. Barrell v. Joy, 16 Mass. 221; May v. May, 109 Mass.
and extras earned.
Michigan. Compiled Laws (1897), 695. Trustees appointed by Probate Court, same compensation as ad9438. Administrator, on all personal ministrators,
and proceeds of
real estate sold.
5 per cent; $1,000 to $5,000, 2
but executors, administra-
and guardians are allowed, and presumably trustees, such reasonable compensation as court decrees just. Re-
Reasonable compensation. Shirley v. Sbattuck, 28 Miss. 13. Missouri. Reasonable compensation. Kemp v. Fos22 Mo. App. 643. ter, Montana. Civil Code (1895), 3301, reasonable 2776. For first compensation. Code Civil Procedure,
See also Central Trust Co.
Johnson, 25 Ky.
$1,000, 7 per cent; all between $1,000 and $10,000, 5 per cent; between $10,000 and $20,000, 4 per cent; all above $20,000,2 per cent; extra not to exceed amount allowed
Nebraska. Reasonable Lamb, 56 Neb. 104, 118.
For executors, see Compiled
West, 8 N. H. 444,
trustee allowed 1 per cent on principal, rate of income being 6 per cent. Practice is 5 per cent on income.
Robinson, 33 N. H. 104, 118. General Statutes (1895), p. 2380, 109, 110. Actual value, p. 2402, 204. Reasonable compensation not exceeding 5 per cent on income.
New Mexico. No authority. For executors, see 1972. Compiled Laws (1897), New York. Code of Procedure (1902), 2730, 2802, and 3320, as amended by Laws of 1904, p. 1921, ch. 755. Allowed 5 per cent up to $1,000; $1,000 to $10,000, 2| 1 per cent; for all above $11,000, 1 per cent. North Carolina. Reasonable commission not exceedSherrill v. Shuford, 6 Ired. Eq. 228. ing 5 per cent. North Dakota. Revised Code (1895), 4293, same as executors. 6492, for first $1,000, 5 per cent; $1 ,000 to $5,000, 4 per cent. All above, 2| per cent.
Revised Statutes (1890), 6333; reasonable compensation. Oklahoma. No authority. Statutes (1903), 1719, as
No authority. Oregon. 1209.
Pennsylvania. Brightly's Purdon's Digest (1894), 2031, 29; reasonable compensation; 5 per cent rea-
1 Trustee who has collected bnt not paid out is entitled to half commission. In re Todd, 64 App. Div. (N. Y.) 435.
Clemson, 9 Serg.
R. 204; Davis's
Appeal, 100 Pa.
8. (1896), ch. 219, Code (1902), vol. 1, 2590, same as South Carolina. executors; 2560, executors allowed not exceeding 10 cent. Court has no discretion. Cobb v. Fant, 36 per
Civil Code (1903), 1646. Same as If rate not speciexecutors, if trust instrument silent. Exfied in trust instrument, reasonable compensation. ecutors, 5 per cent on collections up to $1,000; 4
per cent between $1,000 and $5,000; 2| per cent on all above $5,000. Judge of probate may make allowance for extraordinary services. Probate Code (1903),
Code (1896), 3525. Tennessee. masters, not exceeding 5 per cent, masters' fees defined.
Texas. Reasonable compensation. Harris v. First National Bank, 45 S. W. 311 (1898. Texas Civil Appeals).
Fisher, 25 Vt. 539.
Code (1904), 2695. Reasonable commisVirginia. sion on receipts or otherwise. Usually 5 per cent. Boyd v. Oglesby, 23 Gratt. 674, 688.
Executors, Code (1897),
Code (1906), 3309. West Virginia. Reasonable Hoke v. Hoke, 12 W. compensation. Usual 5 per cent. 10 percent allowed for extraordinary services. Va. 427. Shepherd v. Hammond, 3 W. Va. 484. No authority. Executors, Annotated Wisconsin.
THE TRUSTEE'S ESTATE
Executors, Revised Stat-
The Trustee's Estate.
estate in personal property l but in real estate he will take a large enough estate to administer the trusts and
no larger, entirely irrespective of the use or absence of words of limitation, or the technical phraseology of the
trust instrument. 2
the estate is granted without words of limi-
tation, but a power of sale is given to the trustee, he will take an estate in fee instead of a mere life estate, 8
since without a fee he could not exercise his power; but
no larger estate
is given than is absolutely necessary, as, for instance, a life estate being sufficient to support an 4 annuity, no larger estate will be implied.
Although a fee be given to the trustee to support a A until B comes of B comes of age irre6 spective of the trustee's fee; and there is often statutory provision that the estate of the trustee shall terminate on
less estate, as e. g. for the benefit of when he age, the estate will vest in
the completion of the purposes of the trust. 6
In some Code States, namely,
New York, Michigan, "Wistrusts not ex-
and South Dakota, 7 the
See infra, p. 102. v. Pierce, 49 Mo. 393. Cleveland v. Hallett, 6 Cush. 403 Packard v. Old Colony Railroad Co., 168 Mass. 92, p. 96; Greenwood v. Coleman, 34 Ala. 150; King v. Parker, 9 Cush. 71 Smith v. Proctor, 139 N. C. 314. 8 Bagshaw v. Spencer, 1 Ves. Sen. 142 Welch v. Allen, 21 Wend.
Norton, 2 Sand. 296; Code Ga. (1895),
Coleman, 34 Ala. 150. 5 Slevin v. Brown, 32 Mo. 176; Nash Ga. Code (1895), 3191.
Coates, 3 B.
N. Y. Rev. Stat. (1901)
Mich., Wise., Minn., Cal.,
Dak. Rev. Civ. Code. 7 Rev. Stat. N. Y. (1901), p. 3026, 77, 78; Annot. Stat. Mich. 3250 ;> Wise. Statute 8843; Rev. Laws Minn. (1905), (1882),
334.) 627. 8 buys . Rev. a 8 * Presley White Clark. 144 Mass. 48 Infra. 349. 543. Frierson ' . as such trusts are not within A passive trustee title to naked the scope of this treatise. a trustee who merely holds a permit another to do something. Stat. where there are more than one. 3685. L. Western Railroad Co. 8 Paige.. Ind. Learned v. no title passes. R. 3 Dev. N. Fowle. Knaggs. Staats v. If he in a tax title. v. Jackson. 49 Mo. 356 Burns's Annot. Sinclair v. joint estate which is not subject to If one trustee conveys his part without join- ing the others the conveyance is void. 6 6 v.. 3342. Possession. (N. At law the trustee is entitled to the possession of the real estate. 310. 153 . 109. Code. Beach Stribling. p. Attorney General v. 8 He is equally entitled to the possession of the but the beneficiary may have an equipersonal property table right to possession and will receive it under those 6 circumstances. he cannot hold it against the trustee. (1899). Perry. pp. Albertson. v. Civ. take a partition. J. 1 and may eject the beneficiary. 30 Ark. Gleg. Div. (1903). 175. 100. 14 Vt. Soc. v.POSSESSION TRUSTEE'S ESTATE is JOINT 45 pressly established by statute are cut power and no title vests in the trustee. Div. and the grantee does not take an undivided estate in the premises. down to a mere (that is. Dak. . 40 Cal. g. 2 nor can the beneficiary deny the trustee's title if he is his landlord. Trustees. Y. Storm. 8 Chapin v. 241. 393 . Nolan. i Clark v. 28. Stat. (1895). 2 Eq. (N. First Univ. 8 Cow.) 169 . So. Pace N. though even then at law his possession will technically be the possession of the trustee. Seidelbach v. Morville v. 8 Gray. Y. (1901). Rev. Pierce. Beach. 4 Trustee's Estate 7 is Joint. v. 580. 7. collect the rents) takes a modified title. 134. 513. as. Welton. 8 2084. 527. Y. 44 App. and Boursot v. 24 Miss. but see. 1 Atk. Branch. 76 App. about which we need not concern ourselves. contra. v. Savage. e. 453.
n. Y. (1901). Shook. 12 Cush. and on the death of one the whole estate vests in the survivors. Comp.) 627. 3387. 124 Mich. (1905). In the Code States the trustee having no estate. 346. Hall.46 TRUSTEE'S ESTATE is JOINT ALIENATION All the trustees are equally seised. . Okla. Wise. (N. 2080. the conveyance would be simply void. p. if the trustee had no power given him to convey. Stat. Stat. 41 . Stat. the legal owner. N. Lit. Alienation. Code (1895). but a power merely. and there is a similar statutory 6 provision in Indiana. Okla. 8 * Underbill. . Mich. the purchaser will acquire the title discharged of the trust. 7 Rev. tees' estates. 1 79. 286. Norris v. 3028. Civ. Canoy v. 19 Barb. 7 Ired. Stat. Minn. 653. and would be bound by the trusts his grantor was bound by. Ames. 317 Rev. 2 Shook Dixon v.-(1897). Code (1895). Laws Mich. Wise. 4083. v. p. (1899). 8 The trustee. 76 App. has a full discussion of auPerry. Dak. Stat. Ind. Stat. 4096. and his being transferee will stand at law entitled in his place. (1903). thorities. Code So. 3400 Rev. . Laws. Dak. 85 Comp. ch. (1903). 5 . Kan'. Civ. but is often enacted by statute. 3028. 856. Dak. 5 N. N. 8849. N.. ( 1897). 1 A provision in the trust instrument for keeping up the number of the 2 and the statutes trustees will not prevent survivorship in many States providing that joint tenancies shall be construed as tenancies in common do not apply to trus. 113.. 6 This 1 is universal law. p. Civil Code Calif. 4 But Transmission of the Trustee's Estate. n. Stat. Stat. (1901). and no estate would pass. 84. Staats v. . Div. (1903). Homer. Rev. Storm. Troutman. . his transferee would take no larger title than the trustee conveyed. Y. 7 Co. Ames. may make conveyance. 8838. Stat. See also infra. (1897). n. 6 217 et seq. Rev. (1899): 3395. Y. (1903). 170. 382. 155. Gen. If the trustee transfers his estate to a purchaser for value without notice of the trust. Rev. 113. (1901). 85. 2091 . Burns's Annot. 3259 .
580. Stat. S. 511. v. 100 Mass. but the fact that the consideration is inadequate. Rev. (1905). Chase. Me. Lange. 56 N. Brown. 51 Md. or that it goes elsewhere than to the trust estate. the transferee is not a purchaser for value. 2. . 1 Brock. and fails to he is If a purchaser has once acquired a good title. (N. Watson. 45. Adm'r. Burgess. 113. ch. See Rua v. and even he may hold title if he takes it as trustee in another trust. (1902). Y. c. ch. Kan. A. R. Ct. 1042. Spencer. 31 App. 6 Where the trustee was one of the beneficiaries as well as trustee. 8 Meldon v. 133 Mass. 188 and note. Infra. W. 114 Tenn. 47 is on the the property were transferred to secure a pre-existing debt. his transferee will take a good title unless he knows that the transfer is a breach of trust. Rogers v. Ala. for decision to contrary. Rev. Abbott. . Div. Devlin. 147. 382 Third Nat. and the word " trus" tee occurring on the face of the deed or certificate is sufficient to put him to his inquiry as to the trustee's 2 power to transfer the property. p. 1 Mass. 3248. ch. Rev. Dak. Code (1896). Stat. Pet'r. Peake. it was said that the legal title would pass sub- Burns's Annot. 453. Thomson v. 8 If the trustee have the power to transfer. Stat. 17 S. Shaw v. .ALIENATION In some jurisdictions an attaching creditor same footing as a purchaser for value 1 but if . s. 330. Laws 3. Gen. 467 s. Laws Minn. erty is held in trust. will be sufficient notice of fraud to invalidate the title. (1903). 2 Smith v. 75. If the purchaser has reason to believe that the prop make proper inquiries. not a purchaser without notice. 3392. 1 50.) 146. Wormeley. (1901). Bk. as the trustee will not be supposed to intend to commit a breach of trust. 55 Me. 4 No title to trust property will pass by a general assignment. and the deed will not be so construed as to make him do so. he may transfer a good title to any one but the person who defrauded the trust in the first place . U. N. * 5 Wormeley v. E. . 13 So. (1897). 138 Ford v. 537. Cir. Ind. 1 L. 15.
. 2 Dow & 2 4 Clark. 164. 590. . Collins. 631 Sanders v. Mason v. Warren v.48 ALIENATION seems to be that ject to the execution of the trusts. 562.. 223 Manderson's Appeal. if the trustee were in default. 6 Supra^ p. v. 1 55 . Ga. Code . the liability would bind the trust estate If. 7 for instance. and so is liable to all the set-offs which the trustee would his claim. in most jurisdictions the creditor takes only by subrogation through the trustee. 7 Strickland v. 6 be . 232 Anderson. in all jurisdictions to the extent to which the trustee is entitled to reimbursement. he will take title subject to the trust. Fausset v. No title will pass to the trustee's assignee in bank2 ruptcy or insolvency. 29 Me. In Beck Lumber Co. . 16. as. Div. he will stand in the position of a bonafide purchaser. 3185. less the however. 40 Ch. . 8 Ames. 523. Pomeroy. 423. n. 6 15 Amer. Hupp. . Raikes n. 47. 5 The trust property may be taken on execution for debts incurred by the trustee in the execution of his trusts. Law Rev. Div. 107 Ga. B took conveyance on a secret oral trust. P. Houghton Supra. Supra. and in some without regard to That is to say. pp. (1895). p. . . 17. 201 Pa. where he is authorized to carry on the testator's business. 151 Mass. Norton v. Moritz. Ireland. in re Kembles's Estate. . 9 Ga. 113 Pa. 3 If the creditor levies with notice of the trust. but the better opinion 1 it will not. Phelps. 4 but if he attaches in some States without any notice. Symons. 74 Me. but took nothing. general agent by statute or by the trust instrument. 245 Dowse v. 1 Doe d. 54 Miss. Davenport. 151 Mass. Gorton. the would only take the amount due. v. nor can the trust property be taken for the trustee's private debt. the trustee were given the powers of a as. for instance. 393. 536 Ames. which he executed by giving a deed before this was recorded his creditors attached. 26 Ch. . 449 Wylly v. 1 Starkie. Carpenter. creditor default. 28. Houston Guano & Warehouse Co. 467. 188 111. 49. 62 . 164 Mayo v.
7 Daly (N. 6 but if he were ignorant of the trust relationship. 569 Woodard v. R. SET-OFF but even then it is 49 held must come against the trustee first. 10 or for any amounts A 1 2 * Fairland Norton 6 6 Percy. 131 111. Laws Mass. (1903). 8 Stat. v. & Div. ch. First Bank. Phelps. v. 467. S. A 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. . . 217. 471. Me. or insolvency. (1902). 102 Mass. 617 Merry v. 82 Cal. 376. Pownall. 9 Walker v. unless he knew at the time of its creation that the claim was a trust claim. p. Stat. 125 Mass. L. Infra. (1899) 77. 241. he may keep his set-off.. 6 Set-off. Bennett. 8 The trustee can set off. 174. 6 7 . 4 and is not forbidden to encumber the estate by the trust instrument. 125 Mass. 7 The trustee's private creditor has no set-off in equity. or out of the court's jurisdiction. Div. Franklin Savings Bank v. (1896). Nat. Ala. 4260. against third persons. Tuke. Y. Taylor. 117 Dodds v. bankruptcy. Bk. 104 U. n. inthat the creditor solvent. Ins. creditor of the beneficiary may set off his debt in equity or in an action at law by the trustee as an equitable bar in most jurisdictions. Wright. Brooks.). Co. only such debts as his beneficiary could set off. v. 5. 84.ALIENATION to the extent of his authority . 9 The trustee has a set-off against the beneficiary for debts due him from the trust estate. 184. Rev. 25 Ch. ch. that where the trustee is dead. The trustee's private creditor might set off his debt in a suit at law. . 241 Rev. 54 Miss. Meyers v. 270. . but see Walker v. School Dist. 4 . . Wise. 1 Ch. Stat. Birchmore. (1898) 306. and in equity can set off the debts of the beneficiary. v. 54. Brooks. 3 Prob. 174. 202 Bradbury v. 10 Mass. 8 Ames. the creditor may proceed against the trust property direct. 4183. in which case he will be enjoined from doing so in equity. 1 The court has held in Mississippi. 2 and it is provided 8 by statute in Alabama.
. Marshall. Div. even though he have an equitable estate only. 8 passes to Remainderman though his Estate be Where the trustee's estate is reduced only Equitable. to a mere power by statute. On the resignation or disability of a trustee the title to the property may vest in the successor by conveyance of the outgoing trustee. . 3 Gray. 7 24 App. Kraak. 197 Mo. (N. 110 Tenn. 8 Ames. 1898) Temple v. Moore. Perry.50 TITLE PASSES TO REMAINDERMAN . Janes. 138 Mass. the trust estate will pass out of the trustee's hands. (N. 4 Stats. 84. and the intervention of the trustee will not be necessary to perfect the title. if he be ficial 1 are not unconstitutional. as the estate taken is not beneto the trustee. . a 2 1 professional fee or personal loan.) 133. D. Marshall v. 438. 4 or where a life estate only Title due him from the beneficiary as beneficiary was necessary to execute the trusts. C. 11. pp. 6 Packard v. Rep. Harris Elliot. 30 Misc. Michigan. Infra. Such acts thorizing it the court estates. and vest in the remainderman. Foote.) 156. Rep. as. Y. 6 But in the absence of statute. when the purposes of the trust are accomplished. 333 . 12. a conveyance by the trustee is 6 necessary. in New York. Winship. 270. or where there is a statute au- may appoint a person to convey the beyond the jurisdiction. Ferguson. 45. 570 (Ala. . n. 319 Cherry v. but he cannot retain the trust property to liquidate a debt due from the beneficiary in another capacity. where the trustee has taken a fee. 44. 301 Davidson v. and is generally entitled to such set-off as an equitable plea. In equity the defendant may set off a debt due a third person as trustee for the defendant. 24 S. Supra. 7 Supra. 119. for instance. 133 Mass. 129. pp. &c. 359 but the set-off was allowed in Smith v. v. Wisconsin. . p. 2 Abbott v. Dodd v. Richardson. In the absence of such statute there is no way of divesting the outgoing trustee's title save by act of the legislature. 5 Morgan v. Y. 23 App. 146 Mass.
92 Md. 322. p. infra. 5 and a husband no curtesy in a trust estate. Flint. . the property will de- scend to his representative 4 . Forfeiture. Stat. Talbot i. 8 Aside from statute. If the sole trustee dies intestate. p. 5 Barn. J. Leatherbury. for instance. Wisconsin. & Ad. 254. 321. that in where the general devisee is a class of persons. N. as. p. 4 Schenck Schenck. office. 54. although the Crown took subject to the trust. Transmission on Death of Trustee. 19 Barb. it is generally provided by statute that the property and office shall vest in his successor in the trust. or where the general devisee is a minor. . 1280. Shook. * 6 7 Gen. Perry. J. 653. As to 166. survival of v. but it will not to a general devisee where such an intention would pass be negatived by the circumstances.TRANSMISSION ON DEATH OF TRUSTEE 51 Transmission. but now there is no forfeiture in equity. 174 25. on the death of a sole trustee tes- tate the property will pass to his general devisee in the absence of intent to confine the disposition of property to which he had a 'beneficial interest. or otherwise incapable or In such case the property will descend to the heir unfit. Alabama. New York. see survival of powers. (1895).. and it is generally provided by statute that there shall be neither forfeiture nor escheat. and Missouri. 2 8 Supra. Michigan. the title in the meanwhile remaining in the court or his heirs and personal representatives. 46 Shook v. both the office and the title to the es2 tate vest in his co-trustees by survivorship. Forfeiture of the trustee's property formerly carried with it a forfeiture of the trust 1 property. Eq. as unde vised estate. but a widow has no dower. and when a sole trustee dies. 125 . 6 Or in some 7 jurisdictions the title to real estate vests in the court Mildmay. When one of sev- eral trustees dies. 16 N. : or 1 King v. Perry 341.
What Powers tee. ch. POWERS. 46. Perry. Infra. 10S Mass. 6 6 De Peyster v. or personal representative of a trustee. is II. 54. We need only concern ourselves with those powers which the trustee must. 8 Stevens v. for instance. to carry It is entirely inappropriate for him to attempt it and in many jurisdictions that he takes no estate. 147. 24. 6 expressly provided on the trust. such as children or charities. Ireland. Laws Md. 2 . 1044. 11 Paige. 344 Code Ala. 183. and apportion the shares among beneficiaries. does not come within the scope of this treatise to consider the powers which a trustee may have collateral to the trust estate. 344 Mass. N. a power to distribute the trust property among a certain class of persons. whether they are to be exercised over the trust property or elsewhere. and make up an account. (1896). 2 When the title to an estate vests in the devisee. It Of Powers in General. 13. (1904). Perry. As. 4 Mortimer v. But otherwise in some States. 1 a Trustee has. 4001. Cowdrey. where personal representatives succeed to trust West Va. Rev. s. the devisee or personal representative only holds the title until such time as a successor the office. 6 and to make it over to the new trustee. Laws (1902). Ferrers. heir. could Pub. in connection with the management of the trust property. . Austen. . p. 873 Harlow v. 8 may be appointed he does not succeed to but to the title only. 1 In some jurisdictions they may disclaim. Art. 13.52 eldest son WHAT POWERS A TRUSTEE HAS by statute. Gen. 7 Jur. At common law a trusbeing the absolute legal owner of the property. or ordinarily does have. Code (1906). 4 and he has power to ex. . ecute the trust only so far as is necessary to preserve it. 721. 11 Jurist.
and consequently a trustee will be restrained from exercising any power inconsistent with the beneficiary's rights. since the original conception of a was some one to be trusted with the title to the property. and not general and incidental to the office. In addition it frequently gives other powers of a discretionary character. receive. and usually does. but are special. powers The general powers incidental to the office are limited to and comprise all those that are necessary to the performance of his duties. as the trustee office has more and more become. to invest the funds and lease the real estate. . but in a court of equity the rights of the beneficiary are paramount. and those which are conferred by the trust instrument. The trustee retains in equity as incidental to his office certain of the powers which are his at law as owner of the property he has also those additional powers which . or against him as trustee to disburse and distribute the property. and to defend suits against him in respect to the property. and not a sort of business manager. such as a power of revocation of the trust. hence a trustee may be said to have only those powers which he will not be restrained from using. or mainare conferred . and sue for the trust property or any income accruing on it. to take proper measures to keep the real estate repaired and insured. or a power of appointment as to distribution of income.WHAT POWERS A TRUSTEE HAS 53 exercise all the ordinary powers which an absolute owner might. and to change investments. and it usually enlarges the general powers incidental to the office. to protect the beneficiary. tain him if incapable of maintaining himself. The powers to sell the trust property. trust instrument itself may. and to convert real into personal estate and vice versa. are usually bestowed on the trustee by the legislature or court. such as power to demand. by the legislature or the court. confer in express terms the powers which the court or legis- The lature gives.
p. but have the usual incidental powers to manage the estate but only such powers as are necessary to preserve the property until it can be conveyed to a properly conauthorized. and will vest in the successors in the trust. where a trustee is to borrow money on mortgage. for instance. 4 1 2 8 Webster v. There are some cases in which the powers incidental to the office do not vest in the holder of the title. and neg- powers to perform it and in such case the trustee will take by implication all every the powers necessary to execute his duty. 394. 484 Schouler. Granger. Y. 219. stituted trustee. where the ownership vests in the heir or personal representative of a sole trustee. 134 Mass. Mass. pp. dictions to 5 6 same effect. . 428. Hammond v. Statutes in many jurisInfra.54 VESTING OP POWERS Implied powers are also often given by the trust instrument where it places a duty on the trustee. 52. in all the trustees will pass to the survivors or survi4 and this jointly. O'Brien. 72. 159 128 Mass. Vesting of Powers. Infra. 12 N. p. 1 As. . notwithstanding a provision for the keeping up of the number of the trustees. The old law was that special powers limited to " my " " trustees or " my trustees A & B did not pass with the Supra. . more than one trustee. will not . 6 Special powers conferred by the trust instrument upon the trustees in that capacity 6 will pass to survivors and successors. For instance. Vandeventer. Pet'r. or in a stranger by a conveyance not properly In such cases the owner will be a trustee. Belmont v. 60. 426. 8 The powers and. Cloon. White. if there is will vest in a trustee properly appointed. 2 or where he is to keep the estate safely invested he will have implied power to sell hazardous investments left by the lects to give expressly the . 117 Mass. 65. I. 66. 272 Bailey. 15 R. The general powers vor. maker of the trust. 6 Gray. Nugent v. he may give a mortgage containing a power of sale. Wemyss v. Pet'r.
Delgado. Bernard. 8 Benedict v. 184 Mass. Safe Dep. 309. 584. 144 Mass. 139 Mercer v. Ch. 381. 4 Execution of Powers. or pass to their suc8 cessors.. Doyle. 91 Md. 315. Vandever's Appeal. and the preference phrases for the individual to the exclusion of the trustee for the time being must be clearly expressed. 4 Blackf. 1 Ch. In the Matter of Wadsworth. Fowle. and an execution by part. Hence the insanity or refusal to concur of one trustee can block all action. The court. (N.. . But the rule is weak. 373. & Trust Co. 7 and where the trustees disagree. J. . But it still remains a question of intention. 14 Johus. 276. L. Martin. 61 N. 31 L. Ch. 513 v. 25. jority of a board may act. Lembca. App. Dunning. 1 which the court will not do. or to trust to A and B but not to are but little regarded now. is void. Gleg. Lamb. cution of a power in the trustees. 111. 186 Mass. p. 15. 1 Atk. In re Smith. often com109 . ordinary trust. Hibbard 2 . Osgood. EXECUTION OP POWERS 55 because there was an implied intention to trust to more trustees. 71 111. 405 2 Barb. 110 App. R. except where the power is limited to them and In that case the powers will and assigns. A charity differs from an . v. Doughty. Eq. instead of removing the trustee. the discretion of two or A there is a personal confidence in the individuals who are named trustees. 527. Morville v. 4 Warnecke Stott v.. Swale. 8 Mannhardt v. Y. Franklin v. & Trust Co. 391 Ray v. Sells v.VESTING OF POWERS office. 91. 225 Dillingham v. 98 Md. unless provided for by the instrument. and a maCity of Boston v. Supra. Attorney General v. . 102. the only remedy is to have a trustee removed and a new one it 8 appointed. See Snyder Kennard v. unless the con- v. 356 . pass to the trustees' successors but not to their personal their heirs representatives. Safe Dep. 22 Beav. Staats Zcitnng Co. p. Div. can only be executed by the joint action of all the trustees. 6 8 Lord. 115. 5 is The essential part of the exethe exercise of the discretion vested this As discretion vests in them jointly. however. 90 111. 8 Watts & S. 1 Such one. 2 If. J. even though a 6 majority. . 5. 7 Swale v. it will not survive. 93 Md. but not to that of alone. Supra. (1904). Arab.) 303.
Queensland N. Cummings. he will not be protected by all bind 6 by a compromise. or any other income ac- cruing. 148 et seq. 222. 259 Ridgley v. 26 R. 9 The execution of a power in its essential cannot be delegated either to a stranger or by one of part pels action. Magnus v. is treated below. and be mortgage. 5 6 Infra. Div. Bowes v. R. . 11 Barb. In equity a joint receipt is required. 89. 204.56 MUST BE JOINT DELEGATION duct of the trustee has been factious and unreasonable or promoted by corrupt or selfish motives. 125 Mass. I. Ledsam. p. 9 Infra. 104. Sankey. as he may colone trustee may pay out income. 8 Watts & S. Supra. Y. Ch. Eq. & Bat. 105. Guedalla. Stott v. Marshall v. The liability of one trustee for allowing his co-trustee to receive or have the custody of the property is a differ- his 8 ent question and Delegation. collect dividends. 2 8 4 Norcum v. so single receipt. Infra. 527. Wright. 281. 2 Johns. Mendes v. p. as all the trustees must join in the suit. Garvey 1 v. Supra. pp. 98. 24. hence if the debtor knows that the trustee is committing a breach of trust in receiving the money. 5 Nor can one trustee Conversely. Seeger. 87. 201 . Lord. 1 p. 1 Must be Joint. Caldwell. J. lect it alone. Dev. or if be has been warned to pay to all the trustees only. Ochiltree v. as must act in a sale or assignment of the all the trustees trust property. 185 Barbour v. Johnson. 385. 59 et seq. p. . but in 7 dealing with matters of principal all should join. Trustees are joint tenants at law. L. 466 Webb v. Fassitt. Collister v. interest. 20. infra. 4 nor could he collect a judgment. 37 Ch. 336. however. 150 Mass. v. 31 L. D'Oench. & Hem. pp. 425 Garvey. 163 N. 75. . hence one of them-may give a debtor a good discharge if he pays his debt into his hand 2 hence one trustee may . 15 Eq. rents. & J. Lee . ^ 8 Infra.. 391. 1 K. Bk. . assign a mortgage. 17 Mo. 3 may receive a simple debt or discharge a He cannot. p.
Floyer. v.DELEGATION the trustees to another. 356 . J. 29 111. Duff. 6 such as the delivery or execu- tion of a deed or lease.a special power to carry out the sale and convey the property. 69. or the appropriateness 5 of the security selected for investment. Ch. 266-270. 154 Pa. 368. 4 because by doing so he delegates the essential part of his power. 4 Johns. 487. 7 trustee. Infra. or in the case of a sale of stocks may sign a special power of attorney in blank to transfer the stock. or the need of repair. or hand the funds to a solicitor to invest. See article in 12 Central L. 5 Paige. Smith. 2 Rutland Trust Co. 7 8 Hawley v. pp. 473. 1 McLean (Ky. as the evident implication is that the trustee has not passed on this particular case. . may give his attorney . * Bostock v. the exercise of his discretion in determining the selling or letting prices. v. 1 Atk. Transfer of Stock. 90. v. as there is nothing to suggest that the trustee has delegated his discretion. R. unless the trust instrument re- A convenient Hence a quires his personal execution of these unessential matters. 26. the 1 Pearson v. 76 Hawley Lowell. 8 Gillespie v. James.). 8 Berger v. 307. L. St. 1 57 the trustees divest Nor can themselves of their discretion by asking the advice of the 2 Thus a trustee cannot appoint an agent to sell court. Jamison. . 1 Eq. ubi supra. Weed. or any other matter not requiring the exercise of discretion. James. 6 Woddrop v. This does not prevent the trustee from intrusting the unessentials to an agent. Duff. Sheldon. namely. Berger v. and has delegated his 8 discretion to his general attorney. 59 Vt. 4 Johns. the property 8 or to manage the real estate. and the transferee will not be put on his inquiry. having fixed the terms of sale. 374. mode of action in such cases is to authorize the agent to contract subject to the assent of the trustee. 318. 197 . Attorney General Gleg. But an attempt to reach same results under a general power would be otherwise. Ch. 368.
Philbin v. or extin6 guished in any other way. where there proved to be plenty of per7 sonalty. Batemau v. Thus. 69. 79-85. waived. or one having a meritorious claim. i. 5 Nor could a power to appoint by will be executed. but it will not aid a volunteer. Ruggles v. 3 Mad. the power will 1 Sugden on Powers. 3d Amer. an execution by parol or by will is ineffective. g. Thurn. Minot v. i. Law. 391 Amer. 300. If the execution is defective. the subsequent ratification will not be sufficient. 1899). if the power is to be executed by deed. ed. 103 Md. 81 N. e. 4 or if it is to be executed by deed witnessed by two men. See p. A power need not be executed at one time. 4 6 6 7 8 Carpenter v. 60 Pa. and the court will not interfere. 2 If the power is substantially executed in essential matters. where a ti'ustee was to sell land to support the beneficiary. 3d Amer. 927.. i. the condition must be proved and may be traversed. ed.58 PARTIAL OR DEFECTIVE EXECUTION Partial or Defective Execution.. 342. it was held that no power of sale arose. 475. 299. 2 8 Sugden on Powers. Sugden on Powers. 14 Mass. vol.. the execution will be upheld and confirmed by the 8 court. W. p. If the consent of a beneficiary is a condition precedent. but if there has been error in execution as to non-essentials prescribed by the trust instrument the execution is absolutely void. Rep. 8 and if any party die whose consent is necessary. 98. Davis. . a deed signed by them as executors was held to be a sufficient execution of their power as trustees. 495. If the validity of a special power be dependent on a condition. Tyson. in spite of errors of execution as to non-essentials. a deed witnessed by a man and a woman will not do. ed. the execution may be completed at a later date.. Cook. 18. 3d Amer. & Eng. Encyc. 367 (Wise. and if it be only partially exe1 cuted. Thus where the same persons were trustees and executors and had a power to sell as trustees but not as executors. . the court will compel the trustee to complete the execution in favor of a purchaser for value. Prescott.
was held that. J. 8 Only those interested can object to the execution of the power. Wakefield. 21 1 Nickerson v. " Judges and lawyers who see brought before them the cases in which losses have been incurred. 2 and the assent was no longer necessary to its execution. 514. since the court can only execute the power given and is not itself the party creating the right. Div. Gaunt. Lawrence.CONTROL OP COURT OVER POWERS OP TRUSTEE be lost. It follows that the court will control the trustee's powers where they are 4 ancillary to his duties. Eq." is a sound discretion is not always easily determined. and is liable if he fails to do so. tee's Control of the Court over Powers that it is the TrusWhere a trustee has a duty to Duty to Exercise. Re Courtier. Such powers are sometimes . 622 . J. is may act in his So too a decree of the court acting by statute authority invalid which does not conform to the statute authorizit." Speight v. as there were no interests to be protected. tion. the court place. S. and do not see the infinitely more numerous cases in which expense and trouble and inconvenience called " What are avoided. 3 DeG. . men of business rash. 1. And in some jurisdictions it is provided by statute that where the person has died whose consent was necessary beneficiaries and they to the execution of the power. The 1 2 8 * ment as discretion given the trustee by the trust instruto time or manner of performing these duties. Read v. 136. Leeds. Patterson. Cockhill. 34 Ch. p. perform he is held to perform it with sound discretion. 66. and he must exercise -them ac6 cording to the court's standard of a sound discretion. 44 N. it was required to protect their own interests. 10 Gray. are apt to think 9 App. 12 Gray. Alley v. the power had become unconditional. Cas. as it is where it acts on its own equitable jurisdic- ing it by statute. Lord Blackburn says. Ex'r v. Infra. 373. & * powers coupled with a trust. 1 59 but in a case where the consent of a class of all died.
3 As noted hereafter. 4 - It is said that the court will ratify anything which it would order done. the court will not excuse him even under these circumstances. 85 Pac. 4 which shows that he was acting carefully. L. especially if he has acted under advice of counsel. Gilmore 7 Perry. Kansas (1906) v. 218. Shore. Heard. 5 Barb. . since a court will not ratify an unauthorized conversion. 101 Md. 5 Barb. 125 Mass. . 92 N. v. Y. 6 but this is not quite true. 8 Bertron v. trustees being given a discretion as to time of conversion can be compelled to sell vacant land if they fail to do so within a reasonable time. his best course is to ask the instruction of the court before he acts. Proctor. or oust the court of 1 its control over the trustee's action. 2 or they may be restrained from changing an investment where there is no good reason for doing so. (N. 65 Md. Rhodes. Caldwell. 195.60 CONTROL OP COURT OVER DISCRETIONARY POWERS does not convert the corresponding powers into "discre" tionary powers properly so called. 7 Control of Court over Discretionary Powers. such as investing in a second mortgage. 56 . and it is not quite safe to rely on it since a court may not look at the matter just as the trustee does. p. 19 Ves. Yet if the action amounts to a gross breach of trust. 442. . 24 Keeler r. 435 . 7 Cal. Jr. 683 Crabb . Eq. he will be treated with indulgence. . Purely discretionary powers are special powers given the trustee 1 Bethel v. Milner v. 1 7 Eq. Y. Naglee. Abraham. 3 H. R. Tuttle. 476. 106 Mass. L. p. Gilbert. 2 Marshall v. Thus. 195. 387 and note Prendegast . 579 Marshall v. Y.) 190. 641. 96. Prendegast. 5 Owings v. Gilbert. Young. Caldwell. 686. discretion as to the amount of a payment is usually treated otherwise. Lauer. If the trustee has not used his discretion in such a way as to meet the court's approval but has acted in good faith. * Ellig v. 408 . 541 Walker v. v. Eldredge v. . hence if a trustee has any doubt as to his duty. honestly and without selfish motive. Polk. (N. 32 N. Arnold v. Cases. J.) 190. . 195. p. p. 435 Arnold v. Infra. 20 Ohio St. 125 Mass.
< Re Vanderbilt. 47. nor will the court permit the trustee to act from mere whim or caprice. 36 Conu. If. 72 Mo. 273 Bacon v. Norris. 374 . . 520. 8 Pink v. 315. & G. 150 Mass. Bacon. 24. 46 N. Costabadie. 55 Vt. Green. the execution of the power becomes a matter of litigation or is brought into court for execu- his discretion tion the holder can only exercise it with the court's ap7 proval. 122 Mass.CONTROL OP COURT OVER DISCRETIONARY POWERS 61 by the maker of the trust not coupled with a duty. Heyer. Bull. sons for acting or not acting. conscience and discretion of the trustee. 1 The court cannot control the trustee's action. 6 Rutland Trust Co. . Garvey. Mannhardt v. Portsmouth v. T. Bacon. next section. Re Nettlefold. 243.). 5 It also follows that the trustee cannot divest himself of 6 by consulting the court. . L. 7 Bethell Perry. 107 N. 59 L.. which he cannot be compelled to do. 253 Blythe v. W. 511. 1906) Tabor 10 Ch. since he and not the court 4 is the tribunal. 23. Brooks. 111. 243. 90 111. 8 or from fraud or What amounts to fraud is treated in the prejudice. Sellew's Appeal. Bull v. 743 (N. Ch. * Re Beloved Wilkes' Charity. 9 Garvey v. 59 Vt. 2 . J. and he is under no legal obligation to do 2 The maker of the trust meant to trust to the either. 8 v. App. but resting on the trustee's discretion as to whether they shall be executed or not. 20 Hun (N. Hurck. p. the court may review them. Proctor v.). Shackford. Div. 2 Madd. 55 Vt. and not to the 8 Nor can the court inquire into the trustee's reacourt. Abraham. since it is a matter of choice whether he will or will not act. 185. 6 Hare. 3 McN. Bacon v. 440. De Thuisey. and if it finds them insufficient may reverse his action. 410 Zeitnng Co. Y. H. Stephenson v. . 690. By paying 17 Eq. however. 8 Conn. but if he gives his reasons. 315. into court the trustee renounces his disv. 343(Wisc. . 423 Haydel v. 448. 186. 38 Atl. v. 157 . Staats Costabadie v. arbitrarily 9 Where a 1 trustee is given discretion as to the amount of income or principal to be paid to the beneficiary or apLewin. Sheldon. cretion. Supra. R. 525.
regardless of the fact that they 1 2 As to infant's support. I. s. 1906) Chase v. . and has accord5 ingly assumed the control of the whole matter. . and the reasoning in the decisions confused and Some legislatures and courts assert the perplexing. 81 Ky. . Turner. and while the court will insist on his making some payment. . (N. Civ. Dak. Norris. Turner. 229 . 201. have been stated above as they appear on the whole to be established by weight of authority and principle. Div. 281 6 Clark v. The rules governing the court's control over the trustee's powers. or has discretion as to the apportionment of a fund among a class. 8 It has been held that where no express discretion has been given the trustee he is bound to exercise a sound discretion in paying over the income to a beneficiary who is not a proper person to receive money. 2 App. Merritt v. Eldredge v. Civ. . Y. 579. 86 Wise. Heard. Osborne v. 4 On the other hand. 321 Osborne v. 154. Code So. Colton. 12 R. right to control the exercise of all powers. 2629. 127 U. 147 Mass. 71 Hun. 612 Bacon v. . 101 Ireland 17. 1906) Curtis v. 543 In re Hodges. 281. (N. Jones.) 345. Stephenson v. 131 Catherwood's Appeal. 23 L. 92. Code (1903). whether purely 6 discretionary or not. 5 Feltham v. 107 N. 8 Gisborne v. . 754. 761 Cromie v. Y. Gisborne. Fassitt. 2 Allen. 343 (Wise. Fassitt.62 CONTROL OP COURT OVER DISCRETIONARY POWERS 1 plied to his support. Bacon. Blanchard. Button. 52 Pa. W. National Exchange Bank v. Aldrich v. the court has sometimes held the discretion as to the amount of the payment to be ancillary to the duty to make some payment. Cummings. but unfortunately the authorities are conflicting. 86 Wise. Ireland. 1644. 26 R. Rep. Colton v. 92 Collister v. 537. s. 645. Smith. Aldrich.) 345. . 2 it will not interfere with the trustee's determination as to the amount unless there is bad faith. T. 84 N. Gordon. the general rule is to construe his power as a purely discretionary power. St. Norris 107 N. (N. Stephenson v.) 272. * Mason v. p. 343 (Wise. 646 Feltham t7. Bacon. (1903). Chase. Gordon. Cas. Bacon v. 7 Paige. 141 . see infra. p. 2 Barb. T. Corlies. Y. 300. .. 338. 243. Clark. Cook. 55 Vt. 21 Misc. . Cal. 6 Blatch. Rev. 23 L. 55 Vt. W. 163 N. S. I. 300. . 7 Ch. Y. 243 Collister w. Barbour v. Bull. Kimball v. 106 Mass. 163 N. . 64 A. . Gott v.
I. . lant. a power in such a way as to defeat the If he exercise purposes of the trust. L.). Fassit. or to get an advantage for himself or his family. Davis. of the power. matter how clearly the testator may have stipulated that he relied on the judgment of the trustee. If the trustee exercise an unlimited power for his own gain. s * . Barbour v. 524. 2 Prendegast v.) 632. ubi supra . 48 App. * Lovett v. 1 Reade v. 281. though not injurious to others. (N. See infra. 183 Mass. Y. 195. and not that of the court. and thus exercise a power. for instance. if under a power to use the principal for the support of the beneficiary. Cases. Continental Trust Co. it 4 will be a fraud. no . the court can on that ground set it having the usual jurisdiction to remedy a fraud. Farnham. 3 H. as. In re Hodges. . ubi supra. 106 Mass. 30 W. it will be a fraud. 1 Eldredge v.. p. 99. 201 Collister v. If the trustee exercises his power in such a manner as to amount to a fraud. 2 "What amounts to Fraud in the Execution of a Power. R. 1 Sneed (Tenn. the constitutionality of which may well be Practically. 499. 169 Mass. 579 Cromie v. 163 N. Bostick v. Winton. Cummings. Re Brittlebank. he pays the whole amount over at one time for the pur5 pose of revoking the trust. doubted. Bull. Div. 26 R. Hurd.FRAUD IN THE EXECUTION OP A POWER 63 thus set aside the provisions of the settlement vesting the discretion in the trustee. Prendegast. Appel. And accordingly the person attacking the exercise of a power on the ground of fraud must 8 prove his case affirmatively. Y. 82. and not because it has jurisdiction to review the exercise aside. if the trustee uses his discretion in any case honestly and reasonably the court will not interfere with him 1 but if he acts unreasonably he will probably be overruled by the court for one reason or another.
is it Sale." see the preceding section. the balance may be sold at a later date or if a power of 8 appointment fail. 5 Jones Eq. for instance. Garvey. PARTICULAR POWERS. the death or disclaimer of one of those to whom it is by 4 given. 8 Holt v. 214 6 7 Ruggles v. 1 As to " Whim and Caprice. 391. 58 . See supra. or out of 2 spite or revenge. Ward v. Ch. but where the court gives the power it may be otherwise. or the purposes for which fulfilled or A had died. Slocum v. 1899). it may be exercised again. 613 2 Ohio St. Barrows. as. 240 248. a power to sell real estate is not exhausted by the sale of the original property but extends to real property bought with the proceeds. * 6 111. (N. Power of Sale.) 82. 8 A power may become extinct Extinction of Powers. but it cannot be waived or extinguished as 5 against a donee who is not a party to the waiver. and 6 pired. p. . ed. Supra. The real ground for setting aside the execution in such cases is fraud. Tyson. where a power was given to sell and convert into cash for A. Sugden on Powers. . Supra.64 EXTINCTION OF POWERS If he exercise a power for corrupt motives 1 . 185. 220. Western. Moll v. Ch. 81 N. the execution was set aside. As. for instance. 2 Garvey v. Lessee of . W. pp. Hogan. and if part of a tract of land be sold under power of sale at one time. 5. cannot be exercised after the trust has expower A it was given have been become impossible. C. p. 55. Thus where a trustee appointed a double portion to bis son to avoid a lawsuit. Slocum. 19. III. 150 Mass. 1 Barb. . 54. the execution will be set aside. 4 Edw. 241. . 7 A power will not be exhausted by an exercise of part. 8 367 (Wise. Although a power to sell one of the most important powers a trustee may have. Frazer v. Gardner. 3d Amer.
Fe'Rd. Casey p. p. (1903). the object of a trust then being to avoid feudal dues the present day the usual object of a property in the hands of persons of good business ability to manage it for the benefit of others not possessed of such ability . or where the tage. and then the income to B. 5. or to settle property forfeitures. To 54. ch. Supra. Code Ga. As. Lowell. in part at least. (1901). (1894). 93 HI. F<? Rd. N. I. 195.SALE is POWER OP SALE 65 not a general power incidental to his office. 1 Wheate v.. 567. . Stat. S. Mich. & v. 1 Gray. 538. 470712 . (1895). v. The policy of the modern trust is to give the trustees the fullest power to manage the estate to the best advan- and hence a power of sale is a feature of all well drawn trust instruments. it will be implied from the fact that the trustee is given a duty which cannot be performed without a power of 4 6 sale. West Virginia. Transfer of Stock. Y. power of sale collateral inheritance tax. New pay 1073. Jr. 208. Pub. 80. Top. 150 Dodson v. Ky. Code W. 3594. (1894). Atch. Proctor. & S. Top.. ch. In some jurisdictions there is a statutory provision that every will shall be construed to give the trustees power 8 to change all trust investments. and so that the property may not be dissipated by the improvidence or bad management of the persons to be benefited . Michigan. 220. Stat. 3172. 2356. 80 Jones v. 513. (1906). Rev. Session * 6 Laws of Wyoming. (1903). Goodrich Ashley. who usually are. distribute the property. 5. persons unfitted for business and so that the care of large estates. 17 Ves. Gen. 304. Atch. Ky. 304. and 2 At trust is to settle it may form a family fund to descend in the family as long as it can be tied up. In to York.. where the trust was to pay the 6 settlor's debts.. App. Stat. Va. and Wyoming. Hall. Mass. 101 Md. Canavan. ch. 2 62. Acts. 150 Mass. for instance. 1 since the original theory of a trust did not contemplate a trustee's doing anything but holding and taking care of the property. 5 . In many cases where the power is not expressly given. Jones v. 8 R. Laws (1896).
Gen. Dickinson v. 4 Bohlen's Est. Y. Exercise all requisite power and authority. Such statutes do not give the court power to act in dis9 regard of the testator's wishes. Johnstone v. 6 Stone v. Rev. (1902). ~ 8 9 Clymer. 8 So. (1893). Baber. (1895). Stat. 1899).66 SALE UNDER STATUTES trustees were to invest or reinvest in safe securities. 20 Pick. 17. 253. 2 Pa. 495. and the appointment of guardians for all minors or persons unascertained or not in being. and the fact that the in1 v. (1901). Williamson v. 8 How. H. 3028. Stat. 70. 95 Texas. 2100 a. N. may order a sale if the court thinks it necessary or expedient. on the application of any one interested. Kahle. 147. (1894) 3411. 4030. and the decree of the court must conform to the statute. Laws 15. Ind. 2616-2622 . St. 159 Mass. . the trustees have an implied power to sell. Y. 75 Pa. 375 (Texas. 146 Mass. 531. 211 111. Safe Deposit and Trust . and not exceed it. Purdie v. Me. 468. C. where the maker of the trust leaves illegal and improper investments. too. C. . 1 or where they were given the power to manage and invest. N. N. Foil Newsome. v. Biscuit Co. Code Ga. Annot. 115. pay income. . 3415. 304. 8 The statutes generally provide that the court. 2 or to invest as seems prudent. . . W. 6 Mass Rev. Laws of Del. Stat. 106. Stat. (1894). 1035 . and provide for tutional.. 54 S. 138 N. 2617 Code Va. To invest and 114. 8 Boston Safe Deposit Co. St. ch. (1902). Mixter. Stat. 100. 85 Rev. 3172 Rev. (1887). Whitney. 277. but see s. Berry. 233 Ball Norris v. 10 Stat. . 2 Harvard College v. 6 and such statutes are held to be constiIn such cases the power given the court is same general rules as other powers. (1903). p. 4 But the power cannot be engrafted on to the trust by inserting deed of a property purchased by the trustee. (1899). to^ it in the In most jurisdictions power is the probate court by statute to give the trustees given a license to sell. 7 subject to the notice to all persons in interest. Wise. Weld.. 8 Beav. Vt. 721 . ch. 25. Conn. 5 Sale under Statutes. p. Stat. 9 Pub. v. ch. 198. (1901).
Colquhoun. Porter. 6 Baker v. R. Colt. 778. 106 Attorney General v. it is difficult to see what remedy they would possess at a later time. Laws R. ' Cowman v. (1896).ct of the legislature in direct controversion of the settlement has been held void in 3 but elsewhere a special act for a sale. the court without an act of the legislature may order a sale on the cy pres 6 doctrine. Pennsylvania. ch. Laws (1902). or represented by guardian. 561. the court directed a sale of bonds which were falling contrary to testator's expectations. the legislature may authorize a sale by special act. . . 9 Gray. Weeks v. where it is impossible to use the property so as to carry out the testator's wishes. 8 and providing for the appointment of guardians to represales. A. . Leggett Norris v. If such persons are not represented. . 426 . 7 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. 68 Ga. and if all parties in interest were parties to the suit. 164 Mass. 256. Pet'r. 119. 31 1. 60 Md. 24. 127. 4 Comst. 16 Pa. Moreover. and often does so. 18. has been held constitutional. 2 Pa. 19 N. no Co. Hayes. Ervine's Appeal. Y. 6 ch. the sale is of . I. 92 Md. 2 but even a sale under special a. 6 and the trust passes from the property sold to the fund received in its place. though contrary to the testator's intentions. 14 Allen. where adequate provision is made to protect the interests of all 4 persons interested in the trust. Lorillard. * 8 v. St. 1 Davis. 403. sent persons who are unascertained or not in being. Weld. 5 Wall. Pace. 2 Stanley v. 201. 1. Hobson. Clymer. St. Hunter. 445. 127. 150 Mass. 28. 403 . as a change of investment. 1 Where there is no general statute. 23 R. 61 Tex.SALE UNDER STATUTES 67 come will be increased is not a sufficient reason to decree a sale. Gen. Rev. 377 Ryan v.. Briggs. 257 Ansley v. 503 52 L. but in Weld v. Clark v. 8 Mass.
Lorillard. and so the parties were immaterial. so far as they are concerned. 472. 68 Ga. Crocker. 79 N. 4 Comst. Pace. cited in note 1. But see Denegre v.68 SALE UNDER STATUTES EXECUTION OP POWER effect. Walker. The court will not confirm a sale where the trustee had the power to make it. 8 Blacklow v. Schley v. Union Trust Co. on preceding page. Where the trustee sells at private sale he must arrange the terms himself. Brown. 257. 113. the court would undoubtedly ratify it as the trustee had power to make it ex necessitate. and the sale was necessary to preserve the property. Weld. should they afterentitled. 172 111. or where a sale is necessary to preserve the prop3 erty. But see. 1899. 403 Johns. It is unnecessary. "Where no statute giving any court power to decree a sale. . 119 Mass. 70 Ga.. infra. 1 Baker v. Laws. contra. See 2 Old South Soc. 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. a court of equity will decree a sale only where the trust cannot otherwise be carried out. * Baker v. or his agent may arrange them subject to his approval. ubi supra .. Ansley v. Where there is no statute. . v. . and a minor or person unascertained might object on becoming sui juris Power there is or vested with the estate.) . (Wise. the court would only act under and to the extent of the statute. a court will not confirm an unauthorized it would have authorized it had it been but if there was no time to get leave of court. Johns Lorillard. p. 4 It is said that sale even though consulted . 64. and hence cannot be delegated. 1 wards become of Court of Equity to decree a Sale. 5 Execution of the Power. 2 Hare. a court of equity or any court having the power to 2 regulate trusts may do so as one of its ordinary powers. 988. but where such a statute exists. 1. that such a sale would be beneficial to all concerned is not sufficient ground of action. 6 Murphy v. W. The management of the sale requires discretion. 82. 214 111. 766 See Weld v. . 40 Ruggles v. . Tyson. 89 Pacific R.
Ord v. 6 or appearance of a 7 And in some jurisdictions there are statutory party.. Jenks. Jenks. and justify a trustee in organizing a corporation and trans4 If ferring the property to it. 22 R. 473. Waterman v. or a right to mine or cut timber could not be sold. King. Noel. he should attend in person to decide any question arising on the spot. exchange. 51 425. provisions providing that the title of a purchaser from a licensee of a competent court. . who has given bond and due notice of the sale. such as an adjournment or the acceptance of a bid.EXECUTION OF POWER It is settled is at 69 law in Missouri that. West Kansas Laud Co. Carrolton Bank. and any error or omission will vitiate the 2 For instance. shall 8 not be set aside for irregular- ity in the proceedings. Laws (1902). 4 Garesche v. 45. a partial interest such as a life interest. Knox v. the court will affirm the sale. 97 S. 7 Mass. In re Spragne. taking payment in shares. 7 Mass. 2 111. 438. But see. a sale for credit cannot be power 8 made. I. Levering Investment Co. he need not deliver the deed in person if he takes proper precautions to secure the purchase money. be to sell for cash. 488. 146 Mo. power be to sell the whole estate. 72 Mo. 50 Mo. ch. 5 Madd. Mercier v. such as an immaterial error the in the description or advertisement. The sale must be carried out in the manner prescribed in the trust instrument or decree from which the authority is derived. 413. even though there may have been some irregularity. contra. .. but an authority to sell the whole estate will not prevent a sale by lots. if the it may be disaffirmed. Rev. Mass. nor will a power to sell. 148. 1 8 Graham v. Once having successfully attended to the details. 22. Knox v. 488. 19. or dispose of sale. 1 but the usual practice is not so strict in most jurisdictions. even though the sale auction. But the decision seems to rest somewhat on peculiarities of the will 6 7 and statute law. 436 Mitchell v. Spaulding. 6 If every essential requisite has been substantially fulfilled. W.
Lange. Dickinson v. 142. 8 10 Supra. Oliver . and that it has been properly carried 6 out. Westgate. 8 Price. 244 138. H. that where the settlor or court has intrusted the 176. Y. Noel.) 532. 33 * 111. has a general power of sale he need not inquire farther. 8 Cl. 292. See supra. 51 Md. 6 7 Bank Fritz v. p. 211 111. 1 but 2 in that case the purchase money must be refunded. 165. & Fin. Y. 438 . but he may get damages at law from the trustee individually for the breach of the a contract that contract. As to acquiescence. There is no objection to a purchase by the beneficiary unless such a sale negatives the testator's intention. but if he himself be disaffirmed. but has delegated his duty to an agent. so that it amounts 4 to a fraud. Cassell v. him. Mortlock 57. v. 46. p. 71 N. 127. 32. City Trust Co. see infra. McLenegan Wise. Biscuit Co. Ross. (N. 7 He will be liable if he have notice that the trustee has not exercised a personal discretion. Ord Court. the sale may be disaffirmed.. 10 rule 1 The general Application of the Purchase Money. 5 Madd. 510. or if the selling price is wholly inadequate. v. v. 115 Infra. 304. becomes the purchaser the sale may The purchaser must ascertain at his peril that the 5 power of sale arose. Cuddon. is. 8 If there is any fraud. Buller. French v. p. if he purchase from an 8 but the deteragent under a general power of attorney mination of the court that a sale is proper will protect . Div. 766. 2 5 Yeiser. Jr. v. 72 App. Where . the purchaser will be liable not only for the purchase price. the sale is a breach of trust. and if conditions are attached to the power he must But if the trustee see that they are properly performed. but also for damages and he cannot compel the trustee to carry out is a breach of trust. . since equity would not 9 compel the trustee to do wrong. 10 Ves. v. N. as. for instance.70 EXECUTION OF POWER The trustee cannot purchase directly or indirectly either for himself or another at the sale. p.. 9 White v. such as inadequate notice. Third Nat.
Stat 4588. Code N. C. as for instance where the invest- ment requires time and discretion. 4 manner that the funds 5 might be properly invested. 6 Keaue v. pledge or mortgage the trust property incidental to his 1 Wormeley v. Bank v. 88. Rev. (1894). (1894). (1899).. for instance. Laws Minn. n. v. 8 but if money the funds are to be applied in a particular manner at a definite time. or if he knows that the trustee intends to court. pp. Div. Stat. (1903) 4707. 421. Jordan. N. he will be liable if he neglects seeing that they are properly applied. 8 by The trustee has no power to Pledge or Mortgage. Laws Mich. 3028-9. Stat. Dak 2092. Y. Robarts. ch. Barroll v. Transfer of Stock. 8 Code Ala. Y. 6 2 Fritz v. 3260. S.. need not see to the application of the purchase unless required to do so by the decree. Stat. (N. 2 Rob. and statute many from seeing of our States. where the trustee took a note and discounted it for his own benefit. 9 . 8850. 1 or if he has a general 2 power of sale. Stat. for instance. contemplated breach of In England. he is liable for it. Civ. (1897). (1896). 284 . so that he has notice of the 7 trust. 8 Wheat 421. Lange. (1897). 1039. 13 Wormeley . (1898). ( Va. acting where there are three 6 or if he pays in an improper manIf the purchaser has paid in such ner. but where the sale is irregular two trustees. City Trust Co. Gen. 798. Comp. Kan. Wormeley. 51 Md. Ind. Wormeley. 2 De G. & J. (1895). Wilson v. 1 C. 77: Lowell. 332. 330. Davisson. he is not liable. Mo. 88 Md. Wise. 138. (1901). 4 Third Nat. Rev. the purchaser need not see to the applicaIf the sale is by order of tion of the purchase money. 113. 4 Madd. Ky. ' Pell v. . Brock. Stat. Whole subject treated in Underbill. Code Cal. he is exempted to the application of the funds. Forman. S.APPLICATION OF THE PURCHASE MONEY 71 funds to the trustee. Perry. 2244. 3 Bland. 334.). 356. 8 Wheat. 3399 .) 532. 412 . 72 App. 356. Rev. De Win ton. he misapply them. C. as. 4227. (1903). 4846. Rev. 84. 8 Coombs v. U. 188.
U. Y. Stat. Y. Hodgman.to carry out the 8 purposes of the trust. although he has no power to 10 since without such a power of sale the mortgage sell. Loring v. . App. (N. and in such cases the authority is an implied one given by the instrument. Boon v. Div. Roche. 115 111. power of sale apply to this power. 9 75. 284. 7 The law cannot be evaded by selling to a man of straw and allowing him to mortgage and then repurchasing. 8 Waterman Ely " Redwine. 68 Iowa. the court will not order a pledge or mortgage unless it is essential. Caldwell. 65 App. 147. Laws 18. he 6 will also have the power to pledge but the better opinion seems to be that a mere power of sale does not confer the power to pledge. except that. Lowell. Transfer of Stock. (1902). Miller v. 41 Hun . he may give a power of sale mortgage. Rev. Re Chawuer's Will. 75 Ga. 8 The same remarks that apply to the execution of a . 24 Beav. and it is said that where a trustee has a power of sale. (1901). as this power is more unusual. would be unmerchantable." Pike. 3028. S. Hall. Hale. 4 really " sell and If the trustee has power to dispose of" the 8 property. 10 Bridges v. Tattle v. Brodie. 7 6 R Eq. (N.72 1 PLEDGE OR MORTGAGE and the power has not been usually given him by the settlement or by the legislature. 3 85. 549. v. 27 . 255 Manage and Control. v. he will have an implied power of mortgage. (N. W.) 233 . 8 Griswold v. .) 371. Baldwin. Longman. 187 Mass. 2 In the absence of statute. Trust Co. First Nat. Bk. (N. 533. 569. ch. Transfer of Stock. 91 S. 76 App. and he 1 will take by implication Potter v. but of late years this power has been more frequently given to enable the trusoffice. Y. 859 (Texas 1906). Div. 8 L.). 2 Mass. 134 Mass. Div. " v. Y. 9 If the trustee have a power to mortgage. Lowell. 75. 124 la. 296. Y. 81 App. p. N. 130 Roberts v. Rev.) * 520. 453 . the pledgee will be holden to more care than a purchaser. Mansfield v Wardlow. tee to improve the real estate.
as. 543. 581. since it is his duty to get the 6 customary return from the property. 8 Sinclair v. Y. power to make a lease extending beyond that time. * Borel v. Fane. A trustee has no power to make a lease to begin at a future day. Jr. Jackson. State Bank. Keteltas. 30 Cal. or they may be indirectly effected under an ordinary power and reinvestment. 16 Ohio St. 11 Ves. 2 although a power of sale and a power to sell and exchange do not include a of sale 8 partition. the power of sale is restricted to sales for or the reinvestment is restricted. Div. 8 nor to bind the estate 1 by a covenant of re- Lewin. Rollins. however. the trustee has no . 17 N. 534. the partition or 5 exchange could not be made in this way. Barker. Keteltas. York. 491.) 112. 472. 106-108. estate as a general power incidental to his office. 7 Greason v. 236. ubi supra Kent's Commentaries. (N. 467. even though the trust may terminate during the term of the lease. and any lease made by a trustee beyond his power will terminate with his estate. 4 The trustee has the power to lease the real Leasing. on A's becoming of age. If.PARTITION AND EXCHANGE 73 the power to give a merchantable mortgage. The statute law was at one time otherwise in New pp. These leases are binding on the estate for their whole term. 8 Cow. cash. Y. Weir v. 8 Greason v. Farquhar. v. can be made by express authority in the instrument. and will not bind the remainderman. 104 App. . and the remainderman is bound by them 7 but if the trust must terminate at a given time. for instance. but now accords with the text. p. a McQueen 8 Bradshaw . vol. iv. 3 Drew. 6 Cleveland v. 408. 1 A partition or exchange Partition and Exchange. or one in the usual form. v. for such terms as are customary.
All these rules may be modified by the provisions of the trust instrument. 139 Mass.74 PARTITION AND EXCHANGE newal which will extend the whole term beyond the term power to lease. any term less will be a good 1 Newcomb Newcomb Black v. In a building lease. 205. . v. they do not fall within the class of leases which are covered by the power incidental to the office. 259. 19 Barb. but may make reasonable covenants of renewal to the same extent as he might for which he has 1 lease. but the circumstances were peculiar. but are paid for by the life tenant by the use of the property at a less rent during his life. part of the rent is the consideration of the tenant's improving the property. which do not benefit the lessor until the end of the term. because. Bergengren v. 263. 8 8 * v. There is one case where a lease of ninety-nine years was approved. It is often difficult to determine what is a customary term. 608. The v. 184 111. and these improvements. and it is a question of fact in each case to be ascertained by careful inquiry. as the trustee will then be acting under a special power he must conform exactly to its terms. 608. and must necessarily differ somewhat according to the location and the character of the property let. Harp. 19 Barb. Eq. Keteltas. and farming property is often let on even a longer term. Aldrich. ex necessitate. Marsh Ligon. al- though such leases may be in one sense of the word customary. giving the trustee a special power to lease which supersedes the general power he has by virtue of his office. Keteltas. 3 A trustee may not make a building lease. 2 Twenty years has been considered a reasonable term for business property. 4 If the trustee be given a power to lease for a specified number of years. court allowed a longer lease than the will Read. accrue entirely to the remainderman.
The trustee has the duty of gathering in and protecting the trust property . e. unless he has been improvident or unwise. Rolfe. 211. where he has attempted though unsuccessfully to have him adjudged insane. not only in cases directly affecting the property. 6 Chester v. G. 35 . Duncombe. 4 DeG. or in actions at law growing out of ownership of the trust property. M. Ligon. p. 9 Beav. All the trustees must join or be joined in equitable suits. 6 If the trust fund is insufficient. but this is merely a matter of remedy against them.. acquiesced in an improper and received the rents for a long time. These expenses are allowed. 798 supra. 23. . whether successful or not in the litigation. 8 8 * Bowen. the matter of what risks he assumes should be carefully considered. Ca. he may require in- demnity. 8 The trustee To Sue and Defend. v. Nelson v. 29. . Oldknow. Harp. and to defend suits in which it is involved. 1 Ch. 1 and if he exceeds that term the lease will be good to the extent of the authority. 6 205. 3 M. p. p. but also where the trustee has acted with reasonably good faith in attempting to protect the beneficiary himself. Supra. 6 and to employ counsel and incur all necessary expenses at the expense of the trust fund. or in which he is involved as trustee. as the beneficiary has no right to make or unIf the beneficiaries have will be personally liable on the covenants in a lease unless there be an express provision to the contrary.. and as a covenant of quiet enjoyment is implied in every lease. . 4 make leases.PARTITION AND EXCHANGE TO SUE AND DEFEND 75 execution of the power.g. Powcey Kent Com 107 Black v. they will not be heard to object. as. 2 lease. hence he has power to sue for it or for any damage to it. 28. 382. & Supra. but contracts being personal liabilities of 1 Isherwood i'. & S. Eq. and does not make the lease valid if invalid.
) 58. 80 App. 9 Allen. (1896). 8 10 Ellig v. Infra. 102. Naglee. (1902) ch. Stat. 11 2 Diamond v. Wheeler. Devereux. 31 L. 384. 208. Conn. Rev. Me. Supra. 683. Code Ga. Such statutes held con13. 9 approval of the A court is of equity would have the same power where there compromise a suit unless no The trustee should never it is 10 decidedly for the benefit of the trust estate. Cordis. 405. and notice to one trustee is sufficient. 6 The demand A compromise of one of several trustees will not bind the estate. 82. . but neither the admissions of one of several trustees. J. Vandever's Appeal. Lord. St. and unless his right is doubtful. 148. D. tile to their title. (N. 391 Boston v. 173. 5 Gray. Mackey's Adm'r v. 70. 494. 8 empowered by bitration with statute. Rev. (1895) 3429. but expressly by statute in many jurisdictions. 409. 126 Mass. 7 of the beneficiary will not defeat the or submit doubtful cases The trustee may compromise and the in to arbitration. and in compromising a claim he should show a strong probability that 1 it could not be recovered in full. 8 Watts & S. 7 Pope v. Bobbins.3430. Y. Div. Stat. 8. Ch. p. Gen. 6 Stott v. (1903) ch. 350. 1 The beneficiaries need not be joined. 8 Cbadbourn v. will bind his co-trustees or the estate. Laws 13. Bouverie. (1902). Clarke v. Coates. * Low v. and the result of litigation dubious. 9 Mass. 348. ch. 4 Allen. p. 70 Pa. Laws R. the individual trustee who made the contract may be sued alone. Gen. n. 9 Cal. Generally. 18. 28. 4 nor the erroneous representations of one of several trustees. 8 of one trustee is sufficient. 2 unless they are not adequately represented by the trustees but they should be notified of a suit hos. 6 The admissions trustee's title. (1891). 466. 3 Ch. statute some jurisdictions trustees are to compromise or submit to arcourt. stitutional. as to duties in such matters. Chadbouru. * . 11 Ames.I.76 TO SUE AND DEFEND the several trustees.
9 Hale. 28. 124 la. n. 60 N. Child. g. 330. If the trustee having the power to contract expressly 6 provides that the trust estate shall be liable. v. Moritz. New v. 340. 150. 185 Mass. 577 Wylly v. . Arnold. Arnold. Dyett. 73 Taylor . 147. 123 Mass. St. v. 4 although the bound. 223. Mayo N. Durkin v. Richards. 167 Mass. Smillie.. 25 App. (N. the trust estate will be held and an action at law will lie Thus a trustee with power of sale can 7 against the survivor or successor. 110 U. Y. 24 R. p. Langley. Nicoll. Rowland. 151 Mass. the trustee is authorized to continue the testator's business. Collins. 8 but he has no power to give an option for sale at a distant date. 2 The trustee is bound personally unless he expressly 8 provides that he shall not be bound. S. and if he is not no one is bound by the contract. 882. 170 Pa. act which he If the trustee has the power to do the contracts estate in his hands. but ex8 empts himself from liability on the note. 296. Y. 425. 202. 32. Hussey v. 1 express contract. 1 10 or in those States where he is given the powers of . Mulrein v. 6 Shoe & Leather Nat. Hadlock v. 9 10 Armory Board. Mannix 8 Purcell. I. Buswell. where the trustee mortgages the trust property. Div. 148. or beneficial improvement to the trust property. pp. such as a contract to pay for repairs. 129 Mass. 7 Paige. where justify the sale when the time comes. 82 Mo. 36.) 135. since he cannot decide in advance that the circumstances will 9 So. Wadsworth v . 347. 164 Packard . or the contract is such a one as would be implied by law. 497 North American Coal Co. Mason v. Drew. also. v. Brooks. Dix. 507 8 8 . 174 Mass. 481. trust property given as security may be held as e. Kingman. v. Bank v. Bushong v. 102. he may bind the trust in those of his successor by his He cannot bind the beneficiary. p. Roberts v. Taylor. v. St. 46 Ohio Yerkes In re v. 82 Va. Y. 346. C.TO CONTRACT * 77 To Contract. 109 Mich. S. 9 Ga. 660 Poindexter v. 92 N. Pomeroy. Everett v. Supra. and to do. 438 4 Davis. make a contract for a sale which can be specifically enforced. Chatham v. 117. 178 Mass. Whittier Underhill. v. 127 ' . 151 Mass. .
Mason v. Mulrein 8 v. 330. If the creditor must reach the trust assets through the trustee's right to indemnity. S. 153 Mass. 124 la. L 32. 2 Civ. Y. p. Smith v. (1903) 2267. Janes v. 5 assets of the trust estate is that he succeeds to the trus- indemnity from a suit at law 7 8 effects on a judgment against the trustee. Therefore his remedy liability cannot be settled in nor could execution issue against the trust The ultimate The theory on which recourse to the trust assets is allowed makes a material difference. DSv. 536. Smillie. 320. 664 Mitchell v. Code Cal. Mason v. Code N. Hampton App. he is then subject to all equities or counter claims which the trust estate has against the trustee. 151 Mass. 103 U. 40 Ch. 7 Paige. Cotting. 1907 ). McAllister. 297. Dak. 497 North American Coal Co.) 58. Gorton. Lyons. 24 R. Davis.C. (N. 82 Texas. Kingman. 444. 292. Gorton. 80 N. 8 general broad enough even the is not in itself such an express provision as will ordinarily exempt the trustee from personal liability under the contract. p. 8 Odd Fellows Hall Assn. Arnold. 1642. 80 App. Div. . 9 and he would then be obliged to make good any default of the trustee or pay his debt to the trust before receiving 10 payment. 4 Shoe & Leather Nat. 15 Ch. v. (N. (1895) 4289. 123 Mass. Mandeville's Ex'or. and if the authority assets of the estate. Burwell v. Connally v. Dowse v. 4 The general tee's right of 6 is in equity. Dak. 25 7 v. 103 U. Foster. 1 Civ. 28. Whitlock. 600 ( Mass. 548 . 536 . . 164. Div. rule under which the creditor reaches the it. 6 In re Johnson. v. 8 Packard v. or bind the " as trustee " Describing himself trust estate. Div. Kev. Dowse v. Dix. Div. 40 Ch. Dyett. Y. 15 Ch.78 a general agent 1 he TO CONTRACT may bind the funds invested in the is 2 business. Bank v. 135. S. Roberts v. . Code S. Div. 330. Supra. 9.) Pomeroy. Ayer. 2 How. 164. 166 . p. E. 560. . 10 In re Johnson. 121 N. 148 . 296. 548 . The law seems to be settled thus in England. 151 Mass. 127 Fed.. Pomeroy. Wadsworth v. S. Hale. Foote v. 9 Cases cited in notes 4 and 5. 468 Diamond v. Wheeler. 1 10 U. Taylor v. Walker. 109 Mich.
Supra. The trustee has a general power incidental to his office to maintain and support his The power is coextensive with the duty. the trustees being given the power to select the persons to whom the income is to be paid or to accumulate it in their discretion. to which a valid power of this kind can be granted is to apply the He treated later. Field u. pp. p. 145 Mass. the court will not inquire into his motives titled to anything. 62. and this is the only remedy the beneficiary will have. p. 8 3 * 6 Ga. 61. instead of paying it to him directly. Wilson. 62. and he 1 is interested to that extent. 9 164. 223. 38 Atl. 743 (N. 151 Mass. Mason Wylly v. Rep. But it has been held that the court can compel the trustee to act or execute the trust itself. Collins. . n. the creditor was allowed to go directly against 2 the trust assets in a suit in equity. however. he may be removed from his office of trustee. beneficiary. the creditor was al- lowed a lien on the trust effects for repairs. 49 Vt.). pp. Infra. 9 Underbill. 61. 157. Green. J. 136 et seq. which is treated elsewhere. Discussed supra. Wilson v. 61. 4 Maintenance and Support. Infra. 5 very commonly also has a special power given him income of the property to the maintenance and support of the beneficiary. J But see below. Blythe v. 490. or . pp. he is prejudiced and cannot fairly exercise the power. Ch. the object being to enable the beneficiary to The extent enjoy the property in spite of his creditors. l In Georgia.MAINTENANCE AND SUPPORT 79 In this country the law seems to be still unsettled. pp. Pomeroy. 6 This special power is usually discretionary to the fullest extent. If. 6 8 . 347. 346. In such a case none of the possible recipients is enhas any real interest in the trust 7 and so long as the trustee applies the income within the limits assigned. and in Vermont. 8 or revise his acts. 62. Wilbur. in a similar suit which seems to go to the extreme limit: 8 the trustees being out of the jurisdiction. 167. 79 supra. v.
v. 17 R. 109 Mass. 48 App. for that purpose. Supra. vt supra. 492. May. and where exercised reasonably 6 will not be reviewed by the court. 241. Berrjr. 145 Mass. Putnam. Wilson.6. or in many may deem necessary for his comand support. 63. Brown v. This rule is weakened. * J. 490.) 632. instead of discretion and judgment. Farnham. (N. 2 Wilson p. 6 Bradlee r. and an exercise of such a power to draw all the funds out of the trust so as cases as the beneficiary. in Berry.80 MAINTENANCE AND SUPPORT In such trusts the court considers that the power should be exercised primarily for the support of the beneficiary. H. and not to revise his acts. 252. . Andrews. although in some jurisdictions the court claims the power to review the 1 May v. 28. 163 N. 123 Collister v. and also for the rights of those whose interests are in4 juriously affected by its exercise". too.. 55. ' Brown Barker. 1 but it will only interfere to remove a trustee who acts from caprice or mere whim. Supra. Continental Trust Co. The general power to support a beneficiary incapable of acting for himself is also in a large measure discretionary in its execution. 169 Mass. a power is often expressly given to apply such part of the principal as either the trustee. discretion in paying her such reasonable amounts as she could spend . and void. 137 Mass. 8 The amount spent by whoever has " must be founded the power of deciding what is needed on a reasonable judgment. 281 " " In this last case income was payable to a woman for her use as and the court held that the trustees must exercise a sound support. 152 Mass. Y. Greene v. and cases cited Reade v. . and having a due regard for the purposes for which the power was given. fort to effect a revocation is not a good exercise of the 5 power. p. . 71 N. dealing with existing facts and reasonable anticipations of the future. 1. v. 62. I. Div. or from improper and selfish motives. pp. 6 Same case. Smith. Hills v. 2 So. Supra. 50. Fassitt. Y. Lovett v. 63.
Eq. 6 McKnight v. J. where the question arises as spending any part of the principal. May. 8 May v. Walker. Brackeubury. 9 If there are more beneficiaries than one entitled to sup- the question whether they are support. McKnight v. Eq. 1 App. Ch. is to be intention of the maker of the trust as port. Norris. 136. p. The interest of the beneficiary. for instance. or whether the trustee may them according to their needs. Supra. Y. 2 Collins v. 2 Strob. 12 R. Walker. 8 Ga. Eq. he is entitled to the whole income. 141. 2 Strob. Pollock. 63. 280. W. J. 107 N. 252. 1 81 and at it will interfere 2 where the trustee makes no payments to all. 2 Del. 1 L 8 9 10 Owens v. 343 (Wise.) Stephenson v. 289 . . not merely to what is needed. 2 Colly. 23 N. Aldrich. as although it may authorize an expenditure of principal it is said that it will not ratify one. 62. 512. p. 62. Smith. (1895). as. In the case of an infant. Servereon. (N. Code 3185. Langton v. and he is capable of enjoying. 109 Mass. Gasquet v. Div. Supra. 6 Rep. Walsh. and not the accumulation of income for the benefit of the remainderman is the chief consideration. 1906). Supra. 10 R. 62. Aldrich v. 23 N. pp. Eq. 8 Where the insane life tenant is represented by a guardian. . 8 but in those jurisdictions where the courts give the trustee a large discretion it would prob4 ably ratify any expense it would have authorized. If the income is settled on a class of persons whose circumstances are the same 10 or if an equal division ol 1 Owens v. or providing expensive farm buildings or gifts to charity where the fortune is ample. 324. 283. entitled to eqnal apportion among determined by the gathered from the instrument. Walsh. it is more prudent to take the direction of the court. 136. 6 and the trustee may provide such comforts and luxuries as are suitable to the condition in life of the beneficiary.MAINTENANCE AND SUPPORT trustee's action. 289. making a home for his father or mother 8 7 keeping a horse. 446. * Williams v. I.
82 MAINTENANCE AND SUPPORT MISCELLANEOUS 1 property in general was intended. expend accordingly. 181 v. special mon pecially as the mode of execution is generally carefully provided for by the instrument. Brown v. however. and accumulate distributed to 2 the whole balance. 377. 80. 547 . Buttrick. Besides the general powers. D. 39 Ch. Bradley. 248. 137 Mass. 147 Mass. and compowers above treated. 87 Md. even where the special motive for creating the trust has disappeared.. Lawrence v. St. by setting aside for those individuals a sufficient sum to bring the amount them up to the largest amount expended.. 141 Mass. 2 In re Coleman. and its absence is ground to set it 8 aside. & Trust Co. 1 Williams El. 6 Powers to appoint a successor in office or to terminate the trust are not infrequent. 543 . 4 Keyest>. Lawrence. 45. Chestnut Nat'l Bank v. Mercantile Trust Co. . the trustee should take the largest amount actually expended and make up to those whose needs are not so great. 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. Tribe. Carleton. See. 4 A will not authorize the power of drawing the principal as needed for support drawing of all the principal. 270 . 8 Taylor v. If. p. 443. and only the balance will be added to principal. 18 Beav. In England a power of revocation will be inserted in a voluntary settlement. Jones v. Jackman v. 165 Mass. 186 Pa. If there is sufficient income. esMiscellaneous. 300. so as to effect a revocation of the trust. and also because they are governed by the general principles set forth above. trust instruments often contain other special powers too numerous to treat. 3 Allen. he must ascertain those needs. but such is not the law in America. Fidelity Ins. 215. Nelson. and one beneficiary needs a larger expenditure than the others. 6 Supra. Harte v. 333 (disapproved in preceding case). contra. the amount expended must be equal. Foote.
see pp. These duties are not limited to the disposition of the property for his benefit. amount of support. and places on the trustee a large number of duties to his beneficiary outside of and beyond the questions affecting the trust property. Buncombe. and an act of the legislature authorizing him so. 61. may advance Brown.DUTIES IV. 256. which a trustee owes from the management of the all property. 5 Oh. Jr. D. hence he familiar with its provisions must make himself thoroughly and follow them out accurately. SUPPORT DUTIES. 1 is Nelson v. but now in England by statute support to an infant contingently interested (Re George. to use the principal for the support of the life tenant 4 unconstitutional and void. 75. 8 As Lee to discretion in deciding v. but an individual in assuming the charac- of a fiduciary or trustee for another immediately enters into a status with respect to that other which moditer fies their relationship as individuals. As we have already seen. use funds the person would not be entitled to He cannot 8 otherwise. 837) where an estate becoming vested he would be entitled to 8 the accumulations. 5 Ves. 362. His duties are to all the beneficiaries collectively. St. it Support. to maintain and support him out of the funds which he would otherwise 2 pay over to him. p. 16 Pa. * Ervine's Appeal. . except in so far as his ownership is modified by his duties to the beneficiaries. the trustee's duty to see that he has proper care and If insane. we will treat of the duties beneficiary aside with equal justice. and he his is bound to treat them First. l is and if incapable for any reason. 9 Beav. it is his duty to have him declared support. the trustee is the absolute owner of the property. 62 supra. If the beneficiary is under a disability. Supra. and accumulate any balance not needed. 83 The trustee's duty is to carry out the provisions of the trust instrument. 211.
71 N. Putnam. H. sources together. 79. 25 Wilkes v.. 350. 16 Mass. . Loring. taking make reasonable support. Hancock. 100 Mass. pp. 566 Ailing v. and if there are two funds to be drawn from they should be taxed ratably. Lewin. J. so long as they support the child. a fund tion for the support of an insane person. . they : sense for the benefit of the father. Ch. 6 Chase v. Flint. Natick. 6 1 Brown 2 . 4 Hills ?>. n. 123. Gleason v. but the court will see that they do so. 190. the settlement being in a certain is however. 92 . 6 Nat'l Valley Bank v. he may take the whole support from the trust funds irrespective of his own 5 and if the income is to be paid to a father or ability mother for the support of a child. 101 Loring v. should contribute sufficient to all given to trustees to use in their discremay take all his support from that fund irrespective of his other means 4 and if the settlement be on the father as trustee to support his child. l but the trustee should not do so without an order from the court. 52 N. 135. 144 Mass. Supra. 23 N. 241. Boston. they are entitled to it . 8 McKnight v. Berry. In re Bostwick. to support a minor child who is not taken from his v. 80. Eq. which case the trustee is excused. 136. or a mother under coverno^t 7 ture. 350. Thus. Underhill. in which case the court may make an allowance from principal . It is the duty of a father. 653 Underhill. 101. Where. 100. 7 Dedham v.84 SUPPORT is to be taken wholly from income except where the property is absolutely vested in the beneficiary. 2 The support in a case The matter of support that others in may is often complicated by the fact have a duty to support the beneficiary. if the parent be alive and able to furnish support adequate to the minor's condition and fortune. Ailing. 100 Va. 2 Allen. . 152 Mass. 6 Johns. . 4 Johns. Eq. Rogers. the trustee . the 8 trustee should not contribute except under order of court if the parent cannot furnish sufficient support. Perry. Chase. 340. 612. J. Walsh.
v. 2 Under the existing. cretion in paying to parent or guardian. says he may exercise sound disFlint. Pierce.SUPPORT CONTRACTS WITH BENEFICIARY 85 or her care. 6. Bradfield. 5 In other words. 342. Barrett v. g. Ailing. 4 8 v. 547. See Greener. as e. even concerning the He cannot. 92. 17 R. 77 Miss. Bresee v. but a stepfather or a mother under coverture has no such duty. 208. has taken no advantage of his position or influence. Supra. 111 Wise. is take advantage of his peculiar knowledge or position. 28. I. . * husband must support his A wife. . he must not delegate the duty to the father. 620. n. v. 80. and the same rule applies in payments to the beneficiary himself. trust property.'. R. the trustee. Contracts with Beneficiary. 130 Mass. The trustee must handle the funds himself. Von Zedlitz. but Perry.. 2 L. J. or the transaction may be disaffirmed. 191 . either for his own profit or for the profit of the other 4 but if he gains any advantage in the transbeneficiaries action he will be under the burden of showing that the beneficiary was fully informed and thoroughly understood the matter. except in their relations with their husbands. Jackson v. Hartley. Smith. in which case he should protect her rights. 331. 136 Lindington 6 Bowker v. any transaction with a beneficiary in which the trustee receives a benefit is pre. Eq. Field v. Middlesex Banking Co. as in dealing with a stranger. 52 N. 262 . generally have the same status as other individuals. creditors cannot disaffirm. 99 Va. 1 2 Ailing Taylor Mass. 180 ries' Patton. 8 and the trustee has no peculiar duty to them except in preventing the husband from reducing his wife's property to possession. Where the beneficiary of full legal capacity. the trustee may deal with and make binding contracts with him. Buttrick. Eq. But the beneficia. and that he. statute law married women. 165 Mass. and not delegate the management of the funds for support to another.789.
Code 2235. to suspicion. 34. Civ. Dak. relying on his representations. and all concerning the trust. As see supra. Civ. Code (1903). 4271. A trus- bound to exercise the concerns of the trust. 2228. and afterwards induces his beneficiary. his acts must be governed by strict loyalty to it and the 1 Cal. (1903) 1617. 1 The rule is the same whether the transaction concerns the trust proper or property outside of the trust. 34. to allow him to buy in the property on foreclosure to prevent loss. a trustee sells to the trust fund a mortgage for more than the property is worth. or counsel in other than trust matters. . broker. 8 4 5 to professional employment in trust matters. the beneficiary may disaffirm the purchase and require the trustee to take the property and refund the money. there seems to be no reason why a spontaneous present. Code. but if he takes compensation must show that he has not used his position to obtain the employment. Dak. Civ. Code N. Code. Civ. Vaughton v. for instance. 6 utmost good faith in all the whether it be in dealing with the trust property itself. are better wholly omitted. Noble. \ Duties in Exercise of Office tee is Good Faith. So. If. if he acts as soon as he discovers the mis2 representations. Dak. 30 Beav. especially if of small value. Supra. and the burden of proving otherwise falls on him. 20. 1624. Rev. being subject It is said that a trustee beneficiary. Appellant. (1903) (1903). p. 32.86 CONTRACTS WITH BENEFICIARY to GOOD FAITH it sumed be fraudulent. The trustee may accept professional employment from the beneficiary. Kev. So. 4 8 may not receive a gift from a but with the limitations specified as to other transactions. or with the beneficiary in matters His fealty is to the trust. Still such transactions. as that of attorney. Kev. 157 Mass. should not be given and accepted. (1895) 2 Nichols. Cal.
direct or indirect. Civ. 5 DeG. is of the fund. and 2 3 4 5 6 7 Hall. 110 Ga. 18 Pick. K. 48 Neyland v. cepts v. 360. 2 A. L. Code. . (Ky. 711. Minn. 69 Tex.) 388. or set up an adverse claim himself. w Rev. if he has an adverse interest when he accepts the trust 8 or if he sub9 sequently buys one he cannot set it up against the trust. 11 he has demands both as an individual and trustee 12 against the same person. Barker. Thomas Sterling v. p. the title. 76. So. M. Bourquin. Dak. 2230. 10 6 must not come in competition with the trust estate. 12. 110 Civ. v. by its 2 Even where the trustee honestly purchase or sale. he must appropriate any sum he 18 collects ratably between the two claims. 8 Benjamin v. w Scott v. Bendy.GOOD FAITH HIS DUTY IS ALL TO THE TRUST l . cannot make any profit out of the use of the trust property. and if He His Duty 1 is All to the Trust. Gill. 440. 34. or get any advantage. 45 Ga. u Supra. or accept an adverse employment. 344. Code Cal. nor admit the adverse claim of another. 7 Ch. the trustee's duty Perry. 180 Mass. 510. If he accidentally acquire an adverse interest which he intends to assert. Bourquin v. Hayes Ellis v. Bassett Fidelity & Am. 104 . . Marsh. 188 Mass. 12 Dec. 5 nor believes that the intention of the deny the power of the settlor to create the trust. Bowman. Mo. he must resign the trust. Supra. 412 . 10 Stone v. & G. ac- Deposit Co.7 He must yield all controversy. 434. (1903) 1621. 8 his beneficiaries. 84. 30 Sterling. Henderson. Reid v. His bondsman is liable for money he owes the trust when he it. and in a suit for a conveyance he cannot 4 He must not divulge a defect in set up a superior title. In the management wholly to his trust . unless the beneficiaries are informed and consent to his retention of the office. R. (1903). v. p. 9 M'Clanahan v. 32. Ray. 87 not interests of the beneficiaries and any act which is in the interest of the beneficiaries is a breach of trust.. He maker of the trust was he must do nothing to prejudice the interest of otherwise. Mullins.. 77 111. 210. Godfrey.
' and if he permits another to act in his 8 place he does so at his peril. 513. 144 Mass. The trustee cannot turn over the whole trust to another. Floyer.08 TRUST CANNOT BE DELEGATED he must do all that can be honestly done for the furtherance of its interests. 22. unless it is evident that nothing can be gained. Supra. 6 Paige. pp. King. 153. one was held liable . he must not release it. In the case of a demand he must press it by suit. Burnham. as is exemplified in the case of 6 Winthrop v. Supra. where two trustees divided the trust and each managed a half. 1 2 8 * 6 6 7 8 Amer. 1 Eq. Law. See also Morville i. 128 Mass. 57. vol. though he may do so in exercise of a sound discretion and under good advice but if a decision in his favor is 2 appealed from he must maintain his suit. Fowle. Wood v. 1 It is not his duty to appeal from an adverse decision. Bostock v. Attorney General. the income to be accounted for to them. 56. & Eng. In defending suits he should take all good ground that he lias. Graham v. or 4 part of it. for the law does not recognize a passive trustee. L. 155-157. and claim all exceptions. 50 Mo. 8 Paige. 8 Watts . 27. 36 Jones's Appeal. the beneficiary has a right to compel the individual who is trustee to perform the trusts himself. Lewin.. Trust cannot be Delegated. as to conduct of suits. that is to say. 109. Encyc. 666. 76. 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. 9 Clark v. 258. . without adequate consideration. 9 Thus. . . In theory a trust is a personal confidence. pp. p. &S 143. 6 Nor can the trustee delegate any part of his duties or powers his duty is to exercise the powers and discretion himself. . pp. Clark. 75. R. and he should not compromise nnless it is clearly for the benefit of the trust 8 and if he have security.
In the absence of any knowledge of unfitness. 149. dividends. 500. Sneyd. p. 186. 1637 Rev. p. principal. p. 10 distinction should be drawn between the managetrustee 9 A 1 3 8 ment of income and Graham v. 664 Rev. and some other sums of money. 18 Ohio. 500. 601 Perry. 8 9 Evans Estate. 2 Molloy. 148. . Infra. R. Dak. Kilbee v. it is usual for one trustee to assume the by the other. 7 Colbnrn v. S. 148. (1895). 2 Ashmead. Code N. . 181 U. 143. 8 Watts & S. 149. 56). 8 Dover v. In re Mallon's Estate. l Jones's Appeal. Jones's Appeal. 1 the property. 4284. 104. hence. Guilford. 18 Ohio. the other trustees may permit one of their number to exercise these 4 powers. 3 Ont. Civ. 470. They would not be justified in placing the property wholly beyond their control. trustees are joint tenants. Grant. . 8 As noted above (p. Dak.) 569. 273. Denne. . and it is generally unreasonably inconvenient for trustees 8 all agement of the property. p. 409. In practice. pp. rents. It would be impossible.. State 4 State v. 2 Gratt. number to take the general custody and management of 7 the trust estate. Guilford. the trustees to join in the active manall the a general supervision over the trust and "fulfil the purposes of the trust with ordi" 6 they may permit one of the nary care and diligence. L. Infra.TRUST CANNOT BE DELEGATED for the half lost 89 But where the duties cannot be jointly exercised they may make a reasonable apportionment of them. Infra. 143. 105. accordingly one of them alone may demand and receive inactive management of terest. Y. Infra. provided that exercise affairs. 6 Jones's Appeal. 103. 8 Watts & S. 8 Watts & S. it being customary and v. 43 Misc. Infra. Code So. Austin. 8 or in leaving the funds for an unreasonable time in the hands of their coor neglecting to exercise a reasonable oversight over his actions. (1903). and will not be liable if he abuses them. and neither will be liable for the 2 loss of funds or neglect of the other. Rep. 143. (N.
Ex parte Belchier. . but not the latter and a trustee who allowed his cotrustee to collect a large amount of principal and . 103. a trustee who has employed a good conveyancer is not responsible for a flaw in the title which he overlooked. but only for his care in selecting him for instance. in general act for the trustees a moral or legal necessity to employ an and keep the books. But see criticism on this 8. Hopgood v. 300. p. Arab. terms. p. 57. Belchier. but is the lawful act of the trustees by the hand of another. 6 The employment of one of the trustees or an agent in such cases is not a delegation of the trust. let it lie unmolested in his hands would be liable for its loss. 55. Supra. employing a stockbroker to purchase stocks. 22. 268. 8 In such cases the trustee will not be liable for the default of the 4 as again. pp. Ex parte Supra. as. 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. n. 6 Graham King. 22 Cb. Contra. 74. 727.90 TRUST CANNOT BE DELEGATED probably justifiable for one trustee to collect and disburse the former. and wherever there 2 agent. 6 but they might authorize one of the trustees was to execute and deliver the deed for them. Speight v. D. The trustees could not delegate the matter of making the . Parkin. and whether to one of better or not to sell or adjourn the sale the trustees. and paying for them through him. dent man Such a necessity exists where the ordinarily pruof business would employ an agent in his own affairs. 727 . determining the price. 6 Speight v. Arab. Lewin. p. 1 An agent may is be allowed to collect dividends and rents. 149. case. . D. sale it that is. agent. the trustees could not give an agent or one of 1 2 8 4 Infra. Gaunt. 22 Ch. 219. Again. 1 1 Eq. after they had determined the matter of the sale. for example. Gaunt. Underbill. v. 219. 50 Mo.
2 8 Hopkinson v. Mass. v. (1882). 510. Landis v. which is a delegation of the act. 3 K & J. but he is not A by statute. the trustee is the loser. In re Wright's Trusts. Stat. Ackermann. Infra. 142. Scott. King v. 15 n. which should be always open to the inspection of the beneficiary. Fisher. Mullins. 188 Mass. 32 Pa. 2 Ch. 495. p. (1901). Burghley. 447. 2 him. 1 Drew. since everything will be taken against A accounts. 57. trustee must keep accurate and separate accounts of the trust. 1. 495 Blauvelt . even if kept in a book with other If the account is inaccurate or obscure. * Weaver . any trustee can account and pay money into court 6 but in the absence of statute in America there seems to be no general entitled to a release . number a general power of attorney to sell stocks but they might give a special power to transfer a particular stock. 421. under seal. In the first instance the trustees are delegating their power to sell. R. 144.TRUST CANNOT BE DELEGATED their ACCOUNTS 91 . p. 419. p. But see Hayes v. which is a purely ministerial Accounts. but as a general rule the jurisdiction is given to probate testamentary trustee is entitled to a periodical settlement of accounts with his beneficiaries. 1311. 1 trust. Hall. 110 111. 23 N. jurisdiction in the court to in and settle his account. under the trustee's relief act. v. 308. 7 compel the beneficiary to come 1 Supra. 512. p. 6 8 7 Report of Commissioners to revise Public Statutes said passim. 8 A court of equity may courts 4 compel any trustee to account. L. If the trust is a testamentary one. Hayes /. 146. Pub. 6 In England. J. Eq. . St. and to a formal discharge or settlement in court. the trustee will be required to file an inventory (by statute in practically all the States) soon after his appointment. in the latter case they are employing an agent to make a transfer. ubi supra. Hall. ch.
he will be required to settle his account in court at stated 8 In such cases he need not render any other intervals. v. The show the condition of the trustee's account is intended estate. settle his accounts yearly. Infra. 5 The account must show every transaction include a list in detail. 109. and of property in the hands of the trustee. and ask to be allowed for the saine. or as often as the settlement requires. the survivors will settle the account and if a sole trustee dies. 192. and the beneficiary must settle. Holmes. 94 App.92 ACCOUNTS FORM OF ACCOUNT All the trustees must join. 132. Pierce. and does not involve the trustee's personal account with the remainderman or with other trusts. 7 The court in which the account is the form in which the account will be 1 2 settled will prescribe made . Munroe v. but in every Infra. Form to of Account. expended. If a trustee dies. p. 359. account. 1 All the beneficiaries are necessary parties. Provided for by statute in most States. 13 Allen. and if one trustee allows another to render a fraudulent account. and credit himself with every item lost. 133 Mass. He must charge himself with each item received. Blackington. his executor or administrator may . 369. or paid out. 4 although he does not succeed him in the trust. Winship. p. Dodd Clark v. (N. or the rents from real estate which lies in another juris6 diction. Morrill. 110 Mass. but only the surplus brought into the jurisdiction of the court. Infra. 2 If the trustee holds by appointment of the court. In accounting to a court he need not include in his account real estate. Allen. 1 Morrill v. Div. come into court to he should If the trustee does not hold under appointment of court. 94. 8 * 6 6 7 Leonard v. Y. 149. p.) 266. he is liable as a party to it. do so. .
it should appear in the schedule of additions to principal. and changes in investments consisting of debtor and creditor sides. carried out. and deduct- of account given above is that used in the States. and courts of The form many amounts paid out of principal are credited. and these two accounts should balance. and on the credit side. Eq. The schedule of principal on hand should enumerate each item of the trust property with its cost. 284. and the income paid the charges against him. If there has been any gain to the principal. after adding the schedule of additions ing the schedule of deductions. income paid. Klymer. : income received. additions to principal. J. all the amounts paid out as prinside all the cipal . and the schedule of the current year will always equal that of the previous year. The changes in investment should contain on the debtor amounts received as principal for the remainderman. The income received should contain all the sums to which the all life beneficiary is entitled. beginning with any balance of cash on hand. The account should be accompanied by proper vouchers for all payments. de- ductions from principal. principal on hand. as by income added. . either actual or appraised. but all amounts received as principal are charged. 66 N. and the amount between these two schedules will be the difference between the schedule of the current and all difference in preceding year. or sale of a security above its cost. 1 1 Willis v.FORM OF ACCOUNT 93 trust account there should be at least six schedules. or the recovery of an amount not shown in the inventory or previous accounts. viz. The schedule of deductions from principal will be made of similar items of loss and of any charges against the remainderman. but in some States the schedules of changes and additions and deductions are not put in.
either at law or in equity. but are final as to the disposition of 10 the matter in controversy.94 EFFECT OF AN ACCOUNT Effect of an Account. 159-160. pp. Bass. 67. 107. 1 90 Mass. Aldrich v. 6 and cannot be questioned in a collateral " 8 preceding. Minot v. 186. 150. by peculiar statute law. Russell. 62 Md. 220. Hill. 513. 29. p. In re Elting. provided the notice required is given. 167. except 26. Whyte. Div. 120. statute seems to be (1902). 8 Kendall v. App. (N.6 Such a settlement can only be set aside to correct a fraud or mistake. R. If an account is corrected. statutes of the jurisdiction where the account is settled is .) 516. 188 Mass. 144 Mass. Stetson v. 176 Mass. all persons interested will 9 get the benefit of the correction. 6 Mass. Probate courts are peculiar. and that notice is sufficient to cover the constitutional requirements of ' due process of law. 461 . 104 Mass. p. 101 Fed. Bennett v. 60. The settlement of trustees' generally governed by the statutory which varies with the various jurisdictions and the law. 138 Cal. 9 Pick." In Indiana and Massachusetts. as they have jurisdiction over the property itself as_ well as the parties. 427. Infra. 136 Mass. 445. Harris v. necessary. Purrington. Rev. 93 Lowell. Winship. 2 can be similarly represented. A . Barton. Hence judgments of a probate court do not depend on the parties to the suit. Dodd v. 8 Lever v. tled in court is final l as to all In general an account setpersons who are parties to but not as to other persons. Laws 22. Y. 2 Foster v. ch. accounts in court should be carefully studied. 272 . Morse v. 10 Loring v. 4 Cush. Peirce. Steineman. 336. 11 Cush. 8 Minors may be represented by a guardian ad litemf and statutes commonly exist by which persons unborn or unascertained the proceedings. 134 Mass. 204 . DeForest. Foster. Starkey. Russell. 7 Parcher v. 265. 1 Met. Amory v. when an account is filed in the probate court all former by the court ' accounts of the same accountant 1 may be reopened. * Jenkyns v.
Ex parte Geaves.EFFECT OF ACCOUNT EXPENSE OF ACCOUNTING 95 l . Foster. Kendall v. 176. Burns's Annot. 177. the court will not help him. reopen his accounts. eh. 120. but in so far as fairly made is binding on all who take part 8 in it. 396. 104 Mass. But see as to Massachusetts. Mass. Blake r. 265. ch. Bennett v. & G. Lowell. Lowell. Parker v. DeForest.." and a settlement 8 is only conclusive in the case of a is final account. 6 Amory v. 393. R. 186 Mass. Rev. the settlement is so far as the account is assented to by persons interested and able to act for themselves. ( 2559 . and may be 7 reopened even by them to correct mistakes of fraud. Pegram. 8 Amory v. 291. 188 Mass. Infra. p. 8 * 17. 541 186. 6 or has neglected for a long period to enforce his rights. 134 Mass. . 6 7 Infra. . make up an account therefore ordinary compensation covers the'making up of the account. even though it cover a breach of trust. 140 Mass. 8 DeG. Pierce. yet as the state of the funds may be affected by his act. tice. Acts 1907. 167. Laws (1902). but any court charges will be borne by the trust estate. 109 Mass. but not to correct the judgment 2 Notice is construed to mean " actual noof the court. Stat. Bassett v. A successor in a trust not accountable for the faults of his predecessor. 1901). unless the trustee was at to . 183. although there bar him. ubi supra. 150. the successor's duty may require him to investigate his predecessor's acts. p.. 6 final in is no statute of limitations to If the account is not settled in court. It is the trustee's duty The Expense of Accounting. Ind. 4 If a beneficiary had an estate in possession and has assented to the account. 101 Fed. 438. and recover from him or his estate. as to matters which have been heard and determined and as to these matters the accounts may be reopened to correct a fraud or mistake. Granger. Boston Safe Deposit & Trust Co. M. 1 8 Foster v.
In England the trustee can apply to the court for instructions on nearly any question by an order in chambers. & J. p. the fund would bear the expense of accounting. 198. is . In such 6 case. 1868. Holland Trust Co. 58 L. Y. 65 App. 81. Siddal.96 WHERE TRUSTEE IS IN DOUBT AS TO DUTY fault in not accounting. but the expense of furnishing an unnecessary account must be borne by the person requiring it. 6 Greene Hills v. Whitchurch. although there is no obligation on him to do so. 142. . 269. in which case he 1 by the court to pay the costs. and if he does not 2 and object he will not be heard to do so at a later date where the beneficiaries are of full capacity. 436. Putnam. and if he involves the estate in unnecessary litigation he may have to pay costs. In Pennsylvania the court v. 201 Pa. and where the trustee acts without compensation. may be ordered "Where the Trustee is in Doubt as to his Duty. Mnmford. but by statute sometimes. 152 Mass. prudent plan for the trustee to consult his beneficiaries 8 before taking any important step. . (N. he can and should apply to the court for instructions 4 but he life beneficiaries. yet it is undoubtedly a When . 2 Life Association of Scotland v. J. n. p. In England. Bissell. Bradby v. But where a question arises as to the proper construction of the settlement. he may refer the matter conflicting claims 1 Blake v. The Duties and Liabilities .) 252. Ch. N. 35 infra. but that the result might be reached by a fictitious account. the court may tell him to take advice. cannot consult the court simply because he is ignorant and does not know his duty or what the law is. Stat. I. of Trustees. Ohio (1904). 6202. W. held that it had no such jurisdiction. Hammersley. Stat. 558 Chisholm v. 78. 4 Generally. H. Pegram. 4 R. Pub. In re Morton's Estate. Supra. or a determination between 6 is necessary. Div. 432. p. F. 74. . ch. 100 N. N. Y. v. 3 DeG. 124. If therefore a doubt as to what the trustee's duties are. 313 Underbill. a trustee is in doubt as to his duty. Sutherland. 109 Mass. 10. but generally this mode of procedure will only protect the trustee against the there and so is incomplete. S. 541. Rev. 38. (1891). he may notify the beneficiary of his intended action. Re Bosworth. 58..
Chadbourn. Church. I. Woolworth. 313. Chandler. 181 Mass. he be protected from personal liability. u Bullard v. . 406. what is his 8 or what his powers and liability to a creditor or for a tax duties will be under a contemplated reorganization of a 9 nor if he contract under order of court will corporation . I. 345. w Infra. Ep. 374. he is given a discretionary power in the matter. 8 as. Salisbury Mfg. 532. 145. v. 307. 59 Vt. 148. 532. 321. Eq. J. 342. 5 In some jurisdictions he should consult the court before He may 6 investing. Lowe v. De Koven v. 111. Peckbam Newton. Convocation of Prot. 10 No application will be considered until the question is a Hence a question as practical one and must be decided. 8 Greene v. 173. Alsop. 183 Mass. Where. .WHERE TRUSTEE to the court IS IN DOUBT AS TO DUTY 97 and will be protected by its determination. however. a 8 Wheeler Edwards Sohier v. 9 Allen. and not by a fictitious account. 205 Hemenway. 13 . ch. to who will be entitled in remainder cannot be asked 11 during the existence of the life estate. 18 N. as. 7 . Lincoln v. 9 Treadwell v. Perry. Laws (1902). 103 Mass. Edwards. 4 R. p. 141 Mass. Supra. Co. the court will not interfere since he is the forum and not it 7 Nor could he use this method of determining a question at law. Mumford. 77. 12 The proper way to raise the question is by a bill for in18 An account structions. 7 Gray. v. p. 7 Rutland Trust Co. Chadbourn v. 1 Mass. ask its instructions as to a compromise. Rev. 83 Md. " w Tuttle v. for instance. 393. for instance. a stock dividend 4 or the apportionment of the expense of certain repairs. 15 R. 1 sale or investment of the trust property. Aldrich. 409 . 581 * 309. . 149 Mass. 2 or on such a question as the apportionment of a fund between the life tenant and the remainderman. 62 N. 6 6 Hemenway v. H. and the distribution of a fund cannot be decided until the cash is in hand. but will be only assured of indemnity from the trust fund. Sheldon. Eldredge. v.
but trusts only extend to property. 145. . Libby Todd. 152 Mass. 108 Mass. and not to such things as the performance of an act. 6 but if the application was unnecessary the court may order the trustee to pay costs. the court may proceed with less. 137. 343 (Wise. 3 If the suit is in the probate court it will be conclusive irrespective of the should be parties 4 made parties joined. Lowry v. p. Elsley. Winship. Trust Property. Fanners' Loan & Trust Co.1 All persons interested 2 . Norris. 172 N. 6 MANAGEMENT OF FUND. Y. The costs of all parties to the proceedings in ordinary cases will be borne by the principal of the estate. 6 Stevenson v. duty to inquire into the nature of the property 1 Dodd v. even though it be 8 real estate outside of the jurisdiction of the court. and it may. . 630. 1906) . 518. 67. in possession or reversion. 417. 67. 6 Howland v. or trade secret or patent right. 160. Perry. 584 (Mass. 133 Mass. 1907). 285. New Eng. 143. Eaton 140 Mass. * 8 Hills v. Greene. 2 Story. trustee's On accepting a trust. such as the 10 employment of a particular person as attorney or agent. 7 Massie v. Rep. 148. though such a course V. 2 Wagnon v. 80 N. 9 Mitchell v. Div.. W. Barnard. Winslow. What may be interest. or any whether vested or contingent. 19 Ch. refuse to allow even the expenses of the guardian ad litem.98 is WHAT MAY BE TRUST PROPERTY meant trial POSSESSION to show the the of disputed state of the estate. may be the subject of a trust. in its discretion. 6 Cranch. 359 . Trust Co. Infra. Watts. and is not for claims. or 9 something not actually in existence. it is the Taking Possession. which can be as7 signed. E. 107 N. Any sort of prop- erty. p. p. Pease. real or personal. but when they are very numerous and every possible interest is adequately represented. v. 104 Ga. is unusual. w Foster v. 277. 532. 68.
p. in the trustee. Div. where he takes the estate from take immediate steps to secure He will have the trust pr6perty and properly invest it.TAKING POSSESSION 99 and trust documents. 2 He is not bound to take the securities tendered him if they are improper investments. 170. 138. In re Salmon. collect or. 125 Mass. Kinsey. 4 6 Salisbury Mills. Supra. the estate may vest in him by the terms of the trust instrument or by statute. .. . 291. 77 Va. & G. He must Real Estate. Ex parte Geaves. Porcher. takes the securities at their inventory value. Hext v. 8 DeG. Luring v. Thayer v. but may insist on having them converted into cash. vision in the instrument. 219. 4 rule applies The same an executor. 42 Ch. 1 Strobh. 351 . 691 Underbill. and he is not appointed by a decree of court vesting the property in him. 1 2 8 Hallows v. Boyd. he need only take the securities at their actual value and then should 8 If he outgoing trustee. M. 450. an equitable action against a transferee of the legal title made before he became trustee. Having acquired title he should at once take possesIf the real estate is let he sion. Div. Eq. at any rate. Cogbill v. 232. then he must take a conveyance and record it in each jurisdiction. 39 Ch. he must ascertain that he receives all the property that belongs to the estate. p. actual or constructive. 6 If the trustee comes in the place of a former trustee. he will be the balance from the responsible for them at that price. in which case he must see that he is duly appointed or his appointment recorded in each 6 or if there is no projurisdiction where the land lies. which will involve the examination of his predecessor's accounts so far as they are open. 1 If he succeeds a former trustee. If the appointment is the will or settlement will vest the title an original one. 95. 162 Mass. of the real estate and he must see that the instrument is recorded in every jurisdiction where there is any land. 686. Lloyd.
something more must be done by the the executor in order to impress the trust on particular definite act property than to hold the property with the intention that it shall constitute the trust fund. 330. or acknowledge him as his landlord and agree to pay rent to him. and does not as a matter of fact receive it. as until the executors have administered the estate they are entitled to hold it . See infra. 158 Mass. or the evidences of should be delivered to the trustee when the settlement made. J. as the beneficiary's possession is constructively the possession of the trustee. If the trustee is an original apunder a deed. 14. 91. If the trustee joins in a deed acknowledging the receipt of the property. and where the same persons are trustees and executors. and it. or do some other liable as executors showing a transfer. p. 133 Mass. If the trustee is appointed under a will.'2 he may not be it. is no tenant he should If the beneficiary is in possession under the terms of the trust he need do nothing. Dillon. D. Bouverie. they will still remain and will not hold as trustees.. Personal Property. 1 1 Crocker v.100 TAKING POSSESSION should take constructive possession by compelling the tenant to attorn. in Sheffield v. 333. 8 " When a trust fund is to be created by an executor out of the assets of an estate. the personal property will probably pointee be in the hands of the settlor. p. or if there take actual possession of the land. . he will be liable for it as though he had received it. 145. Knowlton. (1891) 82. until they terminate the executorship by filing an account crediting themselves as executors with the trust property. and qualify as trustees. There must be some act of appropriation which transfers it to the trust fund and gives the them. See supra. p." 1 beneficiaries the right to have it held for 4 Low 2 8 * v. Parker. is entitled to the personal property at once. . 3 Ch. to 1 any person acting on the face of his receipt. Supra.
Although the provisions of the trust instrument or decree of the court may have the force of a written transfer. is the proper person to transfer. . 128. and not the former owner. 129. a * Ames. Registered bonds. unless . The transfer should be made without delay on a note by indorsement. 127. and in every case it is desirable where the property is such as not to pass by delivery simply. the obligor should be notified at once 2 as for instance a bank account. or no provision of the trust instrument vesttitle. a payment of the claim or other novation of the security to the previous holder before notice will discharge the debtor. and on a stock certificate or registered bond by indorsement and transfer on the books of the : company. pp. 161-162. n. If there is a chose in action or equity. 4 All claims which are due should be called in. so that there can be no question as to its identity.TAKING POSSESSION 101 In the case of an incoming trustee it is his duty to examine the executor's accounts and ascertain that he 1 obtains all the estate that he is entitled to. pp. Where there is no decree of ing the court. To describe " the holders as " trustees merely is not sufficient. 327. Infra. and should specify the trust under which they are held on their face. an assignment by the holder of the title is indispensable. he. 113 Mass. Daniels. v. as it is not apparent to what fund the stock belongs. and no well advised purchaser will take a transfer of such a stock without further assurance. for although notice is not necessary to complete the 8 title in some jurisdictions. yet in the case of personal property a delivery of the property itself or of the evidence of it is essential. and certificates of stock should stand in the names of all the trustees. But where the property is vested in the new trustee by force of statute or provision of the trust instrument. 1 8 Thayer Infra. notes. to have a written transfer from the former owner.
J. and Am. 509. 2 Care and Custody of the Trust Property. he must be after he careful not to convert the personal property of the estate from personal to real estate without authority in doing so. of Law. it would seem that a trustee must insure.. all say that a trustee may insure. of which the legal title has passed to a third person by a breach of his predecessor in the trust. and Perry. as by spending' any cash that may be on hand or the proceeds of the sale of securities. 154. C. although unsupported by the cases cited. 494. v. p. repair. and Eng. 27. and may be Ames. Assuming that the trustees have got title. but under modern conditions. The trustee should immediately insure the real estate for a reasonable amount. 514. to be enjoyed in specie 1 by Trust chattels are usually meant the beneficiary. Personal Property. McEwen. and he is usually required to do so by well drawn trust instruments.102 TAKING POSSESSION they are such as constitute a proper trust investment. 1. . 314. where every prudent man does insure his own risks. vol. unless he can show that more is to be gained by forbear1 ance. Encyc. Lewin. and the property properly into their hands. in the absence of special power from the trust instrument or court to do so. which states that the trustee must insure. 487. and the cases in general and the English statute. but for any of the trust property which he cannot obtain on demand. and put it in a condition to be let. Loring v. Baldw. 2 Salisbury Mills. 138. and there- must keep the property insui'ed. but. and he will have an equitable suit for property. C. 8 fenced. their next duty is to take proper care of it Real Estate. 163. Chase. But Davis. in Insurance Co. 5 Wall. 8 Burr v. should fence it if necesssary. 125 Mass. If the property is unimproved he may improve it so as to secure a tenant. and if necessary the trustee should sue without delay. not only for these. n. and in and pay the taxes on it. p.
CARE AND CUSTODY OF TRUST PROPERTY
turned over to him, and if he uses them up, lets, or destroys them, the trustee will not be liable; but the trustee should require him to sign an inventory when they are
is not given to the beneshould be converted into money, 8 unless they ficiary, they were to be held unconverted, in which case the trustee
the use of the chattels
must keep the actual possession, and as several persons cannot conveniently hold them they may be left in the
hands of one trustee. Money should be deposited in a good bank in the joint names of all the trustees and if it is deposited in the individual names, the trustees will be liable if it is lost,
though without their
failure of the
All the trustees are responsible
more than temporary purpose in the name of one. 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, they should not permit large amounts of principal to lie in the bank subject to the draft of one of their number.6 But one trustee may be allowed to draw checks against income, since it is not unreasonable to allow one trustee
in a case where there was a dispute, and 7 consequently the funds could not be invested, that the
Dorr v. Wainwright, 13 Pick. 328 McDonald
Irvine, 8 C.
101, 112. 4 As to
when a conversion
proper, see infra, p.
In re Arguello 97 Cal. 1 96 Ames, 484, n. Corya v, Corya, 1 1 9 Ind. 593 ; Civ. Code Cal. (1903), 2236, as amended by Acts of 1905, ch. 615; Rev. Civ. Code So. Dak. (1903), 1625; Rev. Code N.
Monell v. Monell, 5 Johns. Ch. 283 ; 9 Amer. Dec. 298. Lewis v. Nobbs, L. R. 8 Ch. D. 591 ; Clough v. Dixon, 8 Sim.
Sneyd, 2 Moll. 186. Supra, p. 56. Scudder, 11 Mo. App. 166.
CARE AND CUSTODY OF TRUST PROPERTY
trustees were entitled each to hold half
thereon, and one becoming insolvent the other was not held liable, 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. Non-negotiable stocks, registered bonds, notes, deeds, 1 &c., may be left in the custody of one trustee, or in case
of necessity or propriety in the hands of an agent 2 as for instance deeds could be left with a solicitor, or stocks
with a stockbroker tiable securities be
sarily the trustees
left in the
negotiating a sale but if negohands of an agent unneces;
would undoubtedly be liable. 8 Negotiable securities, and partially negotiable securities such as registered coupon bonds, should be deposited in a safe deposit vault, or where none is convenient at a banker's in a separate box, in the joint names of all the trustees.
The question of how far the trustees are justified in allowing one of their number to have access to the box alone, cannot be considered as authoritatively determined. The
general rule, that the trustee must use reasonable care, only postpones the question, as the question still remains whether allowing one trustee access alone is reasonable Mr. Justice Kekewich in a late case 4 expresses his care.
opinion strongly that negotiable securities should not be got at without the consent of the whole body but Vice-Chancellor Wood, in a leading earlier case, 5 said that it was too much to say that ordinary prudence requires a box with three keys, and this latter dictum
seems to accord more nearly with the general usage in
this country. 6
Where a bond could be
would appear to be the
registered, as most bonds may trustee's duty to have it
Riley, 51 N. J. Eq. 124. Lewis, 2 Ves. Sen. 240.
Brise, 6 Beav. 239.
L R. 1894, 1 Ch. 425. Guedalla, 2 Johns & Hem. 259, 278. In re Halstead, 44 Misc. Rep. (N. Y.) 176.
CARE AND CUSTODY OF TRUST PROPERTY
registered if he gives his cotrustee separate access to the securities. 1 In that case the coupons only remain
negotiable, and as one trustee may collect income alone, he could be reasonably allowed separate control of these. 2 There is no question that a trustee who should neglect for a long time to examine the securities, as for instance for four years, 8 or who should confide them to his c6trustee in an unusual manner, 4 would be liable. In any event, it would seem a wise precaution to register bonds where possible, but the trustee is not
do so where it is not customary with prudent do so in caring for their own securities. 5 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, or such care as a prudent
would take of
which the property usually
exists at the formation of the trust, in part at least, is not adapted to trust purposes ; but is generally more adapted
to the needs of the individual than to the requisites of successive estates. An individual may be engaged in business, in a partnership, or in the management of his property for the purposes of gain, and rarely in this country has his property permanently invested without some regard to
v. Nobbs, L. R. 8 Ch. D. 591, 594. Supra, p. 56. Mendes v. Guedalla, 2 Johns. & Hem. 259, 277. Matthews v. Brise, 6 Beav. 239. The principal reason for holding bonds unregistered
transfer taxes, etc.
6 In re Pothonier In this case the court in(1900), 2 Ch. 529. structed the trustees that the bonds might be deposited with bankers with authority to them to cut coupons, as such was the custom of prudent business men. There does not seem to be such a custom in this
Thus where the maker of a trust transfers a partnership, business risk, speculative or unproductive property, to a trustee, or in fact any property which the trustee would not be authorized to invest in under the terms of the
instrument or prevailing law, he must immediately and without delay proceed to convert all such property into investments authorized by the terms of the trust, and
have the implied power to do so. 1 Vacant land, even if it have a large prospective value,
should be converted, since trust property should yield usual income to the life tenant. All undivided
estates should be converted, since the trustee has not 2 the absolute control over them and all leaseholds, wasting investments, such as stocks in land companies
and mines, &c.,
in which the principal is being consumed in dividends to the life tenant, should be converted into trust investments. If the trustee delay beyond a reasonable time, he will be liable for any loss of the property. 8 Where the time within which the conversion is to be made is expressly left to his discretion, he will be protected in a reasonable use of his discretion, but must sell within a reasonable
safe rule is to sell promptly. 6 the other hand, if the settlor has provided for the
continuation of his business, or the holding of his securities, or if he has left his property prudently and perma-
nently invested, not with a view to speculation, the trustee should not convert it, unless the investments are such as he is forbidden to make by the terms of the settlement or
6 by law, since he
to put confidence where the
Kinmonth v. Brigham, 5 Allen, 270 Ames, 491, n. Howe v. Lord Dartmouth, 2 White & Tudor, L. C. (5th ed.), 296 and note; Brown v. Gallatly, 2 Ch. App. 751. Supra, p. 65. 8 Minot v. Thompson, 106 Mass. 583. 8 Sculthorp v. Tupper, 13 L. B. Eq. 232. * Marshall v. Caldwell, 125 Mass. 435; In re Smith (1896), 1 Ch.
In re Atkins, 81 T. (N. s.) 421, ; 5 In re Northington, 13 Ch. Div. 654.
Pick. 446, 462.
and the settlor has impliedly authorized these investments, 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. 1 Thus where the testator has left bonds that will sell for a large premium, 2 which therefore yield a very small return on the money invested, the trustee need not sell and reinvest. Nor will he be held responsible for not selling a stock at par, which afterwards became worth,
he used a reasonable discretion in the matter. conversion can be made of property which the
meant to be enjoyed in specie as, for instance, a house for the beneficiary to live in, or property to be 4 sold at the end of the life estate, or household goods and chattels meant for family use, 6 but such intention must be shown
affirmatively, as the general rule is that
be converted. 6 which the beneficiary the right to use the property life, but otherwise where the real estate
specific real estate is left of
to have the rents for
in specie is implied
not specified. So, also, where the beneficiary is to have the dividends on the property, enjoyment in specie
not implied, unless the property yielding the dividends
Conversion of Real into Personal Property and Vice Unless the power be given by the trust instruthe trustee may not convert the real property into ment, personal, or vice versa, the reason of which seems to
but the distinction
465. Perry, a N. Eng. Trust Co.
Eaton, 140 Mass. 532.
Pierce, 130 Mass. 262. * Erviue's Appeal, 16 Pa. St. 256; Johns
See pages 125 and 175, 176.
Lord Dartmouth, 2 White & Tndor L. C Ch. D. 101, 112.
5th ed., 296 ;
Boys, 28 Beav. 436.
556. 2 Pa. * Hovey v. 154 Mass. 138. Rev. 7. Fidler v. a conversion. 8 If the sale is under a power in the trust instrument. or different way in which personal property descend or could be sell Thus. 2034.108 CONVERSION OP REAL INTO PERSONAL PROPERTY depended on the will. 524. unless for where are the proceeds of a sale of real estate they real estate is sold by an administrator or guardian under buy . 48. Div. 9 . By does 1 statute in so. Fisher. Perry. 3 Rawle. Perry. 22. 21 N. 8 Snowhill v. 1 have originally real estate and disposed of by in bonds. 249 . (1894). 20. 6 458. Eq. Shumway v. 2 . 467. money was 5 in land to protect a debt from great loss. St. Mather. 55. Higgins. the proceeds will be treated as real estate and not as personal 2 but where the estate is sold and converted into personalty under order of court by a trus. ratified by the court. it loses its character as real estate. 143. Dary. 409. Y. the intention of the maker will govern as to whether the proceeds shall be considered as real estate or converted into personalty by his authority. 44 N. Oeslager v. J. Laws (1902). 4 Under the common-law rule the trustee cannot use the personal property of the estate to improve the real estate. tee. says it is not Billington's Appeal. and one that will be 6 This rule is relaxed by statute. Mass. 16 Ala. p. or by practice in some jurisdictions. and where it proceeds of land will not be treated as real 605. the in others. 1 1 Barb. Brightly's Dig. March v. rebuilding with the in- but buying although a conversion.) 520. order of court. 76 App. 2 Green's Ch. and by equity jurisdiction 8 may order a conversion. . the trustee must not real estate and invest real estate with uninvested funds. Snowhill. 7 49 Boon B. Ex parte Jewett. 7 surance held to be a conversion . Berrier. Y. a court many States. 6 Hassard v. ch. Rowe. Eq. (N. is an authorized conversion. Where the testator left an insurance policy on a building which was subsequently burned. Cooper. Hall. 8 Anderson v. 16 Barb. 6 Ired.
427 v. 8 How. an unauthorized one. Dill. and it has been denied that the court has the power to do so in the absence of statute. 8 What is an unreasonable delay a question of fact depending on all the circumstances. Wood v. Dill. It is the trustee's duty to keep all the trust funds at all times fully invested. 65 N. Snowhill. 22 Iowa.CONVERSION OF REAL INTO PERSONAL PROPERTY estate. . 6 Robinson Kaufman v. 531 but the better authority seems to be that the court has the power to order a sale. Johns. 16 Ala. Cairn v. . . 472. 67. 415 Williamson v. the at his majority. . v. Art. 409. Cann. if not expressly so. 462. 33 Weekly Rep. the court will authorize a conversion on the cy pres doctrine. however. 249. 6 vest. jurisdictions. Berry. 7 11 Beav. Rogeret. affirmed on appeal. 20. J. 371. Robinson. 44 N. 172 HI. it is 1 109 But the court will not order a conversion where 2 nor will it contrary to the wishes of the testator . . gives numerous examples. the court not usually authorize a conversion. ratify Where. 38 Barb. c.. but such statutes exist in nearly all 4 If an unauthorized conversion be made. 377 Pennington v. the infant may elect to take the property or the proceeds Where. Where a Investments. 473 8. 11. 6 Robinson v. supra. * Rogers v. 9 Watts & Ser. Mather. . 6 Hill. Johns v. 7 1 is 2 v. Snowhill 8 Weeks Mnseum of Hobson. Crawford. however. 150 Mass. 415 . Robinson. it has become impossible to carry out the testator's wishes. Perry. Metropolitan See p. a power to convert will be implied. Y. which amounts to decreeing that the wishes of the testator shall be carried out in the nearest possible way. 6 Hill. will trust is for an infant. and seems to rest on his implied 8 authority. 495. 2 Greene's Ch. 131. and if he neglects doing so he will be liable for interest for the period of any unreasonable delay. Ex parte Jewett. and under the general language used in most modern settlements the power is generally imtrustee is given the pliedly given. 40. or to sell power to invest and reinand manage the property. Eq.
Attorney General v. 472. Jennison v. property was invested in trade. So. Co.. v. 6 6 7 Perry. 77. Cruce. since it was his duty to charged have invested the interest as it accrued. if the For instance. 520. or universally The true followed. and for all which he might have obtained by due diligence and reasonable skill. 676. Infra. 404. too. Alford. 2 Md. * McKim v. Ch. but in will be chargeable with compound if the fund is for accumulation he will be with compound interest. 418. p. misbehavior. 154. since the profits will be 2 presumed to have amounted to that. 2 Eliott v. Utica Ins. 114 Mass. Feinour. since the claim of the beneficiary interest. the number of shares the money would have purchased If he with the dividends. & G. an emergency exists and there is no opportunity to get a decree. 1 Beav. M. but in this case the trustee may show that the actual profits were less. or for disobeying the orders of court 4 but this doctrine is not general or commendable on principle. or fund.110 INVESTMENTS some cases the trustee interest. 81 Mo. Hibbard. 1 Simple interest will be ordinarily computed. 8 is for actual profits or simple pound and profits actually received by him from the trust fund. p. end v. Lynch. was directed to invest in a particular stock or the beneficiary may elect to take simple interest. will ratify a change made by the trustee without authority. 851 ." 8 principle trustee is accountable for all interest In some jurisdictions the trustee will be charged cominterest as punishment for fraud. Hapgood. v. 6 If the trustee has no express power under the trust instrument to change investments. Infra. 4 DeG. 142 Mass. 154. . the court can authorize a change. Onseley Murray Cruce v. 456. . 453. p. 11 Paige. Anstruther. and will do so for good reason 7 and where . 422. 843. would seem to be " that the . 10 8 1 Pick. Sparrell.
140 Mass. Denike v. . The trust instrument may. Eaton. 31. for instance. . Arnould v. prescribe the kind or class of property in which the trustee invest. Eng. v. Co. which would be attended with dangerous results to the trust fund " 2 but . 84 N. Tr. v. has acquired a speculative value much above its value as an investment. 532. Austin. Ovey. for "the doctrine can readily be pressed so far as to sanction a practice of The mere trading and trafficking in trust securities. 112. Feinour. 140 Mass. N. 524. 155 . as the trustee is equally bound to get the customary income for the life tenant. so that they shall be one. 1 S. Eq. 421 . and ordinarily does. 270. and must not sacrifice the interest of either beneficiary . the investments should not be changed without a good reason l such as. In re Wedderburn. and the popular idea that security is the only consideration is erroneous. the investment should be changed so that the life tenant may receive the increase of income he if it is entitled to. Harris. Kinmonth * Womack v. may . and where it does so its provisions will supersede those of the court or legislature 4 but being special powers they must be complied with strictly. 5 Allen. 532. D. 89 . 9 Ch. was not followed. 533 Murray Kitchen. Brigham. (1900). 1 N. namely. v. so that they shall yield the current rate of He must hold the scales interest to the life tenant. or because life it has become unproductive and the loss. tenant is suffering is fact that the property has increased in value not a sufficient reason to sell. that an investment has become insecure and . Ovey v. 2 Md. 2 Ch. 418 2 8 Eaton. the remainderman is likely to suffer loss. duty in investing the funds io a double to invest them securely. evenly. Grimstead. . 30 N. and cannot 8 sacrifice his interests to those of the remainderman. and to invest them trustee's The productively. Ch. v. preserved intact for the remainderman. Co. Tr. J.INVESTMENTS 111 The property being once well inve8ted. Ward v. 21 Weekly Reporter. 537. C. Y. Eng.
there is a change in the firm. Mulford. In re Hall. 196 . 35 App. 4 Kobinson v. 53 Atl. but authority to invest " in such " to exercise the same securities as to him seems best. it is their duty to do so. 76. & Lat. they should not continue it against A partnership cannot be continued after their judgment. A general gives authority to choose illegal investments in those juris2 but dictions where the class of investments is limited the trustee is still required to exercise a sound discretion . 6 Schaffer v. Where a testator provides that his trustees shall continue his business. Cummins. Talbot. What classes or kinds of investments are trust investments vary in different jurisdictions.112 INVESTMENTS ' ' at discreauthority to the trustee to invest tion" does not specify any kind of property. recourse must be had to the court for directions. Talbot. . & G. (N. Y. 8 Where it is impossible to comply with the investments required by the trust instru9 ment. and dissenting opinion. 499. J. Lawton. Ch. 79. 50 Barb. 5 and a judicious 6 provision of one of the chief requisites of life. 314. Robinson. Rep. 164 N. . 64." or control I now have. 4 DeG M. Stone v. but if the matter is permissive. If the trustee is authorized to invest in real securities or mortgages. 106 Mass. Statsome jurisdictions are construed to be for the proKing v. 744. even in Massachusetts. 551. Acton. 37 1 King v. 7 nor should the amount invested in it be increased. 4 but a house for the occupation of the beneficiary has been held to be an investment in productive real estate. 83 (N. ' Cummins v. Lawton v. 1902). 183 Mass. 40 N.) . Boston. and nothing more. the class will not be held to cover a bond secured by a mortgage of a railroad . 103 Ky. 3 Jo. 19 . 17 Ohio St. Y. Clay. 8 9 McNeillie v. only. Div. and are determined in utes in 1 some by statute and in others by rule of court. 159 Mass. Y. 453 but see Knight v. Zanesville. 1 and does not enlarge his powers. 352. . 6 Mulford v. Mclntire's Adm'rs v. 1 1 Bear. Davis Appellant. He is given the latitude allowed by the Massachu8 setts rule. Wads worth." with other marks of confidence. 2 8 390.
Amory. St. 461 Moulton. ch. banks. 40 N. Beers. a trustee would be imprudent if he invested in other than the specified securities. 446. opened. called the American rule. as well as the probable safety of the capital to be invested. Talbot. Supra. and if . and . 76. Worrell's Appeal. . evolved very different results. which is in " a trustee must observe how men of general terms that prudence.. 8 Where there is no statute or decision of the highest court fixing the class of securities in which a trustee may invest. and intelligence manage their own affairs. 23 Pa. but in regard to the their funds. p. Y. xiv. discretion. or railroad stock. he can safely follow the rule prescribed for the investment of the funds of savings banks. 2 although he . might be justified in not converting unspecified securities. the hazard or risk of loss their skill. 5 tocks J. field is Now under the Trustees Relief Acts a large 4. Harvard College v. 1 no longer dependent upon or discretion in its custody or manageis a 8 4 Clark v. 44. 40 N. 545 King v. v. 61 Conn. 84 Me. 106. considering the income. 76. Y. manufactur- permanent disposition of probable 6 " The moment ing or insurance companies saying that a fund is invested in a bank. 8 . and not as forbidding other investments than those specified by law 1 yet where such a statute exists. King v. or insurance. it has left the control of the trustees its safety. from this rule. In England the only kind of investments formerly allowed were in the government funds 4 but in America the total absence of such securities in early times. the court deciding in New York that a prudent man would not invest in the stocks of railroads. Talbot. Lewin. their relative scarcity in later times. he took them from the testator." 8 The courts and legislatures in various jurisdictions have. Mat . care. 87. Putnam.INVESTMENTS 113 tection of the trustee merely. 9 Pick. . gave rise of necessity to a different rule. not in regard to speculation.
Hunt. when the corporations have acquired.. Harvard College v. profits. and municipal securities. Amory. J. . 187. manu2 facturing and insurance companies. by reason of the amount of their property and in dividend-paying stocks the prudent their management of and their affairs.114 INVESTMENTS ment. and in notes of individuals secured by the stock of such companies. when compared with the amount of money to be invested. satisfactory investments of trust propamount of funds seeking investment is very for securities which are as safe as is affairs of this large the demand world is great.. 141 Mass. 9 Pick. On the other hand.. in addition to the class of securities allowed in New York. show that trustees in this Commonwealth are permitted to invest portions of trust funds and interest-bearing bonds of private business corporations. such as banks. . The . whose possible in the keep the trust fund safely invested in proought not to hazard the safety of the fund under any temptation to make extraordinary duty is to ductive property. railroads. in the stocks of good business corporations. 184. Talbot. and the amount of such securities is small. Chief Justice Field. . in Dickinson's Appeal. first mortgage bonds of corporations. the courts of Massachusetts hold that a prudent man may invest. Appellant. 515. in King v. . and the terms of the investment do not contem"l but plate that it ever will be returned to the trustees that the ideal man would invest in real estate. ubi supra. such a reputainvest tion that cautious intelligent persons commonly own money 1 in such stocks and bonds as permanent investments. bonds of individuals secured by first mortgages of real estate. Our cases. 446. . rule in part as follows : " trustee in this Commonwealth A undoubtedly finds it difficult to make erty. at p. lays down and explains the Massachusetts . A trustee." 2 Woodruff. and 8 certificates of deposit of good banks. however. 152 Mass. *' .
As vendor. Infra. Trull v. and unfortunately trustees are too often appointed from considerations of friendship. . Ames. Dewey. 8 . 2 Cox Eq. 352. since the first mortgage may be foreclosed unproductive 6 real estate. n. 254 Mattocks v. 414 Ormiston 84 N. . Dec. * Gen. and patent rights disapproved. 40 Amer. . however large the margin. will be sanctioned. 36 N. are not usually approved but. opines to the contrary. portunity to use his skill and ability as a financier for the advantage of his beneficiaries but undoubtedly the English rule. Conn. 485. Woodruff. being under dissimilar laws and beyond the court's control. 1 Hunt v. n. and all investments of an untried or speculaInvestments without the jurisdiction of the tive nature. a Porter.: . 471. Amory i>. is better adapted to inexperienced or ignorant trustees. . . 68. Stat. 19S 2 Holmes . as much less is left to their discretion. . The laws of the various States give a preponderance in favor of the Massachusetts rule. v. H. 13 Allen. p. 6 Slauter v. Eq. v. c. . Gontrum. 6 gages on leasehold security. Green. 296. (1902). 545. trustee might be justified in taking a second mortgage in part payment. 185 Mass. since it gives him a larger op. Moulton. 407 Ames. and a large majority of carefully drawn trust instruments give the trustees the 1 larger discretion. Y. 186 Mass. viz. 31. Favorite. 3 investment in unincorporated business ventures. 80 Md. 486. 7 Ames. n. 31 N. J. 1 Perry. The rule prevailing in each of various States is briefly stated at the end of this chapter. Reding. 107 Ind. 292. if they are in con7 formity with the purposes of the trust. or the New York rule. 6 Kimball v. Trull. 13 Allen. and not from consideration of their discretion or business ability.INVESTMENTS 115 is In the hands of a good trustee the Massachusetts rule undoubtedly superior. 456. Taft v. The following kinds of investments are everywhere loans on personal security merely. 84 Me. 174. 64. court. Dring. 498. . partner8 second mortgages 4 and mortship. Smith. 339 Thayer v. See note to Nyce's Estate.
350 2 v. 617 lung v. Parker v. 8 * Brown v. 1 S. but will not necesextend the class of investments in which he may 8 invest. 499. & Trust Co. Eq. 421 Re WLiteley. . a less margin. J. 84 N. 42 Ch. 6 Dickinson's Appeal. and not in the light of later developments . Tuttle v. Amory. Austin. Crapo. 6 Green v. 33 Ch. although it may. 125 Mass. 410. say one third. the trustee must exercise a sound discretion in 1 That selecting investments within the authorized class. . C. . Gilmore. 184. 55. 6 The margin of security required on a mortgage loan is 7 generally fixed either by decision or by statute at one but the amount of margin required also depends half. 339. Y. Div. 36 N. 347. any of the inducements made at the time may be of service in refreshing the recollection. Ormiston v. on the nature of the estate. it has been held imprudent to invest more than a fifth part of the estate in one investment. 1 Womack . ' In re Salmon. The question of whether there was a sound exercise of discretion 4 will be determined according to the state of facts as they existed when the investment was made. but in America business property in a city would probably be so considered. Boston Safe Dep. Davis. French. 9 Pick. duty to use care. he must exercise the same degree of intelligence and diligence that a man of average ability would exercise 2 and a provision of the in making his own investments settlement giving him unlimited discretion does not alter . Appellant. his sarily. 40 N. England farming lands were considered the most stable. Div. 351. In re Salmon. Talbot. 181 Mass. 42 Ch. Div.116 INVESTMENTS Having ascertained the kind of investments he may make. 183 Mass. 6 Where the class of investments allowed is large. or may be forgotten. Harvard College v. is to say. Y. 186 Mass. 446. but as these are sometimes difficult to memorandum reproduce. 351 . 152 Mass. In being required where the values are more stable.. Olcott. 393. 76.
Mortgages and Gen. United States or State securities. Statute not mandatory. English rule laid down. E. Land Co. and conservators. or city bonds. Massey v. 111 Cal. By statute may invest in securities of State or United States. 2433 and 2612. No authorities. 71. United States. n. 104 Ala. Constitution forbids any law authorizing trustees to invest in bonds or stocks of See Randolph v. First 254. 359. the settlement provided that the truson account of taking insufficient security. Arkansas. Massachusetts rule. Bickerton. Stat (1902). mortgages to fifty per cent of value. 2261. 61 Conn. 2717. Stat (1906). Investments allowed in Various States. 355. ch. but there is a rigid responsibility for other investments. Connecticut. he was not excused for making an tee should not be liable for loss unauthorized loan to a person unsecured. No authorities. Colorado. but statute not alluded to. Beers. 4174. Con- See Alabama. 288. Bank stocks. and savings bank securities. 1 since the loss was on account of going outside of the class and not because the investment was poor of its kind. Florida. No express provision concerning investments by trustees. Code (1896). stitution. No authorities. 255. 441. . 3 Swanst. 181. or mortgages approved by the court. Executors. State. administrators. Birmingham private corporation.. Clark v. guardians. In re Cousins's Estate. Ch. American rule. town. Arizona. Stout. Alabama. English rule. Rev. 4 Del. Alaska. Delaware. Investments in stock or bonds of private corporations forbidden. which are free of taxa1 Ryder v. (1906). 80. 87. Laws of 1903. in bonds of the United States or Colorado. Stat.INVESTMENTS 117 Where. Gen. Civil Code (1903). California. 274. however.
136. Campbell Hawaii. White. Illinois. but in Tucker v. Stat.118 INVESTMENTS ALLOWED IN VARIOUS STATES tion. 62 111. Sholty. Walker. 545 Emery v. 110 Mich. v. Kentucky. Stocks and bonds of United States and State. 271. or others ordered by court. Shuey v.. Substantially Massachusetts rule. 111 Ky. v. 3180. or loans secured by same. . 90 Ind. 83 Md. Moulton. Mattocks v. Convention of Prot. 38 Ga. ten years. Favorite. or municipal securities that have not defaulted within Aydelott v. (1903). Ep. App. chusetts rule approved in Slauter v. Brown . mort- gages. No authorities. Code (1897). Masachusetts rule. But not in railroads unless operated ten years without defaulting. No authority. 3416. Sherman v. Glover. v. 80 Md. Wright. v. and mortgages at fifty per cent of value. 296. Hunt r. Massachusetts. Burns's Annot. must be made under order of . Breeding. "233. Maine. 73 Ind. State. 107 Ind. 355. Maryland. 82. Georgia. These statutes refer to executors and guardians. Massa3415. Iowa. Indiana. See Caspari Michigan. ubi supra. 84 Me. but trustees would be safe in following the same rules. English rule. Ch. New York rule approved. No authorities. Fidelity Co. Stat (1901). 140 111. bonds. 304. Massachusetts rule. 242.409. 64 (semble). Mortgage securities allowed on sale. Sholty v. 99 Ga. Statute not mandatory. Semble Massachusetts rule. 90 Ky. Idaho. Any In stocks. Cutcheon. 78 Me. 292. Real estate. 86. . Latta. 847. stocks and bonds. No authority. Code (1895). Lowe v. 4706. 96 Bull v. 364. 71 Ga. and not expressly to trustees. Louisiana. Trustee appointed by court should get its directions. Gontrum. other securities issued by State. or other investment court. Batchelder. Kansas. Massachusetts rule. 196 Miller.
or bonds and loans of State. 59 Mo. 127 Mo. 9 Mo. New New Mexico. Also in stock of leased steam railroads located wholly or in part in New England. ch. town. or county of New Hampshire.. No authority. 295. New York rule. Code (1905). ch. 422 Coffin v. Rev. Reasonable interest. the New York. 1792 and 5054. Crane. and bearing inLaws terest at not less than three nor over six per cent. New Haven. 11. Stat (1901). Massachusetts rule. or of the United States. 194. App. ch. Rep. & Maine. & Hartford. Montana. or the New York Central & Hudson River Railroads. York. city. 146. Same as savings banks also in first mortgages on land worth at least fifty per cent more than the amount loaned 1897. Massachusetts rule. thereon. Kite. Priest. ch. ch. 119 Under direction of court. Laws of amended by Laws of 1902. Laws (1905). . 417. Gamble v. 85. 585 Taylor v. 42 Miss. 529. and of certain municipalreal estate to Also in first mortgages on an amount not exceeding fifty per cent of its value. . In notes secured by mortgage of real estate worth at least double. In bonds of Jersey. ch. Laws the United States. 178. Mississippi. Jersey. No authority. Bramlitt. 103. 45 Misc. In re Avery. Garesch^ v. Gibson. 9. Nevada. Burns. and in no other way. 25 Miss. ch. Civil Code (1895). Laws of 1901. in savings banks. whose rental is guaranteed by the Boston New Hampshire. of 1903. No authority. In United States bonds or any bonds guaranteed ty North Carolina. 3. Smyth v. 144 Drake v. 3013.INVESTMENTS ALLOWED IN VARIOUS STATES Minnesota. 106. 61 Mo. 3249. adds loans or securities in which savings banks may invest ubi supra. . . . 270. 198. Missouri. Pub. New ities. New of 1899. 142. security and Nebraska. 9.
security. Finlay v. municipal corporations of State. 9 S. . No bonds or 69. South Dakota. stocks of business corporation. Gen. South Carolina. or Philadelphia. 144 Pa. if not. investments in debt of United States. No authority. I. Moore v. ch. 123. 4286. v. Nance. Laws (1896). 11. 17 R. Bates's Annot Stat (1906). loan on mortgage. Cf. Law's Estate. Certificates of indebtedness of State or United States. 36 S. No authorities. 12. 321 Grinnell v. Brightly's Purdon's 121. Code (1896). 208. and bonds of United States. (1889). Utah. and in State bonds. 101 N. 122. Code (1904). Ohio. "Rev. C. should loan on Nance v. St. Stat. Hogg. but should invest under order of court. . Eure.120 INVESTMENTS ALLOWED IN VARIOUS STATES Statute not manUnited States. 3. Peckham v. C. C. St. Reasonable security and interest. Pennsylvania. Oregon. 6413. C. 209 Singleif . Code N. Court may authorize Dig. North Dakota. Civil Reasonable security and 1639. 41. Massachusetts rule followed. or as approved by court. (1894). p. 303 Baer's Appeal. Statute mandatory. datory. 127 Pa. State. 56. St. Massachusetts rule approved. 465 . Baker. No authorities. gives trustees full power and discretion. Rhode Island. (1895). 18 Pa. American rule. or by leave of court in ground rents or other real estate. . Hemphill's Appeal. Newton. Lowndes. 499. Const. rule. Massachusetts 39 Tex. Art. and real securities bonds or certificates of debt of school districts. Semble. Nobles v. 594. Should possible. In public stocks Tennessee. 507. 360. and report to county court. 15 R. good ton 322. . Texas. 1 S. Dak. I. Merriman. interest. Massachusetts rule. 5434..
121 In real Semble. English rule. for the last ten years also notes secured by of such securities. the question will usually arise after the death of the life tenant. 54 Vt. p. 59. Governmental and real estate securities bonds of Wisconsin. & G. bonds and stock of steam railroads owning and operating not less than five hundred miles of track. 264. Harman. 189. Supplement pledge of 1906. No authority. p. W. authority. . Semble. M. Fyler.INVESTMENTS ALLOWED IN VARIOUS STATES Vermont. 56 Vt. 184. and which have paid dividends on their entire 32 . Gleason. Fyler v. or such other rule. when the remainderman comes into possession. capital . 194. 5 DeG. Wisconsin Stat. as. 2100 B. Hughes. (1882). 563. where he has paid the life tenant sums of money which belonged to principal. Massachusetts Revised Laws (1894). 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. Bullock. the determination of whether a receipt or charge shall belong to principal or income is of great importance. 123 Wis. 184. 623 v. and these he has no right to recover back in most 1 cases. 223. Semble^ Massachusetts rule. See L. Receipts. sons are entitled to the principal and income of the trust fund. Hooper. and the erroneous determination of the question may make the trustee liable for a large amount. no West Virginia. Key v. Virginia. 25 Beav. Wyoming. 2617. Massachusetts rule in practice. and infra. Allis's Estate. . In fact. estate. 550. 3 Beav. Langdale. McCloskey v. manner as court Barney v. 62.. 54.. 1 Bate v. for instance. directs. 21 Gratt. Va. and of certain other States and municipalities. and should have been invested. Parsons. for striking example. Davis Washington. Wisconsin. 201. As different perPrincipal and Income. 338 Downes v. and when it is too late to recoup from the income.
but on the ground of testator's intent. . Hagan v. 446 Billings v. Eq. 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. 410 . 8 tee's . Brigham. no apportionment will be made if he converts it. and all yearly increase thereafter is income. Ky. 270. 1 Where the estate was stocks pledged as collateral the creditors retained the dividends on account of the notes. 6 Edwards v. 2 . 93 p. or where the property being an unsuitable investment is sold for conversion at an interval after the trust went into effect. 140 Mich. 8 Eq. as. 581 Mndge v. It is immaterial that the trustee be given discretion as to the time when he shall make the * conversion. Where for any reason property does not come into the hands of the trustee for some time after the beginning of the trust. Edwards. This may be the case where the amount of a legacy or other fund is not immediately received or not received in 8 full. They never came as such into executor's hands. 111. St. Taft. Hemenway. and the remainder 2 will be the principal fund. L. 581. Edwards. Kinmonth 206 Westcott Mass. 139 Mass. 8 * v. 6 The rule is the same whether the property be converted because it is unproductive. 257. J. and it was held that they were not income. in whatever condition it may 1 happen to be. Cox. v. R. 5 Allen. 153. Nickerson. Skinner v. 343. at the time the estate comes into the trushands it is all principal. 207 Pa. and in the meanwhile the life tenant has no benefit from it. 120 Mass. Warren. if there must be a conversion at some time but if the trustee has a discretion to hold the property as a permanent investment. . 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 the conversion of the estate. Platt. 183 Mass. for instance. vacant land. .122 PRINCIPAL AND INCOME In general. Parker. 281. 282. Edwards v. Rite's Ex'rs. v. 183 Cox v.48 N. the rule is different. 6 In re Neel's Estate. 264. It was decided otherwise in Kite's Devisees v. 216 Hemenway . 134 Mass. 446.
8 The amount recovered * taking 1 as damages for an injury or a need not be apportioned. R. income in specie. 31 App. Greene v. e. 16 Mass. 258.742. 584 Trenton Trust Co. ed. . I. 65 N. v. L. In re Alston (1901). L. shall have all the proceeds. 8 Winslow. or a defaulted note or obligation on which the whole amount is not recovered. 361 Maclaren v. his intention will preand the whole profits will be paid to the life tenant beneficiary as income. the new capital for one year and two months.50. Eq. 2 Ch. Donnelly. For instance. 382. * Corle v. Meldon Greene. 109 Mass.. but where the return is excessive. Eq. v. Eq. 146.000. In either case the rule is the same. . 2 White & Tudor. i. 2 Parsons v. 6th Am. terest is the so ascertained is the principal. Lord Dartmouth. Monkhouse.257. J. as in the case of a business or partnership. which is the interest at six per cent on the estate 2 $24. C. 73 Westcott v. 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. v. 410. or on a wasting investment such as a land stock where the dividends will ultimately exhaust the security. 47 N. Howe v. Stainton. earnings are greatly in excess of interest. in a case where a trustee who had wasted The sum was removed and only part of the estate was recovered by his successor. as the fund invested will . namely.50. . Heard Eldredge. the amount of the original estate was $30. if a definite intention on the part of the maker of the trust can be shown that the life shall enjoy the vail. t 296. The tenant for life got $1. 619. Devlin. 119. and the inincome payable to the immediate beneficiary. Div. N.000. J. and the whole amount recovered after one year and two months was $26. 11 Eq. 19 R. or where an obligation is in default and the security has been realized on l or whether it be converted because the . Y. 120 Mass. Nickerson.PRINCIPAL AND INCOME 123 a bottomry bond or similar security where the principal and income are included in one sum.
J. 1 57. 5 but where the business is conducted under direction of the trust instrument. 4 St. Van Doren v. 446. St. aff'd 111 App. p. But the matter seems to be now settled in these States in conformity with the law elsewhere. If the gain results not from yearly profits of the business. and the whole gain will belong to the principal of the fund.on Trusts. n. . 8 N. 19 N. 198 Pa. it is 6 ordinarily all the income will go to the life beneficiary. Div. 545. unless he be in a position to insist on a sale and reinvestment of the property. Eq. 366 . The learned 6 Underbill. Graham's Estate. Eng. 1. suggested that some doubt had been thrown on this question by the reasoning in decisions on collateral points in some jurisdictions. 216. Eaton. Supra. Eq. St.) 773. 207 Pa. 64 Pa. i. Rep. Littig. Olden. 368. 445. Y. Y. In re Gerry. the payment of a betterment or removal of an involuntary incumbrance. is : 2 Van Vronker v. 46 Misc. Gain and Loss. falls under the same rule. The general rule is that any gain other than the usual yearly income. . 198 Pa. Eastman. St. 8 and the life tenant will get no benefit from the increase. 301. (N. 256 Earp's Appeal. St. v. fall to the principal of the fund. 216.) 623. Trust Co. Y. 4 loss in continuing a business temporarily until converted is to be apportioned. Gain on foreclosure Parker v. The rule as to vacant land 7 Met. so as to yield an adequate return. 123. 63 Md. The converse proposition. 450 . and any loss other than the usual yearly charges. 250. 140 Mass. In re Neel's Estate. (N. 37 N. Johnson. and the loss of one year will be made up out of the profit Gain or but it is wholly a question of intention to be determined by the construction of the trust instrument. In re Stevens. Heighe v. and the amount recovered will bear interest from the time of the taking. See Wiltbank's Appeal. 28 Pa. J. Thus real estate 2 or securities may advance largely in value without any corresponding increase in income. . editor of the fourth edition of Pern. of the next 1 stated on pp. Graham's Estate. 103 N.124 PRINCIPAL AND INCOME GAIN AND LOSS 1 yield an income. 532 . e. 122-123. 176.
v. 1 Humph. the life tenant may wear them out in ordinary 8 use. 7 Poindexter o. and need not replace them. 2 Md. Major (Tenn. 66 S. 507. Robertson v.). Lewis v. 2 8 16. Burch. 1902) . Hunt v. The life tenant cannot sell it. 325. 8 v. 217. Eq. 657. Y.).GAIN AND LOSS 125 but from increase of value of the plant or property. 2 If the trust property consists in part of chattels.) 773. See infra. farm. Collier. . 124. and there is an intention expressed or implied that the farm shall be kept up. Burnett Leonard v. Watkius. however. 133. Dec. 1 in fact all property First Natl. 413 (Ky. In re Stevens. 107 * 6 6 Woods v. L.) 498. timpal. and need not re6 and the natural increase will place them when they die 7 Where. Herndon. Ch. 3 Mo. (N. Dec. and only the excess to income. W. Haughton. Owen. R. Saunders v. Sullivan. ber cut for thinning will be income. Eq. 111 App. 8 Implements. 78 Ky. v. they cannot be replaced by horses. Lester. 147. 53 111. 581. v. as. 265 life tenant was to keep up farm increase held to go to remainderman. 1 Swan (Tenn. C. and cattle. . 57 Am. If the trust estate consists of country real estate. Smith Rep. Eq. 95 Md. p. 1 Ired. so much of the increase as is necessary to keep up the herd will belong to principal. 93 Ga. But see Flowers v. 678. supra. . Franklin. unless intended to be used in specie. 3 Rich. but probably not to such an extent as to be waste. p. . Blackburn. Davis. 286 Braswell v. Saunders v. 160. 8 Ired. 5 Watts (Pa. other timber princiand it has been held that gravel sold will be income. 1 Hill Eq. 370 (S. 1 Eq. Lee.). the stock is left with a belong to him. 190. but the beneficiary for life may use them up. the 1 gain will belong to principal. Div. v. 586. even though it be replaced 5 by other kind of stock. Calhoun v. . where cows are unprofitable. for instance. n. Haughton. which are intended to be used and not converted into cash and invested. Earl Cowley Wootten . . furniture. Bank of Carlisle v. Furgeson. If the property consists of farming stock it should be 4 converted. Morehead. Hooper. 57 Am. Wellesley.
127 Mass. 404. The current dividends on stocks belong wholly to income. will lose its character as income and become a gain to principal 2 but if the income be kept in a separate fund. p. 7 Sim. and may be used as such during the duration of the trust. income which is rightfully accumulated and added Any to the principal. p. Robinson v. 8 . 111 App. v. Supra. De Brulatour. 102 Md. N. . verted. and the amount which he is entitled to receive will be calculated each year on the new principal dividends. even though invested. 909. Div. 124. 4 Dem. Minot v. the trustee may withhold some of the 1 yearly income to make a sinking fund for that purpose. Brander. See note. Sur. 6 Eeed v. 8 principal. If not so used it will become . 137. in which case he will of course take it. Paris. 743 (N. Y. 185. or a definite share in a property or business. 6 1 made by the credits of the preceding Be Housman. Balch v. Ch. it retains its character as income. 174. 38 Atl. Green. . Y.) 882 Lowry v. And where it is necessary to replace chattels which are wearing out in use. 63. Eng. Eaton. 6 Paris v. Head. If. 106. Bonaparte. and any gain or loss in price is the gain or loss of the 4 principal. Trust Co. (N. 172 N. Brander v. which is presumably worth the price paid. the investment is a wasting one. however. must be bought out of income. 333 Blythe v. and the balance will be applied to reduce the valuation. Such investments should ordinarily be con* . 10 Gray.). 140 Mass.126 GAIN AND LOS8 DIVIDENDS that will wear out in use. such as a mining or land stock. 10 Ves. 6 Allen. even when the stock has been bought at a premium. 800. J. 532. 5 he will be entitled to receive only the current rate of interest on the inventory or cost value of the investment.. Mills. Hallett. 4 Ves. 2 Tappan. 402 Robertson v. since the premium is only a part of the price paid for an investment. Farmers' Loan & Trnst Co. unless the tenant for life is expressly given the full dividend by the settlement. Mills v. Dividends.
for it Besides the accumulations necessary to renew and extend the plant. The successful corporation of modern times earns much more than it distributes in regular yearly dividends to its stockholders. reserves. by subscriptions of new capital. which is not a proper trust invest1 ment. which subscription is usually for a less sum than the market value of the stock given Hence the right to subscribe is a valuable right. is not. the profits which are left after paying the usual annual dividends . Extra Dividends. or valuable rights to subscribe to stock is perplexing. viz. p. i /Supra. and secondly. either to use or to sell. and when it finds that it has more funds than are required as out as extra cash dividends. When The rule has already been explained as to the receipts from an investment.DIVIDENDS EXTRA DIVIDENDS 127 the excess of the dividends has thus entirely out the cost of the investment. and make the necessary additions to working capital to keep up or enlarge the business. To insure continued company must continually put more money into plant and business. it pays them life The settlement ficiary of the respective rights of the bene- and remainderman to receive the benefits of these distributions of stock. first. the accumulation of success the its : surplus profits. This money is drawn from either or both of two sources. and the life tenant. cash. as these accumulations become considerable. though an apparent loser. that is. as reserves to meet future exigencies. and has given rise to much litigation and conflicting decisions. the company distributes stock to represent the capital added to its business . well managed corporations usually in set aside additional earnings prosperous times. and therefore to be converted. . 123. From time to time. all the dividends wiped will go to principal. which is all he is entitled to. because he will receive the dividends on the new investments to the same amount which was originally invested.
Minot v. and are not entitled to any share of it until it has been severed from the general fund and has been made payable to the individual stockholder as a dividend. 1 They can make dividends or not A as they see fit. and Connecticut. 64 Conn. 8 Georgia. 2 Sugden v. Code. Smith v. Paine. . 554. ordinary partners are entitled to the profits as such. Mahon. it is 4 is Knowlton as follows concisely and clearly stated by Chief Justice 6 "In Minot v. . 6 Lyman v. Paine resulted in some degree from the fact that the questions arose in respect to joint stock companies. said that in such cases a simple rule is to re: ' gard cash dividends however large as income. 406. Paine. . . It is probable that the unsatisfactory condition of the law under the early English cases referred to in Minot v. p. 93 Ky. 50 Conn. 284. 12 App. 543. D. Dana. 99 Mass. 77 Conn. Dana. and lately it would seem. 101. This rule p. Ashley. The stockholders as a whole are the corporation. but separately and individually own none of its property. Smith v. . 60. 136 U. 183 Mass. the decision of the directors is absolute. D. Britton. Illinois. 67 Ga. p. and in the States of Massachusetts. Bouch. Hemenway. .128 EXTRA DIVIDENDS corporation is an artificial person. 108. 29 Ch. 385 Sproule v. which owns its property in the same way that a natural person owns his. 635 Sugden v. Ex'ors. 45 Ch. 66. Minot v. Sproule. 472. 99 Mass. . D. 309. 80 Me. and may turn earnings into permanent capital or distribute accumulations held in capital as 2 It is when the dividend has come into the hands profits. Millen v. 4 Brinley v. 96 Tenn. 237. 549. . in of the stockholder in England. Cas. Grou. 45 Ch. p. Paine. 257. Maine. 101 De Koven Alsop. but partnerships and 543. Ga. 8 Gibbons v. Mills v. S. An arbitrary rule has been adopted in the Supreme Court of the United States. 181 Mass. Pratt. 319 Richardson v. Ashley. Richardson. 237 . Paine.. . As between the stockholder and the corporation. 265 Nashville Trust Co. who is a trustee that the difficulty arises determining who is entitled to enjoy it. . 2256 Gilkey v. 58.' 1 Hite's Devisees v. . 205 HI. 75 Me. 99 Mass. 101 Hernenway v. which are not corporations. and stock This general rule dividends however made as capital. 77 Conn. Hite's Pritchett v. 570. Guerrard. 4 Bouch v.
cumulated earnings is principal. 558. a distribution of bonds which were indefinite as to time of payment. S. Mass. The life tenant is v. 309 Second Uuiversalist Church v. Bassett." This rule rests not only on the assumption that the corporation has the right to determine how much of its earnings should be capitalized or properly set aside to cover depreciation or extensions. 2 In the application of this rule it has been decided that a dividend cannot be divided. Minot v. and often it is difficult to decide to which class a particular dividend belongs. or of capital to be retained in some form as an investment in the cited. since he profits by the increased efficiency. . 136 U. Gifford v. or are distributing stock as the evidence of profits which have been made capital. 558. 309. Thompson. 4 So. 77 Conn. and were in effect a sort of pre6 but where the ferred stock. 1 Hence the decision of the directors is final as to whether they are distributing profits as such. 79 . 101 De Koven v. and their decision of these questions is to be gathered mainly from the language of the vote by which the dividend is made. 549 . 2 8 Granger not injured. Paine. 9 . p. AIsop. Alsop.EXTRA DIVIDENDS 129 has been followed by this court ever since. 115 Mass. 4 Minot r. 6 . 176 Mass." (Cases " In determining what is a cash dividend and what is a stock dividend. Mahon. Dana. 101 De Keren v. D'Ooge i'. but even more on the practical impossibility of the determination of those questions by the court. and is either all principal or 8 all income that a distribution of stock representing ac. 176 Mass. 98 D'Ooge v. too. 205 HI. 462. 205 111. substance and not form is regarded. 99 Mass. were held to be principal . 74 Conn. Colgrove. 478. Paine. Gibbons v. Leeds. Leeds. The real question is whether the distribution made by the corporation is of money to be taken and used as income. 1 Smith v. 99 Mass. 543. 560. .) corporation.
App. 1056. and not a " stock dividend " in proper sense of the words. but was absorbed by another company through a banker who . and making it full paid stock to meet the legal requirements in that respect. 478 Second Universalist Church v. corporation. 101 Mass. the whole amount distributed will be considered capital 6 but if the directors distribute part of the funds as accumulated earnings not permanently added to capital. Bissell. 79.130 EXTRA DIVIDENDS distribution was of stock purchased out of earnings. it was held to be a distribution of earnings. 181 Mass. although the whole transaction was obviously a way of making a free distribution of stock to the stockholders. however. Mercer v. 65 Atl. Jackson. R. the dividend was held to be a stock divi4 dend. v. 74 Conn. 115 Mass. and therefore principal. 205 111. though paid from earnings accumulated before the beginning of the trust. 294. 1 Leland Davis v. 58. . 2 So. Hubbell. The rule that the determination of the corporation decides the character of the distribution applies to dividends If there is no apportionment made by the in liquidation. 183 Mass. 6 Hemenway v. Curtis v. 968. 2 8 De Koven v. Daland v. Hemenway. 6 Gifford v. 115 Mass. the right to subscribe to the new stock and the dividend could not be severed. . v. 42 111. a cash dividend which was paid simultaneously with and to the same amount as the cost of subscription to new stock was held to be income where the dividend and the subscription were severable and the stockholder might take his dividend but refuse 8 to subscribe to the stock. and any so belonged to income. 309. Where. Williams. 58. too. v. Waterman 4 Rand Lyman v. Alden. . 1 On the other hand. and the stockholder had no option but was obliged to take the stock and use his dividend in payment for it. was held to be income. 132 Fed. 501. R. 6 In this case the company was not actually liquidated. Green v. 152 Mass. 461 571 . Hayden. Thompson. Buchanan. 542 Alsop. 102 Mass. Colgrove. 65 Atl. . a cash dividend. Pratt. they will be income to the life beneficiary. 406. Oborne.
and in Hemenway v. for the company was liquidated so far as the stock. On precisely the same both the amount paid for the stock and the dividend were held to be principal by the Connecticut court. 28 Pa. and has led to some curious and inconsistent law. Smith v. 408. was concerned. 77 Conn. Olden. Colgrove. Pritchett v. St. 650. so far as this class of stockholders is concerned. making a fair division of extra tenant and remainderman has led many courts to deny the right of the corporation to determine. Fant. though 1 As is said in a later case in that applying the same rule. " but it that the company was sold as " a going concern does not seem as though this could really make any difference. Dec. 74 Conn. 79. Amer. Hemenway 8 the court says that equity will look at the substance of the transaction. 486. 72 Cobb v. the court will then apportion the divi- dend according to the equitable rights of the tenant for life and remainderman to the profits in exactly the same manner as though the corporation was a trustee for its stockholders. Eq. Nashville Trust Co. 19 N. 1 2 * * Second Universalist Church v. tion is inequitable 2 . 1 . H. J. Lord v. 543. which they decided did not form part of the capital and so distributed Some stress was laid by the court on the fact as profits. Earp's Appeal. but left certain quick assets in the hands of the directors. 181 Mass. Brooks. 368. desirability of life The dividends between how much of much proper capital. The evident injustice often worked by the Massachusetts rule has overweighed the convenience of having a definite working rule for the trustee to go by. the rule must yield where the result of its applicaholders' interest facts. 36 S. Van Doren v. 96 Tenn. 472. p. 176. C.EXTRA DIVIDENDS bought 131 all the stock at a certain price.. 551. State. 556. 52 N. Dana. . pp.* the surplus earnings are profits and how reserves for renewals and additions to facts independently of the Having ascertained these corporate action. 97 .
but recognizes that as between the corporation and the stockholders the directors' decisions are final. 2 nor can earnings. McKinlay. Vinton's Appeal. 344. . St. Earp's Appeal. 257-265. 28 Pa. is imIf stock is issued to represent accumulated earnings. Smith's Estate. 357. 176. . 8 and by the variation of is to the value of the stock. St. Kite's Ex'rs. whether in stock or cash. 1 2 3 * v. 368. J. Eq. depends on many other considerations besides ac10 cumulated surplus. St. Common experience indicates that this assumption is contrary to fact. but disregarding the anomalies and practical difficulties. 28 Pa. Olden. Connolly's Estate. 78 Md.132 EXTRA DIVIDENDS The courts have never pushed the principle beyond apportioning the dividend between the parties who have a beneficial interest in the stock at the time the dividend is No part of a dividend will be given to the declared. St. 19 N. 29. Van Doren v. 93 Ky. Pratt. 4 it force the company to divide its 8 With these equitable considerations as a foundation. St. 137. 198 Pa. 344. 434. 368 Thomas v. In New Jersey . Howes. 6 declared. 1 Nor will the court give any part of the increased market price of the stock on account of accumulated earnings to the life tenant. . which is assumed to vary exactly with the amount of accumulated surplus 9 and a master 10 may be appointed to ascertain the facts. 33 Conn. 280. 5 It follows that the form in which a dividend material. 344 Smith's Estate. market price. The " value. 446. Earp's Appeal. 28 Pa. Pratt v. Earp's Appeal. p. p. 99 Pa. 545. 140 Pa. Gregg. 140 Pa." that is. St. estate of a deceased beneficiary. it can be sold to produce the same amount as 7 though the accumulations had been divided in cash. Income and Principal. whether declared in dividends or not. St. The period during which earnings were accumulated be gathered from the company's accounts as shown in their published statements. 31 Beav. Bates 5 6 7 8 9 Kite's Devisees v. the Pennsylvania rule is that all the company's earnings belong to the person who was entitled to the income during the period when is the money was earned.
66 Atl. Gregg. 93 Ky. 140 Pa. * 93 Md. St. Cobb v. De Brula" Kite's Devisees v. the action of the directors in dehow much of the accumulated fund was income termining and how much was principal was approved and followed. Brooks. St. 188 N. 257. whether stock or 5 cash. 58 N. 2 Van Doren . 137. 278. 36 S. was followed in Thomas v. 56 N. 8 This rule is that the dividend. either stock or cash. 621. 179. H. 1. 200. Faiit. Phelps. 154 N. Y. will not be apportioned as to the time when it is earned. 352. 8 78 Md. 1 Lang v. That the testator's intent must be was established by the case of McLouth confirmed in Lowry v. Stewart v. while 9 is not conclusive on the court. In New York a modification of the Pennsylvania rule Trust Co. Lang. 11 the court recognizes that the directors' action must be final as between Lang's Ex'rs. 176. 124. 54 Pa. and that the action of the corporation. 8 7 154 N. 189. 179. Safe 4 Deposit and Trust Co. Y. 325. H. C. 650. Holbrook v. its Each case stands on own merits. 57 N. Y. v. Farmers' Loan u. 52 N. 545. p. Y. 137 . not capital. may be divided and apportioned. J. Hunt 7 and & having great weight. Lord v. Eq. Burroughs. Smith's Estate. Eq. 8 but in Quinn v. Nice's Appeal. although substantially the whole fund was accumulated before the commencement of the trust. New 2 In Maryland this rule Hampshire. Farmers' Loan & Trust Co. 172 N. K. 10 McLouth v Hunt. 301. Applying this rule. but if it is based on accumulated earnings or profits it is income. Y. Lang's Ex'rs v. and South Carolina. 97 Amer.EXTRA DIVIDENDS the proportion of time declared. 302. . 603 . the courts have decided that dividends. 172 N.. p. Holbrook. 10 In a well-considered case in Kentucky. 545. 6 Thomas v. Y. 78 Md. Rdbertson v. discovered. J. 6 28 Pa. p. 9 Lowry v. Hite's Ex'rs. 173 N. 1 is 133 taken since the last dividend was The Pennsylvania rule is followed in New Jersey. 285. Earp's Appeal. Olden. J. Gregg. tour. 375. Dec. 72 Price v. 344. Eq. 19 N. and that earnings accumulated during the testator's lifetime or before the 6 beginning of the trust are principal.
1 desirable. 371. 2 a ' ' Many settlements trustee shall in his uncontrolled discretion dend to the life between them. . Bowman. R. 28. 309 . 93 Ky. and does not attempt to apportion the dividend. 256 . 66 Atl. . Pet'r. principal. See also Holbrook v. 175 Pa. I. 58 111. 66 . 17 R. 64 Pa. I. 2 Atkins v. or apportion it require. irrespective of rules governing extra dividends. between the life cides the case on . 523 Wiltbank's Appeal. Grou. leaving the matter to the trustee's v.. 96 Term. Nashville Trust Co. while it is impracticable to make them good working too expensive and involves too much de- lay to apply to the court for instructions in each case. Greene v. but declines to permit the corporation to decide to whom a dividend shall belong as tenant and remainderman. 8 In re Biting. p. 143. St. as in Pennsylvania there are decisions both ways. The word "generally" was used Biddle'a advisedly. 17 R. 278 . properly speaking. the trustee should take the direction of the court as to the disposition of the dividend. 472 . Smith. 12 Allen. 3 The Massachusetts T s} lvania rule too rule is too arbitrary and the Penn- rules. (N. St. St. whether availed of or sold for cash. The New York court affirmed the trustee's action in such a case. 50 Conn. where he seemed to have acted faithfully and discreetly. Kite's Ex'rs. 359 Eidman v. . 124. 302. Greene v. St. Eisnew's Appeal. . Alsop. 444 De Koven t>. 28 Brinley v.) 675. . 267 Pierce v. as equity may to-day expressly provide that the pay the divitenant or remainderman. and therefore provision by the settlement or by statute would seem discretion. Holbrook. 99 Pa. Albree. In re Kemble's Estate. to be The granting of such a right is really not " dividend. Y.134 EXTRA DIVIDENDS the stockholder and the corporation. The right to subscribe for new stock. where no rule has been adopted. 14 R. 201 Pa. Appeal. Boroughs. H. though often called so in discussing these questions. at all. 205 111. Brown. 58 N. is generally held in all jurisdictions. 257. In other jurisdictions the question has been similarly treated l and in general. 33 Misc. Smith. Pritchett I. Hite's Devisees v. and finally deits merits without attempting to lay down any settled rule. .
205 111. Bridgewater Mfg.. 295. v. 462 . 98 Mass. 6 Londesborough v. McKinley. authorities Perry. 274 . Kite's Devisees v. 2 McKeen's Appeal. 600. and is always paytain day. and not paid when due but paid has been held that they should be apportioned among the persons to whom they would have been paid had they been paid when due. 257 see Clive v. no matter when paid. tenant or buy land according to the terms of the trust 8 instrument. 18. it Where the dividends on stock in full are cumulative. 57 Granger . 100 Ga. 52.. 1 and therefore is never apportionable. 309. 545 . 42 Pa. Alsop. J. All rents and amount received as interest is in. p. but Co. Kite's Ex'rs. N. Lowell. Lang' s Ex'rs. Clive. Delayed Dividends. 479 . where dividends are apportioned like interest. ingenious than convincing to argue that a dividend is severed from the corporate funds by being made cumulative in the charter. De Koven v. Kay. Howes. Meldrim v. 31 Beav. 14 Gray. even including the estate of a deceased beneficiary . Trnstees of Trinity Church. Bassett. 479. Johnson v. 280 . . Transfer of Stock. at a later date. the life beneficiary would be entitled to so much of the proceeds as would equal the dividend lost by the sale. contra. n. St. See pages 128 et seq. 19 Beav. to the stockholder entitled at the time specified in the vote 2 but if the trustee sold a stock just before the dividend day to defraud the life . 6 Interest generally the whole 1 sometimes Apportioned. a 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 cer.ORDINARY DIVIDENDS NOT APPORTIONED 135 No part of Ordinary Dividends not Apportioned. Somerville. Bates v. 325. and remains principal until separated from the other funds and declared payable to the stockholders. able. supra. Income and Principal. and Lang v. 8 * Eq. 4 but this decision is so contrary to the principles already discussed that it It is more is doubtful whether it would be followed. 3. 93 Ky.
Phila. * Infra. Phillips. Y. 65 Atl R. and the balance belonging to. interest accruing up to the date of sale or death being income. 165 N. Div. v. p. 446. 6 Dexter v. (N. . 450. Div. since there is no obligation to convert the bond. 123 Wis. . be converted interest on a bond which is part of the property originally settled need be credited to principal. Ins. Y. but is more often one of security. Y. 154. purchased at a premium. & Trust Co. as the difference of price is not simply a question of interest. 968 In re Hoyt. v. Kite's (N. N. which might be detached and sold separately.) 417. 121 Mass. Clark v. 7 and would then be a separate bond. and in England the rule 1 not subject to any exception. . C.) 773. Kite's Ex'rs.) 285 N. 178. 6 1 Hemenway . 178. and will therefore be apportioned upon a sale of the security on which it The accrues. or upon the termination of the life estate. 143 Mass. 20 Wall. & Trust Co. 528. Hemenway. (N. v. 443. and being part of. 111 App. v. Phillips. 8 The practice of buying bonds which sell at a discount. 27 App. the security turned over. 134 Mass. 4 if is In some States. Iowa City. to balance those bought at a premium. 2 Ibid. Beyer's Estate. But the rule in New York seems to depend largely on the consideration of each case. 121 Mass. Baker.136 INTEREST SOMETIMES APPORTIONED is come. Orphans' 8 5 Ct. a bond sufficient of the interest must be . 583. which would otherwise. Y. 484 No sinking fund in Kentucky and Pennsylvania. interest is payable by a coupon. Life Ins. even though it be worth more than par. set aside yearly to wipe out the premium at the maturity of the obligation. since a bond purchased at a premium is a wasting security. is not sound. Y. 44 W. 223 Curtis v. . Dexter v. Div. In re Allis's Estate.. N. Y. Shaw Cordis. 38 App. Devisees v. Osborn. ubi supra . nor can the loss on one investment be set off against the gain on another. Life In re Stevens. 589. Baker. And this is the rule even where 6 But where the the debt is secured by a bond or mortgage. 1899. Interest accrues from day to day. out of justice to the remainder2 but it follows that no part of the man. ..
4 Van Vronker r. Plympton v. and there no apportionment but where the statute exists. 106 Mass. 6 A betterment assessment is a tax. is otherwise. 6 Maclaren v. the cost is apportioned between income and principal. even . but not an ordinary one. and as between life tenant and remainderman is treated as an encumbrance. in the absence of statute. and a loss occasioned by a breach of trust stands on the same 8 footing. See p. Any loss to the fund by depreciation of the market value of the property belongs to principal. and the income is charged interest thereon yearly. ch. Rev. and the life tenant loses interest and the remainderman . This statute does not apply to settlements made by deed. Mass. If there is an encumDischarge of Encumbrance. brance on the estate. and the principal to the corpus of the fund. 11 Eq. which are governed by the common law. Laws (1902). 5 Similarly. Boston Dispensary. Adams. 361. 139 Mass.. 7 Met. as. such as a betterment assessment 6 or judgment. if at once discharged it is paid from the remainder.INTEREST SOMETIMES APPORTIONED 137 is the rule. 382. supra. or the interest may be funded and charged in a lump or if the life tenant and remainderman are beneficiaries of the same funds. 157. Payments. for instance. 449. but if carried 4 the interest is chargeable to income. Stainton. * Parsons v. the principal. 16 Mass. Eastman. The whole amount is charged to principal and deducted from the estate of the remainderman. R. a mortgage. 1 coupons are apportioned. L. and this is true even when the estate is not charged until a long period say ten years after the settlement. 141. the principal is paid out of the corpus. 544. 25. v. 1 Adams 2 . In some jurisdictions there are statutes apportioning rents and coupons and annuities on the termination of a 2 life estate settled by will. 124. Winslow. where the trustees are compelled to discharge an involuntary encumbrance.
Little. * Smith P. The English cases have arisen almost exclusively where the property was in the possession of the equitable life tenant.) 564 . Parsons v. 7 Little v. 1133. Y. 16 Mass. Supp. 345 . Alterations and additions the usefulness or rental value is whereby increased are chargeable to principal. pp. 642. replacing ruinous buildings which have in new foundations and add5 ing fire escapes when required by the city. 4 or putting to income. America. 345 . 2 Bradf. v. states that in the absence of express provision in the settlement the equitable life tenant is not bound to repair. Y. (N. and are a judicious investment of the trust funds. 2 It is often a difficult question of fact to decide whether a specified expenditure is an addition to the property or a current repair but the rule may be stated that. Sohier v. 188. Little v. pp. Hepburn.^251. Hepburn v. S. 188. 6 So also an expenditure may be in the nature of both an addition and a repair. .) 74. and not being managed as an investment by the trustees. Y. (N. and so all repairs should be made under order of court and apportioned by it. 144. 45 Misc. affd. 990. Brown. 6 In re Parr. 8 Sohier v. 2 Underbill. 8 For instance. In re Parr.138 ALTERATIONS AND REPAIRS to real estate Alterations and Repairs. they . and the addition of an elevator to a building which previously had none will be charged to principal. 161 Mass. Pennsylvania. 161 Mass. 250. as is general in Lewin. In America the rule is as stated in the text. 92 N. 361 . and is then chargeable to principal only to the extent to which it benefits the property and . Y. Y. Eldredge. Rep. 103 Mass. 103 Mass. 1 but the repairs or expenditures which are necessary to maintain the property in its previous condition are chargeable to income.) 111. (X. Eldredge. Keteltas. 644. in some States 1 7 there are statutes allowing an apportionCaldecott 2 Hare. 32 Misc. Little. and a trustee should charge necessary current repairs to income. where repairs improve the property to the extent of their cost. Rep. are chargeable to principal. 100 N. Winslow. while putting in a new elevator in the place of an old one will be a repair chargeable been condemned.
8 Holmes v. but his whole income might be used in preserving the property of v. Jordan. Taber. 24 R. if charged wholly to the 2 income. 146 Mass. 320. 478. Bridge. For instance. All expenditures on newly acquired property which are necessary to put it in condition to let or to hold. which. on the acquisition of a new estate will be considered as so much additional purchase money. Bridge v. v. current are now 5 considered to include insurance. Y. but in doubtful cases it is ment in such cases. although chargeable to income at other times. I. Winslow. 3 Parsons v. well to get the instructions of the court before undertaking an extensive job. says income means net income after deduct4 ing taxes. 192 Mass. Plympton v. Eng. 79 Mo. 144. 343. Supra. and ordinary current expenses . if made with reasonable discretion. Hosp. 59. p. 192 Mass. 7 The whole tax for the year is chargeable to the tenant enjoying the property 8 at the time when the tax is assessed. 361 . might be very burdensome. Legacy taxes on the life interest are to be deducted from income. although 9 the executor may have turned over the estate in one lump. Trust Co. Taxes. 373. Shaw. C. 53 N. except those assessed on vacant land. Dispensary. I. Eaton. Sands. 140 Mass. Trust Co. 532.. Brown. S. Jordan a v. * 6 6 7 7 Met. 2 Hare. New York Life Ins. 136. repairs. 8 As vacant 1 land gives no return to the life tenant. p. Caldecott v. 246. and chargeable to principal. R. App. Co. All annual taxes..ALTERATIONS AND REPAIRS 139 The decision of the trustee in apthe expense. Jordan. 16 Mass. Hildenbrandt v. J. 337. N. 544. whether they are in the nature of repairs or additions. . 344. Watts Howard. All ordinary current expenses are charged to income. 337. Wolff. fencing in land or repairing a house to obtain a tenant. are charged to income. 333. are chargeable to principal. 9 Allen. and expenses 6 in some jurisdictions the premiums paid for securities. Jordan v. v. Fitzgerald v. These expenses. portioning 1 will be upheld by the court . 106 Mass. p.
4 Dem. 1 all charges against it. 6 151 Mass. 6 Met. 482). Croft. v. 56 N.. that the premiums are apportionable according to the respective interests of the life tenant and remaindermen. Underbill. and not in the absence of the manifesta- tion of a contrary intention. 104 Mass. 166 Mass. 265. in a carefully considered opinion. Sur. such as betterment assessments. 119. Burroughs. Watts v. There is singularly little authority on the question. 288). one of the ordinary and necessary incidents of maintaining real estate. 106 Mass. 478. Donelly. 151 Mass. . 19. 257 Trenton Trust Co. 8 sewer taxes. are chargeable to principal. Edwards. On the other hand. says that. 485 Hite's Devisees v. Howard. Special assessments. 93 Ky. 6 Met. n. Ch. Littlefield. Roberts. Y. are chargeable to principal or are ap- 4 portioned as specified. Insurance premiums are expressly chargeable to income by the terms of most carefully drawn trust instruments. etc. and where no express provision is made in the instrument the general practice is to charge them to income. 487. 1 Stone v. 65 N. (Se . Div. and this case seems to state the true reason. 615 (in which no reason is stated). in Darcy v. 581. C. Kite's Ex'rs.) 845. v. H. In re Pitney. Insurance. 302. J. are payable by the occupier. Swett. the court expresses the opinion. 485. 246. J. See also Wiggin v. which is that the income is chargeable with all the ordinary annual expenses of maintaining the property (see Shaw. Swett. 8 Ired. and unfortunately what authority there is is 5 4 conflicting. Eq. Littlefield. 113 App. (N. 544. . Sherwood. p. 183 Mass. 2 -Pierce . Dispensary. 2 The taxes on a dwelling- house given for life from the general income. Eq. 7 Met. 404. and Perry. of which insurance is now like repairs and taxes. Stone v. Plympton v. the court decides. there being no obligation to insure. and because failure to insure by a life tenant is not permissive waste (Harrison v. 194 Amory v. 99. 194. Edwards v.. Pepper. 58 N. and in the New York case. Re Housman. 9 Ir. 8 Wiggin v. on the authority of Peck v. the cost of insuring the life of the annuitant was held chargeable to income.. Lowell. the premium should not be charged to the life tenant without his consent. In Graham v. Y. Probably because in early times and in England insurance was not considered a necessary precaution of an ordinarily cautious man. including taxes.140 TAXES the remainderman.
the contract of insurance being merely to indemnify the individual for his loss. Kite's Ex'rs. 1 In case of a total loss. 342 . Haxall's Ex're v. 8 N. 3 Lerow r. the funds recovered would be used in repairing. 269 I. 288. and in such case the fund recovered would stand in the place of the property destroyed as the property of the remainderman of which the life tenant has the use. although it may be otherwise where the insurance existed at the time of the will. v. 8 Ired. and with the law as now enacted by statute in England. 192 Mass. hence had no right to convert. the remainderman has no claim on the fund recovered. vices which are principal. allowed. 4 Dem. If the life tenant insures the property. Shippen. p. and Bridge v. 8 Haxall's Ex'rs v. St. But see Spangler's Estate. he will insure all his interest which is subject life tenant and remainderman. Trustees 1 Brough v. 35. * Harrison v. H. 2 and could be used in rebuilding if such an investment is authorized. 9 Allen. 8 The charges of the trustees for managing the property. . 18. Pepper. Roberts. 404. p. 146 Mass. Shippen. Eq. the life tenant gave bond to invest money and pay over on death of life tenant. and will retain its character as real estate.) The ordinary practice of charging the premiums to income is entirely consonant with the theories of law. 93 Ky. 23 R. Watermann. see supra. 4 But where a trustee insures the building. 166 Mass. 444. Higgins. 99 . Jordan. 10 Leigh. 382. As to what expenses are . 1893. Kite's Devisees v. Gordon v. Bridge. L Hoep. Trust Co. R. Act. 337.'. 373.INSURANCE 141 In case of a partial loss. 408. The fund recovered does not represent or stand in the place of the building destroyed. or way of a commission on beneficial to the Extra charges for serfund are charged to may be apportioned equitably. 536 6 7 Re Housman. 5 Graham v. 335. are charged to income. In that case.Wilmarth. the fund should be invested. 7 Jordan v. p. which are by the income. as in such case the 8 policy was a personal asset at the outset. 344. Sur. 6 to the claim of both Expenses. 21 Pa. 257. West. 10 Leigh. 536. where such charges were . 2 Gratt.
Green. Law Reg. were properly classed as expenses it in a purchase or sale of commission is in practice considered as part of the price of the property. Howland Chisholm Acts of 1907. and he distributes the wrong amount. Jordan v. the same reasoning would seem to apply to the purchase of stocks and bonds. Hammersley. (N. 98. and his only protection is to obtain But he will a decree of distribution from the court. Eldredge and the supposed custom of trustees the Massachusetts court has decided that brokers' commissions must be charged to income. or pays it to the wrong person. 283. Jordan. and so is generally charged to principal. Supra. or appointment of new trustees are borne by the principal. p. Y. Eldredge. n. The trustee trust fund properly at his peril. p. By statute the law 1 2 is now 8 * in accordance with the text.142 EXPENSES Brokers' commissions on change of investment. Underbill. must bear the loss. but the legal expenses of collecting the income. Supra. The Distribution must distribute the if of the Trust Fund. or of determining the matter of payments chargeable to income. 98. The fact that he has been diligent or has taken advice will not save him. 108 Mass. 337. 248. 8 and so also the expenses of recovering the fund or paying it out. the cost of obtaining the instructions of the court. On the authority of Heard v. fall naturally to income. 99. pp. Heard v. be protected if. ch. 246. where was expressly provided that all expenses were to be charged to income. . and of the final accounting. real estate the brokers' . Smith v. v. 109 Mass.) 565. 371. and so charged to income. 99. 28 Ky. 4 So also the legal expenses of protecting the property. 192 Mass. and charged to income. v. Nones. 258. 114 App. 1 but Legal expenses of settling the interpretation of the trust instrument. Div. and would probably be allowed so generally 2 and in the absence of expressed intention. in paying one beneficiary whose share held to be the ordinary charges of protecting the property. 346. pp.
resort may be had to a court of equity for a decree of distribution. 4 Loring Adm. 227 (Mass. although the securities depreciate so that the others get less. (1906). Stat. v. See statutes 170 Mass. 4059. Purrington. 6 Harris 336 . or which are not created by the decree of a probate court. Iowa (1897).THE DISTRIBUTION OP THE TRUST FUND becomes due before the others.. Wy. 5592. Winslow. or in the absence of statute by the court. passim. 190 Mass. but the original decree will stand in so far as it protects the trustee. (1895). (1899). 295. 445 Cleaveland v. Code. he pays him on a 143 fair valuation of the estate. 370. Code Civ. E. Bates's Annot. and not merely against the parties to the suit. . as amended 1902. Div. p. Pierce v. Ohio Stat. 176 Mass. 1907). as for instance where the estate has been divided among four persons instead of five. 2 . the validity of the decree cannot be questioned by any form of 4 The notice to be given is generally pleading or proof. 128 Mass. Steineman et al. may correct its decree so that the excess be recovered from the persons who have been overmay paid. Annot. 249. Draper. (1903). Mont. and the decree is against the property. and provided the proper notices have been given. Knowles. 8 Minot v. 190 Mass 336. In such suits care must be taken to make in trusts all Where parties interested parties to the suit. Okla. v. 970. 6 the proper statutory authority does not exist. Rev. Purrington. 340. and he will not be liable in any the court event. 80 N. 4446. As these courts have the custody of the fund itself. Stat. Starkey. all persons interested need not be 8 parties in order to give the court jurisdiction. Rev. 140. itself may be paid into court and statutes generally exist giving courts of probate authority to decree distribution in the case of testamentary trusts. 1 In some States the fund for distribution 2 . Proc. 1 Met. . Minot v. or they will not 1 Frere v. Prescott. prescribed by statute. 204 Lamson v. 45 Ch. Where an error has been made in the decree as to the persons entitled to distribution.
DeForest. 9 Vt. He must not pay a minor's share to himself or his 7 parent or guardian without an order of court. on a forged order. by filing the vouchers in 8 The former course is preferable. He may perpetuate the evidence of his payments by an account filed in court. 2 8 Emery . or an invalid assignment. The court in a decree of distribution will not pass on the validity of assignments. . 1 Cathaway v. Laws (1902). Palmer v. by faith age. 166 Mass. Kendall v. 306. Palmer v. Mass. Prea6 cott. Bowles. 389. Div. Perry. or under statutory law.144 THE DISTRIBUTION OP THE TRUST FUND be concluded. 4 The trustee must pay the distributive shares at his The fact that he pays peril to the proper distributees. R. 8 and a share improperly paid over cannot be recovered back. 505. Fulford. as all parties to court. 4 21. 6 or on a power of attorney which he supposes to be good. 452. Laws. 101 Fed. Lenz v. 2 it is not conclusive on all the world. The common practice of getting a final account showing a distribution allowed by the court is objectionable. 306. 166 Mass. There are statutes in some States making such an account conclusive. ch. will not protect him. 167. Rev. 6 7 144 Mass. as although the allowance of the account operates as a decree against all parties to the suit. v. 150. a trustee paying in good under a revoked order is protected. or he be required to pay him again when he comes of may Now. Rev. 150. Hilliard v. and allowed after notice to all interested. Whitney. 20. Buell. 6 but the law is not so in America. 132 Mass. ch. 8 But see Sparhawk 624. 41. p. 136 Mass. Batchelder. Whitney. statute in England. 1 and if there be any doubt as to whether all the proper parties have been joined the trustee may require the payees to give security to reimburse against any claims that may arise. 4 Ch. Underbill. 365. Mass. 54 . but which has in fact been revoked.
p. 155. 157 Mass. Heatley. 110 U. Supra. a conveyance is necessary. Y. Penny. Davison v. but a conveyance to the remaindermen as tenants in common " " the equally divide necessary to estate otherwise.) 156. and is usually two and a half or one per cent on the amount turned over. Bailey. 2 Coll. 6 As these duties are so onerous. 110. 84 8 7 . Seeley. The trustee is may retain the funds in his hands until the 7 account settled and he has been paid VI. 78. 319. pp. C. 6 In some jurisdictions the amount is regulated by statute. the statute of limitations will begin to run from that time. S. Rep. trustee is personally liable on his To Strangers. 10 v. and a power of sale is 8 implied if a sale is necessary to divide the property. Moore. 30 Misc. Morgan v. 160 . v. v. A however. Ferguson. Tarns. contracts. 1 As a distribution of the fund without a decree of the court or a decree of a court itself is an overt act. 281. (N. 36. 110 Tenn. his charges. Taylor Supra. 98 Mass. even where he describes himself as a trustee or adds the word "trustee" to his signature. Parker v. 137.THE DISTRIBUTION OF THE TRUST FUND the suit are forever barred 145 by the suit. LIABILITIES. 76 Ga. Supra. Davis. all that is * ally allowed. J. 2 If the trust was "to convey" or "divide" the real estate. 8 Bowen v. Home Savings Bank. 8 Temple v. Jones v. Baring Willing. 248. and cannot refuse to pay until he gets a receipt. 3 Gray. real estate will usually vest in the distributees by the provisions of the instrument. Foster p. expressly limit his 1 liability to the extent of the 2 8 Chadwick v. 330. and he cannot de- mand a receipt or discharge where he simply follows out the distribution according to the terms of the trust. 8 He may. 743. * How v. 28. Waldron. Eq. 91. 118 Mich. . 56 N. 4 Wash. C. compensation is gener- may be .
special knowledge of their accuracy. 55 Md. Y. Low v. p. he will be liable personally and individually for the price. 2 Jur. 3 Ch. 664. p. 211. 27. if 6 the same extent as though the ownership was all individual. s. and does not affect a 8 He is also liable on the covenants in a deed stranger. Mulrein v. Story Gape. 29. 1 Taylor v. Lyons. owing to defective appointment he is not a trustee.146 LIABILITY TO STRANGERS 1 trust estate. p. C. 109 Mich. p. 497. Diamond v. even though under the preDavis. . if he should have court . * 6 6 1 v. 29. 7 and for taxes. or lease. and if he innocently makes an erroneous representation. 58 Md. ut supra . since the order of court only insures his right to indemnity from the trust property. (N. 537. n. Supra. Packard v. Carmine. Y.* these cases he has a right of indemnity from the trust fund only so far as he has neglected no duty and has acted strictly within his powers. as for instance in selling or leasing to a stranger. Supra. Whitlock.* He is not bound to give information to strangers with whom the beneficiary is negotiating a loan. He is liable personally as stockholder in a corporation. p. 135 (N. Glenn v. 8 and in tort as owner of the property to also for damages. He is liable criminally for embezzlement if he mis- In appropriates the trust funds. 8 Mitchell v. 166 Connally v. Div. 5 is not liable He will be personally liable where he assumes to be as a matter of fact. and the stranger gets no title. . 121 N.) 706. (1891) 82.). and in such cases will have no right to indemnity from the trust property. 80 App.) 58. 100. a trustee. Bouverie. 9 Supra. . therefor. Allison. Kingman. 339 . 30. Supra. (N. and on the recitals in a deed. Div. p. Lewin.. and any. 25 App. 8 Supra. when If he exceeds his powers. 82 Texas. but the terms of the contract must show that the contractor relied wholly on the credit of clearly and not on the personal credit of the Without such a provision the trustee will be personally liable even under a contract ordered by the the trust estate 2 trustee. Smillie. Wheeler. 8 Gill v.
1 for he cannot change himself from a trustee of the funds into a debtor without the consent of the beneficiary 2 and the fact of consent must be . 47 App. even if not the one actually at fault. 2 Drew. as. & & Trust Co.. 53 Pac.LIABILITY TO STRANGERS 147 tence of a loan to himself. Foster. and irrespective of liability among themselves 5 but this joint liability ends with the trustee's death. itself. . 617 (Col. his breach of trust is by 8 a cause for disbarment. 8 In re Farmers' Loan * Thompson McCartin Wiles v. Code Oregon (1902). (N. and not a separate loss. Ohio 6842-. for instance. 208. & G. The trustee is liable to his beneficiary for any loss of the trust property arising from his neglect of duty. 1 . Blake v.. and several. 9 Cal. 1898). 7464. 48 Rev. v. Div. . and he neglects Mass. 323 Bermingham v. for instance. the loss on a building built to make the rest more readily salable is part of the whole 7 transaction. v. Finch. Wil cox. If a defaulting trustee is a lawyer. his estate is liable only for the acts during the trustee's lifetime. as (1896). v. p. 6 7 Gresham. in developing real estate. Stat. amended by Laws 1901. J. Eq. Traphagen. Code Tenn. (1906). 7 H. and not to the . trustee. . 54L Vyse v. 467. 120 Cal. Y. 109 Mass. M. ch. 8 DeG. R. where the trust is created. established positive proof. ch. 560. 643. Janes. 82. Code N.4 Liability to Beneficiaries. L. Gunter . Each transaction stands by off the loss cannot set on another. Kev. Laws (1902). their beneficiaries are joint The and liabilities of trustees to and^a decree may be enforced against either. hence they do not belong to him to set against his liabilities 6 but in administering a fund as a whole. 1836. one transaction cannot be picked apart to show gains and losses. Marshall Marshall. Bates's Ann. hence the gain on one All the gains belong to the trust estate. Dak. L. Rep. 659. Pegram. As. (1895). 43 N.) 448. 318. 2 6592. 258 . Annot.
R. if he has done his duty in is taking care of the property. as amended by Acts of 1905. 100. The usual ex- emption clause providing that the trustee liable for the acts or defaults of his shall not be him if he neglects his duty and The exemption clause applies only agent improperly. p. 3. where the agent is acting properly as such. 240. Lewis. for his own acts and neglects only. he will be liable for interest. 2236. Civ. 8 agent will not excuse intrusts matters to an As a general rule he is liable Liability for Co-trustee. yet if he his duty he will be liable for any loss has been remiss in that may occur in any manner 7 as. where the 6 property is properly deposited aiid then stolen. 1 Eq. or inexcusably allows 2 rents to fall in arrears. Thus. p. while if the property were deposited in the names of the trustees.) 167. 7 Civ. . destroyed. 110. 2 Ves. for instance. 5 Though he will misappropriated. 351. 291 . 8 ch. 615. Green well. if he has mingled the trust money with his own funds in the bank. 6 Jones v. for instance. 1 Mad. See supra. see supra. if he neglects to insure where it is his duty to do he will be liable for the loss. 8 or if he neglects to invest. 8 4 As to his duty.) 271. Supra. Supra. Div- (N. 1625. Floyer. 5 Bostock v. Cas. L. p. not be liable for the acts and crimes of strangers through which the property is lost. but also where it is only indirectly due to his as. 26. if he leaves the property imneglect in the hands of his co-trustee or an agent. 412. or stolen. p. 140 Mass. Dak. u. In re Mclntyre. they would not be liable unless they were careless in selecting the depositary. . 24 App. for instance. (1903). Rev. 2 Carpenter. 102. as. (1903). v. 10 Beav. Patterson (1900). and it properly so. White v. he will be liable for the loss by the failure . and is not liable for 1 Fen wick Tebbs v. of the bank . Sen. Code So. Wyman . 103. Ditson. App. 4 He is liable not only for a loss directly due to his neglect. Code Cal. (Eng.148 LIABILITY TO BENEFICIARIES 1 to collect or secure the property. Y.
contains a receipt for the consideration. Code Cal. 1628j Civ. 109 Mass. Supra. 3 Gift. Civ. 9 allowing his co-trustee to act improperly as his agent. 15. 74 Ala. 90. or looked on at a breach of trust . the act or default of his predecessor in the trust. 378. 2239 Oliver v. 99 Mass. allowed him to receive them. Ch.. has handed the funds to his co-trustee.LIABILITY FOR CO-TRUSTEE 149 his co-trustee. for distincbetween leaving income and principal in the hands of one trustee. * Monell r.. what ought to have been done jointly . by joining in a receipt for the money on a sale of securities and afterwards leaving the property with his 7 co-trustee. 195 Pegram. 1628. Horton collection of income. 10 tion Crane v. L. 9 Rev. 106 Mass. 10 A late case well illustrates these rules. Sherburne. 116. 1 or of 2 unless he joins in the breach of trust. 180. Cal. 283. as to . (1903). Eq. 4 or join6 He will be liable where he ing in a fraudulent account. Civ. to F. v. J. if he can show affirmatively that there was a necessity to join in the receipt and leave the funds in the hands of the co-trustee afterwards. Civ. 25 N. default only. (1903). 89. v. The active management of the estate who had been the testator's man of and embezzled thirty thousand dol- He v. each trustee having a right to give his separate bond. 6 Wilkins v. Court. 166. 89. 541. The trustees under a will were to be held liable for their own was intrusted affairs. which he need never do. 6th Am. Eq. Williamson. 964. Notes. Ames Armstrong. ed. 5 Johns. 6 as. Bowen. v. C. pp. 194 Hinson v. 8 Rev. Code (1903). 7 It is to be noticed that the ordinary form of a deed. (1903). 8 Price. Hearn. 95. Brocklehurst. . 90. for instance. Dak. or and to do alone by standing by and allowing his co-trustee to commit a breach of trust. or . though in that case. 504. Dak. Code So. he will escape liability 8 or by neglecting his duty and . Townley v. 29 Beav. pp. 8 but he can easily make himself negligently permits it so by giving a joint bond. which all the trustees must sign. See supra. 2239 * 6 ct seq. Code So. 127. collected 1 2 Blake Stowe . 3 White & Tudor. . Monell. Hogg. 101.. pp. See supra.
4 So. as. 449. the inactive trustee. 120 Cal. money A 1 provision in the trust instrument that one trustee In re Mallon's Estate.) 324. where property was left in trust to the widow and brother of the testator. . Bermingbam v. 1 04. and the widow wasted the property and died insolvent. Underbill. Div. 109 Mass. p. 467. where each of two trustees took half the property and invested it in his respective business and paid interest on it. Rep. discovered but allowed F. 6 So. 104. It is not necessary to exhaust the remedy against the defaulting trustee first. the brother was held liable for the whole loss. 8 Paige. 214 Pa. (N. In re Beatt/s Estate. Y. for the benefit of the widow for life and then for others. 153. too. Y. 4 Clark v. for instance. if he joins in a fraudulent or unfair account. too. 3 Redf. too. Thus. 2 He may not rely on the So representations of his co-trustee as to the status of the 8 property. But see In re Westerfield. 1 05. 273. 32 App. but he was held inactive trustee The liable for the second. then embezzled thirteen hundred dollars. St.) 365 . and one trustee was allowed to draw them out. but must ascertain it himself. 7 or in a receipt for which is afterwards misapplied. also the trustee will be liable if he puts or unjustifiably leaves the trust property in the exclusive control of his co. where trustee who was excluded from management was not held 2 liable. 6 So. F. 8 Bates v. and the widow managed the trust and the brother never did anything about it. Y. ( N. pp. .150 lars. (N. Austin. 7 Blake v. 6 Graham v. 541. where the trustees improperly divide the management of the trust. Supra. the other was held to make up the loss. Supra.trustee and it is lost. 43 Misc.) 569. 6 Clark. 2 Gratt. LIABILITY FOB CO-TRUSTEE which H. Wilcox. where the securities were deposited with a banker without inspection for four years. Pegram. each will be liable for the other. held liable for the was not embezzlement. to continue to manage first 1 the estate. and then one failed.
43 N. Parish. but who has been deceived by his co-trustees 4 as to the state 8 A of the funds. where the instrument says he may do so. 29 W.. as he is made liable. who has had 6 the benefit of the misappropriation. Eq. & G. Or he may recover of the beneficiary who has received the benefit indemnity 6 of a breach of trust induced by him. Hogg. 104 . 1 * ed. (1892). p. not because the other is at fault. 105. 6th Am. 7 DeG. Hughes. and under statutes even from a married without power of anticipation. & G. 1 and he will not be liable if the loss occurred by following out the directions of the trust instrument.LIABILITY FOR CO-TRUSTEE 151 shall not be liable for the acts or defaults of the other does not relieve him of liability in such cases. 2 Kilbee v. for instance. 390. and so gives the co-trustee the opportunity to waste the estate. J. 3 Ch. Hughes. trustee who has been guilty of no fraud himself. 797. Eq. 479. 7 Perrins v. 1 Ch. Bellamy (1899). 31 Ch. has a right not only to contribution but to full indemnity from his co-trustee. if he sells without having the power to do so. R. 332. Ridehalgh. 53 N. as for instance in leaving money in the hands of A. White & Tudor. woman . The trustee is liable for any loss caused by his exceeding his powers.. is entitled to but where there has contribution from his co-trustees been a joint fraud the court will not help him against . M. Stokes. Griffith v. Dondas. C. 7 or makes an Wilkins v. but because he neglects his own duties. Div.. as. 116. Liability for Errors. Thompson v. 2 who has made good a loss occasioned by a breach of trust not amounting to a fraud. 1029. 8 DeG.. McCartin v. 200. 560. Underbill. 483. 3 Gift. 6 Raby v. 6 Bahin v. M. Y. A trustee his partner in wrong. Pass v. or who has made good a loss caused by his co-trustee's fraud. but the clause may be drawn so as to exempt him. Finch. Sherman v. Sneyd. L. 1030. notetoBrice v. 186. 2 Moll. 323 . Traphagen.
LIABILITY FOR ERRORS
unauthorized conversion, he may be compelled to replace 1 it in kind or make good its increase in value. Or where he invests in securities in which he has no power to invest, even though honestly, he will be liable as, for instance, where the trustee was authorized to in;
vest in real security, and held railroad bonds believing them to be authorized, he was held liable. 2 8 So, too, he is liable if he pays the wrong person, as
e. g. where he paid a sum due an infant to his father, without order of court, the infant could demand the sum on coming of age. 4 Or where a beneficiary has encumbered his estate, and there is notice among the papers. Or where, under a misapprehension, he has paid sums
which should be principal to the
judgment (unless performance of his duties, but expressly exempted) not in the exercise of his discretionary powers.8 The trustee is held to perform his duties with reasonable 6 discretion, that is to say, with the same intelligence that
for his errors in
use in the transaction of his
the fact that he is incompetent is no excuse. He be at the pains to learn his duties. 7 For instance,
being the duty of the trustee to invest the trust funds, he invests too large a proportion in certain securities, or if he uses poor judgment in investing, he will be liable But he is not for the loss, irrespective of his honesty.
Infra, pp. 170, 171.
2 Robinson v. Robinson, 11 Beav. 371. 290; see as to distribution, supra, pp. 142-145. p. Tolferry, 1 P. Wms. 285; Simpson on Infants, p. 180,
2d Eug. ed.
2238; Rev. Civ. Code Supra, pp. 59-63 Civ. Code Cal. (1903), 1627 4274. Dak. (1903), Rev. Code N. Dak. (1895), " 6 Ordinary care and diligence." Rev. Civ. Code So. Dak. (1903), 2258, 1637; Code Ga. (1895), 3170; Cal. Civ. Code (1903),
Cary, 82 N. Y. 65.
Prescott, 128 Mass. 140,
a guardian was held liable for not knowing the law of C. J. Gray cites many other cases in the opinion.
LIABILITY FOR ERRORS
supposed to be
and where he has acted with
uses in his
discretion which an ordinarily prudent
own affairs, 1 and honestly, he will be proand even where he has acted in good faith only the court will treat him leniently, and give him the benefit of the doubt, 2 especially if he is acting under advice of 3 counsel, since this fact shows that he used due diligence,
4 though it is not in itself an excuse. This 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 iu trust instruments, and will be given 6 effect by the courts. But this clause does not excuse a trustee who knowingly or carelessly hazards the trust funds, and fails in his duty where reasonable inquiry would have made him safe. 6 He cannot set off the gain on another investment against the loss on any injudicious investment, since all gains belong to the trust fund, and the loss on an improper investment is a personal liability, and the fact that the trust fund has largely profited by the good management of the trustee does not affect his liability to
error of judgment. he have a discretionary power to do any act, the court will not inquire whether he has used good judgment or not, provided he has been honest in its exercise as, for instance, if he have a power of sale, the court will not inquire into the price unless it be so grossly inadequate as to suggest a fraud, or where he has a power to support,
make good any
In reCousins's Estate, 111 Cal. 441. Supra, p. 116. Crabb v. Young, 92 N. Y. 56. 8 Perrine v. Vreeland, 33 N. J. Eq. 102. * Stott v. Milne, 25 Ch. D. 710; Boulton v. Beard, 3 DeG., M. & G. 608 In re Westerfield, 32 App. Div. (N. Y.) 324 Perrins v. Bellamy
Hogg, 8 Jur.
(N. S.) 25.
Gilmore, 36 N. J. Eq. 617. 147 Wiles v. Gresham, 2 Drew. 258.
LIABILITY FOR ERRORS
MEASURE OF DAMAGES
the discretion of the trustee, honestly exercised, as to the amount of support will be final. 1
A trustee who has caused loss of Damages. must make the fund good, and will be charged with interest if any would have been earned. Interest is simple in most cases, 2 but compound interest is allowed if the trust was for accumulation, or if the funds have been used in trade, as that amount will be supposed
to his trust
to be realized, or as a punishment for disobeying the order of the court, or wilful misconduct in the management of
the trust. 8
If the trustee fails to perform a specified duty, as, for instance, to invest in specified stock, the beneficiary may elect to have the money and interest, or an equivalent amount of stock and the dividends declared in the
Similarly, if he exceeds his powers in selling real estate or stocks, he may be required to replace them by like real estate or stocks ; 5 and if he sell trust stock and
have shares in the same company in his own estate, they can be held by the beneficiary as against his assignee in
had sold the
priated the proceeds to his own use, but rendered accounts as though he still held the securities, he was charged with the market value of the securities at the date of the event,
the amount of dividends payable up to that time, but with an allowance for taxes and commissions, since the
Blake, 139 Mass. 593.
Ames, 498, n. McKim v. Hibbard, 142 Mass. 422 Jennison v. Hapgood, 10 Pick. 77 Bemmerly v. Woodward, 124 Cal. 568; Kane v. Kane's Adm., 146 Mo. 605 St. Paul Trust Co. v. Strong, 85 Minn. 1.
844 ; Freeman Perry, Infra, pp. 170, 171. 6 Supra, pp. 151, 152.
Cook, 6 Ired. Eq. 373
Stone, 71 Me. 175.
MEASURE OP DAMAGES
settlement was on the theory that the account was made 1 up as though the trust had been properly administered. Had the stock fallen in value, the beneficiary might have claimed the price at which it actually sold and interest. 2
Io the absence of evidence of the actual price received, the trustee is chargeable with at least the inventory value. 8 If a trustee buys the trust property at a sale, he must
make good any
loss in price incurred at reselling. 4 Or if sell to a bona fide purchaser before the sale is dis-
must account for any profit. 5 And if the has depreciated in value, he must make up the property difference of the value at the time of purchase, with
If he purchased the property himself, at
price, the court
an inadequate confirm the sale, requiring him to
pay the difference to make the
market value. 6
If, however, the trustee, supposing that he has acquired a good title, has laid out money in good faith, and im7 proved the estate, he will be allowed for it.
The liability of the trustee may Liability Terminated. be ended by his passing through bankruptcy, 8 or getting a release, 9 settling his accounts, or by the statute of
If his successor in the trust takes over, the property without objection at its inventory valuation, and retains it for a considerable time unconverted, he cannot subse1
Hibbard, 142 Mass. 422.
2 Ibid. 427.
Fanning, 2 Johns. Ch. (N. Y.) 252. Blackington, 110 Mass. 369.
Daroue v. Fanning, 2 Johns. Supra, p. 147. 8 Thompson v. Finch, 8 DeG., M. & G. 560. This is true of the United States Bankruptcy Act, but not of the Massachusetts Insolvency Act. Tallant v. Stedman, 176 Mass. 460, p. 466.
136 Mass. 60. Mass. 60; also
Ch. (N. Y.) 252.
Infra, p. 176.
-Supra, pp. 144, 145; infra, p. 178.
1 If, howquently charge his predecessor with any loss. ever, the successor seasonably converts the property, he may claim the loss, or he can object to taking the property at more than its real value. 2 He is not liable for the doings in the trust subsequent to his death, but an action against him for a breach of trust survives in equity. 8
The ordinary statute limiting the time for the collection of a debt to two years after the death of the debtor does
not apply to the collection of trust funds from the estate of a trustee, even though the trustee so mingled the trust funds with his own that they cannot be traced, for he cannot convert himself from a trustee into a debtor without the beneficiaries' consent, 4 and the statute is against debtors only. 5
Thayer v. Kinsey, 162 Mass. 232. In re Salmon, 42 Ch. Div. 351 Thayer Dodd v. Wilkinson, 41 N. J. Eq. 566.
Kinsey, 162 Mass. 232.
Supra, pp. 146, 147.
Janes, 9 Cal. 643, p. 659
and dogs. properly. Trusts for " things. San Rafael Turnpike Road Co. Bequests to unspecified charities stand on another footing. where the poor of a town was considered too . as they are not persons. might be the objects of trusts. could not hold it through the 8 instrumentality of a trustee. Parrots. As.PART Who may III. will not be interfered with by the court. may be cannot appear in court to enforce the trust. For statutes against aliens holding land in sundry States. be a Beneficiary. * But see Fosdick Town of Hempstead. the property should go to the next of kin. Almost any person a beneficiary. and in former times slaves. n. 18 Ala. That is to say. indefinite. p. but the carrying of them out must depend on the honor of the trustee. but a person who could not legally hold property within the jurisdiction cannot be entitled as a beneficiary. since the 4 Attorney General will appear to enforce them. that." such as pets. a slave. Y. 125 N. too. 581. see v. if properly drawn. etc. 49 Cal... 517. 2 8 Coleman v. the gift may be to a trustee to expend so much as he thinks fit in maintaining certain horses and dogs. Harrison. 95. Underbill. horses. 1 an alien enemy or a corporation2 that could not hold property in its own name in the jurisdiction. THE BENEFICIARY. for instance. 514. added." and therefore I. if the trustee failed to support the animals So. the direction to employ a particular person as an at- A 1 Pool v. the further clause might be residue to go to the trustee. but they could not be true u beneficiaries.
Supra. . or a person to whom a beneficiary has given an order on the trustee. 7 Paige. Elsley. Dexter v. "339. II. 162. Estate of the Beneficiary. 19 Ch. 90 Pa. 8 In the absence of statute ordering the appointment of a guardian ad litem. 172. although. Nor is The claim of the beneficiary is not to any part of the property itself. St. 48 N. 4 Persons having a mere possibility. a contingent interest being such a claim. although they are interested in the trust and may intervene to have a proper trustee. 103. 203 . 145 Mass. Hartman's Appeal. Y. Bradstreet v. pp. 162. p. 7 6 G Infra. persons not ascertained or not in being are not parties interested. Bntterfield. Deveaux. 513. Div. 4 Hawley v. although they 6 have property that may be the holder of a general power of ap8 pointment a beneficiary. Wilson. Western Railroad Co. and the claim is 8 against the trustee only. 92. Clarke v. in some jurisdictions. The claim need not be vested. 490. either at law or in equity hence he cannot sue to recover. The estate of the benebe described as his right to force the trustee ficiary may 1 8 8 Foster v. 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. v. Cotting. Nolan. 149 Mass.158 WHO IS THE BENEFICIARY? torney or agent by a testator does not create a trust or make the person designated a beneficiary. since they have no claim they can enforce or assign. Statutes in 8 Code Supra. are not beneficiaries. 518. 22 and 81 . C. Wilson v. p. assigned. Ross. 129 Mass. 7 All the property rights are in the . and protect the fund or recover damages for an injury to it. if he exercise the power his creditors will take the estate. 26. 2 Persons to whom income is payable at the discretion of the trustee are not beneficiaries under the above definition. 1 S. trustee. States and several others. p. infra.
Gardner. Lauer. 640. 26 and see Lewiu. if their interests cannot be separated the court all proceed in the best interests of all. 8 the beneficiary is not clothed with the privileges and burdens incidental to the ownership of the property. however. and others. v. and have invested his equitable estate with many of the same incidents and in qualities pertaining to legal ownership a court of law. Earle. for instance. 710. Levi v. 541 (Kansas. p. they regard him as the true owner of the property. and he may treat it in as the legal owner of property may treat is although it is not such an ownership of things as would. 34. 247. qualify a voter where a property 4 qualification is required. S. or than even an individual. Burgess K. 177. 7 Morse v. . . and the beneficiaries do not agree in desiring a reconveyance. p. 53 Underbill. or 7 damages for all. 60. 3 8 4 Freedman's Co. A beneficiary may act independently of the admissions of one will not estop the Where. Lewin. Keeler v. p. 251. beneficiaries is not joint. 85 Pac. Incidents of the Equitable Estate. p. C. even beneficiaries entitled to equal The estate of the in though and similar interests there be several the trust. which are attributes of the legal estate and consequently belong to the trustee . p. S. 6 majority has no greater right than a minority. there has been a breach of trust in the sale of trust property.ESTATE OP THE BENEFICIARY to 159 carry out the terms of the trust. 6 Each the others. Supra. Supra. 2 As has been hereinbefore pointed out. Hill. 1 Eden. R. much property. but his equitable estate general his. as it thinks best. Wheate. 136 Mass. 24. 1906). 62. 1 As courts of equity recognize the beneficiary's absolute right in this respect. 110 U. Or where an account is corrected at the instance of will the beneficiaries and order an avoidance for 1 If a valid trust is established the court will enforce it even though the testator provides that the trustee shall not be interfered with by the court.
350. 188 Mass. when it will attach although limited to the wife's heirs. Perry. 444. the beneficial estate 10 alienated as freely as any other property. Reed v. 186. and claims the property so 9 that the statute of limitations begins to run. Bl. Simonds. 19 Me. 2 That curtesy may attach. 383. Alienation. Tillinghast v. 6 Hamlin v. 1652. Perry. In early times dower was not an incident of a trust 4 but now. Wheate. (1901). of the settlement or statute. as Massachusetts and Maine. Gray. Rev. Bennett Mass.160 one. 3202. C. Hamlin. trustee. Vohmann v. 3078. 6 v. 123. 7 R. INCIDENTS OP THE EQUITABLE ESTATE all will be entitled to participate in the benefit of the correction. Y. 1 The equitable estate may descend or be devised. and is now usually liable to the incidents of curtesy and dower. 7 Gray. the estate must be in possession. 161 Supra. Bartlett. 323. 156. 2d ed. a married 3188. Laws of Del. 7 but under the statutes in the United States on failure of heirs the trust property. 533. 94. Dunn. (1893). 275 b. it away and it will pass to the account. 112 Mass. Whitney. but the wife is compensated in other 6 ways. 8 10 327. . 533 . 164. ch. may sell to woman can convey only in the manner provided Quin's Estate. 436. it usually is. In Ga. 144 Pa. Coggeshall. 85. 5 although there are some jurisdictions where there is no dower. In the absence of restraint by the terms may be The 1 beneficiary v. the settlement. whether 8 real or personal. Dunn v. 137 Mass. Code Miss. 8 estate. Y. by statute. 420. 141 Reed Simonds v.. Even where they have assented to Pierce. 2 p. Michel. 8 * N. (1906). 7 Burgess v. may convey v. 1 . 7 Gray. would pass to the State. p. in S. band and any person except husIn Pennsylvania and South Carolina. Beneficial estates in lands have been held not liable to forfeiture or escheat. 280. 178. unless the breach of trust has been knowingly released. Infra. 189. . Bartlett v. 1 W. Little Little. p. I. Code (1895). Stat. Whitney. See Stimpson. 1 Restraints on Alienation. The beneficial estate is subject to disseisin where a trustee repudiates the trust. 185 N.
J. tion. 2d ed. ing it everywhere. being a claim instead of property. & H. and a purchaser for value 6 gets no better title than a volunteer. Restraints on Alienation. 5 Allen. H. 343.. his 5 assignee will take subject to making good the default. Y. 554. 152 Mass. being also a defaulting trustee. Supra. 30. 468. 8 N. Alienation. St. that the assignor can only transfer what rights he has. p. 4 Or if the beneficiary. 137 Mass. Y. 1 Forbes 2 . R. if the beneficiary was indebted to the trustee. his equity will pass to his transferee subject to the trustee's counter claim. 49. Belknap. On execuGray.. DeG. 208. Drake v. 10 9 Judaon v. This equity or claim against the trustee is subject to all the counter claims of the trustees. but not if it be in autre droit. 7 and if a A later assignee acting in good faith fortifies his equity by a legal right. such as payment of the claim. as it might cloud the legal title of the trustee. 9 or a new obligation from the trustee to him direct. 6 8 Philips Philips. R. Eq. 184. 7 Furniss v. give his own trustee could claim priority over an assignee. or. * Infra. 20 Johns. Bridge tx Conn. like the Thus. v. and the assignees accordingly take in the order of their assignments. Leupp. What Estate passes. 45 N. 4 11 . as they are called. 328. the manner in which it is reached varying 2 but there is some way of reachaccording to local law pose of it . 427. Lothrop. Spader.ALIENATION his assignee WHAT ESTATE PASSES 161 under a general assignment. execution. It follows from the nature of the estate. 17 How. The beneficiary. p. and it may be taken by his creditors for his debts. his equity.. 523. he may hold the property both in law and equity.. assigns. Life Ins. Hadden v. H. All he has are 8 his rights. F. 130 Mass. 34 N. 8 a judgment. Belknap v. Cheyney v. Chase 8 Thus he cannot have his assignment of his interest noted against a trust mortgage in the registry of deeds. 1 He may disby will. Geary. unowner. v. By creditor's bill for equitable Searls. Co. 170-174. Rice. 51 1. 67 N. has no property to alien. Schuyler. 612. Ames. Corcoran. 10 v. & J. 159. Co. N. 410. 194 Pa.
Thayer Daniels. In re Dunglison's Estate. 59 S. 5 Minn. Div. 13 W. Braswell. 488. 9 Humphrey v. who has a general power of appointment and 8 in Massachusetts. Sargent. C. Y. & Fin. the person giving notice first will have priority was aware help him. sary to complete the transaction. 7 assignee knowledge is notice. 201 Pa. but in some other States the property is held to pass directly to the appointee under a general power in the same way as if the power were 9 special. and 2 Virginia. but if the person giving the notice of the previous assignment. 531. * Roxburghe v. 398. 129. WHAT ESTATE PASSES an equity assignee in real jurisdictions the assignment of estate is l . Minnesota. 104 N. D. 17 Ch. Notice to be good must be given to the trustee after his and notice to one of several trustees or other joint obligors is notice to all. Wiley. 73 App. if obtained in such a manner as appointment. l If the power of appointment be special. but if he be . Y. but in other jurisdictions notice to the trustee is necessary to complete the assignment of an West 8 equity in personal property. the Lee v. 108. since he should have appointed exercises to them instead of to volunteers. 520. Ingraham. 496 Kneeland. 293.. 438. v. New York. Howlett. Cambell. 718. Banks. . Lloyd v. Fairbanks v. 200. a McDonald . complete when assignor and have assented and the same rule is true of personal property in Massachusetts. his notice will not .) Ames. 328. 352 Clarke v. St. 2 K. (N. 8 Foster v. 456 1 Jones Eq. 14 Ind. 137 Copeland v. Wallston v. 527. & J. 126 Mass. Farmers' Loan & Trust Co. in those jurisdictions where notice is necesAccordingly. Cox. A person it. v. Manton. 4 would affect a reasonable man is the trustee his knowledge 6 but if the assignor is not notice. v. White v. 6 6 7 8 Perry. 113 Mass. Hogeman.8 Knowledge is notice. 39 . . n. end. 3 Ch. Va. 22 Ohio St. Seger . 592. . Indiana. makes the property assets of his estate for creditors. . Cockrell. Clapp v.162 In all ALIENATION. 3 Cl.
p. decisions on this subject. 15 Gray. and the policy involved. 330 Cowx v. 133 Mass. or be liable to be taken for his debts. 166. 144 Mass. C. 4 Restraint on Alienation. v. J. 175-177. Whitney. Foster. bution has been ordered.D. 2d ed. are thoroughly discussed in Restraints on the Alienation of Property. p. 30. 310. in PaBank v. Restraints on Alienation. 6 As a general rule in America. such a restraint on the alienation of the income is valid.. Stevens v. Palmer v. 2d ed. LL. And heirs who have assigned all their interest have no right to call the trustee to When a decree of distriaccount. Prescott. decisions. The policy of the law is well set forth by Morton. instead of giving it outright. 167 j. Lloyd. WHAT ESTATE PASSES 163 creditors could not take unless the settlor and the donee of the power were the same. 8 4 Infra. 505. the assignees may compel payment to themselves in equity. The assignee's standing in the Probate Court is a matter of some doubt. 1 in which case quaere?* But a person to whom income is payable at the pleasure of the trustee has no estate that can be assigned or taken for his debts. Palmer. but is invalid as regards the principal fund. Windram.. as his assignees or creditors must take through him and he has no rights that he can enforce. 5 See supra. 505. There is a lack of direct . In such cases it is usual to insert a limitation in the trust instrument that the beneficiary shall not take his income by way of anticipation. 6 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 1 2 cific Bailey v.* In some States the creditors have lien by statute even where the power is not exercised. by John Chipman Gray. One of the ordinary motives for giving property in trust. . 80.. p. and that it and the principal shall not be assigned. Lenz The 6 Gray.. 5 Russ. but the allowance of an account showing a payment to an assignee necessarily involves the determination of the validity of the assignment. 1895. 166 Mass. is the desire of donors to secure to the beneficiaries the enjoyment of its benefits irrespective of their improvidence or extravagance. 306. 1 Johns. & Hem.ALIENATION.
111 111. . 81. 589. 33 Beav. 88 Pa. Overman's Appeal. 51 W. (1903). Bartlett. 8 and cannot be set aside to relieve against her fraud or breach of 4 trust.. 10 12 13 14 11 Maryland. 77 . 161 Jackson Sq. 175 Jackson v. 20 Mo. Restraints on Alienation. 7 8 Code Cal. Von Zedlitz. 86 Tenn. App. v. See note to Underbill. 268. Broadway Bank v. where she cannot settle property on herself without power of alienation during coverture. Robinson . Brown 3 v. 92 Tex. Fletcher v. Van . 87 v. Texas. . 428. Stanley v. Whitehead. Horn. 6 notably those having codes. Jourolman v. 7 Massachusetts. Code (1895). Mississippi. 325. p. 6 Civ. Towers. Adams. Massengill. w Tenn.164 beneficiary BESTRAINT ON ALIENATION a married woman. Lazear. 2686. nor will acquiescence by the married woman excuse a trustee for disregarding it. u Smith v. 87 Md. 247. In Pennsylvania. Md. 1 who is excepted everywhere except in Massachusetts. Gray. 17 Indiana. where such restraint is provided for by statute. 269-277 a. App. 10 Ind. 426. and Maryland.. 214. 4 Del. 135. Corbit. 464. N. . 133 Mass. some States. Stevens. 3398. Loan & Savings Ass'n v.5 In most States the restraint on alienation can be made There are only by the terms of the trust instrument. 271 Gray. 18 ginia. 328. 867 . Vance. Code (1896). 2 This restraint in the case of a married woman cannot who is be removed by any one. 1 2 . Brown v. Steib v. 84 Me. D. Stanley. Murphy. 15 Guernsey v. Ch. Missouri. Civ. 161. 562. 69 Miss. Macgill. 276. 136 Mass. 134-213. 342. 181 Mass. 2d ed. Macgill.. 18 Thompson v. 616. 133 Mass. Pennsylvania. not even by the court. Dak. Va. 9 Maine. Nickerson v. 377 Pacific Bank Ibid. Greene. 17 Gray v. Delaware. 923. Windram. 170. 661. 7 Ch. 8 Illinois. 10 Roberts v. 6091-6093. West Vir15 16 and probably Tennessee. Restraints on Alienation. Harrison. 21 Beav. 95 Md. 69 Md. 14 Monday v. 12 Leigh v. 13 Lampert v. Haydel. * 6 Wheelwright. 2d ed.
p. (1901). Restraint was allowed in Garland v. bad 5 in Rhode Island. 11 12 13 14 16 Ohio.RESTRAINT ON ALIENATION 165 settlor and in the Federal courts 1 and Vermont. 18 Under the statutory provisions of 17 1 New Nichols 8 2 Barnes v. 169. Minnesota. 758. 100 Va. 140 N. 78 Ky. 59 Vt. Code (1895). Bk. See note 1 8. it comes into Such restraints are adjudged New York (aside from statute 7 ). 240 A to 249 b. 73 N. 516. 101 Va. v. 87 Va.. 530. 178. Virginia. 7 Rome Exch. 119. and it cannot be taken for his debts. 10 3149. S. Wisconsin. 8 North Carolina. Stat. 36 Ala. 91 U. Maxwell. . 4 Abb. Johnston. 8 Pace v. v. Bailie v. and probably in Arkansas in Connecticut the dicta are conflicting. 8 South Carolina. 83. Indiana. 177 a. Shreve. also p. Restraints on Alienation. 675. v. 8 The provision need not specify that the income may be accumulated. 281. App. 10 Alabama.. * Nickersou 5 Smith. Eq. 9 Georgia. Cochrane v. California. Schell. N. Ct. Rev. 195. 4 Rich. 8 Ark. 156 N. Eaton. 2d ed. 8 Tillinghast v. 562. Civ. 181 Mass. 9 Heath v. v. 12 Hobbs w w Kuefler v. Bishop. the beneficiary may be restrained from alienating the rents and profits. 83. infra. Ga. decisions. See note 7. Bradford. I. aa amended by Laws of . Y. 15 16 17 18 Lindsay v. C. Restraints on Alienation. it is only necessary to have a clear intention expressed by the settlor that the income settle the life estate cannot be controlled by the beneficiary until his actual 4 possession. Schenck v. 2 the without power of alienation on may any one but himself as beneficiary. Harrison. 316. and North and South Dakota. Pace. but disallowed in Hutchinson v. Y. Duff. 716. 5 R. Garland. Honaker Sons v.. McWhorter. 3027. 302. 2d ed. 16 New York. and there are no . 56 Ga. Michigan. 205. but changed by statute. Restraints on Alienation. 11 Robertson v. 297. Gray. Gray. 197. 46. Barnes. Kentucky. 15 Ohio St. 419. In voluntary settlement on self income can be reached by creditor in spite of statute. but not the gross sum. Eames. Kansas. Dow. Y. Jersey. Gray. Van Horn. supra. 183. 2d ed.
2 N. 3394 Gray. 4232. (1903). Where it is so provided by the settlement. 8847 Rev. the estate vests in him absolute!}'. Laws Minn. ch. Wis. if at the creation of the trust his debts do not exceed five hundred dollars. vol. Burns's Annot. (1895). 867 Rev. (1897). 3398. Stat. pay the income to the beneficiary. . Ariz. 4 and therefore nothing that he can alien. Ind. 88 N. the trustee must account to the creditor for English any income which he pays to or expends for the beneficiary 6 after notice of his assignment. C. Nickerson Lickorish. Ch. Although there are jurisdictions. 2d ed. 305. 39 Gray. Rv. 341 r. 8 Huntington v. Dak. Gen. Code Cal. Stat. D.166 RESTRAINT ON ALIENATION In Arizona 1 he may settle on his children without power of alienation. (1903). 5 Hahn v. (1898). Kan. or that can be taken for his debts but in such cases.Van Horn. (1895). 4. (1 905). 443. Ch. Comp. Hutchinson. Code 1588. . that is to say.think fit. by leaving it to the pleasure of the trustees whether 8 they will use the trust fund for the beneficiary. 45. 562. (1901). St. Re Coleman. 91 1903. and no spendthrift trust is estab5 In England. Gen. . Code So. 4 In re Bullock Good v. D. 315. 60 L. Stat. use a part of it for his support. 159 Pa. 2089. although if he pays or it for members of the family or other persons expends . 859. . 1. . Rev. Mich. Stat. 13a 6 167$r. or as more commonly provided. (1901). 390. (1905). rule. Restraints on Alienation. Jones. . ch. and in North Carolina 2 it may be so settled on a relative. because the beneficiary has no right to any specific income which he can enforce. J. Civ. yet the is same what commonly known result is practically reached by as a spendthrift trust . Laws 3257 . Stat. 72 Conn. or accumulate so much as the}. 113. 181 Mass. . .307. the creditors of the beneficiary cannot take the income. J. 857. where a restraint on alienation cannot be successfully attached to a settlement where the gift to the beneficiary is unlimited. and in those States following the lished. 1 Rev. as appears above. (1897). Civ.. p. 296. Code N. if the beneficiary is also trustee.
S. 401. D. 716. D. Gray. the income shall pass to others. even though the person to whom 8 the income passes is the wife of the original beneficiary. Mortimer. in most jurisdictions none of the income can be taken. 7 Jackson v. 30 Ch. be alienated. and allows the beneficiary to alienate Potter v. 4 may attach a condition to the gift of income. Bank v. . therefore there is no surplus for a creditor. 2d ed. 616. 99 N. and for whom he fails to provide. 159 but in Illinois the statute curiously cuts out the creditor. Supra.) 686. 296. if the provision be to pay all the income to him or apply it all to his support. 1 but in others. 165. 166 N.. note 18. 2d ed. 438. see Stimpson. Restraints on Aliena46. Lockhard. in spite of a provision to the contrary.. . 198 Pa. 119 Nichols v. For the straints . 12 Ch. n. Reon Alienation. S. Eaton. Skuse. Von Zedlitz. Sherman v. Gray. or if the beneficiary become bank5 rupt. Wood. where the income is settled on the settlor himexcept only 7 but this exception does not apply to a married self. Furniss v. (N. of Charities v. 67 N. 2d ed. tion. Couch. Lcupp. 296. and this condition will be valid in any case. * * Board Re . 136 Mass. * Samuel v. not cover the support of his wife and family living apart. Tollesw. 345. creditors.. St. and give no power of voluntary alienation to the benefi8 A provision for the support of a beneficiary does ciary. Eq. 121 Cal. 2 First National statutes. Samuel. Y. Gray. p. Restraints on Alienation. Statute Law. 2 and this amount is sometimes fixed by the statute but the statutes only protect the creditor. 28 Misc. notably where the matter is regulated by much as is left after reasonable support may be taken or alienated. They are like other statute. Ames. 91 U. 572. In jurisdictions not allowing restraints on alienation. 152. McAvoy. Levy's Trust. Y. 3 292. . A court of equity cannot demuch income is required for support of beneficiary and family. 237 . 141 U. -p. 342. settlor The that if it 1 Seymour termine how v. so . he has an absolute right which he can alien or which can be taken. If the provision be to pay him or support his familj7 .RESTRAINT ON ALIENATION specified 167 by the settlement the creditor lias no claim. J. Y.
Carew. the estate vests. 137 Mass. v. (N. Maryand Massachusetts. 164. Lester. 131 Mass. Massie v. Where enforced. Div. 57-74. 105 App. irreof the situation of the trust property. J. Watts. 8 limitation of the income to the sole and separate use of a married woman is not a restraint on alienation. 8 Brown . 7 Forbes v. in which case the trustee can only be sued there. Jones. 1 Johns. Kildare v. Fisher v. C. The beneficiary may have a sub- 8 poena against the trustee wherever he can find him. See supra. the beneficiary consists of his right to compel the trustee to carry out the trust.. 159.. 355. 523. 199. Gray. Wister. where married women have the coverture. 1 Vernon. 2 1 woman under land. St. 154 Pa. 29 Mich. As the whole estate of Rights against Trustee. Y. 7n/ro. 160. 72 Conn. . 379. 65. 6 Crane h. pp. Foster v.p. Desmond. 38 111. status as other individuals. 45. if he needed It in his business. his creditors could take 6 it. then the gift over becomes void. Lothrop. 100 Mass. Scarlett. Smith. v. he is considered to be peculiarly under the care of the court. 7 duty to call for A III. unless ancillary trusteeship be also taken out in the jurisdiction where suit is brought. Jenkins v.) McDonell. 316. 189. 267 . Eustace. & Hem. 4 but where A the it life tenant might call for the principal it. Mandlebaam Ullman 6 6 Huntington v. 8 trustee having discretion to spend part of the principal for the beneficiary need not pay his debts. 2d ed. Marshall. 163. 148. the courts of that 2 Clive v. 405 9 10 v.168 RESTRAINT ON ALIENATION except in Pennsylvania. 10 And where the trust is established by the decree of a court of one 1 8 * State. Cameron. Restraints on Alienation. 156 Mass. same A similar condition the fund is valid but if attached to a gift of the principal of so long as the estate remains contingent. 78. 9 unless the spective trust be created by the decree of a court of another State. Cooley v. was his A provision attached to a gift that so much as shall not be used or alienated shall go to another is void.
since they can remove the trustee and appoint one to act in his 1 So also. p. 213. (N. 9. 81. James. 134. the trustees will hold the property on a resulting trust for the heirs. Y. 440. St. 2 Allen. however. 6 Blatchf. In Bourquin v. but the trust property is within the jurisdiction of the court. (N. the beneficiary may sue or defend in the name by getting leave of court to do so 6 but 7 the trustee must be shown to be in default. Can Compel What.) 279. fied for costs. Anderson v. Daley. Curtis v. 9 and infra. Y. 8 in the jurisdiction If the trust is illegal where it is sought to be enforced. Supra. If. the beneficiary was allowed to bring ejectment against his trustee. 110 Ga. 119 Mass. Randall. Seesupra. Chase. . if the trustee is not within the jurisdicplace. unless it have jurisdiction over the trustee in whom the title is vested. pp.RIGHTS AGAINST TRUSTEES WHERE ENFORCED 169 State have jurisdiction to regulate the trust. v. 4 The beneficiary is entitled to have proper persons and a proper number of trustees. 27 Misc. and there is a statute vesting the property in a trustee appointed by the court. 199. v. and any person interested in the trust. 38 App. 120. Chamberaburg Ins. 8 * McCann Hooper. even though the interest is contingent on the mere possibility of receiving a payment at the discretion of the trustee. 537. tion. Smith. Makepeace. . and indemni. Smith. p. where he had a right to use the trustee's name. Bourquin. 7 to 6 5 Hawley v. 1 2 8 Chase Felch v. trustee's and beneficiary can compel the if the trustee refuses to sue or defend. who claimed the trust estate under the purchase of a tax title. there is no statute to transfer the title to the property. 52. although both the trustee and beneficiary are out of the jurisdiction. Thompson u Remsen. 7 Paige. the court is powerless. v. Kansas Pacific Railroad.) 505 Zimmerman v. Co. 2 then the court can appoint a trustee to execute the trusts. 7 Morgan v. 11 Pa. may apply to the court in the matter of 6 removing or appointing a trustee. 101 . Div. 152 Ind. In some recent cases the beneficiary has been allowed and sue in his own name. The trustee to perform his duties. 147 Mass. 191. 21 Blatchf.
14 Wis. Civ. 366 and 440. N. Code N. 1626. 1 54. 131 Perry. (1895). and cannot pursue both remedies 1 7 . 74. pp. and pending trustee. 2237. 1868. supra. on the whole. Rev. 3183.3184. 8 his removal and the appointment of a new In England and some of the States he may have the 4 by the court. p. p. 470 (3). Barker. governed by the general rules applicable to such powers. and lose his may . where it instrument. . it is better to leave the full responsibility on the trustee. the beneficiary may elect whether he will take the property into which the funds have been converted. 4 Ames Jones 276. 6 6 Underbill. 7 Barker v. 6 If the trustee commits a breach of trust. 154 Rev. 4273. p. (1903). See trustee's liabilities to beneficiary. or the amount taken with 6 interest. Dougherty.. Whitchurch. 1 belongs. 3*DeG. he must return the Life Ass'n of Scotland Bradby v. 2. or voting against his wishes 2 if it would cause him irreparable injury. . 10 Ga. the beneficiary may either sue in equity for his damage or loss. v. But he must choose. (1895). 81 . n. If the trustee has been guilty of a breach of trust in in- vesting or using the funds of the trust. or in testamentary trusts may sue on the bond given to the estate administered court. v. Dak. Code Ga. 58.170 CAN COMPEL WHAT 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. p. (1903). he remedy against the trustee should the action be injudicious therefore. Supra. Civ. 273. and if he disaffirms a sale. If an express it is power be given by the trust instrument. Code So. He can have the trustee enjoined from committing a contemplated breach of trust. Siddal. F. Supra. . 2 8 & J. Dak. He may have a receiver appointed to hold the property if it is imperilled by remaining in the hands of the trustee. W. 7. but such receivership suits are not in vogue in this country in trust estates. Code Cal.
information about the concerns of the trust at all rea- sonable times. Supra. as. But he has no right to demand that the trustee shall assist him in encumbering his interest by answering the how his interest is already encumbered. he must show his interest. and may not examine them to establish an interest. 363 (1898). or where there is a presumption that more was earned. see supra. 8 full The beneficiary has a right to Right to Information. as a condition precedent. 2 In general. 7 Pa. 1891. D. the court will order whichever remedy it thinks best under the it is property and the balance . 13 Allen. 417 136 Mass. 4 He can examine the deeds or opinions of counsel consulted by the trustee in respect to the trust affairs. but compound interest is allowed when the income was to be added to the principal periodically. 121 et seq. Smith v. . although only contingently interested. the damage recoverable is the amount of the loss for the remainderman. 60. ' Low v. Ames. he but if circumstances. A 1 Yeackel v. As to accounts. Barnes. 3 Ch. nor can a stranger acting under his authority require the 7 trustee to answer. Clisby. holds property in trust to permit B to enjoy the income. L. R. 154. Litchfield. p. insufficient. Marx 8 . is income. Dist. with simple interest for the life tenant. 130 Ala. 502 p. inquiries as to where In a simple trust. pp. 1 If he follows the may prove his claim for the beneficiaries are not agreed. 82. 8 As to what Bouverie. usually once a year. 91. and is entitled to an accounting at reasonable 6 intervals. 6 Sloan's Estate. n. 470. or the breach was wilful. 6 but. 1 Eq. the income as it accrues belongs to B imme- 8 Right to Income. Hill. He can examine the books of accounts and securities at all reasonable times. for instance. . p. 2 Morse v.CAN COMPEL WHAT RIGHT TO INCOME 171 consideration in absence of fraud. see supra. 65 . Rep.
184 Mass. 298 .172 diately. Lewin. Adm. 321 et seq. but in the case of an ordinary trust. the court would probably not allow a large amount to lie in the hands of the trustee for . Supra. Y. by statute the life beneficiary is enincome. 138 Mass. 6 but the intention of the settlement. titled to the England as to the and the de- In Massachusetts. express or implied. such a long period if the beneficiary needed it. and make the necessary deductions before pa3*ing it over. will govern. Fanning v. 478. 137 et seq.rate of interest it would have 4 produced if properly invested. Copeland. 75 App. 103. 6 Williamson v. pp. on the fund given for his use from the date of the testator's death . Div. in the absence of statute the 123. as explained supra. 6 Howard. 2 . on the conversion of the property the proceeds are divided into income and principal so as to give the life beneficiary the usual rate of income. beneficia^. 7 Met. in beneficiary's share of the first year's income. to collect it. and therefore would seem to be payable only on the settlement of the yearly account but as the income belongs to the beneficiary. Williamson. 6 Paige. 8 cisions have been classified by Mr. if 1 i>. 8 Lewin. 6 Keith v. Main.. Adm. at the . (N. income means net income after deducting the taxes and repairs and ordinary current 1 So the trusteee is entitled expenses attending the estate. RIGHT TO INCOME and he may require the trustee to give him a power of attorney to collect it for himself. 4 Loring v.only gets the actual income that accrues on the fund. In such cases the net income can only be ascertained yearly. 303. In re Chesterman. it can be discovered. 77 Conn. page In other jurisdictions. Watts. Thompson. pp. 94. 2 Most trust instruments have an express provision that the net income shall be paid quarterly or semiannually. and where the whole or a part of the fund does not produce income. which provision would govern in There has been much discussion all cases.) 573.
75 and 83. 8 rule. pp. 149 Mass. and order the shares of the Though by others to be conveyed 6 but as a general rule. sale. Howard.RIGHT TO INCOME RIGHT TO A CONVEYANCE 173 The for trustee may withhold income to reimburse himself erroneous!}* paid to the beneficiary. 7 If the property is to be held in trust for children until all agree to a . Y. infra. and all the beneficiaries. 134. The question of the beneficiary's Right to Support. part cannot call for a conveyance. v. 59S Harris v. p. 89 N. Goodson 19. Code of Ga. Harris. being sui juris. ubi supra. Henderson's Estate. 1 to what constitutes income. 6 Lent 7 8 v. If the trust trust. Supra. there is an unusual statutory provision. the trustee may say that he will convey all or none. 460. see pages 123 et seq. 3 Russell. 583. lutely and entirely in the beneficiary. desire 4 it. 109. . one of the beneficiaries objects. Claflin v. that where the trustee fails to support the beneficiary. if A is statute in New York the court ma}' in its discretion refuse to order a conveyance. 205 Pa. 169. the trust may be terminated or modified in any way. . the latter may contract debts binding the trust property. St. but cannot reimburse himself in this manner for an individual loan money made As before he became trustee. Beal. 106 Mass. Claflin. 184. he may call for a 1 2 8 * The English Supra. 15 Phila. which also prevails in some of the is that. 2 In Georgia right to support has been treated already. 3187. (1895). and there is no reason why it should be continued. that is to say. Goodson v. in such case. is Right to a Conveyance. Ellisson. 8 merely a dry given property simply to hold in trust for B. or if the purposes of the trust have been accomplished. p. 5 If. Ellisson. Walker v. the court may sever the trust. the beneficial estate having vested absoStates.
1 89. Estate. Claflin 5 Ibid. App. Ullman v. . Bailey's Trustee v. St. 297. . 287.) 167. v. while under the American rule the trust continues until he becomes 4 thirt}' years old though it is not definitely decided that the estate might not be taken by a creditor. Div. 217 111. Cameron. 15 Bennett v. Krebs's Estate.T. The trust being for a woman and her issue. Dalby. lute and unqualified in the beneficiary. Smith v. 115. conveyance. Smith. (N. . 434. 149 Mass. 132 Mass. Rhoads. Slead. 395. 91. 220 111. Hutchison's Appeal. 92 App. as in such a case the purpose of the trust has not been accomplished. Bennett. 63 Md. 222. Rep. the fact that she is sixty years old and unmarried does not entitle her to a conveyance. Young Sears Snow.174 conveyance if RIGHT TO A CONVEYANCE he be sui juris . Y. Pa. App. where the purpose of the trust was to protect a married woman against her husband when she got a divorce. If. 6 7 . Wetmore. Vantier. and have the whole estate. p. 448. 5 still it would seem that he would have no greater right than his debtor 6 But where the estate is absothrough whom he claims. the purpose of the 8 trust being accomplished a conveyance was ordered. he may have a . Byron. Noonan. 774. 1906) 810. 467 Zabriskie v. St. 82 Rhoads v. Bailey. 26 N. Lewin. v. n. St. Choate. 142 Cal. 198 Pa. W. 239 Gunn v. 211 Pa. . 18. 452. 176 Mass. v. 8 Gary v. and can be alienated or taken for his debts. . Carney v. Brown.I. 4 Seamans v. 97 S. 70 Mo. 611 Ingraham. 509 Ames. Claflin. (Ky. . as no one else 1 Saunders v. Mass. Thus. Eq. 7 all the beneficiaries and the trustee agree is to terminate the trusts in such a case. 98 Mo. . 4 Beav. although the beneficiary be sui juris. 508. 43 111. 2 On the other hand. Gibbs. App. In re Moore's Shower's Estate. 96. 239. Rector v. 184 Pa. 19 R. he cannot call for a conveyance if it would defeat the intention of the settlor. 283. l but the American rule prevailing in most States is that. 19. and he desires it. where property is left in trust for A until he reaches the age of thirty 3*ears. . under the English rule A may call for a conveyance on becoming of age. however. 146 Mass. Eakle v. Danahyv.
by making a small provision for some person unascertained. Nothing less than the whole of an absolute estate will entitle the beneficiary to a conveyance. p. 102 v. w6i supra. he will be entitled to possession. Mass. 69 Tex. title if he is his landlord. Ordinarily in America the right to possession of the real estate and chattels belongs to the trustees 8 but if the instrument intends that the beneficiary . even under the English rule. . . such as the payment of an annuity. the interest of the beneficiary is vested If. 105 Willard. 48. the trust can be determined without a 1 decree. 7 The Right to Possession. Grinnell. 117 Ga. 1010. the beneficiary may have a conveyance by secur- ing the annuity properly. Dorr v. Thorndike. Moore v.- Supra. 13 Pick. Sinnott. Walton v. trustee cannot set up superior title in a suit for a 6 Nor can the beneficiary deny the trustee's conveyance. v. 139 Mass. 711. Therefore. or for the trustee himself. 45 and 100. v. 164 Mass. Brandenburg v. 6 ever. Supra. 4 8 Lemen Young 111. Wainwright. 8 And a with power of disposition beneficiary by will. nor can the beneficiary buy in a tax title and hold it against the estate. if there are contingent or unas- certained interests there can be no agreement. 63 Md. 45. is to enjoy 1 them v. and there is no one who can object even under the American rule. But obviously the maker of the trust can prevent the beneficiary's calling for a conveyance even under the English rule. Follansbee. how- subject merely to some simple duty. Sise 6 Russell v. Neyland 7 Bendy. 425. 131 147. McComas. pp. has not such an absolute estate as entitles him to a conveyance 4 nor could he call for one if the trustee has life estate. who has a discretion as to the application of the income. . but if the aid of the court is sought it will not be 2 given. 328.BIGHT TO A CONVEYANCE BIGHT TO POSSESSION 175 interested. 153. in specie. Snow.
8 1 2 8 4 If. . pp. Wadsworth. 768. however. personal property is likely to be injured or lost in his posIf he session. Pope v. p. tee The Beneficiary may lose his Rights against the Trusby Release. 2 Where the instrument has no specific directions. furnished house. and neither he nor the trustee will be required to replace it is heirlooms or the appurtenances of an such as the tools on a farm or the furniture of a estate. Jr. he ma}' use them wherever he pleases. and the Running of the If the beneficiary full is Statute of Limitations. and has a breach of trust or otherwise. he may make a valid and binding release of any claim he has against the trustee for a and fully informed. Brice Stokes. A estate. and unless sion of a dwelling-house or farm as a home. he may be required to give security for it. . 467. 146 Mass. certain specific estates. 107. 3 Beav. But where the reside in a house and use the furniture. The beneficiary has no right to the possession of the trust securities but where he is given the dividends on ficiary the trustee . though 8 may do so.176 RIGHT TO POSSESSION and by statute in England the right of possession is in the 1 As. the beneficiary has no such right. 106 Mass. 19 Ves. Fyler. 550. Lewin. is given the use of personal property he may wear it out. but the bene- cannot compel him to buy him a residence. 319. Acquiescence. sui juris. n. v. Shore. married woman is sui juris. 111. 125 Schaffer v. or the rents of certain specific can require the trustee to give him a power of to collect but where the trustee has the duty to attorney manage the estate and pay over the net income. 5 Fyler v. 387 but a married woman . where he is intended to beneficiary. he stocks. the beneficiary Ames. Supra. 339. Jr.* knowledge and appreciation of the facts. . 563. Farnsworth. 11 Ves. without power of anticipation cannot release. the trustee will be justified in putting the beneficiary in posses- it . for instance. p. 2. Supra. 325. 19. and may release as to her separate Walker v.
Yonmans. 12 App. or mistake. Rep. beneficiary of his remedy unless he has been guilty of 1 Wade v. Generally. v. Perry. if the beneficiary who is sui juris knows of a breach of trust. (1892). Treadwell. Liebert. 3 Ch. 554. 109 N. and neglects 9 to make any claim. 7 DeG. if he was fully informed but the assent to one improper investment will .HOW BENEFICIARY MAY LOSE HIS BIGHTS 177 has come of age latel}'. even though the transaction has been set forth in an account settled in court. 109. 151. Quirk v. Turner. 2 Trustee's Act. there was fraud. 510. as his inexperience may form a ground to invalidate his 1 Nor will a beneficiary be bound by his release action. 10 he will be taken to have assented. 84 Minn. 59. 2 If the beneficiary knew and urged a breach of trust. McKay. he not only cannot recover. or does not make it for an unreasonable time. C. 157 Mass. v. Field v. If the beneficiary who is sui juris assents to a breach of trust. 8 if even though the beneficiarj7 be a married woman without power of 4 anticipation. he cannot subsequently recover the loss. v. but by statute in England. 8 So. Badger. See Griffith p. 12 . Hughes. Lobdell. 434. and so cannot complain . 104. 922. . and he may disaffirm the transaction on learning the 7 truth. 11 Lamberton v. he should be advised by counsel. Adair Nichols.. v. 87. 6 ^ 8 Mant Leith. p. such as an improper sale 5 or investment. 77 Miss. him. M. 1888 (51 & 52 Viet. 441 Treadwell 176 Mass. 20. (Minn. 1 Denholm v. 15 Beav. See supra. Y. 4 Cash. also. 180. 539. 8 * Raby Ridehalgh. accident. Brimmer. Hill. 8. if he had no reason to suspect a breach of trust he is not bound to inquire. The ordinary statutes of limitations apply in England now. 6 If he has been misled by the trustee his assent will not conclude. 524. ch. D. Morse v.). v. 394. 105. 1906) 229. 2 Wall. D. 74 N. 148 Mass. but is liable to contribution. not authorize a second of the same character. W. 9 Badger v. 6 Fryberger o. though he might have dis11 but time will not deprive a covered it had he done so.. 60. 136 Mass. Appellant. Middlesex Banking Co. & G.
S. 52 Pa. J. 94 Fed. 100 Va. 8 Sawyer v. 8 4 Preceding page. In re Jones's Estate. Colley. 377 U. 6 Wheat. 13. . but as a general rule mere lapse of time alone will not bar the beneficiary where the position of others has not been changed. 137 Mich.178 laches. Story. but he is not guilty of laches or acquiescence until the estate comes into his possession. 135 U. 8 off by inducing the trustee to What constitutes laches depends on the circumstances of each case. C. 2 Stewart v. and brings the matter home to the beneficiary so that he is compelled to take 8 action. v. Halsey v. 724 . Y. 2 Myl. 53 N. after sixty years held barred. S. 377. S. Whitehill. 30 Misc. 481. Morse 6 Hoyt v. Philippi u. he may take the benefit of the statute. in order to see rise or fall. v. 4 Lapse of time with circumstances indicating an intention to abandon the trust are sufficient 5 to bar a recovery. . 553. 120 U. Curtis v. 498. Traders' Nat'l Bank. & K. Utah. 143 U. Tate. but the stat- Prevost v. Blake v. 151 Davis v. 2 But a minor may cut himself act by fraud. Conrad's Adm'r. 66 . 1899) . 145. 155. supra. but see Browne . 188 Mass. Henrici. Cross. 377 . Coburn. adverse position. 128 Mass. 14 Beav. S. n. Home Savings Bank. 118 Mich. Foley. Rep. (N. Lakin. 65 Ga. c. 136 Mass. 3. 9 Statute runs from time of distribution. 120 U. 145 Mass. repudiates the trust. 141 Mich. Speidel v. . 98 Thome v. Riddle v. Dean. Saulsbury. or from date of decree of distribution.) 354. Cook. Bennett v. and the will run from the date when he brought his adverse time claim distinctly to the beneficiary's notice 1 9 . 164. 65. 8 Phillippe. v. 251 (C. St. Latham. p. 649. Jones v. 7 Speidel v. Skelding v. 7 since the possession of the trustee is in the interest of the beneficiary but if the trustee takes an . 225 . 115 . electing whether or not whether the property will cannot elect at a later time. S. Gratz. 60. Y. 311 Henrici. 621. A beneficiary who has delayed to confirm a sale. 143. . 128 181 8. 105.' Ordinarily the statute of limitations will not run against the beneficiary. Mdbury. Hill. Hubbell v. 1 HOW BENEFICIARY MAY LOSE HIS RIGHTS A remainderman may interfere to protect the estate during the life tenancy. 5 Sim. Transfer of shares Iverson .
if he denies the beneficiary's title. Tattle v. As. v. 138. First Nat'l Bank. a bank which has received stocks and bonds. Porter. v. although he claims under the trus- A . for instance. if the transferee bought the estate for value. If the bondsman has made good the loss. Brodie. * 6 Wetmore Supra. though the beneficiary must sue in the name of the trustee. * The beneficiary has no claim to the property itself. 1 Stirapson. that is to sa}'. he is subrogated to the beneficiaries' Loring v. but he may constitute any person into whose hands it has come wrongfully a trustee 2 for him. claim. 46. Am. 51 Md. then he in a court of equity is equally meritorious with the beneficiary. 533. 92 N. 145 Mass. TV. p. 2 3 Third National Bank Lange. 27. and the court will not help the beneficiary against him. Rights against Strangers. and it will begin to run from the time when the beneficiary is in possession and not under disability and in case of fraud. Blake v. holds 8 Althe stocks and bonds in trust for the beneficiaries. 13. and will not be compelled to hold it 6 as trustee. A purchaser with notice from the trustee. 237. since he claims the property by a title which supersedes that of the trustee 6 and a purchaser for value without notice takes the property free of trust.* disseisor will not be held a trustee. tee. Statute Law.HOW BENEFICIARY MAY LOSE HIS BIGHTS 179 ute will not begin to run against the remainderman until his estate vests in possession. 76. p. which it knows belong to the trust estate as security for a personal loan to the trustee. can avail himself of statute. 187 Mass. Traders' Nat'l Bank. the defendant cannot set up the defence that the trustee was a joint wrongdoer in pari delicto. Supra. 6 p. Y. 134 Mass. and so he ma}' keep his legal title. from the discovery of the fraud. . without notice of the trust. or when it might have been . nor will it begin to run so long as the beneficiary is under the control of the trustee. 453 .
if it can be shown that the proceeds remain somewhere unexpended But by great weight of authority a trust in the estate. Hopkins v. 111 Ind. J and the usual period of adverse possession is good against the beneficiary. 229. 18 R. 62 Ala.. Oriental Mills. Wms. Poor.) Merriam v. Lincoln v. 111 Iowa. 24 Colo. 8 See Slater v. 264 . Bradley v. 8 the substituted property can be followed. 14 Allen. Pearson u. v. 353. 56 Md. Hall v. . 2 Aside from those who claim by a superior or adverse title. 64 Kan. 6 Deg Pennell O'Brien. 3 For instance. 478. Ward v. 197. 516. M. 316. 411. the beneficiar}. . . Morrison. Crawford Co. Davenport. Molton v. 372. 130 Cal. 4 DeG. . Money is 5 said to have no earmark. Harvey.. Soc. Attorney General v. 502. while it is not enough to show that trust property went into the general assets. unless the proceeds can be identified and traced into some specific fund or prop1 2 McCoy v. 3 Gray. it cult. The mere commingling of the trust moneys does not necessarily prevent their identification. 74 Me.180 BIGHTS AGAINST STRANGERS discovered with reasonable diligence . and if it can be clearty shown that other property has been substituted for the trust property. 111. 109. 151 Mass. is enough to charge the whole estate with a trust. 458. Burr. v. Reeves v. 520.. the assets of the business belong to the trust. Hassam. the trust may be enforced to the ex4 tent of the trust property. Byrne v. Haydel. McGrath. Where the trust funds form only part of the consideration of the substituted property. Ditto. etc. Chesebrongh. W. 2 P. 151 Houghton v. Rep. Patterson. Deffell. Chadwick. 64 Neb. 12 S. Avhere the trust estate has been wrongfully put into a business. Pierce. 941 (Ky. I 352. 126. 414. 1. n. 502. 90 Mo. 590. 253.may follow the property as long as it can be identified . v.471 Rep. hence if it becomes so mingled with other funds that its identification is im6 possible. Henderson. 140 7 6 Deg. 426 Williams v. 822. . the beneficiary becomes a simple creditor merely. Com'rs v. * Cases on tracing unmingled funds contra. 381 Wetherell Little v. 146. First Presb. Underbill. . & G. App. 1 Ohio St. but makes it more diffi7 " In some States it is held that. 8 cannot be established against the proceeds of trust property which has been disposed of. Proprietors. 149 Fed.
2 National Bank v. p. he 6 next in Georgia. Where J.. 104. U.. . Cavin v. 461 Morrison v. Weatherby. 26 v. 66 Wis. v. Evans. Lowe v. App. Marqnette Fire Com'rs v. In re Steinway's Estate. Walther. 57 Neb. Encyc. Louis Sheet Metal Co. 177 N. In re Hallett's Estate. 20. Ellicott . 15 Dick. 1899) v. 196 111. 60 N. 37 App. 105 N. . 509 . and Wisconsin preferred to funeral expenses. 13 Ch. Rep. 3ded. v. Law (1st ed. Eq. p. 7 Mo. 3189. and Mercantile Trust Co. 104. 6 Marshall v. S. Lowe . D. 617 (Col. 1 Howard Fay. 170 N. but see Welch Policy. 1 Knowlton. 655. Lebanon Bank's Estate. Co. Kuhl. Goodwin. (Cir. v. v. Earth. 192 Mass. Ry. claim the trustee cannot identify. 225 . Dak. Stone.). 36 Fed. RockSchool Dist. 197 111. 143 Mo. Evangelical Synod . Rep. 27. J. 362 . . wood Cushman v. Morse on Banking. 8 Lewin. See Bowers v. 670 Frelinghuysen v. Div. . Missouri. St. Woodhouse v. Wilkinson. 590. 103 256. & Eng. St. 353 . 1900).) 704. . 101 . 70 N. 175. Little . Hauk v. 109.. 133. 257. (N. 71 Wis. (N. 1025 v. Kuhl. 192 Mass. Nugent. v. 6 become a simple creditor. but generally a beneficiary has no the beneficiary has 7 preference on account of the nature of his claim. 99 Fed. Rep.RIGHTS AGAINST STRANGERS l The trustee will not be presumed to erty. Natl Bk. 95 Me. p. 94. 333 Burnham v. 151 Mass. 53 Pac. 133 U. . 401. S. Evans. Elevator Co. v.. Gleason. Y. 622." 2 so the beneficiary the trust funds for himself . . 4 Stock is like money. Code (1895). Ct.. 37 Misc. 670. Van Ingen. Bircher 77 Mo. Marshall. Y. Schoeneich. Draper v. one share is as good as another . 89 Wis. 163 Mo. Lincoln Savings Bank. 696. and repayment to him on the eve of bankruptcy is not a fraudulent preference 8 but all 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. Northern Dak. 104 U. p. Clark. 388 Peters v. 652 McLeod v. . C. S. 3 No. v. Bain. 333 See Amer. vol.. 229 In re Hicks. Ellicott v. 71 Me. 485 St. . 166 Pa. Y. 94. Y. 138 Mass. 195 . Crandall. 117. so the beneficiary can take all shares in the company in the trustee's hands irrespective of the name they are registered is in. Louis. .) 279. 181 have used may . 119 Mich. Div. Jones. H. in an exhaustive opinion reviewing authorities in Jones. 70 App. Insurance Co. Chadwick. Y. &c. 54 In re Holmes. Bircher v.) 15 (1899) . 6 Ga. (N. Y.
Mass. 131 8 595. In such cases they will have notice of the trust if it is described on the face of the certificate. 2 Johns. Barker. Farmers & Mechanics' Bank. 37 L. 18. Barker v. I. 363. 2 Md. 138 Bayard v. and this The irrespective of the trustee's right to recover the payment. . Queensland N. both remedies. although the mere " has been held not to be occurrence of the word " trustee 8 but the general rule seems to be that the word notice. 466. Salisbury Mills. 15 B. Div. Bullock. Jones. R. 259.182 BIGHTS AGAINST STRANGERS The beneficiary is not bound to follow the trust funds he prefers to hold the trustee or his bondsman l but he may elect which he will pursue he cannot however hold if . Albert v. 68 L.. Lowell. Clark Mass. p. Div. 145 . 4 Md. Traders' Nat'lBank. Ch. Stoneham. 154 and 170. Barnardiston. 232. . South Sea Co. v. So too he has a direct claim where a banker delivered up one trustee the bonds 5 or money 6 which were confided him by three trustees. 13. L. Dixon v.R. 587. 592. 2 If he elect to follow the property he may choose whether he take the trust propertj* as it is. v. 24 S. 184. Guedella. Blake v. 2 Evans's Estate. Hodges v. Dixon. Infra. St. C. Transfer of Stock. Bk. Supra. Wright. 104. T. or where a corporation transferred stock improperly^ that is to say. Stockdale v. 52 Pa. 8 Right against Stranger aiding in Breach of Trust. 125 Lowell. R. 2 Ashmead. . 171. 526. 6 6 7 v. or a tenant for life to whom he has 4 paid or loaned part of the corpus of the estate. or have it converted and charge the trustee with loss. City of Baltimore. pp. Supra. 8 69 . Ch. beneficiary has a equitable suit against a person who aids in a breach of trust. 9 Ch. in a manner which 7 it knew to be a violation of the trust. 470 Wayman v. Transfer of Stock. as for instance against a person to whom the trustee has made a wrongful payment in distributing the estate. 14 Wis. 4 Cowper Mendes v. and must elect one of them. to to alone is a sufficient notice of a trust to put the purchaser or corporation on its inquiry as to the trustee's trustee 1 ' ' " 500.. Loring v. 66. Magnus . 159. p. & Hem.
177. Lowell. Spencer. 382 Bayard v. 178. 428. 100 Mass. Stearns v.BIGHT AGAINST STRANGER IN BREACH OP TRUST 1 183 right to transfer. Palmer. 10 1 Shaw v. N. Spencer. cuse it. and not on the filing of copies. and p. 137 Mass. and he must sue in the name of the trustee.. Newhall v.. but must ascertain if he has fact that there . . Co. 189. 73. If they know is that v the executor title trustee. 113 Pa. 6.. under the duty As this is acting in fact as of executor. 9 . . 232 Stenfelds v. Ins. and in Pennsylvania he might maintain an action for its recovery. 25. 10 Met. v. it can only insist on in5 spection of them. Miller v. The 2 is a usage to make transfers is not an exnor can they rely on the power of sale which accom8 panies the office of executor. the beneficiary has unusual privileges. 8 where. Transfer of Stock. but in the absence of a by-law or statute requir- ing a deposit of the documents. 114 Mass. it may require the trustee making the transfer to supply the documents or other evidence showing his right to make the transfer. & N. R. 100 Mass. St. Ibid. 505. 114 Pa. can set up his 7 title against the beneficiary. 188 Mass. 4 they are liable. 6 6 7 8 Bird v. owing to lack of equity courts. Wheeler. he may maintain any action for the property which any other bailee might maintain and no one but the trustee. 52 Pa. Zufall. 7 Mass. 169. Bailey v. 382. If the beneficiary is actually in possession of the trust 6 property. Farmers & Mechanics' Bank. I. 32. L. Eng. 9 Seibert. St. the possession of the beneficiarj' is the possession of the trustee. they must ascertain the right of the trustee to make the proposed transfer at their peril. Watson. St. Batchelder 2 8 * Central Nat'l Bk.. Ordinarily. 196. p. note sue in own name. Bat the deposit of a check in the trustee's individual account made to his order " " as trustee is not notice to the bank of a wrongful use of the money. for instances where beneficiary . placed upon the corporation. 139 Fed. Fernstler v. 10 may Supra. or some one claiming under him. Shaw v. Railroad. 317. Chicago. 72. Mnt.
nor where a property qualification is needed does he gain a vote by his ownership. Nolan. 10 N. . Young. 29. 513. at law. but his liability is not affected by the fact that he is a benefician". or if the beneficiary obtains a wrongful advance of the principal. 51 Misc. and. Y. He may be liable for taxes where the trustee is a non8 resident. and need not contribute to protect it on 6 He does not become liable as foreclosure or otherwise. unless it be for taxation. 145. Hammond. 7 v. and such a tax is constitutional. R. 173. 479. Y. (N. 125 Mass. He is not liable as an owner. 94 Me. 475. Supra. Y. 4 He is not liable to indictment for a nuisance on the 5 trust property. Crocker a. Western Eailroad Co. 7 A beneficiary who induces a trustee to commit breach of trust is liable to the other beneficiaries. App. 110 Mo. through his beneficial ownership. Lewin. People Winslow v. 247. for instance. nor sue in tort for an injury to 2 The beneficiary incurs no liabilities V. Hammond Mass. a stockholder. for instance. and may be liable to the trustee. and which the beneficiary took innoIn such cases the trustee's remedy does not go cently. * Norling v. 97. 3 Hill. 48 N. 8 . 138. 141. Dillon.184 BIGHT AGAINST STRANGER IN BREACH OF TRUST cannot protect the property in equity He any more than it. Townsend. restrain the assessors 1 from taxing the estate. p. refund a payment made by the trustee and disallowed in the trustee's account. 83 In re Hurlburt. principal which he should have paid from income. Loring v. 133 Mass. 169 p. Coffman v. Alice. the trustee may withhold his income to make up the 8 but the court will not order him personally to deficit. 1 2 3 5 6 v.) 263. 91 . cannot be sued for an accident caused by the blowing over of a fence. and could not. Supra. Gates. p. Sup. but he becomes liable by his If the trustee pays charges from acts as an individual. Liabilities. v. Salisbury Mills.
he i may be liable for costs. 338. 333 Mass. If he litigates unnecessarily. 121. 111 .. 182. supra. p. . Peny. & G. Blair v. Div. 438. App. Laws (1902). p. Smith v. pp. his co-beneficiary will farther than the right to recoup out of the income * but have a right to recover from him personally if there was fraud or collusion. 146 Mass. Rev. Supra. Hooper. Bate v. ch.LIABILITIES 185 . 5 DeG. Cargill. but see contra. * 174. or if he took the payment knowing that he had no right to it.'2 The trustee cannot withhold the income as against an assignee of the beneficiary's estate to reimburse himself for money 8 lent the beneficiary before he was appointed trustee. Abbott v. 197 Mo. 6. 49. M. 853. Supra. Foote. 161 .
154 Mass. Trust Co. . Clark. v. 1 If the settlement is by deed. 13 N.. 442 Merrill v. (N. Conflict of Laws. 8th ed. according to the law of the place where the settlement is made. 330. Supp. 485. 8 If the settlor obviously intended the settlement to be governed by the laws of some other jurisdiction. Y. Y. Jones. 131. 152 Mass.) 456 Keeney v. U. 330 In re Price (1900). Re Megret (1901). 132 Mass. 6 . Story. 320. in the absence of a contrary intention on the part of the settlor. 496. 561 . 1 Ch. 501 Merritt v. . 131 N. 214.. 135 Mass. 8 Merritt v. Tuttle. 479 a. 132 F. 2 Mercery. 185 N. S. 152 Mass. 214 . In re Price (1900). R. 501 Codm. Y. Allen. Acklin. Mount v. 451 Robb v. Paschal v. 612 . 368 Townsend v. 54 Ind.) 104. Thiebaud v. 4 If the trust is to be executed elsewhere. 107 Pa. 1 Ch. 1 1 .in v. and the instrument will be construed. 149 Mass. 442 CodLincoln v. 132 Fed. Krell. Y. Y. Y. 149 Mass. Y. .. Ch. Cross v. the place of probate is the place of making. 173. Corties. . the validity of the trust will be determined. such an intention is manifested 6 but a settlement made in New Jersey covering real estate both in New Jersey and New York as well . If the trust concerns personal property. INTERSTATE LAW. 71 App. Lincoln v. 131 N. Dufour. . Y. (N. S. (N. Y. Buchanan. Perry. man Krell.PART IV. 368 . 73 Aubert's Appeal. Supp. U. * Cross v. 447 Mercer v. Construction of the Settlement. Proctor v. 40 Misc. . 547 . Washington and Jefferson College.) 660. Robb v. Div. 27 Tex. Jones v. 45. . Wilmer. Washington and Jefferson College. 185 N. . St. Perry. the grantor's domicile is the place of making. 485. Corties. 71 Hun. Buchanan. 2 If by will. . Preston. 8 Misc. Morse. Sewall v. 24 N. the document will be construed according to this intention. Trust Co.
8 Thus a creditor suing in New 1 Sullivan v. Wood. 131. 485 Sewall Lanius v. Y. Pr. p. 6 Keeney v. Eq. Wylie. Clark.CONSTRUCTION OP THE SETTLEMENT 187 as other property. Smith. Proctor v. Washington and Jefferson College. 354 Bingham's Appeal. 5 Paige. Acklin. 368. . Fayr. . 8 Misc. Babcock. Wilmer. 120. C. 6 Cranch. 154 Mass. 1 N. 136 Pa. . 662. .) 660. Y. (N. 131. Lawrence's Estate. Div. Mclntyre. . p. St. 8 Robb v. Jones. because later it is to be transferred to a jurisdiction where it will be valid. Williams. 137 . L. Y. 27 Tex. W. . Y.* This does not go so far as to allow an invalid trust to be established in New York. 7 Paschal v. r. 8 Sewall v. 6 Cranch. . 144 Liucolu Perry. it will be upheld everywhere. 1 Vern. 173 Massie v. . Haven. p. Land is naturally subject to the laws of the jurisdiction in which it lies. J. 132 Mass. 149 Mass. 3 Met. . does not indicate that the testator had to New York law in mind. 10 II. (N. 7 and no court would enforce incompatible for- eign laws as to personal property which happened to be within its jurisdiction. and the document will be construed according to the law of the jurisdiction where the land lies and the . and the funds will be transmitted to the duly appointed trustee. 4 The construction adopted by the court in the jurisdiction where the settlement was made is conclusive on the courts of all other jurisdictions.) 660. its validity will be determined. Wilmer. 45 . Watts.) 439 Laws v. 216 Bovey v. 596. 6 of The Execution the Trust A trust must be ad- 6 ministered according to the law of the place of execution. 2 Massie v. law of the domicile must yield to the law of the jurisdiction where the land lies. 1 Jones v.) 104. 101 So. 64 Pa. Rep. 148. 553 Jones v. . 148 Paschal v. 149 Mass. 2 If the trust is valid according to the law of the place where it is to be executed.(N. 29 App. Acklin. (N. 137. 27 Tex. Perry. . English v. Lincoln v.7l App.Y. . 63 How. 368 Enohin v. 8 Misc. St. Tower. 1076. * 6 Wood v. . Jones. 1 and will be construed according If the trust concerns real property. Fletcher. Morse. 345 Penfield v. 173. 185 N. 56 N. New Jersey law. 132 Mass. D. Div. 109. Watts.
132 Cal. he is invested with his legal office.) 104. and the effect of the act is confined to the territorial jurisdiction over which the law extends. 6 Cranch. therefore. Y. I. 4 The first consideration is. . 25 Curtis v. . 44 Oregon. Y. Memphis Savings Bank v. since the trust is an obligation on the trustee's con2 science to do his dut}' to the beneficiary. Y. title from an act of the law. & Q. 160 . such as recording the deed or filing the will. pp. 148. could not reach the income under New York law. Smith. Morse. Leland v. Watts. 627. Smith. 6 Curtis v. . 69 Fed. 115 Fed. Hence wherever he goes. . 549. where a Rhode Island trust was being administered. and may be called to account. p. Gerhardt. 1 88 Toronto Trust Co. 6 Schwartz . B. Davis.188 THE EXECUTION OP THE TRUST York. R.. C. Div. 131 Mass. the Keeney Nat'l v. Hoag. 472. See First Nat'l Bk. Smith. Broadway . 90 Smith. 537.) 660. R. (N. 546-549 Jenkins v. v. King. 425-431 . 4 Curtis v. 96. 3 Massie v. 6 Thus he may sue for the trust property or transfer it in am 1 r 7 jurisdiction. . Bk. 131 Mass. 358. Smith v. Cal. In Jones v. 156 N. Lester. p. * Pennington v. Jones. 2 Sw/>ra.. and accompanies the trustee wherever he is. whether the settlement be by deed or by will. 25 and 158. p. Houchens. 355. "Where the Trust Exists. v. or by a decree of court? If the trustee is appointed by the settlor. 743 Iowa & Cal. (N. v. his right to enforce the trust will be respected everywhere 5 upon his comptying with the observances of local law. Smith. parties being all there. In the nature of things a trust is ambulatory. Y.. Land Co. except as hereinafter noted. 123 N. 37. pp. 1 although he might do so under Rhode Island law. an Illinois trust was enforced in New York. 6 Blatchf. 459. 71 App. 8 The exception is when the office is created by In this case the trustee derives his a decree of court. 18 R. v. 549 Bradford v. 8 Misc. was the legal title to the property created by the act of the owner of the property. 6 Blatchf 537. p. 537. 108. 6 Blatchf. R.
148 . Scarlett.WHERE THE TRUST EXISTS 189 So. llth ed. and v. 316 Story.. and the court may commit him for con2 tempt if he fails to obey its decree. 444. Ay res v. Memphis Savings Bank v. such as a contract for sale. Eq. be answerable in the local court only. Jenkins v. . Hoag. Smith. 147. Bispham's Eq. even though the contract or matter in controversy affected land. to the trust property is generally vested in him 6 This decree has no force beyond the terby the decree. Kildare v. S.. might be ordered by the court of one State to foreclose the whole mortgage. Siebel & Co. Stats. too. 47. Maine Rev. Eustace. 131 4 8 Cooley Massie 355. 8 Wilson v. . Juris. 267. Stats. Scarlett. Houchens. but if the action is transitory. Rev.. 66. llth ed. 6 Cranch. Lester. 115 Fed. Laws.. 38 1291. 169 Brown v. 256. 48 W. ritorial jurisdiction of the court. and to enforce his trust in another jurisdiction he must receive an ancillary appointment. Story. v. 69. In matters affecting the title to land. 5 When the title the Trustee is Appointed by Judicial Decree. Cooley v. Dows. he would be answerable in any jurisdiction where he was sued. . he may be sued or forced to account wherever 1 may be found. Eq. Gen. 1 . Watts. Curtis v. 6 Blatchf. 537 Mass. which covered land situated in several States. 82 Iowa. 38 HI. (1903). 4 Thus a trustee of a railroad mortgage. 347. 94 U. statutes passim. Desmond. Man 8 8 * Mnller Supra. 7 Thus a trustee appointed in Maryland could not Virginia. Braden. Va. 196 Iowa & California Land Co. 96. . 9 v. 168.. and the court can enforce its decree by removing the trustee and 8 appointing one in his place . p. 132 Cal. 627 . he would. 1 Vernon. . 405 . 100 Mass. and other actions he which are local in their character. (1902). Juris. 11. 316 . Conn. ch. transfer real estate in West 8 2 111. 1291. pp. v. If the trustee has a legal title to the property he may sue in a foreign jurisdiction to recover the property if the decree of the home State is not necessary to establish that Supra. like other individuals.
110 Mass. 4 and that court may order the property to be distributed under its own decree. . Ch. 2 Penn v. . Bradford v. 110 Mass. Stevens. 74. 354.) 8 Rev. Trust Co. 188. 172. 81 . Even though diction 7 the court will retain control of the trustee has removed from the juristhe trust. 109. . 188. 555 Pennington v. 295. Co. 18 R. Snyder v. Brewer. McCann v. 6 Welch v. 452 . Smith. 30 Wash. B. R. C. 1 Md. (See Jones v. 37. & Q. 2 Allen. 143 N. v. 69 Fed. 147 Mass. King. Fay v. WHEN TRUSTEE The title IS APPOINTED BY JUDICIAL DECREE fact that there is a foreign trust attached to 1 by foreign decree will not defeat it For the same reason a trustee by judicial act can only be sued. 7 Pennington v. 5 The trustee in the principal jurisdiction is accountable only for the balance transferred after settling his accounts in the subsidiary 6 jurisdiction. 132 Mass. 123 N. takes out ancillary administration. 95 Ga. the trustee and appoint one to act in his This exclusive control of a trust vested in the court in which it originates may be divested by the court's making 1 Fidelity Ins. Ohio 5993. R. Smith. or may order it to be transferred to the original jurisdiction. . Emery v Batchelder. Haven. (1890). 69 Fed. (N. I. 101 . 683.. Sewall v. Shaw. 2 A court in a foreign jurisdiction may that appoint a trustee to carry out a foreign will. Adams. 8 Misc. 6 Clark v. 369. 131 Mass. * Clark v. Nelson. Y. by statute that the trustee appointed in the original juIf he risdiction may take out ancillary administration. Smith. Randall. 12 Gill & J.) 660. Jones. 137 Jenkins v. 3 Atl. Wilmer. . 3 Met. p. Stats. v. Blackington. 7 Blatchf. R. Chase. Y. Y..190 title. 188 Smith v. Chase v. Toronto Gen. 131. Smith. Calloway. 152 Mass. Linton v. and is accountable only in the jurisdiction where he was appointed. R. Lester. . Blackington. 113. he is answerable in the subsidiai'y jurisdiction for the property which lies in that jurisdiction. 69 Fed. Suyder. if it has the 8 It is usually provided trust property in its jurisdiction. 6 Blatchf. 86 Gulick v. 743. 369. 132 Mass. and Paget v. 537. and may remove place. Curtis v. Gulick. 340 Pennington v.
as in the case of personal property. or if there is no statute vesting the new appointee. (1894). . the matter will be terminated but if there is no personal service on the . 19. Pendelton. 6 In Pennsylvania. 7 Supra. a conveyance must be obtained from the former trustee. and it was held that the appointment trust was not established by the probate of the will in Massachusetts. Shaw. (N. When the trustee removes from the State or remains out of the jurisdiction. 673. Y.) 256. 2034. v. Smith v. 8 Misc. it will not appoint a non-resident trustee. pp. where the beneficiary is a If a nonforeigner. and therefore was not a trust established by judicial decree until substituted trustees were appointed in New York. 6 Curtis v. . Pa. Brightly's Dig. Davis. as a rule. Y. Jones. estate in the . 24. Supra. p. . the court may appoint a co-trustee for a non-resident trustee * but. and in some jurisdictions it is forbidden to do so 7 in others. p. T . p. 6 Blatchf. If the property is within the jurisdiction and there is a statute vesting the estate in a new trustee. 683. Smith. and the new trustee can sue him wherever he can find him. the vacancy can be filled al4 though the trust fund has been removed. 25. the New York court might 2 In this case the original appoint substitute trustees. and it has been held that where a trust originated in Massachusetts. (N. he may be removed 8 or if he dies. 90 Cal. Non-resident Trustee. and both of the original trustees had died. 169.WHEN TRUSTEE IS APPOINTED BY JUDICIAL DECREE 191 1 a final disposition of the trust. 95 Ga. it will appoint a foreign trustee. singular remedy. 37 Misc. the Schwarz v. resident trustee 1 holds land and neglects his dut} . 425. absent trustee and the property is with him. 537. 431 Linton v. p. 168. Jones v. 2 8 * Farmers' Loan & Trust Co. See supra. Gerhardt. 44 Oregon.) 660. Non-resident trustees are usually required by A statute to appoint an agent within the State. 6 52. was b}* the testator. since joint action of the trustees is indispensable.
R. 8 In order to control the land. See also Conn.192 NON-RESIDENT TRUSTEE court can in some States by statute appoint a trustee. Stat. Welch v. 147. (1902). 150. Clark 7 v. 369. 9. and where it is satisfied that a bond has been given. Gen. Stat. he must settle his account in the principal jurisdiction for any surplus funds in his hands after settling his account in the it The ancillary jurisdiction may subsidiary jurisdiction.7 A trustee need not inventory or account it. (1894). 32. The approval of an account showing payment to a foreign executor is equivalent to a decree. Stats. (1904). 452. Code Va. 452. Batchelder. 4179. Va. Ky. Code 2630. Pa. R. Code Ala. L. Code W. 132 Mass. 5 proper Where a trustee takes out ancillary trusteeship. (1903). 12. (1904). 92. order the trust fund to be transferred to the origiual jurisdiction. p. 67. (1895). 3685. and if he sells by order of court it must be by the order of the court where the land 1 lies. or the rents of in the jurisdiction of his appoint- ment. J. (1902). Adams. Laws Mich. 256. Generally. 3249-3251. (1896). 2632. p. (1906). too. be conveyed to a non-resident trustee where the beneficiaries 4 live out of the State. 152 Mass. Pa. 8 (1902). 30. 2032. * 27 . 110 Mass. p. and 1 order the land sold. 10. Blackington. Code W. p. pp. N. Mass R. 8 4709-4711 . appointment. of Va. Gen. 9. Emery v. (1902). 8 Supra. 230. Stat. ch. (1894). Brightly's Dig. and remove the proceeds to the 2 jurisdiction of his original can order personal property 8 to So. 74. Conn. Batchelder. he must be appointed in 9 the jurisdiction where the land lies. ch. Comp. (1902). ch. Va. Gen. 3249. or its 6 may order a continuation of the trust under for foreign real own orders. Supra. 2 Rev. L. (1899). The court can give a foreign trustee leave to sell land. 40. 9302. 10. Brightly's Dig. Stat. estate. 132 Mass. Me. 2031. L. See Emery v. (1897). 9 . and Mass.
13 . 413. There may be good reason why a foreign investment would be authorized. 184. Supra. 13 Allen. p. Supra. and the principle only 1 is stated. Ortniston v. 4 The trustee may be liable to taxation on the personal property where he resides. 8 where the land The trustee will be taxed on and ma}' be compelled to real estate tional tax. only come into the jurisdiction of the trust to account. Amory Hunt v. 2 4 6 Greene. however. Taxation.FOREIGN INVESTMENTS 193 As a general rule. 339. v. 84 N. 165 Mass. 29. where the beneficiary resides out of the State and needs a home 2 or where both trustee and beneficiary reside in another jurisdiction. 1 This rule has. 116. Y. 8 Supra. and . Perry. not authorize foreign investments beyond its jurisdiction and control as. the latter may also be liable to an addilies. 287. as. mortgages or real estate . been more observed in the breach than in the observance by trustees. p. a court will Foreign Investments. for instance. for instance. Olcott. Snch laws are not unconstitutional. 6 The statutes are too numerous and varied to cite. p. and if the beneficiary resides in another State. out of the jurisdiction. pa}' a tax on the income in his home State.
94. implied from not disclaiming seasonably. 93. account not proper method of getting instruc- tions of court. ACTIONS. expense of. 94-95. . liability for joining in false account. should be settled periodically. 150. ADMINISTRATOR. implied from meddling in trust. p. 5. does not take place of decree of distribution. See ALTEBATIONS. 171. 5. 91. 3. 142. 91. 177. 97. trust. open to inspection of beneficiary. 6. 92.INDEX ABANDON. 23. iii. ACCUMULATIONS OF INCOME. See TABLE OF CONTENTS. 32. generally. n. corrected by one beneficiary all get benefit. refusal to. 92. 92. 35. fictitious 93. ACQUIESCENCE. See EXECUTOB. may amount to a decree of distribution. See SUITS. ACTIVE TRUSTEE. is cause for removal. 20. how made. beneficiary entitled to. 91-94. See MANAGING TRUSTEE. 1. 126. duty to investigate trust deeds and property. in breach of trust estops beneficiary. ADDITIONS. ends liability. 3. 144. 145. ACCOUNT. charged to whom. 149. 144. 93. 145. must keep accurate and separate. 159. must account for any benefit received. 91. effect of. 83. become principal. form of. settlement in court. 6. ACCUMULATIONS. trustee cannot abandon ACCEPTANCE OF TRUST. trustee's lien until settled. duty to examine predecessors'. vii. 95. need not accept trust.
of counsel excuses what. 48. 96. passes. 192. ALIENATION BY BENEFICIARY. as trustee. made in what place. See RESTBAINT ON ALIENATION. 15. trustee may ask court. 70-71. may disclaim trust. 161-162. ADVERSE INTEREST. 157. general or APPOINTMENT OF TRUSTEE. must trustee cannot have. 10. 87. 49. beneficiary cannot acquire. APPOINTEE. trusts for. attachment and execution. temporary trustee may be appointed. 192. 3. trustee may who may be 8. 46. or proper. APPOINTMENT. who administers estate. 157. against trustee. 188-190. ALIEN. 45. may be employed when. beneficiary no right to give. 47. ANTICIPATION. 9. ANIMALS. ALIENATION BY TRUSTEE. 88. be appointed where property appointed trustee. 191. 67. 7. 90. AGENT. 46-50. how made. provisions against. 159. 192. effect of conveyance. 190. 57. cannot exercise trustee's powers. ANCILLARY TRUSTEESHIP. 96. under special power. made when necessary 7. as beneficiary. 10. 47. 15. 163 et seq. 8-9. 162. 8. 88. 76. set off. charge on principal. ALTERATIONS. ADVICE. APPEAL. 89. 138. APPLICATION OF PURCHASE MONEY. See RESTBAINT ON ALIENATION. is. 76. 175. exercise of general makes estate assets. 48. resign if he acquires. what court has jurisdiction. 192. what title passes. what of equitable estate. 15-18. effect of. foreign appointment. 170. 18. by against each other. 143. 142.196 INDEX beneficiary. 161. 46. by one trustee. made by court when. 7. restraint on. duty to maintain. 163-168. 142. . may ask beneficiaries'. ADMISSIONS. 87.
57. liable for delivering securities to wrong BANKRUPT. trustee may be for beneficiary. person. is unfit to be trustee. to BANKRUPTCY OF TRUSTEE.. at end of life estate. 124. discharges his liabilities. on conversion of security. ASSIGNEE. ATTORNEY OR AGENT. of beneficiary's estate. 79. of extra stock dividends. AUGMENTATION. in spendthrift trust. 135. 182. by beneficiary to breach of trust. rule as to employing self as. 34. 48. regularity not questioned in collateral proceedings. 136. 127-134. beneficial estate passes assignee. 49. 16. 157. 166. 158. none of current dividends. 160. BANKER. 48. 126. 163. of interest. expense charged to trust fund. trustee's general assignment does estate. See TABLE OF CONTENTS. 136. 77. iv. of trust property for trustee's debts. incomplete without title to the property. 35. of coupons. p. ARBITRATION. BANKRUPTCY OF BENEFICIARY. may act by when. trustee payment to. 86. APPRECIATION OF PROPERTY. ASSIGNMENT. 25. who is a. does not affect trust estate. person who may receive income 79. ASSENT. 176. 158. belongs to principal. 159. 17. 158. taxes. viii. 159. 47. 18. no claim on trust property. 169. 90. 158. . are proper persons. 166. of beneficiary. etc. 155. valid. 47. ATTACHING CREDITOR is sometimes purchaser for value. 167. 47. 136. power of. 123. gift over on. BENEFICIARY. ATTACHMENT. 11. who may be. 75. 142. ATTORNEY. See GAIN AND Loss. at trustee's pleasure not. 24. 7. BANKRUPT TRUSTEE. 144. his estate. not necessarily removed. 19. of trust property for trust debts.. APPORTIONMENT. 137-139. rights of. of expenses. 135. beneficial estate not pass trust may be assigned. 8.INDEX 197 APPOINTMENT OF TRUSTEE who (continued).
168-169. 160. BENEFIT. can compel trustee to perform trust. stranger aiding in breach of trust liable to. 83. 163. 159. 175. contracts with trustee. 177. 182. rights against trustee. is not stockholder in corporation. 184. allowed. 175. 26. 45. BENEFICIARY estate of. expense of suit to protect. 176. trustee can take none from trust. 168. is unfit to be trustee. before end of trust. liable for fraud. 151. 96. 86. cannot deny trustee's title as landlord. 75. cannot acquire tax title. 182. trustee's liabilities to. 147. payment of share to. 32. maintenance and support of. 173. gifts to trustee. enforced where. admissions by. discharge trustee.198 INDEX (continued). 176. 175. choose damages or property. 184. 26. 91. can purchase trust property. 170. do not bind trust. 178. 85. not usually necessary parties to suit. trustee. 100. may may may disaffirm transaction. 142. 75. right to account. 70. causing breach of trust. 179. 171. 182. 81. right to income. liabilities. 45. 177. in possession of property may sue. 183. 189. 91. 16. 27. restraint on alienation of estate. 151. 181. 173. 155. may be notified of proposed action. right to possession of trust property. liable. 178. right to conveyance. right to information. 75. 160. 184. 169. 83. rights as creditor. must elect whether to hold trustee or follow property. 19. 184. no right to advise loss of rights. will descend like other property. right to support. . support apportioned where several. alienation of estate of. 171. interests not joint. 170. right to follow property. 76. 175. 45. 75. need not refund payment.
BONDSMEN. charged to what. liable. 34. 148. should be converted. CAPRICE. sureties on executor's bonds liable for his acts as trustee. 140. purchase of bonds at discount to balance ones at premium improper. expense of surety company charged to whom. AS INVESTMENTS. not apportioned. 16. is not discretion. need not be converted. and several. 111. See INCAPABLE. elect to follow property or trustee.See SUBETIES. not mortgage bonds. . or accidental. 14. BUILDING. sureties may be required. when required of trustees. BONUS. 176. 74. 18. BONDS. lost how. 12. cause for removal. 136. loss by breach falls on principal. 154. trustee may be for beneficiary. See COMMISSION. 108. liable for co. 24. 35.INDEX 199 BETTERMENTS. 112. rule as to employing self as. remedy for. amount care of. 136. conversion. 112. 12.trustee if joint bond given. 105. BONDS. 96. commissions charged to trust fund. required. may BROKER. joint damages for. 61. BUILDING LEASES. commissions as between principal and income. contribution beneficiary among those liable. is cause for removal. stranger aiding in. BUSINESS RISKS. liability for. of testator carried on sometimes. CAPABLE. BUSINESS. 13. trustee should be. CAPITAL. 147. railroad bonds not real securities. with personal property. 104. See PRINCIPAL AND INCOME. 123. 24. . 91. BOOKS OF ACCOUNT. 23. but not if merely technical. 142. 107. 182. 149. 137. 112. refusal to give. court will appoint only capable trustee. selling at premium. BREACH OF TRUST. open to beneficiaries' inspection. BILL FOR INSTRUCTIONS. 23. interest apportioned when. 90. 114. 35. 182.
extra on principal. trustee's lien for. 87. 125. draw. from debtor to trust and self. 159. 111. support payment of. CLERK. CHATTELS. 85. on condition valid. COMPOUND INTEREST. 37. COLLECTION. where parent living. who may CHILD. 34. on which income purchaser must see that condition fulfilled. for expert services. apportioned. 170. trusts for animals. when made. 125. trustee can take no commission from strangers. See NOTICE. COMPLETION OF DUTIES. 179. 101. from what fund paid. on termination of trust. 102. not converted when. for distribution of estate. 84. on. 88. 19. See INTEB-STATE LAW. 103. 36. 34. See COMPENSATION. expense of charged to whom. 152. COLLECTION OF ASSETS. 147. 101. 70. 144. trustee entitled to what. 107. 58. 175. discharges trustee. rules for various States. of beneficiaries. rule as to. CONFLICT OF LAWS. buy up. must account for any received. 76. 58. 37. CONDITION. trustee cannot come in. CHANGE OF INVESTMENTS. CESSER. 19. 24. See CUSTODY. 38. COMPENSATION. 98. 34. CLAIM. to cease valid. CHECKS. what are allowed. effect of notice. CHARGES. 102. . 38. 45. right to possession of. to father for. 35. 37. CARE OF TRUST PROPERTY. trustee not removed CAPRICIOUS TRUSTS. COMMISSIONS. 145. 145. 35. but may follow it in hands of stranger. CAPRICE OF BENEFICIARY. 166. discharges trustee. trustee's lien for.200 INDEX for. 87. 37. should notify obligor. SUIT. CESTUI QUE TRUST. CHOSE IN ACTION. gift over of beneficiaries' estate 166. trustee cannot beneficiary cannot buy up. 110. 154. who has See EXPENSES. beneficiary has none to trust property. 39-44. 84. 157. of beneficiary as a condition. 145. 175. See BENEFICIARY. COMPROMISE OF power dependent charged when. CONSENT. 25. 32. COMPETITION. 145. when proper.
36. CONTRACT. CONVERSION OF SECURITIES. 47. 151. CONTRIBUTION FOR MAKING GOOD BREACH OF TRUST. 46. 151. 86. 67. 182. 107. apportionment between principal CONVERSION OF REAL INTO PERSONAL PROPERTY. improper. 107. 48. 105 equitable conversion. by one trustee void. from beneficiary. with beneficiary may be set aside. sufficient to intervene in appoint- CONTINGENT INTEREST. on execution. 122-123. implied authority. none of property meant to be enjoyed in specie. may be a trustee. 85. 106. trustee binds himself personally. 78. to assignee. between trustee and beneficiary. 77. 77. 109. 52. 145. at law. and income. et seq. but trustee liable for breach of. 184. 158. CONVEYANCE BY TRUSTEE. CONTINGENT REMAINDER. " " trustee makes no difference.INDEX 201 CONSIDERATION. sale of. 70. 122. 36. to remainderman. as to compensation valid. CORPORATION. from co-trustee. 86. 109. be returned where sale disaffirmed. not of testator's good investments. 28. 145. 108. ment of trustee. to what extent the trustee can bind the estate. beneficiaries' right to. 175. 145. 177. to successor. 45. 175. of real into personal may be authorized by court. 50. securities at premium not necessarily converted. 70. to purchaser for value. signing as for sale not specifically enforced when breach of trust. into trust investments. right of beneficiary to. CONVEYANCE TO REMAINDERMEN. necessary when. trusts for. 77. 145. how trust estate is bound. 46. 157. 28. . CONVEYANCE. what title passes to volunteer. on cy prds doctrine. must 170-171. 107. 109. CONVERSION OF FUND. of infant's estate. liability for transfers of stock. 15. 67.
See SETTLOR. See SET-OFF. in equitable estate. COVENANTS. 151. of beneficiary in spendthrift trust. 88. rule as to employing self as. 149. 188. or deed. advice expenses charged to trust fund. 98. 22. 189. 105. 34. trustee liable on in lease. 9. 191. 27. 148. CUSTODY OF TRUST PROPERTY. 181. 35. COSTS. trustee may be for beneficiary. 35. beneficiary is not. also PBOBATE COUBTS and INTEB-STATE LAW. 75. cannot give to co-trustee. 90. what court has what court has jurisdiction of the trust. 96. 143. 166 et seq. controls execution of powers when. of person exercising general power of appointment takes. beneficiary's rights as. 77. 162. 28. for nuisance 51. of non-negotiable securities.202 INDEX ( CORPORATION continued ) . CREATOR OF TRUST. his rights against equitable estate. 146. 29. 78. CURTESY IN TRUST ESTATE. on trust property. COUNTER CLAIM. liability for acts of. 142. 178. remedy against trust property. remedy against trustee. 23. CREDITOR OF TRUST. 57. 9. contribution from. of. will instruct trustee when. 30. 49. 22. 192. 59-62. what court has jurisdiction to remove trustee. 147. may may itself administer trust. CO-TRUSTEE. trustee is stockholder in. 142. 188. may set off debt in equity. 104. cannot delegate trust to. will appoint trustees when. CREDITOR OF BENEFICIARY. 7. 162. trustee liable as stockholder. 191. . 22. 27. 9. 160. 7. 170. 68. degree of care required. 146. COURT. 29. COUNSEL. when allowed. 189. power to appoint trustee when. may order sale of trust property. 75. 90. jurisdiction to appoint trustees. CRIMINAL LIABILITY. See does not excuse mistake. exercise its discretion in removing a trustee. CREDITOR. will remove trustee when. 27. for taking trust funds. 163 et seq. 48. will not remove when.
collected from individual and trust debtor apportioned. what become of office and title. 19. ministerial acts beneficiary in converting. sometimes replace property and earnings. 89. usually measure of. 67. 123. 90. 61. DELAYED DIVIDENDS. 11. 76. may lose rights by. 3. conversion under. 147. of legal estate. title passes to whom. trustee cannot convert himself into. destroys power. liability ends at. office and titla pass to survivor. 49.INDEX 203 (continued). may employ DEMAND. 160. new trustee may be appointed. 155. DEED. DEBT. trustee cannot delegate powers. generally loss of principal. 22. liable when on recitals. of one trustee sufficient. 135. 88. 90. CUSTODY OF TRUST PROPERTY of negotiable securities. DEATH OF TRUSTEE. 146. title. general power DELAY. trustee liable for to defend actions. of equitable estate. See DISCLAIMED DECREE. DEATH OF SOLE TRUSTEE. 66. DEATH OF HOLDER OF POWER. 20. 154. delay in investing. 51. DEFEND. trustee is liable on covenants. . 87. 175. how title passes to successor. DEVESTMENT OF OFFICE. 106. after payment of one bene- DESCENT. CY PRES DOCTRINE. 136. of sale must conform to statute. not apportioned. 154. DEBTOR. 45. 2. DEPRECIATION OF PROPERTY. may be delegated. 64. 105. 52. 51. DECLINE. cannot delegate trust. 50. 29. 90. of trust chattels. 146. DAMAGES FOR BREACH OF TRUST. by trust ending. ficiary. 147. appointing trustee should order transfer of 180. 19. 20. by resignation. 143. agent where there is necessity. 57. 106. what can be set off. 104. amount of loss and interest. 75. 20. ends trusteeship. 57. 109. by death of trustee. 20. 100. 20. DELEGATE. 177-178. sale under. 7. 154. by removal. DAMAGES RECOVERED. 124.
of one trustee blocks all action. what is sound in investing. 70. not cause of removal. effect of. 3. of legal estate. 152. 176. if unreasonable. 24. 57. 57. amount required. 129. 3. 89. 86. 32. unreasonable or prejudiced exercise is cause for removal. DIRECTOR. 4. whole trust must be refused. See DEVESTMENT OF OFFICE. 5. in various ways. 24. trustee cannot profit by. can disaffirm sale by trustee to self. form of. not cause for trustee's removal. DISCOUNT. cannot be exercised by court. 51. cannot be delegated to agent or co-trustee. 147. defaulting trustee liable to. by end of trust. 4. 23. cannot be exercised by any one but trustee. 160. controlled by court when. DILIGENCE. by refusing to give bond. trustee is eligible as stockholder in corporation. by bankruptcy. 60. beneficiary is not. heir or representative of deceased trustee cannot always disclaim. pre- bond purchased at discount does not balance one at mium. how made. DISABILITY OF TRUSTEE. 27. 155. 176. 19. with beneficiary. cause for removal. . amount required in investing. DISAFFIRM. DISCHARGE OF TRUSTEE. 4. INDEX of equitable estate. 61. cost apportioned. 19. 59. necessary. 58. essential to execution of power. 62. 34. 56. honest exercise of. 136. 27. 85.204 DEVISE. disaffirm transaction where mis- DISAGREEMENT. trust may be refused. effect of. beneficiary can led. DISCHARGE OF ENCUMBRANCE. personal exercise of. by beneficiary. 55. 116. 137. 22. 112-117. if one of several trusts in same instrument. 106. 19. DISCRETION. 101. 106. DISBARMENT. 4. 112. court may exercise in removing trustee. 113. 177. 55. in managing trust. 19. 23. 3. 152. with other trustees. DISCLAIMER. "in his discretion" means little.
143. 16. 96. 145. delayed. payment of shares at different times. 87. 85. 127-134. DOWER. 98. payment not apportioned. to examine trust property and documents. 143. DISTRIBUTION. of property is not a trustee. reasons for execution need not be given. ordinary are income. 135. 2. 96. by fictitious account improper. 83. DISCRETIONARY POWERS. 1. 144. 81. 166. not to aid adverse claimants. tended action. be. 2. 153. 87. not liable for use of. as to support of family. where trustee is in doubt. 142. 23. unfit trustee. 126. in trust estate. 63. DUTY. DIVIDENDS. conveyance to remainderman necessary when. 152. See NEGLECT. may have decree for. DIVISION OF TRUST. 86. may notify beneficiary of in- may get instructions of court. 147. 167. DISSEISOR. execution not controlled by the court. 143. of trust fund at trustee's risk. 105. 179. 87. cannot accept part. of trustee as to support of beneficiary. to convert into trust investments. no excuse. to exercise the trust personally. is all to the trust. 88. 135. on wasting investments. 85. 6. paying whole fund fraud. 143. of part. to invest. neglect of. in equitable estate. 98. not to come in competition. to take possession of property. execution set aside for fraud. 51. to exercise utmost good faith. of. compensation for. 160.INDEX 205 DISCRETION (continued). . 82. 126. DRUNKARD. to examine predecessor's accounts. extra or stock belong to whom. 145. 96. ignorance may be removed from office. 109. 98. 61. in spendthrift trusts. trustee may 63. 126. cannot disclaim part. 60-63. 4.
laches. 14. not affected by statutes making tenants in common. 154. 182. ESTATE OF TRUSTEE. . EQUITABLE ESTATE. pay taxes. 58. 19. fence. 188. ELECT. ERRORS. 13. power to. 111-124. is joint. EXECUTOR. 45. to testator's business. of equitable estate. in personal property absolute. 147. how ended. note 1. 158. See ESTATE OF BENEFICIABY. EXCHANGE. in code States no title. trust may be where. incidents. 25. 44. cannot be severed. prosecute suits. 83. 159. 176. 102. 122. 102. by by receipting for securities. ENFORCED. may be a trustee in fact. 159. 46. 44. ENCUMBRANCE. 6. 100. 161. in real estate what is needed. of trust discharges trustee. ESCHEAT. 111. 91. discharge of apportioned. of a person is not trust property. repair. 6. ESTATE OF BENEFICIARY. of power must be accurate. 102.206 INDEX (continued). 137. trusteeship 98. 14. EXECUTION. 48. equitable estate may be taken on. trust property may be taken for trust debts. 102. 73. liability of bondsmen for acts as trustee. 160-168. 48. EMBEZZLEMENT. 147. alienation of. of disclaimer. 159. 44. END. 177-178. 45. 88. investing is what. DUTY in as as to to to to to to to keep accounts. or trustee. passes to survivor. 46. 5. levy of does not affect trust estate. insure. EMPLOYMENT. 189. EFFECT. ESTOPPEL. liability for. 106. when he becomes a trustee. 19. 151. 100. support beneficiary. to class of investments. EQUITABLE CONVERSION. beneficiary may elect to pursue property may elect damages or property.
does not take trust powers. from liability by settlement. 6. FOREIGN REAL ESTATE. of trustee's estate. need not accept trusts in same will. See PABENT. 193. 64. 95. 67. in account. 92. 92. FATHER. may ends executorship and becomes trustee how. a trustee should be fit. 115. may be used by whom. from furnishing sureties on bond. FIT. 18. 35. FRAUD. 138. 63. 19. 20. to draw whole fund at once under power to use principal if FORFEITURE needed. EXPENSES. 13. EXECUTORY DEVISE. 12. 4. 51. . 75. See UNFIT. EXEMPTION. of accounting. FARMING IMPLEMENTS. cost charged to what. of protecting beneficiary. improper investments. 80. FOLLOWING. inherit trust. EXTINCTION OF TRUST. END OF TRUST. FENCE. what are chargeable to income and principal. EXTINCTION OF POWER. 6. his duty as to testator's trusts. 125. 125. FOREIGN TRUSTEE. the trust property into hands of stranger. of equitable estates. increase usually income. discharges See trustee. 75. 3. FOREIGN SECURITIES. not part of account. 24. 20. effect of. 192. FARMING STOCK. of suit allowed. court ordinarily will only appoint a fit trustee. EXECUTOR OF TRUSTEE. 102. 192. duty to. 115. 54. 54. 192. FOREIGN INVESTMENTS. 179182. 192. 192. duty as to trust estate. 160. 35. 16. 3. See PEBSONAL PBOPEBTT. 137. 149. of. removal appointment of. power to disclaim testator's trusts. 102. 36. need not be inventoried. 175. 191. ancillary 188. 100. rents from. trusteeship necessary. 153. 95. what may be charged to trust fund. sale of.INDEX 207 EXECUTOR (continued). 17. See CHATTELS.
for beneficiary proper investment. required of trustee. 176. 151. when new INCIDENTS. is in sale. 87. 48. 125. HOUSE. 35. replaced from income. GIFTS. 25. 15. 26. not proper trustee for wife. may FURNITURE. what See PRINCIPAL AND INCOME. 151. in execution of power. be forced to contribute. 85. GRAVEL. of duties. 20. 63. contribution among parties to. protects when. INCAPABLE TRUSTEE. does not take trustee's powers. 125. trustee.208 INDEX (continued). GENERAL ASSIGNMENT. GUARDIAN. to usually principal. 3. 70. expenses allowed. INCOME. 17. beneficiaries' right to use. 16. FRAUD what beneficiary liable for. 172. may HONESTY. 125. 172. 124. court will instruct when. IGNORANCE. 96. ILLEGAL TRUST. 54. 153. of beneficial estate. 102. . have title to trust estate. 85. HEIR OF TRUSTEE. to guardian. use of position is fraud. See CHATTELS. 2. 9. 151. trustee in place of. 139. 136. 159. 32. 169. IMPLEMENTS. not enough alone. GAIN AND LOSS. 124. no excuse. 147. 142. when income. 151. of legal estate. 187. may be trustee for wife. may be used up when. payment on separate transactions not See ASSIGNMENT. 151. 144. set off. first year's is net. may be used by whom. 171. 151. 85. 35. See CHATTELS. 152. 111. income. HUSBAND. 86. 176. of lunatic or infant trustee. in contract between trustee and beneficiary. investment should produce. presumption of fraud if trustee gets any advantage. of ownership fall to trustee. GOOD FAITH. 125. 184. 8. cannot be enforced. 142. 112.
144. 37. lies when. 146. INTERESTED. liable for neglect of. 136. from trust estate. be withheld to reimburse trustee. See LUNATIC. . no conversion in trust for. INSTRUCTIONS. See PURCHASES INSANE PERSON. for not investing. 170. proceeds. 110. 75. effect of infant's being trustee. be on condition. right to support. 78. 109. apportioned when. 15-16. apportioned how. 136. 96. on bonds bought at premium apportioned. payable when.INDEX 209 INCOME (continued). See SUPPORT. necessary parties. simple and compound. 31. 143. as to distribution. FOR VALUE. 154. no excuse. 85. See RESTRAINT anticipation of. bill for. trustee may get when. 84. who are. 75. INTEREST ON INVESTMENTS. 172. 16. 173. 142. for breach of trust. may may commissions on. 126. beneficiary's right to. trustee may require. See SUPPORT. 97. 141. INFORMATION. 171. expense of suit to establish allowed. 171. 171. becomes principal. INSOLVENCY. payments to. premiums charged to whom. accumulated. INSANITY. strangers not entitled to. need not give to stranger at beneficiary's request. 158. should not be sought by fictitious account. INTEREST. 146. INFANT. 171. 148. trustees' right to. 140. 35. 154. 158. 110. INNOCENT PURCHASER. persons having possibility not. may be a trustee. INCOMPETENCY. 96. 30. 171. charged. 151. See BANKRUPTCY. beneficiary is entitled to. duty to insure. 16. 158. holders of general power of appointment not. 176-177. INSURANCE. right to support. 89. 152. breach of trust may be enjoined. becoming of age should have advice. infant trustee may be removed. may be collected by one trustee. INDEMNITY. 102. INJUNCTION. ON ALIENATION. 166. 98.
210 INDEX (continued). where trust can be enforced. should be changed when. INTER-STATE LAW. LAND. receive income at trustee's pleasure not. trustee must use good. 116. what court may remove a trustee. INVESTMENT. 10. 114. of whom as parties. 148. 109. soundness determined by facts at time of investing. what court has jurisdiction over trustee. 105. JOINDER. 159. JOINT TENANTS. 106. 116. JOINT. improper ones. 75. 169. beneficiaries are not. 116. right to contribution. 69. 188-190. should be converted. 147. makes trustees liable for co-trustee. 186-193. JUDGMENT. 116. 48. 184. 178. LACHES. 51. must sue jointly. 177. 192. JOINT TRUSTEES. execution of powers necessary. 55-56. 8. 188. aided when. 112. must trustees are. JOINT BOND. 187. INVALID TRUSTS. American rule. exercise trust jointly. 124. 115. what courts may appoint trustees. rights of beneficiary lost by. 158. gain on one does not balance loss on another. 117-121. 8. in discretion of trustee means what. purchaser takes risk of. 151. English rule. 113 et seq. 177. 111. 166. allowed in various States. 152. 26. INTERESTED person 166. survivorship. person may have trustee appointed. JURISDICTION. who may potential payee in spendthrift trust. 189. 22. 110-111. not always to be converted. 22. 106. 54. liability joint and several. 189. 153. 142. 191. 149. 169. 55-56. 113. 79. when liable for co-trustees. 151. proportion in one security. 147. duty to make. sound discretion must be used in. what are proper. 45. 45. 136. must produce income and be safe. IRREGULAR SALE. 9. of testator. VACANT. 70. . 54. 75.
100. payment to wrong person. for errors. See REAL ESTATE. 29. 144. See CBIMINAL LIABILITY. ends on death. 146. LIABILITIES OF BENEFICIARY. 151. beneficiary cannot deny trustee's title as. 27. 101. 104. 153. 92. to strangers. 146. improper investments. for acts of predecessor. 150. 109. proceeds of sale apportioned. for taxes. 29. for not investing in particular stock. . for allowing rent to fall in arrears. LEGAL EXPENSES. 147. joint and several. 179. 110. See ESTATE OF TRUSTEE. by trust instrument. 28. 151. for fraud. 145. 149. LEASE. for use of discretionary power. 143. 74. inducing breach of trust. See LEASE. 149. 74. LIABILITIES. 147-156. beneficiaries'. 73. 145. on trust property. 146. 148. on contract. power is general and incidental to office. 122. LANDLORD. 30. 77. 142. 148-149. trustee is liable as stockholder in corporation. 155. 154. for neglect of duty. for acts of co-trustee. 35. 139. 153. for distribution of fund. excused from. what binds the estate. 20. for misrepresentations. 70. trustee is liable on covenants. taxes on. LEASEHOLDS. to beneficiary.INDEX 211 LAND. 148. 146. charged to principal. 75. 151. 147. 115. for for for care of securities. 75. 175. 80. payment of share to beneficiary. 30. terminated. charged to trust fund. 184. building lease. criminal. 105. 75. 45. trustee liable on contract of sale not enforceable in equity. 146. 142. LIEN. trustee is liable on covenants in deed. 184. 184. LEGAL ESTATE. VACANT (continued). LET. 29. 73. criminally. 148 et seq. trustee is liable as owner of property. trustee on covenants in lease. 103. 184.
pp. 156. principal. LUXURIES. xiv. status of. MAKER OF TRUST. MISTAKE. 123. 15. MARRIED WOMAN. MISMANAGEMENT. 36. MANAGEMENT OF TRUST PROPERTY. See TABLE OF CONTENTS. when statute runs for trustee. allowed when. of rights by beneficiary. statute of. 145. if for respective rights. xvi. 83. MECHANIC'S LIEN. trustee's for expenses. 33. duty to. See SETTLOR. expense of declaring. 111. 81. by breach of trust. statute runs for breach of trust when. 88-89. 178. 147. mechanic's lien attaches when. 148. 146. xv. liability for. See GAIN AND Loss. cannot loan trust funds to self. MISREPRESENTATION. discharges trustee's liabilities. 178. 94. liability for. LUNATIC. in investing. if honest. or to relative or partner. 156. may be a trustee. 49. account may be re-opened for. powers. LOAN. 160. 49. 88. 15. 23. 116. duty LIMITATIONS. cannot exercise all MAINTENANCE. trustee barred by statute there ia no rem- edy. 23. statute runs after distribution or decree for. See SUPPOBT. power of. 152. 15. on personal security not proper investment. 178. not a cause for removal. 100. 174. restriction as to income. attaches MINOR. . 147. to trust property when. See DAMAGES. 85. 27. MEASURE OF DAMAGES. liability for. LOSS. MANAGING TRUSTEE. See LIABILITIES. See INFANT. See PBINCIPAL AND INCOME. 176. 167. settlement on self. 35. effect of lunatic's being trustee. 116. trustee's for his charges. LIFE TENANT trustee's AND REMAINDERMAN. 145. 24. to. liability for. 98. may be removed. is cause for removal.212 INDEX ( LIEN continued ) .
159. 106. 72. drawing whole fund at once a fraud. 182. 112. MORTGAGE OF TRUST PROPERTY. 158. care single trustee of. 80. 24. 101. 162. NEGOTIABLE SECURITIES. OWNERSHIP of trust property belongs to trustee. See SINGLE TRUSTEE. NUISANCE. 90. trustee is liable for nuisance on trust property. effect on priorities in equitable estate. See PABENT. what 80.INDEX 213 MONEY. should be given when. 25. 192. may collect. power of power of court will not order. trustee. is. 71. 172. 63. power implied. second not proper investment. railroad bonds not investment in. MORTGAGES. 47. NEGLECT. can be followed. to convert. not general power. expense of. 89. or may not be removed. 179. 162. examine trust securities. 139. . considered to be in beneficiary. 116. 161. NOTICE OF TRUST. 184. may defined. NEED. trustee liable for. charged to whom. security. bonds may not be. 72. of trust property does not belong to beneficiary. what is. sale MOTHER. 191. 148. what word " OFFICE. 172. margin of mortgage implied. to NET INCOME. 182. beneficiary not liable for. 178. 116. 104. of prior equity. 103. 71. 31. 18. See TRUSTEESHIP. to claim rights. 25. 7. See FOREIGN TRUSTEES. to obligor of chose in action. 71. is. NON-RESIDENT TRUSTEES. in equity." 47. required when. 158. 72. sale does not include. court will not control discretion as to. 177. 159. ascertained when. 149. to disclaim implies acceptance. purchaser with. ONE TRUSTEE. 35. estops beneficiary. 104. OFFICE OF TRUSTEE. 112. 80-81. 180. NOTICE. 171. care of. 109. will not be appointed when. 162.
PASSIVE TRUSTEE. of deceased trustee 20. 92. duty as to trust estate. to bill for instructions. of deceased trustee does not succeed to trust powers. 123. See INTEBESTED. to decree of distribution. 176. 88. 85-. See LIABILITY. are necessary. 45-46. 98. 84. 9. 107. 89. to attorney. duty of. a trust is a personal confidence. See MORTGAGE. 90. 32-35. should be converted. of deceased trustee. 75. 3. by debtor. 73. 143. beneficiaries generally not necessary parties. may be invested with trust estate. OWNERSHIP PARENT. 144. none recognized by law. for child. . 54. 45. 143. 26. are sometimes. to infant. PERSONS. of share to beneficiary before end of trust. PERSONAL REPRESENTATIVES OF SOLE TRUSTEE. to wrong person. may include parent. not converted when meant to be enjoyed in specie. who are beneficially interested. power to. 99-102. duty to support support of child child. 3. PARTNERSHIP. PLEDGE. PARTIES TO SUIT. 84. to suit for appointment of trustee. 107. 20. 85. 152. 184. who to account. 152. 125. 51-52. 103. by mistake. 84. taking possession of. 22. 176. 107. 94. PARTITION. fall to trustee. 26. 143. 95. conversion into real. beneficiary not required to refund. not beneficial to trustee. is unfit trustee. profits partly principal when. 79. 16. cannot disclaim decedent's trusts. beneficiary may recover. 175. improper investment. 112. 112. 26. to suit for removal. 20. 54. PERSONAL LIABILITY. 84. PERSONAL PROPERTY. 106. incidents of. may be authorized investment. who entitled to possession. 152. 144. 115.214 INDEX (continued). 144. to wrong person. PAYMENT. 152. estate of trustees is not subject to. 45. to single trustee. 144. 88. 175. 144. PERSONAL. payment to. 20. 125.
the taking of beneficiary is that of trustee. 55. defective sale confirmed. 5. 5253. 59. 89. 89. execution must be joint. POWERS. 162-163. pass to successors. specially given by the instrument. may give special power. vesting when and when not. 63. who has who has right. 55. 54. 54. 56. OF ATTORNEY. 56-57. 169. execution set aside for fraud. the legislature can grant. 99. 188. 57. 58. interested in appointment of trustee. 107. incidental to the office of trustee. 45. if for removal. execution must be exact. POSSESSION OF REAL ESTATE. 162. 166. 103. 100-102. 53. should be taken at once. general principles. . 11. 45. 98-102. POVERTY OF TRUSTEE. must be exercised by all jointly.INDEX 215 POSSESSION. 58. beneficiary entitled may be entitled to in equity. 52. when lost by disclaimer of one trustee. 56. 69. 175. 54. 144. 79. 102. 45. 58. 14-15. 24. POWER general and special. but may sometimes. to at law. 158. defective execution aided for purchaser. holder of ciary. 89. 55. 58. 57. 125. trustee is POSSESSION OF TRUST PROPERTY. POSSIBLE PAYEE. but has no interest in trust. POSSESSION OF PERSONAL PROPERTY. trustee cannot give a general one. literal execution necessary when. of. of single trustee. 175. exercise of discretion is essential part of. 53. 45. to act by agent or attorney. substantial execution aided. court controls execution when. not always cause POWER OF APPOINTMENT. 45. 56. payment on invalid power.to. 158. otherwise where power is special. 175. 53-54. exception as to collecting money. who administers estate where general or special. taken how. 79. is not a benefi- general power exercised creditors of holder take. 100. 64. right to. 58. partial execution may not exhaust. the court can grant.
64. partition. of to of of of to of to of to to to support. 73-75. fraud in execution of. 63. 126. not in heirs. 9. appoint trustee. extra dividends. liability for exceeding. 124-127. of sale are not incidental. . extinction of. See SALE. farming stock. 125. what is. mortgage or pledge. convert real into personal property. 82. 125. POWERS and survivors when. 138. gain and loss on securities. interest apportioned when. 73. 136. exhausted how. purchase of bonds selling at premium and discount to balance improper. timber and gravel are what.216 INDEX (continued). 8-9. dividends are what. of sale. at. 151-152. lease. PREJUDICED TRUSTEE. importance of distinguishing. 64. 127-134. arbitration. 108. 54. 53. 23. exchange. See INSURANCE. repairs. 77-78. vest in successor. 64. contract. 73. 137.. discharge of encumbrance. PREMIUMS. alterations and additions. accumulated income. reduced by sinking fund. stock dividends. may PREMIUM ON BOND. bond selling be removed. compromise. 136. not liable for use of discretionary. 138. 153. 121-142. 107. 139. 79-82. 64. cease when trust is accomplished. 126. appoint new trustee when. taxes. 64. 54. not necessarily converted. PRINCIPAL AND INCOME. 121. 14. in whom. etc. betterments. 136. 128-129. of sole trustee. 76. 135. 136. revocation. 76. interest on bonds bought at premium. 140. 71-72.
123. passes to successor how. 142. beneficiary has no claim on. 56. 98. 103. beneficiary's right to possession of. must see to application of purchase takes risks of irregularity. 32. 32-35. right of single trustee to handle.INDEX 217 PRINCIPAL AND INCOME insurance. 25. 44. 182. the trustee's estate in. PURCHASER. 79. beneficiary's right to conveyance of. 32. passes to remainderman how. 71. replaced when. 50. trustee cannot buy trust property. trustee cannot make profit from trust. trustee cannot purchase trust property. but not property to be used in specie. 70. apportionment on conversion. 8. 106-107. 46-47. 175. 71. 173-175. who is 46. brokers' charges. appointment of trustee under will. 155. trustee cannot take any benefit from. 158. 48-49. 102. 99. what may be trust property. PRIORITY. 70. 107. 100. to accept trust not binding. 2. vests in trustee how. title in. trustee cannot use trust property. 70. 154. 155. 142. unproductive should be converted. legal expenses. may follow into hands of stranger. 89. care and custody of. PROPERTY. . PROBATE COURTS. 2. 44. PURCHASE MONEY. 99. 125. REAL ESTATE. 50. 161. PROMISE. 140. apportionment at end of life estate. 141. 179. 4. 98. ownership of trust property belongs to trustee not beneficiary. 32. PROFIT. beneficiary. (continued). of trust may be taken for trust debts. among transferees of equitable estate. title trustee takes only necessary should stand in joint names. 11. and who is not. trustee should examine. money when. 45. 32-35. PURCHASER FOR VALUE WITHOUT NOTICE. expenses. rights of. 45. 3. support of beneficiary. 102. proper place to file disclaimer under will. from purchaser must see to when. 161-162. 83. 123. 107.
173. is in discretion of court. unproductive. 173. when trustee can. 136. what are. 99. repairs charged to what. 45. when proper. by beneficiary. 85. 116. 106. RECEIVER. for expenses of suit. RECEIPT. REAL SECURITIES. 23. title vests in 2. taking possession of. 3. infant trustee may be removed. 22. 95. railroad bonds not. 149. sufficient when. 154. unproductive. of one trustee. trustee bound by when. 188. 24. REAL ESTATE who entitled to possession. 104-105. 154.218 INDEX (continued). remove for what. 188. REIMBURSEMENT. . 19. is income. 189. 16-17. appointed when. discharges liabilities. tioned when. conversion into personal. 102. REGULARITY OF TRUSTEE'S APPOINTMENT. RECOUP. liability for joining in. 56. 16. between trustee and beneficiary. REMOVAL. RELATIONSHIP. for payment to beneficiary. of absentee trustee. 100. 170-171. 138. lunatic trustee may be removed. must foreign. 175. 193. for damages in suit. 170. RENT. duty to improve. REMAINDERMAN. 194. 92. 56. will without conveyance. beneficiary need not. RELATION. 35-36. 155. See DISCLAIMER. REFUSAL OF TRUST. deed should be recorded. 50. 29. 184. alterations and additions charged to principal. will not remove for what. for expenses of accounting. 23. conveyance to when. care and custody of. 36. 99-100. should be converted. 102. 107-109. 70. is not a fit trustee. 112. 176. 16. RELEASE. be joint in equity. 138. RECORD. improper investment. 35. REFUND. not ques- REGISTERING BONDS. 192. 9. 112. beneficiary disaffirming sale must refund consideration. 75. 145.
155. charged to what. 66. on alienation. to trustee. 32. beneficiary may examine. SECURITIES. right to possession of. 70. resign independent trusts under responsible in what court. of inserted in settlement in England not draw whole fund fraud. 138. liability for misrepresentation. disaffirmed. implied from a given duty. power of not incidental to office. 21. purchaser's responsibility for purchase money. RESTRAINT. 155. REPRESENTATION. power in America. power under statutes. of one trustee not binding. 21. 170. resign whole trust. confirmed when. 147. REPAIRS. 164-166. 32. 70. or partner. may be ordered by special law. 68.INDEX 219 RENT (continued). REVOCATION. 64-65. apportioned when. 68-69. 70-71. 70. 65. 114. under cy pres doctrine. a SALE. duty to. RESIGNATION. by order of court. beneficiary may cannot sell to relative purchase. 80. 136. consideration must be returned. may same instrument. 70. 68. 105. by spendthrift trust. 67. 100. irregular. married women. 21. RETIREMENT OF TRUSTEE. purchaser takes risk of regularity of. 102. 67. 164-166. not valid in others. REPAIR. 82. power of. . 8. 65-66. management of. 166. 63. duty to convert into trust investments. liability for allowing to fall in arrears. damages. SAFETY. necessary feature of investment. 111. 163. 154. 69. unauthorized. 67. 175. 22. trustee cannot purchase at. power usually specially given. must must be accepted by or by the court. of contingent remainders and executory devises. 145. all. 21. by using discretion to See DEVESTMENT OF OFFICE. valid in some States. 171. 76.
90. 103. 182. 104-105. 99. should indicate trust on their face. must not release. aiding in breach of trust liable. dividends of. 106. title passes to whom. 188. 79. certificate should stand in joint names. not principal. 166. may be entrusted with securities when. whom and when. 116. with trust funds improper. 78. See LIMITATIONS." effect of. 18. 15. beneficiary is not. See COMPENSATION. SOLE TRUSTEE. STATUTE. should examine. 116. STOCKHOLDER IN CORPORATION. 27. investments improper. representation of not binding. may handle income. trustee is liable as. SPECULATION. 146. 56. 128. 105. 168. 51-52. 184. unfit trustee. 158. 101. 136. SECURITIES SERVICES. 103. SINGLE TRUSTEE. peculiarities of. 101. SPECULATIVE. 2. may collect money. 167. of limitations. 79. 113-115. 89. trustees' set off against beneficiary. 107. trust vests in successor. 27. 129. 184. 103. SPENDTHRIFT TRUSTS. may be a trustee. 88. 83. SOVEREIGN. on self. 1. STRANGER. may provide for sale of trust property. 49. 89. See FARMING STOCK. 179-182. 67. 27. SETTLEMENT. SET OFF. may appoint cannot restrain self SIGNATURE AS TRUSTEE. 161. 89. 98. 76. sale under. 3. for bonds purchased at premium. what are 32. 32. investments should be converted. STOCK. property followed into hands of.220 INDEX (continued). STOCK. 166. 110-111. beneficiary is not. SPECIAL LAW. . on death of. 54. SETTLOR. may do what alone. 67. sufficient. 51-52. 104. as an investment. SINKING FUND. 76. 182. on death of. 54. 27. " from alienation. speculative investments. 116. trustee is. interest of possible payees. 28. care of negotiable and non-negotiable. liability for transfer of. 183. demand of. by trustee cannot set off private debts against creditor of trust. belong to whom. 167.
note office 3. 81.INDEX 221 STRANGER (continued). 51-52. 168. 95. 193. should attorn to new trustee. SURETIES. possible recipient not interested in trust. 102. not bound to receive property tendered. 188-191. 169. admissions in. 95. 146. 102. 101. appointed when. beneficiary may sue or defend in trustee's name. 189-190. 35. should examine predecessor's accounts. SUIT. 98. when court will review discretion. 29. 168. 139-140. takes title on death of trustee. trustee's discretion as to quantity. when 65. 45. 79. power and duty from principal and income. 167. subrogated to trustee's claim. duty passes to survivors. 148-149. 7. trustee's liability to. often given. liable for acts as trustee when. gets title how. 26-27. 179. SURVIVING TRUSTEE. not liable for acts of predecessor. 13. beneficiaries' rights in actions. See LIABILITIES. 159. on bonds of executor. TENANTS IN COMMON. 29. 46. 171. 29. 35. trustee has general power to sue and defend. TENANT. principal or income. 84. usually discretionary. expense of surety company allowed. 75-76. compromise expense of. allowed. SUBPOENA. trustees are not. cannot require information from trustee. where SUCCESSOR. 80-83. TEMPORARY TRUSTEE. 173. 81-82. 79. where taxes are payable. in what jurisdiction. 79. 22. 170. how apportioned among special power beneficiaries. effect of taking the property. 26. to pay. 156-157. to support beneficiary. 76. 12. 101. may be required on trustee's bond. SUPPORT. 6. 169. 26. 88. 14. of beneficiary or family in spendthrift trusts. . note 1. 80. 83-84. liabilities of. trustee is personally liable. 102. 75. 183. 51. 76. 9. are binding when. beneficiary may be liable for. had. of. TAXES. 75. necessary parties to. 184. 11-12. others have duty. making good loss. how apportioned. 95. duty to press. against trustee. 88.
183. of trustees is entitled to act. 13. 17. 50.101. 7. 145. 99. may resign. enforced where. 88. 50. by conveyance to beneficiary. may advantages and disadvantages of. 170. 14. 44. 146. 157. trustee takes none in code States. can refuse. may TORT. to property necessary to complete appointment. vest in new trustee by statute. 44. may vest by provisions of settlement. See DISCLAIM. grant. cannot abandon trust. 168. on disclaimer of one. 11. See PROPERTY. trusts for. to property. commissions on. 19. 14-15. 15. See be refused. See APPOINTMENT. temporary trustee may be appointed. THINGS. See ALIENATION. TRANSFER OF STOCK. appointment of. 99. See DISCLAIMER. TRUSTEE. removal of. TRUST COMPANY. 31. cannot be delegated. 73-74.222 INDEX of lease trustee TERM. vests in others. when income or TITLE. 26. how it passes to successor. liability for." TRUST. 44. " DEATH. may TERMINATION OF TRUST. principal. trustee liable in tort. TRUST PROPERTY. 173-175. decree for conveyance to new trustee. 5. 184. 144. 173. trustee takes absolute to personal property. 180. to property should stand in joint names. 7. will not fail for want of trustee. See REMOVAL. . 169. beneficiary not liable in. to remainderman. differs from agency. 19-24. TRANSFER OF PROPERTY. who of two sets who can be. trustee takes what estate is necessary in real estate. any person intermeddling is trustee. TRANSFER OF TRUST PROPERTY. 15. See REMAINDERMAN. 189-190. on death of trustee. TRUST TERMINATED. 11. TRACING trust property into hands of stranger. 125.x 6. 11. 11. See RESIGNATION. TRANSMISSION OF ESTATE. may be a trustee. 99. passes to remainderman how. 38.. 19-24. TIMBER. executor performing such duties is a trustee. 11. to new trustee. 12.
2. 85. 194. " TRUSTEE. 19-24. . single trustee may do what. . UNFAITHFUL TRUSTEE. See SINGLE TRUSTEE. not always desirable. who may is unfit to See FRAUD. cannot have adverse interest. 87. attorney or broker when.INDEX TRUSTEE who (continued). 155. 11. 18. 2. 34. 89-90. not an agency. compensation. See TABLE OF CONTENTS. 87. may act as counsel. contracts with beneficiary. may be ended how. 19. " as trustee effect. his expenses. 146. when. 86. can take no benefit from ownership. is owner of trust property. 83. 57. is unfit to be. 90. cannot purchase at sale. TRUSTEESHIP. 22. See SUCCESSOR and DEATH. 39. should be converted. See DEATH AND EXECUTOR. 16. must exercise trust himself. 88. be appointed by creator of trust. the estate of. duties. 155. liabilities. 28. See LIABILITIES also TABLE OF CONTENTS. right to possession of property. 19-20. 176. 16. See EXPENSES. 32. certificate is notice. pp. UNDUE INFLUENCE. when new trustee in place of. xi. 2. should be capable. powers. See ESTATE and TITLE. UNFIT TRUSTEE. death of. See POSSESSION. 16. 16. is " discharged how. confirmed when. passes to whom. &e COMPENSATION. 26. 106. good faith required. See ACCOUNTS. removal from. 78. 32. 32. p. pp. is a personal confidence. See DELEGATE. See INSTRUCTIONS. be a trustee. 68. xvi. 47. may be resigned. 25. 70. 173. when and how. 182. 90. cannot be abandoned. 85. 88. 26. may lose compensation. 2. See TABLE OF CONTENTS. xii. xiii to xvi. 86. 19. UNDIVIDED PROPERTY. 2. may get instructions of court. gifts from beneficiary. managing and passive trustees. must keep accounts. 8. 35. UNAUTHORIZED SALE." on signature is a relationship.
23. 159. 139. 170. WASTING INVESTMENT. may UNPRODUCTIVE PROPERTY. beneficiary not qualified to. 175. UNFRIENDLY TRUSTEE. cause for removal. trustee cannot use. should be converted. WASTE. beneficiary's right to use trust property. 123. 102.224 INDEX be removed. converted. as owner. chargeable. 27. may be trustee for husband. VOTE. See TITLE. should be converted. 32. USE. 100-107. 106. 17. trustee enjoined from voting against beneficiary's interest. 107. WIFE. 106. VACANT LAND. taxes on. should be converted. 23. trustee votes as stockholder. how VESTING OF TITLE TO PROPERTY. 23. WILFUL BREACH OF TRUST. 126. 45. . 125. is partly income. dividends on apportioned. cause for removal of trustee.
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