MARSHALL KF 730 .B43X 1897 ■^^ ilataJjall Equttg ffloUcrttott (gift of IE. 31. MarslfaU, 21. 21. 1. 1B94 CORNELL UNIVERSITY LIBRARY 924 084 249 865 The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/cletails/cu31924084249865 COMMENTARIES ON THE LAW OP TRUSTS AND TRUSTEES, AS ADMINISTERED IN ENGLAND AND IN THE UNITED STATES OF AMERICA. CHARLES FISK BEACH, rOCNSELLOR AT LAW. IN TWO VOLUMES. VOL. II. ST. LOUIS: CENTRAL LAW JOURNAL COMPANY. 1897. COPTRIGHT 1897, BT Central Law Jouknal Company. St. Louis, M( .. Printed by Central Law Journal Company. VOLUME II. CHAPTER XVIII. APPOINTMENT, SCBSTITDTION, RESIGNATION AND REMOVAL OF TRUS- TEES. Page. 848 SoO 852 853 856 859 § 362. Introductory . 3G3. Appointment of trustees 864. Appointment of trustees continued 365. The executor as trustee 366. The subject continued 367. The executor of an executor as trustee 368. Appointment under a power 369. The subject continued 370. The same subject 371. Where the appointing power fails . 372. The subject continued 373. The same subject 374. Trustee da son tort 375. Acceptance of trust . 376. Acceptance of trust continued 377. Proof of acceptance . 378. The subject continued 379. Disclaimer of trust 380. Disclaimer continued 381. Disclaimer by parol . 382. Devolution of trust estate under disclaimer 383. How a trustee may be released 384. The subject continued 385. The same subject 386. Eesignation and removal 387. Eesignation and removal continued 388. Eemoval of trustees of charities 389. Delegation of appointing power 390. The vesting order 865 868 870 873 875 876 877 879 882 883 8S6 889 891 894 896 897 809 900 903 90.-> 907 90S CHAPTER XIX. THE RELATION OF TRUSTEES TO THE TRUST ESTATE. § 391. Introductory ...... 392. The legal title of trust estate Page. 910 911 TABLE OF CONTENTS VOLUME 11. § 393. The legal title continued 394. The subject continued 395. The same subject 396. Determined by intention of settlor 397. Effect of power in trust 398. Effect of charge on realty 399. For preserving contingent remainders 400. The trust estate for married women 401. The subject continued 402. Enlargement of trust estate in equity 403. Trustees for rents and profits 404. The subject continued 405. Limitation of estate executed by statute 40tl. Limitation in wills and deeds 407. The trust estate in personalty Page. 913 916 018 921 923 026 929 930 933 935 938 939 940 941 943 CHAPTER XX. THE RELATION OF TRl'STEES TO THE TRUST ESTATE CONTINUED. Page. § 408. The legal estate at common law . . . 945 409. Responsibility of trustee as holder of legal title . . ilJG '410. Protection of legal title .... 949 411. Protection of title continued .... 951 412. Eight of trustee to possession of trust estate . 953 413. Possession of trust estate continued , . 956 414. The subject continued . ... 959 415. The same subject . . . . 961 416. Dower in trust estate . . • 962 417. Liability of trust estate to escheat . . 9G5 418. Conveyance of estate subject to trusts . . . 968 419. The trust estate in assignees . . . 969 420. Trust estate in bankrupt trustee . . . 971 421. The subject continued ..... 973 422. Beneficial interest of bankrupt trustee . . . 975 423. Merger of equitable and legal estates . . . 077 424. Trustees as joint tenants ..... 979 425. Presumption in regard to conveyance . . 980 426. The doctrine of presumption continued . . . 982 § 427. 428. 429. 430. 431. CHAPTER XXI. CONCERNING THE POWERS OF TRUSTEES. Introductory General powers Special powers Discretionary powers Discretionary powers continued — class first Page. 986 988 991 994 997 TABLE OF CONTENTS VOLUME II. § 432. Discretionary powers continued — class second 433. Discretionary powers continued — class third 434. Discretionary powers continued — class fourth 435. Discretionary powers continued. 436. The execution of a power 437. Limitation of the power to execute a trust 438. Power on refusal of trustee . 439. The power to assign the trust estate 440. Powers of trustees as survivors 441. Powers of new trustees 442. Executors as trustees 443. Powers of co-trustees as such 444. Powers of feme covert, or infant, as ti-ustees 445. Power to make repairs and improvements 446. Power to lease trust estate 447. Power to insure trust property 448. Power to borrow money 449. Power of sale 450. Power of sale by implication 451. Power of sale continued 452. Power to consent to a inarrisige 4.53. The subject continued 454. The same subject 455. The power to compromise 456. The power to arbitrate 457. Power to satisfy incuinbrnnces 458. Power to confess judgment 459. Power to bring suit 460. Power to act through agents 461. Power to employ an attorney 462. Power to convey for public uses 463. Power to apply to the court for instructions Page. 999 1001 1005 1006 1009 1011 1013 1014 1016 1018 1020 1021 1022 1024 1027 1028 1031 1033 1036 1038 1040 1013 1045 1046 1048 1050 1051 1053 1055 1057 1058 1060 CHAPTER XXII. THE POWER TO SELL THE TRUST ESTATE. § 464. Introductory . 465. In what manner conferred . 466. Form of words required 467. Power to sell by implication 468. Limitations of power 469. The subject continued 470. Limitations in regard to exchange 471. Power of sale by consent of parties 472. Consent of parties continued 473. Power of sale by order of court 474. How the power of sale is to be executed 475. The rule in case of a contingency . Page. 1063 1066 1067 1070 1072 1074 1075 1077 1080 1081 1082 1085 VI TABLE OF CONTENTS VOLUME II. § 47G. Power of sale in survivor 477. Power of sale for payment of debts 478. Sale by tenant for life 479. Incidents of the sale . 480. Manner of conducting public sale . 481. Adjournment of public sale . 482. Conditions of sale 483. Sale without notice . 484. Restraint upon power of sale 485. Where a trustee may be required to sell the trust 486. Conveyance of the trust estate 487. How a sale by a trustee may be avoided estate Page. 1087 1090 1091 1091 1095 1098 1100 1102 1104 1105 1106 1108 CHAPTER XXIII. THE GENERAL DUTIES AND OBLIGATIONS OF TRUSTEES. § 488. Introductory ..... 489. To reduce the trust estate into possession 490. To assume the control of personalty 491. Duty to obey the directions of the instrument 492. Duty to act in good faith 493. The duty of joint action 494. The duty of joint action continued 495. The subject continued 496. Responsibility of co-trustees in regard to checks 497. The rule in its application to public trusts 498. To act in accordance with the instructions of the court 499. Duty to exercise diligence and care 500. The duty of trustees touching the exercise of discretion ary powers .... 501. To preserve and to protect the trust estate 502. The subject continued 503. To collect outstanding claims 504. To pay debts and charges 505. Primarily from personal property . 506. The subject continued 507. Duty to collect rents and profits 508. Duty to make repairs 509. With respect to insurance and taxes 510. The subject continued 511. To renew leases 512. The subject continued 513. To convert and invest trust property 514. The subject continued 515. The use of trust funds 516. The mixing of trust and private funds 517. Duty to dispose of property liable to waste Page. 1111 1113 1116 1118 1119 1121 1124 1126 1128 1130 1130 1133 1135 1138 1140 1143 1145 1147 1150 1151 1152 1155 1157 1159 1162 1164 1168 1169 1172 1175 TABLE OF CONTENTS VOLUME II. VU Page. § 518. Concerning the purchase of trust property from benefi- ciaries ^ . . . . . . .1178 519. Concerning the giving of information . . . 1181 520. Purchasing at his own sale .... 1182 521. Duty to deposit money in bank .... 1187 522. To be prepared to render an account of his trusteeship . 1190 523. To distribute trust property .... 1193 524. The subject continued . . . . 1195 CHAPTER XXIV. THE INVESTMENT OF TRUST FUNDS. 525. Introductory ..... 526. The general rule .... 527. The general rule continued 528. Permissible securities 529. Investments under a discretionary power 530. The rule in England .... 531. The rule in the United States 532. The subject continued 533. Statutory regulations 534. Investment of trust funds for charitable purposes 535. The change of investments . 536. Investments for the accumulation of the income Page. 1197 1198 1200 1201 1204 1206 1209 1212 1213 1216 1217 1218 CHAPTER XXV. THE LIABILITIES OF TRUSTEES. Page. § 537. Introductory ... ... 1221 538. The general rule ...... 1223 539. Limitations of the rule . . . . .1226 540. Liability in breach of trust ..... 1227 541. Liability as co-trustee ..... 1229 542. The right of contribution ..... 1231 543. Liability for 00- trustees .... 1233 544. The subject continued ..... 1236 545. Liability of co-trustees as determined by their bond . 1238 546. The subject continued ..... 1240 547. Liability of trustee on covenants .... 1241 548. Liability of trustee in delegation of powers and duties . 1243 549. The subject continued .... 1247 550. For loss from insufficient security .... 1248 551. Liability of a father as trustee for a son , . . ]2.)2 552. For delay in investment of trust funds . . . 1253 553. The measure of liability .... 12o!i VUl TABLE OF CONTENTS VOLUME II. CHAPTER XXVI. SIMPLE, PASSIVE OR DRY TRUSTS. § 554. Introductory . 555. Introductory continued 556. Subject to legal rules 557. Where an active trust becomes passive 558. Liability to creditors 559. Liability to creditors continued 500. The rule in married women's separate esta;e 561. The devolution of the trust estate . 562. The trust estate as affected by statute 563. For preserving contingent reipaindevs Page. 1260 1263 1265 1266 1268 1270 1274 1276 1277 1280 CHAPTER XXVII. TRUSTS FOR SPENDTHRIFTS. 564. Introductory 565. Created under statutory provisions 566. Discretionary powers of trustees .567. Liability fur debts of beneficiary 568. The subject continued 569. Conditional limitation 570. The subject continued 571. Liability for family of beneficiary 572. Spendthrift trust for women 573. Trust for settlor 574. Spendthrift trust for insolvent 575. Liability of guardian 576. Effect of a decree creating a spend 577. Where a spendthrift trust fails Page. . 1281 . 1283 . 1286 . 1289 . 1297 1301 . 1303 . 1304 . 1306 . 1308 . 1311 . 1312 thrift trust . 1313 . 1314 CHAPTER XXVIII. TRUST FOR PAl'MENT OF DEBTS AND LEGACIES. § 578. Introductory . 579. The rule under a will 580. Claims of creditors as a charge on realty 581. Order of procedure . 582. How the trust estate vests 583. Creation of trust by deed 584. The trust deed continued 585. Devisees as executors 586. The collection of debts 587. The rule in conversion of assets 588. The right to employ collectors 589. Power of trustees to compound and settle debts Page. 1317 1319 1321 1324 1326 1327 1329 1333 1334 1337 1339 1341 TABLE OF CONTENTS VOLUME II, IX 590. 591. 592. 593. 594. 595. Claims of creditors for interest The mode of raising money Payment of legacies The payment of legacies continued The rule relating to the surplus Duty of bankrupt trustee touching his own indebtedness Paee. 1340 1347 1351 13.54 1357 1458 CHAPTEK XXIX. TRUSTS UNDER ASSIGNMENT FOR CREDITORS. 596. Introductory . 597. Formalities required 598. Reservation by the assignor 599. The subject continued 600. The preferment of creditors 601. Assets of creditors 602. The rule in England . 603. Assent to direct assignments 604. Where assent will be presumed 605. The manner of assent 606. What property passes under assignment 607. Fraudulent trusts under assignments 608. The subject continued 609. Acceptance of assignee 610. Powers and duties of assignee 611. The subject continued 612. Liability of assignees 613. Kight of creditors under an assignment 614. The right to enforce a trust 615. Property of debtor as affected by liens 616. Assignments by corporations 617. Partnership assignment 618. Partnership assigments continued 619. Assignment of realty 620. The order of distribution Page. 13(;0 1361 1365 1368 1370 1375 1377 1380 1381 1382 1384 1387 1390 1392 1394 1397 1399 1403 1406 1407 1410 1413 1416 1418 1420 CHAPTER XXX. TRUSTEE FOR TENANT FOR LIFE AND REMAINDER-MAN. 621. Powers and duties of trustees 622. Tenant for life as constructive trustee 623. Where the tenant for life is entitled to possession 624. Tenant for life as new trustee 625. Payment of charges by tenant for life 626. Repairs and improvements .... 627. Liability for current charges 628. Bights in perishable property Page. 1424 1426 1427 1430 1431 1433 1435 1436 TABLE OF CONTENTS VOLUME II. CHAPTER XXXI. TRUSTS UNDER POWER OF SALE ittORTGAGES AND DEEDS OP TRUST. Page. . 1440 1442 . 1444 § 629. Introductory . 630. Origin and character of powers 631. The validity of powers of sale 632. Limitations of power of sale in deeds ..... 633. Who may exercise the power of sale 634. The subject continued 635. Delegation of power of sale . 636. The subject continued 637. Possession as a condition of the right to sell 638. The revocation or suspension of the power 639. The subject continued 640. Injunction to restrain sale 641. The duty of a trustee 642. Notice of sale 643. How notice shall be given 644. The subject continued 645. Time and place of sale 646. The manner of sale 647. Whether the estate shall be sold 648. Adjournment of sale . 649. Who may purchase at a sale 6.50. The subject continued 651 . The same subject 652. Statutory regulations 653. Sale at an inadequate price 654. The rights of the purchaser 655. Subsequent purchaser without notice 656. The setting aside of a sale 657. The subject continued 658. The right of redemption 659. The right of redemption continued 660. The power of sale a cumulative remedy 661. Cumulative remedy continued mortgages and trust 1446 1449 1452 1453 1455 1457 1459 1463 1464 1468 1471 1475 1478 1479 1483 1485 1188 1490 1492 1495 1497 1498 1500 1504 l."i05 l,i08 1.^09 1512 1514 1517 CHAPTER XXXII. PERPETUITIES AND ACCUMULATIONS. 662. Introductory ..... 663. Accumulations for charities . 664. Accumulations for the payment of portions 665. The subject continued 666. Interest on portions .... 667. Advancement by portions Page. 1520 1523 1524 1527 1529 1530 TABLE OF CONTENTS VOLUME II. X] CHAPTER XXXIII. EQUITABLE AND STATUTORY LIMITATIONS. Page. 668. The rule in general .... . 1533 669. Where the rule is operative . 1585 670. Breach of trust .... . 1538 671. Concerning stale claims . 1541 672. Bar from acquiescence . 1543 CHAPTER XXXIV. TRUST COMPANIES AS TRUSTEES. 673. Introductory . 674. Powers and liabilities in general 675. The subject continued 676. Claim of beneficiary for Interest 677. Claim for compensation 678. Accumulations by trust companies Pago. 1546 1548 1551 1553 1554 1555 CHAPTER XXXV. THE CESTUI QUE TRUST. RIGHTS AND REMEDIES — DIVISION FIRST. RIGHTS AND REMEDIES IN RELATION TO THE TRUSTEE. 679. Introductory .... 680. Right to judicial construction of the trust 681. Eight to maintenance 682. Right to an accounting 683. The subject continued 684. Right to the enforcement of the trust 685. Execution of the trust by the court 686. Right to an injuction 687. Right to the removal of the trustee 688. When a receiver will be appointed 689. Trust property appropriated by trustee 690. Personal liability of trustee 691. Liability of trustee for unreasonable acts 692. Liability of trustee for mismanagement 693. Liability of co-trustee 694. Loss by act of cestui que trust 695. Acquiescence by cestui que trust 696. Acquiescence by lapse of time 697. Waiver of claim by cestui que trust 698. The right to protect the trust estate 699. Claim of beneficiary to an advancement Page. 1556 1559 1561 1563 1566 1567 1570 1573 1574 1576 1578 1581. 1584 1585 1587 1589 1591 1594 1596 1599 1600 XU TABLE OF CONTENTS VOLUME II. §700. Priority of beneficiaries' claim in case of insolvency . 1602 701. The subject continued ..... 1606 702. Partition of trust estate ... ' . 1611 703. Eight of beneficiary not in esse . 1613 704. Right to bring an action . . . 1616 705. Eight to terminate the trust 1617 706. The subject continued . . . . 1620 CHAPTER XXXVI. THE CESTUI QtJE TKDST CONTINUED. RIGHTS AND REMEDIES — DIVISION SECOND. BIGHTS AND REMEDIES IN RELATION TO THIRD PERSONS. rage. § 707. The right to follow the trust fund . . 1624 708. The subject continued ..... 1628 709. The identification of the trust property . . . 1630 710. The subject continued ... . 1G33 711. The right of assignment . . . 163.5 712. The right to alienate the trust estate 1638 713. Right to mortgage the trust estate . . . 1641 714. Right to the quieting of a title . . 1642 715. Liabilities of the cestui que tiust . . 1643 CHAPTER XXXVII. APPLICATION OF THE PURCHASE MONEY. Page. § 716. Introductory . . ,. ... 1645 717. The rule in general ...... 1646 718. Modifications of the general rule . . . 1649 719. The rule in trusts for the payment of debts . . 1652 720. The rule relating to personalty ... 1 655 721. The rule in case of breach of trust . 1056 722. The sale or pledge of stock by the trustee . . 1659 723. Statutory provisions . . . 1661 724. Period of equitable relief .... 1603 725. The rule in England . ... 1663 CHAPTER XXXVIII. COSTS AND ATTORNEY'S FEES. § 726. Introductory . 727. The rule in England . 728. The rule in the United States 729. Lien on the trust property for costs 730. Where a lien will not attach 731. Costs in defending an action 732. Costs in case of breach of tru-^t 733. In case of unreasonable expenses, . Page. 1666 1667 1671 1674 1675 1677 1678 16S1 TABLE OF CONTENTS VOLUME II. Xlll CHAPTER XXXIX. THE COMPENSATION OP TRUSTEES. § 734. The common law rule 73r). The rule In the United States 736. The compensation determined 737. Fidelity required 738. Determined by the instrument 739. Where determined by the court 740. Compensation of new trustee 741. Eeimbursement for necessary expenditures 742. For employment of assistants 743. Compensation as executor and trustee 744. Compensation as solicitor 745. Compensation as solicitor continued 746. In trading with trust funds . 747. Lien of trustee for compensation 748. Waiver of compensation Page. 1682 1684 1687 1691 1696 169S 1700 1701 1701 1705 1708 1710 1713 1714 1715 CHAPTER XL. PLEADING AND PRACTICE IN TRUST CASES. § 749. Introductory . 1717 750. Jurisdiction In trust cases 1718 751. Jurisdiction continued 1721 752. Extent of equity jurisdiction 1724 753. The reforming of the instrtiment 1727 754. Parties to trust suits . 1728 755. Parties, to trust suits continued 1731 756. The averments of a bill 1735 757. The amendment of the bill . 1739 758. The decree of the court 1742 CHAPTER XLI. THE DETERMINATION OF THE TRUST. § 759. Introductory ..... 760. Determination by the limitations of the trust 761. By agreement of parties 762. Presumption from lapse of time 763. By the act of the trustee 764. On request of the beneficiary Page. 1744 1746 1747 1749 1750 1752 TRUSTS AND TRUSTEES, CHAPTER XVIII. APPOmTMENT, SUBSTITUTIOISr, KESIGSTATION AND RE- MOVAL OF TRUSTEES. Proof of Acceptance. The Subject Continued. Disclaimer of Trust. Disclaimer Continued. Disclaimer by Parol. Devolution of Trust Estate Under Disclaimer. How a Trustee may be Re- leased. The Subject Continued. The Same Subject. Resignation and Removal. Resignation and Removal Continued. Removal of Trustee of Charities. Delegation of Appointing Power. The Vesting Order. § 363. Introductory. — A trustee, employing the word in a general sense, may be defined as a person vested with some power, interest or estate, to be held as the representa- tive of another, and to be administered or controlled for his benefit. The comprehensive terms of this definition, without expressing all that is involved in the idea of a trus- tee, would include various other forms of trusteeship or agency, as executors, administrators, guardians, assignees, § 362. Introductory. § 377 363. Appointment of Trustees. 378 364. Appointment of Trustees, 379 Continued. 380 365. The Executor as Trustee. 381 366. The Subject Continued. 382 367. The Executor of an Execu- tor. 383. 358. Appointment Under a Power. 384. 369. The Subject Continued. 385. 370. The Same Subject. 386. 371. Where the Appointing Power Fails. 387. 372. The Subject Continued. 388. 373. The Same Subject. 374. Trustee de son Tort. 389. 375. Acceptance of Trust. 376. Acceptance of Trust Con- tinued. 390. 848 APPOINTMENT, ETC., OF TRUSTEES. [§ 362. and agents, in the ordinary sense of that word.^ But the term trustee, using the word in its legal sense, has a much more restricted and definite meaning. It designates a per- son holding a legal and formal trust. As such, trustees are subject only, or in an especial sense, to the jurisdiction of cause he has property delivered to him, in the confidence that he will do with it according as he is di- rected by the bailor ; but the word is not used in the statute in this sense. The statute requires that the property must be conveyed to the trustee." Beers v. Lyon, 21 Conn. 604, 614. "Trustee is also used in a wide and, perhaps, inac- curate sense to denote that a person has the duty 6f carrying out a transaction, in which he and an- other person are interested, in such manner as will be most for the benefit of the latter, and not in such a way that he himself might be tempted for the sake of his per- sonal advantage, to neglect the in- terests of the other. In this sense directors of companies are said to be trustees for the shareholders. The essential difference is, that a trustee owns the trust property and deals with it as principal, subject to his equitable obligation towards his cestui que trust, while a director is rather an agent with a limited authority." Sweet, Law Diction- ary, 846. "The office of director is that of a paid servant of the com- pany. A director never enters into a contract for himself, but he en- ters into contracts for his princi- pal, that is, for the company of whom he is a director, and for whom he is acting. He cannot sue on such contracts nor be sued on them unless he exceeds his au- thority. That seems to me to be the broad distinction between trus- tees and directors." Smith v. An- derson, L. R. 15 Ch. D. 247, 276. 1. "A trustee is not an agent. An agent represents and acts for his principal, who may be either a natural or artificial person. A trustee may be defined generally as a person in whom some estate, interest or power in or affecting property is vested for the benefit of another. When an agent con- tracts in the name of his principal, the principal contracts and is bound, but the agent is not. When a trustee contracts as such, unless he is bound no one is bound, for he has no principal. The trust es- tate cannot promise; the contract is therefore the personal under- taking of the trustee. As a trustee holds the estate, although only with the power and for the pur- pose of managing it, he is person- ally bound by the contracts he makes as trustee, even when des- ignating himself as such." Taylor V. Davis, 110 U. S. 330, 334. "The trusts of an assignment for the ben- efit of creditors constitute a very important feature of the transfer. These trusts, in one form or other, enter into the composition of all assignments which contemplate provision or security for creditors (as distinguished from transfers in absolute and final payment and satisfaction) ; embracing not only such as are made to trustees for- mally appointed by the assignor, distinct from the creditors or ces- tuis que trust, but such as are made directly to creditors them- selves." Burrill on Assignments, § 208. "In a certain sense a mere bailee or agent is a trustee, be- § 362.] APPOINTMENT, ETC., OF TRUSTEES. 849 equity. 1 Under the English Court of Chancery, the estate of the old feoffee to uses has been perpetuated, with such modifications as have adapted it to modern industrial con- ditions and to recent legislation, in the trustee of the pres- ent. Through these modifications the objectionable feat- ures of the ancient uses were reformed, and the trust has been adapted to modern conditions and necessities. To the business of the present day, the trust, so far as appears, is an absolute necessity. Apparently it would be impossible to conduct it without the aid of the machinery afforded by the present system of trusts and trustees. The value and importance of this system, if not its absolute necessity, and its adaptation to meet the demands of business in its ad- vanced forms, appear from its universal prevalence. Not only a very large, but, as well, a steadily increasing pro- portion of the business of this and of other enlightened lands, is conducted through the instrumentality of the trust, and the large and ever increasing number of the associa- tions and institutions of this character is continually adding to the extent and importance of this branch of equity juris- ' The following are a few defini- property for the benefit of another, tions of the word trustee, by au- One to whom property is conveyed, thorities of high standing: ''A or by whom it is held, or required person in whom some estate, in- to be held, for the benefit of an- terest, or power in or affecting other." Burrill's Law Dictionary, property of any description, is tit. Trustee. "A person to whom vested for the benefit of another, property or funds have been corn- One to whom property has been mitted in the belief and trust that conveyed to be held or managed he will hold and apply the same for another." Bouvier's LawDie- for the benefit of those who are tionary, tit. Trustee. "In the entitled, according to an expressed strict sense of the word a trustee intention, either by the parties is a person who holds property themselves, or by the deed, will, upon trust." Sweet's Law Die- settlement or arrangement of an- tionary, tit. Trustee. "A person other; also by extension, a person holding the legal title to property, held accountable as if he were under an express or implied agree- expressly a trustee In law." Cen- ment to apply it, and the income tury Dictionary, tit. Trustee. "A arising from it to the use and for person in whom some estate, in- the benefit or another person, who terest or power in or affecting is csdleA the cestui que trust.'''' An- property of any description is derson's Law Dictionary, tit. Trus- vested for the benefit of another." tee. "One who is intrusted with Hill on Trustees, *41. 54 850 APPOINTMENT, ETC., OF TRUSTEES. [§ 363. prudence. Some of the most learned and elaborate of the decisions of the courts of equity relate to this subject, and in England recent legislative enactments have enlarged the powers of these courts in this direction to such an extent as to give them almost absolute discretion in regard to the appointment and removal of trustees. ^ § 363. Appointment of Trustees. — Trustees are ap- pointed either by the parties or by operation of law. A trusteeship may be constituted by will, or by deed, or other instrument of couvej'ance inter ■vivo.'i. But the instrument, whether will or deed, must pass the legal title to the trust estate and contain an adequate declaration of trust. ^ It is not necessary that the declaration of tru.st should be a part of the instrument by wliich the legal title to the trust es- tate is conveyed, though this is the convenient, safe and proper manner of making the declaration. But the declara- tion of the trust must be in writing, it must be made in anticipation of, or contemporaneously with, the instrument of conveyance, and it must be connected with it in such a manner as to leave no ground for doubt in regard to the intention of the grantor. Unless the conveyance is in some manner vitiated by fraud, no subsequent declaration will devest the grantee of a beneficial interest in the estate.^ Even in a devise, or bequest, an instrument subsequently executed will not create a trust, unless it is of such a char- acter as to operate as a revocation of the will.^ Without 1 Blackstone's Commentaries, whenever a trust is created, a legal 333 ; Coke's Littleton, 290, b.; Bull, estate sufficient for the execution n. I. 3; 2 Fonblanque's Equity, B. of the trust shall, if possible, be 2, ch. 1, § 4; Hopkins v. Hopkins, 1 implied; secondly, the legal estate Atk. 591. limited to the trustees shall not be "Hill on- Trustees, *63. "The carried farther than the complete following rules of construction execution of the trust necessarily have been adopted by the courts requires."' 1 Lewin on Trusts, in reference to this branch of our *213. subject in the case of wills, and, ^ Adlington v. Cann, 3 Atk. 145, except so far as they are controlled 151; Crabb v. Crabb, 1 Myl. & K. by the positive enactments of the 511 ; Kilpin v. Kilpin, 1 Myl. & K. late Wills Act, must still be re- 520, 532. sorted to for guidance : First, * Adlington v. Cann, 3 Atk. 152. § 363. J APPOINTMENT, ETC., OF TRUSTEES. 851 any instrument of conveyance, and without, in any manner, parting with the possession of the estate, the owner may constitute himself a trustee for another person by a proper declaration of trust. ^ It is by a declaration of trust, not by a conveyance of the legal title, that a person is constituted a trustee, and it is not necessary that the declaration should be by any formal instrument. It may be a memorandum, an entry in a book, a letter, or any other writing, however informal and untechnical, if it clearly indicates that the conveyance is in trust, and definitely and positively connects the trustee with the estate.^ A testator, after bequeathing vari- ous charitable and other legacies, gave to S P £3,000, and a like sum of £3,000 in addition for the trouble she would have in acting as esecu- tris. She then gave further chari- table and other legacies and spe- cific bequests, and then all the residue of her personal estate to S P, heirs, executors, administrators and assigns, "well knowing that she will make a good use and dis- pose of it in a manner in accord- ance with my views and wishes." Four papers were found in the testatrix's handwriting, undated, unsigned and unattested, in which she named various persons and charitable institutions as objects of her bounty, and gave directions for money being laid out in land for charitable purposes. The will and codicil, and one other paper, were admitted to probate, but these four papers were not. It was held that S P did not take the residue bene- ficially, but was a trustee for the next of kin of the testatrix; and a reference was directed to the mas- ter to inquire and state whether the views and wishes concerning the disposition of the residue, which were mentioned in the will of the testator, were ever and when declared or made known by her, in and by any instrument, paper or writing, or instruments, papers or writings. Briggs v. Penny, 3 De G. & Sm. 525; affirmed in 3 Macn. & G. 546. See also Johnson V. Ball, 3 De G. & S. 85; Johnson v. Clark- son, 3 Eich. Eq. 305; "Walgrave v. Tebbs, 2 Kay & J. 313; Tee v. Ferris, 2 Kay & J. 357; Eussell v. Jackson, 10 Hare, 204; Lomax v. Kipley, 3 Sm. & Giff. 48; Brown V. Brown, 12 Md. 87. 1 Ex parte Pye, 18 Ves. 149; Meek V. Kettlewell, 1 Hare, 469; s. c, 1 Phill. 157; Hughes v. Stubbs, 1 Hare, 478*; Wheatley v. Purr, 1 Keen, 553; Stapleton v. Stapleton, 14 Sim. 192; Suarez v. Pumpelly^ 2 Sandf. Oh. 336. 2 "Where a person has used lan- guage from which it can be gath- ered that he intended to create a trust, and such intention is not negatived by the surrounding cir- cumstances, and the settlor has done such things as are necessary in equity to bind himself not to re- cede from that intention, and the trust property is of such a nature as to be legally capable of being settled and the object of the trust is lawful, and the settlor has complied with the provisions of the law as to 852 APPOINTMENT, ETC., OF TRUSTEES. [§ 364. § 364. Appointment of Trustees Continued. — Another class of trustees is constituted by operation of law. Trusts of this character are created, or arise by inaplication from the intention of the parties, either expressed or implied, or from the nature of the transaction, or they may arise inde- pendently of any such intention, or even in opposition to it, by the operation of law through equitable construction. The former class are resulting, and the latter constructive trusts.^ Under this class of trusts trustees are constituted by the decree of the court. The trusts are created on a bill in equity, by an order which constitutes the party, or parties, trustees for the equitable owner of the propei'ty in question. For example, where, in the convej'ance of prop- erty, the legal title is taken in the name of one person, while the consideration is paid by another, a trust results from the transaction, in which the person to whom the es- tate is conveyed is constituted a trustee for the person who pays the purchase price, ^ as where a person is induced to evidence, a good and valid declara- tion of trust has {prima facie) been made. But a trust prima facie valid may yet be impeachable from incapacity of the settlor, or of the cestui que trust, or from some mis- take or fraud attendant upon its creation ; or, again, it may be valid as between the parties, and yet in- valid as against the subsequent purchasers." Underbill on Trusts and Trustees, 18. See the follow- ing cases for examples of sufficient declaration: Blythe v. Easterling, 20 Tex. 565; Wiswell v. Ross, 4 Port. 321; Luco v. De Toro, 91 Cal. 405 ; Blackburn v. Blackburn, 110 N. Car. 488; Milbank v. Jones, 127 N. Y. 370; Adams v. Adams, 21 Wall. 185; Reilly v. Whipple, 2 S. Car. 277; Burnside v. Wayman, 49 Mo. 356; Boyce v. Sikes, 97 Mo. 362; Smith v. Davis, 90 Cal. 25; Ewing V. Buckner, 76 Iowa, 467; Sprague v. Thurber, 17 K. I. 451 ; Mull V. Bowles, 129 Ind. 343; King V. Remington, 36 Minn. 15 ; Butler V. Hyland, 87 Cal. 575 ; Van Cott v. Prentice, 104 N. Y. 45 ; Chadwick V. Chadwick, 59 Mich. 87 ; Walden V. Karr, 88 111. 49; Shields v. Mc- Auley, 37 Fed, Rep. 302; Pinson v. McGeehee, 44 Miss. 229 ; Beadle v. Beadle, 40 Fed. Rep. 315; Drosten V. Mueller, 103 Mo. 624; Hance v. Frome, 89 N. J. Eq. 324; Lake v. Freer, 11 111. App. 576; Brison v. Brison, 90 Cal. 323 ; Smith v. Smith, 1 McCord Eq. 134; Adams v. Ad- ams, 64 N. H. 224. By separate instruments see McLaurie v. Part- low, 53 111. 340; Inchiquin v. French, 1 Cox, 1 ; Blake v. Collins, 69 Me. 156; Smith v. Altersoll, 1 Buss. 266 ; Van Cott v, Prentice, 35 Hun, 322 ; Hannlng v. Mueller, 82 Wis. 235. ButseeBogersv. Rogers, 53 Wis. 36; s. c, 40 Am. Rep. 756. 1 See Ante, chs. VIII.-X. 2 See Ante, chs. IX. and X. § 365.] APPOINTMENT, ETC., OF TRUSTEES. 853 convey property through fraud or deception, by mistake, or through intimidation, or by any other course that is op- posed to fair dealing, the party to whom the property is conveyed will be constituted a trustee for the person who has been defrauded by the conveyance. ^ § 365. The Executor as Trustee. — An executor may or may not be a trustee of the estate for which he has been appointed executor. If he is appointed by the will as both executor and trustee, he is vested with certain powers and responsibilities that are not inherent to his office as execu- tor. Where the executor is not expressly appointed as a trustee, and there is occasion for the exercise of trustee powers, the court will determine, from a careful examina- tion of the will as a whole, whether it was the intention of the testator to make him a trustee as well as an executor. Under certain circumstances it will be held that the exer- cise of trustee powers belongs to the executor as such. In Maine it has been held that, if a legacy be given in trust, and there is no special designation in the will of the execu- tor, or of any other person, as trustee, it belongs to the executor, as such, to administer the estate according to the provisions of the will.^ Under this decision the executor is 1 See Ante, chs. XI. and XTI. Talbot, 10 Gush. 1 ; Carson v. Car- 2 Groton v. Kuggles, 17 Me. 137. son, 6 Allen, 397; Town v. Ammi- Where a will creates certain trusts down, 20 Pick. 535 ; Holbrook v. and imposes upon the executors Harrington, 16 Gray, 102; Ches- duties which are usually performed nut v. Strong, 1 Hill Oh. 124 by trustees, they will take such in- Pettingill v. rettinglll, 60 Me. 411 terest in the property as is requi- Nutter v. Vickery, 64 Me. 490 site, although the will fails to name Knight v. Loomls, 80 Me. 204 them as trustees, or bequeath the Williams v. Nixon, 2 Beav. 472. property to them in trust. Scott The offices of executor and testa- V. West, 63 Wis. 529. Where the mentary trustee are distinct. See will contains express directions Gulick v. Bruere, 42 X. J. Eq. 639 ; what the executors are to do, an S. C, 9 Atl. Rep. 719; Warfleld v. executor who proves the will must Brand, 13 Bush, 77 ; Worley v. do all which he is directed to do Worley, 18 Beav. 58 ; Gartwright as executor, and he cannot say that, v. Shepherd, 17 Beav. 301; Gra- though executor, he is not clothed ham v. Graham, 16 Beav. 550; In with any of those trusts. William's re Wilson's Estate, 2 Pa. St. 325. Executors, 1796. See also Hall v. The appointee may accept the of- Cushing, 9 Pick. 395; Prior v. fice of executor and decline that of 854 APPOINTMENT, ETC., OF TRUSTEES. [§ 365. constituted a trustee by his appointment as executor. In Massachusetts it has been held that, in the case of a general legacy to one for life, with remainder over, if no provision is made in the will for the appointment of a special trustee to manage the fund and pay over the income to the legatee for life, it is incumbent on the executor, as such, to per- form those duties, and his bond as executor will cover his proceedings in relation to such legacy. ^ In a case where a testator gives all his property to his wife, in trust to be trustee, in which case the probate court may appoint another to the residuary trust. In some' States separate bonds are required for the respective offices ; and if the per- son appointed gives bonds as ex- ecutor, but not as trustee, he will be deemed to have declined the latter office. Williams v. Gushing, 34 Me. 370. Persons who are both executors and trustees cannot con- tinue the office of executor after their duties as such have ceased and they should have acted as trustees, but if executors author- ized to purchase and sell as trustees take and execute conveyances as executors, the title to the real es- tate will not be affected, as the law will attribute the act to the proper authority. State v. Ches- ton, 51 Md. 352. Where a person is appointed executor and trustee, and he fulfills the duties of execu- tor, and files a sworn account, which is allowed by the probate court, in which he, as trustee, credits himself with the amount of the trust fund, and he is appointed trustee, and gives bond as such, and at the time has in his hands the amount of the trust fund, and he afterwards misappropriates and wastes the fund, his default is as trustee and not as executor, and the loss must fall on the trust estate and not the general estate. Crocker V. Dillon, 133 Mass. 91. Where there is doubt as to which estate is chargeable with the delinquency it is the tendency of later decis- ions to permit beneficiary to sue both sets of sureties and allow them to adjust the equities between themselves. See Perry v. Car- michael, 95 111. 519; Harris v. Harrison, 78 N. C. 202. 1 Dorr V. Wainwright, 13 Pick. 328. "We also consider it to be now settled by a series of decisions in this commonwealth, that when a testator by his will, either in ex- press terms or by legal implica- tion, has given the income of a sum of money to one for life, and then the principal to another, and has not in terms placed it in trust with any trustee other than the executor, it is the province and duty of the executor as such to hold and invest the fund in some secure and productive stock, or at interest at good security, and to pay over the Income from time to time, within reasonable times, to the legatee for life, and at the decease of the legatee for life to pay out the principal to the person then by the will entitled to it." Ibid. See Saunderson v. Stearns, 6 Mass. 37; Bllis V. Essex Merrimack Bridge, 2 Pick. 243; Claggett v. Hardy, 3 N. H. 148. § 365. J APPOINTMENT, ETC., OF TRUSTEES. 855 disposed of at her discretion for her own support and for the support and education of the children of the testator, in such time and manner as she shall deem most for her in- terest and theirs, the wife, upon accepting such bequest, becomes a trustee subject to the control of the court, as in ordinary cases. She is, therefore, required to give bonds according to the provisions of the statute, and on neglecting to do so shall be taken and held to have declined the trust. It seems that her marriage, after the death of the testator, does not disqualify her from executing the trust. ^ In Pennsylvania it has been held that where a man directs by his will that his executors shall sell his lands, or perform any other trust created by his will, or where he creates a trust without saying who shall execute it, and appoints an executor, the execution is intrusted to him by operation of law, and the Orphans' Court alone have jurisdiction. Where a testator appoints a person by name to execute a trust created by his will, and then makes the same person executor also, the trust is not annexed to his office as ex- ecutor, and the jurisdiction belongs to the Common Pleas. ^ The operation of this rule, where the estate consists of per- sonalty, is stated by Mr. Chief Justice Bigelow, in Carson V. Carson, as follows: "The principle is well established that where a testator by his will, either in express terms or by legal implication, has given the income of his personal estate to one for life, and on his or her decease to another, or left it on the termination of the life interest undisposed of, so that it will then go to his heirs-at-law, and has not 1 Sawyer's Appeal, 16 N. H. 459. the probate of the will by the ex- See Carson v. Carson, 6 Allen, 397 ; ecutor will not make him a trustee, Howard v. Am. Peace Soc, 49 Me. unless he accepts the trust and 288, 306 ; Eichardson Y. Knight, 69 qualifies himself according to law. Me. 385; Pettingill v. Pettingill, See De Peyster v. Clendening, 8 60 Me. 412. Paige, 295; Worth v. McEden, 1 2 Jones' Appeal, 3 Grant (Pa.), Dev. & Bat. 209; Judson v. Gib- 189. See Zane's Estate, 4 Whart. bons, 5 Wend. 226; Wheatley v. 179 ;'Barnitz's Appeal, 9 Watts, 300; Badger, 7 Pa. St. 459; Knight v. Baird's Case, 1 W.&S. 288; Moody Loomis, 30 Me. 204; Hanson v. V. Fulmer, 3 Grant (Pa.), 17. But Worthington, 12 Md. 418; Williams where the will gives the trustees a v. Cushing, 34 Me. 370; Deering v. distinct and independent character, Adams, 37 Me. 265. 856 APPOINTMENP, ETC., OF TRUSTEES. [§ 366. in terms placed it in trust with any trustee other than the executor to hold it, and to pay over the income, from time to time, to the legatee for life, and at the death of such legatee to pay over the principal to the person who may, by the will, be then entitled to it, or, in default of any ul- terior disposition of it by the will, to distribute it among the heirs-at-law."^ The jiresumption in regard to a legacy is that the executor holds it as an executor, unless it is in- dicated in the will that he is to hold it as trustee.^ An ex- ecutor, who is also trustee under the will, cannot be con- sidered as holding any part of the assets in the latter capacity until he has settled an account at the probate office as executor, in which he is credited as executor with the amount which he holds as trustee.^ The beneficiary, or his representative, can sue on the bond of a trustee, or an ex- ecutor, only by permission of the court.* § 366. Tlie Subject Continued. — Since there is a well established and clearly defined distinction between the lia- bility of an executor and that of a trustee, it is of im- portance to be able to determine, in a given case, whether the executor is acting as an executor or in the ca- pacity of a trustee. In England it has been held that 1 Carson v. Carson, 6 Allen, 399; the change of property from exec- Doll V. Johnson, 3 Allen, 364, 367. utor to trustee where they are the 2 State V. Nichols, 10 Gill & J. same person may be shown by s^u me 27. authoritative and notorious act. 3 Hall V. Gushing, 9 Pick. 395. See Conkey v. Dickinson, 13 Met. Executor is chargeable :is such for 53; Hubbard v. Lloyd, 6 Cush. 522; pxoperty in his hands until he has De Peyster v. Clendening, 8 Paige, given bond as trustee, and charged 310; Newcomb v. Williams, 9 Met. himself with the property as 534; Tyler v. Deblois, 4 Mason, trustee. See Prior v. Talbot, 10 131; State v. Brown, 68 N. C. 554; Cush. 1 ; Deering v. Adams, 37 Perkins v. Moore, 16 Ala. 9 ; Hitch- Me. 264; ;Treadwell v. Cordis, 5 cook v. Bank of D. S., 7 Ala. 386; Gray, 341; Conkey v. Dickinson, Pyron v. Mood, 2 McMuU. 2SS; 13 Met. 53; Johnson v. Fuquay, 1 Puffin v. Harrison, 81 N. Car. 208; Dana, 514; Swope v. Chambers, 2 Jacobs v. Ryland, L. B. 15E(i. 341. Gratt. 319; Perkins v. Moore, 16 ^ Floyd v. Gilham, 6 Jones Eq. Ala. 9; Elliott v. Sparrell, 114 183. But see Crocker v. Dillon, Mass. 404; Muse v. Sawyer, T. E. 133 Mass. 91; Perry v. Carmichael, 204. In some cases it is held that 95 111.519. §366. J APPOINTMENT, ETC., OF TRUSTEES. 857 where executors assent to a specific bequest given to them in trust, they become trustees, and henceforth hold the fund as trustees, and not as executors.^ In Massachu- setts it has been held that: "We consider the law to be well settled that, if a legacy is given by will, and the same person is executor and trustee or guardian of the legatee, he is bound to account for the legacy as executor, if he has iDix V. Burford, 19 Beav. 409; Wilmot V. Jenkins, 1 Beav. 401; Ex parte Wilkinson , 3 Mont. & Ayr. 145; Brougiiamv. Poulett, 19 Beav. 119; Ex parte 'Do\ev, 5 Sim. 500; Byrchall v. Bradford, 6 Madd. 13; Phillips V. Mannings, 2 Myl. & Cr. 309. Where the executor proves the will he must do all that he is directed to do as executor, and he cannot say that though executor he is not clothed with the trusts in connection as the circumstance of taking prohate of the will is an ac- ceptance. See Mucklow v. Fuller, Jacob, 198; Booth v. Booth, 1 Beav. 125; Stiles v. Guy, 4 Y. & C. 571, 575; Williams v. Nixon, 2 Beav. 472; Schenck v. Schenck, 16 IST. J. Eq. 174. A trust is often created by implication in the executor from a direction to pay income to a leg- atee for life with remainder over. Eichardson v. Knight, 69 Me. 285; Nutter V. McVickery, 64 Me. 490; Hollbrook v. Harrington, 16 Gray, 102. Where executor was also guardian for the residuary legatee, his overpayment as guardian for maintenance of infant may be re- imbursed out of the funds held as executor, reducing that liability pro tanto. Mattoon v. Cowing, 13 Gray, 387. When the same persons are appointed trustees and execu- tors of a will, a revocation by the testator of their appointment as executors is not necessarily a revocation of appointment as trustees. See Graham v. Graham, 16 Beav. 550; Cartwright v. Shep- heard, 17 Beav. 301; Worley v. Worley, 18 Beav. 58. It is the duty of an executor acting also as trus- tee to keep separate accounts, and until he has accounted in the sep- arate capacities no decree can be had against him for a default in either capacity. Findlay v. Trigg, 83 Va. 539. See also Hedrick v. Tuckvviller, 20 W. Va. 489 ; Water- man v. Allen, 144 III. 90; Kee v. Kee, 2 Gratt. 116. Where the offices are distinct the jurisdiction of the probate court will not extend to the administration and account as trustee. Wheatley v. Badger, 7 Pa. St. 459. "It is extremely plain that such acceptance must be vol- untary. The right of renouncing a trust which has no necessary con- nection with the office of executor is no less clear than the right of renouncing the office itself; and in either Instance, the right rests upon the very simple and elemen- tary proposition that no man can be compelled against his own will to execute the testamentary wishes of another." Beekman v. Bonsor, 23N. Y. 298; s. c, SO Am. Dec. 269. See also Burritt v. Sillman, 13X. Y. 93; s. c, 64 Am. Dec. 532; Dunning v. Ocean Nafl Bank, 6 Lans. 298; Peterson v. Chemicaj Nafl Bank, 27 How. Pr. 502; s. C, 2 Kobt. 608 ; Estate of Besley, 18 Wis. 455. 858 APPOINT3IENT, ETC., OF TRUSTEES. [§ 366. sufficient assets, unless he has rendered an account in tlie probate office, charging himself as trustee or guardian, and that account has been allowed by the probate court. "^ In New York it has been held that in cases where the execution of a trust, or of a power in trust, is confided by the testator to his executors as such, they cannot execute the trust without also taking out letters testamentary and assuming the office of executors. In such cases the administrator with the will annexed is probably entitled to execute all the trusts of the will in the same manner as if he had been named therein by the testator as executor and trustee.^ Where the executor is entitled to act in a double capacity he will be required to account in his capacity of executor, and the sureties on his bond as executor will be liable for the faithful discharge of his duties as trustee, unless for greater convenience, and with the assent of the judge of probate, he chooses to open a new account as trustee, in which event he must give a new bond as trustee, and trans- fer to his account as trustee the property to be held and administered by him in that character, before his liability as executor will terminate.^ If an executor be also ap- ' Conkey v. Dickinson, 13 Met. See Silvers v. Canary, 114 Ind. 129; 51, 53. An executor who is also Lucas v. Donaldson, 117 Ind. 140; trustee under the will, cannot be Nichols v. Campbell, 10 Gratt. .o61. considered as holding any part of If a discretionary power of sale the assets in the latter capacity, is given to an executor he will be until he has settled an account at considered a trustee, and the power the probate office as executor, in cannot be executed by a mere ad- whioh he is credited as executor ministrator with the will annexed, with the amount which he holds as See Greenland v. Waddell, 116 N. trustee. Hall v. Gushing, 9 Pick. Y. 234; s. c, 15 Am. St. Kep. 400; 395. Joralemon v. Van Eeper, 44 N. J. 2 De Peyster v. Clendening, 8 Eq. 299 ; Hood v. Haden, 82 Va. Paige, 295,310. See also Judson 588; Mott v. Ackerman, 92 N. Y. V. Gibbons, 5 Wend. 226; Worthy. 553; Warnecke v. Lembca, 71 111. McAden, 1 Dev. & Bat. 209; Dear- 91; s. C, 22 Am. Kep. 85. But see Ing V. Adams, 37 Me. 265; Hanson Davis v. Hoover, 112 Ind. 423. V. Worthington, 12 Md. 418; Will- When the same parties are execu- iamsv. Gushing, 34 Me. 370; Wheat- tors and trustees under a will, the ley V. Badger, 7 Pa. St. 459. But fact that they take out letters examine Anderson v. Earle, 9 S. of administration, as executors, Car. 460. amounts to an acceptance of the 2 Miller v. Oongdon, 14 Gray, 114. trusts created and imposed by the § 367, j APPOINTMENT, ETC., OF TRUSTEES. 869 pointed trustee in the will, but gives bond only as executor, he is chargeable in that capacity for the property in his hands, until he has given bond as trustee and charged him- self with the property as trustee. In a recent case before the Supreme Court of Errors of the State of Connecticut, where the will authorized the executors to place certain bonds, stocks and sums of money, the life use or income of which was given to several legatees, in trust with some good chartered security company, for safe-keeping, for the col- lection of principal, dividends and interest, and reinvest- ment, it was held that the executors were trustees of these bequests, and could properly and safely commit the trust funds to the care and management of a security com- pany such as the will described ; and, if exercising due care in the selection of such company, and in continuing it as agent, would not be responsible for its defaults in respect to such funds. 1 § 367. The Executor of an Executor as Trustee. — In England it is well established that the executor of an executor, in accepting the appointment, becomes the execu- tor and trustee of the original testator. Where such an ex- ecutor comes into possession of all the assets of his testator, in whatever capacity the testator may have held them, in accepting the obligation to administer the estate of his im- mediate testator, he binds himself to administer all the trusts with which the jiroperty in the hands of his testator was charged.^ An executor is obligated to administer an will. Sangston v. Hack, 52 Md. ^ Pinney v. Newton, 66 Conn. 173; Hanson v. Worthington, 12 Ul; s. C, 33 Atl. Kep. 591. Md. 418. But see Anderson v. ^ In the Goods of Perry, 2 Curt. Earle, 9 S. Car.' 460; Green v. (Ecoles.) 655; Goods of Beer, 15 Green, 4 Kedf . 357 ; Doggett v. Jiir. 160 ; Wangford v. Wangf ord, White, 128 Mass. 398. Declining Freem. (K. B.) 520; Haytan v. to act as executor is not neoessa- Wolfe, Cro. Jac. 614; s. c, Palm, rily a renunciation of the trust, 156; Hult. 30; Maudlin v. Armi- where same party is appointed both stead, 14 Ala. 702 ; Nichols v. Camp - executor and trustee. Garner v. bell, 10 Gratt. 561 ; Worth v. Mc- Dowling, 11 Heisk. 48. Compare Aden, 1 Dev. & Bat. 199; Mitchell Mutual L. Ins. Co. v. Woods, 51 v. Adams, 1 Ired. (Law) 298; King Hun, 640; s. C, 4 N. Y. Supl. 133. v. Lawrence, 14 Wis. 238; Scbenck 860 APPOINTMENT, ETC., OF TRUSTEES. [§ 367. account for all the assets that come into his hands. If the testator was in possession of an estate of a previous tes- tator, which remains unadministered, or if his testator held property as a trustee, a probate court will appoint an ad- V. Schenck, 16 X. J. Eq. 174. But see Knight v. Loomis, 30 Me. 204. "In all cases, except of special trust and authority, "without the office of executorship, the executor of an executor, how far soever ia degree, remote, stands, as to the points both of being, having and doing, in the same state and plight as the first and immediate execu- tor." Williams on Executors (9th Eng. ed.), 829. "In all these cases the executor derives his povrer from the appointment in the will and depends upon that appoint- ment for his clami to the office, even though as in some of the cases he is not appointed by name, but by the choice of persons named by the testator. There is, however, one case which existed at common law, and is the law in those States which have not abrogated the rule of the common law by statute, in which the right to an executorship is devolved upon one without the choice or nomination of the testa- tor, that is, where a sole executor dies testate. Then the executor of his will becomes ex officio the execu- tor of the first will as well." Cros- well. Executors and Administra- tors, § 111. Where a party holding the legal title as trustee to real es- tate dies, his executors become clothed with his duties and re- sponsibilities as such trustee, and they are proper parties to any litigation affecting the rights of their cestui que trust in the subject- matter of the trust. Anderson v. Northrop, 30 Fla. 612; s. c, 12 So. Eep. 318. Trusts as to personalty upon the death of the trustee vest in his executor or administrator, upon whom devolve the estate and office of the deceased trustee, and such executor or administrator will be charged with all the duties of such trustee. Margaran v. Christie Orange Co. (189G) (Fla.), 19 So. Kep. 637. If an executor dies pend- ing proceedings on his final ac- count, it is his administrator's duty to obtain the decree of approval and allowance of his final account as executor. Jarnagin v. Frank, 59 Miss. 393. See Foster v. Wither, 1 Paige, 537; Trescott v. Trescott, 1 McCord Ch. 417; Smith v. Moore, 4 N". J. Eq. 485; s. C, 5 jST. J. Eq. 649; Steenv. Steen, 25 Miss. 513; Henderson v. Winchester, 31 Miss. 290; Davis v. Yerby, 1 Sm. & M. 508; Ray v. Doughty, 4 Blackf. 115. The executor of an adminis- trator cannot be charged as the representative of the original in- testate. Arline v. Miller, 22 Ga. 330; Scott V. Fox, 14 Md. 388. The executor of a sole executor may retain out of any funds of the first testator coming into his hands, the amount of a claim of the second estate against the first. Lay v. Lay, 10 S. Car. 208. The executor of an executor cannot fill the office where the will expressly provides a differ- ent mode for filling vacancies. Navigation Co. v. Green, 3 Dev. L. 434. See Edward's Estate, 12 Phila. 85. If the person appointed executor dies before the testator, there must be administration cum testamento annexo. Brown v. Payns, Sty. 147; Pullen v. Sergeant, 2 Ch. § 367.] APPOINTMENT, ETC., OF TRUSTEES. 861 miiiistrator with the will of the preceding testator annexed, or a new trustee. In such a case it will be the duty of the executor of the second testator to settle an account with such administrator or trustee, and pay over the assets that have come into his hands. Until he has made such a dis- posal of them he will hold the assets subject to the same trusts and conditions as his testator, and he will be under the same obligation as his testator to administer them.^ The rule in England is stated by Sir Herbert Jenner as fol- lows: "It has been for many years the practice in this court that an executor, taking probate of the will of an ex- ecutor, becomes executor of the will of the first testator, and is not permitted to renounce probate of the first will, and take probate of the second. I am not aware of any in- stance of departure from this rule, and unless there be some clear principle or authority, the general rule of practice must be observed."^ A, named executor in a will, acts on behalf of particular legatees, disclaiming an intention of interfering generally. He afterwards renounces formally in favor of B, who was named a trustee in the same will, who thereupon obtains administration cum iestamenta an- nexo. B possesses himself of the assets, and afterwards dies insolvent. A is liable as executor, notwithstanding his reaunciation, and is answerable for the acts of B, it appear- ing that he had control over the assets, and B being con- sidered as having obtained possession thereof by his means. ^ Where an instrument appoints an executor to two distinct Eep. 300. See also Day v. Chat- house v. Post, 31 Conn. 259 ; Reeves field, IVern. 200; In re Drayton, v. Tappan, 21 S. Car. 1; Perry v. 4 McCord Ch. 46; "Wankford v. De Wolf , 2 R. I. 103; Bloxham v. WanMord, 1 Salk. 308. See gen- Hooker, 19 Fla. 163; Powell v. erally. Brooks v. Haynes, L. R. 6 Knox, 14 Ala. 702. • Eq. 25 ; In the Goods of Delacour, ^ Brooke v. Haynes, L. R. 6 Eq. 9 Ir. Eq. 86; In the Goods of 25. Griffin, 2 Ir. Eq. 320; Burch v. nn the Goods of Perry, 2 Curt. Burch, 19 Ga. 174; Dean v. Dean, (Eecles.) 655. 7T. B. Mon. 304; CarioU v. Con- s Doyle v. Blake, ? Sch. & Lef. nett, 2J.J. Marsh,195,209; O'Dris- 229. See Mucklow v. Fuller, Jac. coll V. Fishburne, 1 STott & McC. 198; Ward v. Butler, 2 Moll. 533; 77; Worth & McAden, 1 Dev. & Lowry v. Fulton, 9 Sim. 115. Bat. Eq. 199, 209; White School- 862 APPOINTMENT, ETC., OF TRUSTEES. [§ 367. trusts, he cannot accept one and reject the other. ^ Thus, if the estate consists of real and personal property, and he administers the personalty, he will be held to have accepted the entire trust. ^ The English doctrine has been generally accepted by the courts of this country, but in most of the States it has been materially modified by statutory enact- ments. In Wisconsin, where a complaint alleged that cer- tain funds were held by A, at the time of his death, in trust for the plaintiff, who had created the trust for her own ben- efit, and that the defendants, who were A's executors, had refused to account to the plaintiff for such funds, and had converted them, it was held that the complaint showed a good cause of action.^ In New Jersey it has been held that the probate of the will is conclusive evidence of the execu- tor's acceptance of the trust. It is not discretionary with the executor whether he will or will not act as trustee. By accepting the office of executor he becomes ex officio trustee in the stfead of his testator, charged with all the duties and responsibilities of the ofiice, and he will be decreed in equity to perform the trust. ■* In a leading case before the New York Court of Chancery it was held that an executor named in a will, and who never qualified as such, but who took possession of some part of the personal property of the testator and paid some of his debts, was held by those acts to have elected to act as an executor, and was charge- able as executor.^ 1 Urc-h V. "Walker, 3 Myl. & Cr. and statutes. See Prescott v> 702. See note 5 for decisions and Morse, 64 Me. 422. Fosdick v. statutes modifying English doc- Delafield, 2 Eedf. 392; G-illiland trine. v. Breden, 63 Pa. St. 393. See 2 Ward V. Butler, 2 Moll. 533. statutes of the following States: ' King V. Lawrence, 14 Wis. 258. Alabama. Code, 1SS6, p. 468. § 2012. ^ Schenck v. Schenok, 16 IST. J. Cah'/oraia. 3 Deering's Code, §1358. Eq. 174. See Wetzler v. Fitch, 52 Cal. 638; 5 Van Home v. Fonda, 5 Johns. Bush v. Lindsey, 44Cal. 121. Colo- Ch. 403. The English common rado. Mills' Ann. Stat. 1891. §4686. law doctrine which makes the ex- Connecticut. Gen. Stat. ISSS, § eoutor of an executor an executor 553. Delaware. Kevised Laws, of the first testator is in many of 1874, p. 541. Idaho. Kevised States of the United States ex- Stat. 1S74, § 5344. Kansas. Gen. pressly repudiated by decisions Stat. 1889, § 2794. Kentucky. Stat- § 368. J APPOINTMENT, ETC., OF TRUSTEES. 863 § 368. Appointment Under a Power. — The power to appoint a successor is not inherent to the office of a trustee. But the trustees of an express trust may be invested with this power by the settlor or creator of the trust. Where a trust utes 1894, § 3890 ; Gen. Stat. 1888, p. 592, § 11. Maryland. Rev. Code, 1878, § 108. Michigan. Howell's Annotated Stat. 1882, § 5845. See Perrin v. Probate Judge, 49 Mich. 342. Maine. R. S. 1883, § 23. Missouri. Rev. Stat. 1889, ch. 1, art. 1, § 6. Nebraska. Compiled Stfit. 1895, 2688, § 174. New Hamp- shire. Pub. Stat. 1891, ch. 188, § 8. New York. 2 Stat, at Large, 73, § 17. North Carolina. Code, 18S3, § 2166. North Dakota. Stat. 1895, § 6310. Ohio. Rev. Stat. 1896, § 6003. Nevada. Gen. Stat. 1885, § 2712. South Carolina. Gen. Stat. 1882, § 1904. Pennsylvania. Bright- ley, Purd. Dig. & Supl. § 15; Piird. Dig. (1853) 189. Massachusetts. Pub. Stat. 1882, ch. 129, § 10; Gen. Stat. ch. 93, § 9. New Jersey. Rev. 396, § 2. Oklahoma. Statutes, 1893 (6255), § 18. Bhode Island. Pub. Stat. 1882, § 23. Illinois. Starr & Curt. Ann. Stat. (1896), p. 284, § 37. Arkansas. Dig. 1884, § 40. Mississippi. Ann. Code, 1892, § 1856. Indiana. R. S. 1881, § 2240. South Dakota. C. L. Dak. 1887, § 3395. Vermont. Stat. 1895, § 2379. Virginia. Code, 1887, § 2643. West Virginia. Code, 1891, ch. 85, § 8. Wisconsi7i. Sand. & Ber. Stat. § 3804. Wyoming. Rev. Stat. 1877, § 2022. In Oregon and "Washington the second executor has no authority to commence or maintain an action or proceeding relating to the estate of the testator of the first executor. Hill's Ann. Laws, Oi-e. p. 403, § 372; Hill's Stat, and Code, Wash., vol., 2, § 709. In Iowa, the executor has no au- thority to act in the matter vrhen his principal was merely an exec- utor or trustee. R. C. 1888, § 2433. After the death of an executor, his administrator, and hot the admin- istrator with the will annexed, is entitled to the custody and pay- ment of the securities for moneys belonging to the first estate which the executor had loaned, not in his representative, but in his individ- ual capacity. Caulkins v. Bolton, 98 N. Y. 511. The executor or ad- ministrator of a deceased executor stands in the place of the decedent for the purpose of the accounting, and the surrogate's power is pre- cisely the same as if the letters of the deceased executor had been revoked in his lifetime and he had been called upon to deliver up the assets. In re Clark, 119 N. Y. 427 ; Herbert v. Stevenson, 3 Dem. 236. A will directing the executor to pay the interest of a certain sum to a brother for life and on his death distribute the principal among certain persons, and to jiay the interest of an equal sum to a sister, creates an express trust, and on the death of the executor, with- out fully executing the trust, the surrogate may, under Code, Civ. Proc. § 2218, appoint a successor trustee. In re Schneider's Estate, 71 Hun, 62; s. C, 24 IST. Y. Supl. 540. Where a testator devised cer- tain real estate in trust for his son until he should be 28 years of age, and directed the trustee to act as guardian until that time, such ap- pointment was personal to the one named, and on his death before the 864 APPOINTMENT, ETC., OF TRUSTEES. [§ 368. is created by a deed or will, the trustees may be empowered to appoint their successors, but the power must be conferred by the instrument by which the trust is created.^ A trustee can delegate his power only as he is authorized to do it by the instrument creating the trust. The person who creates a trust has the right to determine the form of it, subject to the requirements of the law, and to fix the conditions under son's majority the statutory guard- ian appointed by the court cannot act as such trustee after the son comes of age, but the court may then appoint a trustee to act until the expiration of the trust. Kean V. Kean (.1892) (Ky.), 19 S. W. Rep. 184. In case of the death of a trustee, a court of equity may appoint another trustee in his place, with all the powers and duties of the first, in an ex parte proceeding instituted by the cestui que trust. Sullivan v. Latimer (1892), 35 S. Car. 422; s. C, 14 S. E. Kep. 933. Where a will creates a continuous and active trust for a widow's life, and the partition of the corpus at her death among those in remainder, the powers of the trustee do not devolve on ad- ministrators with the will annexed, and the appointment of a trustee is necessary. In re Finch's Estate, 26 Pitts. Leg. J. (X. S.) 142. 1 Selden v. Vermilyea, 3 Comst. 525; Wilson v. Towle, 36 N. H. 129; Winthrop v. Attorney-Gen- eral, 128 Mass. 258; Wilkinson v. Parry, 4 Euss. 272; Chalmers v. Barry, 1 J. & W. 68; Adams v. Paynter, 1 Coll. 532; Bayley v. Mansell, 4 Madd. 226; Suarez v. Pumpelly, 2 Sandf. Ch. 336; In re Roche, 1 Conn. & Law. 306; Lons- dale V. Becket, 4 De G. & S. 73; Camoys v. Best, 19 Beav. 414 ; In re Coates, L. E. 34 Ch. D. 370; In reNorris, L. R. 27 Ch. D. 333; In re Glenny, L. R. 25 Ch. D. 611; Walsh V. Gladstone, 14 Sim. 5; Crook V. Ingoldsby, 2 Ir. Eq. 375; Tweedy v. Urquhart, 30 Ga. 446 ; Leggett V. Grimmett, 36 Ark. 498; Morrison v. Kelly, 22 111. 610; s. C, 74 Am. Dec. 169; Bowditch v. Banuelos, 1 Gray, 220 ; Whelan v. Reilley, 3 W. Va. 597. Although a deed of trust or will gives an individual the power to appoint new trustees, yet a court of chan- cery may control his exercise of the power, at least to the extent of preventing an abuse of discretion, and may require an appointee named, who is of doubtful financial responsibility, to give security. Bailey v. Bailey, 2 Del. Ch. 95. Where a husband devised certain realty in trust to his wife for life, with power to dispose of it by her last will, and by another item gave all the residue of his estate (which would include the remainder in the realty devised to the wife, in case she did not dispose of it by will) to a, named trustee, to be invested by him for the purpose of keeping up a free school for the poor children of a certain city, with power to appoint his own successor, and the trustee died without exercising this power, the judge of the Superior Court could, during the lifetime of testator's widow, appoint a trustee to cari-y out the provisions of the will in the item last mentioned. White v. McKeon, 92 Ga. 343; s. c, 17 S. E. Rep. 283. § 369. J APPOINTMENT, ETC., OF TRUSTEES. 865 which the trustees may be relieved of their office and others may be put in their places. ^ A testator may confer upon a trustee the power to appoint his successor by will.^ Where there is a statutory enactment that renders the provisions of a will or deed void, or where there is a failure on the part of trustees to fill a vacancy, the court will provide a remedy. But aside from these contingencies, vacancies will be filled only in the manner prescribed by the settlor in the instrument creating the trust. Where trus- tees are appointed by the court they will not be empowered to appoint their successors, but as often as the occasion arises there must be a resort to the court for relief.^ There is an exception to this rule in the case of charitable trusts. Where this has not been fully provided for in the instru- ment creating the trust, equity will authorize a plan by which trustees may be appointed without continued or re- peated application to the court. ^ § 369. The Subject Continued. — Where it becomes necessary to exercise the power of appointment under a will or deed, the appointment must be made in strict con- formity to the provisions of the power. Any failure to 1 Whelan v. Keilley, 3 W. Va. strued. Turner v. Maule, 15 Jur. 597. 761 ; Withington v. Withington, 16 2 Ablaott, Petitioner, 55 Me. 580. Sim. 104; Sharp v. Sharp, 2 B. & 3 Wilson V. Towle, 36 X. H. 129; Aid. 404; Guionv. Pickett, 42 Jliss. Golden v. Bressler, 105 111. 419; 77; Mastin v. Barnard, 33 Ga. 520; Oglander v. Oglander, 2 De G. & Chestnut v. Gann, 76 Tex. 150; Sm. 381; Holder v. Durbin, 11 Kennedy v. Edwards, 134 U. S. Beav. 594; Bowles v. "Weeks, 14 117. The fact that a trust deed Sim. 591 ; Bayley v. Mansell, 4 conferred on the beneficiaries, who Madd. 226; Southwell v. Ward, were minors, power to appoint a Taml. 314. While courts generally substitute trustee, in case of va- recognize the right of the settlor cancy, will not affect its validity, to make provision for the selection as a court of equity will not per- of a successor to the trustee se- mit a trust to fail for want of a lected, a regard for the rights of trustee. Taylor v. Watkins (1893) creditors must be observed. See (Miss.), 13 So. Rep. 811. Bobbins v. Emery, 1 Sm. & M. 297 ; * Attorney-General v. Winchel- Planck V. Schermerhorn, 3 Barb, sea, 3 Bro. Ch. 373; Attorney- Ch. 644. Powers given to trustees, General v. Shore, 1 Myl. & Or. 394; in the trust instrument, to appoint s. C, 12 Sim. 420. their successors, are stri&tly con- 866 APPOINTMENT, ETC., OF TRUSTEES. [§ 369. comply with the terms and conditions of the instrument by which the power is conferred will render the retirino- trustee liable for any breaches of trust by which it may be followed, and the new trustee will be incapable of exercising any legal control of the property. Any assumption of the right to control the trust estate will render him a trustee de son tor-t, and any purchaser of the trust property will be liable to find his title void, or at least voidable. ^ For the same 1 Adams t. Payntcr. 1 Coll. 532; Walker v. Brumgard, 13 Sm. & M. 723. See also Pierce v. Weaver, (55 Tex. 44 ; In re Abbott's Petition, 55 Me. 580; Oglander v. Oglander, 2 De G. & Sm. 381 ; Bayley v. Jtau- sell, 4 Madd. 22U ; Wilson v. Towle, 36 N. H. 129; Bowles v. Weeks, 14 Sim. 291 ; Whelan v. Eeilley, 3 W. Va. 597; Winthrop v. Attorney- General, 128 Mass. 258. Where a trust deed of personal property authorized the substitution of an- other trustee by the beneficiaries, in place of the one mentioned, upon the latter declining to act, but did not prescribe a mode of appointment, it was held that the appointment might be by parol, and the new trustee would succeed to all rights and powers of the original trustee. Leggett v. Grim- mett, 30 Ark. 496. The following form has received the approval of Mr. Lewin, Mr. Hill and Mr. Perry, and is inserted for the guidance of the reader as a proper power for the appointment of new trustees : "Provided, always, and it is hereby further declared, that if the trustees hereby appointed, or any of them, or any future trustees or trustee hereof, shall die (either before or after their or his acceptance of the trusts thereof) , go to reside abroad, desire to be discharged from re- nounce, decline, or become incapa- ble or unlit to act in the trust of these presents, while the same trusts, or any of them, shall be subsisting, then, and in every or any such cases, and as often as the same shall hap- pen, it shall be lawful for the said (the cestuis que trust, if any, for life), or the survivors of them, by any writing or writings, under their, his or her hands or hand, attested by two or more witnesses, and after the decease of such sur- vivor, then for the surviving or continuing trustees or trustee hereof, or the executors or admin- istrators of the then last acting trustee (whether such surviving trustees or trustee, or executors or administrators, respectively, shall be willing to act in other respects or not) , by any writing or writings, under their or his hands or hand, attestedbytwo or more witnesses, to nommate and substitute any person or persons to be trustee or trustees hereof, in the place of the trustee or trustees so dying, going to re- side abroad, desiring to be dis- charged, renouncing, declining, or becoming incapable or unfit to act as aforesaid. And that, so often as any new trustee or trustees hereof shall be appointed as afore- said, all the hereditaments, etc., which shall, for the time being, be holden upon the trusts hereof, may be thereupon conveyed, assigned and transferred, respectively, in such manner that the same may § 369. J APPOINTMENT, ETC., OF TRUSTEES. 867 reason the retiring trustee should see to it that his succes- sor is legally appointed and duly qualified before he is put in possession of the trust estate. Any irregularity in the matter will render the retiring trustee responsible for the fmids transferred to his successor. ^ The coui-t will not prevent the exercise of a discretion given for the appoint- ment of trustees, but will see to it that it has been so ex- ercised as to answer the purposes contemplated by the con- ferring of the power. ^ Where one or more of the trustees a^ipointed hy the settlor retire and others are appointed in their places, the appointment will be valid only as the cir- cumstances are such as were contemplated in the conferring of the power. The instrument should clearly and definitely express the conditions on which new trustees may be ap- pointed, and should embrace all the events and circum- stances that can render such an ajjpointnient necessary.^ Though there were some earlier decisions to the contrarv, it is now well settled that the surviving trustee, or trustees, may fill vacancies created by the death of trustees appointed by the testator, whether they die during his lifetime or after his death.* Where the power is conferred by the in- become legally and effectually appointed a trustee in the place of vested in the acting trustees hereof the trustee, to whom he shall, for the time being, to and for the whether immediately or otherwise, same uses, and upon the same succeed." trusts,, and with and subject to the ^ Pearce v. Pearoe, 22 Beav. same powers and provisions as are 248. herein declared, and contained of - Bailey v. Bailey, 2 Del. Ch. and concerning the same heredita- 95; Sharp v. Sharp," 5 B. & Aid. ments and premises, respectively, or 404; G-uion v. Pickett, 42 Miss, such of the same uses, trusts, powers 77. and provisions as shall then be sub- ^ Sharp v. ShariJ, 2B.& Ald.404; sisting, or incapable of taking Guion v. Pickett, 42 Miss. 77; effect. And that every new trastee, Eaton v. Smith, 2 Beav. 236 ; Haw- to be from time to time appointed kins v. Kemp, 3 East, 410; CookV. as aforesaid, shall thenceforth be Crawford, 13 Sim. 91; Travisv. Ill- competent in all things to act in ingworth, 2 Dr. & Sm. 344. the execution of the trusts hereof, ^ Lonsdale v. Becket, 4 De G. & as fully and effectually, and with Sm. 73; J« re Hadley's Trust, 5 De all the same powers and authori- G. & Sm. 07; S. C.,9 Eng. L.&Eq. ties to all purposes whatsoever, as G7. Where i trust deed contains a if he had hereby been originally power in the cestui que trust to sub- 868 APPOINTMENT, ETC., Or TEUSTEES. [§ 370. strument the remaining trustee, or trustees, may appoint, upon tlie disclaimer of one or more of the original number, and the paying of the trust fund into court, in compliance with an order or permission to that effect, will be treated as a declining on the part of the trustee by whom the exer- cise of the power is authorized.^ § 370. The Same Subject. — It has been held that where the creation of a trust provides that in case of one or more of the trustees, for any cause, becoming unfit for the discharge of the duties of his office, the power may be exercised where a trustee becomes bankrupt ; but where a bankrupt had obtained a first-class certificate of discharge, he was not regai'ded ])v the court as designated by that term.^ Where the designation is incapable only, the rule in regard to stitute a new trustee upon condi- tions specified, a subsequent "ex- tension" of the trust deed, malting all the provisions of said deed a part thereof, did not revoke the power of substitution. Mc- Connell v. Day (1896), 61 Ark. 464; 33 S. W. Bep. 731. A will directed that if either of the trustees named therein should refuse to execute the trust, or become incompetent, the court of probate, with the ad- vice of the other trustee, should appoint some person to fill the va- cancy. It was held that the direc- tion, providing that the advice of "the other trustee" be taken in making an appointment, related only to a vacancy in the original trustees, and that an appointment made after the resignation of both of the original trustees should be made solely by the probate court. Tar- rant V. Backus, 63 Conn. 277; s. c, 28 Atl. Rep. 46. ' In re Eoohe, 1 Conn. & Laws. 306; "Walsh v. Gladstone, 14 Sim. 2; Travis v. lUingworth, 2 Dr. & Sm. 344; Mitchell v. Nixon, 1 Ir. Bq. 155; Cook v. Ingoldsby, 2 Ir. Bq. 875; /n re Williams' Settlement, 4 Kay & J. 87. 2 In re Roche, 1 Conn. & Laws. 308; s. C, 2 Dr. & War. 287; In re Bridgman, 1 Dr. & Sm. 164; In re Renshaw's Trusts, L. R. 4 Ch. 783; Combes v. Brooks, L. R. 12 Bq. 61. Though the trustee is insolvent, whei'e the beneficiary is only en- titled to receive the interest on the fund during life, which is provided for by a safe invp^tment of the fund, and the suflicieucy of the trustees sureties is not questioned, the beneficiary is not entitled to have the trustee removed. Moor- man V. Crocket, 90 Va. 185; s. c, 17 S. E. Rep. 875. See Waterman V. Alden, 42 111. App. 294; s. c, 32 N. B. Kep. 972. Where at the instance of mortgage bondholders represented by a trustee, a receiver was appointed to take charge of the mortgaged property because of the trustee's being an improper person, it was equivalent to the removal of the trustee and the ap- pointment of another. Clay v. Selah Valley, etc. Co. (1S96) (Wash.), 45 Pac. Rep. 141. § 370.] APPOINTMENT, ETC., OF TRUSTEES. 869 bankruptcy will not apply, the implication being that of personal, and not pecuniary incapacity. ^ In an English case, where a trustee of property in London had been for a number of years domiciled in New York, it was held that he was incapable of the trust within the meaning of the in- strument.^ In England it has been held that where a deed provides that if the cestui que truat shall deem the trustees appointed by the instrument unsuitable persons to act in 1 In re Watts' Settlement, 9 Hare, 106; Turner v. Maule, 5 Eng. L. & Eq. 222; S. C, 15 Jur. 761; In re Bignold's Settlement, L. K. 7 Ch. 223; /« re Blanchard, 3 De G., F. & J. 131. The statutes of New York provide tliat letters of ad- ministration shall not be granted to "a person convicted of an in- famous crime nor to any one in- capable by law of making a con- tract, nor to a non-resident alien, nor to a minor, nor to any one who shall be adjudged incompetent by the surrogate to execute the duties of such trust by reason of drunken- ness, improvidence, or want of understanding, nor to a married woman." The improvidence con- templated is that want of care or foresight in the management of property which would be likely to render the estate and effects of the intestate unsafe and liable to be lost or diminished in value by im- providence, in case the adminis- tration should be committed to an unprovident person. Coope v. Lowerre, 1 Barb. Oh. 45. A gam- bler held to be improvident under such statute. McMahon v. Harri- son, 2 Seld. 443. See also Glover V. Glover, 1 MoMull. Ch. 153; In re Lemanns' Trusts, L. K. 22 Ch. D. 633. The clause In § 2 of the Trustees Act of 1850, which de- clares that the expression "person of unsound mind" shall mean "any person, not an infant, who not having been found to be a lunatic, shall be incapable from infirmity of mind to manage his own affairs," must be construed as referring to a person who, al- though not found a lunatic, is nevertheless in such a state of mind as to render him liable to be so found if an inquisition were held upon him. The case of a trustee who is from great age and its infirmities practically incapable of transacting business (though not otherwise of unsound mind) is within the thirty-second section of the Trustee Act, 1850. IrerePhelp's Settlement Trusts. L. K. 31 Ch. D. Sol. But see In re Martin, L. K. 34 Ch. D. 618; In re Barber, L. R. 39 Ch. D. 187. Where a person having power to appoint a new trustee is a lunatic, found so by inquisition, an order appointing a new trustee may be made in chan- cery. In re.Sparrow, L. R. 5 Ch. 662. See In re Murton's Trusts, L. R. 10 Ch. 272; In re Mason, L. R. 10 Ch. 273; /rare Ticker's Trusts, L. R. 3 Ch. D. 112; In re Lamotte, L. L. 4 Ch. D. 325; In re Pearson, L. R. 5 Ch. D. 962; In re Arde, L. R. 24 Ch. D. 271 ; In re Hume, L. R. 35 Ch. D. 457. 2 Mennard v. Welford, 1 Sm. & Giff. 426. But see Wlthington v. Withington, 16 Sim. 104; O'Reilley V. Alderson, 8 Hare, 101. 870 APPOINTMENT, ETC., OF TRUSTEES. [§ 371. that capacity, and shall wish to remove them at any time before the trust shall have been fully administered or de- termined, he may lawfully appoint other persons whom he may deem suitable as new trustees. ^ § 371. Where the Appointing Power Fails. — The power of trustees to appoint their successors is not inherent to the office, but is wholly derived from the instrument by which the trust is created. Where a trust estate is con- veyed to trustees without the conferring of any specific power to appoint their successors, any exercise of such a power is illegal and void. In cases of this character suc- cesBors can be appointed only by the court. ^ In some in- 1 Walker v. Brungard, 13 Sm. & M. 758. Under Act, April 9, 1868 (Purd. Dig. p. 1658, pi. 64), which authorizes the court of common pleas or orphans' court in and for the city of Philadelphia to remove a trustee on the application of the cestui que trust, the power of the court, while it is not to he exer- cised, capriciously, or at the mere whim of the cestui que trust, is not dependent upon the misconduct of the trustee sought to be superseded, and the fact that there has been no intercourse or communication between the trustee and the cestui que trust for several years, and that the trustee has not consulted with the cestui que trust, or any one on her behalf, with regard to the re- pairs of the trust estate, is a sufficient ground for granting the cestui que trust's application for re- moval. In re Marsden's Estate, 166 Pa. St. 213; s. c, 31 Atl. Rep. 46. See also Waterman v. Alden, 144 111. 90; Gartside v. Gartside, 113 Mo. 348. In re Woods, 24 Pitts. Leg. Obs. (N. S.) 222. See "Ee- moval of Trustees for Bad Manners and Unreasonable Opposition to Co-trustees," 19 Am. Law Eev. 437. 2 Wilson V. Towle, 36 IST. H. 129; Pierce v. Weaver, 65 Tex. 44. Civil Code, Cal. § 2287, provides that the "superior court may ap- point a trustee whenever there is a vacancy, and the declaration of trust does not provide a practical method of appointment." Held, that notice of an appointment by the court to fill a vacancy occa- sioned by the death of a trustee in a deed of trust was within the dis- cretion of the court, and failure to give such notice to the trustor did not Invalidate a sale by the trustee so appointed. Dyer v. Leach, 91 Cal. 191; s. c, 27 Pac. Rep. 598. Land was conveyed to certain per- sons as trustees to be used as a cemetery for a church congrega- tion. Two years later a special act was passed, at the instance of the trustees and the church, in- corporating the trustees and au- thorizing them to provide for the election of their successors. The trustees provided by a by-law that their successors should be elected by the trustees of the church, and they were so elected for many years. Held, that the church could not claim that the trustees of the § 371.J APPOINTMENT, ETC., t)F TRUSTEES. 871 stances, as in England, this rule is modified by statute.^ If the appointing power is conferred upon trustees who are named in the instrument, and nothing is said of survivor- ship, the power must be exercised by the trustees jointly, and, as it cannot be otherwise exercised, on the death of one trustee the power is lost.^ But if the power is con- ferred on several trustees, simply as trustees, and not on the individuals under their proper names, the authority will continue in the body as long as there is more than one trus- tee, though the number may have been reduced by death or resignation. Where the power is annexed to the office, and not to the persons named as trustees in their individual character, it may be exercised by the persons who are trus- tees for the time being, whoever they may be.** In a case cemetery had no authority to elect their successors. Wall St. JI. E. Church V. Johnson, 140 Ind. 445, s. C.,39]Sr. B. Eep. 251. ' 44 & 55 Victoria, ch. 41. See In re Walker and Hughes' Contract, L. K. 24 Ch. T>. 698; Cecil v. Langdon, L. R. 28 Ch. D. 1; In re Shafto's Trusts, L. K. 29 Ch. D. 247. On a summons under the Vendors and Purchasers Act 1874, an objection was taken by a pur- chaser from trustees that an ap- pointment of one of their number under the power given by section 31 of the ConveyancingActof 1881, in the place of a trustee who had been abroad for more than twelve months, was invalid, because that trustee had not joined in making the appointment. Held, that there being no evidence that the absent trustee was either willing or com- petent to join in making the ap- pointment, the objection could not be sustained. The instrument cre- ating a trust cannot be taken to have expressed a contrary intention within subsection 7 of section 31 of the Conveyancing Act of 1881, merely because it does not provide for filling up a vacancy in the number of trustees upon the hap- pening of an event not contem- plated by the parties to that in- strument. Semble, that if a trust deed contained a power to appoint new trustees expressed in the same words as subsection 1 of section 31, without anything more, it would not be necessary that a retiring trustee should join in the appoint- ment of his successor. In such a case the words "continuing trustee" would mean only a trustee who is to continue to act in the trusts after the completion of the appointment. In re Coates, L. R. 34 Ch. D. 370. See also in support: Travis v. Illingworth, 2 Dr. & Sm. 344; /nreNorris,L.R.27Ch.D.33. 2 Co. Litt. 113, a. ; Sugden, Pow- ers, 141. 3 Byam v. Byam, 19 Beav. 58; 1 Sugden, Powers, 144; Gartland v. Mayott, 2 Vern. 105 ; S. C, Eq. Cas. Abr. 202; 2 Freem. 105; Dyer, 177, a. ; Belmont v. O'Brien, 2 Kern. 394. A testator devised real and personal estate to certain trustees, "to them 872 APPOINTMENT, ETC., Or TRUSTEES. [§ 371. before the Court of Appeals of the State of New York, where a deed in trust to three persons provides that, in the event of the death of either of them, the survivors might, with the consent of the ceshii que (rust, appoint a trustee in place of the deceased, and that, thereupon, the survivors and the substituted trustee should hold the trust estate with the same powers conferred on the original trustees, it was held that, on the death of one of the trustees, the sur- vivors, without appointing a successor, could execute the powers expressed in the trust deed.'^ Where a power is conferred upon executors as such, it may be exercised by a single surviving executor.^ A power conferred upon the survivor of two persons cannot be exercised by the one who dies first, nor by the two together during the lives of both.^ Where there are two trustees, and the instrument confers on the survivor the power to appoint a co-trustee in case either shall decline to act, such power does not authorize an appointment where both decline.* The rule is that the provisions of the instrument by which the trust is created must be strictly followed. Power conferred upon one class cannot be exercised by any other class. It can be exercised only by the class or the persons to whom it is given in ex- press terms. ^ But it has been held that where a power is and the survivor of them and the ' Belmont v. O'Brien, 2 Kern. 394. heirs, executors and administrators ^ Davoue v. Fanning, 2 Johns, of the survivor," in trust "that the Ch. 252; 1 Sugden, Powers, 244. said trustees, or the survivor of ^ Bishop of Oxford v. Leighton, them, or the person or persons 2 Vern. 370; McAdam v. Logan, who may succeed them in the 3 Bro. Ch. 320. trust," may from time to time ^ Sharp v. Sharp, 2 B. & Aid. 405. change the investments of the ^ Bradford v. Belfield, 2 Sim. stocks and the proceeds thereof 264; Cooli v. Crawford. 13 Sim. 91 ; "with any accumulations of the Hall v. May, 3 Kay & J. 585; Gran- fund generally." JfeW, that it was ville v. Mclv'eale, 7 Hare, 15G; the intention of the testator that Eaton v. Smith, 2Beav. 236; Titley the real and personal estate should v. Wolstenholme, 7 Beav. 424; Cole remain in the same hands, and the v. "Wade, 16 Ves. 47; Mortimer v. trust was not transmitted to the Ireland, 6 Hare, 196; Ockleston executor of the surviving trustee, v. Heap, 1 De G. & Sm. 640; Cape but the whole trust became vacant v. Bent, 3 Hare, 245 ; Davoue v. on his death. McKim v. Handy, Fanning, 2 .Johns. Ch. 252; McKim 4 Md. Ch. 228. v. Handy, 4 Md. Ch. 230. § 372. J APPOINTMENT, ETC., OF TRUSTEES. 873 given to a surviving trustee, it may be executed by a con- tinuing or actins trustee where a co-trustee disclaimed, but is still living. 1 • § 372. The Subject Continued. — "Where a power is conferred on a board of trustees, and there is a limit to the number by which the power maybe exercised, fixed by the in- strument creating the trust, it cannot be exercised by a smaller number, and if the power is not exercised before the number is reduced below the limit designated, there is a lapse of the power, and it cannot be exercised by the remaining trustees.^ In such a case the court will provide for the appointment of new trustees. But while the power to fill vacancies must be exercised when the limit is reached and cannot be exercised after it is passed, the vacancies may be filled without wait- ing to have the number reduced to that which has been fixed as the minimum, or limit.' A grantor cannot confer upon a court of equity any power, though he may upon a judge as an individual. Where a trustee is appointed by deed, with a provision that in case of his decease, or legal incapacity, the court shall be vested with all the trusts and confidences reposed in the trustee, the court may appoint a trustee, by virtue of its inherent jurisdiction, to execute the devise of the grantor as expressed in the deed. In this case the right of the court to act does not depend upon the acquiring of jurisdiction over the heirs or personal repre- sentatives of the beneficiary or beneficiaries. Where the court has no jurisdiction to appoint trustees, the power cannot be conferred by a testator.* This power may be 1 Lane v. Debenham, 11 Hare, unless such appointment would 188; Eaton v. Smith, 2 Beav. 236; contravene the express terms of Sharp v. Sharp, 2 B. & Aid. 405. the will. Held, that notwithstand- 2 Attorney-General v. Floyer, 2 ing the use of the word "sole," Vern. 748; Attorney-General v. the provision applies to a case Bitchfleld, 5 Ves. 825. Code Civil where there are several trustees Proc. N. Y., § 2818, provides that and they all resign. Royce v. when a sole testamentary trustee Adams, 123 N. Y. 402; s. c, 25 N". dies, becomes a lunatic, is removed E. Kep. 386. or resigns, and the trust has not ^ Dupleix v. Koe, 1 Anst. 86. been fully executed, the surrogate's * Leman v. Sherman, 117 111. 567; court may appoint a successor, McCleary v. McLnin, 2 Ohio St. 874 APPOINTMENT, ETC., OF TRUSTEES. [§ 372. conferred upon a corporation or firm, or upon a married woman, but not upon an infant, unless it is simply collat- eral. ^ In England it has been held that the court has not 368; Morrison v. Kelly, 22 111. 610. A trust deed pT-ovided that in case ' of the death, resignation or dis- qualification of the trustee, the county court "may, and is hereby requested," upon application of any member of the company, to appoint a successor. Held, that an order of the county court appoint- ing a trustee was void, as the county court had no jurisdiction, by law, to exercise such a power. Harwood v. Tracy, 118 Mo. 631; s. c, 24 S. W. Kep. 214. Where a deed of trust of land in another State is executed in California, by persons residing there, stipulating that, if the trustee named therein cannot act, a court of competent jurisdiction may appoint a new trustee, a court of California hav- ing jurisdiction of the parties may appoint a new trustee, and direct him to carry out the trust. Smith V. Davis, 90 Cal. 2.5; s. C, 27 Pac. Kep. 26. On the death of a trustee another was appointed by the court; one of the two cestuis que trust joining in a affidavit wherein she swore that the substi- tuted trustee was a proper person for the position. Held, that she thereby estopped herself from at- tacking the validity of the trustee's appointment, and that, subse- quently, a joint action by the two cestuis que trust to set aside a subsequent conveyance by the sub- stituted trustee on the ground of Invalidity of bis appointment, could not be maintained, though such appointment may not have been valid as to the otter cestui que trust. Lowe v. Sugss, 87 Ga. 577; 8. c.,13S.E. Kap. 505. Under 1 Eev. St. p. 730, § 68, providing that on the death of the surviving trustee of an express trust, the trust shall vest in the court of chancery, and shall be executed by some person appointed for that purpose under the direction of the court, the court has no power to appoint a new trustee in place of one deceased, but the attempt by the court to exercise such power will be sustained as the appoint- ment of a person to execute the trust under the direction of the court. Wildey v. Eobinson, 85 Hun, 362 ; s. c. 32 N. Y. Supl. 1018. The trustee of a trust created by will died without appointing a successor, and the circuit court of the city of St. Louis appointed a trustee who qualified and ac- cepted the trust. Held, that such court had no inherent power as a court of equity to revoke such ap- pointment, remove such trustee, and appoint his successor without notice to him. Hitch v. Stone- breaker's Estate, 125 Mo. 128 ; s. c, 28 Mo. 443. » Smith V. Smith, 21 Beav. 385 Druramond v. Tracy, 1 Johns. 60S People v. Webster, 10 Wend. 554 Kingham v. Lee, 15 Sim. 401 Tweed v. Urquhart, 80 Ga. 446 Leggett V. Grimmett, 36 Ark. 498 King V. Belford, 1 Hem. & M. 343 Hearle v. Greenbank, 3 Atk. 695 s. c, 1 Ves. 298. Where a testator appoints his wife trustee to man- age the estate, and in the event of her death before his grandchil- dren, who are to succeed her In the trust, come of age, then the trust to devolve upon his son, and the wife voluntarily renounces the § 373.] APPOINTMKNT, ETC., OF TRUSTEES. 875 jurisdiction to tal?:e away the power of appointing new trus- tees from the donee of the power, where the donee is capa- ble of exercising and willing to exercise the power, although such donee may have disclosed an intention or desire to ex- ercise his power corruptly. ^ Under a power enabling a surviving or continuing trustee to appoint a new trustee in the place of a trustee dying, going to reside abroad, becom- ing incapable of acting, etc., the surviving trustee, although himself residing abroad, may appoint another trustee in the place of the one deceased. It is the duty of trustees, having power to appoint new trustees, to make such appointment impartially, as between their cestuis que trust, and not without communication with them.^ Trustees ought not to exercise a power of selecting new trustees for the mere purpose of continuing the trust property under the man- agement of a particular solicitor, even if the trustees that they select are otherwise unobjectionable.^ § 373. The Same Subject. — Beneficiaries are not abso- lutely disqualified as trustees, and where the circumstances favor or justify such a course the court will appoint them. In an English case, Vice Chancellor Sir W. P. "Wood said: "I have great objection, of course, to appointing one of the cestuis que trust to be a manager of this property. But, in this case, the trusts are so onerous that it would per- haps be very difficult to find any stranger who would un- dertake them, and, indeed, that appears from the affida~ trust, and procures an order mib- Hare, 428; Peatfield v. Benn, 17 stituting the son as trustee, such Beav. 522; Nagle's Estate, 52 Pa. order is final as to the right of the St. 154. widow and son to manage the ^ Marshall y. Sladden, 7 Hare, property, and is not void because 428. A trustee, who retired and said infant grandchildren, who are allowed a new trustee to be ap- not beneficiaries under the will, are pointed, without communiuation not notified. Moore v. Superior to his cestui que trust, is not a neces- Court, 86 Cal. 495; s. c, 25 Pac. sary party to a suit complaining of Eep. 22. See ^nte, ch.III. suchnevv appointment, and seeking 1 In re Hodgson's Settlement, 9 to displace such new trustee and Hare, 117. appoint others, all relief against the ' O'Keilley v. Alderson, 8 Hare, retired trustee being waived. Ibid. 101. See Marshall v. Sladden, 7 876 APPOINTMENT, ETC., OF TRUSTEES. [§ 374. vits."i This decision is on the principle that all the bene- ficiaries have an equal right to the services of a disinter- ested and impartial trustee.^ But the court will always distinguish between what is illegal and what is only im- proper.^ Near relationship is held to be an objection, but not an absolute disqualification for the office of a trustee.* § 374. Trustee De Son Tort. — As we have seen, there are various methods under which a person may be appointed a trustee. In addition to these, he may become a trustee by his own act. He may put himself in this position by a mistake, or by an act that is intentionally illegal. Where a person assumes the character of a trustee, and enters upon the discharge of the duties of the office under the impression that he has been legally appointed as such, while, in fact, he has no basis for the assumption, he thereby becomes a trustee de son tori, and, having been decreed a trustee by the court, he will be held responsible for any property of which he may have come into possession under the trust. ^ 1 Ex parte Glutton, 17 Jur. 988 ; In re Hays' Will, 9 Hare, 221 ; Ex parte Conybeare's Settlement, 1 W. K. 458; Moke v. Norrie, 21 Hun, 128. Where a valid trust has been created, the life beneficiary of the trust estate may afterward be ap- pointed trustee by an order of the court. People v. Donohue, 24 N". Y. Supl. 437. See also Frazier v. Church, 147 Pa. St. 256. The fact that a trustee appointed by a will is a married woman, and one of the beneficiaries under the will, is no ground for remoying her from the trust. Curran v. Green (1893), 18 K. I. 329 ; S. C, 27 Atl. Eep. 596. On a petition, by one entitled for her life to the income of a trust fund, for the appointment of a cer- tain person trustee, persons entitled to part of the fund after the peti- tioner's death opposed such an ap- pointment, because the proposed trustee was one of the sureties on the bond of the petitioner as ex- ecutrix of the estate of her deceased husband, who had held the same fund for his life ; her husband had left to her all his property, much more than the trust fund, and the only claim suggested against his estate appeared to be without grounds. Held, that this did not necessarily, and as matter of law, make the proposed trustee incom- petent. Gaskill V. Green, 152 Mass. 526; s. c, 25 N. E. Eep. 969. 2 Passingham v. Sherburne, 9 Beav. 424. 3 Keid V. Keid, 30 Beav. 388. * Wilding V. Bolder, 21 Beav. 222 ; In re Hattat's Estate, 18 W. K. 416. 5 Pearce v. Pearce, 22 Beav. 248; Life Assn. v. Siddall, 3 De G., F. & J. 58 ; Hennessey v. Bray, 33 Beav. 96; Kackham v. Siddall, 16 Sim. 297; S. C, 1 Macn. & G. 607; Mor- ris v. .Joseph, 1 W. Va. 256; s. c. § 375. J APPOINTMENT, ETC., OF TRUSTEES. 877 § 375. Acceptance of Trust. — A person appointed to the office of trustee becomes such, in a legal sense, only as he accepts the trust. This he may do by a voluntary act, or by implication. By whatever method the trust may be created, no title to the trust estate will vest in the trustee until he accepts the trust. This rule has no application, of course, to implied trusts. In trusts of this class the trustee becomes such by a decree of the court, and, in consequence, is compelled to execute the trust. But so far as relates to express or direct trusts, any person appointed to a trustee- ship is free to accept or to refuse the office. Even where a person has been appointed a trustee in a will or deed in consequence of his promise to discharge the duties of the trust, he may decline the office, and if he have a good reason for so doing, he may properly decline. ^ Where land 91 Am. Dec. 386 ; Coleman v. Cocke, 6 Kand. (Va.) 618; s. C, 18 Am. Dec. 757. See also Piper v. Hoard, 107 N. Y. 73; s. c, 1 Am. St. Rep. 789 ; Grumley v. Webb, 44 Mo. 444 ; s. C, 100 Am. Dec. 304; Tyson v. Passmore, 2 Pa. St. 122; s. c, 44 Am. Dec. 181 ; Wyllie v. Ellice, 6 Hare, 505; Drury v. Connor, 1 H. & G. 220; Chaney V. Smallwood, 1 Gill, 367; Goodhue v. Barnwell, KiceBq. 198; Bloomfleld v. Eyre, S Beav. 250; Phene v. Gillan, 5 Hare, 5; People v. Houghtaling, 7 Cal. 348. "It is, however, essential to the character of a trustee cle son tort that he should have trust prop- erty either actually vested in him, or so far under his control, that he is in a position to require that it should be vested in him. Thus, where the capital of a trust fund, having got into the hands of the trustee's solicitor, was, through his intervention, spent by the trus- tee, the solicitor was held liable; for, where trust funds come into the custody and control of a solic- itor, or, indeed, of any one else, with notice of the trusts, he can only disohai-ge himself of lia- bility by showing that the prop- erty was duly applied in accord- ance with the trusts." [Jnderhill, Trusts and Trustees (4th ed.), 604. See also In re Barney (1892), 2 Ch. 265 ; Blundell v. Blundell , 40 Ch . D . 370; Barnes v. Addy, L. R. 9 Ch. App. 244; Morgan v. Stephens, 3 Gift. 226 ; Blythe v. Pladgate (1891) , 1 Ch. 887; Bennett v. Austin, 81 N. Y. 308 ; Fort v. Delafleld, 3 Edw. 31 ; White School House v. Post, 31 Conn. 248, McCoy v. Scott, 2 Rawle, 222; Schwartz's Estate 14 Pa. St. 42. 1 McCubbin v. Cromwell, 7 Gill & J. 157 ; Trask v. Donaghue, 1 Aik. 870; Armstrong V. Morrill, 14 Wall. 188 ; In re Kobinson, 87 N". Y. 261 ; Cooper v. McClun, 16 111. 435; Judson V. Gibbons, 5 Wend. 224; Bulkley v. De Peyster, 26 Wend. 21; Burritt v. Sillivan, 18 N. Y. 93 ; De Peyster v. Clendening, W Wend. 21; Robinson v. Pitt, 3 P. Wms. 251; Lowry v. Fulton, 9 Sim. 123; Moyle v. Moyle, 2 Russ. 878 APPOINTMENT, ETC., OF TRUSTEES. f§ 375. is left ill trust, and all the devisees decline to act, the legal title will vest in them for the time, and the execution of the trust will devolve upon the court. Other trustees will be appointed, if necessary, in the place of the persons ap- pointed in the creation of the trust. ^ -^iiy conveyance of property to a donee is presumptively for his benefit; hence, the court will presume that it is accepted unless there is evidence to the contrary. For this reason, where there is a refusal to act, there should be either an express dis- claimer, or such an implied refusal as to leave no doubt of the import of the act.^ After a considerable lapse of time & M. 715; Mahoney v. Hunter, 30 Ind. 250; Beekman v. Bonsor, 23 N. y. 298; s. C, 8 Am. Dec. 269; Kennedy v. Winn, 80 Ala. 166; Doyle V. Blake, 2 Sch. & Lef. 239; Evans V. John, 4 Beav. 35; Smith V. Knowles, 2 Grant Cas. 413 ; Crook V. Ingoldsby, 2 Ir. Bq. 375. In case of refusal the trust is not in- validated as the court will appoint another trustee. NicoU v. Miller. 37 111. 387; NicoU v. Ogden, 29 111. 323; S. C, 81 Am. Dec. 311; Cloud V. Calhoun, 10 Rich. Eq. 358; Elstner v. Fife, 32 Ohio St. 358; Thatcher v. St. Andrews' Church, 37 Mich. 264; Johnson v. Koland, 2 Baxt. 203. A trustee who has received the trust fund is estopped to assert that she had not formally accepted the trust in an action for an accounting therefor. McBride v. Mclntyre (1892), 91 Mich. 40; S. C, 51 N. W. Kep. 1113. In the absence of anything to the contrary, a trust beneficial to the trustee will be presumed after a great length of time without any disclaimer to have been ac- cepted. Kead v. Robinson, 6 W. & S. 331; Wise v. Wise, 2 Jon. & La. 412; Eyrick v. Hetrick, 13 Pa. St. 494; Penny v. Wise, 3 B. Mon. 313; Furman v. Fisher, 4 Coldw. 626; s. c, 94 Am. Dec. 210; Rob- erts V. Mosely, 64 Mo. 507 ; Goss v. Singleton, 2 Head, 67; In re Need- ham, 1 Jon. & La. 34; Barclay v. Goodloe, 83 Ky. 493; Earle v. Earle, 93 N. Y. 104; Harvey v. Gardner. 41 Ohio St. 642 ; Flint v. Clinton Co., 12 N". H. 432; Crocker V. Lowenthal. 83 111. 579; Lewis v. Baird, 3 McLean, 56; Ridenour v. Wherrett, 30 Ind. 485. No formal acceptance is necessary on the part of the trustee where the title to a slave is conveyed to him in trust for the use of another; it will be presumed from the possession re- maining with the beneficiary. Penny v. Davis, 3 B. Mon. 313. ' King V. Donnelly, 5 Paige, 46, 2 Read v. Robinson, 6 W. & S 331 ; Furman v. Fisher, 4 Coldw, 626; Penny v. Davis, 3 B. Mon, 313; Wilt V. Franklin, 1 Binn. 502 Thompson v. Leach, Ventr. 198: Goss V. Singleton, 2 Head, 67 Townson v. Tickell, 3 B. & Aid. 36 One receiving money to hold in trust and acknowledging the trust by declarations and the payment of interest to the beneficiary cannot repudiate it. Crist v. Hovis, 12 N. J. Eq. 84. The institution of a suit to recover the property con- veyed, and the execution of a § 376.- APPOINTMENT, ETC., OF TRUSTEES. 879 this presumption of acceptance will be confirmed, and where circumstances appear to the court to justify it, even a short period will be sufficient to fix upon the persons appointed the responsibility of trustees. ^ In Wisconsin it has been held that where a conveyance is made to public officers, and their successors in office, the successors are not bound un- less they expressly, or by implication, accept the trust. ^ § 376. Acceptance of Trust Continued. — Where, by a will, the trust is vested in the executor as such, in his ac- ceptance as executor he accepts the trusts connected with the executorship.^ Where the trust is created by deed, the power of attorney to an agent to execute the trust, are unequivocal acts of acceptance of the trust and place the party in the same condi- tion as if he had accepted it in the beginning. Christian v. Yancey, 2 Patt. & H. 240. Where an exec- utor accepts securities intended by the testator for another, an obliga- tion is created on his part, as trusi ee, to carry out the wishes of the de- ceased and deliver the trust prop- erty to such other person. Wadd V. Hazelton, 17 N. Y. Supl. 410. Where A conveys land to B to be afterwards reconveyed to him by B, an express trust is created which B accepts by accepting the deed. Hearst v. Pujol, 44 Cal. 230. Though the liabilities and duties of a trustee cannot be imposed upon a man without his assent, yet where one with a knowledge of his appointment, interferes with the trust property in such a man- ner and to such an extent as cannot be accounted for on any other ground than an acceptance of the trust, his interference will be suffi- cient proof of an acceptance, and will subject him to all the respon- sibilities of a trustee in the same manner as if the office had been expressly accepted. Macoubbin v. Cromwell, 7 Gill & J. 1.57. See Chaplin v. Givens, Rice Eq. 132. 1 In re Uniacke, 1 Jon. & La. 1 Eyrick v. Hetrick, 13 Pa. St. 493 In re Needham, 1 Jon. & La. 34 Wise V. Wise, 2 Jon. & La. 403 Penny v. Davis, 3 B. Mon. 314 Lewis V. Baird, 3 McLean. 65 ; Read V. Robinson, 6 W. & S. 338. 2 Delaplaine v. Lewis, 19 Wis. 476. See also Smith v. Westoott, 17 R. I. 366. 3 Eavle V. Barle. 93 N. Y. 104 Harvey v. Gardner, 41 Ohio St. 642 Crocker V. Lowenthal, 83 111. 579 Lewis V. Baird, 3 JIcLean, 56 ; Flint v. Clinton Co., 12 N. H. 432; Ride- nour V. Wherrett. 30 Ind. 485. De- clining to act as executor is not necessarily a renunciation of the trust, where the same party is ap- pointed both executor and trustee. Garner v. Dowling, 11 Heisk. 48. In Sangston v. Hack, 52 Md. 173, it is held that where a party is both executor and trustee under a will, the fact that he takes out letters of administration as executor amounts to an acceptance of the trust. But see Daggett v. White, 128 Mass. 398; Attorney-General v. Barbour, 121 Mass. 568; Prior v. Talbot, 10 Cush. 1; Dorr v. Wainwright, 13 Pick. 328; Green v. Green, 4 Redf. 880 APPOINTJJENT, ETC., OF TRUSTEES. [§ 37(5. orderly and proper method of acceptance is by the signing of the deed. While this is not essential, it is effectual. It settles any question that may arise in regard to the ac- ceptance of the trustee. But if he accepts the trust with- out signing the deed and proceeds to execute it, by virtue of his act he will be as effectually bound as he would have been had he affixed his signature to the instrument.^ In a recent case it was held that where a deed creating a trust provides for the trustee's acceptance thereof by signing the deed, the occupation of the premises conveyed and the pos- session of the deed by the trustee are sufficient to show ac- ceptance of the trust by him, though he never signs the deed.^ 357 ; Anderson v. Earle, 9 S. Car. 460. 1 Patterson v. Johnson, 113 111. 559; Cook v. Fryer, 1 Hare, 498; Montfort v. Cadogan, 17 Ves. 48S; s. C, 19 Ves. 638; Small v. Ayles- wood, 9 B. & Cr. 300; Leffler v. Armstrong, 4 Iowa, 482 ; Buckridge V. Glasse, 1 Cr. & Ph. 131 ; Roberts v. Mosely, 51 Mo. 284; Bixler v. Taylor, 3 B. Mon. 362; Field v. Arrowsmith, 3 Humph. 442 ; Smith v. Knowles, 2 Grant, Cas. 413 Doe V- Harris, 16 Mees. & W. 517 McClellan v. McClellan, Go Me. 500 Bates Y. Hurd, 65 Me. 180 ; Union Mut. Life Ins. Co. v. Campbell, 95 111. 267; s. c, 35 Am. Eep. 166; Tanner v. Skinner, 11 Bush, 120; Urann v. Coates, 109 Mass. 581. "The question, therefore, is, whether, in order that the assign- ment may be obligatory on the parties in interest, it be neces- sary that there should be written evidence of the assent of the trustee to the assignment, be- fore a specitic performance of the trust could be decreed. But it is by no means necessary that the assent should be in writing in order to enable the court to decree a spe- cific performance of the trust. If he had signed his name to the deed, he could have done nothing more towards executing the trust than he had done already. He could only have taken possession of the property, and paid debts ; and these steps he has already taken. He has proceeded far enough to bring himself within the jurisdiction of a court of chancery. It has been settled that where the trustee has interfered in the fulfillment of a trust, he binds himself to its per- formance, even where he is made a party to the deed and has omitted to execute it." Flint v. Clinton Company, etc., 12 IvT. H. 430, 433. A trustee who has accepted the trust created by deed with a knowl- edge of the consideration on which it was made, and has held posses- sion of the trust property for a long period of years, is, when sued to establish the trust and require him to account for the property, estopped from maintaining as a de- fense to said suit that the trust deed was executed on an illegal consider- ation, or that it was defectively exe- cuted. Saunders v. Richard (1895) , 35 Fla. 28; s. c, 16 So. Rep. 679. 2 Daly V. Bernstein (1892) (N". Mex.), 28 Pac. Rep. 764. See § 376. J APPOINTMENT, ETC., OF TRUSTEES. 881 Where a deed contains no words that Avill be construed as a covenant at law, the mere fact of the signing of the deed is not a covenant on his part to execute the trusts, and where the deed does contain such words, if the trustee did not execute it, he cannot be sued on the covenant, though, after accepting the trust, he would be liable for a breach of contract, as for any other contract debt.^ In an English case, where a trustee had executed a deed contain- ing merely an appointment of him as trustee, and a declara- tion by him that he accepted the office, it was held that no covenant by him would be implied, and that a claim for trust money received and misapplied by him would not con- stitute a specialty debt against his estate.^ In England a breach of covenant under the hand and seal of a trustee creates a specialty debt, or a debt which takes precedence of debts under an ordinary contract.^ This distinction is not recognized in this country, the estate of a decedent be- ing liable, equally, for all of his debts. In a recent case it was held that where two distinct assignments of a judgment are made to two different parties for the benefit of infant children, and in a chancery suit pending both of said as- signees file petitions respectively, claiming to be entitled to the control of said judgment, the successful party in said contest must be regarded as having accepted said assign- ment, and subsequently as holding said judgment as trus- tees for said children.* also Wadd v. Hazelton, 62 Hun, Bishop, 1 De G., F. & J. 140; 602; s. C, 17 N. Y. Supl. 410. Montford v. Cadogan, 19 Ves. 635; 1 Adey v. Arnold, 2 De G., M. & Bartlett v. Hodgson, 1 T. R. 42. G. 433; s. c, 16 Jur. 1123; Wynuh 2 Holland v. Holland, L. K.4Ch. V. Grant, 2 Drew. 312; S. C, 18 449. Jur. 1010; Courtney v. Taylor, 6 ^ jiayoj. y. Davenport, 2 Sim. M. &Gr. 851; Marryat v. Marryat, 227; Gifford v. Maully, For. 109; 6, Jur. (X. S.) 572; Isaacson v. Har- Benson v. Benson, 1 P. Wms. 131; wood, L. K. 3 Ch. App. 225; Hoi- Deg v. Deg, 2 P. Wms. 414; Tur- land V. Holland, L. E. 4 Ch. App. ner v. Wardle, 7 Sira. 80; Bailey v. 449; Newport V. Bryan, 5 Ir. Ch. Ekins, 2 Dick. 632; Wood v. Har- 119 ; Richardson v. Jenkins, 1 Drew, disty, 2 Coll. 542; Primrose v. 477; Vincent v. Godson, 1 Sm. & Bromley, 1 Atk. 89; Cummins v. G. 384; Benhury v. Benbury, 2 Cummins, 3 Jon. & La. 64. 2 Dev. & Bat. Eq. 238; Ghee v. ^ Feamster v. Feamster, 35 W. 56 882 APPOINTMENT, ETC., OF TRUSTEES. [§ 377. § 377. Proof of Acceptance The acoeptance of a trustee may be established by parol evidence. His ac- ceptance may be shown from his admissions, and aa admission may be involved in his words, in his acts, or in a general course of conduct. The rule is that any assumption of control of the trust estate, or of voluntar}^ and deliberate interference with it, will be construed as an acceptance of the trust. ^ This jDresumption may be rebutted, however, by showing that such acts are to be referred to some other ground, or motive, as by presenting evidence that he is act- ing as the agent, or attorney, of the real trustee.^ It has Va. 1; s. c, 13 S. E. Bep. 53. A trustee under a will who has re- ceived the whole or any part of the trust fund, and treated it as such, is estopped when called upon to account by the cestui que trust from asserting that he has not formally accepted the trust. McBride v. Mclntire, 91 Mich. 406. See also Weaver v. Van Aiken, 77 Mich. 588; "Wooden v. Kerr, 91 Mich. 188. 1 White v. Barton, 18 Beav. 192 ; Cummins v. Cummins, 8 Ir. Eq. 723; Doyle v. Blake, 2 Sch. & Lef. 231 ; Malzy v. Edge, 2 Jur. C:^. S.) 80; Penny v. Davis, 3 B. Mon. 313; Maccubbin v. Cromwell, 7 Gill & J. 157 ; Lewis v. Baird, 3 McLean, 56. C was appointed trustee of a will, but he never expi-essly ac- cepted tlie appointment. One of the trusts was in re.~pect of the rents of a plantation then in lease to the testator's son. C acted as agent of the son who was heir-at- law, and received the rents of the estate from him. It was held that, by so interfering with the trust property, he could not repudiate the trust, and say that he merely acted as the son's agent. He received the property from the person who was nominally to have remitted the rents, and it was incumbent on him, if he would not have acted as trustee, to have refused, and not to leave himself at liberty to say he acted as trustee or not. Co- nyngham v. Conyngham, 1 Yes. Sr. 522. See Bence v. Gilpin, L. K. 3 Ch. 76, as to acceptance by exer- cise of control of estate. See also Urch V. Walker, 3 Myl. & Cr. 703; James v. Fi'earson, 1 N. C. C. 375; s. c, 1 Y. & C. 370 ; Doe v. Harris, 16 Mees. & W. 517; Kidenourv. Wherrett, 30 Ind. 485; Shephei'd v. McEvers, 4 Johns. Ch. 136; Han- son v. Worthington, 12 Md. 418; Roberts v. Mosely, 64 Mo. 507. 2 Lowry v. Fulton, 9 Sim. 115; Stacy V. Blph, 1 Myl. & K. 195; Balohen v. Scott, 2 Ves. Jr. 678; Dove V. Everard, 1 Euss. & Myl. 281; s. C, Taml. 376; Judson v. Gibbons, 5 Wend. 224; Carter v. Carter, 10 B. Mon. 327. Any vol- untary interference with the trust property will be held an accept- ance, unless it can be plain Ij- re- ferred lo some other groimd of ac- tion ; the onus being on the trustee to show this, and every doubt be- ing resolved against him. Wliere a sum of money was bequeathed in ti-ust to be loaned out on bills of exchange or bonds secured by mortgage, the interest to be col- lected semi-annually by the trustee § 378. J APPOINTMENT, ETC., OF TRUSTEES. 883 been held that where a person who is named in a deed as a trustee takes possession of the deed, with a view to holding it until another trustee can be legally appointed, his pos- session of the deed is not to be construed as an acceptance of the trust, inasmuch as his act is plainly referable to another ground.^ But evidence of this character must be such as to leave no ground for doubt touching the reason or motive of the act. If the evidence leaves the court in doubt whether he intended to accept, the doubt will be construed against him, and he will be held responsible as a trustee.^ Among the acts that will be construed as an acceptance of a trust are the following: The signing of a receipt as trustee, the executing of a power of attorney, the signing of a joint draft, order, or other paper, to enable another person to administer the trust, etc.^ § 378. Tbe Subject Continued. — Where an executor is invested with a trust, or where, in addition to his executor- ship, he is appointed trustee of real estate under the will, and as executor takes out probate to the will, he will be held to have accepted the office of trustee.* At law an ex- and paid over to the beneficiaries, Smith v. Knowles, 2 Grant's Cas. and the administrator of the estate 413. made an arrangement with a mer- ^ howry v. Fulton, 9 Sim. 115; cantUe house, of which the trustee Conyngham v. Conyngham, 1 Ves. was a partner, to supply the bene- 522; Montgomery v. Johnson, 11 flciaries with goods on credit to be Ir. Eq. 476; Doe v. Harris, 16Mees. paid out of the semi-annual inter- & W. 517 ; Eead v. Truelove, Arab. est as it accrued, and paid the ac- 417; Chaplin v. Glvens, 1 Rice Eq. counts every sis months, tuklng 154. receipts signed by the trustee as ^ Conyngham v. Conyngham, 1 such. Held, that the giving of Ves. 522; Montford v. Cadogan, 17 those receipts showed an accept- Ves. 487 ; James v. Frearson, 1 Y. & ance of the trust, notwithstanding C. 375 ; Chidgey v. Harris, 16 Mees. the accompanying declarations of & W. 517; O'Xeill v. Henderson, the trustee that "he would not ac- 15 Ark. 235; Pond v. Hine, 21 cept the general trust," and the Conn. 519; Crocker v. Lowenthal, fact that the administrator repre- 83 III. 579; Hanson v. Worthing- sented that he only wanted a ton, 12 Md. 418; Roberts v. Mosely, proper receipt to use as a voucher 64 Mo. 507; Penny v. Davis, 3 B. on his settlement. Kennedy v. Mon. 313. "Winn, SO Ala. 165. niuddow v. Fuller, Jac. 198; ^ Evans v. John, 4 Beav. 85; "Ward v. Butler, 2 Moll. 533: In re 884 APPOINTMENT, ETC., OF TRUSTEES. [§ 378. ecutor derived his authority, not from the probate court, but from the will. Hence, an executor might assume the trusts and proceed to their execution without offering the will for probate. 1 Any act of this character will be treated as proof of his acceptance of the trust. ^ In most of the States it is required by statute that wills shall be presented for probate, and that executors and trustees under a will Perry, 2 Curt. 655; Brook v. Haynes, L. K. 6 Eq. 25; Booth v. Booth, 1 Beav. 128; Williams Y. Nixon, 2 Beav. 472; Clarke v. Parker, 19 Ves. 1 ; Peeble's Appeal, 15 Serg. & K. 39; Worth v. Mc- Aden, 1 Dev. & Bat. 209 ; Venable V. East India Co., 2 Exc. 633; Easton V. Carter, 5 Exc. 8; Cum- mins V. Cummins, 3 Jon. & La. 64; Mitchell V. Eice, 6 J. J. Marsh. 625; Sears v. Dillingham, 12 Mass. 358 ; Van Home v. Fonda, 5 Johns. Ch. 403. In some courts it has been held that until qualification the executor has no power to act. See Monroe v. James, 4 Munf. 195; Mitchell V. Rice, 6 J. J. Marsh. 625 ; Robertson v. Gaines, 2 Humph. 381; Carter v. Carter, 10 B. Mon. 327. Where, by statute, trustees are required to give bond, the giving bond as executor only, by one who is both executor and trustee under a will, is to be deemed a refusal to act in the latter capacity, and another trus- tee should be appointed. See Will- iams V. Gushing, 34 Me. 370; Deer- ing V. Adams, 37 Me. 265 ; Harri- son V. Worthington, 12 Md. 418. Where two executors, who were directed by will to sell a particular piece of land to a person named, and also other land for the pay- ment of debts, joined in the con- veyance of the first parcel, it was held that a purchaser from only one executor, of the last men- tioned land, was not precluded from showing that the other exec- utor had refused and neglected to act. Roseboom v. Mosher, 2Denio, 61. Where nothing appeared in the register's office, other than an indorsement on the will that an executor had been duly sworn, there being, however, no affidavit on record thereof nor letters testa- mentary, it was held insufficient proof of acceptance. Miller v. Meech, 8 Barr, 417. See Luscumb V. Ballard, 5 Gray, 403 ; Sawyer's Appeal, 16 N. H. 459; Gaskill v. Gaskill, 7 E. I. 478; Johnson's Appeal, 9 Barr, 416 ; Gardner v. Brown, 21 Wall. 36. A bond of an executor, having other duties as such executor, will cover all deal- ings with the estate. Sheets' Es- tate, 52 Pa. St. 257; Lansing v. Lansing, 45 Barb. 182; Towne v. Ammidown, 20 Pick. 535; State v. Nichols, 10 Gill & J. 27. But see Parsons v. Lyman, 5 Blatchf . 170 Mastin v. Barnard, 33 Ga. 520 Perkins v. Lewis, 41 Ala. 649 Pomroy v. Lewis, 14 E. I. 349. ' Easton v. Carter, 5 Exc. 8 ; Vena- ble V. East India Co., 2 Exc. 633 ; Van Home V. Fonda, 5 Johns. Ch. 403; Mitchell V. Rice, 6 J. J. Marsh. 625. 2 Conyngham v. Conyngham, 1 Ves. 522; Doyle v. Blake, 2 Sch. & Lef. 231 ; James v. Frearson, 1 Y. & C. 370; Baldwin v. Porter, 12 Conn. 473; Chaplin v. Givens, 1 Eice Eq. 133 ; Flint v. Clinton Co., 12 N. H. 432; Latimer v. Hanson, 1 Bland, 51. § 378. J APPOINTMENT, ETC., OF TRUSTEES. 885 shall give bonds for the faithful execution of the trusts. "Where these statutes are in force, a refusal or neglect on the part of an executor or trustee to qualify by taking out probate and giving a bond will be construed as a disclaimer of the trusts. 1 But a person may be appointed both execu- tor and trustee under a will in such a manner as to enable him to accept one of the appointments and to decline the other. If it appears from the will that the testator in- tended to give the trustees a distinct and independent char- acter, the taking out of probate by the executors will not serve to make them trustees unless they expressly accept the trust and qualify as trustees.^ If there is a question in regard to the appointment the court will determine, from an examination of the entire will, whether the executor is to act also as trustee, and where it is doubtful whether an ex- ecutor is authorized to execute a trust, the court may appoint him trustee and require him to act both as executor and trustee.^ Where a trust is given to a person by name, and he is subsequently appointed executor, the trust will be held as distinct from the executorship.* 1 Monroe v. James, 4 Munf . 195 ; La. 64 ; Williams v. Nixon, 2 Beav. Luscumb V. BallarO, 5 Gray. 403; 472; Clarke v. Parker, 19 Ves. 1. Trask v. Donaghue, 1 Aik. 373; ^De Peyster v. Clendening, 8 Mahony v. Hunter, 30 Ind. 246 ; Paige, 295 ; Williams v. Conrad, 30 Gaskill V. Gaskill, 7 R. I. 478; Barb. 424; Wilson's Estate, 2 Pa, Sawyer's Appeal, 16 N. H. 459; St. 325; Ward v. Butler, 2 Moll Carter v. Carter, 10 B. Mon. 327; 533; Mucklow v. Fuller, Jac. 198: Bobertson v. Gaines, 2 Humph. 381 ; Hanson v. Worthington, 12 Md. 418 Miller v. Meetch, 8 Barr, 417; -^ Sawyer's Appeal, 16 N. H. 459 Williams v. Gushing, 34 Me. 370 ; Carson v. Carson, 6 Allen, 397 Deering v. Adams, 37 Me. 265 : Howard v. Am. Peace Soc, 49 Me, Groton v. Buggies, 17 Me. 137; 288; Pettingill v. Pettingill, 60Me, Eoseboom v. Mosier, 2 Denio, 61 ; 412 ; Richardson v. Knight, 69 Me, Wood V. Sparks, 1 Dev. & Bat. 396. 385 ; Saunderson v. Stearns. 6 Mass, The omission to give bond does 37; Prescott v. Pitts. 9 Mass. 376 not divest the trustee of legal title. Hall v. Gushing, 9 Pick. 395; Per Gardner v. Brown, 21 Wall. 36. kins v. Moore, 16 Ala. 9; State v. See also Booth v. Booth, 1 Beav. Nichols, 10 Gill & J. 27; Lansing 125; Stylesv. Guy,lMac.&G.431; v. Lansing, 4.j Barb. 182; Sheets' Wardv. Butler, 2 Moll. 533; Scully Estate, 52 Pa. St. 257; Dorr v. V. Delany, 2 Ir. Eq. 165; Worth Wainwright. 13 Pick. 328. V. McAden, 1 Dev. & Bat. Eq. 209; « Jones' Appeal, 3 Grant's Cas. Cummins v. Cummins, 3 Jon. & 169. 886 APPOINTMENT, ETC., OF TRUSTEES. [§ 379. § 379. Disclaimer of Trust. — Upon receiving notice of an appointment as trustee, whether by will or by deed, the person so appointed may disclaim both the office of trustee and the trust estate. The disclaimer should be made with- out unreasonable delay, but where there has been no ac- ceptance it may be made after the lapse of a considerable period. Whether a disclaimer will be sustained after a long delay will depend upon the circumstances of the par- ticular case. The proper method of disclaiming is by deed, but if the treatment of the matter has been such as clearly to indicate the intention to decline the appointment, it may be accepted instead of an express disclaimer. In the lead- ing case of Stacy v. Elph, a person named as executor and trustee under a will neglected to renounce probate until after the death of the acting executor, and did not formally disclaim the trusts of the will. He purchased a part of the realty of the trust estate, and took a conveyance from the tenant for life and the heir-at-law, to whom the estate must have descended on disclaimer of the trust. It was held that his acts relating to the matter constituted a disclaimer both of the office and of the trust estate. In his opinion in this case, Sir John Leach, M. R., said: "In this case there is no ambiguity in the conduct of the defendant ; he never in- terfered with the property, except as the friend or agent of the widow, and it is plain from the confidence which the testator appears to have placed in him by his will that he was a particular friend of the family. It never became necessary that he should formally renounce the executor- ship until the death of the widow, and then his formal re- nunciation took place. It is true he never executed a deed disclaiming the trust, but his conduct disclaimed the trust; in the purchase of the small real estate made by him he took by feoffment from the widow and eldest son of the testator, in whom the estates could only vest by the dis- claimer of the trustees. "1 But while a course of conduct ' Stacey v. Blph, 1 Myl. & K. useful as being the most perfect and 195. "A disclaimer in writing has convenient evidence of the refusal in itself no operation, it is merely of the donee. Therefore, it is im- § 379.] APPOINTMENT, ETC., OF TRUSTEES. 887 essentially inconsistent with a purpose to accept the trust, or even the disclaimer by counsel at bar may be sustained as sufficient, it is a matter of ordinary prudence to disclaim material at what time the formal In- strument of disclaimer is executed, the actual disclaimer or refusal of the estate will be held to have been made at the time of the gift, if the disclaiming party have never done any act inconsistent with a refusal of the estate. However, it is unques- tionably advisable that the dis- claimer should be made at the earliest period after the creation of the trust." Hill on Trustees, *221. Where acts inconsistent with ac- ceptance have been construed as disclaimer see VVardwall v. Mc- Dowell, 31 111. 364; Thornton v. Winston, 4 Leigh, 152; Williams v. King, 43 Conn. 572; Judson v. Gibbons, 5 Wend. 224. In 1830 A and B were appointed trustees of a part of a sum vested in other trus- tees. The deed contained a power for the settlors to appoint new trustees in case any trustees should wish to be discharged from, or should decline to act in the trusts. B did not execute. In 1848 B, al- leging he had never acted, dis- claimed and A retired, and there- upon two new trustees were ap- pointed, and the fund assigned to them by A only. Held, that whether B had acted or not, the new trustees had been duly ap- pointed, and tbat the cestuis que trust were not necessary parties to a suit by such new trustees against the persons who held the fund to compel payment to the new trus- tees. Noble V. Meymott, 14 Beav. 471. '-It has been held by two highly respectable courts in sister States, that the refusal need not be by deed nor by matter of record, but that it may be proved like other matters in pais, by any evi- dence which has a legal tendency to establish the fact. Presump- tions may he indulged, and the declarations- of the executors who did not join in the sale may be given in evidence. Geddy v. But- ler, 3 Munf. 345; Nelson v. Car- rington, 4 Munf. 332; Den v. Sparks, 1 Dev. & Bat. 389, are the cases referred to, and they were decided on the 21 Henry VIII., ch. 4, and it was then held that the mere omission of the executor, for a. considerable period, to qualify and enter upon his trust, was suf- ficient prima facie evidence of the refusal. * * " The duties arise immediately upon the death of the testator, and a forbearance to enter upon the execution of them, when the will is proved, is presumptive evidence of a refusal to accept the charge of his testament. The for- bearing to qualify is prima fade evidence of refusal. But if he neither qualify nor act, if he in- termeddle not with estate of tha deceased, either regularly or ir- regularly, then the evidence of re- fusal is full." Wardwell v. Mc- Dowell, 31 111. 3G4, -371. There maybe a valid renunciation of the executorship of a will by matter in pais. An executrix declines to qualify as such, and agrees that administration with the will an- nexed shall be granted to her daughter, reserving her right to qualify after her daughter's death. Held, this renunciation of the ex- ecutorship is absolute and perpet- ual, and cannot be restored after the death of the administratrix. Thornton v. Winston, 4 Leigh, 152. 888 APPOINTMENT, EffC, OF TRUSTEES. [§ 379. by deed, and to do so without unnecessary delay. ^ Where this is done there will be no question of the liability of the person api^ointed. While parol disclaimer maj' be accepted, even after a considerable period, there are circumstances under which a neglect to execute an instrument of disclaimer will be held to constitute presumptive, though not neces- sarily conclusive, evidence of acceptance. In an English case. Sir W. Page Wood, V. C, expressed a doubt whether a trust in real estate could be disclaimed otherwise than by deed.^ But in a later case, where a person who was ap- pointed trustee under a will, and who renounced probate and never acted as trustee, it was held that this was con- clusive evidence of disclaimer.^ In a still later case, the Mere abandonment will not relieve the trustee of his responsibility. Thatcher v. Candee, 3 Keyes, 157 ; Cruger v. Holliday, 11 Paige, 314. "It is well settled that an estate may be disclaimed by conduct without any express declaration of disclaimer." Lopes, L. J., in In re Birchall, L. E. 40 Ch. D. 436, 439; Brandon v. Carter, 119 ilo. 572; s. C, 24 S. W. Rep. 1035. ' Xorway v. Norway, 2 Myl. & K. 278 ; Legg v. Mackrell, 1 Giff. 166 ; Hickson v. Fitzgerald, 1 Moll. 14. It is not necessary for a defendant who disclaims to make an affidavit of that fact ; if he appears at the hearing and disclaims, the claim will be dismissed against him. Leadbrooke v. Bleaden, 16 Jur. 630. Where a trustee renounces simply by parol, and a suit is insti- tuted to which he is no party and a petition presented, with which he is not served, but to which he appears, it is sufficient if he dis- claims at the bar, and it is not necessary that he should execute a deed of disclaimer. Foster v. Dawber, 8 W. B. 646. But see Znre Ellison's Trusts, 2 Jur. (X. S.) 62. Where one of the trustees dis- claimed acting as trustee by an an- swer in chancery in Missouri, held, his subsequent death, without ever assunyng the trust or claiming a right to act, made valid that dis- claimer and vested all the estate in the surviving trustee, and the cesteis que trust were bound by the decree in that suit. Clemens v. Clemens, 60 Barb. 366. 2 In re Bllison's Trusts, 2 Jur. (N. S.)62. 3 In re Gordon, L. R. 6 Ch. D. 531. Devise and bequest of free- hold and copyhold land and per- sonal estate to A and B, upon trust as to the land for sale, and as to the i:)ersonalty to real- ize the same, and to stand possessed of the proceeds upon trust for C M, who was his heir- at-law, absolutely. A predeceased the testator ; B renounced probate, and died three years afterwards, not having acted as trustee, though he did not disclaim the trusts, and letters of administration — with the will annexed — were granted to C M. From and after the testator's death C M, through his agent, i-e- ceived the rent of the land, but did not exercise any other act of owner- § 380. J APPOINTMENT, ETC., OF TRUSTEES. 889 English Court of Appeal held that where land is devised to a trustee, conduct which amounts to a disclaimer of the office of trustee will also amount to a disclaimer of the legal estate.^ § 380. Disclaimer Continued. — So far as relates to the responsibility of the person appointed as a trustee, it is immaterial at what time the disclaimer is made, if there has been no act or course of conduct which can be construed as an acceptance of the trust, and the disclaimer is sustained by the court. The disclaimer will be operative from the time of the creation of the trust, or from the notice of the appointment. 2 Where a person has accepted a trust, either in express terms, or by any act from which an acceptance is implied, he cannot thereafter disclaim or renounce the trust. ^ In New York it has been held that a trustee, after ship. ISTo one was admitted tenant of the copyhold. The land was let from year to year, and there was one change of tenancy effected by the agent. On the death of C M, who survived the testator nearly nine years, the question arose whether the land was to be treated as real estate. Held, that on B re- nouncing probate, the legal estate devolved on C M, and that, whether the legal estate was outstanding or not, C M must be taken to have elected to take the land as real estate. Ibid. Un re Birchall, L. B. 40 Ch. D. 436. "It was contended that there was no evidence that A had dis- claimed the legal estate, even if he had disclaimed the office of trustee. I should be sorry that it should be thought that a trustee could dis- claim the office of trustee and, nevertheless, take the legal estate." Ibid. 408. 2 Stacy V. Elph, 1 Myl. & K. 195. ^ Conyngham v. Conyngham, 1 Ves. 522; Bead v. Truelove, Anib. 417; Stacy v. Elph, 1 Mji. & K. 195; Doyle v. Blake, 2 Sch. & Lef. 231 ; Armstrong v. Merrill, 14 Wall. 138; Thatcher v. Corder, 2 Keyos, 157; Strong v. Willis, 3 Fla. 124; Drane v. Gunter, 19 Ala. 731; Cru- ger V. Halliday, 11 Paige, 314; Shepherd v. McEvers, 4 Johns. Ch. 136; Latimer v. Hanson, 1 Bland, 51 ; Jones v. Stockett, 2 Bland, 409 ; Chaplin v. Givens, 1 Eice Eq. 133; Perkins v. MoGavock, SHayw. 265; One who as trustee has accepted and proceeded to execute a deed of trust, cannot by his own act or default, terminate the trust. Xel- son V. Ratliff (1895) (Hiss.), 18 So. Rep. 487. Where a deed establishing a trust contains a re- nunciation by the trustees of the previous trusts from the same grantor, to enablethe trustees under the new deed to act, and the second deed is void, the renuncai- tion is inoperative and the status of the parties remains as fixed by the original instruments creating the trusts. Avery's Trustees v. Avery, 90 Ky, 613; s. c, 14 S. W. Eep. 593. When executors are required 890 APPOmTMENT, ETC., OF TRUSTEES. [§ 380. he has accepted the trust, cannot discharge himself from habihty by a resignation merely. He must either be dis- charged from the trust by virtue of a special provision in the deed or will which created the trust, or by the order or decree of the Court of Chancery, or with the general con- sent of all the persons interested in the execution of the trust. But where infants, or persons not in esse, are in- terested in the trust, it seems that a trustee cannot be dis- charged without an order or decree of the court. ^ In a case where a trustee accepts the trust and dies, his heir cannot disclaim it. Inasmuch as the acceptance vests the estate in the trustee, in the event of his death the law casts the es- tate upon the heir, but the heir cannot devest himself of to found a charitable institution, and to appropriate tlie income of the trust property to maintain the same, and are authorized to sell and convey and invest the proceeds of the trust property, the trust can- not pass to an administrator with the "will annexed of one of the ex- ecutors, at leas^t while any of the original executors are living, and have not declined. Hayes v. Pratt, 147 U. S. 557; S. C, 13 S. C. Eep. 503. In u proceeding instituted by a trustee for leave to resign and to procure the appointment of a new trustee, the beneficiaries who are made parties are not entitled to allowances out of the fund for coun- sel fees, as such allowances can only be made to trustees or those occupying trust relations towards the fund, not to beneficiaries. In reHolden, 126 N. Y. 589; s. c, 27 N. E. Eep. 10B3. When a trustee under a will refused to accept the trust, he is not a necessary party to a proceeding in equity to appoint one to fill the vacancy. Brandon V. Carter, 119 Mo. 572; s. C, Vii S. W. Kep. 1035. Trustees will be permitted to resign where disagree- ments have arisen between them and the grantor in the deed, who is the primary beneficiary under its provisions, disturbing their rela- tions to such an extent as to render them incapable of friendly and cordial co-operation; but the trus- tee cannot maintain an action for the annulment of the deed. Par- ker V. Allen, U N". Y. Supl. 2C5. Where property is left in trust for the life of the cestui que trust, remainder to her heirs, such re- mainder-men are nolf beneficiaries in si!ch a sense that notice to them of the resignation of a trustee is necessary. Leake v. Watson, 58 Conn. 332; s. c, 20 Atl. Rep. 343. 1 Cruger v. Halliday, 11 Paige, 314. See also Sugdeu v. Crossland, 3 Sm. & G. 192; Webster v. Van- deventer, 6 Barb. 527; Perkins v. M-cGuvock, 3 Hayw. 265 ; Eidgely V. .Johnson, 11 Barb. 527; Diefeu- dorf v. Spraker, 10 J^". Y. 240 ; In re Bernstein, 3 Eedf. 20. Mere aban- donment insutHcient. Thatcher v. Candee, 3 Keys, 157; Courteney v. Courteney, 3 Jon. & La. 513; For- show V. Higginson, 20 Beav. 485; Greenwood v. Wakeford, 1 Beav. 576. § 381.] APPOINTMENT, ETC., OF TRUSTEES. 891 the legal title, or repudiate the trust by a mere disclaimer.^ It has been maintained that in the absence of any exjiress decision on the subject, a disclaimer by the heir, or per- sonal representative of a donee in trust, may well be sup- ported on principle where the original donee has done no act in his lifetime to testify his acceptance of the trust. ^ In a later case, where P devised lands to W and S, and the heirs of the survivor, upon trusts for payment of debts, and to apply the surplus, S, the survivor, died many years afterwards, having never proved P"s will, nor in any man- ner acted in the trusts. S, by his will, devised all his mort- gage and trust estates to L and B. L and B, by their answer, stated that they believed their testator had never acted, nor claimed any right under the devise from B ; that they did not make, and never had made, any claim, and they expressly disclaimed; it was held that as S had never disclaimed, and as L and B had accepted the trusts of S's will, the legal estate of P's lands was vested in them.^ Where there is more than one trustee, and the business is conducted wholly by one, and he dies, another, who was named as co-trustee with him, but Avho has not accepted and has not done any act amounting to an acceptance, may disclaim after the death of the acting trustee.* § 381. Disclaimer by Parol — We have already seen that it is not essential that a disclaimer should be by deed.^ A person named in a conveyance as a trustee may decline 1 Humphrey v. Morse, 2 Atk. 408. 2 Hill on Trustees, *222. Where one of several executors re- ^ King v. Phillips, 16 Jur. 1080. nounces the executorship, and let- ^ Stacy v. Elph, 1 Myl. & K. 195. ters testamentary are thereupon "However, in the absence of any issued to others, such executor, express decision on the subject, it after the death of the other execu- is submitted, that upon principle a tors, may retract his renunciation disclaimer by the heir or personal as a matter of course. But where all representative of a donee in trust the executors renounce, and admin- may well be supported where the Istration with the will annexed Is original donee has done no act in actually granted, the executors his lifetime to testify his acceptance cannotretract their renunciation, at of the trust." Hill on Trustees, least during the life of such ad- *222. ministrator. Kobertson v. Mc- ^ Ante, 379. Geoch, 11 Paige, 640. 892 APPOINTMENT, ETC., OF TRUSTEES. [§ 381. the trust by a course of conduct essentially inconsistent with the presumption of acceptance, or by a parol declara- tion. But if the disclaimer is of this character it must be unequivocal. If reliance is placed upon the general course of conduct, it must be such as to leave no doubt of the in- tention of the person presenting the claim, and if the dis- claimer is by a parol declaration the language must be positive and free from ambiguity, and it must involve a full renunciation of his interest in the property. "^ In an English case, where the devisee of an estate refused to take it, sa}'- ing she was entitled as heir-at-law, and would not accept any benefit by the will of the devisor, it was held that this was not such a disclaimer as prevented her from afterwards bringing ejectment and relying on her title as devisee.^ It has been held that after a long refusal or neglect to qualify, and where there has been no interference with the trust es- tate, a disclaimer will be assumed.^ Where a person is 1 Townson v. Tickell,3 B. & Aid. 31 ; Nicholson v. Wordsworth, 2 Swanst. 369; Bray v. "West, 9 Sim. 429 ; Peppercorn v. Wayman, 5 De G. & S. 230; Rex v. Wilson, 5 M. & R. 140; Small v. "Warwood, 4 M. & R. 190; Adams v. Taunton, 5 Madd. 435; Stacey v. Elph, 1 Myl. &K. 198; Smith v. Smith, 6 B. & C. 112; Smith v. Wheeler, 1 Ventr. 128; Foster v. Dawber, 1 Dr. & S. 172; Begbie v. Crook, 2 Bing. K. C.70; s. c, 2 Scott, 128; Thomp- son V. Leach, 2 Ventr. 198 ; Doe v. Smith, 9 D. & R. 136; Bingham v. Clanmorris, 2 Moll. 253; Xorway V. Norway, 2 Myl. & K. 278; Miles V. Neave, 1 Cox, 159; Com. v. Mateer, 16 Serg. & R. 416; Rose- boom V. Mosier, 2 Denio, 61; Sher- ratt V. Bentley, 1 Russ. & M. 655; Mut. Life Ins. Co. v. Woods, 51 Hun, 640; s. C, 4 N. Y. Supl. 133 ; Thornton v. Winston, 4 Leigh, 152; Wardwell v. McDonald, 31 III. 804; Williams v. King, 43 Conn. 572; Ayers v. Weed, IG Conn.291,; Jud- son V. Gibbons, 5 Wend. 224. 2 Doe V.Smyth, 6 B. & C. 112. See Judson v. Gibbons, 5 Wend. 124. " Marr v. Play, 2 Murph. 85. "It is most prudent that a deed of dis- claimer should be executed by a person named trustee who refuses to accept the trust because such deed is clear evidence of the dis- claimer, and admits of no ambi- guity. ' ' Sir John Leach in Stacy v. Elph, 1 Myl. & K. 199. Yet where there has been a refusal, as in Jud- son V. Gibbon, supra, it is held that an acceptance may be executed at any time. In Pond v. Hine, 21 Conn. 521, it wi^s held that a trus- tee refusing to accept on terms might afterwards accept, unless his previous conduct by producing an alteration in the condition of the parties amoimted to an estoppel. The case, however, is otherwise if he has executed a deed of dis- § 381.] APPOINTMENT, ETC., OF TRUSTEES. 893 named as a trustee, and a bequest is left him as such, thus connecting the bequest with the office, the person so named cannot decline the trusteeship and at the same time claim the bequest.^ But if he is named as a trustee, and the be- quest is made apart from the appointment as trustee, and altogether independent of it, he may claim the bequest In Ex parte Hadley, a testa- while disclaiming the trust. ^ claimer. In re Schoonover, 5 Paige, 559. See Maccubbin v. Cromwell, 7 G. & J. 165. The effect of the disclaimer is to leave the trust in the same condition as if the dis- claiming trustee had not been nom- inated. Hawkins V. Kemp. 3 East, 410; Townson v. Tickell, 3 B. & Aid. 31 ; Smith v.Wheeler, 1 Ventr. 128; Leggett v. Hunter, 19 N". Y. 445; Clemens v. Clemens, 60 Barb. 366; Dunningv. Ocean Nat'l. Bank, 6 Lans. 296; Martin v. Paxson, 66 Mo. 260; Johnson v. Koland, 2 Baxt. 203 ; Thatcher v. St. Andrew's Church, 37 Mich. 234. A trustee who has surrendered his position cannot thereafter confer any of his original powers on his successor who is appointed subject to the control of the court touching the trust. Kenaday v. Edwards, 134 U. S. 117. In the case of an exec- utor, even a formal renunciation will not in general prevent his sub- sequent acceptance of the office, so long as the chain of executorship has not been broken by the grant of administration. Harrison v. Harrison, 2 Eob. Bccl. 406 ; Vena- bles V. East India Co., 2 Exc. 648; Wood V. Sparks, 1 Dev. & Bat. 396; Eobertson v. McGeoch, 11 Paige, 643. See also Perry v. De Wolf, 2 B. I. 103; Taylor v. Tibbetts, 13 B. Mon. 184. 1 Stackpole v. Howell, 13 Ves. 417; Lewis v. Maxwell, L. E. 8 Eq. 277; Abbott v. Massie, 3 Ves. 148; Calvert v. Sebbon, 4 Beav. 222; Eeed v. Devaynes, 3 Bro. Ch, 95; Harrison V. Eowley, 4 Ves. 212 Cockerell v. Barber, 1 Sim. 23 s. c, 5 Euss. 585 ; Dix v. Eead, 1 S & S. 237; Brydgesv. Wotton, 1 Ves & B. 134: In re Hawkins' Trusts, 33 Beav. 570 ; Hanbury v. Spooner, 5 Beav. 630 ; Griffiths v. Pruen, 11 Sim. 202 ; Brown v. Higgs, 4 Ves. 708; Granberry v. Granberry, 1 Wash. 246; Thayer v. Wellington, 9 Allen, 283, 295; King v. Wood- hull, 3 Bdw. Ch. 79; Morris v. Kent, 2 Edw. Ch. 175; Newcomb v. Williams, 9 Met. 525 ; Dixon v. Homer, 9 Met. 420; Hale v. Gush- ing, 9 Pick. 395; Billingslea v. Moore, 14 Ga. 370; Eothmaler v. Myers, 4 Desaus. 255; Barnes v. Kirkland, 8 Gray, 512; Lewis v. Matthews, L. E. 8 Eq. 277 ; Slaney V. Watney, L. E. 2 Eq. 418. Under a clause in a will providing, "I hereby appoint Franklin Xarra- more as trustee, to take and keep the above legacies, the income of which he shall appropriate to their comfort so long as they live. After their decease what remains I be- queath to the above trustee," it was held that the trustee could not take such remainder, unless he ac- cepted the trust, either expressly or by doing some act under his ap- pointment. Kirkland v. oSTarra- more, 105 Mass. 31. 2 Andrew v. Trinity Hall, 9 Ves. 525; Pollexfon v. Moore, 3 Atk. 272; Talbot v. Eadnor, 3 Myl. & K. 524; Warren v. Eudall, 1 Johns. 894 APPOINTMENT, ETC., OF TEUSTEES. [§ 382. trix gave real and personal property to trustees, with a proviso that if the trustees thereby appointed, or to be ap- pointed, should die, or decline to act, it should be lawful for the then surviving or continuing trustee, or if there should be no surviving or continuing trustee, then for the trustee so declining to act, by deed to substitute or ap- point any other person, or persons, to be a trustee, or trustees, in the place of the trustee or trustees so dying, or declining to act. One of the two trustees died in the life- time of the testatrix, the other survived her and by deed disclaimed the trust, except the power of nominating other persons to be trustees, and by the same deed he appointed two persons to be trustees in the place of the trustee who had died before the testatrix, and of himself ; it was held that the power had been properly executed.' § 882. Devolution of Trust Estate under Disclaimer. — Where there are two or more trustees appointed and one disclaims, the trust estate will vest in the remaining trustee or trustees. All the power and authority conferred by the instrument upon the trustees as a body will belong to those who accept the trust. ^ Thej^ may lease or convey & H. 1; Buel v. Yelverlon, L. K. Goss v. Singleton, 2 Head, G7; 13Eq. 131; In re Isabella Denby, Leggett v. Hunter, 25 Barb. SI; 3 De G., F. & J. 350; Burgess v. s. C, 19 X. Y. 445; Clemens v. Burgess, 1 Coll. 367; Granberry v. Clemens, 60 Barb. 366; Webster v. Granberry, 1 Wash. 246. Even VandSventer, 6 Gray, 428 ; Eatcliff though a person may have agreed v. Sangston, 18 Md. 383; In re in the lifetime of the testator to be Crossman, 20 How. Pr. 350; Trask his executor he is at liberty any v. Donoghue, 1 Aik. 370. Where time before the proving of the will one of the trustees die the others to refuse to accept the executor- take by survivorship, where the ship. Doyle v. Blake, 2 Sch. & trusteeship is joint. Xixon v. Kose, Lef. 239. 12 Gratt. 425; Gray v. Lynch, 8 1 In re Hadley, 5 De G. & Sm. 67. Gill, 403; Stewart v. Pettus, 10 Mo. 2 Townson v. Tickell, 3 B. & Aid- 755; Jones v. Maffett, 5 Serg. & K. 31 ; Bonifant v. Greenfield, Cro. 523. In some of the States there Eliz. 80; Denne v. Judge, 11 East, are statutes whichprovidethatupon 288; Smith v. Wheeler, 1 Ventr. the refusal of one of several trustees 128; Hawkins v. Kemp, 3 East, to accept the trust it devolves upon 410; Beghie V. Crook, 2 Bing. N. the others, and the whole trust Cas. 70; Ellis v. Boston, Hartford estate vests in them; but if all re- & Erie K. R. Co., 107 Mass. 13; fuse, though the legal estate nomi- § 382. J APPOINTMENT, ETC., OF TRUSTEES. 895 the trust estate and give good receipts for purchase money, without the concurrence of the disclaiming trustee or trus- ts tees, and they cannot be compelled to join in such trans- action. ^ But there must be disclaimer, notice, or other evidence of the failure of a trustee to act, before it can be determined whether the acts of the trustee or trustees who accept are valid. ^ A power conferred upon a body of nally vests in the trustees, the ex- ecution of the trust devolves upon the court, and new trustees, if nec- essary, may be appointed. King V. Donnelly, 5 Paige, 46; Hawley V.James, 5 Paige, 31S; Burrill v. Shiel, 2 Barb. 4o7; McCosker v. Brtidy, 1 Barb. Ch.3-29; Gamble v. Dabney, 20 Tex. G9 ; Lee v. Ran- dolph, 2 Hen. & M. 12. Upon thfe death of a trustee, under 1 Rev. St. N. Y..pp. 730, 731, §§ 71, 72, the trust devolves upon the supreme court, and it has jurisdiction to appoint trustees, with full power to execute the trust. Royce v. Adams, 123 JST. Y. 402; s. C, 25 N. E.Rep. 386. Where the trustee of a will has retired from the man- agement of the trust, the circuit court has full power to appoint his successor. Dillon v. Stevens, 02 Mo. App. 479. On a proceeding in equity for the appointment of trustees under a mortgage made by a railroad company, where two of the three original trustees have d ied, and there is no provision in the mort- gage for the appointment of new trustees, the court may, under its general equity powers, fill the va- cancies, and the special provisions of the statutes regarding the elec- tion of trustees by the bondholders are cumulative and not restrictive. ^Inhabitants of Anson v. Somerset R. Co., 8.5 Me. 79; s. c, 26 Atl. Kep. 996. Generally, however, upon the decease of a trustee who has accepted, his interest passes to his executor, and if he has insti- tuted suit as trustee it should sur- vive in the name of the executor. See Maudlin v. Armistead, 14 Ala. 702; De Peyster v. Ferrers, 11 Paige, 13; Schenck v. Schenck, 16 N. J. Eq. 174; Xichols v. Campbell, 10 Gratt. 5G1; Powell v. Knott, 16 Ala. 364; Tyler v. Mayre, 95 Cal. 160. But see also McDougal v. Carey, 38 Ala. 320; Armstrong v. Park, 9 Humph. 195. In Tucker v. Grundy,83 Ky . 540, where an execu- tor refused to act as testamentary trustee, and filed his resignation as trustee in court, which was not acted on, the court, at the instance of the beneficiaries, who could not get the income or find another trustee, treated both executors as trustees and held them accountable to the beneficiarj'. So, where a trust terminates at the death of a trustee, the trust property does not pass to his personal representative. Cook V. Dyer. 47 Mo. 214. 1 Adams v. Taunton, 5 Madd. 435; Crewe v. Dicken, 4 Ves. 100; Moir V. Brown, 14 Barb. 39; Bayley v. Cummings, 10 Ir. Eq. 410; Haw- kins V. Kemp, 3 East, 410; White V. McDermott, 7 I. R. C. L. 1; Cook V. Crawford, 13 Sim. 96; Wilson V. Bennett, 5 De G. & Sm. 475 ; Stevens v. Austin, 7 Jur. (X. S.) 873; Osborne v. Rowlett, L. R. 13 Ch. D. 774; Morton v. Hallett, L. R. 15 Ch. D. 143; In re Ingleby, L. R. 13 Ir. 32:!. 2 Moir V. Brown. 14 Barb. 39. 896 APPOINTMENT, ETC., OF TRUSTEES. [§ 383. trustees, or the survivors of them, may be exercised by an acting trustee, or trustees, although the disclaiming trustee, or trustees, may be still living, and it is immaterial that a disclaiming trustee is named in the instrument as one of the persons by whom the power in trust is to be exercised.^ But where the power attaches to the person, and not to the oiEce, a disclaimer by one of the trustees will not vest the power in the others. Powers that imply a personal con- fidence in the donee as the ground of the conveyance must be exercised by such donee directly, or in person, and where there is a refusal or failure to act the power is lost.^ A disclaimer, if effective, is held to be retroactive in its operation, and to vest the trust estate, ab inilio, in the trustee, or trustees, that have accepted the trust ; and where all the trustees disclaim, the estate vests in the heir from the same time."^ § 383. How a Trustee May be Released. — Where a person has accepted the office of trustee and assumed the trusts connected with it, he cannot, by his own act, release himself from the obligations involved. He may be dis- charged in one or another of three methods. AYhere the instrument by which the trust was created makes a pro- vision for a change of trustees, he may be released in ac- cordance with such provision ; he may be discharged, and a new trustee may be appointed in his place by the concur- rence of all the parties in interest, or he may be removed and a new trustee may be substituted by a court having jurisdiction of the trust. ^ Where trustees are joint tenants, 1 Crewe v. Dicken, 4 Ves. 100; G. &Sm.230; Stacy v.Elph,lMyl. Adams V.Taunton. 5 Madd. 435. & K. ]95; Dunning v. OceanNat'l 2 Cole V. Wade, 16 Ves. 44 ; Eaton Bank, 6 Lans. 296. V. Smith, 2 Beav. 236; Attorney- ^ Cruger v. Halliday, 11 Paige, General V. Doyler, 2 Eq. Cas. Abr. 319; Webster v. Vandeventer, 6 194; Newman v. Warner, 1 Sim. Gray, 428; Perkins v. McGavock, 3 (N. S.) 457; Eobertson v. Flight, Hayw. 265; Jones v. Stockett, 2 83 Beav. 268; Lancashire v. Lan- Bland, 409; Craig v. Craig, 3 Barb, cashire, 2 Phill. 657; Walsh v. Ch.76;Dranev. Gunter,19Ala.731; Gladstone, 14 Sim. 2; Wilson v. Thatcher v. Candee, 3 Keyes, 157; Pennock, 27 Pa. St. 238. Shepherd v. McEvcrs, 4 Johns. Ch. 2 Peppercorn v. Wayman, 5 De ISO ;-Kidgley v. Johnson, 11 Barb. § 384. J APPOINTMENT, ETC., OF TRUSTEES. 897 the abandonment of the trust by one or more will not vest his title in the remaining trustees without deed or legal process, and it will not release him from his liability.^ Where a trustee conveys the trust estate, even though the donee may be a co-trustee, and appoints another person to execute the trust, the conveyance may pass the legal title, but it will have no effect to release him from his responsibility as a trustee, unless the transaction is sanctioned by all the parties in interest, or is in pursuance of a decree of the court. The conveyance will not invest the person so appointed with any authority as a trustee, and any attempt to assume control of the trust estate will render him a trustee de son tort? § 384. The Subject Continued. — Where a trustee is relieved of his office by the consent of the parties in inter- 527; Pearoe v. Pearce, 22 Beav. 248; Sugden V. Crossland, 3 Sm. & G. 192. Interference by the cestui que trust may be a good cause lor resignation of the trustee. Green- wood V. Wakeford, 1 Beav. 576. As to cases where the matter of good cause for resignation have been considered, see Howard v. Rhodes, 1 Keen, 581 ; Hamilton v. Fry, 2 Moll. 458; Coventry v. Coventry, 1 Keen, 758; Taylor v. Glanville, 3 Madd. 176; Ex parte Greenhouse, 1 Madd. 92; Curtis v. Chandler, 6 Madd. 123; Bowditch V. Banuelos, 1 Gray, 220; Field v. Arrowsmith, 3 Humph. 442; S. C, 39 Am. Dec. 185 ; Cole v. Wade, 16 Ves. 27; Curtis v. Smith, 6 Blatch. 537; Green v. Blackwell, 31 K. J. 37. 1 Webster V. Vandeventer, 6 Gray, 428 ; Cruger v. Halliday, 11 Paige, 314; Thatcher v. Candee, 3 Keyes, 157. 2 Pearce v. Pearce, 22 Beav. 248 ; Sugden v. Crossland, 3 Sim. & G. 192; Chalmers v. Bradley, 1 J. & W. 68; Williams v. Parry, 4 Buss. 272; Adams v. Paynter, 1 Coll. 57 532; Braybrooke v. Inskip, 8 Ves. 417; Ardill v. Savage, 1 Jr. Bq. 79; Cruger v. Halliday, 11 Paige, 314. A and B were trustees. A deed was prepared appointing C a new trustee in the place of B. It was executed by C, but not by the other parties, so that the appointment was invalid. At the same time the trust fund was transferred by A and B to A and C. Afterwards A and C authorized the husband of the tenant for life to receive the fund, and it was lost. Held, that both C (who had not been ap- pointed a trustee, though she had acted as such) and B were liable for the loss. Pearce v. Pearce, 22 Beav. 248. Where infants, or per- sons not in esse, are interested in the trust, it seems that a trustee cannot be discharged without an order or decree from the court of chancery. Cruger v. Halliday, 11 Paige, 314. Where two trustees have committed a breach of trust, the court may determine the order in which they shall be answerable for the loss. McCartin v. Trapha- gen, 43 :N'. J. Eq. 323. 898 APPOINTMENT, ETC., OF TRUSTEES. [§ 384. est, without a decree of the court, the transaction operates as an estoppel of the beneficiaries, rather than as a legal transfer of the trusteeship. A beneficiary who concurs in such a change cannot subsequently call the released trustee to account for a breach of trust. Where a trustee appoints another person in his place and conveys the trust estate to him, with the consent of all the cestuis que trust, they are effectually estopped from holding the retiring trustee re- sponsible for any loss that may subsequently be suffered in consequence of the transaction. i But the esto^jpel will op- 1 Wilkinson v. Parry, 4 Kuss. 272, 276. Where a settlement requires that retiring trustee should assign the trust property to the continuing trustee, and that a new trustee should be chosen in the place of the retiring trustee, and there is no power to appoint a sole trustee, then if a retiring trustee assign the trust property to the continuing trustee, and he in abuse of his trust dis- pose of It, the retiring trustee is answerable. Ibid. Where, upon the trustee's death, the court ap- pointed his successor, and one of the two beneficiaries joined in an affidavit to the effect that the trus- tee so substituted was a fit person for the position, it was held that by this affidavit she was estopped from questioning the validity of the trustee's appointment. The court also held, as a consequence, a joint action by the two bene- ficiaries to set aside a subsequent conveyance by the substituted trustee, on the ground that his ap- pointment was invalid, would not lie, although such appointment may not have been valid as to other beneficiaries. Lowe v. Suggs, 87 Ga. 577. Where the supreme court appointed a testamentary trustee in a county other than the one in which the will had been probated, but in which a portion of the trust estate was situated, no ob- jection having been made to the appointment, it was held that the appointment could not be collater- ally impeached, and that it was immaterial that the petition for the appointment was addressed to the court in another county. Brad- street V. Butterfield, 129 Mass. 339. See also Bassett v. Craft, 129 Mass. 513. A trustee appointed by the court as successor to the original trustee, under a mortgage executed to secure bondholders, will not, at the instance of one representing neither the mortgagor, mortgagee, nor any of the bondholders, be re- moved because of irregularity in the appointment, it having been recognized and acquiesced in by the mortgagor and a large major- of the bondholders. New York Security Co. v. Saratoga Gas, etc. Co.,34N.Y. Supl. 890. See Free- man V. Prendergast, 94 Ga. 369; s.c.,21S.E.Rep.837. The failure of a testamentary trustee to com- ply with an order of court to fill vacancies in the trust, as contem- plated by the will, is not sufficient ground for removal on petition of the cestuis que trustent, who have acquiesced in the course pursued by the trustee for nearly ten years, and have thus led him to believe that they were satisfied with his § 385. J APPOINTMENT, ETC., OF TRUSTEES, 899 erate in the case of such beneficiaries, only, as concur in the conveyance. Where any of them are not in esse, are infants, or married women, or refuse to unite in the re- lease, their rights will not be affected, but the retiring trustee will be held responsible for any subsequent breach of the trust. In order to an effectual release, the bene- ficiaries must all be sui juris, and must all concur in the appointment of the new trustee. ^ Without such concur- rence a trustee can be released only as the instrument by which the trust is created provides for the change, or it is effected under a decree of the court. ^ § 385. The Same Subject. — Where a settlor has fixed the number of trustees, which he desires for the adminis- tration of the trust, the number must be maintained. If two or more trustees are named in the instrument, with power to appoint their successors, they are not at liberty to transfer the property to a single trustee. Such a trans- fer will be held to be a breach of trust, and the retiring trustee will be held responsible.^ Where the instrument sole management. In re Dugan's ing her life, and after her death Estate, 12 Pa. Co. Ct. 591; s. c, 2 the fund to be transferred to certain Pa. Dist. 194. A mere irregularity public institutions ; and in case the in the appointment of a trustee trustees named, or either of them, will not, where the court has juris- should resign the trust, or die be- diction of the subject-matter, fore having fully performed and ex- make the appointment void in a ecuted the same, "the judge of pro- collateral proceeding until it is set bate having jurisdiction of the will aside. Budd v. Hiler, 27 N. J. L. shall forthwith appoint one or more 43. See also Loveman v. Taylor, trustee, or trustees, in place of such 85 Tenn. 1. trustee or trustees so failing." The 1 Colebrooke's Case, cited Sx trustees named having accepted parte Hughes, 6 Ves. 622; Ex parte the trust, one of them died, and Lacey, 6 Ves. 628, 630, n. the other afterwards resigned, be- 2 Cruger v. Halliday, 11 Paige, fore the trust had been fully per- 314. formed. It was held that the ap- 3 "Wilkinson v. Parry, 4 Buss. 272, pointment by the judge of the pro- 276; Hulme v. Hulme, 2 Myl. & K. bate, of one person as sole trustee, 682. Devise of a sum of money to was not a compliance with the in- two persons, named in trust, to be tent of the will, but that two trus- invested in safe and productive tees should be appointed. Mass. stock, the income thereof to be Gen. Hosp. v. Amory, 12 Pick. 445. paid to the testator's widow dur- The will provided that if the trus- 900 APPOINTMENT, ETC., OF TRUSTEES. [§ 386. confers the power to do so, one trustee may be appointed, in the place of two or more, and two or more may be put in the place of one.^ Not only the cestui que trust, but all other persons interested, although the interest may be simply a contingent interest in the remainder or reversion of the trust, are entitled to have the administration of the trust estate committed to proper persons, and also to a proper number of persons.^ § 386. Resignation and Removal. — By virtue of their general powers, courts of equity have jurisdiction to accept the resignation of trustees, or to remove them for cause, and to appoint others in their places. In some of the States similar powers have been conferred upon courts of probate by statute.^ This power will not be exercised tees named, or either of them, should decline the trust, die or be- come incompetent, the court of probate, with the advice of the other trustee, should appoint some suitable person in his place. Both trustees had resigned, and their places had been filled ; one of the new trustees had died and the other had resigned; the present trustee had then been appointed by the court of probate, and was now the sole trustee. Held, that the testator had intended that there should be two trustees, and that a co-trustee with the present one should be appointed, and that the present trustee had no power of appointment, and that it could be only made by the court of probate. Tarrant v. Backus (1893) , 63 Conn. 277; S. C, 28 Atl. Kep. 46. ■> Minertzhagen v. Davis, 1 Coll. 335; Emmet v. Clarke, 3 Gift. 32; Hillman v. Westwood, L. K. 3 Eq. 142; Greenev. Borland, 4 Met. 330; Dixon v. Homer, 12 Cush. 41 ; At- torney-General v. Barbour, 121 Mass. 268; Hammond v. Granger, 128 Mass. 272; Miller v. Priddon, 1 De G., M. & G. 335; Bulkley v. Eglinton,19Jur. 994; Keidv. Eeid, 30 Beav. 358 ; Pell v. De Winton, 2 De G. & J. 17; Travis v. Illing- worth, L. J. 34 Ch. 665 ; s. c, 2 Dr. & G. 344. See also Birch v. Crop- per, 2 De G. Attorney-General v. London, 3 Bro. Oh. 171; Attomey-G-eneral v. Stephens, 3 Myl. & K. 347 ; In re Fowey's Charities, 4 Beav. 225; Wilson V. Wilson, 2 Keen, 251; Attorney- General v. Clack, 1 Beav. 467; Buchanan v. Hart, 31 Tes. 647. Under Act of April 26, 1855 (P. L. 331), providing that no dis- position of property for any relig- ious, charitable, etc., use shall fail for want of a trustee and authoriz- ing a court having equity jurisdic- tion to appoint a trustee to carry the testator's intention into effect, the court of common pleas may appoint a trustee of ground rents devised to a church society, v?ho may sue for and recover the same. Frazier v. Rector, etc. St. Luke's Church, 147 Pa. St. 256; s. C, 29 W. K. C. 337; 23 Atl. Kep. 442. A will bequeathed to certain persons a sum of money in trust for the benefit of a church, and directed that the trustees, or their success- ors, invest the same for the benefit of the church. It was held that they took the money as legatees, but were trustees as to the per- formance of the duties imposed, to the extent that upon refusing to act a court of equity might appoint successors rather than permit the trust to fail for want of a trustee. In re Petranek's Estate, 79 Iowa, 410. Where new trustees had pro- cured themselves to be appointed with the object of converting a chapel to the use of the seced- ing section of a congregation of particular Baptists they were removed. See Newsome v. Flow- ers, 30 Beav. 461. Innocent mis- appropriation of the trust fund is not necessarily a ground for the removal of trustees. Attorney- General V. Cain's College, 2 Keen, 150. See also Attorney-General v. Clarendon, 17 Ves. 499 ; Ex parte Kirkby Eavensworth Hospital, 15 Ves. 314. 2 Attorney-General v. Cooper, 1 Bro. Ch. 439. 2 Attorney- General v. Daugars, 33 Beav. 621 ; Attorney-General v. Clifton, 32 Beav. 596; Attorney- General v. Stamford, 1 Phill. 737. § 389. J APPOINTMENT, ETC., OF TRUSTEES. 907 irregular appointment of trustees of a charity had been accepted for more than seventeen years, the court refused to remove them.^ § 389. Delegation of Appointing Power. — Where the creation of a trust confers upon the trustees no power to appoint their successors, or to fill vacancies, and new trus- tees are appointed by the court, the court will not confer upon the new trustees any appointing power. At an early period there was some difference of views and of practice in the English courts on this point, but it is now well estab- lished that the court will not delegate any part of its au- thority in this direction to new ti'ustees.^ Where the act- ing trustees hold the power of appointment under the trust, the court will not interfere with their exercise of dis- cretion unless there is evidence that they are not acting in good faith. ^ 1 Attorney-General v. Cuming, 2 Y. & C. 150 ; Lancaster Charities, 7 Jur. (N. S.) 96. 2 Joyce V. Joyce, 2 Moll. 276; White V. White, 5 Beav. 221; Bay- ley V. Mansell, 4 Madd. 226 ; Hol- der v. Durbin, 11 Beav. 594; South- well V. Ward, Taml. 314 ; Oglander V. Oglander, 2 De G. &Sm. 381; Brown v. Brown, 3 Y. & C. 395; Bayley v. Mansell, 4 Madd. 226. A trustee, hy will, was given ex- tensive discretionary power, and there was no provision for succes- sion in case of his failure to act. It was held, upon his death, that the court would exercise the trust through a successor appointed by it, and by the substitution of equi- table rules in the place of arbitrary power. Weiland v. Townsend, 33 N. J. Eq. 393. See also Sullivan v. Latimer, 35 S. Car. 422; Doe v. Ladd, 77 Ala. 223; Schouler, Pet'r, 134 Mass. 426; Druid Park, etc. Co. V. Gettinger, 53 Md. 46. A new trustee will not be appointed in place of one who has died, where the trust is clearly void. See In re Butterfield's Will, 133 IST. Y. 473; Schlessinger v. Mallard, 70 Cal. 326 ; Howard v. Davis, 6 Tex. 174 ; In re Christie, 133 N. Y. 473; s. c, 31 N. E. Rep. 515. Powers given to trustees in tbe trust Instrument are strictly construed. Turner v. Maule, 15 Jur. 761 ; Sharp v. Sharp. 2 B. & Ad. 404; In re Coates, L. E. 34 Ch. D. 370; Mastin v. Barnard 33 Ga. 520; Guion v. Pickett, 42 Miss. 77. 3 Bowditch V. Banuelos, 1 Gray, 220. "But when we say that she (the cestui que trust) had power at her pleasure to appoint, we do not mean to say that this was an arbi- trary power to appoint a person unfit or unsuitable to execute such a trust, as a minor, an idiot, a pauper, or person incapable of performing the duties. It must be a person of full age, sufficient mental and legal capacity, and in all respects capable of performing the required duties. In case of trust property, of real and personal 908 APPOINTMENT, ETC., OF TRUSTEES. [§ 390. § 390. The Vesting Order. — Where a new trustee is appointed as a substitute for one who has disclaimed or re- signed, or has otherwise vacated his office, tlie substitution will not be complete until he has been vested with the trust estate. In the decree by which such appointment is made the court will include an order for the conveyance directly to him, if he is a single trustee, or to him and his co- trustees, if there are others. In such conveyance all the parties that had previously held the legal title, either in- dividually or jointly, will be required to unite. ^ In some of the States it has been provided by statute that upon a proper qualification of the new trustee, the trust estate shall vest in him as an essential j)art of the appointment, and that his holding of the legal title shall be identical with that of the trustee for which he is a substitute. ^ If estate, we are not prepared to say whether an alien, not naturalized and not capable by law to hold real estate, would or would not be a suitable or legal appointment. We think the power was not ex- hausted by the appointment of the first substitute, but that the same power existed, on every resignation, to appoint a new trustee, pursuant to the original trusts ; but that this power, by necessary implication, was limited to the appointment of a person legally capable of execut- ingit." Jbid. See also Hodgson's Settlement, 9 Hare, 118; Chase v. Davis, 65 Me. 102. 1 O'Keefe v. Calthorp, 1 Atk. 18. 2 Gibbs V. Marsh, 2 Mete. 253; Parker v. Converse, 5 Gray, 336; Stearly's Appeal, 3 Grant's Cas. 270 ; Wooldridge v. Planters' Bank, 1 Sneed, 297; Duffy v. Calvert, 6 Gill, 487; Burdick v. Goddard, 11 E. I. 516; Golder v. Bressler, 105 111. 419; In re Fisher's Will, 1 W. K. 505. See also 56 & 57 Viet., ch. 53, § 12, called the Trustee Act of 1893, which contains the fol- lowing provisions : (1) Where a deed by which a new trustee is ap- pointed to perform any trust, con- tains a declarationby the appointor to the effect that any estate or in- terest in any land subject to the trust, or in any chattel so sub- ject, or the right to recover and receive any debt or other thing in action so subject, shall vest in the persons who, by virtue of the deed, become and are the trustees for performing the trust, that declara- tion shall, without any conveyance or assignment, operate to vest in those persons as joint tenants, and for the purposes of the trust, that estate, interest or right. (2.; Where a deed by which a retiring trustee is discharged, under this act, contains such a declaration as is in this section mentioned by the retiring and continuing trustees, and by the other person, if any, empowered to appoint trustees, that declaration shall, without any conveyance or assignment, operate to vest in the continuing trustees alone, as joint tenants, and for the § 390. J APPOINTMENT, ETC., OF TRUSTEES. 909 the appointment has been made under the provisions of the instrument by which the trust was created, the trust estate will vest in the new trustee in accordance with such pro- visions. Where the nature of a trust is such that the pro- visions of the statute cannot govern the vesting of the trust estate in the new trustees, and the instrument is silent in regard to the matter, a conveyance must be made in form in order to vest the estate in the new trustees.^ purposes of tbe trust, the estate, interest or right to which the de- claration relates. (3.) This sec- tion does not extend to any legal estate or interest in copyhold, or customary land, or to land con- veyed by way of mortgage for se- curing money subject to the trust, or to any such share, stock, an- nuity or ijroperty as is only trans- ferable in books kept by a com- pany or other body, or in manner directed by or under act of parlia- ment. ■^ Folley V. Wontner, 2 Jac. & ^V. 461; Owen v. Owen, 1 Atk. 496; Foster V. Goree, 4 Ala. 440; Crosby V. Houston, 1 Tex. 203; O'Keefe v. Calthorp, 1 Atk. 18. A devise to one in trust does not of itself vest the estate in the successor of the trustee, where the devise is silent on the point, and the court appoint- ing the successor makes no pro- vision for vesting the title in him. West V. Fritz, 109 111.425; Nat'l Webster Bank v. Eldredge, 115 Mass. 424; Ellis v. Boston, etc. K. Co., 107 Mass. 1. CHAPTER XIX. the" relation of trustees to the trust estate. The Subject Continued. Enlarg;eiuent of the Trust Estate in Equity. Trustee for Rents and Profits. The Subject Continued. Limitation of Estate Exe- cuted by the Statute. Limitations In Deeds and Wills. The Trust Estate in Per- sonalty. § 391. Introductory. 401. 392. The Legal Title of Trust Estate. 402. 393. The Legal Title Continued. 403. 394. The Subject Continued. 395. The Same Subject. 404. 396. Determined by Intention of Settlor. 405. 397. Effect of Power in Trust. 406. 398. Effect of Charge on Realty. 399. For Preserving Contingent Remainders. 407. 400. The Trust Estate for Mar- ried Women. § 391. Introductory. — In England the relation of the trustee to the trust estate is determined, to a great extent, by the statute of 27 Henry VIII., commonly designated as the statute of uses. Under the operation of this statute the estate of the feoffee was practically devested, and the uses were transferred into possession by converting the equitable interest of the cestui que use into a legal estate. Where a feoffment was made to A and his heirs to the use of B and his heirs, B, the cestui que use, at once became seized of the legal estate by the operation of the statute. ^ In many ^ 4 Kent's Commentaries, 293. In many of the courts of the various States the statute has been held to be a part of the common law. See Chapin v. First Univ. Soc.,8 Gray, 580; Brewer v. Hardy, 22 Pick. 376; s. c.,33 Am. Dec. 747; John- son v. Johnson, 7 Allen, 197; S. C, 83 Am. Deo. 676; First Baptist Soc. V. Hazen, 100 Mass. 322 ; Barrett v. French, 1 Conn. 354; s. c, 6 Am. Deo. 241; Bryan v. Bradley, 10 Conn. 474; Emery v. Chase, 5 Me. 232 ; Marden v. Chase, 32 Me. 329 ; Earp's Appeal, 75 Pa. St. 119 ; Rush V. Lewis, 21 Pa. St. 72; Deibert's Appeal, 78 Pa. St. 296; Witham V. Brooner, 63 111. 344; Night- ingale V. Hidden, 7 R. I. 132. The statute of uses has been enacted § 392. J ESTATE OF THE TRUSTEE. 911 of the States of this country the English statute is in force, and in some of them the doctrine has been still farther complicated by various additional statutory regulations. In a bill for the revision of the New York statutes relative to uses and trusts, the committee reporting it offer the fol- lowing objections to the rules then in force: "They ren- der conveyances more complex, verbose and expensive than is requisite, and perpetuate in deeds the use of technical language, unintelligible as 'mysterious jargon' to all but the members of one learned profession." It is difficult to withhold the expression of a wish that this sensible com- mittee might have had the statute of 27 Henry VlII. under consideration many years since. They would have saved a vast expenditure of legal learning and an untold expense of time and money. § 392. The Legal Title of Trust Estate — At law the trustee of a direct or express trust takes the legal title of the trust estate. This will be the operation of the rule, whether the estate is real or personal. It was against this rule that the statute of uses was directed. But there are many cases in which the legal estate is not vested in the cestui que use under the operation of the statute. The legal title may vest in the donee to uses, as a trustee for the ces- tui que use, or cestui que trust, as it would have done at law before the statute went into effect. Though it was the de- sign of the statute of uses to prevent the trustee from taking any interest in the trust estate, and to vest the legal as well as the equitable ownership in the cestui que use, yet, in consequence of the strict construction put upon the statute by the courts, there are conditions under which the power of vesting the legal title in trustees, either by will or by deed, remains.^ It has been said that, notwithstanding substantially in the following 7 Ohio, 275 ; Foster v. Denison, 9 States: Alabama, Delaware, Geor- Ohio, 124; Williams v. First Pres- gia,Illinois,Indiana,Kansas,Mich- byterian Soc., 1 Ohio St. 497; Gor- igan, Minnesota, Missouri, New ham v. Daniels, 23 Vt. 600; Sher- Jersey, New York, South Carolina, man v. Dodge, 28 Vt. 26 ; Bass v. South Dakota, Wisconsin. But Soott, 2 Leigh, 359. contra, see Helfenstine v. Garrard, > Hill on Trustees, 63, 229. See 912 ESTATE OF THE TRUSTEE. [§ 392. the provisions of the statutes, there are three direct meth- ods of creating a trust in realty: "First, where a use is limited upon a use, as in a conveyance or devise to the use of A and his heirs to the use of B and his heirs ; second, where copyhold or leasehold estates are limited by deed or will to a person upon any use or trust ; and third, where the donee to uses has certain trusts or duties to perform which require that he should have the legal estate."^ In a leading Henderson v. GrifSn, 5 Pet. 151; Webster v. Cooper, 14 How. 488; Adams v. Law, 17 How. 417 ; Chap- man V. Glassell, 13 Ala. 50; s. C, 48 Am. Dec. 41; Society, etc. v. Hartland, 2 Paine, 536; Tindal v. Drake, 51 Ala. 574; "Wilkinson v. May, 69 Ala. 33; Witham v. Brooner, 63 111. 844; Adams v. La Rose, 75 Ind. 471 ; McCoy v. Monte, 90 Ind. 441 ; Adkins v. Hudson, 11 Ind. 372 ; Bayer v. Cockrill, 3 Kan. 282; Ware v. Richardson, 3 Md. 505; s. c, 56 Am. Deo. 762; Thatcher v. Omans, 3 Pick. 521; Bullard v. Goffe, 20 Pick. 2.52; Richardson v. Stodder, 100 Mass. 528 ; Chamherlain v. Crane, 1 N. H. 64 ; Upham v. Varney, 15 N. H. 466; Hutchins v. Heywood, 50 N". H. 495; Reeves v. Brayton, 36 S. Car. 384; Ayer v. Ritter, 29 S. Car. 135; Howard v. Henderson, 18 S. Car. 184; Bristow v. McCall, 16 S. Car. 545; Snelling v. Lamar, 32 S. Car. 72; S.C, 17 Am. St. Rep. 835; Faber v. Police, 10 S. Car. 376; Ramsey v. Marsh, 2 McCord, 252 ; s. c, 13 Am. Dec. 717; Moorev.Shultz, 13 Pa. St. 98; s. c, 53 Am. Dec. 446; Kayv. Scates, 37 Pa. St. 31; s. c, 78 Am. Dec. 399; Rush v. Lewis, 21 Pa. St. 72; Melickv.Pid- cock, 44 2ir. J. Eq. 525; s. c.,6Am. St. Rep. 901; Jackson v. Pish, 10 Johns. 456; McCartee v. Orphan Asylum Soc, 9 Cow. 437; s. c, 13 Am. Dec. olG; Battle v. Petway, 5 Ired. 576; s. c, 44 Am. Dec. 59; Dick V. Pitchford, 1 Dev. & Bat. Eq. 576; Adams v. Guerard, 29 Ga. 651; s. c, 76 Am. Dec. 624; Jones V. Bush, 4 Harr. 1 ; Roy v. Garnet, 2 Wash. 9; Park v. Cheek, 4 Cold w. 20; Hannig V.Mueller, 82 Wis. 235; White V. Fitzgerald, 19 Wis. 480; Skinner v. James, 69 Wis. 610; Meacham v. Steele, 93 111. 135; Kellogg V. Hale, 108 111. 164; Mor- ton V. Barrett, 22 Me. 261; s. C, 39 Am. Dec. 575 ; Norton v. Leonard, 12 Pick. 152; Blount v. Walker, 31 S. Car. 13; Kickell v. Handley, lOGratt. 336; Adams v. Perry, 43 N. Y. 487. 1 Hill on Trustees, 230 ; Perry on Trusts, § .300. Under first rule see the,followingaathorities : Tyrrell's Case, Dyer, 155a ; Durrant v. Ritchie, 4 Mason, 65 ; Croxall v. Sherard, 5 Wall. 268; Hurst v. McNeill, 1 Wash. C. 0. 70; Reed v. Gordon, 35 Md. 183; Whetstone v. Bury, 2 P. Wms. 146 ; Williams v. Waters, 14 Mees. &W.166;Doev. Passing- ham, 6 B. & C. 305; Wilson v. Cheshire, 1 McCord, 233 ; Matthews V. Ward, 10 Gill & J. 443. Under the second see Sympson v. Turner, 1 Eq. Ca. Abr. 383; Doe v. Rout- ledge, 2 Cowp. 709; Pyron v. Mood, 2 McMull. 281; loor v. Hodges, Speers, 593; Doe v. Nich- ols, 1 Barn. & C. 336; Schley v. Lyon, 6 Ga. 530; Slevin v. Brown, 3 Mo. 176; Harley v. Piatt, 6 Rich. § 393.] ESTATE OF THE TRUSTEE. 913 case before the New York Court of Chancery, Mr. Chan- cellor Walworth said: "It was not the intention of the framers of the statute of uses to defeat and destroy the beneficial interest of the cestui que use, but only to change his mere equitable interest in the use of the property into a legal estate in the property itself of the same quality and duration. Where the beneficial use, therefore, cannot take effect as a legal estate in the cestui que use, it will take effect as a trust in the same manner as if the statute had not been passed, where it can take effect as a trust con- sistently with the rules of law.^ § 393. The Licgal Title Continued. — This rule, as stated in the preceding section, originated in the strict and technical construction put upon the words of the statute : "Where any person is seized of any lands or tenements to the use of any other person." It was held that a use lim- ited upon a preceding use did not come within the pro- visions of the statute, as the second cestui que use could not be said to be seized to the use. The legal estate was ex- ecuted in the first cestui que use, who was thereupon treated in equity as a trustee for the persons to whom the ultimate use or trust was limited. This doctrine has been fully ac- cepted in this country. In Croxall v. Shererd, before the Supreme Court of the United States, Mr. Justice Swayne, in his opinion, said: "A use limited upon a use is not ex- Eq. 315. As to the third see Mott 575; Hutching v. Heywood, 50 N". V.Buxton, 7 Ves. 201; "Wheeler v. H. 500; McCosker v. Brady, 1 Newhall, 7 Mass. 189; Chapln v. Barb. Ch. 329; Deibert's Appeal, Univ. Soc, 8 Gray, 580; Norton v. 78 Pa. St. 296; Gerard Ins. Co. v. Leonard, 12 Pick. 152 ; Exeter v. Chambers, 46 Pa. St. 485; Porter v. Ordiorne, 1 X. H. 232; Wright v. Doby, 2 Rich. Eq. 52; Ashurst v. Pearson, 1 Edw. Ch. 125; Wood v. Given, 5 Watts & S. 323; Vaux v. Wood, 5 Paige, 596; Barker v. Parke, 7 Watts & S. 19; Nickell v. 'Greenwood,4Mees.&W.429; Doev. Handly, 10 Gratt. 336; Williams v. Homfray, 6 Ad. & El. 206; Garth McConico, 36 Ala. 22; Wood v. V. Baldwin, 2 Ves. 646; Anthony v. Mather, 38 Barb. 473; Vanderhey- Kees, 2 Cr. & J. 75; Kobinson v. den v. Crandall, 2 Denio, 9; Posey Grey, 9 East, 1; Neville v. Saim- v. Cooke, 1 Hill, 413. ders, 1 Vern. 415; Meacham v. ' Vandervolgen v. Yates, 3 Barb. Steele, 93 111. 135; Morton v. Bar- Ch. 242. 292. rett, 22 Me. 257; S. c, 39 Am. Dec. 58 914 ESTATE OF THE TRUSTEE. [§ 393. ecuted oi affected by the statute of uses. The statute ex- ecutes only the first use. In the case of a deed of bargain and sale the whole force of the statute is exhausted in transferring the legal title in fee-simple to the bargainee. But the second use may be valid as a trust and enforced in equity according to the rights of the parties."^ In Durant 1 Croxall V. Shererd, 5 Wall. 268, 282. See also Doe v. Passingham, 6 Barn. & C. 305; Jackson v. Gary, 16 Johns. 304; Francisous v. Rei- gart, 4 Watts, 108 ; Roe v. Tran- marr, 3 Smith's LeadingCases, 1780, note; Doe v. Oliver, 14 Barn. &Cr. 181. A deed to X, Y and Z, their heirs, etc., in trust for the only- proper use of the grantors during life, and afterwards for the use of their grandchildren, conveys the legal estate as an executed use, and does not vest a trust estate in the grantees. Jones v. Bush, 4 Harr. 1. As to persons in esse the legal es- tate is vested immediately, and as to persons not in esse it vests im- mediately upon their coming into being, if they come in good time, otherwise it passes over to the next remainder-man. Roy v. Garnet, 2 Wash. (Va.) 9. Where land is given in trust to a husband for the use and benefit of his wife, and upon her death in trust for the heirs of her body, and "at any time should the said husband deem it best for the interest of his said wife and children to sell said property and reinvest the pro- ceeds, he is hereby empowered so to do," the legal title remains in the husband as trustee, and the statute of uses does not control. Carrigan v. Drake, 86 S. Car. 354. Where an estate is conveyed to a trustee for certain purposes, and it is intended to protect the estate until tlie time fixed for the division, and this can only be done by the legal title continuing in the trustee, the use will not be executed in the beneficiary. Poser v. Cook, 1 Hill, 413. A devise for the trustee of real and personal estate to hold in trust for, and to collect, and receive the income from said estate, and pay over the same to the son of the testatrix, during his natural life, without being subject to his debts and liabilities, is an active opera- tive trust, and the whole estate passes to the trustee. Shankland's Appeal, 47 Pa. St. 113. A testator devised his entire estate to trustees to collect and divide the net in- come in specified proportions among his children for their re- spective lives, and at the death of each child gave a specific portion of the corpus of the estate to the child or children of the child dying, and in the event of there being none to others. Held, that on the death of each child the estate which the trustees formerly had in that portion of the corpus which was devised over on the death of such child ceased. Roarty v. Smith, 31 Atl. Rep. 1031. A simple deviseof real and personal property in trust for plaintiff, a married woman, where there are no limita- tions over, and no active duties to be performed by such trustee, vests the legal title to the real estate in plaintiff under the statute of uses. McKenzie v. Sumner, 114 ]Sr. Car. 425; s. c, 19 S. E. Rep. 375. A deed conveying land to a trustee "and his heirs forever, in fee-sim- § 393. ] ESTATE OF THE TRUSTEE. 915 V. Ritchie, before tlie Circuit Court of the United States, this doctrine is stated by Mr. Justice Story, as follows : "Then came the statute of uses, which ordained that such as had the use cf lands should, to all intents and purposes, be reported and taken to be absolutely seized and possessed of the soil itself, so that the interest of cestui que use was, by this means, changed from an equitable into a legal es- tate, for the statute executed the use to the possessioii, and made cestui que use complete legal owner, to all intents and purposes, annihilating the intermediate estate of the feoffee. JBut the courts of common law, in the construction of the statute, soon adopted a narrow and illiberal mode of inter- pretation, and held that a use could not be limited on a use, so that if A made a feoffment to B and his heirs, to the use of C and his heirs, in trust for D and his heirs, they held that the statute executed only the first use, and that the second was a mere nullity, thereby throwing all such trusts back again into equity. This consideration made it very important to examine the operation of different modes of conveyancing upon uses.''^ Where lands were conveyed to A, to have and to hold to him, his heirs and assigns, "in trust for the sole use and benefit of B, her heirs and assigns, forever, i. e., in trust for said A, to bargain, sell and convey, and to lease and demise said premises, and to pie, in trust for the sole and sepa- come, or in case the wife he- rate use of 'a married woman' dur- come entitled thereto under the ing her natural life, and, at her provisions of the settlement, to pay death, in trust to be equally divided them to her, for her sole and sepa- between such children of her and rate use, and, on the death of the her present husband as may be in husband and wife, to hold the life at her death, and the represent- property to the use of their chil- atives of any one or more of said dren, vests the legal estate in the children, if any, as may have died trustees, the trust not being a mere before" her decease, passed the fee formal trust within the statute of in the land to the trustee. Cush- uses, which in such case executes man v. Coleman, 92 G-a. 772; s. c, the use, and vests the legal estate 19 S. E. Rep. 46. A marriage set- in the beneficiary. Dyett v. Central tlement formally conveying land to Trust Co., 140 2sr. Y. 54; s. c, 35 trustees and investing them with N. E. Eep. 341. power to sell and reinvest, and i Durant v. Ritchie, 4 Mason, 45, directing them to permit the bus- 65. band to receive the rents and in- 91(5 ESTATE OF THE TRUSTEE. [§ 394. mortgage the same as he may be directed by said B in writing," and to pay over to her the proceeds, or reinvest them as directed by her from time to time, it was held that this was an active trust, and valid, and the trustee might sue in his own name alone. ^ § 394. The Subject Continued In the second class of cases which are held to be exempt from the operation of the statute of uses, copyhold or leasehold estates are lim- ited to uses. At an early day it was held that the word seized was applicable to freeholds only, and that, in conse- quence, the statute did not apply to copyholds or terms for years, of which no seizin can be had, and where lands of either of those tenures are limited by deed or will to one person to the use of another the first taker will have the legal estate, and will hold it as a trustee for the other. In an American case, where, by the provisions of a marriage settlement, the real and personal estate of the intended wife was vested in a trustee, to be held for her until the 1 Goodrich v. City of Milwaukee, 24 Wis. 422. M and his wife, to- gether with their son John and his wife, being the owners of the legal title to the property in controversy, quitclaimed to K, who immedi- ately reconveyed to the son, who also on the same day executed a bond to his father and mother, to the effect that the rents and profits should be paid to them, and that he held the title "in trust for the ben- efit of the children" of said M and his wife, "excepting diaries G., A., J., Eliza, J., P., K.," this property to be divided equally among the children, upon the death of M and his wife, the court held that as this trust was passive in all its terms, the estate did not vest in a trustee and passed directly to the seven children as beneficiaries under the statutes of Wisconsin. Hannig v. Mueller, 82 Wis. 23.5. See White v. Fitzgerald, 19 Wis. 480; Ruth v. Oberbrunner, 40 Wis. 238 ; Smith v. Ford, 48 Wis. 133; Skinner v. James, 69 Wis. 610. The existence of a duty to be performed by the trustee prevents the statute of uses from operating so as to ex- ecute the trust, and continues the legal title in the trustee. Webster V. Cooper, 14 How. 488 ; Kellogg v. Hale, 108 111. 164; Nickell v. Hand- ley, 10 Gratt. 336; Blount v. Walker, 31 S. Car. 13; Adams v. Perry, 43 N". Y. 487; Wood V. Mather, 38 Barb. 473; Leg- gett V. Perkins, 2 N. Y. 297; Meacham v. Steele, 93 111. 13.5; Norton v. Leonard, 12 Pick. 152; Morton v. Barrett, 22 Me. 261 ; s. c 39 Am. Dec. 575. A trust for a married woman and her infant children will stand, although no active duties are to be performed by the trustee. Dean v. Long, 122 111. 447. 394. J ESTATE OF THE TRUSTEE. 917 miirriage, ''and from and immediately after the solemniza- tion thereof, in trust to permit" the husband and wife "to have, use and possess" the said property "for and during their joint lives, and from and after the death of either, then to permit the survivor to use and possess the said property during his or her natural life," with contingent remainders over ; and it was provided that the real and per- sonal estate might be altered, sold or exchanged, with the joint consent, in writing, of the trustee and cestui que trusits, provided the proceeds were invested in other property, to be held subject to the same trusts, it was held that the legal title to the real estate remained in the trustee.^ 1 Eioe V. Burnett, 1 Spears' Eq. 579, See also Sympson v. Turner, 1 Eq. Ca. Abr. 383; Doe v. Kout- ledge, 2 Cowp. 709; loorv. Hodges, 1 Spears' Eq. 593 ; Pryon v. Mood, 2 McMuU. 293; Doe V.Nichols, IBarn. & Or. 336 ; Harley v. Platts, 6 Rich. L. 315; Schley v. Lyon, 6 Ga. 530; Slevin v. Brown, 3 Mo. 17G ; Barker V. Greenwood, 4 Mees. & W. 421 ; Doe V. Briggs, 2 Taunt. 109 ; Eob- inson V. Gray, 9 East, 1; Dodson V. Ball, GO Pa. St. 492; s. c, 100 Am. Dec. 586; Barnett's Appeal, 46 Pa. St. 392; Killam v. Allen, 52 Barb. 605 ; Wood v. Wood, 5 Paige, 596; s. c, 28 Am. Dec. 451; Vail V. Vail, 4 Paige, 317 ; Brewster v. Strilier, 2 N. Y. 19; Garth v. Bald- win, 2 Ves. 645. Where the dece- dent left a will by which all his residuary estate was given to trus- tees, their heirs and successors in trust; that one-sixth part should "go to and become the property, of" H, absolutely and forever, and the remaining five-sixths should be held by the trustees for the use and benefit of certain beneficiaries. Authority was given to the trustees to sell and convey the whole or any part of the estate for the purpose of making a partition or for any other necessary purpose. The court decided that, under this will, a legal estate in the entire property vested in the trustees, and that the trust in the one-sixth part did not come to an end until that share of H should be ascertained by parti- tion. Devries v. Hiss, 72 Md. 560. A testator devised a portion of his estate to certain trustees, "for the use and benefit of my son 0, to be applied and appropriated to the use and benefit of said 0, at the dis- cretion of my said trustees," and authoi-ized the trustees "to sell and pass deeds to convey any and all of my real estate at their discretion," It was held to vest in the trustees an estate in fee. Packard v. Mar- shall, 138 Mass. 301. A husband conveyed his property to D and his heirs in trust for the use of the grantor's wife during her life, and thereafter in trust for the grantor during his life, and, finally, after the death of the survivor of them, in trust for the use and benefit of right heirs of the widow in fee. This conveyance was held to in- vest D with the entire legal estate, and the beneficiaries with a mere equitable interest. Leonard v. V. Diamond, 3] Md. 536. "It seems 918 ESTATE OF THE TRUSTEE. [§ 395. § 395. The Same Subject. — The third class of cases which are exceptions to the operation of the statute of uses falls under a rule which is much less technical and intricate, and of much wider application. The rule is that, wherever the instrument creating the trust confers upon the trustee any power in trust, or imposes any duty relating to the control or management of the trust estate, or establishes any agency to be performed by the trustee as such, the legal title will vest in him in order to enable him to admin- ister the trust. In a recent case in Illinois, where a testa- tor named certain persons as executors and trustees, and declared that the bulk of the estate, which was to be divided on the death of ten annuitants, should be and remain in the care and control of said executors and trustees until its di- vision, it was held that the executors, being trustees of an express active trust, took the legal title to the estate, though it was not expressly devised to them.^ In another to be pretty well established that a devise to trustees to hold real property for the sole use and ben- efit of a named beneficiary, and to pay him or her the rents annually, taking receipts therefor, is '-such a power of management as vests the legal estate in the trnstee." Look V. Barbour, 62 Ind. 577. A con- veyance to trustees to receive the yearly income, rents, profits and produce, and apply the same yearly to the use of the grantor, free from the control or influence of her hus- band, is by the New Tork statutes recognized as avalid express trust, and vests in the trustees the entire legal and equitable estate, subject only to the execution of the trust imposed; and every interest and estate not embraced in the trust, and not otherwise disposed of by force of the statute, remains in and reverts to the grantor and her heirs as a legal estate. Townshend v. Frommer, 125 N. Y. 446. Where legal title in the trustee is essential to the performance of the duties imposed by implication, the trus- tee will be held to take the legal title. See West v. Fritz, 109 III. 425; Gill V. Logan, 11 B.Mon. 233; Morton v. Barrett, 22 Me. 257 ; s. C, 29 Am. Dec. 575; Wilson v. Buss, 17Fla. 696; North v. Philbrook, 34 Me. 537 ; Warner v. Sprigg, 62 Md. 14; Cleveland v. Hallett, 6 Cush. 403; Packard v. Marshall, 138 Mass, 301; Fisher v. Fields, 10 Johns. 505; Welch v. Allen, 21 Wend. 147; Barkley v. Dosser, 15 Lea, 529; Freedley's Appeal, 60 Pa. St. 349 ; Williams v. First Pres- byterian Society, 1 Ohio St. 478; Toronto Gen. Trust Co. v Chicago, etc. E. Co., 123 N. Y. 37 ; Killam v. Allen. 52 Barb. 605; McCosker v. Brady, 1 Barb. Ch. 329. 1 Hale V. Hale (1893) , 146 111. 227 ; s. c, 33 N. E. Eep. 858. See Mott V. Buxton, 7 Ves. 201 ; Norton v. Leonard, 12 Pick. 152 ; Wheeler v. Newhall, 7 Mass. 189; Chapin v. Univ. Soc, 8 Gray, 580; Exeter v § 395.] ESTATE OF THE TRUSTEE, 919 recent case, a testator, by one clause of his will, devised certain property to A, subject to the provisions of another clause appointing trustees to manage it, applying the in- come to his support, and making the trust a limitation on Odiorne, I N. H. 232; Wright v. Pearson, 1 Edw. Ch. 125; Striker V. Mott, 2 I'aige, 387; s. c, 22 Am. Dec. 646; Wood v. Wood, 5 Paige, 596. The trust or use remains a mere equitable estate, where an agency, duty or power is imposed on the trustee, by a limitation to him and his heirs to pay the rents. Doe v. Homfray, 6 Ad. & El. 206; White v. Barker, 1 Bing. (N. Cas.) 573; Barker v. Greenwood, 4 Mees. & W. 429 ; Ken- rick V. Beauclerk, 3 Bos. & P. 178; Garth v. Baldwin, 2 Ves. 646 ; An- thony V. Kees, 2 Cromp. & J. 75; Leggett V. Perkins, 2 N. Y. 297 ; Neville v. Saunders, 1 Vern. 415; Eobinson v. Gray, 9 East, 1 ; Brew- ster v. Striker, 2 5r.Y. 18; Meacham V.Steele, 93 lU. 135; Wickham v. Berry, 53 Pa. St. 70; Shankland's Appeal, 47 Pa. St. 113; Barnett's Appeal, 46 Pa. St 392; Adams v. Perry, 43 N. Y. 487; Maurice v. Maurice, 43 N. Y. 203; MeCosker V. Brady, 1 Barb. Ch. 329; Hutch- ins V. Hey wood, 50 N. H. 500; Morton v. Barrett, 22 Me. 257 ; s. C, 39 Am. Dec. 575; Ogden's Appeal, 70 Pa. St. 501 ; Diebert's Appeal, 78 Pa. St. 296; to apply rents to the maintenance of the beneficiary, Sylvester V.' Wilson, 2 T. K. 444; Doe V. Edlin, 4 Ad. & El. 582 ; Vail V. Vail, 4 Paige, 317 ; Girard Ins. Co. V. Chambers, 46 Pa. St. 485 ; Doe v. Ironmongers, 3 East, 533; Town- shend v. Frommers, 125 N. Y. 446; Preachers' Aid Soo. v. England, 106 111. 125. Testator bequeathed $1,000 a piece to certain of his griindchildren, payable to them when they should respectively at- tain majority, providing that their respective fathers should hold the bequests in trust, and apply the income "towards their education and support." Held, that so long as the fathers adequately educated and supported the legatees the income was the fathers' property, and might be alienated by them, subject to its liability for the edu- cation and support of the children. Dixon V. Bentley (1892), 50 N. J. Eq. 87 ; s. c, 25 Atl. Kep. 194. "It is because a seizin of the legal es- tate is necessary to enable the trustee to collect the rents and profits that a devise of the legal estate in the rents and profits to a trustee for a term of years, or for any other limited period, carries with it the legal estate in the land, for the same period or time, by necessary implication at the com- mon law." Wood V. Wood, 5 Paige, G03; s. c, 28 Am. Deo. 451; to make repairs, Shapland v. Smith, 1 Bro. Ch. 75; Tierny v. Moody, 3 Bing. 3 ; Brown v. Rams- den, 3 Moore, 612; to invest the proceeds or principal, or apply the income of the estate, Exeter v. Odiorne, 1 N. H. 232; Ashurst v. Given, 5 Watts & S. 323; Vaux v. Parke, 7 Watts & S. 19; Nickell v. Handley, 10 Graft. 336 ; Zabriskie V. Morris, etc. K. Co., 33 N. J. Eq. 22; to dispose of the estate by sale, Bagshaw v. Spencer, 1 Ves. 143; Wood V. Mather, 38 Barb. 473; Hawker v. Hawker, 3 B. & Aid. 537; s. C, 5 E. C. L. 386; Shaw v. Weigh, 2 Str. 798; Villiers v. 920 ESTATE OF THE TRUSTEE. [§ 31)5. the title vested in A by the first clause, until, in their dis- cretion, A had become competent to manage it when the title should vest absolutely in A, it was held that the abso- Villiers, 2 Atk.72; Mott v. Buxton, 7 Ves. 201; Doe v. Eldin, 4 Ad. & EI. 582; s. c, 31 E. C. L. 143; Preachers' Aid Soc. v. England, 106 111. 125; Glover V. Mouckton, 3 Bing. 13; S. C, 11 E. C. L. 9; Gibson v. Montfort, 1 Ves. 485; Warter v. Hutchinson, 5 Moore, 143; s. C.,1 B. & C. 121; Watson V. Pearson, 2 Exc. 594 ; Kirkland v. Cox, 94 111. 402; Spessard v. Kohrer, 9 Gill, 262; Jackson v. Robins, 16 Johns. 537 ; Stockbridge V. Stockbiidge, 99 Mass. 244; JSTeilson v. Lagow, 12 How. 98 ; to sell or mortgage for the payment of debts, legacies or annuities, or to purchase other lands to be set- tled to particular uses, Doe v. Ewart, 7 Ad. & El. 636; Cunis v. Price, 12 Ves. 82; Bagshaw v. Spencer, 1 Ves. 142; Spence v. Spence, 12 Com. B. (N". S.) 199; Smith V. Smith, 11 Com. B. (N. S.) 121 ; Chamberlain v. Thompson, 10 Conn. 243; S. C, 26 Am. Dec. 390; Vaux v. Parke, 7 Watts & S. 19; to exercise control over the estate for the purpose of preserv- ing contingent remainders, Van- derhayden v. Crandall, 2 Denio, 9; Barker v. Greenwood, 4 Mees. & W.431; Biscoe v. Perkins, 1 V. & B. 485 ; Henson v. Wright, 88 Tenn. 501; to protect the estate for a given time, or until the death of some person, or until division, Williams v. McConico, 36 Ala. 22; Nelson v. Davis, 35 Ind. 474; Za- briskie v. Morris, etc. K. Co.,33N. J. Eq. 22; Ames v. Ames, 15 B. I. 12; Leonard v. Diamond, 31 Md. 536; Poser v. Cook, 1 Hill, 413; Morton v. Barrett, 29 Me. 257; s. c, 39 Am. Dec. 575. But see McNish V. Guerard. 4 Strobh. Eq. 66. The statute will not operate, notwithstanding, on a trust to sell, a power be given to one of the cestuis que trust to control the sale in part, Chapman v. Blisset, Talb. 145 ; Wykham v. Wykham, 18 Ves. 395; nor because on a trust for payment of debts and legacies out of the proceeds of a sale of land, the direction is only in aid of the personal property, Murthwaite v. Jenkinson, 2 Barn. & Cr. 357. An estate was devised in trust to ex- ecutors for the children of the tes- tator until the youngest should attain his majority, the directors being directed, in the meantime, to manage the estate and receive the income. It was held that a fee-simple estate in trust was vested in the executors, defeasible when the youngest child should attain the age of twenty-one years. Pearce v. Savage, 45 Me. 90. A and his wife conveyed all their property, both real and personal, to B in trust to immediately sell so much as would be sufficient to pay all the then existing debts of A, and to hold the residue in trust for his wife and children. It was held that the trustee had an absolute legal estate, and that a sale made by him was valid, although con- trary to the terms of the trust the proceeds were applied to the pay- ment of new debts of the husband, after the old ones had been paid in full. Stokes v. Middleton, 28 N. J. L. 32. Where property was be- queathed to be invested by the ex- ecutor "in good and reliable secu- rities for the use of" the legatee, tbe interest to be paid to him semi- § 396. ] ESTATE OF THE TRUSTEE. 921 lute title to the property was vested in the trustees. ^ In a leading case before the Supreme Court of Pennsylvania, Mr. Justice Agnew, in his opinion, said: "A special trust maintains the legal estate in the trustee to enable him to perform the duties devolved on him by the donor, and gives to the cestui que trust only a right in equity to enforce the performance of the trust ; and where the trust is not ac- tive, the legal estate will remain in the trustee so long as it is necessary to preserve the estate itself, as in the case of a trust for a married woman to protect the estate from her husband, or a trust for a spendthrift son to protect it from his creditors, or to preserve contingent remainders. As a consequence, it is a geiaeral principle that a simple or passive trust cannot continue the legal estate in the trustee, except for a useful and proper purpose, such as the law will regard and protect, and as soon as the purpose fails or ceases to exist, the legal estate becomes executed in the cestui que trust. In the former case equity preserves the trust to give effect to the donor's right of dominion over his property, and in the latter, in favor of public policy, permits it to fall as useless."^ § 396. Determined by Intention of Settlor. — Where there is a question with regard to a conveyance to a trustee, as to whether it is a use executed by the statute, or a trust to be administered by the trustee, it is to be determined by the intention of the grantor as expressed in the instrument. It will be construed as a use, or a trust, as will best carry annually during his life, and there- Kawle, 247; PuUen v. Reinhard, 1 after the prinoipal to go to his Whait. 520; Thomas v. Folwell, 2 children; or should he die without Whart. 11; Wright v. Brown, 44 issue, to revert to the estate of the Pa. St. 224; Fisher v. Taylor, 2 testator. By this bequest an active Rawle, 33 ; Holdship v. Patterson, trust was held to be created en- 7 Wat1«s, 547 ; Ashurst v. Given, 5 titling the trustee to possession. Watts<& S.323; Eyrick v. Hetrick,l Holl's Appeal, 133 Pa. St. 351. Harris, 491 ; Brown v. Williamson, 1 Meek V. Briggs (1893), 87 Iowa, 36Pa.St. 338; Barnett's Appeal, 46 610; s. c, 54 ]Sr. W.Eep.456. Pa. St. 409; Freyvogle v. Hughes, 2 Dodson v. Ball, 60 Pa. St. 492, 56 Pa. St. 228; McBride v. Smyth, 497. See Barnett's Appeal, 46 54 Pa. St. 250. Pa. St. 400; Lancaster v. Dolan, 1 922 ESTATE OF THE TRUSTEE. [§ 396. into effect the intention of the parties. In Massachusetts it has been held that it is a general rule to consider estates conveyed in trust as estates conveyed to use, if it be not repugnant to the manifest intent of the grantor. If it be it is considered as a trust estate, and the trustee is answer- able for damages, as on an implied assumpsit to the cestui que trust that he would execute the trust, and in this case the court adds a remedy certainly very inconvenient, fre- quently very inadequate, and resorted to from necessity, because no court is competent to compel a specific perform- ance of the trust. ^ In a later case, before the same court in which this case is cited in the opinion with approval, Mr. Chief Justice Shaw said: "The principle to be de- duced from these cases is that the nature and quality of the estate will be determined by the intent, that the intent will be inferred from the purposes of the conveyance, and that where the conveyance is a mortgage to secure a personal undertaking, it shall be taken that the parties intended to create such an estate as is best adapted to give effect to the deed as such collateral security."^ iNewhall v. Wheeler, 7 Mass. Md. 505; s. c, 56 Am. Dec. 762; 189. See Cleveland v. Hallett, 6 Coulter v. Robinson, 24 Miss. 278; Cush. 407; Gibson v. Montfort, 1 s. c, 57 Am. Dec. 168; Smith v. Ves. 485; Gates v. Cooke, 3 Burr, Metcalfe, 1 Head, 64; Gardenshire 1684; Stearns V. Palmer, 10 Met. 32; v. Hinds, 1 Head, 402; Ellis v. Sears v. Kussell, 8 Gray, 86; Jour- Fisher, 3 Sneed, 231 ; S. C, 65 Am. olomon V. Massingill, 86 Tenn. 82; Dec. 52; Koenig's Appeal, 57 Pa. Young V. Bradley, 101 U. S. 782; St. 352; McBride v. Smyth, 54 Pa. West V. Fitz, 109 111. 425 ; Gossen v. St. 245 ; Ivory v. Burns, 56 Pa. St. Ladd, 77 Ala. 224; Fox v. Storrs, 300; Matthews v. Ward, 10 S. & 75 Ala. 267; Gould v. Lamb, 11 J. 44. Met. 84; Brooks v. Jones, 11 Met. ^ Norton v. Leonard, 12 Pick. 191 ; Fisher v. Fields, 10 Johns. 152, 158. See Ware v. Richardson, 495; Doe v. Field, 2 B.& Ad. 564; 3 Md. 505; Williams v. Waters, 14 Trent v.Hanning,7East, 99; Shaw Mees. & W. 166; Douglas v. Con- V. Wright, 1 Eq. Ca. Ab. 176; greve, 1 Keen, 410. "Whether this Brewster v. Striker, 1 E. D. Smith, were a use executed in the trustees 321 ; Richardson v. Stodder, 100 or not must depend upon the in- Mass. 528 ; Bryan v. Weems, 29 tention of the devisor. This pro- Ala. 423; s. c, 65 Am. Deo. 405; vision was made to secure, to a Greenwood v. Coleman, 34 Ala. feme covert a separate allowance, to 115; McElroy v. McElroy, 113 effectuate which it was essentially Mass. 509; Ware v. Rich.ardson, 3 necessary that the trustees should § 397.] ESTATE OF THE TRUSTEE. 923 § 397. Effect of Power in Trust — It is the rule that all trusts that trustees are required to execute, whether conveyed absolutely or as powers in trust, are to be ex- ecuted out of the estate conveyed to them.' Where in a take the estate, with the use exe- cuted, for otherwise the husband would he entitled to receive the profits, and so defeat the object of the devisor." Harton v. Harton, 7 T. K. 652. "The later and more modern decisions, however, seem to favor a more liberal construction of deeds and wills, in order to reach the real intention of their makers." Ware v. Richardson, 3 Md. 505, 552. "The intention of the grantor is to, prevail in cases like the pres- ent, but with this qualification, that it must not contravene or de- feat the established rules of con- struction ; or, in other words, the in - tention is to be ascertained by the legal rules of interpretation." Ibid. 549. "That where it becomes necessary to ascertain the intent of the parties to u. conveyance, such intent may be inferred and deter- mined from the nature and pur- poses of the conveyance, as well as from the force and technical effect of the particular form of words by which it is made, has often been decided in this court. Under a statute of this commonwealth it is provided that all conveyances to two or more shall be held to carry estates in common, unless it appear to have been the intent that joint estates should be created. * * In the case of JSTewhall v. Wheeler, which was a case extremely like the present, being a conveyance to three persons, selectmen of the town of Hollis, in New Hampshire, for the use, benefit, and behoof of one Hunt, it was held that the con- veyance was a trust and not a use executed, because such construc- tion would best comport with the general purposes of the convey- ance and carry into effect the in- tent of the parties." Shaw, J., in Norton v. Leonard, 12 Pick. 152, 157. 1 Watson V. Pearson, 2 Exc. 593; Blagrave v. Blagrave, 4 Exc. 569 ; Brown v. Whlteway, 8 Hare, 156 ; Shapland V.Smith, 1 Bro. Oh. 75; Heardson v. Williamson, 1 Keen, 33; Player v. Nichols, 1 B. & Cr. 142; Warter v.. Hutchinson, 6 Moore, 153; s. C, 1 B.& Or. 721; Chapman v. Blissett, Forr. 145; Doe V. Claridge, 6 C. B. 641; Barker v. Greenwood, 4 Mees. & W. 429; Ex parte Gadsden, 3 Kich. 468; Nash v. Coates, 3 B. & A. 839; Doe v. Hicks, 7 T. R. 433; Norton v. Norton, 2 Sandf. 296; WiUiman v. Holmes, 4 Rich. Eq. 475; McElroy v. McElroy, 113 Mass. 509; Watkins v. Specht, 7 Cold. 585; Davis v. Williams, 85 Tenn. 646; Farmers' Nat'l Bank v. Moran, 30 Minn. 167; McBride v. Smyth, 54 Pa. St. 245; Wilcox v. Wilcox, 47 N. H. 488; Ivory v. Burns, 56 Pa. St. 300; Koenig's Appeal, 57 Pa. St. 552; Bryan v. Weems, 20 Ala. 423 ; Greenwood v. Coleman, 34 Ala. 150; Slevin v. Brown,32Mo.l76; Smith v.Metcalf, 1 Head, 64; Gardenshire v. Hinds, 1 Head, 402; Pearce v. McClen- aghan, 5 Rich. 178; Ware v. Rich- ardson, 3 Md. 505; Ellis v. Fisher, 3 Sneed, 231 ; s. C. 65 Am. Dec. 52. Where the deed of trust conferred unlimited discretion as to the time and method of exercising the power 924 ESTATE OF THE TEUSTEE. [§39 i . devise to trustees and their heirs upon divers trusts in suc- cession, in -which some required the legal estate to remain in the trustees, and others in themselves would not do so, the entire legal fee remains in the trustees.^ Where an es- tate is conveyed to trustees in fee upon trusts that do not exhaust the estate, and a power is added which can be ex- ecuted only in conveying in fee-simple, the trustees will hold the estate in fee, and by virtue of the title in them as trustees, and not of the mere power, their conveyance of the estate will be valid. ^ A power of disposal annexed to of sale, and provided that the pro- ceeds of all sales were '-to be rein- vested and held on the same trusts and way as the property so sold," the court held that such a trust re- quired and implied a fee-simple in the grantee. The conveyance was made to Caroline, wife of W. E. Slockbridge, '-for and during her natural life, and from and after her decease to the persons who would then be the heirs-at-law of Stock- bridge if he had then died intestate, but upon the trusts and with the powers following; that Caroline at any time during the life of Stock- bridge, and with his concurrence, testified in writing under his hand and seal, may sell and convey the granted premises, or any part or parts thereof, in fee-simple or for any less estate at public or private sale, at such time or times, to such person or persons and for such con- sideration as may seem to her judi- cious, without the necessity of ap- plying to any court for leave so to do; the net proceeds of all such sales to be reinvested and held on the same trusts and way as the property so sold," and that her deed with the written consent of Stockbridge should "cut off the rights of such remainder-men in the granted premises as fully and effectually as if such remainder had not been hereby created and the absolute estate in fee-simple had been hereby ganted to the said Caroline." The court held that the deed of Caroline Stockbridge, executed with her husband's con- currence, would be effectual to pa?s the entire title; that no part of the title remained in the settlor to convey; that Caroline acquired as her beneficial interest the use during her life, and that the estate in remainder could not be sold and the proceeds reinvested separately from the estate in possession. Stockbridge v. Stockbridge, 99 Mass. 244. ^ Brown v. Whiteway, 8 Hare, 156; Hawkins v. Luscombe, 2 Swanst. 375, 391 ; Harton v. Harton, 7 T.'r. 652; Stockbridge v. Stock- bridge, 99 Mass. 244. See also Tucker v. Johnson, 16 Sim. 341; Leonard v. Diamond, 31 Md. 536. 2 Poad V. Watson, 37 Eng. L. & Eq. 112; Fenwick v. Totts, 8 De G., M. & G. 506; Watkins v. Fred- erick, 11 H. L. Cas. 354 ; Haddesley V. Adams, 22 Beav. 266 ; Marvin v. Smith, 46 N. Y. 571; Cleveland v. Hallett, 6 Cush. 403. See also Eamsdell v. Ramsdell, 21 Me. 288; Pickering V. Langdon, 22 Me. 213; White V. White, 21 Vt. 250; Bur- bank V. Whitney, 24 Me. 146. § 397.] ESTATE OF THE TRUSTEE. 925 an estate for life, although it may devest the estate in re- mainder, cannot enlarge to a fee an estate for life ex- pressly declared and limited.^ In Pennsylvania it has been held that where an estate for life is given with a general power of appointment, and on failure to appoint, to children or special heirs, the power will not enlarge the estate to a fee, or fee tail, and the children or special heirs will take by purchase.'^ Whether the trustee takes the the legal title depends upon the intention of the grantor; hence, where there is no evidence of an intention that the trustees shall take anything beyond what is necessary for the ex- ecution of the trust, the estate, even if limited to them and their heirs, will be reduced to the limit fixed by the trust. ^ 1 Burleigh v. Clougb, 52 N. H. 274. '-It will be found, upon ex- amination, that a majority of the authorities to which we are re- ferred by the appellants, which ap- parently go to the extent of holding that a power of disposition annexed to an estate for life enlarges the life estate to a fee, are cases in which the estate for life is not con- ferred by express terms, but arises from implication, such implication being deemed essential, in the par- ticular case, in order to give effect to the intention of the testator, as manifested by the whole scope of the devise." Ibid. 274. ^Yarnall's Appeal, 70 Pa. St. 340. 2 Beaumont v. Salisbury, 19Beav. 198; Doe v. Hicks, 7 T. K. 433; yash V. Coates, 8 B. & A. 839; Webster v. Cooper, 14 How. 499; Coulter V. Kobertson, 24 Miss. 278; s. C, 57 Am. Dec. 168; Curtis v. Price, 12 Ves. 89. Where the pur- poses of a trust can be answered by a less estate than a fee-simple, a greater estate than is sufficient to answer such purposes shall not be permitted to pass to the trustee; but the uses in remainder, limited on such lesser estate so given to them, shall be executed by the stat- ute of uses. Doe v. Simpson, 5 East, 162. Land had been con- veyed by deed to trustees "and to the survivor of them, and to the heirs and assigns of such survivors, ' ' that they should "execute such leases, conveyances, contracts and agreements," attaching the land conveyed as the cestui que trust might request. The deed stipulated that in the event the cestui que trust died befoi-e the grantor, the land should descend to her surviving children; and in case the grantor died first, the trust should termi- nate. It was held that the trustees had no power to convey the fee, even with the consent of the cestui que trust, their estate being only for the joint lives of the cebtui que trust and the grantor. Walton v. Fol- lansbee, 131 111. 147. See also Bryan V. Weems, 29 Ala. 423; s. c, 65 Am. Deo. 407; McBride v. Smyth, 54 Pa. St. 245 ; Williman v. Holmes, 4 Rich. Eq. 475 ; Wilcox v. Wheeler, 47 N. H. 488; Xorton v. Norton, 2 Sandf. 296; Slevin v. Brown, 32 Mo. 176. 926 ESTATE OF THE TRUSTEE. [§ 398. Where trustees are to hold an estate for a limited time, in order to pay debts and legacies, and convey to the bene- ficiary when he comes of age, or at a fixed date, they may take only a chattel interest in the real estate, even though it is limited in the instrument to them and their heirs. ^ In a leading case before the English Court of Appeal in Chan- cery, where land was conveyed to a ti-ustee, his heirs and assigns, to certain uses, and after the determination of these uses to the use of the trustee, his heirs and assigns, upon trust to receive the rents and profits, and pay them to A, a married woman, for her separate use, and after the determination of that estate to stand seized of the said land to such uses and upon such trusts as A should by will appoint, and in default of appointment to the use of the heirs and assigns of A, it was held, — reversing the decision of the Master of the Rolls, — that, though the construction might be otherwise on a will, the trustee took the legal es- tate in fee, and that A took an equitable estate for life, with an equitable remainder to her heirs and assigns, which two estates united according to the rule in Shelley's Case, and gave her the equitable estate in fee.^ Where an estate was conveyed to a husband in trust for his wife for life, and to her heirs forever, subject to her husband's curtesy, it was held that the trustee took a legal estate which terminated on the death of his wife, and that on her death the trust ceased.^ § 398. Effect of Charge on Realty Where a trust estate consists of realty, a charge upon it of legacies or 1 Goodtitle v. Whitby, 1 Burr, 228; Wheedon v. Lea, 3 T. K. 41 Badder v. Harris, 2 Dowl. & Ky 76; Stanley v. Stanley, 16 Ves.491: Warter v. Hutchinson, 1 B. & Cr, 721; Pratt V. Timins, 1 B. & Aid Q. B. 430; Pearce v. Savage, 45 Me. 90. 2 Cooper V. Kynook, L. K. 7 Ch. App. 398. ^ Noble V. Andrews, 37 Conn. 346. Where the trust was for A 530; Brune v. Martin, 8 B. & during her natural life, and at her Cr. 497 ; Tucker v. Johnson, 16 death to descend to her children, Sim. 341; Player v. Nicholls, 1 it was held that A took a life estate B. & Cr. 336; Cadogan v. Ewart, only, the remainder vesting directly 7Ad. &E1. 136; Glover v. Monck- in the children. Greenwood v. ton, 3 Bing. 13; Doe v. Davies, 1 Coleman, 34 Ala. 159. 598. J ESTATE OF THE TRUSTEE. 927 debts will not vest the legal estate in the trustees, unless the instrument creating the trust contains some direction to them to raise money for the payment of the charge, or unless it contains some requirement to execute an active trust. 1 Where the charge upon the estate is contingent upon the insufficiency of some other fund, the legal estate will not vest in the trustees, for in that case they do not at once take a vested interest. But if the charge is in aid of another fund, without contingency, the trustees will immediately take the legal estate.^ Where the trustees are to demise the trust estate for a term, the tei-m must come out of their interests, and for the term the leo-al estate must be in them.^ But where the instrument con- fers upon the trustees only a power of leasing, the exe- cution of the power will create a good legal term, without the holding of the legal estate by the trustees.* In a case 1 Collier v. McBean, 34 Beav. 426 ; Creaton v. Creaton, 3 Stn. & Gif. 386; Doe v. Claridge, 6 Man. & S. 657; Kenrick v. Beanolerk, 3 B. & P. 178; Cadogan v. Ewart, 7 Ad. & El. 636; Jones V. Say & Sele, 8 Vin. 262. 2 Hawker v. Hawker, 3 B. & Aid. 537; Goodtitle v. Knott, Coop. 43 Gibson V. Mountfort, 1 Ves. 485 Popham V. Bamfleld, 1 Vern. 79 Wykham v. Wykham, 18 Ves. 395 Murthwalte v. Jenkinson, 2 B. & Cr. 357. 3 Doe V. Willan, 2 B. & Aid. 84: Doe V. Walbank, 2 B. & Aid. 554; Doe V. Cafe, 7 Exc. 675 ; Kiley v. Garnet, 8 De G. & Sm. 629; Brew- ster V. Striker, 2 N. Y. 19 ; Burr v. Sim, 1 Whart. 266. "The executors were vested by the will with an absolute interest in an undivided moiety of the whole residuary es- tate, on which the power was to operate, and they were also directed to keep the whole of this residuary estate as much as possible on in- terest or rents for the general ben- efit. This authority to lease, and this interest in the subject itself, must be sufficient to exempt the power from the character of a mere naked authority to a stranger. It is not necessary that the interest, coupled with the power, should be a legal interest. An equitable es- tate is .sufficient, and is regarded in this court as the real interest. So it was held by Lord Hardwicke, in Hearle v. Greenbank (3 Atk. 714), nor does the character of the power depend upon the quality of the in- terest. A trustee invested only with the use and profits of the land for the benefit of another has an interest connected with his power. This was so understood in Bergen V; Bennett (1 Caine's Gas. 16), and in Eyre v. Countess of Shaftesbury (2 P. Wms. 102) ; a testamentary guardian, with authority to lease, was held to possess a power, coupled with an interest and capa- ble of a survivorship." Osgood v. Franklin, 2 Johns. Ch. 1, 20. * Osgood v. Franklin, 2 Johns. 928 ESTATE or THE TRUSTEE. f§ 398. before the Supreme Court of New York, where a testator directed by his will that all his estate that might be left, after paying certain expenses and legacies, should remain in the hands of his executors, or under their control, for the use of his wife and children while under age; and after his youngest grandchild should have arrived at the age of twenty-one years, he directed that the same should be divided among his children, share and share alike. It was held that the executors took no estate in trust, although they were directed to convert the estate into money, and to hold and manage the proceeds, the intei'est and estate were in the wife and minor children.^ Where a direction in the instrument creating a trust simply confers a power of disposition upon a trustee, he may execute it without holding the legal title. ^ come invested by the executors; that during the twenty years the estate should remain undivided, and that immediately afterwards it should vest in the grandchildren; prohibited any sale of it by the ex- ecutors, but authorized them to lease it, and to exchange a speci- fied part of it for other land, and to execute deeds therefor; required that, upon the marriage of the fe- male grandchildren, the executors should protect the portion of each one of them from the control of their respective husbands; and provided that, if within twenty years the grandchildren should all die without issue, the estate should be appropriated for relieving the poor of the vicinity, in such man- ner as the executors should pre- scribe. Held that, by construc- tion, the executors took a fee- simple in trust, defeasible at the end of twenty years, or when the trust created by the will should have been accomplished. Deering v. Adams, 37 Me. 264. See also Miller v. Meetch, 8 Pa. St. 417; Chew V. Chew, 28 Pa. St. 17. Ch. 1, 20; Eyre v. Countess of Shaftesbury, 2 P. Wms. 102. 1 Burke v. Valentine, 52 Barb. 412. '^ Keeve v. Attorney-General, 2 Atk. 223; Hilton v. Ken worthy, 3 East, 553; Bateman v. Bateman, 1 Atk. 421 ; Fowler v. Jones, 1 Ch. Cas. 262; Yates v. Compton, 2 P. Wms. 308; Bradshaw v. Ellis, 2 Dev. & Bat. Eq. 20 ; Hope v. John- son, 2 Yerg. 123; Dabney V. Man- ning, 3 Ohio, 321; Jameson v. Smith, 4 Bibb, 307; Jackson v. Schauber, 7 Cow. 187; s. c, 2 Wend. 12; Burr v. Sim, 1 Whart. 266; Guyer v. Maynard, 6 Gill & J. 420; Shelton v. Homer, 5 Mete. 462; Bank of U. S. v. Beverly, 10 Pet. 532; s. c, 1 How. 134; Fay v. Pay, 1 Cush. 94. A will prohib- ited for twenty years the vesting of the real estate in the heirs-at-law, who were the minor grandchildren of the testatrix, and gave to the executors the entire care' and man- agement of it during that period ; required that from the income the grandchildren should be supported and educated, and the surplus in- § 399. J 'ESTATE or THE TRUSTEE. 929 § 399. For Preserving Contingent Remainders. — A devise to trustees and their heirs to preserve contingent remainders passes an estate during the life of the tenant for life only, and not in fee. In an English case, where there was a devise to trustees and their heirs, in trust for A and his wife for their lives, and after the death of the survivor to testator's four granddaughters, as tenants in common during their respective lives, with benefit of survivorship, remainder to the trustees "and their heirs" upon trust to preserve contingent remainders, remainder to the issue male of the four granddaughters successively, remainder to the testator in fee, it was held that the granddaughters took for life, as tenants in common, with survivorship to the survivors and survivor of them; and that, after the death of the last survivor, their issue took the several inher- itances in tail. It Avas also held that the limitation to trustees, and their heirs, to support contingent remainders, was not in fee, so as to make the subsequent remainders equitable and prevent the coalescing of the remainder to the issue, with the life estate to the parent, and, there- fore, that the four granddaughters took estates tail.^ Where the words "to the use of the trustees" are employed, the statute of uses will not execute the trust in the beneficiarj', although it may to the use of the trustees in trust for an- other, as the first use only is executed by the statute.^ ' Haddesley v. Adams, 22 Beav. Laurens v. Jenney, 1 Spears, 365; 266. See also ISTash v. Coates, 3 B. Whetetone v. St. Bury, 2 P. Wms. ifcAd. 839; Cunliffe =v. Brancker, 146; Syuipson v. Turner, 1 Eq. Gas. L.R.3Ch.D.39a; Festingv. Allen, Abr. 383; Hawkins v. Luscombe, 3 12 Mees. & W. 279 ; Marshall v. Swanst. 376, 388 ; Hopkins v. Hop- Gingell, L. K. 21 Oh. D. 790. kins, 1 Atk. 586. Where, by the Where the conveyance was made terms of a will, the legal estate is to the trustee "in trust to take, vested in the defendant, who is the hold and convey the remainder on sole cestui que trust, and the trusts the death of the life beneficiary," being fully discharged there re- to certain persons named, an active mains a surplus, such surplus fol- trust is created which prevents the lows the legal title, and is not merger of the legal and the equi- charged with any trust. Attorney- table estates. Hanson v. Wright, G-eneral v. Minister, 36 N. Y. 452. 88 Tenn. 501. Where land was conveyed to trus- 2 Keene v. Deardon, 8 East, 248; tees named in the deed, "and their 59 930 ESTATE OF THE TEUSTEE. [§ 400. Where more than one trust is created by the same instru- ment, some of which would be executed by the statute, and others would vest the legal estate in the trustees, the trustees will take the legal estate. This will occur, though the trusts are so limited as to arise in succession.^ § 400. The Trust Estate for Married Women — Where a testator devises the rents and profits of real estate to his wife, to be paid to her by his executors, the executors take the lands in trust to receive the rents and jirofits to the use of the wif e.''^ In Massachusetts in a case where, after a de- successors," in trust to build thereon a house of worship, "for the use of members of the Methodist Episcopal Church in the United States (so long as they use it for that purpose, and no longer, and then to return to the original owner), according to the rules and discipline" of the church at their general conference, it was held that the legal estate of the trustee could not survive the use, to protect which it was created. As the trustees were unincorpora- ted they had no legal succession, and tbe employment of the word "successors," in the deed, could not continue the estate beyond the use designated. It was also held that the equitable estate was in the members of the church, for so long as they continued to use the prop- erty as a place of worship, accord- ing to the usages of the Methodist Episcopal Church. When they ceased their use the estate must revert. But the abandonment must be by church authority, and according to the rules of discipline then existing; and that a mere temporary or unauthorized suspen- sion of services would not neces- sarily terminate the use. Hender- son V. Hunter, 59 Pa. St. 335. 1 Hawkins v.Luscombe, 2 Swanst. 375, 391; Stockbridge v. Stock- bridge, 99 Mass. 244; Harton v. Harton, 7 T. R. 652; Trent v. Harding, 10 Ves. 495; s. c, 7 East, 95; IB. &P. (N". Cas.) 116; In re Hough, 4 De G. & Sm. 371; In re Turner, 2 De G., F. & J. 527; Bla- grave v. Blagrave, 4 Exc. 570. De- vise to trustees and their heirs upon divers trusts in succession, some requiring the legal estate to remain in the trustees, and others which in themselves would not do so, the whole legal fee remains in the trus- tees. Devise (before the statute of wills, 7 Wm. IV. & 1 Vict. ch. 26) of lands to certain persons, and of pits and veins of clay under the same lands to other persons, the latter devise passed only the pits and veins of clay open at the date of the will, semfcZe. Brown v. White- way, 8 Hare, 145. See also Tucker V. Johnson, 16 Sim. 341; Leonard V. Diamond, 31 Md. 536. 2 Bush V. Alleyne, 5 Mod. 63; Neville v. Saunders, 1 Vern. 415; Harton v. Harton, 7 T. E. 652; Hawkins v. Luscombe, 2 Swanst. 391 ; South v. Alleyne, 5 Mod. 101; Jones V. Say & Sele, 1 Eq. Ca.Abr. 383; Doe v. Claridge, 6 C. B. 641; Robinson v. Grey, 9 East, 1 ; Ayer V. Ayer, 16 Pick. 330 ; Franciscus v. Reigart, 4 Watts, 109; Williman v. §400.] ESTATE OF THE TRUSTEE. 931 vise "in trust to A," "for the benefit of B, wife of C, to her sole and separate use, and her heirs and assigns for- ever," took effect, B died, leaving C and their two children surviving. It was held that B took an equitable estate in fee during her coverture, which descended to the children, subject to C's tenancy by the curtesy; that the use was executed in the children by the statute of uses, and that upon the death of one child under age and unmarried its share was inherited by the other, under the statutes of Massachusetts.^ In all cases in which the instrument will Holmes, 4 Rich. Bq. 475; Escheator V. Smith, 4 McCord, 452; Bass v. Scott, 2 Leigh, 356 ; Rogers v. Lud- low, 3 Sandf. Ch. 104; Richardson V. Stodder, 100 Mass. 528 ; McNish Guerard, 4 Strob. Eq. 475. A de- vised lands to E in trust to pay- rents, etc., to I-I's wife for life, and on her death to convey it to Mrs. G, a married woman, and M in fee. It was held that on the death of H's wife the trust ceased. Ed- munds' Appeal, 68 Pa. St. 24. A devise in trust to allow the widow of the testator to enjoy the rents and income of his estate during her widowhood, conveys legal estate to the widow under the statute for the time prescribed. Parks v. Parks, 9 Paige, 107. 1 Richardson V. Stodder, 100 Mass. 528. If the duties imposed upon the trustees require that they in- vest the funds, pay over the in- come, etc., and the trust runs for the use of a feme covert for life, and then to her children, the courts will consider the trust an active one and maintain it. Kane's Estate, 9 Phila. 339. By the provisions of the trust deed land was conveyed in trust for the benefit of a married woman, during the joint life of her- self and her husband, and in the event she should survive him, then for her use and that of such chil- dren as she might then have living by her said husband, during her life, or so long as she should re- main his widow; but on her re- marriage or death to be divided equally among the said children, and the issue of such children as might then be dead. The court held that the duties of the trustees terminated upon the husband's death, and that, thereupon, the legal estate vested absolutely in the wife and the children then liv- ing, and their deed operated to de- feat the contingent remainders to the issue of a daughter, who after- wards died during the lifetime of the mother. Snelling v. Lamar, 32 S Car. 72. The deed of A con- veyed certain property to a trus- tee, his heirs, executors and admin- istrators, in trust for the use of A during her life, and after her death for the use, benefit and be- hoof of her children by her present husband and their heirs forever. It was held that the estate of the trustee continued after the death of the first taker. Bryan v. Weems, 29 Ala. 423; s. c, 65 Am. Dec. 407. A trust to a man for the sole use of his wife ceases when the hus- band dies. The wife then becomes ipso facto the legal owner, and a judgment against her binds the estate, so that the purchaser of the 932 ESTATE OF THE TRUSTEE. [§ 400. admit of it, the gift will be given this construction, as the execution of the estate in a married woman hy the statute would give to the husband certain rights which might be in direct conflict with the intention of the grantor.^ The question in all cases of this character relates essentially to the intention of the donor, or the person creating the trust. If the intention to create a separate estate or in- terest in the wife is distinctly expressed, or clearly ap- pears from the circumstances relating to the creation of the trust, the language in which the intention is expressed is altogether immaterial.^ In a leading and very instructive case, before the Supreme Court of Maryland, it was held that a separate estate in real property cannot be enjoyed by a married woman, except through the interposition of a ti'ustee, and this circumstance of itself implies the per- formance of some active duties on his part. By the exe- cuting of the use in the wife, the marital rights of the husband are established over the property, and this result property at the sheriff's sale under such judgment gets a legal title. Coughlin V. Seago, 53 Ga. 250. A trust to receive and pay the in- come of real and personal estate to a feme covert for life, does not come to an end on discoverture, but con- tinues until the death of the benefi- ciary. Bacon's Estate, 6 Phila 335. 1 Ware v. Richardson, 3 Md. 505 Moore v. Shultz, 13 Pa. St. 98 Kice V. Burnett, 1 Spear, Eq. 580. 2Ayer v. Ayer, 16 Pick. 331: Kirk V. Pauline, 7 Vin. Abr. 95; Tyrrel v. Hope, 2 Atk. 558; Darley v. Darley, 3 Atk. 399; Hartley v. Hurle, 5 Ves. 540. "The question in all these uses and others has been what was the intention of the donor or person creating the trust ; and if the intention to create a sepa- rate estate or interest in the wife is distinctly expressed, or mani- festly appears by circumstances connected with the words of gift, it is immaterial in what language t'be intention is manifested. In the present case, the estate was con- veyed to the trustee 'in trust and for the sole use and benefit of plaint- iff,' during her natural life, she then being married. These words, we think, distinctly express an in- tention to create a trust for the separate use of the wife, and would entitle her to the rents and profits to the exclusion of her husband, if the conveyance had been made to the husband on the same trust, or if the land had been conveyed to the wife directly for her sole use and benefit for life, and remainder to her three children, without vesting the estate in trustees. It seems to be now settled in England, although formerly doubted, that a court of equity will supply the want of trustees by the gift or devise, and make the husband trustee." Ayer v. Ayer. 16 Pick. 327, 331. § 401.] ESTATE or THE TRUSTEE. 933 is tx reason why a different construction should be given to the instrument, in order to effectuate the intention of the grantor. The modern decisions favor a more liberal construction of deeds and wills, in order to reach the real intent of the makers, and in all cases of devises or con- veyances to trustees for the separate use of married women, the court will, if possible, so construe them as to vest the legal estate in the trustees, because this will best effectuate the intention of the donor. ^ In an English case, where by lease and release, by way of marriage settlement, lands, the inheritance of the wife, were convej'ed by her to trus- tees and their heirs, to the use of the wife and her assigns, until the marriage; and from the solemnization of the marriage, in trust for the wife and her assigns, during her life, for her own sole and separate use, independent of the debts, control or engagements of the husband; and from her decease, to the use of the husband, his heirs and as- signs ; it was held that the trustees did not take the legal estate during the life of the wife, but that the use was executed in her, notwithstanding the words "to her own sole and separate use."^ § 401. The Subject Continued. — An estate conveyed to trustees for the sole and separate use of a woman will vest in them only as she is a feme covert, or as it is conveyed in the immediate contemplation of her marriage. If neither of these conditions exist, the estate will at once vest in her under the operation of the statute of uses. Or if the con- vevance is held to create a trust and to vest the legal title in the trustees, she will have the right to demand the ex- ecution of the trust and the conveyance of the legal title to her by the trustees, unless there is some provision in the will or deed, or something in the circumstances relating to the creation of the trust, that renders it active, and thus makes it necessary that the legal estate should continue in the trustees.^ In Pennsylvania it has been held that a 1 Ware v. Eichardson, 3 Md. 505. ^ McBride v. Smyth, 54 Pa. St. 2 Williams V. Waters, 14 Mees. & "^50; Ogden's Appeal, 70 Pa. St. "W. 166. 501; s. C, 29 Leg. Int. 165; Lan- 934 ESTATE OF THE TRUSTEE. [§ 401. trust will be supported notwithstanding the cestui que trust is a. feme sole, provided that it be done in immediate con- templation of marriage. "Immediate contemplation of marriage" means a marriage presently in view of the donor to take place with a particular person, a short time after the instrument is to go into effect. The marriage must be in immediate view when the trust is created. On the ter- mination of the coverture the trust falls, and is not revived by a second marriage. That a marriage is in view need not appear by the instrument creating the trust. The caster V. Dolan, IRawle, 231; s. c, 18 Am. Dec. 625; Cridland's Estate, 132 Pa. St. 479 ; Springer v. Arundel, 64 Pa. St. 218; Wells v. McCall, 64 Pa. St. 207 ; Hammersley v. Smith, 4 Whart. 129; Yarnairs Appeal, 70 Pa. St. 339 ; Smith v. Starr, 3 Whart. 63; s. c, 31 Am. Dec. 498; Kay v. Scates, 37 Pa. St. 31; s. c, 78 Am. Dec. 399; Kuntzleman's Estate, 136 Pa. St. 142; s. C, 20 Am. St. Eep. 909. Where the estate was not merely given in trust for the use and heneflt of the wife, but for her separate use, thereby giving title to a separate estate In the wife. It was held that upon the determina- tion of the power by the limitation contained in the trust itself the trustee could no longer hold the trust property in his hands, and if he died without transferring it to the beneficiary, or disposing of it for her benefit or use, the court should decree her immediate pos- session. Waring v. Waring, 10 B. Mon. 331. A husband conveyed to a trustee upon the following trust: "In trust, nevertheless, for the use and benefit of said (the grantor's) wife, as a separate estate and property for her support." This deed was held to clearly indi- cate the settlor's object to be the support and maintenance of the wife during her life; and the fact that the conveyance was to the trustee in fee makes no difference, the trust terminates when the pur- pose for which it was created is accomplished, the estate thereupon reverted to the grantor. Pillow v. Wade, 31 Ark. 678. Where an In- fant made an antenuptial settle- ment of her estate upon her hus- band for life, after his death in trust for her for life, and after the survivor's death in trust for the children of the marriage, and in case of no child then in trust for such persons as she should appoint by will, and ultimately in trust for her next of kin. The marriage having terminated without children, the trust failed for want of a motive. Hastings v. Orde, 11 Sim. 205. A parent whose daughter had a dis- sipated husband, devised property in trust for the daughter for life, the remainder to her children, with the provision that if she became a widow the trust should end and the property be turned over to her absolutely. It was held '-to become a widow" will be construed to mean husbandless, in view of the testa- tor's probable intent, and the daughter having procured a divorce she is entitled to have the trust ended. Rittenhouse v. Hicks, 23 Week. Law Bull. 269. See also Fox v. Scott, Phila. 151. 402. ESTATE OF THE TKUSTEE. 935 creation of the trust is evidence that the marriage was in contemplation of the donor, and when this is followed within a reasonable time by its consummation it concludes the proof .1 § 402. Enlargement of the Trust Estate In Equity. — Where trustees are required to discharge some duty, or to perform some act, by the creation of a trust for which the instrument gives no authority, the court will hold that such authority is conferred by implication, and it will enlarge the legal estate in the trustees to that extent. But this will be done only as it is necessary to carry out the directions of the trust. ^ Where executors are authorized to rent, 1 Wells V. McCall, 64 Pa. St. 207. A trust for a married woman will stand during coverture, but will fall as soon as the husband dies. Baker v. Wall, 59 Mo. 265 ; Roberts V. Mosely, 51 Mo. 282; Liptrot v. Holmes, 1 Ga. 381; Freyvogle v. Hughes, 56 Pa. St. 230; Kuntzle- man's Estate, 136 Pa. St. 142 ; s. C, 20 Am. St. Kep. 909; Warland v. Colwell, 10 B. I. 869; Megargee v. Naglee, 64 Pa. St. 216. ' Markham v. Cooke. 3 Burr. 1684 ; S. c, ] W. Black. 543 ; Bush v. Allen, 5 Mod. 63 ; Doe v. Sampson, 5 East, 162; Doe v. Homfray, 6 Ad. & El. 206; Doe v.Woodhouse, 4 T. E. 89. "The established doctrine is that trustees take exactly that quantity of interest which the purposes of the trust require. The question is not whether the testator has used words of limitation or expressions adequate to carry an estate of in- heritance ; but whether the exigen- cies of the trust demand the fee- simple or can be satisfied by any, and what less estate? and, there- fore a devise to trustees may be either restricted or extended, as the nature and purpose of the trust re- quire. Although the devise be ex- pressly to the trustees and their heirs, it is well settled that if the duties imposed on them, or the purposes of the trust, require only an estate pur autre vie to be vested in them, their legal interest will be cut down to that extent notwith- standing the express limitation to them in fee. This construction has been held to prevail even in the case of a deed by necessary impli- cation arising from the object of the trust in connection with the nature of the subsequent limita- tions ; and much more readily will it prevail in the case of a will. And on the other hand, in the ab- sence of any express limitation suf- ficient to carry the legal inherit- ance, the estate of the trustees may be enlarged and extended into such an estate as the nature and purposes of the trust require. The construction in this respect is governed mainly by the intention of the testator, as gathered from the general scope of the will." Ellis V. Fisher, 3 Sneed, 231; s. c, 65 Am. Dec. 52. "The rule is well settled that trustees will be held to take that quantity of interest in estates devised to them which the exigencies of the trust may de- mand ; and where lands are devised 936 ESTATE OF THE TRUSTEE. [§ 402. lease, repair, or insure, a legal title will be given them by implication to enable them to discharge the dutj^ though the estate was not convej^ed by the instrument. ^ In a case where A gave an annuity to B for her life, to be paid to her out of certain lands by his executor, and then devised those lands to C, and appointed C his executor, it was held that C took an estate during the lifetime of the annuitant.^ A devise of lands and hereditaments to A and B, in trust for others in tail and in fee, is a devise in fee to the trustees, though there be not the words "heirs" or "ever."^ In a case before the Supreme Judicial Court of Massachusetts, Mr. Chief Justice Shaw, in his opinion, said: "The gen- eral rule of law is that both in a deed and in a will the word 'heirs' is necessary to vest a fee-simple in the devisee or grantee, being a natural person, though the rule is more flexible and more readily relaxed in a devise than in a deed. But the rule itself is subject to several exceptions, and one as well established as the rule itself is that where the con- veyance is in trust, and the trusts are of such a nature that they do, or by possibility may, require a legal estate in the trustee, bej^ond that of an estate for his own life, then, without words of limitation in the conveyance to the trus- tee, he shall take a fee. As in a marriage settlement, where an estate is conveyed to a trustee, without words of limitation, in trust to apply the income to the use of the husband and wife, for their joint lives, and then to convey the estate to their heirs, the trustee takes in fee."^ Thus, to trustees to convey to the objects the trust do not require a fee-sim- of the testator's bounty, the legal pie estate. Watkins v. Specht, 7 estate necessarily vests in the trus- Coldw. 585. tees till they have conveyed it, and ' Kellam v. Allen, 52 Barb. 605. it must be commensurate with the ^ Jenkins v. Jenkins, Willes, 656; estate which they are bound to con- Shaw v. Weigh, 2 Str. 798; Gates vey; if they are to grant a fee it is v. Cooke, 3 Burr. 1648; Kellam v. necessary they should have a fee." Allen, 52 Barb. 605. Sears v. Eussell, 8 Gray, 86. Courts 3 s^aw v. Weigh, 2 Str. 798. will not by implication merely cut ^ Cleveland v. Hallett, 6 Cush. down an estate in fee conferred on 403,407. "It is a well settled prin- the trustee by the terms of the in- ciple, that no particular form of strument to an estate for life, upon words is requisite to create a trust, the ground that the purposes of The intent is what the courts look § 402. J ESTATE OF THE TRUSTEE. 937 where land is devised to trustees without the use of the word "heirs," and involving a trust to sell, or a contingency under which it may be necessary to sell, the trustees must have the fee. Whether the trust was for the sale of the whole, or of a part of the estate, would be immaterial, and a trust to convey, or to lease, at the discretion of the trus- tees, would be subject to the same rule.^ Where an estate is limited to trustees, and their heirs, in trust to sell, or to mortgage, or lease, at the discretion of the trustees, or to divide among a number of persons, or to perform other acts of a similar character, they will hold the estate in fee.^ to. A trustee or cestui que trust yviW take a fee without the -word heirs when a less estate will not l3e suffi- cient to satisfy the purposes of the trust. This has been frequently ruled in chancery and the court of King's Bench, during the time of Lord Mansfield, made the same de- cision at law. A purchased an estate in the name of a third per- son who gave a bond to convey it to such person and uses as A should appoint ; and the lord chancellor held that the third person was a trustee to A, who had in equity a specific right to the land, and he was decreed to convey. Here a bond was held sufficient to create a trust in fee. But what put this point beyond all doubt is the doc- trine of the common law on the subject of uses and trusts. Before the statute of uses, if a man had bargained and sold his land for a valuable consideration without in- serting the words heirs, the court of chancery would have decreed an execution of the use in fee, because the use was merely in trust and confidence, and because this was according to the conscience and in- tent of the parties. But after the statute of 2 Hen. VHI., as the uses were transferred and made a legal estate, a different rule took place. A trust is merely what a use was before the statute of uses. It is an interest resting in conscience and equity, and the same rules apply to trusts in chancery now which were formerly applied to uses. And in exercising its jurisdiction over the executory trusts the court of chan- cery is not bound by the technical rules of law, but takes a wider range in favor of the intent of the party." Fisher v. Fields, 10 Johns. 497, 505. 1 Gibson v. Montford, 1 Ves.491; S. C, Amb. 95; Shaw v. Weigh, 1 Eq. Ca. Ab. 184; s. C, 2 Str. 798; Watson V. Pearson, 2 Exc. 594: Bagshaw v. Spencer, 1 Ves. 144; Glover v. Monckton, 3 Bing. 113; s. c, 10 Moore, 453; Hawker v. Hawker, 3 B. & A. 537; Warter v. Hutchinson, 5 Moore, 143; s. c, 1 B. & C. 121; Booth V. Field, 2 B. & Ad. 556; Keen v. Walbank, 2 B. & Ad. 554; Deering v. Adams, 37 Me. 265; Brewster v. Striker, 2 N. Y. 19; Spessard v. Rohrer, 9 Gill, 262; Jackson v. Bobins, 16 Johns. 537; Doe v. Howland, 7 Cow. 277; Chamberlain v. Thomp- son, 10 Conn. 244. 2 Keane v. Deardon, 8 East, 242; Bagshaw v. Spencer, 1 Ves. 142; Collier v. Walters, L. K. 17 Eq. 265; Creaton v. Creaton, 2 Sm. & 938 ESTATE OF THE TRUSTEE. [§ iOo. § 403. Trustees for Rents and Profits It is now well settled that where an estate is limited to trustees, and the words used are "in trust to pay to" a specified person the rents and profits of the land, there the trustees take the legal estate, because, without such title, thej^ have no power to make the payments as required by the trust ; but where the words of limitation are "in trust to permit and suffer A B to take the rents and profits," then the use is devested out of them and executed under the statute in the party in interest. In this case the purposes of the trust do not re- quire that the legal estate should remain in the trustees. It is equally well settled that where the testator distinctly ex- presses his meaning to be that the trustees are to interfere in the execution of the trusts, and certain duties are im- posed upon them, as, e. g., if he order that they shall re- ceive the rents and profits, there the trustees take the legal estate, whatever may be the form of words used in the in- strument by which the trust is created, and it appears from some of the cases that very slight circumstances of this character will be held sufficient for this purpose. ^ It has Grif . 386 ; Shelly v. Edlin, 4 Aid. & receive before they can make the El. 582; Rees v. Williams, 2 Mees. required payments; but where the & W. 749; Booth v. Field, 2 B. & words are 'in trust to permit and Ad. 564; Garth v. Baldwin, 2 Ves. suffer A B to take the rents and 646; Tompkins v. Williams, 2 B. profits,' there the use is divested out <& Aid. 84; Keen v. "Walbank, 2 B. of them, and executed in the party, & Aid. 352. the purposes of the trust not re- 1 Barker v. Greenwood, 4 Mees. quiring that the legal estate should & W. 429; Boughton V. Lankley, 1 remain in them. That is clearly Eq. Ca. Abr. 388; s. c, 2 Salk. 679; the settled law, and has so long Eight V. Smith, 12 East, 455; Wag- been so, that it is not now open to staff V. Smith, 9 Ves. 524; Gregory inquire whether it was rightly es- V. Henderson, 4 Taunt. 773; Doe V. tablished or not. It is also equally Briggs, 2 Taunt. 109 ; "Witham v. clear and settled, that if the testa- Brooner, 63 111. 344; Parks v. tor distinctly expresses his mean- Parks, 9 Paige, 107; Kamsey v. ing to be, that the trustees are to Marsh, 2 MoCord, 252. "It is now interfere in the execution of the clearly settled, that where an estate trusts, and certain duties are cast is limited to trustees, and the words upon them if he order, for example, used are 'in trust to pay to' a spec- that they shall receive the rents, iiied person the rents and profits etc., there they take the legal of the land, there the trustees take estate, whatever words may be the legal estate, because they must used. And the case of Gregory v. § 404.] ESTATE OF THE TRUSTEE. 939 been held that a trust to hold for the use and benefit of, and to apply the rents to the children of A, is executed by the statute in the children, notwithstanding the use of the word "apply' ' in the instrument.^ In the case of a devise "in trust to pay unto, or else to permit and suffer the testator's niece to receive the rents," it was held that the legal estate was executed in the niece, because the words "to permit" came last, and in a deed the first, in a will the last words prevail.^ § 404. The Subject Continued — The rule, as set forth in the preceding section, will not apply where any duty is imposed upon the trustees by the instrument, whether in express terms or by implication. Where there is a direction to permit A to receive the net rents, or the clear rents, it will be held that the trustees are to receive the gross rents, and to pay over what remains after expenses are deducted ; Henderson, 4 Taunt. 772, shows that very slight circumstances of this nature are sufficient for this purpose. There then was a devise to trustees, to permit and suffer the testator's widow to receive and talie all the rents and profits, and it was declared that her re- ceipts for the rents, with the ap- probation of the trustees, should be good and valid ; and the court held that the legal estate remained in them, on the ground that there was some duty for them to per- form." Barker v. Greenwood, 4 Mees. &! W. 421, 430. 1 Laurens v. Jenney, 1 Spears, 356. 2 Doe V. Biggs, 2 Taunt. 109; Pybus V. Smith, 3 Bro. Ch. 340. --I thought that it had been settled by the case of Shapland v. Smith that the distinction was abolished, un- less in cases where something es- special was to be done by the trus- tee, as to pay rates or repairs ; but I find it is otherwise. It Is mi- raculous how the distinction ever became established ; for good sense requires that in both cases it should equally be a trust, and that the estate should be executed in the trustee; for how can a man be said to permit and suffer who has no estate, and no power to hinder the cestui que ti-ust from receiving." "This case might be argued and considered forever, without advancing it at all in law, reason or precedent. But as it happens in this will the last words are -permit and suffer' which give the cestui que trust a legal estate ; and the general rule is, that if there be a repugnancy the first words in a deed, and the last words in a will, shall prevail; and, consequently, for want of a better reason, we are forced to say that we think this will give the legal estate to the party beneficially interested." Mansfield, C. J., in Doe v. Smith, 2 Taunt. 112, 113. MO ESTATE OF THE TRUSTEE. [§ 405. but this gives the trustees the legal estate.^ Where there was a devise of land to trustees in trust to jDermit testator's wife and daughters to receive the clear rents of three parts, to their sole and separate use, and the testator's son the clear rent of the fourth part, the trustees to pay all out- goings, to repair, and to let the premises, it was held that the legal estate, as to all of the four parts, vested in the trustees.^ § 405. Limitation of Estate Executed by the Statute — Where a trust is of such a character as to be executed by the statute of uses, the beneficiary takes the estate as it was conveyed to the trustee.' This rule will not apply where a 1 Barker V. Greenwood, 4 Mess. & W. 421 ; Keene v. Deardon, 8 East, 248; Rife v. Geyer, 59 Pa. St. 395. A trustee to whom there has been made a conveyance of land to re- ceive the rents and profits and pay them over to a feme covert during her life, has, under the Revised Statutes, the legal and equitable title, subject only to the execution of the trust, and the cestui qug trust has no interest in the lands or in- come which she can in any way pledge or bind. Noyes v. Blake- man, 6 :N^. Y. 567. A testator gave to his wife the use of real estate, for the purpose of educating and rearing his children, and to be di- vided between her and them when the youngest should become twenty-one. It was held that she held the rests and profits as trustee for the children, and that they were not to be taken on execution against her. Anderson v. Crist, 113 Ind. 65. " White V. Parker, 1 Bing. (N. Cas.) 573 ; Biscoe v. Perkins, 1 V. & B.4S5; Webster V. Cooper, 14 How. 409 ; Nay lor v. Arnitt, 1 Russ. & M. 501; Vandersheyden v. Crandall, 2 Denio, 9 ; Exeter v. Odiorne, 1 N. H. 232. AVhere the direction in the trust implies a power of disposi- tion, which maybe executed with- out the legal title, the authorities hold that a trust of this kind would vest the legal estate directly in the beneficiary. See Burk v. Valentine, 52 Barb. 412; Reeve v. Attorney- General, 2 Atk. 223; Lancaster v. Thornton, 2 Burr. 1027; U. S. Bank V.Beverly, 10 Pet. 532; s.C.,lHow. 134; Deering v. Adams, 37 Me. 264; Fay v. Fay, 1 Cush. 94; Guyer v. Maynard, 6 Gill & J. 420; Jameson v. Smith, 4 Bibb, 307; Jackson v. Schauber, 7 Cow. 187; S. C, 2 Wend. 12; Dabney v. Manning, 3 Ohio, 321; Burr v. Simms, 1 Whart. 366; Hope v. Johnson, 2 Yerg. 123. SNewhall v. Wheeler, 7 Mass. 189 ; Nelson v. Davis, 35 Ind. 474 ; Baptist Soc. V. Hazen, 100 Mass. 322; Idle V. Cooke, 1 P. Wms. 77; Doe v. Smeddle, 2 B. & Aid. 126; Cham- bers V. Taylor, 2 Myl. & Cr, 376; Van Home v. Harrison, 1 Dall. 137 ; Jackson v. Fish, 10 Johns. 456. Where a grant is made to individ- uals for the use of a church, unin- corporated at the time the grantees stand seized to the use, and when the church acquires a legal capacity to hold real estate, the possession § 406. ESTATE or THE TRUSTEE. 941 trust is not executed by the stiitute. In cases of this class tlie limitations of the estate are determined, not by any particular words or expressions in the instrument, but by the intention of the parties as shown by the instrument as a whole, and the intention as thus determined will limit the legal interest of the trustee in the trust estate.^ § 406. Liiinitatioiis in Wills and Deeds. — In the con- sti'uction of language relating to limitations to trustees, the English courts uphold a distinction between that of wills and of deeds. It is held that in the construction of the language of wills greater freedom is to be exercised than in the construction of that of deeds. In the construc- tion of wills the court will endeavor to carry out the inten- tion of the testator as it is gathered from the entire instru- ment, rather than from a strict construction of particular words or legal terms, while in a deed the presumption is that words and terms are employed in their technical and legal sense. In Colmore v. Tyndall, Lord Chief Baron Sir William Alexander said: "I will first allude to the known distinction between a deed and a will, where the party is supposed to be, and frequent]}' is, inops consilii. This dis- tinction is found everywhere in our books, and it would be of the use is executed by the stat- ute and the estate vests. Reformed Dutch Church v. Veeder, 4 Wend. 494. 1 Cleveland v. Hallett, 6 Cush 407; Gibson v. Montfort, 1 Ves 485; Newhall v. Wheeler, 7 Mass 189; Stearns v. Palmer, 10 Mete 32; Sears v. Eussell, 8 Gray, 86 Gould V. Lamb, 11 Melc. 84 Brooks V. .Jones, 11 Mete. 191 Fisher v. Fields, 10 Johns. 495 Brewster v. Striker, 2 N. Y. 19 Richardson v. Stodder, 100 Mass 528; Neilson v. Lagow, 12 How 98; Chamberlin v. Thompson, 10 Conn. 244; Payne v. Sale, 2 Dev. &Bat. Eq. 460; ISTiohol v. Went- worth, 4 Denio, 385; Upham v. Varney, 15 X. H. 462 ; King v. Par- ker, 9 Cush. 71 ; Williams v. First Soc. in Cin., 1 Ohio St. 478 ; Web- ster V. Cooper, 14 How. 499 ; Cow- bry V. McMichael, 19 Ala. 751 ; Gill V. Logan, 11 B. Mon. 233; Powell V. Glen, 21 Ala. 468; Meeting St. Baptist Soc. V. Hail, 8 K. I. 240; Nelson v. Davis, 35 Ind. 474; Kor- ton V. Norton, 2 Sandf . 296 ; Willi- man v. Holmes, 4 Eich. Eq. 475; Ware v. Richardson, 3 Md. 505; Ellis V. Fisher, 3 Sneed, 281; Gar- denhire v. Hinds, 1 Head, 402; Slevin V. Brown, 32Mo. 176; Green- wood V. Coleman, 34 Ala. 150; Bryan v. Weems, 29 Ala. 423; Ivory V. Burns, 56 Pa. St. 300 ; Wil- cox v. Wilcox, 47 N. H. 488; Mc- Bride v. Smyth, 54 Pa. St. 245; Watkins v. Specht, 7 Cold. 585; 942 ESTATE OF THE TRUSTEE. [§ 406. legislatine to abolish it."^ In Lewis v. Eees, Vice Chan- CO ' cellor Sir W. Page Wood, referring to a discussion of this doctrine by Lord Eldon, said: "He first adverts to the well known distinction which has at all times prevailed as to the construction of deeds and wills, and which I have always understood to be this, that although in both cases the courts look to the intention of the parties, yet in con- struing a deed, unless there be in the deed some manifest contrariety or distinction, rendering a different interpreta- tion necessary in order to effectuate the intention of the parties, the courts are guided by the strict legal meaning of words; but in the case of a will, the testator is sup- posed to have been inops consilii, and on that ground a greater latitude is allowed in the construction of legal terms. "^ The distinction in this regard established by the English courts has not been maintained in this country. The general rule is that the trustee will take such an estate as will enable him to carry out the intention of the grantor.'^ Koenig's Appeal, 57 Pa. St. 552; Adams v. Adams, 6 Q. B. 866; Doe Y. Hicks, 7 T. K. 433 ; Nash v. Coates, 3 B. & Aid. 839; Warter v. Hutchinson, 5 Moore, 153; s. C, 1 B. & Or. 721; Player v. Nichols, 1 B. & Or. 142; Brown v. Whiteway, 8 Hare, 156 ; Blagrave v. Blagrave, 4 Exc. 569; "Watson v. Pearson, 2 Exc. 593; Gates v. Cook, 3 Burr. 1648 ; Doe v. Field, 2 B. & Ad. 564 ; Trent V. Henning, 7 East, 99; Doe V. Willan, 2 B. & Aid. 84; s. C.,8 Vin. Abr. 262. 1 Colmore v. Tyndall, 2 Y. & J. 605; Curtis v. Price, 12 Ves. 89; Venables v. Morris, 7 T. R. 342, 438; Doe v. Hicks, 7 T. R. 437; Brune v. Martyn, 8 B.&Cr. 497; Beaumont v. Salisbury, 19 Beav. 198 ; Lewis v. Recs, 3 Kay & J. 132 ; Cooper V. Kynock, L. R. 7 Ch. 398; Wykham v. Wykham, 18 Ves. 395; Dinsmore v. Biggert, 9 Barr, 123. 2 Lewis V. Rees, 3 Kay & J. 132, 146. See also Pottowv. Fricker, 6 Esc. 570 ; Villiers v. Villiers, 2 Atk. 72; Bagshaw v. Spencer, 1 Ves. 142; Doe v. Simpson, 5 East, 162; Coulter V. Robinson, 24 Miss. 278; s. c, 57 Am. Deo. 168. The trustee of a deed of trust will be protected by equity, so far as consistent with law, and equity will not order the transfer of the legal title to the beneficiary, while there are ulte- rior trusts which he might destroy. Dick V. Pitchford, 1 Dev. & Bat. Eq. 480. 3 King V. Parker, 9 Cush. 71 ; Stearns v. Palmer, 10 Mete. 32; Rutledge v. Smith, 1 Busb. Eq. 283; Liptrot v. Holmes, 1 Ga. 390 ; Welch v. Allen, 21 Wend. 147 ; Fisher v. Fields, 10 Johns. 105; Wright V. Delafield, 23 Barb. 498; Attorney-General v. Federal St. Meeting House, 3 Gray, 1; Cleve- land v. Hallelt, 6 Cush. 403; Gould § 407. J ESTATE OF THE TRUSTEE. 943 § 407. The Trust Estate in Personalty. — The opera- tion of the statute of uses is limited to real estate. It has no application to personal property, or to chattel interests in lands. A trust in personalty vests the legal estate in the trustee and entitles him to possession until the ends of the trust are answered. In Rice v. Burnett the court said : "Deeds of this character should be construed according to their plain intent and meaning. The legal estate should continue in the person to whom it is transferred until the property is to be delivered to those for whom an absolute estate is provided." "Where a trust has been created in personalty, and all the purposes of the trust have ceased, or are at an end, the absolute estate is in the person en- titled to the last use. From the character of the property possession is a sufficient title, without a formal convey- ance. "^ V. Lamb, 11 Mete. 84; Neilson v, Lagow, 12 How. 110; North v. Philbrook, 34 Me. 537; Parker v. Converse, 5 Gray, 336 ; Greenwood V. Coleman, 34 Ala. 150; Churcliill V. Corker, 25 Ga. 479; Williams v. First Presb. Soc, 1 OliioSt. 498; Shaw V. Galbraith, 7 Pa. St. 112; Cobper v. Kynock, L.R. 7 Ch. 398. But see Miles v. Fisher, 10 Ohio St. 1. The deed in controversy had been executed without consid- eration by the plaintiff's husband. It conveyed land to the defendant and his assigns, the word "heirs" being stricken out, and stipulated that the lands were conveyed in trust for the benefit of the plaintiff and her husband, and to be held by the defendant for their use and benefit, and contained also the fol- lowing provisions: "And it is fully understood that the said first parties are to have the use and benefit of said land, being the in- come thereof, during the natural lives of both of said parties." It appeared from the evidence that the purpose of the deed was to prevent the grantor from wasting the property, and that up to the time of the grantor's death the defendant had nothing further to do with the land than to merely hold the title. The control, pos- session and benefit remained alto- gether in the hands of the plaintiff and her husband. The court held that this deed created a passive trust, whereby the legal title, under the Michigan statute of uses, passed to the cestui que trust. Everts V. Everts, 80 Mich. 222. 1 Eice V. Burnett, 1 Spear Eq. 590; s. c, 42 Am. Bee. 336. See Harley v. Platts, 6 Rich. L. 315; Schley v. Lyon, 6 Ga. 530; Doe v. Nichols, 1 B. & Cr. 336; Lawrie v. Banks, 4 Kay & J. 142 ; White v. Baylor, 10 Ir. Eq. 53; loor v. Hodges, 1 Spear Eq. 593; Bring- hurst V. Cuthburt, 6 Binn. 398; Freyvogle v. Hughes, 56 Pa. St. 228; Eife v. Geyer, 59 Pa. St. 395; Harnett's Appeal, 46 Pa. St. 392; Dodson V. Ball, 60 Pa. St. 492; 944 ESTATE OF THE TRUSTEE. [§ 407. Bacon's Appeal, 57 Pa. St. 504; Westeott V. Adams, 68 Pa. St. 34 ; Slevin v. Brown, 3 Mo. 176; Cut- ting V. Cutting, 20 Hun, 371 ; For- syth V. Kathbone, 34 Barb. 408 Brown v. Harris, 25 Barb. 136 Bunn V. Vaughn, 5 Abb. Pr. (N S.) 271 ; In re Carpenter, 131 N. Y 86; Day v. Both, 18 N. Y. 448 Savage v. Burnham, 17 N. Y. 571 Archer v. Zeh, 5 Hill (N. Y.), 203 Kane v. Gott, 24 Wend. 641; s. c, 35 Am. Dec. 641. Where there is a gift of personal estate to a trustee, without words of limitation, it vests in him the whole estate sub- ject to the trust. Hanson v. Worth- ington, 12 Md. 418. As regards personal estates in trust, upon the accomplishment of the purposes of the trust, the absolute estate is in the person entitled to the last use, but this must depend upon the plain intent and meaning of the in- strument. Denton v. Denton, 17 Md. 408. CHAPTEE XX. THE RELATIOjST OF TRUSTEES TO THE TRUST ESTATE CONTINUED. Conveyance of Estate Sub- ject to Trust. The Trust Estate in As- signees. Trust Estate in Bankrupt Trustee. The Subject Continued. Beneficial Interest of Bank- rupt Trustee. Merger of Equitable and Legal Estates. Trustees as Joint Tenants. Presumptions in Regard to Conveyance. The Doctrine of Presump- tion Continued. § 408. The Leg-al Estate at Common Law. — At com- mon law the legal title of the trust estate vests in the trus- tee, and as trustee he has all the rights and is subject to the same limitations as the usuf ructorj' proprietor. All the covenants appertaining to, or running therewith, vest in him. He is entitled to all the benefits of such covenants, and is subject to all the responsibilities which they involve.^ 408. The Legal Estate at Com- mon Law. § 418 409. Responsibilities of Trustee as Holder of Legal Title. 419 410. Protection of Legal Title. 420 411. Protection of Title Con- tinued. 421 412. The Right of Trustee to Possession. 422 413. Possession of Trust Estate Continued. 423 414. The Subject Continued. 424 415. The Same Subject. 425. 416. Dower in Trust Estate. 417. Liability of the Trust Es- tate to Escheat. 426. ' Devin v. Hendershott, 32 Iowa, 192. '-It is a proposition asserted by the appellant, and not denied by the appellee, and we apprehend that it is sound in principle, as well as having the unvarying sup- port of the authorities, that who- soever becomes seized of lands be- comes entitled to the benefit of the covenants running therewith. The 60 first pertinent inquiry, then, is : Did the grantee, in the trust deed, be- come seized or vested with the legal title to the land in question, as held by the grantor therein? This proposition has been several times answered by this court. In Tucker v. Silver, 9 Iowa, 261, it is said, under our code, * * 'the legal title, now, as heretofore, vests 946 ESTATE OF THE TRUSTEE. [§ 409. But a legal title, held as trustee, is held for the benefit of the cestui que trust. Any conveyance or use of the trust property for any other purpose than that of the proper ex- ecution of the trust will be a breach of the trust, and as such void. Any charges and incumbrances to which he may subject the trust estate for any other purpose will be treated by a court of equity as altogether null and void. The only claims of this character that will be recognized in equity are those of a purchaser for valuable consideration without notice.^ The holding of the legal title by the trus- tee is subject to the equity of the beneficiary. As the holder of the equitable interest and title he may deal with the estate, — where he is not subject to any legal disability, — in equity, as the trustee may deal with the legal title. He may dispose of the estate by sale, or otherwise, and his conveyance, if regular, will have the same effect in equity as the conveyance of the legal estate would have at law.^ § 409. Responsibilities of Trustee as Holder of Legal Title. — In taking the legal title the trustee becomes respon- sible for a faithful distharge of the duties belonging to the office. Lord Northington's dictum that, "no man can require, or, with reason, expect, that a trustee should man- age another's property with the same care and discretion that he would his own," has not been accepted. It is well established that a trustee must exercise precisely the same care and solicitude in his treatment of the trust estate that in the trustee. * * He does not accordance with the terms of the stand as the mere agent of the deed of trust.' See also Newman parties, but as the middle man, so v. De Lorimer, 19 Iowa, 244. Also to speak, holding the legal title. 2 Am. Law Keg. (N. S.), where it * * ^ It may be that he was is said that 'tbe authorities are powerless to act in the manner uniform, that a deed of trust places pointed out in the deed, but he was the legal title in the trustee.' " not without the legal title.' In Cook ' Leake v. Leake, 5 Ir. Eq. 366. & Sargent v. Dillon, 9 Iowa, 407, it 2 Matthews v. Wardell, 10 Gill is said: 'By the conveyance (deed &J. 443; Keid v. Gordon, 35 Md. of trust) from Barrow to Dillon, the 184; Campbell v. Prestons, 22 legal title of the grantor in the real Gratt. 396 ; Boteler v. Allington, 1 estate passed to Dillon, the trustee, Bro. Ch. 72; Croxall v. Shererd, subject to be defeated by the pay- 5 Wall. 268. ment of the money by Barrow, in § 409. J ESTATE OF THE TRUSTEE. 947 he would exercise under similar circumstances in dealing with his own property. ^ But it has been held that some- thing more than this may be required of a trustee. In King V. Talbot, before the Supreme Court of New York, it was held that it will not do to say that a trustee can deal with trust funds as with his own, and that he is to be ex- cused if he invests them as he does his own, in railroad, petroleum, or mining stocks, though the investment is left by the trust instrument to his discretion generally. It is not true, either in morals or law, that a trustee is not 1 Jones V. Lewis, 2 Ves. 241 ; Inre Speight, L. E. 22 Ch. D. 739; s. c, L. K. 9 App. Cas. 19; Massey v. Banner, 1 J. & "W. 247 ; Attorney- General V. Dixie, 13 Ves. 534; Buda;e v. G-ummow, L. R. 7 Ch. App. 720; Morley v. Morely, 2 Ch. Cas. 2; Litchfield v. White, 7 N. Y. 438; Carpenter v. Carpenter. 12 R. I. 544; Taylor v. Benham, 5 How. 233 ; King v. Talbot, 50 Barb. 453 ; White v. Cuddon, 8 CI. & Fin. 766; Mortlock v. Buller, 10 Ves. 292; Bridger v. Rice, 1 J. & AV. 74; Ord v. Noel, 5 Madd. 438; Harper v. Hayes, 2 Glff. 210; Turner v. Harvey, Jacobs, 178. A trustee in possession of trust prop- erty is only bound, under our code, for ordinary diligence in its pres- ervation and protection. And a trustee in possession of promissory notes as trust property may re- ceive payment of said notes in such currency as a prudent man under the like circumstances wo^ld re- ceive in payment of debts due him individually. A trustee who, dur- ing the war, in good faith, received Confederate treasury notes in pay- ment of promissory notes held by him in trust, acted under color of law, and is protected by the Act of 1866, and the ordinance of the conventions of 1865 and 1868. If the trustee received Confederate currency before the adoption of the code, and after its adoption in- vested it in securities not author- ized by law, and without an order of court did so at his own risk, and is liable for the value of such cur- rency at the time when it is said to have been reinvested. Campbell V. Miller, 38 Ga. 304. "The dis- cretion thus reposed in the trus- tees was not a mere arbitrary dis- cretion, but a discretion coupled with a trust, and to be exercised solely for the benefit of the cestuis que trust. It was their duty, there- fore, in making a sale of the prop- erty to act in a prudent and busi- ness-like manner, with 'a view to obtain as large a price as might, with due diligence and attention, be fairly and reasojiably obtainable under the circumstances ; in other words, lo exercise that diligence and caution which a careful and prudent owner would observe in the sale of his own property. If the sale be made under circum- stances of haste and imprudence, or if the trustees fail in reasonable diligence in inviting competition, or adopt an injudicious and dis- advantageous mode of selling the property, a court of equity ought not to ratify the sale." Gould v. Chappell, 42 Md. 466. 948 ESTATE OF THE TRUSTEE. [§ 409. bound to take greater care of trust funds than he takes of his own. Pie has no right to speculate with trust funds, and every investment in stocks of a railroad, mining, bank- ing, or other private corporation, must be looked upon as an adventure. 1 Where a trustee is empowered to invest trust funds he must do it without unnecessary delay, and he must invest the funds in such a manner as not only to render the principal secure, but also in such a manner as to secure an immediate income from the in^'estment. He is not justified in taking any risk in his investment, even at the request of a beneficiary.^ Where money is lost by a trustee through the employment of an agent, the question whether he will be held responsible for the loss will depend upon the circumstances of the case. It has been held that where an executor, or trustee, employs an agent to collect money under circumstances which make such employment proper, and the money collected is lost by the agent's in- solvency, the burden of proof is not on the executor to 1 King V. Tabot, 50 Barb. 453. 2 Hemphill's Appeal, 18 Pa. St. 303; Wolf V. Washburn, 6 Cow. 261; Bacot V. Hey ward, 5 S. Car. 441; Willis' Appeal, 22 Pa. St. 330. A trustee empowered to invest the trust moneys "in any property, real or personal, that he may see fit," must invest the same in such manner as not only to secure the principal, but to obtain an imme- diate income from the investment, such trustee is not justified in mak- ing an investment in the stock of a manufacturing company, the works of which are unfinished and the stock not paid up in cash. Pray's Appeal, 34 Pa. St. 100. A testator directed that his trustees should invest the moneys coming to their hands in respect of his estate in their names or under their control in such mode or modes of invest- ment as they in their uncontrolled discretion should think fit. Before the commencement of an action to administer the testator's estate, the trustees (who were executors), in- vested moneys forming part of it in the purchase of bonds of a for- eign government, bonds of a colonial railway company, and shares of a bank on which there was a further liability. The chief clerk, in taking the accounts of the testator's estate, disallowed the trustees the sums which they had expended in the purchase of these bonds and shares. The shares in the bank had been previously sold at a profit. Held, though the in- vestments in question ought not to be retained by the trustees, yet as they had acted bona flde, and no loss had resulted to the estate, they ought not to be disallowed the sums which they had laid out in making the investments. In re Brown, L. R. 23 Ch. D. 889. § 410. ] ESTATE OF THE TRUSTEE. <)49 show that the loss was not attributable to his own default, but on the persons seeking to charge him to prove that it was.i In another English case, where trust funds were in- vested on security which proved to be inadequate, it was held that the trustees were chargeable with the sum so invested.^ § 410. Protection of Legal Title. — Holding the legal title by virtue of his office, the trustee must defend and protect it. He is a party to all actions at law in regard to it, and he is the only person who can bring a suit at law re- lating to the estate ; and where a suit is brought against the estate, the trustee is the defendant. In law the beneficiary, though he is the equitable and absolute owner of the trust estate, is regarded as a stranger.^ It has been held that a court of law may investigate some questions of fraud, and, where proved, treat a deed as a nullity; but, in general, it will not go behind the naked legal title and inquire into the equities. Even in the case of a naked trustee, a trustee may recover in ejectment against the cestui que trust.*' A ^ In re Brier, L. R. 2G Ch. D. Mordecai v. Parker, 3 Dev. 425; 238; Bostock v. Floyer, L.K. 1 Eq. Kirklandv. Cox, 94 111. 402; Pon- 28; S. C, 35 Beav. 603; Mason v. der v. McGruder, 42 Ga. 242 ; Eyan Whitthorne, 2 Coldw. 242 ; Morri- v. Bibb, 46 Ala. 323 ; Church v. son Y. Kinstra, 55Miss. 71. A trus- Stewart, 27 Barb. 553; Western K. tee who deposits in bank, and K. Co. v. Nolan, 48 N. Y. 517; causes to be credited to his private Adlerv. Sewell,20 Ind. 598; Moody account money of the trust fund, v. Farr, 33 Miss. 192; Raymond v. without giving any notice that it is Holden, 2 Cush. 268; Baptist Soc. not his private property, or making v. Hayden, 100 Mass. 822; Cox v. any special agreement in regard to Walker, 26 Me. 504; Beach v. it, thereby converts it to his own Beach, 14 Vt. 28 ; Moore v. Bur- use; so that the bank, in the absence nette, 11 Ohio, 334; Wright v. of any notice that it is not his pri- Douglass, 3 Barb. 59; Matthews v. vate property, may apply it as Ward, 10G.& J.443; Finnv. Hohn, such. School Dist. Greenfield v. 21 How. 481 ; Hooper v. Scheiner, First ISTat'l Bank, 102 Mass. 17. 23 How. 235; Fitzpatrick v. Fitz- 2Budge v. Gummow, L.K.7 Oh. gerald, 13 Gray, 400; Chapin v. App. 720. Universalist Soc, 8 Gray, 581; 3 Goodtitle v. Jones, 7 T. R. 47 ; Crane v. Crane, 4 Gray, 323. Gibson v. Winter, 5 B. & Ad. 96 ; ^ Reece v. Allen, 10 III. 241 ; Tay- Allenv.Imlett, Holt, 641; Davis v. lor v. King, 6 Munf.358; Phillips Charles River R. R., 11 Cush. 506; v. Ward, 51 Mo. 295; Matthews v. 950 ESTATE OF THE TRUSTEE. [§ 410. trustee sued by :i stranger on a title hostile to his cestui que trust, in order to protect himself by the recovery against hira, must at least show that he acted bona fide; that the cestui que trust, if sui juris, was notified of the suit, and had an opportunity to defend. ^ Any failure to meet this obligation will be treated as a breach of trust. Where the title to land is vested in trustees individually they may re- cover at law, though in their writ and declaration they style themselves trustees. The word "trustees" may be treated as surplusage.^ Where land is in the actual possession of the cestui que trust, though the trustees may bring an action for trespass, the cestui que trust should be the plaintiff, though it is otherwise in an action in ejectment.^ But McPherson, 65 N. Car. 189; Gary V. Whitney, 48 Me, 516. iMackay v. Coates, 70 Pa. St. 350; Warland v. Cohvell, 10 K. I. 369. Where suit has heen brought against the trust property, it is the trustee's duty to either defend it or give notice to the cestui que trust, and if the cestui que trust be a mar- ried woman, he must notify her husband also. Dozier v. Freeman, 47 Miss. 647. On being informed of proceedings affecting their title to the trust estate, it is the right and duty of trustees to inter- pose, and on failure to do so they are concluded by the determination made in such proceedings, al- though they may not have been parties to the record. Burr v. Bigler, 16 Abb. Pr. 177. Where the trustee is exempt from attach- ment or garnishment, he must suf- fer personally the loss, if any, oc- casioned by neglect to assert this right for his estate. Cockey v. Leister, 12 Md. 124; s. C, 71 Am. Dec. 5S8; Hinckley v. Williams, 1 Gush. 490; s. C, 48 Am. Dec. 642; noyt V. Swift, 13 Vt. 120; s. c, 37 Am. Dec. 58G; Bentley v. Shrieve, 4 Md. Ch. 412; Farmers' Bank v. Beaston, 7 Gill & J. 421; s. C, 28 Am. Dec. 228; Parker v. Portis,14 Tex. 166; Groome v.Lewis, 23 Md. 137; s. c, 87 Am. Dec. 563. Where a trustee agreed to purchase and pay for a farm, at the request and for the use of the cestui que tntst, out of the proceeds of the trust estate ; and he purchased the farm, for which he g ive his bond, se- cured by a mortgage on the prem- ises; but when the bond became due he refused to pay it, but pro- cured a foreclosure and sale of the farm, by the mortgagee, at a loss of above $4,000; the trustee w.as held chargeable for this loss, and all the costs of the suits. Green v. Winter, 1 Johns. Ch. 26. 2 Walker v. Fawcett, 7 Ired. 44. sCox V. Walker, 26 Me. 504; Stearns v. Palmer, 10 Mete. 32; Second Cong. Soc. v. Waring, 24 Pick. 309 ; Beach v. Beach, 14 Yt. 28; s. c, 39 Am. Dec. 204; Comm's V. Walker, 6 How. (Miss.; 143; s. c, 38 Am. Dec. 433; Huckabee V. Billingsley, 16Ala. 414; s. c, 50 Am. Deo. 183. Where the trust deed provided that "upon default of payment of the debt secured, the trustee shall immediately take § 4 11. J ESTATE OF THE TRUSTEE. 951 where a trust has determined, and, in consequence, the property has vested in the cestui que trust, he may bring an action against the holder of the legal title to obtain pos- session. He may also maintain an action in ejectment upon a demise in his own name, although the legal estate is still in the trustee. This rule will also apply where there is a reasonable presumption of a surrender or conveyance to him of the legal estate. ^ § 411. Protection of Title Continued. — Where the trustee is in possession of the trust estate he is the proper person to defend it against other claimants to possession, and he must prosecute the claim for damages where land is condemned for a public purpose. In a case before the Supreme Judicial Court of Massachusetts it was held that the trustee, and not the cestui que trust, is the proper per- son to petition for a jury to assess damages caused by tak- ing the trust estate for a raihva}', and if the suit be brought by the cestui que trust the respondents may deny the pe- titioner's title at the hearing before the jury.^ In Pennsyl- possession, and, having given of the trustees, or of placing the notice, sell the land conveyed," it execution of it, in whole or in part, was held that this language was in other hands. Vose v. Trustees, intended to give the trustee the 2 "Woods, 647. See also May v. right of possession, hut did not Taylor, 6 51. & G. 201. make such taking possession a ' Matthews v. McPherson, 65 JS". condition precedent to the power Car. 189 ; NicoU v. Walworth, 4 of sale. Tylerv. Herring, 67 Miss. Denio, 385; Lockhart v. Canfield, 169; s. C, 19 Am. St. Rep. 203. 49 Miss. 470; Hopkins v. Ward, 6 See also Vaughn v. Powell, 65 Munf . 38 ; Doggett v. Hart, 5 Fla. Miss. 402; Kirkpatrick v. Clark,132 215; Den v. Ohert, 20 N. J. 394. 111.342; S. C, 22 Am. St.Kep.531; Although the terms of a trust may Cearnes v. Irving, 31 Vt. 60G ; Kirk- seem to contain an unqualified di- land V. Cox, 94 111. 23G ; Essex rection to the trustee to pay over County V. Durrant, 14 Gray, 447 ; the money to the cestui que trust, Guphill V. Ishell, 1 Bailey, 230; yet the trustee is to exercise dis- s. C, 19 Am. Deo. 675. Neither cretion on that subject, and he is the attorney for trustees charged not to place money, or whatever he With a public trust, nor one of the may furnish, directly in the hands trustees acting as attorney for of a beneficiary, who is incapable others, may consent, in the ab- of using it for himself. Mason v. sence of express authority, to a Jones, 2 Barb. 229. decree which has the effect of ^ Davis v. Charles Kiver R. R. taking the trust out of the hands Co., 11 Cush. 500. Where a testa- 952 ESTATE OF THE TRUSTEE. [§411. vania it has been held that if land previously appropriated by the owner to a charitable purpose, without conveyance, be, subsequently, by mistake, conveyed to another, the grantee thereby becomes a trustee for those who are bene- ficially interested in the charity, and if such trustee disturb and oust the cestui que trust from his possession, an eject- ment will lie to recover it back, at the suit of the cestui que trust, or of those who stand in the same relation to the trust estate. 1 But the qualified possession which the trus- tees of an incorporated town have, at law, in the streets, is not sufficient to enable them to maintain an action of tres- pass quare clausum fregit, for an injury to such streets.^ tor devised lands to trustees to be sold for certain purposes, and a portion of the lands was taken for the public street, the damages should be assessed in favor of the trustees, and not in favor of the estate of the testator. The State V. Mayor, etc. of Orange, 32 N. J. 49. 1 School Directors v. Dunkle- berger, 6 Barr. 29; Presbyterian Cong. V. .Johnston, 1 Watts & S. 56 ; Hunt v. Crawford, 3 Pa. St. 426; Kennedy v. Fury, 1 Dall. 76; Caldwell v. Lowden, 3 Brewst. 68. 2 Kegina v. Shee, 4 Q. B. 2 ; Man- chester V. Manchester, 17 Q. B. 859 ; Kegina v. Commissioners, 15 Q. B. 1012. "A slight attention to the nature of a public street, and an examination of the powers of a town corporate, will enable us to determine this question. A street in a town is a public highway. It is a subject of common use, and not of exclusive possession — an in- corporeal hereditament, in which all persons possess equal right, the right of passing over it, and is, in its nature, Incapable of being re- duced into possession. But it is a subject of government; and the government of it is, by the act of regulating the incorporation of towns, placed in the hands of the corporation. They have the power to keep it in repair, to remove nui- sances, etc. ; but this power is no more than a supervisor possesses over a common highway, and is certainly of a very different nature from a possession, either absolute or qualified. Consequently, no possessory rights exist in the cor- poration, by which the action can be supported. Works of use or or- nament erected in the streets by the corporation are of a different na- ture, and depend on different prin- ciples." Conner v. New Albany, 1 Blackf. 88; s. c, 12 Am. Dec. 211. The enjoyment of laud oc- cupied as a street, subject to the easement of the public, belongs to the former owner. He may main- tain trespass quare clausum fregit for any exclusive possession of the soil by another. Lade v. Shepherd, 2 Str. 1004; Cortelyou v. Van Brundt, 2 Johns. 357. But the pos- session given by the sheriff will still be subject to the easement. Goodtitle v. Alker, 1 Burr. 133; Jackson v. Hathaway, 15 Johns. 447. Where not incompatible with the public right of way, the right § 412.] ESTATE or THE TKU8TEE. 953 In certain of the States it has been provided by statute that all persons who are entitled to the actual possession of lands, and the receipt of the rents and profits thereof, whether in law or in equity, shall be deemed to have a legal estate therein of the same quality and duration, and subject to the same conditions as their beneficial interests.^ § 412. Bight of Trustee to Possession of Trust Es- tate. — The right of the trustee to the possession of the trust estate is not a matter of course, but is to be de- termined by the instrument of conveyance and the circum- stances connected with the creation of the ti'ust. This right as against that of the cestui que trust depends upon the limitations of the trust and the duties which it imposes upon the trustee. It is well settled that questions relating to this point are to be determined by the intention of the settlor, as that is gathered from a careful examination of the entire instrument. In the case of Tidd v. Lister, Vice Chancellor Sir John Leach, in his opinion, said: "There may be cases in which it may be plain, from the expressions in the will, that the testator did not intend that the prop- erty should remain under the personal management of the trustees. There may be cases in which it may be plain, from the nature of the property, that the testator could not mean to exclude the cestui que trust for life from the per- sonal possession of the property, as in the case of a family residence. There may be very special cases in which this court would deliver the possession of the property to the cestui que trust for life, although the testator's intention appeared to be that it should remain with the trustees, as to mines, quarries, etc., belong to of his heirs in the lot was sold, the former owner. Jackson v. Hath- under a decree of court, to E, who away, supra. brought ejectment against C, then 1 McGill V. Doe, 9 Ind. 306. A in the adverse possession of the town lot was conveyed to A as the lot. Held, that as against A, or trustee of B, with words of grant any purchaser from him with and the habendum to A for and on notice, the statute conveyed a legal behalf of B, his heirs and assigns title, and the action would be sus- forever. A, as such trustee, con- tainable. Ibid. Also see Codes of veyed to 0. D was in possession Indiana, New York and Ohio, under 0. B died, and the interest 954 ESTATE OF THE TRUSTEE. [§ 412. where the personal occupation of the trust property was beneficial to the cestui que trust, there the court taking means to secure the due protection of the property for the benefit of those in remainder, would, in substance, be per- forming the trust according to the intention of the testa- tor."^ Where a fund is left in trust for the sole and sep- arate use of a person, with power to dispose of the prin- cipal fund by will or deed, to take effect at his death, it is not in legal effect an absolute gift, and does not give absolute possession to the extent that the person is entitled to re- cover the same- from the trustee.^ Where the entire inter- 1 Tidd V. Lister, 5 Madd. *429, *431. Plaintiff, lor a valuable con- sideration, by deed in form of bar- gain and sale, conveyed land to C "and her heirs and assigns intrust, nevertheless, to the use and behoof of said C during her natural life, with full power to sell and convey the same, or any part of the same, as she may need the same, for her comfortable support; and if any part shall remain unsold, then such remaining part shall be in trust for the use and behoof of the grantor and his heirs and assigns." C died without having conveyed the land, leaving .minor heirs. Held that, notwithstanding the form of the deed, and the use of the words "in trust," the intent of the plaintiff must determine its construction; and he could not have intended to make C"s infant heirs trustees for himself, the lim- itation over vested the legal title to the land on the death of C in plaintiff, by way of a use executed by the statute, and did not give him merely an equitable interest. Carr v. Kiohardson, 157 Mass. 576; s. c, 32N. E.Eep. 958. Where a person conveyed real and personal property in trust to another, the deed authorizing the trustee to de- vote certain portions thereof to the payment of his debts, and empow- ering such trustee to collect the rents from the trust property and pay over the same to the grantor free from liability for his debts, and reserving to the grantor the right of disposition of the prop- erty so conveyed only by will, he is not entitled to have any part of such estate transferred to him tor any purpose whatever, since by such deed he clearly intended that it should remain under the control of the trustee until the testament- ary disposition could take effect. Worthington v. Rich, 77 Md. 265; S. C, 26 Atl. Rep. 403. 2 Barkley v. Dosser, 15 Lea, 529. Where the trust deed minutely de- scribes the circumstances under which the trustee may dispose of the trust property, and the manner in which he is to do it, the trustee may not dispose of it in any other manner. Any act in contravention of the authority of the deed of trust will bind the trustee's indi- vidual estate, but will not affect the property held in trust. Hunt V. Townshend, 31 Md. 336; s. C, 100 Am. Dec. 63. A feme covert, empowered by deed of trust to dispose of property by deed, or 412.J ESTATE OF THE TRUSTEE. 955 est is vested in the trustees, with power to manage the property, to pay taxes, insurance and other charges, it will be presumed that it was the intention of the testator that th,e trustees should have possession, unless the will con- tained specific directions to the contrary. i Where the trustees are clearly in possession of the trust estate, it has been held that they may cultivate the land, making such purchases as may be essential to the successful prosecution of the business, notwithstanding there is no provision to that effect in the instrument.^ If the tenant for life is a female and single, the possession will remain in the trustees for the protection of her interest in the case of her mar- riage.^ Where there are annuities, or other charges, on gift, or will, can di^^pose of it in no other way; and a disposition of it by bill of sale is void. Marsliall V. Stepiiens, 8 Humph. 159; s.'c, 47 Am. Dec. 601. The intention of the instrument must guide the trustee, and protect him in the performance of his duty. Hester V. Wilkinson, 6 Humph. 215; s. c, 44Am.Dec.303; Carter v. Kolland, 11 Humph. 333. iTidd V. Lister, 5 Madd. *429; NaylOT V. Arnot, 1 K. & M. 501; Blake v. Bunbury, 1 Ves. Jr. 194, 514; S. C, 4 Bi-o. Ch. 21; Jenkins V. Milford, 1 J. & W. 629; Marshall V. Sladen, 4 De G. & Sm.468; Mat- thews v. McPherson, 65 N. Car. 189; Mosely v. Marshall,. 22 X. Y. 200 ; Young V. Miles, lOB. Mon. 290. 2 Mayfield v. Kilgour, 31 Md. 241. "Equity cannot intend that this land was to remain unproductive in his hands, because no special power was conferred by deed to cultivate or to rent it. These powers are taken as incidental to the trust, and are limited to the exercise of a sound discretion. In the exercise of this discretion the trustee seems to have concluded to cultivate the land, and to carry out this purpose he acted within the scope of his powers in making the purchase in question." Ibid. ' Mayfield v. Kilgour, 31 Md. 241. A testator gave to his wife "one- third of his real and personal es- tate, to use, occupy and enjoy as long as she remained his widow: at her marriage or death'' the re- mainder "to trustees for his son dm-ing life, and at his death to his heirs in fee." In another clause he gave to the same trustees all the residtie of his estate "for the use, support and maintenance of his son, and in case of his death with- out issue, to the use and support of testator's sisters and brother, or to the survivor, at the happen- ing of that event; and directed the trustees to educate his son, and to keep the farm without sale or division during his life, and make it as profitable as may be for him and his heirs; and at his and their death to his sisters and brottier, or such as may be living on the happening- of the event as heretofore expressed." The will created an active special trust, and the son, on arriving at age. was not entitled to the possession of 956 ESTATE or THE TRUSTEE. [§ 413. the estate to be paid by the tenant for life, who is in pos- session, and he permits such charges to fall in arrears, the trustees will be put in possession for the purpose of carry- ing out the intention of the settlor in this regard, § 413. Possession of Trust Estate Continued. — Where a trust estate consists of personal securities, or where there are personal securities belonging to the trust estate, such as chattel deeds, certificates of stock, bonds, mortgages, notes, etc., the trustee is entitled to possession and will be sus- tained in an action for their delivery, even against the cestui que trust? All actions for trespass, replevin, detinue, or trover, relating to personal property, must be brought in the name of the trustee, even where the cestui que trust is in possession.^ In equity the possession of the beneficiary the farm. Wickham v. Berry, 55 Pa. St. 70. iTidd V. Lister, 5 Madd. 429; Denton v. Denton, 7 Beav. 388; Blake v. Bunbury, 1 Ves. Jr. 194; Campbell v. Preston, 22 Gratt. 396. 2 Pace V. Pierce, 49 Mo. 393 ; Kyan V.Bibb, 46 Ala. 343; Western R. K. V. Nolan, 48 N. Y. 513; White v. Albertson, 3 Dev. 241 ; Giiphill v. Isbell, 8 Kich. 463 ; Presley v. Strib- ling, 24 Miss. 257; Schaffer v. Lav- retta, 57 Ala. 14; Bringhurst v Cuthbert, 6 Binn. 398; Eife v, Geyer, 59 Pa. St. 395; s. c, 98 Am Dec. 351; Dodson v. Ball, 60 Pa St. 492; s. C, 100 Am. Dec. 586 Delbert's Appeal, 83 Pa. St. 462 Stone v. Hackett, 12 Gray, 227; Davis v. Ney, 125 Mass. 500; s. c, 28 Am. Dec. 272; Day v. Roth, 18 X. Y. 448; Silman v. McArdle, 99 N. Y. 451 ; s. C, 52 Am. Rep. 41 Stettheimerv. Tone, 114 N. Y. 501 loor V. Hodges, 2 Spear, Eq. 593 Prather v. Weisinger, 10 Bush, 117 Hanson v. Worthington, 12 Md 418; Beach v. Beach, 14 Vt. 28 Roe V. Read, 8 T. R. 118; Reece v Allen, 10 111. 236; s. C, 48 Am. Dec. 336; Kirkland v. Cox, 94 111. 400; Kirkpatrick v. Clark, 132 III. 34£; s. c, 22 Am. St. Rep. 531; Jones V. Jones, 3 Bro. Ch. SO; Pool V. Pass, 1 Beav. 600. 2 McRaney v. Johnson, 2 Fla 520 ; Hower v. Geesaman, 12 Serg & R. 251; Poage v. Bell, 8 Leigh, 604; Coleson v. Blanton, 3 Hayw, 152; Guphill v. Isbell, 8 Rich. L 463; Thompson v. Ford, 7 Ired 418; Schley v. Lyons, 6 Ga. 530 Jones V. Strong, 6 Ired. 367; Mm-, phy V. Moore, 4 Ired. Eq. 118 Chambers v. Mauldin, 4 Ala. 477 Parsons v. Boyd, 20 Ala. 112; Jones V. Cole, 2 Bail. 330; Wynn V. Lee, 5 Ga. 236; Daniel v. Dan- iel, 6 B. Mon. 230; Pressley v. Stribling, 24 Miss. 527 ; Newman v. Montgomery, 5 How. 742; Stoker V. Yelby, 11 Ala. 327; Baker v. Washington, 3 Stew. & P. 142. The trustee of a married woman is the proper person to bring an action at law for asserting or defending the legal title, and every action founded on such title must be brought in his name. The fact §413.] ESTATE OF THE TRUSTEE. 957 is the possession of the trustee, and at law the trustee is entitled to possession as against the cestui que trust.^ Even where a defect in the title of the trustee is established a suit may be brought in his name.^ At law the trustee is that the property, for an injury to which the action was brought, was in the actual possession of the feme at the time of the injury, does not change or affect the right of the trustee to sue. When the trust deed allows the property to remain in possession of a married woman, her possession is consistent with the deed, and she is to be re- garded as the agent of the trustee. The right of action in such case cannot be in the husband and wife, the cestui que trust, he having neither the ownership nor pos- session. Wherever the trust would be supported in equity, the right of the trustee will be supported at law. The trustee is the owner and has all the remedies devised by law for any injury done to the property in his charge. McEaeny v. John- son, 2 Fla. 520. iWynn v. Lee, 5 Ga. 217, 236; Jones V. Cole, 2 Bail. 330; White V. Albertson, 3 Dev. 241. A trustee of chattels is entitled to the pos- session after sale for the purpose of delivering them to the pur- chaser, and may bring an action, either of replevin or trover, when the possession is witheld. Pace v. Pierce, 49 Mo. 393. "It is believed to be a well settled principle, that a man may take his property wherever he can find it, provided he does not, in taking it, commit a breach of the peace. If this property, then, was the property of the wards of D H B, his right to take it in a peaceable manner, and procure the aid of others for that purpose, cannot be denied. The general proposition, both at law and in equity, is, if any property in its original state and form Is covered with a trust in favor of the principal, not even a change of that state can divest it of that trust, or give the agent or trustee converting it, or those who repre- sent him in right (not being bona fide purchasers for a valuable con- sideration without notice), any more valid claim in respect to it than they respectively had before such change. An abuse of trust can confer no rights on the party abusing it, or on those claiming in privity with him." Brush v. Blanchard, 19 111. 31, 37. It is the duty of the trustee to give imme- diate notice of his possessions to all parties in interest in the per- sonalty. See Judsou v. Corcoran, 17 How. 614; Foster v. Mix, 20 Conn. 395; Murdook v. Finney, 21 Mo. 138 ; Inre Barker, 6 Wend. 509 ; Northampton Bank v. Balliet, 8 Watts & S. 311; s. c, 42 Am. Dec. 297; Fisher v. Knox, 18 Pa. St. 622; S. C, 53 Am. Dec. 503; Mur- phy V. Moore, 4 Ired. Eq. 118; Parsons v. Boyd, 20 Ala. 112; Bar- ney V. Douglass, 19 Vt. 98. 2 Rogers v. White, 1 Sneed, 69. Upon his acceptance of the trust, the trustee instantly becomes vested not only with the right of possession but in legal contempla- tion with actual possession also, and may maintain trespass against a wrongdoer having no title, although the decree creating said trust be technically imperfect, and does not vest him with the absolute 958 ESTATE OF THE TRUSTEE. . [§413. the owner of the property, and has at his command all the remedies devised by law for any injury done to the property in charge.^ In a case where a note was given to A and B as trustees of a corporation, it was held that they must be sued in their names as trustees, and not in the name of the corporation, since they have the legal interest in the note.^ The legal principle, in its relation to the equitable rule in- volved in this subject, is stated by Mr. Chitty, as follows : "The courts of law will not, in general, notice mere equita- ble rights, as contradistinguished from the strict legal title and interest, so as to invest the equitable or merely bene- ficial claimant with the ability to adopt legal proceedings in his own name, although the equitable right embrace the most extensive, or even the exclusive, interest in the benefit to be derived from the contract or subject-matter of litiga- tion. This rule could not be disregarded without destroy- ing the fundamental distinction between courts of law and courts of equity, with regard to the remedy peculiar to each jurisdiction. If the cestui que trust were permitted to sue at law in his own name, the benefits and protection intended to result from the intervention of a trustee, clothed with a legal title, might be lost, and the advantages ai'ising from giving courts of equity exclusive control over matters of trust would be defeated. Besides, it would be impossible, consistently with the common principles of jurisprudence, to exclude the power of the trustee to sue in respect of his legal right, and it would be highly mischievous and unjust legal title. Ibid. A deed of trust did not require the trustee to take provided that, on the default in possession of the land before sale, payment of the debt secured, the Vaughn v. Powell, 65 Miss. 401. trustee, "shall, at the request of See also Kiley v. Brewster, 44- 111. the cestui que trust, take possession 18(3 ; Tyler v. Herring, 67 Miss. 169 ; of all the property conveyed under s. c, 19 Am. St. Rep. 283. Contra: this deed, and after giving ten days Eoarty v. Mitchell, 7 Gray, 243. notice sell the same." Held, that ' McKaeny v. Johnson, 2 Fla. taking possession of the land or 520. demanding it was not a condition ^ Binney v. Plumly, 5 Vt. 500 precedent to the exercise of the "^ake v. Tinkler, 16 East, 36 power of sale under such deed; the Davant v. Guerard, 1 Spear, 242 language quoted authorized, but Ingersoll v. Cooper, 5 Blackf . 420. § 414.J ESTATE OE THE TRUSTEE. 959 to permit the defendant to be harassed by two actions upon the same contract or transaction. The right of action at law has, therefore, been wisely vested solely in the party having the strict legal title and interest, in exclusion of the mere equitable claim. "^ § 414. The Subject Continued. — In general it may be stated as the rule that suits are to be brought and to be de- fended by the trustee, and not by the cestui que trust. Under the operation of this rule the trustee will be held responsible for the use of all due diligence and earnestness in the prosecution of suits in the interests of the estate and of the cestui que trust, and in the defense of such suits as may be brought against him as the representative of the beneficiaries and as the holder of the legal estate. Where there is an appeal from a judgment in favor of the estate, or of the cestui que trust, he must use diligence in the effort to sustain the decision of the court below at the hearing of the appeal.^ In Pennsylvania it has been held that it is 1 1 Chitty on Pleadings, *2. 2 "Wood V. Burnham, 6 Paige, 513. "Where the decision of the court below is against the rights of un- known parties whose contingent interests are represented by a trus- tee, it may not be the duty of such trustee to appeal from the decision in order to protect himself from future responsibility. But where the decision of the court below is in favor of the rights of such un- known parties, it is unquestionably the duty of the trustee to endeavor to sustain such decision in the appellate court. Ibid. See also Gooding v. Gibbs, 17 How. 274; In re Autenreith, 3 Dem. 200; V^^estern K. Co. v. Nolan, 48 jST. Y. 518; Burr V. McEwen, Baldw. 154. A trustee who is sued on a title hostile to his cestui que trust must show that he acted in good faith, and that the cestui que trust knew of the suit, in order to protect him- self by the recovery against him. Mackay v. Coates, 70 Pa. St. 351. See alsQ Dozier v. Freeman, 47 Miss. 647. On being informed of proceedings affecting their title to the trust estate, it is the right and duty of trustee to interpose, and, on failure to do so, they are con- cluded by the determination made in such proceedings, although they may not have been parties to the record. Burr v. Bigler, 16 Abb. Pr. 177. The trustees 'counsel fees will be allowed him where incurred in the acquisition of the trust prop- erty. See Dow v. Memphis, etc. R. Co., 23 Blatchf. 84; Grimball v. Cruse, 70 Ala. 534; Clark v. Ander- son, 13 Bush, 111; Brady v.Dilley, 27 Md. 570 ; Downing v. Marshall, 37 jS". Y. 380; McBlhenny's Appeal, 46 Pa. St, 347; Perkin's Appeal, 108 Pa. St. 314; s. c, 56 Am. Rep. 208; Walker's Appeal, 140 Pa. St. 124; Williams v. Smith, 10 R. I. 960 ESTATE OF THE TRUSTEE. [§ 414. not necessary, in order to enable a cestui que trust to carry on u suit in the name of the trustee, that the trustee should expressly authorize the suit. If the legal plaintiff has a right to recover the court will see to the jDroper application of the moneys raised, when moved to do so by a party in in- terest.^ Where a trustee refuses to bring a suit, or to per- mit his name to be used, in the interests of the estate or of a beneficiary, he may be compelled by a bill in equitj^ to take such steps as may be demanded by the interests of the estate or of the cestui que trustJ^ In suits of this character in the name of a trustee a debt due from the cestui que trust cannot be offered as a set off ,^ and in a suit by a trus- tee, on a claim of the trust estate, a personal debt of the trustee cannot be pleaded as a counter-claim.* Where a 280; Chamberlin v. Estey, 55 Vt. 378; Ingham v. Lindeman, 37 Ohio 8t. 218; Heckert's Appeal, 24 Pa. St. 482; Kiddie's Appeal, 83 Pa. St. 340; Perrine v. Newell, 49 N. J. Eq. 57; Shirley v. Shattuck, 28 Miss. 26. 1 Insurance Co. v. Smith, 11 Pa. St. 120. See Koden v. Murphy, 10 Ala. 804; Annesley v. Simeon, 4 Madd. 390. 2 Chisholm V. Newton, 1 Ala. 371 ; McCullum V. Cox, 1 Dall. 139; Parker v. Kelly, 10 Sm. & M. 184; Welch V. JIandeville, 1 Wheat. 233; Blin V. Pierce, 20 Vt. 25. "It is true that where an execution is levied on property secured hy a mortgage or deed of trust, as a com- plete remedy exists at law, by the trial of the right of property a resort cannot be had to a court of equity. But in this case it is expressly alleged that the trustee refuses to take the necessary steps to have a trial of the right, and this allega- tion not being controverted, or put in issue by the answer, must be considered as admitted. The cestui que trufit has no means of com- pelling the trustee to make the affidavit, and execute the bond which the statute requires as a pre- liminary to a trial of the right of property, and if he refuses to do so the beneficiary may resort to a court of chancery for protection." Kobinson v. Mauldin, 11 Ala. 977, 982. ^ Wells V. Chapman, 4 Sandf. Ch. 312. Campbell v. Hamilton, 4 Wash. C. C. 93; Porter v. Morris, 2 Harr. 509 ; Tucker v. Tucker, 4 B. & Ad. 745; Beale v. Coon, 2 Watts, 183. ^ Page V. Stephens, 23 Mich. 357. An assignee for the benefit of creditors, who sells the assigned stock on credit, cannot create an offset or payment in reduction of the price by incurring liabilities to his vendee, who knew of the trust, for articles knowingly furnished for his personal use and not on account of the trust fund ; and a subsequent trustee, appointed in his place, will not be compelled to allow such debts of his prede- cessors in reduction of the purchase debt. Ibid. "If a cestui que trust § 415.] ESTATE OF THE TRUSTEE. 961 suit in behalf of the trust estate, or of the cestui que trunt, is pending, and the trustee fraudulently releases a claim to the prejudice of the real plaintiff, without his consent, the court will set aside the release.^ Where a trustee releases a mortgage, or other obligation, without payment, or with- out the consent of the party in interest, such release will be treated as a nullity.^ § 415. The Same Subject. — One of the legal incidents and obligations of an absolute title is that of responsibility for taxes. Taxes assessed against a trust estate constitute a cause of action against the holder of the legal title. As such holder the trustee must see to the payment of the taxes levied against the trust estate. In some of the States the place at which such taxes shall be paid is determined by statute, but in the absence of any statutory regulation the law presumes that the trustee is the owner and assesses the property at his domicile.^ It may be said, in general, that all the privileges and obligations which appertain to the trust estate, especially in personaltj^, attach to the trustee.- As he is responsible for any misapjalication of the trust funds, it is necessary that he should have possession and the right of control. If the property consists of stocks in corporations, he is entitled to attend the corporate meet- ings and to vote and hold ofBce in the corporation as the and a trustee, before any rights of Allen, 69, 77; Upham v. Wyman, other parties have attached, agree "^ Allen, 499. that the income coming to the ^ Legh v. Legh, 1 B. & P.- 447; former may as it accrues heap- Payn v. Rogers, Doug. 407; Man- plied to a debt due by him to the ning v. Cox, 7 Moore, 617; Hickey trustee, it may be that this would v. Burt, 7 Taunt. 48; Barker v. create an equitable lien in favor of Richardson, 1 Y. & J. 362 ; Baner- the trustee, which a court of equity man v. Radenius, 7 T. R. 670; would enforce against the cestui Greene v. Beatty, Cose, 142 ; Kirk- guetrMsJ or any one claiming under patrick v. McDonald, 11 Pa. St. him. But equity will not enlarge 387; Roden v. Murphy, 10 Ala. the right of set-off at law, unless, 804. by agreement or otherwise, such ^ Woolf v. Pate, 9 B. Mon. 210. an equity or lien exists." Abbott ^ Latrobe v. Baltimore, 19 Md. V. Foote, 146 Mass. 33S, 334. See 13. Green v. Mumford,4 R.I.313. also Spaulding v. Backus, 122 "If the maker of the trust deed, Mass. 553 ; Holbrook v. Bliss, 9 and the trustee, neglected to pay 61 962 ESTATE OF THE TRUSTEE. [§ 416. representative of the cestui que trust, or as the holder of the legal title, ^ AYhere a trustee dies the personalty of the trust estate passes to his executor, or administrator, who will hold it until the appointment of a new trustee, and such executor or administrator, holding the legal title for the time, may vote upon the stocks at corporate meetings.^ § 416. Dower in Trust Estate. — In England, by stat- ute, a wife is entitled to dower in all the lands of which her the taxes on the lands, any ben- eficiary in the deed could advance the taxes and ask contribution from the other beneficiaries, or claim reimbursement out of the trust fund, but he could not permit the lands to be sold for taxes and ac- quire a valid legal title by pur- chasing in the certificates of sale."' Frierson v. Branch, 30 Arli. 453, 464. See also Pettus v. Wallace, 29 Ark. 476. See statutes of the various States for provisions governing assessments of trust estates for taxation. 1 In re Barker, 6 Wend. 509. "If trustees be holders of shares in a company, their liabilities are the same as if they were the beneficial owners, though the fact of their trusteeship be noticed in the com- pany's books." 1 Lewin on Trusts, *239.* See also In re Phoenix Life Assurance Co., 2 John. & Hen. 229; Dobson's Case, 12 Jur. (N. S.) 60; Lumsden v. Buchanan, 4 Macq. H. L. Cas. 950; Imperial Mercantile Credit Association, Chapman and Barker's Case,L. R. 3 Eq. 361. 2 People V. Tebbetts,4 Cow. 364 Bailey v. Hollister, 26 N. Y. 112 Bunn V. Vaughan, 3 Keyes, 345 Middlebrook v. Merchants' Bank, 3 Keyes, 135. Upon the death of a stockholder in a corporation intes- tate, and the appointment of ad- ministrators of his estate, and their acceptance of the trust, such ad- ministrators become, by operation of law, vested with the legal title to the stock, and consequently stockholders of the company, rep- resenting the estate of their in- testate, as such they have all the rights appertaining to the owner- ship of the stock, one of which is, the right of voting at elections of directors of the company. No formal transfer on the books is necessary to give this right. The fact that the decedent held the stock subject to a trust or duty in favor of others does not affect the question. The right to vote fol- lows the legal ownership, and the corporation has nothing to do with the equities between the owmer and third persons. Upon the death of a trustee of personal property the trust devolves upon his represent- ative. And as to everybody but the cestui que trust, such represent- ative is absolute owner. As trus- tee, however, he owes the duty of active management, for the pro- tection and preservation of the trust estate. And where that con- sists of stock in a corporation, the duty of voting at elections of di- rectors thereof is too plain for argument. In re North Shore Ferry Co., 63 Barb. 556. § 416. j ESTATE OF THE TRUSTEE. 963 husband held a beneficiary interest at his death. ^ Before the enactment of the statute a widow was not entitled to dower in a use or trust, and lands were frequently conveyed in trust with a view to defeating the right of dower. ^ Where a man before marriage conveyed his real estate to trustees in trust for himself and his heirs in fee, the wife had no right of dower, and if he purchased lands after his mar- riage, and took the title as a trustee in trust for himself and his heirs, the effect was the same.^ But the rule did not appl}' to the husband. Where lands were conveyed to trustees in trust for a woman and her heirs in fee, the hus- band was entitled to his curtesy.* This obvious injustice was corrected by the statute. In this country it is the rule that a wife is dowable in equitj^ in all the lands to which the husband had an equitable title at his death, and the I'ule 13 & 4 Wm. IV., ch. 105. Of this act the late Mr. Lewin, in his work on Trusts, Vol. 2, page 737, says : "fey a late act' the widow is entitled to dower in equity where the husband dies beneficially en- titled to any interest (not confer- ring a title to dower at law) which, whether wholly equitable, or partly legal andpartlyequitable,isan estate of inheritance in possession, or equal to an estate of inheritance in possession, other than estate in joint tenancy. But in either case the wife will not be entitled to dower out of any property ab- solutely disposed of by the hus- band in his lifetime or by will, and by the act a widow is not entitled to dower out of any land, when in the deed of conveyance thereof to her husband, or in any deed ex- ecuted by him, it shall be declared that his widow shall not be en- titled to dower. And the widow's right of dower may also be barred by declaration contained in the husband's will. The act does not extend to the dower of any widow married on or before the 1st day of January, 1834, and does not apply to copyholds, though it does to lands of gayelkind tenure. The ordinary uses to bar dower vest in the husband the whole inheritance in possession, partly at law and partly in equity, and therefore, in the absence of declaration by him to the contrary, must confer on a widow, married after the act, a right to dower." 2 Williams, Real Property, 134- 136. See also Dixon v. Savllle, 1 Bro. Ch. 326; D'Arcy v. Blake, 2 Sch. & Lef . 387 ; Maybury v. Brien, 15 Pet. 38. 3 Coke, Littleton, 208 a (re. 105). 4 D'Arcy v. Blake, 2 Sch. & Lef. 387; Chaplin V.Chaplin, 3 P. Wms. 234; Dodson v. Hay, 3 Bro. Ch. 405 ; Cunningham v. Moody, 1 Ves. 174; Sweetapple v. Bind on, 2Vern. 236; Watt v. Ball, 1 P. Wms. 108; Attorney- General v. Scott, Cas. t., Talbot, 139; Banks v. Sutton, 2 P. Wms. 713; Casburne v. Casburne, 2 J. & W. 194. 964 ESTATE OF THE TRUSTEE. [§ 416. applies to the curtesy of the husband. ^ In Maine it has been held that the widow of the cestui que trust is not dow- able of an estate in which the husband had only an equitable title, ^ and in Massachusetts it has been held that a widow is not entitled to dower in land in the possession of her hus- band at the time of his death under an executory contract for the purchase thereof, the terms of which were not complied with in his lifetime.'* Other States may have 1 Shoemaker v. Walker, 2 Serg. & K. 554; Robinson V. Miller, 1 B. Men. 93; Smiley v. Wright, 2 Ohio, 512; Davenport v. Farrar, 1 Scam. 314; Bowers v. Keesecker, 14 Iowa, 301 ; Peay v. Peay, 2 Rich. Eq. 409; Dubs v. Dubs, 31 Pa. St. 154; Eeid V. Morrison, 12 Serg. & R. 18; Miller v. Beverly, 1 Hen. & M. 322; Lawson V. Morton, ti Dana, 471; Bowie v. Berry, 1 Md. Ch 452; Miller v. Stump, 3 Gill, 304 Hawley v. James, 5 Paige, 318 Thompson v. Thompson, 1 Jones, 430; Gully v. Ray, 18 Ky. 113 Barnes v. Gay, 7 Iowa, 26; Lewis V. James, 8 Humph. 537; Rowton V. Rowton, 1 Hen. & M. 92; Til- linghast v. Coggeshall, 7 R. 1. 115; Alexander v. Warrance, 17 Mo. 228 ; Robinson v. Codman, 1 Sumn. 128; Gardner v. Hooper, 3 Gray, 404; Houghton v. Hapgood, 13 Pick. 154; Rawlings v. Adams, 7 Md. 54; Nightingale v. Hidden, 7 R. I. 115. 2 Hamlin v. Hamlin, 19 Me. 141. See also Lobdellv. Hayes, 4 Allen, 187; Reed v. Whitney, 7 Gray, 533. • -The inquiry arises whether, under these circumstances, the demandant is entitled to dower in that farm. The legal seizin is according to the title, unless the owner has been disseized; E was in possession un- der a verbal contract to receive a title from the tenant, and, of course, in submission to that title, and a jury would not be authorized to find that the husband was seized of any legal estate in the premises, and if the tenant should be con- sidered as holding the estate in trust for the benefit of E, the de- mandant would not be entitled to dower. For the widow of the cestui que trust is not dowable of an estate in which the husband had an equitable but not a legal title." Hamlin v. Hamlin, supra. See also Ray V. Pung, 5 B. & A. 5(51. 3 Lobdell V. Hayes, 4 Allen, 187. "By the common law, it is per- fectly well settled that a widow is dowable only of those estates of which her husband had the legal seizin, and that she is not entitled to dower, in estates of which he was only equitably seized or to the beneficial interest of which he was entitled as cestui que trust. The familiar rule of equity, that all the incidents of legal estates shall attach and apply to equitable es- tates, does not include the right of dower. This exception is con- trary to all the analogies of legal and equitable estates, and, if it were now open to question, would be no longer recognized. It has been changed in many of the States of the Union, and was abrogated in England by 3 and 4 Wm. IV., ch. 105, as to all persons married after first of January, 1834." Reed v. Whitney, 7 Gray, 533, 535. § 417. J ESTATE OF THE TRUSTEE. 965 adopted these or similar doctrines, but in those States in which the common law principles of dower are accepted the presumption is that the general rule, as above given, is in force. It has been held to be essential to the curtesy of the husband that the wife should have been in actual pos- session of her equitable estate. A right where the wife was not in possession will not entitle the husband to cur- tesy.^ The husband will not be deprived of his curtesy by any negligence on the part of the trustee, and his curtesy will not be excluded by a trust for the separate use of the wife where the estate is to go to her heirs. ^ § 417. Liability of the Trust Estate to Escbeat. — By the statute of 33 Henry VIII., ch. 20, it was enacted that if any person should be attainted or convicted of high treason, the King should have the benefit of any uses, etc., to which the convicted party was entitled.' But it has since been held in England that on the conviction of a cestui que trust of real estate for felonj^ neither the trust nor the land will be forfeited to the Crown, but the trustee will hold the estate for his own benefit.* The soundness of this doctrine has been questioned,^ but it has recently been recognized, in the case of Taylor v. Haygarth, by the Vice Chancellor of England, and is there established as the law on this subject.^ The general principle on which these 1 Parker v. Carter, 4 Hare, 413 ; Tillioghast v. Coggeshall, 7 R. I. Pitt V. Jackson, 2 Bro. Ch. 51; 383. Morgan v. Morgan, 5 Madd. 408. s Hill on Trustees, *270. A husband is not entitled to an es- ^ Attorney-General v. Sand, tate by the curtesy in a mere Hard. 496; s. c, 1 Eden, 177; equitable right in the wife which Sweeting v. Sweeting, L. J. 33 Ch. does not amount to an estate. 211. Sentillv. Robeson, 2 Jones Bq. 510. ^ Middleton v. Spicer, 1 Bro. Ch. 2 Sweetapple V. Bindon, 2 Vern. 204; Sweeting v. Sweeting, L. J. 536; Bennett v. Davis, 2 P. Wms. 33 Ch. 211. 316; Casborne v. Scarf, 1 Atk. 609; ^ Taylor v. Haygarth, 14 Sim. 8; Parker v. Carter, 4 Hare, 413; s. c, 8 Jur. 185; Barrow v. Wad- Roberts V. Dixwell, 1 Atk. 609; kin, 24 Beav. 1 ; Rittson v. Stordy, Morgan v. Morgan, 5 Madd. 408; 3 Sm. & Gif. 230; Onslow v. Wallis, FoUett V. Tyrer, 14 Sim. 126; 1 Mac. & G. 506; s. c, 1 Hall &T. Hearle v. Greenbank, 3 Atk. 715; 513; Henchman v. Attorney-Gen- Dodson V. Hay, 3 Bro. Ch. 405; eral, 3 Myl. & K. 485. 966 ESTATE OF THE TRCSTEE. [§417. cases have been decided is that the ]es:al estate, being vested in a trustee, the land cannot escheat for lack of a tenant. 1 In a case where a man dying possessed of lease- hold propert}^ which he orders to be sold and the money paid to a charity which is prevented from taking by the statute of mortmain, the executor having a legacy, and there being no next of kin. Lord Thurlow held that the ex- ecutor is a trustee for the Crown. ^ In most of the United 1 Walker v. Dpan. 2 Ves. Jr. 170; Middleton v. Spicer, 1 Bro. Ch. 201; Barclay V. Enssell. 3 Ves. 424; Powell V. Merritt, 1 Sm. & Gif. 381; Cradock v. Owen, 2 Sin. & Gif. 241 ; Henuhman v. Attorney- General, 3 Myl. & K. 485; Taylor v. Haygarth, 14 Sim. 8; Bishop v. Curtis, 17 Jur. 23. 2 Middleton v. Spicer, 1 Bro. Ch. 201 ; Burgess v. Wbeate, 1 Eden, 171, 261; King v. Coggan, 6 East, 431; "Walker V. Deane, 2 Ves. Jr. 170. Where it appeared that a trustee, under a deed, held freehold premises, in trust for L S, her heirs and assigns, for her and their own use and benefit. L S, who was illegitimate, and died without Issue, "by her will devised these premises, among others, to trustees in trust to sell, and out of the pro- ceeds to pay debts and legacies, the legacies being specified in a certain paper marked A. This paper not being forthcoming, the trustee of the deed offering to pay the debts claimed to be entitled to retain the trust premises as for his own benefit. On bill filed, how- ever, by the trustees of the will, a conveyance to them was directed, the lord chancellor holding that the will gave them a title as against the trustee of the deed, who had nothing to do with the question how the premises would be dis- posed of, in consequence of their being unable to carry the trusts into effect. Onslow V. Wallis. 1 Macn. & G. 506; s. C, 1 Hall & T. 513. Lands and accumulated profits might be held in trust to await the naturalizationof an alien, to whom, on that event, they were to be conveyed; but that the trust under which the profits of two parcels were to go absolutely to an alien was contrary to policy, and liable to forfeiture for the alienage of the cestui que trust. That as the alien was alive, an inquisition of office, according to the facts as they exist, should be found, and upon that the escheator might go into equity to compel execution of the f orfeit.able trust, for the benefit of the State. That the escheat act covers not only cases of ti chnical escheat, but all cases of forfeiture to the sover- eign, wherever the person last seized is divested by operation of law. McCaw v. Galbraith, 7 Kich. L. 74. See Barrow v. Wadkin, 24 Beav. 1. But see also Kittson v. Stordy, 3 Sm. & Giff. 74. The English Trustee Act of 1850 con- tains these provisions : XLVI. And be it enacted that no lands, stock or chose in action, vested in any person upon any trust or by way of mortgage or any profits thereof, shall escheat or be for- feited to her majesty, her heirs or s.iccessors, or to any corporation, lord or lady of a manor, or other § 417. j ESTAUE OF THE TRUSTEE. 967 States the rule has been fixed I))' statute. It is well estab- lished that a trust iu land for an alien is liable to escheat to the State. An alien can take by purchase but not by de- scent. An estate conveyed by deed or by will to an alien can be held against all the' world unless his title is devested by escheat. But if the alien is not in possession he can maintain no action to recover it. This follows, not from any lack of capacity to hold the land until the State shall determine his title by a process of escheat, but from his in- ability to maintain any real or mixed action. ^ In a case before the Virginia Court of Appeals, where land was pur- chased by or for an alien, and paid for by him or with person, "by reason ol the attainder or conviction for any offense of such trustee or mortgagee, but shall remain in such trustee or mortgagee or survive to his or her co-trustee or descend or vest in his or her representative, as if no such attainder or conviction had taken place. XLVII. And be it enacted, that nothing contained in this act shall prevent the escheat or for- feiture of any lands or personal estate vested in any such trustee or mortgagee, so far as relates to any beneficial interest therein of any such trustee or mortgagee, but such lands or personal estate, so far as relates to any such beneficial interest, shall be recoverable in the same manner as if this act had not been passed." The fourth sec- tion of the Intestates' Estates Act of 1884 provides that "from and after the passing of this act, where a person dies without an heir and intestiite in respect of any real es- tate consisting of any estate or in- terest, whether legal or equitable, in any incorporeal hereditament, whether devised or not devised to trustees by the will of such per- son, the law of eseheat shall apply, in the same manner as if the estate or interest above mentioned were a legal estate in the same heredita- ments." ^ Leggett V. Dubois, 5 Paige, 114; De Hourmelin, v. Sheldon,! Beav. 79; s. c, 4 Myl. & Cr. 525 Fourdrin v. Q-owdy, 3 Myl. & K 382; Gilman v. Kay, 2 Hayw. 108 Groves v. Gordon, 3 Brev. 245 Ennas v. Franklin, 2 Brev. 398 Richards v. McDaniel, 1 McCord 852 ; Fairfax v. Hunter, 7 Cranch 603; Sheafe v. O'Xeill, 1 Mass. 256 Garlick v. James, 12 Johns. 146 Darrah v. McXair, 1 Ashm. 236 Matthews v. Ward, 10 G. & J. 443 Crane v. Reeder, 21 Mich. 25. Upon the death of a tenant in fee with defect of heirs, the title and right of possession to the lauds, and also to his personal estate, eo instanti vests in the State, and by the oper- ation of the laws of this State all such estate, real and personal, im- mediately becomes and constitutes a part of the general school fund of the State. The administrator of the estate of such decedent can convey no title to such lands, and has no right of pos-ession to the same to deliver. State ex rel. v. Reeder. 5 Neb. 203. 968 ESTATE OF THE TRUSTEE. [§ 418. money furnished by him, but the convej'anoe was taken to a citizen upon express trust that he sha,ll hold for the ben- efit of the alien and his heirs, it was held that this trust estate of the alien can only be so acquired for him for the commonwealth, and that a court* of equity will compel the trustee to execute the trust for her benefit.^ In this country, where land escheats to the State, it will be held by the State subject to all the equities to which it was sub- ject while in the hands of trustees. It will not escheat for lack of a trustee, because where, for any cause, an estate is left M'ithout trustees, they will be appointed by the court, and where land passes by escheat to the State the rights of beneficiaries will be protected. § 418. Conveyance of Estate Subject to Trusts. — It is an elementary and well established doctrine of equity that all persons, except purchasers for a valuable consideration without notice, who take under a trustee, take subject to the trusts to which the estate was subject before the con- veyance. The rights of beneficiaries are not changed by any act of trustees without their concurrence. This rule applies to creditors who sell under an execution, to those who are entitled to dower or curtesy, to heirs, executors, ^ Hubbard v. Goodwin, 3 Leigh, he acquires, subject to the right of 492. ''An alien may take lands by the State to seize it at pleasure, purchase, but he cannot hold them, This can only be done, however, except for the benefit of the State, by office found, or something But although he can take by pur- equivalent thereto. For, it is one chase, he cannot take by act of of the principles of the common law, as by descent or curtesy; in law, that the crown can only take other words, he cannot take by act by matter of record; a principle of the law, but only by his own established for the security of act, for the law will not cast the private property from the grasp of freehold upon him, merely that it power. And until office found, or may be forfeited. There Is, more- some equivalent proceeding, he over, no distinction herein, whether may hold against all the world, not the purchase be by feoffment, excepting the State, and Is not ac- bargain and sale, or other deed, or countable for rents and profits by devise. In all those cases, as previously received. Ibid. 511. the act of the party, and not the See also Craig v. Leslie, 3 Wheat, mere act of the law, casts the free- 563, 589; Doe v. Robertson, 11 hold on the alien, he can take; Wheat. 332. though he can only hold the estate § 419.] ESTATE OF THE TRUSTEE. 969 administrators, assignees, and, in general, all devisees. Against a disseizor a cestui que tr'ust has no remedy, ex- cept to require the trustee to bring an action for the recov- ery of possession. The ceshii que trust cannot compel the disseizor to hold the estate subject to the original trusts, and his remedy is in the trustee. If the trustee refuses to bring an action to recover the estate, the court, in response to the petition of the cestui que trust, will remove him and appoint a successor.' § 419. The Trust Estate in Assignees. — On this sub- ject there is some conflict of authorities, but it now seems to be established that a trust estate will pass by a general devise, unless the contrary intention can be gathered from expressions in the will, or from plainly expressed purposes or objects of the testator. In Braybroke v. Inskip, Lord Chancellor Eldon held that where there is a will containing words large enough, and there is no expression in it which can be construed as authorizing any narrower construction than the general legal construction, nor any such disposi- tion of the estate as a testator is unlikely to make of any property not in the strictest sense his own, the trust will ' Doe V. Price, 16 Mees. & W. 603 ; ton v. Pringle, 3 S. Car. 77 ; Bel- Eeynolds v. Jones, 2 Sim. & S. 206. mont v. O'Brien, 12 jST. Y. 402. A The cestui que trust is the beneficial trustee cannot devest himself of his owner in equity, and a court of fiduciary character by converting law will protect him, and those the trust fund into money and the acting by his authority, in an entry money into land. Pierce v. Mc- upon and occupation of the trust Keehan, 3 W. & S. 280. A judg- property, as against a stranger to ment docketed against a man hold- the title. Oatman v. Barney, 46 ing the title to premises in his own Vt. 594. When real estate held in name, but in fact in the right of a trust has been legally and regularly firm, to which he belongs, is a sold under the direction of the cloud on the title of his grantee to court, upon a petition to sell and whom, by a deed reciting the facts reinvest the proceeds, the equita- as to the title, he conveys the ble title of the beneficiary is trans- premises in trust to sell the same ferred from the land to its proceeds, to pay an indebtedness of the firm. Cowman v. Colquhoun, 60 Md. such that a purchaser by contract 127. See also Spicer v. Spicer, 21 from the trustee may refuse to Ga. 200; Hawley V.James, 5 Paige, complete his purchase. Moore v. 444; s. C.,16"VVend. 61; ISTearpass William-, 115 N. y. 586; S. C, 5 V. Newman, 106 N. Y. 47; Creigh- L. R. A. 654. 970 ESTATE OF THE THISTEE [§ 419. pass.i ]\Ir. Hill states the doctrine in the following well considered words : "It is now settled, though after some fluctuation of opinion, that a general devise of real estate will pass estates vested in the testator as trustee or mort- gagee, unless a contrary intention can be collected from the expressions of the will, or from the purposes or limitations to which the devised lands are subjected."^ The English doctrine has been fully accepted by the courts of this country. In the case of Taylor v. Benham, before the Su- preme Court of the United States, Mr. Justice "Wood- bury, in his opinion said: "The better opinion is that a trust estate always passes in a general devise to the 1 Braybrooke v. Inskip, 8 Ves. 436. See Koe v. Keade, 8 T. R. 118; Ex parte Morgan, 10 Ves. 101; Hawkins v. Obeen, 2 Ves. 559 ; Ex parte Shaw, 8 Sim. 159; Lind>ell v. Thacker, 12 Sim. 178; Langford v. Auger, 4 Hare, 313; Ex parte Ser- gison, 4 Ves. 147; Attorney-Gen- eral V. Bowyer, 3 Ves. 714; Exparte Brettell, 6 Ves. 570; Leeds v. Mun- day, 3 Ves. 348; Thompson v. Grant, 4 Madd. 447. If the devise was to uses in strict settlement, It could not be intended that estates, subject to an equity of redemption, came within the general words of a devise, the subject of which was to be tied up. It is farther to be observed that, although the legal estate, in a mortgage in fee (^which lias been forfeited by default of payment according to the condi- tion) will pass under a general devise, unless some intention in- consistent with that construction can- be collected, yet with respect to the beneficial interest, the devisee will be a trustee for the party to whom the testator's personal estate is bequeathed ; just as the heir-at law if the legal estate had been allowed to descend, but the mort- gage interest had been disposed of by will, would be a trustee, for the party to whom the beneficial right was so given, or for the personal representative, if no particular dis- position of such interest was made, and if the mortgage was not in fee, but for a term of years, and, as such, the legal title thereto de- volved on the executor of the mortgagee, the executor would, in like manner, be only a trustee for any person to whom the money due on such mortgage was be- queathed. Attorney-General v. Meyrick, 2 Ves. Sr. 46. I^ot only may the legal estate in a mortgage pass under words of general de- vise, but the beneficial and per- sonal interest in such chattels may pass under words usually appro- priated to the transfer of real property; thus where a testator devised all his freehold in a named parish, and it appeared that he never had an interest in land in that parish, except a mortgage in- terest, in favor of the plain inten- tion, that interest was held to be well and beneficially given by such inaccurate description. Clark v. Abbott, Barnard, 401. 2 Hill on Trustees, *283. § 420.] ESTATE HF THE TRUSTEE. 971 residuary legatees, if no circumstances appear to indicate a contrary intent."^ § 420. Trust Estate in Bankrupt Trustee. — In En- gland, by a recent statute, it was enacted that "all such property as may belong to or be vested in the bankrupt at the commencement of the bankruptcy, or may be acquired by or devolve on him before his discharge, shall, imme- diately on the debtor being adjudged bankrupt, vest in the trustee."^ At an earlier date the operation of the bank- ruptcy acts was expounded by Lord Chief Justice Willes, as follows: "Assignees under a commission of bank- ruptcy are not to be considered as general assignees of all the real and personal estate of which the bankrupt was seized and possessed, as heirs and executors are of the es- tates of their ancestors and testators; but that nothins; vests in these assignees, even at law, but such real and personal estate of the bankrupt in which he had the equita- ble as well as the legal interest, and which is to be applied for the payment of the bankrupt's debts. "^ Under this rule, in the case of a bare trustee, the trust estate, whether real or personal, will not vest by the bankruptcy in the as- signees, even at law, and the rule will apply, not only to trustees of express trusts, hut also to trustees virtute officii, ' Taylor v. Benham, 5 How. 270. property which he then possessed, See also Hughes v. Caldwell, II or which he might thereafter ac- Leigh, 342; Merritt v. Farmers' quire, or that should belong to Ins. Co., 2 Edw. 547; Ballard v. him at the time of his death, to his Carter, 5 Pick. 112; Asay v. wife for life, with a general power Hoover, 5 Pa. St. 35; Deane v. of disposal. The wife devised to Gunter, 19 Ala. 731 ; Kichardson B, a, feme covert, for her separate V. Woodbury, 43 Me. 206. Trust use. iSsZd, a legal title vested in A estates under which is included the in trust, passed to his devisee, and interest of a mortgagee, who, until from her to B by her will, and that foreclosure, is a trustee for the a conveyance by B and her hus- mortgagor, will pass under gen- band passed the legal estate, so eral words in the will relating to that the outstanding equitable title realty, unless it can be collected could not be set up in ejectment from the expression in the will, or against an intruder. Heath v. the purposes and objects of the Knapp, 4 Pa. St. 228. testator that his intention was ^ 40 ,1^ 47 Viot. ch. 52, §§ 44, 54. otherwise. Jackson v. Delan^y, ^ Scott v. Surnam, Willes, 400, 13 Johns. 537. A devised all the 402. 972 TESTATE OF THE TRCSTEE. [§ 420. as executors, administrators, factors, etc.^ By the late bankruptcy acts it is expressly provided that the property of the bankrupt shall not be taken to comprise any prop- erty held by the bankrupt in trust for any other person.^ In a recent English case it was held that where creditors, acting under section 21 of the bankruptcy act, 1883, have appointed a trustee of the property of the bankrupt, and it appears that the person so appointed is an accounting party 1 Ex parte Gennys, 1 Mont. & Mac. 258; Houghton v. Koenig, 18 C. B. 235; Winch v. Keeley, 1 T. E. 619; Carpenter V. Marnell, 3 B. & P. 40; Westoby v. Day, 2 Ell. & Bl. 605; Boddington v. Castelli, 1 Ell. & Bl. 879; Gladstone v. Had- wen, 1 Maule & S. 517; Howard v. Jemmett, 3 Burr. 1368; Ex parte Butler, 1 Atk. 213; Vinerv. Cadell, SEsp. 88; Earr v. Newman, 4 T R. 629; £■£ parte Ellis, 1 Atk. 101 Godfrey v. Fuzo, 3 P. Wms. 186 Tooke V. Hollingsworth, 5 T. E 226; Copeman v. Gallant, 1 P, Wms. 318; Delarmey v. Barker, 2 Stark. 539; Boddy v. Esdaile, 1 Car. & P. 62; Ex parte Dumas, 2 Ves. 582; s. C, 1 Atk. 232; Pane V. Birch, 2 Atk. 623; Eyall v. Eolle, 1 Atk. 172. Where money was paid into bank by a firm of brewers, and an agent "S'las allowed to draw upon the account in order to provide himself with funds for purchasing barley to be malted for the brewers, and the agent bought large quantities of barley, and also (although not authorized so to do) of malt, and drew largely upon the account, but in lieu of paying for the barley and malt, misappro- priated the moneys which he re- ceived and subsequently became bankrupt, it was held (1) that the moneys drawn out by the agent were impressed with a trust under which he was bound to appropri- ate them in the cash purchase of barley ; (2) that even if the barley and malt which remained at the time of the bankruptcy in the bankrupt's possession were not bought in accordance with the au- thority given to the agent, and the legal property in them was not In the brewers but in the agent, he was a trustee of them for the brewers to the extent of the mon- eys advanced by the brewers, for they were the product of or sub- stitute for the original trust prop- erty, and as such subject to the trust; (8) that the bankrupt or his representative could not be al- lo>ved to set up the bankrupt's fraud and abuse of trust to defeat the title of his cestui que trust. Harris v. Truman, L. E. 7 Q. B. Div. 340; s. c, L. E. 9 Q. B. Div. 264. See also Taylor v. Plumer, 3M. &S. 575; Ex parte Cooke, L. E. 4 Ch. D.123; Tooke v. Hollings- worth, 5 T. E. 227. 2 32 & 33 Vict. ch. 71, § 15. "The property of a bankrupt divis- ible among his creditors does not comprise property held by him as trustee for any other person, al- though it is property in his order and disposition at the commence- ment of the bankruptcy." Under- hill on Trustees, 242. See also £x parte Barry, L. E. 17 Eq. 113; Ex parte Marsh, 1 Atk. 158. See also TrustPC Act. 1893. t; 48. § 421. J ESTATE OF THE TEUSTEE. !73 to the estate, and that questions will arise between him and the estate which will render it difficult for him to act a\ ith impartiality by reason of the conflict between his own in- terests and his duty to the creditors, these circumstances will, as a general rule, justify the board of trade in ob- jecting to the appointment under the powers conferred on them by subsection 2 of section 21. ^ § 421. The Subject Continued. — It is well established in this country that the insolvency, or even the bankruptcy of the trustee, in itself will not be treated as a ground for his removal, or otherwise change his fiduciary relation.^ 1 In re Martin, L. K. 21 Q. B. Div. 29. See also Kyall v. Kolle, 1 Atk. 172; Zinck v. Walker, 2 W. Bl. 1154; Garratt v. Cullum, Bull. N. P. 42 ; Hartopp v. Hoare, 3 Atk. 50; Miller y. Eace, 1 Burr, 457. ^ Shryock v. Waggoner, 28 Pa. St. 430. "It is very clear upon principle and authority, tbat the estate in the hands of the trustee is hound in equity to discharge the legacies to the other cestuis que trust, before he or his assigns can claim any part or it, if the estate has heen diminished by a violation of his duties as trustee. The equities of those to whom he is bound by his assumption of the trust are prior and superior to any which he can create in the trust fund by con- tract. As was held in Fuller v. Knight, 6 Beav. 205, a trustee can- not bargain away his power to make good a deficiency in the trust fund, arising from his breach of trust. The doctrine is very suc- cinctly stated ,in Morris v. Livie, 1 Y. & Coll. 380, of which the marginal note is as follows: 'If an executor assigns his reversion- ary legacy, the assignee takes it subject to the equities which at- tached to the executor,' and, there- fore, if the latter, though subse- quently to the assignment, wastes the testator's assets, the assignee cannot receive the legacy till satis- faction has been made for the breach of the trust.' " Hoar, J., in Belknap v. Belknap, 5 Allen, 468, 471. An interest in property' held in trust lor a person during life, under a will providing that no part of it shall be "assignable" * * or in any way liable to be taken "for any of his debts and liabilities before payment, conveyance or transfer to him, does not pass to his assignee in insolvency under Mas*. Pub. Stat. ch. 157, § 44, as limited by § 46, since such interest is not property which the debtor "could have lawfully sold, assigned or conveyed, or which might have been taken on execution." Billings V. Marsh, 153 Mass. 311; s. C, 10 L. E. A. 764. Where an executor and trustee, under a will renders a final account and charges himself with a certain amount as retained by him to pay annuities, and never sets this sum apart, but uses it in his business, together with his own money, and afterwards makes an assignment for benefit of creditors, the annuitants cannot impress the funds in the hands of the assignee with a trust for the payment of 974 ESTATE OF THE TRUSTEE. [§ 421. If he has given a bond, as he should be required to do, his capacit}' to discharge the duties of a trustee is not essen- tially changed by a loss of his own property. After he has come into possession of the trust estate and has commenced the execution of the trust, he will not be removed or re- lieved of his trust on his resignation, except for a good and sufficient reason. In itself bankruptcy will not be regarded by the court as a sufficient ground for a decree in his favor. In a leading case in Maryland it was held that although a trustee, who has accepted the trust, may, by the consent of all or of most of the cestuis que trust, and with the sanc- tion of the court, because of his unwillingness to continue any longer in the office, be discharged and another ap- pointed in his place ; yet the cestuis que trust must be fully apprised of his application to be relieved. And if it appears that the beneficiaries who hold the largest interests, or the greater part of them, are not at the time in being, or for any reason are incompetent to give their consent, the re- quest of the trustee will not be granted. The rule is, that he cannot by any act of his own, without the consent of his cestuis que trust, denude himself of the character of trustee until he has fully executed the trust. ^ In Massa- chusetts it has been held that where one who undertakes to act as trustee of a particular fund for another, from whom he received it, without compensation, with no beneficial in- terest in the fund, and with no agi-eement to act for any specific length of time, is entitled to be discharged when- ever the further execution of the trust becomes incon- venient to him.^ But where a trustee is relieved by the court on his own petition, he will be required to pay the costs of the proceedings.^ annuities. Little v. Cliadwick, 151 Burr. 1467; O'Keefe v. Calthorpe, Mass. 109; s. c, 7 L. K. A. 570. lAtli. 18; Crewe v.Dioken, 4 Ves. 1 Jones v. Stockett, 2 Bland Ch. 100; Chalmer v. Bradley, 1 J. & 435. See also Ex parte Phelps, 9 W. 68; Cruger v. Halliday, 11 Mod. 357; Uvedale v. Ettrick, 2 Paige, 314; Craig v. Craig, 3 Barb. Ch. Ca. 130; v. Robarts, 1 Ch, 76. J. & W. 251 ; Webb v. Shaftesbury, 2 Bogle v. Bogle, 3 Allen, 158. 7 Ves. 487; Bayley v. Mansell, 4 s Ire re Jones, 4 Sandf. Ch. 615; Madd. 226; Kex v. Simpson, 3 Howard v. Rhodes, 1 Keen, 581. § 422. ESTATE OF THE TRUSTEE. 975 § 422. Beneficial Interest of Bankrupt Trustee. — Property in which a bankrupt trustee has only a trust estate will not pass to his assignees under an assignment, but, as a rule, where he has a definite and substantial inter- est in trust property which is legally vcKted in him as trustee, such property will pass to the assignee, or trustee, who takes as trustee for his creditors and other parties in- terested. Such trustee will hold the property subject to all of the trusts to which it was subject before the bankruptcy of the original trustee. ^ In an English case before the Where a bill for the removal of trustees contained allegations of great fraud against them which failed, the triistees were held to be entitled to the costs of the whole suit, though they were removed on another ground. Stanes v. Parker, 9 Beav. 385. Where a party dis- claims so as to show that he had no interest in the subject-matter of the suit at the time of its institu- tion, he will he entitled to his costs as of course. But when the defend- ant, being properly brought before the court in respect of his interest, afterwards disclaims, it is a matter of discretion whether the court will direct the plaintiff to pay the defendant his costs, on the ground that he ought not to have filed his bill without ascertaining whether a suit was necessary. Gabriel v. Sturgis, 5 Hare, 97; s. c, lOJur. (_N. S.) 215. A party named trustee without his sanction and called on to disclaim is authorized in taking the opinion of counsel as to his obliga- tion to execute a disclaimer, and is entitled to his costs for such service and for the deed. Iti re Tryon, 7 Beav. 496. A trustee put in a dis- claimer to a bill of foreclosure, and set out a correspondence to show that he had always refused to act. It was held that he was entitled to the whole of his costs, for the plaintiff might have shown by the bill that a simple disclaimer was sufficient. Benbow v. Davies, 11 Beav. 369. See also Appleby v. Duke, 1 Hare, 303; Grigg v. Stur- gis, 5 Hare, 93; Gabriel v. Sturgis, 5 Hare, 97. 1 Carpenter v. Marnell, 3 B. & P. 40; D'Arnay V. Chesneau, 13Mees. 6 W. 809 ; Boddington v. Costelli, 1 Ell. & Bl. 879; Leslie v. Guthrie, 1 Bing. (N. Cas.) 697; Parnhaui v. Hurst, S Mees. & W. 743. "But is an assignee under a commission of bankruptcy placed in a different situation from that of the bankrupt himself? I have always under- stood, the assignment from the commissioners, like any other assignment by operation of law, passed his rights precisely in the same plight and condition as he possessed them. Even where a complete legal title vests in them, and there is no notice of any equity affecting it, they take subject to whatever equity the bankrupt was liable to. This shows they are not considered purchasers for a valu- able consideration in the proper sense of the words. Indeed, a dis- tinction has been constantly taken between them as a particular assignee for a specific consider- ation; and the former are placed in the same class as voluntary 976 ESTATE OF THE TRUSTEE. [§ 4l>2. House of Lords, where a person having a legal estate in certain premises as trustee, and an equitable and beneficial interest in the same estate, executes a deed which might be construed either as purporting to pass both estates or only the equitable estate, which alone he had a right to convey, it was held that the instrument should be construed as in- tending to pass only the estate which he had a right to con- vey, for a party shall be presumed to have intended to do only that which he had a right to do, provided the instru- ment be fairly and reasonably capable of that construction. ^ Where the trust is constructive and there is a doubt in re- gard to the equity of the case, the court may direct the creditors' trustees to unite in the conveyance, though they are not necessarily parties to such conveyance.^ assignees and pei-sonal represent- atives. Thus, in Jewson v. Moul- son, 2 Atk. 417, Lord Hardwicke says, 'it is. clear, if the husband makes a voluntary assignment of the wife's portion, the volunteer must stand in the place of the hus- band; and there is the same equity as to assignees of bankru^jts; for it is the law that casts it upon them.' " Mitford V. Mitford, 9 Ves. 87, 100. See also Worral v. Marlar, 1 P, Wms. 459. A general assignment in bankruptcy, or under insolvent laws, passes the wife's property and her choses in action but subject to her right of survivorship. Van Epps V. Van Densen, 4 Paige, 64; Outcalt V. Van Winkle, 1 Green Ch. 516 ; Pierce v. Thornely, 2 Sim. 167 ; Johnson v. .Johnson, 1 J. & W. 456; Parsons v. Parsons, 9 N. H. 321 ; Hartman v. Dowdel, 1 Eawle, 279; Saddington v. Kins- man, 1 Bro. Ch. 51. ^ Fausett v. Carpenter, 2 Dow. & CI. 232. 2 Bennet v. Davis, 2 P. 'Wms. 316. Taylor v. Wheeler, 2 Vern. 564. Under 6 Geo. IV., ch. 16, estates of which a bankrupt is seized as a bare trustee do not pass to his assignees, and the assignees of a bankrupt are not necessary parties to the conveyance of an estate of which the bankrupt was seized as trustee. Ex parte Gennys, I'Mont. & Mac. 258. Where the legal prop- erty passes, the cestuis que trust have the same relief in equity against the creditor's trustee as they would have against the bank- rupt himself. See Bennet v. Davis. 2 P. Wms. 316; Taylor v. Wheeler, 2 Vern. 564; Ex parte DameS, 2 Ves. 585 ; Hinton v. Hin- ton, 2 Ves. 633; Grant v. Jlills, 2 V. & B. 309; Mitford v. Mitford, 9 Ves. 100; Jones v. Mossop, 3 Hare, 572 ; Tyrrell v. Hone, 2 Atk. .558 ; Bowles V. Rogers, 6 Ves. 95; War- ing v. Coventry, 2 Myl. & K. 406; Ex paHe Herbert, 13 Ves. 188; Mestaer v. Gillespie, 11 Ves. 624; Ex parte Hansom, 12 Ves. 349; Ex parte Coysegame, 1 Atk. 192; Frith v.Cartland,2H. &M.417; Fleem- ing V. Howden, L. R. 1 H. L. Sc. 372; Harris v. Truman, L. E. 7 Q. B. Div. 340; 3. C, L. K. 9 Q. B. Div. 264. § 423. J ESTATE OF THE TEUSTEE. 977 § 423. Merger of Equitable and Legal Estates. — Where a legal and an equitable estate meet in the same per- son, the equitable merges in the legal estate, and the whole fee-simple estate follows the legal title. ^ This doctrine is on the principle that a man cannot be trustee for himself. In order to the operation of this rule the interest in each estate rnust be the same.^ In Hunt v. Hunt, before the Supreme Judicial Court of Massachusetts, Mr. Chief Justice Shaw, in delivering the opinion, said: "In order to effect a merger at law the right previously existing in an individual, and the right subsequently acquired, in order to ' Wade V. Paget, 1 Bro. Ch. 363; Harmood v. Oglander, 8 Yes. 127 ; Creagh v. Blood, 3 Jon. & La. 133; Selby V. Alston, 3 Ves. 389; Phil- lips V. Brydges, 3 Ves. 126; Good- right V. Wells, Doug. 771 ; Finch's Case, 4 Inst. 85; Haberghain v. Vincent, 2 Ves. Jr. 204; Downes V. arazebrooli, 3 Meriv. 208; Ayliff V. Murray, 2 Atk. 59; Willis v. Cooper, 1 Dutch. (N.J.) 137; Gard- ner V. Aster, 3 Johns. Ch. 53; Hopliinson v. Dumas, 42 X. H. 306 ; Butler v.Godley,lDev. 94; Nichol- son V. Halsey, 1 Johns. Ch. 422; Lewis V. Starke, 10 Sm. & M. 128; Brown v. Bontee, 10 Sm. & M.268; Healey v. Alston, 25 Miss. 190; Cooper V. Cooper, 1 Halst. Ch. 9; James v. Johnson, 6 Johns. Ch. 417 ; Mason v. Mason, 2 Sandf . Ch. 433 ; James v. Morey, 2 Cow. 246 ; BoUes V. State Trust Co. 27 N. J. Eq. 308. The trust estate of a sole executor, who is also sole devisee and legatee, is solely for the bene- fit of the testator's creditors, and when they are paid the equitable estate is merged into the legal title. Blood V. Kane, 130 N. Y. 517. A trust once created attaches to the legal estate, and can be detached from it and extinguished only by the union of the two estates in one 62 person; then the equitable will merge into the legal estate. Bad- gett V. Keating, 31 Ark. 400. Where lands are devised to a trustee, for the use and benefit of the testator's son and of his wife and children, if he should marry and have children, and active duties are imposed on the trustee, although the son may take a beneficial interest sus- ceptible of alienation and liable to be subjected to the payment of his debts, the legal and equitable es- tates are not merged under the statutes, but the legal estate con- tinues in the trustee commensurate with the nature and exigencies of the trust. Jones v. Eeese, 65 Ala. 134. Where a grantee accepts a conveyance of lands, the title to which is defective, by a deed in which certain trusts are created, and he afterwards acquires an out- standing title, which he takes in his own name, so that the title in him is complete, and continues to hold without renouncing the trust, it will be presumed that the latter purchase was made in aid of the former trust. McCormick v. Ocean City Association, 45 N. J. Eq. 561. 2 Hopkinson v. Dumas, 42 N. H. 306. 978 ESTATE OF THE TRUSTEE. [§ 423. coalesce and merge, must be precisely co-exlensive, must be acquired and held in the same right, and there must be no right outstanding in a third person to intervene between the right held and the right acquired. If any of these re- quirements are wanting the two rights do not merge, but both may well stand together. "^ It is farther essential to the operation of this rule that the merger is in accordance with the intention of the parties. A court of equity will always prevent a merger to preserve any beneficial interest of the parties, to promote the purposes of justice or to carry into effect the intention of the donor. ^ Whether a charge upon the legal estate, as a mortgage, will merge in the legal title on being paid, will depend upon the intention or upon the interests of the parties.^ At law the estates will merge wherever the interests meet, but a court of equity will maintain the status quo where this is necessary in order to protect the rights or interests of the jiarties con- cerned. Where the equitable interest has been illegally or dishonestly acquired, the merger will be prevented.* ^ Hunt V. Hunt, 14 Pick. 374, Johnson v. Webster, 4 De G., M.& 384. Q-. 474; Morley v. Morley, L. J. 25 2 Donald V. Plumb, 8 Conn. 453; Ch. 1; Tyrwhitt v. Tyrvvhitt, 32 Den V. Vanness, 5 Halsfc. 102; Mole Beav. 244; Brown v. Stead, 5 Sim. V. Smith, Jacobs, 490; Thom v. 535. Newman, 3 Swanst. 003; Nurse v. ■• Gardner v. Astor, 3 Johns. Ch. Terworth,3Svvanst. 608; Saunders 53; James v. Morey, 2 Cow. 246. v. Bournford, Finch,424; Gardner See also ganerally, Clark v. Tenni- T. Astor, 3 Johns. Ch. 53 ; Jamesv. son, 33 Md. 85; Elliott v. Arm- Morey, 2 Cow. 246; Mechanics' strong, 2 Blackf. 208; Buchanan v. Bank \. Edwards, 1 Barb. 272; Harrison, 1 Johns. &H. 662; Bran- Starr V. Ellis, 6 .Johns. Ch. 393; don v. Brandon, L. J. 31 Ch. 47 Hunt V. Hunt, 14 Pick. 374. Lewis v. Stark, iO Sm. & M. 128 3 Hunt V. Hunt, 14 Pick. 374; Hood v. Phillips, 3 Beav. 513 Horton v. Smith, 4 Kay & J. 630; Pitt v. Pitt, 22 Beav. 294; Gunther Watts V. Symes, 16 Sim. 040; v. Gunther, 2;i Beav. 571; Johnson Cooper V. Cartwright,! Johns. 679; v. Webster, 4 De G., M. & G. 474 Garnett v. Armstrong, 2 Con. & Trevor v. Trevor, 2 Myl. & K. 675 Law. 45S; Greswold v. Marsham, Wigsell v. Wigsell, 2 S. & S. 364 2 Ch. Ca. 170; Mocatta v. Murga- Buckinghamshire v. Hobart, 3 troyd, 1 P. Wm. 193; Parry v. Swanst. 199; Drinkwater v. Combe, Wright, 1 S.&S. 369; s.r., 5 Puss. 2 S. & S. 340; Shrewsbury v. 542; Forbes v.Moffatt, 18 Ves. 390; Shrewsbury, 3 Bro. Ch. 120; s. C, Tomlinson v. Steers, 3 Meriv. 210 ; 1 Ves. Jr. 227 ; St. Panl v. Dudley, § 424. J ESTATE OF THE TRUSTEE. 979 § 424. Trustees as Joint Tenants. — As a rule the trust estate is limited to trustees as joint tenants. Where the creation of the trust leaves any doubt in regard to the intention of the grantor, the court will construe the instru- ment to mean a joint tenancy of the trustees, if the lan- guage is capable of such a construction. Where joint ten- ancy is abolished by statute, exceptions have been made in some instances in favor of trustees. An action for the par- tition of a trust estate will not be sustained in equity. ^ On the death of one joint ti'ustee the trust estate passes to the survivor or survivors, and on the death of the last survivor, if he has made no disposition of the estate, it passes to his heirs if real estate, and to his executors or administrators if it consist of personalty. In the latter case a trustee may be appointed by the probate court. ^ On the death of 15 Ves. 173; Astly v. Miller, 1 Sim. 298; Burrell v. Egremont, 6 Beav. 205; Faulkner v. Daniel, 3 Hare, 217; State v. Kock, 47 Mo. 582; Jackson v. Moore, 13 Johns. 513. ^ Baldwin v. Humphrey, 44 N. Y. 609 ; Saunders v. Schmaelzle, 49 Cal. 59. 2 Moses V. Murgatroyd, 1 Johns. Ch. 119; Webster v. Vandeventer, 6 Gray, 429 ; Watkins v. Specht, 7 Coldw. 585; Jenks v. Backhouse, IBinn. 91; Stewart v. Pettus, 10 Mo. 755; Whiting v. Whiting, 4 Gray, 23G ; De Peyster v. Ferrars, 11 Paige, 13; Shook v. Shook, 19 Barb. 653; Shortz v. Unangst, 3 Watts & S. 45; Gray v. Lynch, 8 Gill, 404 ; Mauldin v. Armstead, 14 Ala. 702; Powell v. Knos, 16 Ala. 364; Eichesonv. Eyan, 15 111. 13. So complete is this change that even no recovery can be had on the bond of the deceased trustee for wrong doing of the surviving trustee committed after the death of the co-trustee. On this point Parker, G. J., in Brazier v. Clark, 5 Pick. 105, says : "All executors while living and in the enjoy- ment of the trust, may inspect and control the conduct of each other ; they may watch over the funds, and they may complain of the misconduct of any one, to the Judge of probate, who may in his discre- tion remove him from the trust; and so there may be no great hard- ship in their being made answera- ble for each other. But at the death of one, the whole power de- volves upon the survivor, and the representatives of the deceased have no power or means of con- trolling his conduct, or taking the funds into their custody. It would be hard, then, that they should be' answerable for all defalcations which accrue during that trust, and their estates be liable for the deficiencies, notwithstanding they have no participation in the neg- ligence or fraud; but they are not bound in this manner for acts or neglects which takes place after their power has ceased. The sur- vivor succeeds to the whole au- thority and power, and he alone 980 ESTATE OF THE TRUSTEE. r§ 425. all the trustees but one, the title in him will be complete, and he alone will be responsible for the execution of the trust. If he becomes insolvent or is in such circumstances as to render the estate insecure under his management, re- lief is to be sought by the cestui que trust or by some per- son interested in the estate.^ All the powers of the origi- nal trustees belong to the survivor, and he may bring an action relating to the trust estate in his own name, and in case of his death such action may be continued by his ex- ecutor or administrator.^ § 425. Presumption in Kegard to Conveyance. — After the lapse of a considerable period courts will presume the conveyance of the trust estate to the cestui que trust. In the State of New York it has been held that after a lapse of thirty-two years a release to a cestui que trust will be presumed against the heirs-at-law of a trustee.^ This doc- and those who are sureties for him are responsible." See also Towne T. Ammidown, 20 Pick. 535. 1 Shook V. Shook, 19 Barb. 653. 2 Eicheson v. Kyan, 15 111. 13 Wheatley v. Boyd, 7 Exc. 20 Nichols V. Campbell, 10 Gratt. 581 Powell V. Knox, 16 Ala. 364 Mauldin v. Armstead, 14 Ala. 702 Eobins v. Deshon, 19 Ind. 204 Childs Y. Jordan, 106 Mass. 323 Farrell v. Ladd, 10 Allen, 127 King V. Lawrence, 14 Wis. 238 Baird's Appeal, 3 Vi^atts & S. 459 Schenck v. Schenck, 1 Green Ch. 174; Hill V. State, 2 Ark. 604; Cole V. "Wade, 16 Ves. 45; Sharp v. Sharp, 2 B. & A. 405; Townsend V. Wilson, 1 B. & A. 608; Cook v. Crawford, 13 Sim. 91; Hall v. Dewes, Jacobs, 189; Peyton v. Bury, 2 P. Wms. 620 ; Bradford v. Belfield,2 Sim. 264. A husband who comes into possession of money held by his wife in trust, whether as her administrator or otherwise, is held as trustee, and may be compelled in chancery to account for it. Keister v. Howe, 3 Ind. 26S. 3 Moore V. Jackson, 4 Wend. 59. See also Jackson v. Pierce, 2 Johns. 226; Sinclair v. Jackson, 8 Cow. 543 ; Mathews v. Ward, 10 Gill & J. 443 ; Jackson v. Moore, 13 Johns. 513; Dutch Church v. Mott, 7 Paige, 77; England v. Slade, 4 T. K. 682; Wilson v. Allen, 1 J. & W. 611; Noel v. Bewley, 3 Sim. 103; Cooke V. Salton, 2 S. & S. 154; Hillary v. Waller, 12 Ves. 239; Lade V. Halford, Bull. N. p. hq; Doe Y. Hilder, 2 B. & A. 782; Emery y. Grocook, 6 Madd. 54; Townsend y. Charapernown, 1 Y. & J. 538; Goodtitle y. Jones, 7 T. K. 47; Doe v. Sybourn, 7 T. R. 2. "Where positive CYidence can be presented to the court, the fact may be presumed after a period much shorter than the usual one. And on the other hand, though the distance of time may be far greater than the ordinary limit of § 425.] ESTATE or THE TEUSTEE. 981 trine is based on tlie recognized necessity of some rule for the quieting of titles. In Hillary v. Waller, Sir William Grant, M. E., in his opinion, said: "Presumptions do not always proceed on a belief that the thing presumed has actually taken place. Grants are frequently presumed, as Lord Mansfield says, merely for the purpose and from a principle of quieting the possession. There is as much occasion for presuming conveyances of legal estates, as otherwise titles must forever remain imperfect, 'and, in many respects, unavailable, where, from length of time, it has become impossible to discover in whom the legal es- tate, — if outstanding, — is actually vested. "^ Of this rule presumption, yet if there appear any positive evidence to negative tlie fact, tlie legal inference cannot be sustained, for the rule is stabit prcesmnptio donee probetur in con- trarium. But the court has judged it better for the ends of justice, that presumptions should be fav- ored in law, and should not be re- butted by slight evidence in contra- diction." 2 Lewin on Trusts, *S70. See also Jones v. Turberville, 2 Ves. Jr. 13; Grenfell v. Girdlestone, 2 Y. & C. 662; Eldredge v. Knott, Cowp. 215; Mayor v. Horner, Cowp. 108 ; Morse v. Koyal, 12 Yes. 374;, Flower v. Bolingbroke, 1 Str. 639; Oswald v. Leigh, 1 T. E. 271 ; Reeves v. Brymer, 6 Ves. 519; Fladong v. Winter, 19 Ves. 200. Continued possession of the mort- gaged premises by the mortgagor and his heirs for twenty years after the mortgage debt is payable, without any entry or claim by the mortgagee, constitutes a presump- tion in fact that such debt has been paid, but this presumption of fact is always liable to be controlled by other evidence. Howland v. Shurt- leff, 2 Met. 26. 1 Hillary v. "Waller, 12 Ves. 239, 252. "Presumptions of fact are at best taut mere arguments, and are to be judged by the common and received tests of the truth of prop- ositions and the validity of argu- ments. They depend upon their own natural force and efficacy in generating conviction in the mind, and should not be aided tay sug- gestions or intimations from the court as to what they do or do not prove." Lawthorn v. Carter, 11 Bush, 7. "A presumption may be defined to be an inference affirma- tive or disaffimative of the truth or falsehood of a doubtful fact or proposition drawn by a process of probable reasoning from something proved or taken for granted. Best's Evidence (Am. Ed.), 300. Pre- sumptions of law consist of those rules which in certain cases either forbid or dispense with any ulterior inquiry. Greenleaf's Evidence, p. 20. A presumption of law is a judicial postulate, that a particular predicate is universally assignable to a particular subject. 2 Whar- ton's Evidence, 406. "A legal presumption is the conclusion of the law itself of the existence of one fact from others in proof, and is binding on the jury, prima facie, till disproved, or conclusively, just 982 ESTATE OF THE TRUSTEE. [§ 426. Lord EUenborough said: "Presumptions of this sort, where fit to be made, are always made in favor of the pos- session of those who are rightfully entitled to it. The rule of presumption is, ut res rite acta est, and is applied, where- ever the possession of the party is rightful, to invest that possession with a legal title. "^ In many instances it is on this principle only that a title can be quieted. The pos- session of the cestui que trust is altogether consistent with the fact of the legal title in the trustee, so that no conflict is implied in the holding of the fegal title by the trustee while the cestui que trust is in actual possession. It is this relation that renders the accejited doctrine in regard to pre- sumption both fit and necessary. § 426. The Doctrine of Presumption Continued. — It is a well established rule of equity that where a thing ought to have been done it will be treated as actually done. Con- veyance will be presumed only where it was the duty of the trustee to convey. Where the trust has not been executed as the law adopts the one or the other as the effect of proof." Tanner v. Hughes, 53 Pa. St. 289. "A presumption of fact is properly an inferring of that fact from other facts that are known ; it is an act of reasoning, and much of human knowledge on all subjects is de- rived from this source. A fact must not be inferred without i5 re- mises that will warrant the infer- ence; but if no fact could be thus ascertained by inference, in a court of law, very few offenders would be brought to punishment. Keg. v. Burdett, 4 B. & Aid. 161. 1 Keene v. Deardon, 8 East, 362. Though A who survived his wife and B continued in possession of the L estate down to 1795, when he sold it and died sometime after; and though after sale of the N es- tate in 1774, for the payment of the debts, the trustees of the L estate never interfered in further execu- tion of the trust during A's life- time, but brought ejectment after his death; yet that no presumption would be made at the trial in favor of the defendants, who purchased from A in 1795, for a valuable con- sideration, without notice, either that the trustees had reconveyed the legal estate to A in his life- time, as upon a satisfled trust, ac- cording to the old uses, or had conveyed a new estate to him as a, purchaser under a sale by them in execution of their trust. For a court of law will never presume a reconveyance by trustees where such reconveyance would be a breach of their trust. Kor is such a presumption to be made in the first Instance, even in the case of a doubtful equity, before a court of equity has declared in favor of the equitable title of the party for whom such presumption is re- quired. Ibid. § 426. j ESTATE OF THE TRUSTEE. 983 under the operation of the statute of uses, but has termi- nated in accordance with the limitations of the instrument by which it was created, it is the duty of the trustee to convey the legal title to the cestui que trust, or in accordance with his directions, and this is what the court presumes to have been done. In an English case, where the trustees were directed to convey to a devisee on his attaining the age of twenty-one j'ears, it was held that the jury might be directed to presume a conveyance at any time afterwards, though the period might be considerably less than twenty years. 1 In his opinion in this case, Lord Chief Justice 1 England v. Slade, 4 T. K. 682; Wilson V. Allen, 1 J. & W. 611 ; Noel v. Bewley, 3 Sim. 103; Emery T. Grocock, 6 Madd. 54; Goodtitle v. Jones, 7 T. R. 47; Doe v. Sy- bourn, 7 T. K. 2; Doe v. Hilder, 2 B. & A. 782; Lade v. Halford, Bull. N. P. 110; Cook v. Salton, 2 S. & S. VA; HilLary v. Waller, 12 Ves. 239; Sinclair v. Jackson, 8 Cow. 543; Jackson v. Pierce, 2 Johns. 226 ; Matthews v. Ward, 10 Gill & J. 443. "Although this con- firmation was not necessary to give the church and congregation the use of the property vested in their trustees, it probably was considered necessary to enable the corpo- ration to take and hold the legal title, as the annual value of other property which the corporation might thereafter purchase or ac- quire was limited by the charter, and such confirmation certainly is evidence from which a presump- tion may arise, after a lapse of 140 years, that the trustees actually conveyed the legal title to such corporation. The case of The Corporation of Reading v. Lane, Toth. 32, above referred to, is also a case in point to show that where there was an appropriate corpo- ration,whose general duty it was to administer the charitable use, and which was legally authorized to hold the legal title and to receive and apply the rents and profits ac- cordingly, this courthad the power to compel a conveyance of the trust property to such corporation. Although the defendants therefore have no knowledge of the execu- tion of a conveyance by the trus- tees to the corporation which was subsequently lost, and do not ad- mit the same, yet as the corpo- ration has always possessed and enjoyed the property, and as there was no reason whatever for keep- ing the legal title in the original trustees, or their heirs, after the confirmation thereof to the cestui que trusts as a corporation by the charter of 1696, the legal presump- tion is that such conveyance was executed by the trustees as alleged by the complainants." Dutch Church V. Mott, 7 Paige, 77, 80. Conveyances from trustees will be presumed where the cestui que trust has been let into possession as is ordinarily the case, and where there is a duty in the trustee to eonvey at a certain time which has elapsed. The court do not wait any given period after the duty arises. A very short time in case 984 ESTATE OF THE TRUSTEE. [§ 426. Kenyon said: "There is no i-eason why the jury should not have presumed a conveyance from the trustees to him, upon his attaining the age of twenty-one, in pursuance of their trust, according to what was said by Lord Mansfield in Lade v. Halford.^ It was what they were bound to do, and Avhat a court of equity would have compelled them to have done if they had refused ; but it is rather to be pre- sumed that they did do their duty."^ In a case where a term was created in 1711 for raising portions there was no evidence of the portions being satisfied, but a settlement of the estate took place in 1744, and a recovery was suffered, and there was a covenant that the estate was free from in- cumbrances. No assignment appears to have been at any of a clear trust would "be adopted either at law or in equity. See Jackson v. Woolsey, 11 Johns. 436 ; Jackson v. Lamh, 7 Cow. 431; Jackson v. Brooks, 8 Wend. 42G; Doe v. Phelps, 9 Johns. 169; Waggener v. Waggener, 3 B. lion. 347. See also particular cases of pre- sumption from non-user : Wright V. Freeman, 5 Harr. & J. 477 Dyer v. Dupin, 5 Whart. 584 Arnold v. Stevens, 24 Pick. lOG Williams v. Nelson, 23 Pick. 141 Hatch V. Dwight, 17 Mass. 2S9 Emerson v. Wiley, 10 Pick. 310 White V. Crawford, 10 JIass. 183 French v. Braintree Mfg. Co., 23 Pick. 21G; Corning v. Gould, 16 Wend. 531; Yeakle v. Xace, 2 Whart. 123. Presumption from circumstances : Botts v. Ballman, lYeates, 584; Cottle v. Payne, 3 Day, 289; Blake v. Quash, 3 Me- Cord, 340; Clark v. Hopkins, 7 Johns. 556. As to satisfaction of mortgage : Giles v. Baremore, 5 Johns. Ch. 552; .Jackson v. Pratts, 10 Johns. 381 ; Trash v. White, 3 Bro. Ch. 291. 1 Lade v. Halford, Bull, N. P. 110 ; England v. Slade, 4 T. R. 682 ; Doe v. Sybourn, 7 T. E. 2; Doe v. Eead,8T.E.118;Goodtitlev. Jones, 7T. E. 49; Evans v. Bicknell, 6 Ves. 174. It would not he reason- able to presume a grant, where no adverse right had been exercised against the party capable of mak- ing the grant ; consequently, pos- session of an easement, a right of way, or encroaching lights, for twenty years, merely hy the acqui- escence of a tenant, without the knowledge of hislandlords,will not authorize a presumption against the owner of the inheritance; but, even in such cases, the origin of the right claimed adversely must be traced in order to repel the doc- trine of presumption. It will not be sufficient to show that the he- reditaments which are deteriorated have been for twenty years in the occupation of tenants, it should also be made to appear, that the encroachments complained of had their commencement within the period of the alleged tenancy. Daniel v. North, 11 East, 374; Wood V. Veal, 5 B. & Aid. 456; Cross V. Lewis, 4 Dowl. & Eyl. 239; s. C, 2 B. &C. 688. 2 England v. Slade, 4 T. E. 683. § 426. J ESTATE OF THE TRUSTEE. 985 time made of the term. On an objection to the title by the purchaser, it was held that a surrender of the term must be presumed, and that in matters of presumption the court will bind a purchaser, where it would give a clear direction to a jury.i 1 Emery v. Grocock, 6 Madd. 41. See also Hillary v. Waller, 12Ves. 239; Morse v. Koyal, 12 Ves. 374; Jones V. Turberville, 2 Ves. Jr. 13; Flower v. Bolingbroke, 1 Str. 639 ; Reeves v. Brymer, 6 Ves. 519 ; Dixon V. Dixon, 3 Bro. Ch. 510; Bailey v. Hammond, 7 Ves. 690; Lee V. Wilcock, 6 Ves. 606 ; Camp- bell V. Wilson, 3 East, 301 ; Gibson V. Clark, 1 J. & W. 162; Eldridge V. Knott, Cowp. 215; Darwin v. Upton, 2 Saund. 175; Attorney- General V. Nichol, 16 Ves. 343; Jesser v. Gifford, 4 Burr. 2141; Attorney-General v. Bentham, 3 Ves. Sr. 543. CHAPTEE XXI. CONCERNING THE POWERS OF TRUSTEES. § 427. Introductory. § 445 428. General Powers. 429. Special Powers. 446 430. Discretionary Powers. 431. Discretionary Powers Con- tinued, Class First. 447 432. Discretionary Powers Con- 448 tinued, Class Second. 449 433. Discretionary Powers Con- tinued, Class Third. 450 434. Discretionary Powers Con- 451 tinued, Class Fourth. 452 435. Discretionary Powers Con- tinued. 453 436. The Execution of a 454 Power. 455 437. Limitations of the Power 456 to Execute a Trust. 457 438. Power on Refusal of Trus- tee. 458. 439. The Power to Assign the Trust Estate. 459. 440. Powers of Trustees as Sur- vivors. 460. 441. Powers of New Trustees. 461. 442. Executors as Trustees. 443. Powers of Co-trustees as such.' 462. 444. Powers of Feme Covert or Infant as Trustees. 463. Power to Make Repairs and Improvements. Power to Lease Trust Estate. Power to Insure Trust Property. Power to Borrow Money. Power of Sale. Power of Sale by Implica- tion. Power of Sale Continued. Power to Consent to a Marriage. The Subject Continued. The Same Subject. The Power to Compromise. Power to Arbitrate. Power to Satisfy Incum- brances. Power to Confess Judg- ment. Power to Bring Suit. Power to Act Through Agents. Power to Employ an At- torney. Power to Convey for Pub- lic Uses. Power to Apply to the Court for Instructions. § 427. Introductory. — The powers of trustees are de- rived from and limited by the trusts which they are ap- pointed to administer. Whatever may be the character of the trust, it is the source of the authority under which the acts of trustees are performed, and it determines their duties and obligations. Their powers and responsibilities are modified in a degree by the character and circumstances of the parties in interest. In direct or express trusts the instrument by which the trust is created is not only the § 427.] POWERS OF TRUSTEES. 987 source of authority for the execution of the trust, but it also furnishes a rule or guide to trustees in the discharge of their official duties. Where trustees become such by a de- cree of the court under the operation of law, their powers and duties are determined by the legal rules to which trusts of this character are subject. These powers have been designated as general and special. General powers are such as belong to trustees, viriute officii, while special pow- ers are those which are conferred by the instrument by which an express trust is created. The former are con- ferred by law, the latter by the settlor in fixing the terms and conditions of the trust. ^ ^ Lewin on Trusts, *572. See also generally Hester v. Wilkinson, 6 Humph. 215; s. C, 44 Am. Deo. 303; Carter v. Holland, 11 Humph. 333; Deakin's Case, 2 Bland, 398; Brown V. Lambert, 33 Gratt. 256; Bradshaw v. Cruise, 4 Heisk. 260; Kichardson V. Cole, 2 Swan, 100; Jones V. Caldwell, 97 Pa. St. 42; Courcier v. Ritter, 4 Wash. 549; Wormley v. Wormley, 8 Wheat. 421; Beatty v. Clark, 20 Cal. 11; Nicoll V. Ogden, 29 111. 323; s. c, 81 Am. Dec. 311; Cassell v. Boss, 33 111. 245; 8. c, 85 Am. Dec. 270; Peterson's Appeal, 88 Pa. St. 397; Swift's Appeal, 87 Pa. St. 502; Anewalts' Appeal, 42 Pa. St. 416; Coonrod V. Coonrod, 6 Ohio, 114; Methodist Church v. Wood, 5 Ohio, 283; Price v. M. E. Church, 4 Ohio, 515; Booth v. Purser, 1 Ired. Eq. 37; Haack v. Weicker, 118 N. Y. 67; Evans v. Boot, 7 IST. T. 189; s. c, 57 Am. Dec. 512; Bell V. Palmer, 6 Cow. 128; Park- ist V. Alexander, 1 Johns. Ch. 394 ; Equitable Trust Co. v. Fisher, 106 111. 189 ; Floyd v. Johnson, 2 Litt. 109; s. C, 13 Am. Dec. 255; Ring- gold V. Ringgold, 1 Har. & G. 11; S. c, 18 Am. Dec. 250; Hewitt v. Townghend, 31 Md. 336; s. c, 100 Am. Dec. 63; Hammond v. Put- nam, 110 Mass. 235; Coffin v. Bramlitt, 42 Miss. 194; s. C, 97 Am. Dec. 449; Williams v. Camp- bell, 46 Miss. 61; Vernon v. Board of Police, 47 Miss. 181; Clark v. Maguire, 16 Mo. 302; Powers v. Kueckhoff, 41 Mo. 425; s. c, 97 Am. Dec. 281 ; Eitelgorge v. Mu- tual, etc. Bldg. Association, 69 Mo. 55; Crevelling V. Fritts, 34 X. J. Eq. 134; Morton v. Adams, 1 Strobh. Eq. 72; Loring v. Salis- bury Mills, 125 Mass. 138; Waldo V. Cummings, 45 111. 421; Wads- worth V. Connell, 104 111. 369; Pat- terson's Appeal, 104 Pa. St. 369 Green v. Putney, 1 Md. Ch. 262, Melick V. Voorhees, 24 N. J. Eq 305; Greene v. Smith, 17 B. I. 28 Thomas v. James, 82 Ala. 723: Bergengren v. Aldrich, 139 Mass 259; Devecmon v. Shaw, 70 Md 219; Winder v. Diffenderfer, 2 Bland, 166; Berrien v. Thomas, 65 Ga. 61 ; Busby v. Mitchell, 23 S. Car. 476; Feizel v. First German Soc, 9 Kan. 593. A provision in an agreement creating a trust in personalty that there shall be no disposition of the trust estate ex- cept with the written consent of the beneficiary is valid. Suarez v. De Montigny, 1 Hun App. 494; s. C, 37 N. Y. S'upl. 503. See also 988 POWERS OF TRUSTEES. [§ 428. § 428. General Powers. — The general powers of trus- tees are such as are inherent to the office. They are such as are conferred by law upon all persons who hold the po- sition of trustees. Under these general powers a trustee may do such things as are essential to the care, to the protection, or to the preservation and benefit of the trust estate. He may also perform such acts as are required by an intelligent regard for the rights, for the maintenance and support, or for the proper care of a beneficiary who is incapable of caring for his own interests. This is permissi- ble, however, only as it may be done without trespassing upon the rights of other beneficiaries.^ The rule is that Starke v. Olsen, 44 jSTeb. 646. A direction in a will empowering trustees to postpone the sale and conversion of any part of the tes- tator's property, lor such period as to them should seem expedient, justifies the trustees in postponing the sale of the testator's business, and in carrying on the business with a view to benefit the ten- ant for life, who is entitled to the profits till sale. In re Crowther, L. K. (1895), 2Ch. 56; s. C, 13 Keports, 496. See also Smoot v. Richards, 8 Tex. Civ. App. 146. A trustee is not entitled to add to the trust that which neither the donor nor the cestui que trust di- rects or assents to. He cannot in- sist upon holding property in- trusted to him until indebtedness in no Way connected with the trust is paid. Angell v. Jewett, 58 111. App. 596. The authority of a trustee holding the legal title to land for a corporation to make contracts with reference thereto can be questioned only by his cestui que trust. Moody V. jSToyes (1896) (Wash. St.), 45 Pac. Kep. 732. A trustee can only charge the trust fund in the man- ner authorized by the instrument creating the trust. Heth v. Rich- mond, etc. E. Co., 4 G-ratt. 482; s. c, 50 Am. Dec. 88. If the trustee fails to follow the directions given him by the instrument of trust or disobeys the order of the court he must answer for all loss resulting therefrom. Tucker v. State, 72 Ind. 242; Gilbert v. Welde, 75 Ind. 557. Where a trustee is appointed under the statute of Maryland, to sell property directed by will to be sold for the payment of debts, etc., his proceedings may be controlled and limited by the court; but his powers will not be extended be- yond the authority given by the will. Deakin's Case. 2 Bland, 398. 1 Ward V. Ward, 2 H. L. Cas. 784; Waldo V. Waldo, 7 Sim. 261; Bright V. North, 2 Ph. 220; Bowes v.E.L. Water Co., Jao. 324; Sisson V. Shaw, 9 Ves. 288; Maberly v. Turton, 14 Ves. 499; Cotham v. West, 1 Beav. 381 ; Ex parte Green, IJ. & W. 253; In re Howarth, L. K. 8 Ch. App. 415; De Witte v. Palin, L. R. 14 Eq. 251 ; Swinnock v. De Crispe, Freem. 78; Wood v. Matterson, 10 Beav. 544 ; Seagram V. Knight, L. R. 2 Ch. App. 630; Beatty v. Clarke, 20 Cal. 11; Wormley v. Wormley, 8 Wheat. 421; Tillinghast v. Coggeshall, 7 §428, POWERS OF TRUSTEES. 989 the trustee may do in this direction, on his own responsi- bility, where he is required to act by the exigencies of the case, whatever the court would order if application were made for direction. But the court will direct whatever it E.I. 383; Cheatham v. Rowland, 92 N. Car. 340; Herbert v. Herbert, 57 How. Pr. 333; Williams v. Smith, 10 E. I. 280; Soheir v. El- dredge, 103 Mass. 34.5; Loring v. Stineman, 1 Met. 207; Slevin v. Brown, 32 Mo. 176; Guion v. Pickett, 42 Miss. 77; Kerr v. Ver- ner, 66 Pa. St. 326. The trustee has no right to take any unusual risks in the care of trust property ; he cannot use his trust to accommo- date other parties, nor enter into a banking business with the funds thereof. Loud v. Winchester, 64 Mich. 23. Land was conveyed to three trustees to manage, collect rents, etc. Thereafter J, one of th« three, extended a lease to the owner of a house on the land, and collected rent from time to time. Shortly before the expiration of the extended lease the tenant had an interview with J and negotiated in regard to extending the lease, selling the house, and letting the tenant's sublessee stay in for a cer- tain time beyond the term of the lease, she to pay rent directly to J. Thereafter J wrote the tenant that the other trustees would do nothing about the matter until the premises were vacated. The sub- tenant remained until after the termination of the lease, and until put out by the trustees. Held^ in an action by the tenant against the trustee for the value of the house, which he claimed J had bought at the time of said interview, that the trust being a joint one, requiring the consent of all the trustees, a verdict was properly directed for defendants. Shaw v. Canfield (1891), 86 Mich. 1 ; s. C, 48 N. W. Rep. 873. By the terms of a will, a part of the testator's estate was to be placed in the hands of a trustee, to be held for the use of the testa- tor's son, who was to receive the interest yearly, the principal being bequeathed after the death of such son to his heirs. In such a case it was held that the trustee must an- swer for the part of the principal which he had paid to the testator's son, although such payment was made with the consent of the son as well as that of the remainder- men in esse, such payment being in violation of the terms of the trust, inasmuch as there may be different remainder-men upon the termination of the trust. Grothe's Appeal, 135 Pa. St. 585 ; s. C, 19 Atl. Rep. 1058. Mere naked powers are purely discretionary, the donee of such power is not subject to the compulsory power of a court of chancery. Where, however, the power is coupled with a trust for the benefit of third parties, or in the execution of which third parties are interested, it becomes imperative and may be coerced. Kintner v. Jones, 122 Ind. 148, 152. Where a trustee is invested with the apparent title to property, persons dealing with him are not chargeable with the undisclosed limitations upon his powers with respect to the subject of the trust; but where his powers are clearly defined, by deed or other instru- ment creating the trust, duly filed or recorded in conformity with the 990 POWERS OF TRUSTEES. [§ 428. is strictly necessary to do.^ At law the trustee, as the holder of the legal title, is the absolute proprietor of the estate, and he may exercise such powers as are conferred by legal ownership ; but in equity the cestui que trust is the absolute owner, and, in consequence, the trustee can deal with the estate only in such a manner as a court of equity will sustain. It is well established in equity that a trustee will not be permitted to use the powers which, at law, are conferred by the trust, except for the legitimate purposes of the trust. Such exercise of the general powers of a trusteeship will be sustained by the court, but for any use of trust funds that is not strictly of this character the trustee will be held personally responsible.^ Where the circumstances are such as to require immediate or prompt action on the part of a trustee, and it appears that he acts in good faith and to the best of his judgment, he will be sustained by the court, even where it subsequently appears that his act was unnecessary, or even prejudicial to the in- terests of the beneficiary. Though it is a dictate of ordi- nary prudence to ask direction of the court where it is practicable to do so, the trustee may not be held responsi- registration laws, persons dealing and control the property for the with him in respect to the trust benefit of all concerned." The property must at their peril take trustee was not to be responsible notice of the extent of such power, for the acts or conduct of A. The Stark V. Olsen, 44 Neb. 646. latter was, however, for the pur- 1 Seagram v. Knight, L. R. 2 Ch. poses of the deed, to be a co-trus- App. *628. tee, but neither had power to 2 Balls V. Strutt, 1 Hare, 146; charge the property for any future Life Association of Scotland v. liability beyond the support of A Siddal, 3 De G., F. & J. 58. A and during his life. A survived B and B, his wife, conveyed her separate died insolvent. A bill was filed property to a trustee upon trust against the trustee, and the child for her use during her life, and in of B alleging that upon A's order remainder in fee for the use of her the complainant had advanced children living at the time of her moneys and furnished supplies death. The deed reserves to her which were used for the benefit of the power to sell and exchange the the trust estate, and praying that property, and declares "that the it be subjected to the payment of trustee is to permit A, as agent for the claim. Held, that the bill was the trustee, and as agent and trus- properly dismissed. Hewitt v. tee for her children after her death, Phelps, 105 U. S. 393. to superintend, possess, manage § 429.] POWERS OF TRUSTEES. 991 ble for an error in this direction. In Forshaw v. Higgin- son it was held that a trustee, who, acting in the bona fide exercise of his discretion, makes a payment which, though not authorized by the terms of tlie trust, is in his opinion necessary to enable him to execute the trust, will be allowed such paj^ment in passing his accounts, though he does not act prudently in assuming the responsibility of making such a pajanent without the sanction of the court. ^ § 429. Special Powers. — The special powers of trustees are such as are conferred by the instrument by which the trust is created. We have seen that there are certain pow- ers that necessarily attach to the office. There are certain powers without which a man cannot become a trustee. In all special trusts particular instructions and directions ai'e given in regard to the execution of the trust. These in- structions and directions impart to the trustees their special powers. They impose certain duties and confer the power to discharge them, and such powers they not only may^ but must exercise. They must pursue, without deviation, 1 Forshaw v. Higginson, 3 Jiir. for the fund loaned, in. the absence (N. S.) 476. Upon the question of of willful default or gross negli- imputed negligence in not collect- gence on his part in not compelling ing a note, a trustee may show that H to pay the interest annually on before the plaintiff acquired im in- the prior liens. In re Old's Estate terest, the others beneficially in- (1896), 176 Pa. St. 150; s. c, 34 terested directed him to pursue the Atl. Rep. 1022. Where a testa- course of delay which was attrib- mentary trustee has by necessary uted as negligence. Johnson v. implication the power to enter into Kendall, 20 X. H. 304. The testa- an option contract for the sale of mentary trustee for H, during his land belonging to his trust, he is life, and, after his death, for his liable in his official capacity for a widow and children and their heirs, breach of that contract. Yerkes v. with the approval of the orphans' Richards, 170 Pa. St. 346; s. c., 32 court, loaned the fund to H, on the Atl. Rep. 1089; 37 W. N. C. 69. security of land subject to prior There is no peremptory obligation liens, on which H and his family imposed upon a trustee to sue upon resided. During the following a bond passed to him in that char- nineteeu years H was unable to acter the month or year it becomes keep up the interest on the prior due, especially when the larger liens, and at the end of that time portion of those interested in the they amounted to more than the trust approve of the delay. War- land would sell for. Held, that the ing v. Darnall, 10 Gill & J. 126. trustee or his estate was not liable 992 POWERS OF TRUSTEES. [§ 429, the prescribed course. Any act relating to the execution of the trust, not in accordance with tlie limitations of the instrument by which they are made trustees, will be a breach of trust. There are circumstances under which they may go beyond the powers conferred by the trust, but not under which they may disregard the intention of the grantor. Where it is demanded by the interests of the trust estate, the trustee may exercise the discretionary powers of a bona fide proprietor. "Where a trust has come before the court the powers of the trustee are so far modi- fied that he must act under the direction of the court. W^here the directions of the instrument are not specific the court will give definite instructions, and without such in- structions he has no right to proceed. But in an emergency, or under circumstances which render it difficult to obtain the instructions of the court, or involve a delay that might be attended with injury or loss to the estate, the trustee will be sustained in a timely and wise exercise of discre- tionary power. 1 In cases of this character, where the 1 Angell V. Dawson, 3 Y. & C. to her husband, contingent on the 317; Darke V. Williamson, 25 Beav. husband's survivorship and her 622 ; Harrison v. Randall, 9 Hare, death without issue, may mortgage 407 ; Forshaw v. Higginson, 8 De such lands if the beneficiary and G., M. & G. 827; Ward v. Ward, 2 husband join, and by such mort- H. L. Gas. 784; Lincoln v. Purcell, gage cannot affect the interests of 2 Head, 143; s. C, 73 Am. Dec. the heirs of the /enie cow;-J's body. 196. As to power to mortgage see Wood v. Kice, 103 Mo. 329. See generally, McBrayer v. Carriker, also Cruger v. Jones, 18 Barb. 467 ; 64 Ala. 50; Miller v. Eedwine, 75 U. S. Trust Co. v. Eoche, 116 N.Y. Ga. 130; Dibrell v. Carlisle, 51 120. In the absence of authority. Miss. 785; Eogers v. Rogers, 111 the trustee cannot incumber land N". y. 228 ; Weeks v. Cornwell, 104 conveyed to him for the benefit of N. Y. 825; Taylor v. Franklin Sav. a maiTied woman. Seborn v. Bank, 50 Fed. Rep. 289; Pike v. Beckwith, 30 W. Va. 774. Where Baldwin, 68 Iowa, 263; Waterman a trustee has the authority to make V. Baldwin, 68 Iowa, 255 ; Mavrich an expenditure, and has no trust T.Grier, 3ISrev. 52;s.C., 93 Am.Dec. funds, and such expenditure is re- 373; Gilbert v. Gilbert, 39 Iowa, quired to protect the trust estate, he 657; Schulting V. Schulting, 41 jST. cannot make the expenditure a J. Eq. 130; Ryder v. Sisson, 7 R. charge on the trust estate except I. 341. One who holds lands in by express agreement. Johnson v. trust for a feme covert and the heirs Leman, 30 111. App. 370. The trus- of her body, with remainder in fee tee of a naked trust cannot bind the § 429. J POWERS OF TRUSTEES. 993 cestui que trust is an adult, he should be consulted, and if he is not consulted, or the action is taken in opposi- trust estate by mortgage. Griffin V. Blanchard, 17 Cal. 70. Where a trustee clothed with full power to manage and control the trust es- tate assigns a mortgage impressed with the trust, to a bona fide pur- chaser or pledgee, the assignment cannot be impeached by the cestui que trust. Dillaye v. Commercial Bank, 51 N. Y. 345. See also Nor- ton V. Phelps, 54 Miss. 471 ; Clop- ton V. Gholspn, 53 Miss. 466 ; Har- ris V. Mclntyre, 118 111. 275. As to power to borrow, see generally, Troup's Case, 29 BeaY. 353 ; Hoare's Case, 30 Beav. 225; Burroughs v. Bunnell, 70 Md. 18. By the terms of a trust the duties of the trustee were limited to the application of moneys coming into his hands from the sale of goods to the payment, first, of the cost of conducting the business, then to the payment of A and B, who had advanced moneys to the settlor. It was held that the execution of any notes by the trus- tee, and particularly the execution of notes on which to borrow money to pay the settlor's debts, were acts altogether beyond the author- ity conferred upon him by the trust. Storrs V. Flint, 46 N. Y. Super. Ct. 498. As to power lo confess judg- ments, see Wilhelm v. Folmer, 6 Pa. St. 296; Dickerson's Appeal, 7 Pa. St. 255; Hunt v. Townshend, 31 Md. 336; s. c, 100 Am. Dec. 63. The general power given to trus- tees to sell and reinvest does not carry with it -the power to settle various ejectment suits pending against him by agreeing to allow judgments to be taken for the plaintiff in some and against him in others. Lemon v. Jennings, 52 Ga. 452. As to power to compro- 63 mise debts, see Mills County v. Burlington, etc. Ey. Co., 47 Iowa, 66; Pool V. Dial, 10 S. Car. 440; Blue V. Marshall, 3 P. Wms. 381 ; In re Graham, 13 Ir. Ch. 137; Kat- cliff V. "Winch, 17 Beav. 216; For- shaw v. Higginson, 8 De G., M. & G. 827 ; Jevon v. Bush, 1 Vern. 342 ; Georges v. Chancie, 1 Ch. Cas. 125 ; Wiles v. Gresham, 5 De G., M. & G. 770; Clark v. Cordis, 4 Allen, 466 ; Mayer v. Foulkrod, 4 Wash. 349; Bacot v. Heyward, 5 S. Car. 441 ; Zambaco v. Cassavetti, L. E. 11 Eq. 439 ; Meacham v. Sternes, 9 Paige, 398. A trustee may com- promise a debt due to the trust estate, if he acts in good faith, and the question of good faith is for the jury. Maynard v. Cleveland, 76 Ga. 52. If the deed confers no authority on the trustee to com- promise the debts, he cannot com- promise them without the consent of the beneficiaries. Eoyall v. Mc- Kenzie, 25 Ala. 363. Where a creditor assigns the debt to trus- tees, in trust to pay debts due the 'trustees, and for other purposes, and to pay the surplus to the assignor, the trustee has power to compromise the debt, and execute a release. Allen v. Randolph, 4 Johns. Ch. 693. As to power to arbitrate, Davis v. Kidge, 3 Esp. 101 ; Hutchins V. Johnson, 12 Conn. 376; s. C, 30 Am. Dec. 622. As to administrators and executors, see Jones v. Deyer, IG Ala. 221 Averly v. Averly, 1 Mete. 117 Kendall v. Bates, 35 Me. 357 Chadbourn v. Chadbourn, 9 Allen, 173; Coffin v. Cottle, 4 Pick. 454 Ailing V. Munson, 2 Conn. 691 Logsdon V. Roberts, 3 T. B. Mon 255; Bean v. Farnam, 6 Pick. 269 994 POWERS OF TRUSTEES. [§ 430. tion to his wishes, the court may charge the trustee with costs. ^ § 430. Discretionary Powers. — We have seen that circumstances may arise under which a trustee must exer- cise his discretion in caring for the interests of the bene- ficiary under his general powers. It may become his duty to do certain things which he has not been specifically em- powered to do, but it very frequently occurs that a trustee is clothed with special discretionary powers by the will, or other instrument, by which the trust is created. Trusts involving the exercise of discretionary powers have been divided into four principal classes, as follows : First : Trusts in which trustees are empowered to make or with- hold a gift or appointment of trust property to a specified donee, or class of donees, at their discretion. Second: Trusts where trustees are authorized to make a selection from, or to make a distribution among, the objects of an express tx-ust. Third: Trusts where the discretionary power relates to some ministerial act connected with the manage- ment or control of the trust estate, as the leasing or selling of the estate, or of some part of it ; the making of improve- ments or investments, the appointment of new trustees, and the like acts. Fourth : Trusts in which the discre- tionary powers to be exercised are purely and simply a matter of judgment, as where they are to determine whether a marriage is suitable, or whether the conduct of an individual is such as to entitle him to a devise or legacy.^ Powers of this nature must be exercised directly and bona fide, and where this is done, or there is no evidence to the contrary, the court will not interfere with the exercise of the power. In a recent case where, in a marriage settle- ment, the trustees were empowered to apply the income of the settled fund for the benefit of the husband and wife and their children, as they should "in their uncontrolled and irresponsible discretion think proper," the court, while expressing an opinion that the trustees were not acting 1 Bradby v. Whitchurch, W. N. ^ Hill on trustees, *489. 1868, p. 81. § 430.J POWERS OF TRUSTEES. 995 judiciously, declined to interfere with their discretion, there being no proof of mala fides} In another leading case it 1 Tabor v. Brooks, L. E. 10 Ch. D. 273. See also Gisborne v. Gis- borne, L. R. 2 App. Gas. 300; Austin V. Austin, L. E. 4 Ch. D. 233; Gainesborough v. What- combe, etc. Co., L. J. 54 Ch. 991; Eastwood V. Clark, 48 L. T. 395; s. C, L. E. 23 Ch. D. 134; Tempest v. Camoys, L. E. 21 Ch. D. 571; Clarke v. Parker, 19 Ves. 11; Brereton v. Brereton, 2 Ves. 87, n.; Walker v. Walker, 5 Madd. 424; Cole v. Wade, 16 Ves. 47; Markey v. Langley, 92 U. S. 142; Smith V. Wildman, 37 Conn. 384; Veazie v. Forsaith, 76 Me. 172; Morse v. Morrell, 82 Me. 80; National Ex. Bk. v. Sutton, 147 Mass. 131; Ames y. Scudder, 11 Mo. App. 168; Adams Female Academy v. Adams, 65 N". H. 225; Eead v. Patterson, 44 N. J. Bq. 211; s. C, 6 Am. St. Kep. 877; Naglee's Estate, 52 Pa. St. 154; Blaisdell v. Stevens, 16 Vt. 179; Cochran v. Paris, 11 Gratt. 356; Nichols V. Eogers, 139 Mass. 146; Cox V. Williams, 5 Jones' Eq. 150. Where an estate was devised to trustees, the survivor of them, or "such person or persons as they or the survivor of them may by last will appoint," with power to in- vest the same "in their discretion." But the trustees appointed by will failed to appoint any successor. A trustee appointed by the court did not have the discretion vested in the trustees named in the will. Lowe v. Convention, etc. (1896) (Md.), 35 Atl.Eep.87. Discretionary powers conferred on a trustee by a testator should be held as annexed to the office and not personal to the orig- inal trustee, where the will does not show that they were conferred because of any peculiar confidence reposed in such trustees, and where witholding their exercise by a suc- cessor would defeat the object of the trust. In re Blakely (1896) (E. I.) , 33 Atl. Eep. 518. Although a trustee has discretion as to the time and amount of payments to be made to a married woman out of a trust fund for her benefit, yet if he refuses to make any payment he is guilty of a breach of trust against which a court of equity will relieve. Collins v. Severson, 2 Del. Ch. 324. The court will control the discretion of the trus- tee to the extent, and only to the extent, of compelling an honest and bona fide exercise thereof for the purposes designed in the cre- ation of the trust. Bacon v. Bacon, 55 Vt. 243. If trustees have dis- cretionary power to execute a deed of the trust property, a court of equity may, in a proper case, com- pel them to execute a conveyance. Saunders v. Schmaelzle, 49 Cal. 59. Where a trustee was author- ized by a will to transfer the trust property to the cestui que trust ab- solutely, whenever he should be- come satisfied that it would be for his best interest, and by statute the jurisdiction of the supreme court in the case of testamentaiy trusts was made "subject to any pro- visions contained in the will," and the court was forbidden to "re- strain the exercise of any powers given by the terms of the will," it was held that even if the court had power to overrule the discretion of the trustee and order him to transfer the property to the bene- ficiary, it should be exercised only upon the fullest and clearest proof. 996 POWERS OF TRUSTEES. [§ 430. was held that where the disposition of a trust estate amongst certain objects is made by the author of the trust to depend upon the discretion of the trustees, the court will, in a proper suit, inquire into the manner in which the trust has been administered, and require that such discretion shall be fairly and honestly exercised ; and so long as it appears to be so exercised the court will not deprive the trustee of the discretionary power which he possesses, or assume itself Martin v. Southgate, 28 Me. 41. Unless prohibited by statute a trus- tee may execute the power as con- ferred, and in the manner desig- nated in the deed of trust, without the interposition of the chancellor. O'Bannon v. Musselman, 2 Duv. (Ky.) 523. A testator bequeathed property to a trustee, to be applied to the benefit of the cestui que trust as should in the judgment of a judge of probate be found neces- sary, and it was held that the trus- tee was accountable in a chancery court for the property received and not in the court of probate; that in the exercise of the "discretion" and ''judgment" confided in him, the judge of probate acted per- sonally and officially, and that no appeal lay from his proceedings and doings. Downer v. Downer. 9 Vt. 231 . Where certain real and personal property was devised to a trustee to collect the rents and pay them to the testator's daughter until she should be twenty-five years of age, at which time it was to pass to her absolutely, with a proviso that the trustee, in his dis- cretion, might transfer all of such property to her before attaining that age, with a remainder over to the testator's brother in case of her death without issue before the con- veyance of the property to her, and the trustee transferred a portion thereof to her before she reached the specified age, it was held to be a lawful exercise of the discretion given him. Sellew's Appeal, 36 Conn. 196. See also Champlin v. Champlin, 3 Edw. Ch. 571 ; Ireland V. Ireland, 84 N. Y. 321 ; Cromie V. Bull, 81 Ky. 646; Albright v. Albright, 91 N. Car. 220; Allen v. Harris, L. E. 27 Ch. D. 333; Bound V. South Carolina Ky. Co., 50 Fed. Eep. 854; Babbitt v. Babbitt, 26 IST. J.= Eq. 44; Oliver v. Oliver, 3 N. J. Eq. 368; Jacobus v. Jacobus, 20 N. J. Eq. 49; Foley v. Parry, 5 Sim. 138. Where discretion is given it is not to be delegated. See Saund- ers V.Webber, 39 Cal. 290; Win- throp V. Attorney-General, 128 Mass. 258; Whittlesey v. Hughes, 39 Mo. 13; Bales v. Perry, 51 Mo. 449; Graham v. King, 50 Mo. 22; s. c, 11 Am. Kep. 401; Howard v.- Thornton, 50 Mo. 291; St. Louis v. Priest, 88 Mo. 612; Heyer v. Deaves, 2 Johns. Ch. 154; Sinclair V. Jackson, 8 Cow. 543 ; Newton v. Bronson, 13 N. Y. 587; s. c, 67 Am. Dec. 89; Wilson v. Towle, 36 N. H. 129; Fuller v. O'Xeill, 69 Tex. 345; s. c, 5 Am. St. Eep. 59; Seeley V. Hills, 49 Wis. 473; Ingle V. Partridge, 32 Beav. 661; Turner V. Corney, 5 Beav. 517; Alexander v. Alexander, 2 Ves. 643 ; Bradford V. Belfleld, 2 Sim. 264; Singleton V. Scott, 11 Iowa, 589; Hawley v. James, 5 Paige, 318. § 431. J POWERS OF TRUSTEES. 997 the exercise of that power; but to avoid a repetition of suits, where there is reason to apprehend that the conduct of the trustee may be liable to question, the court may re- quire the discretion of the trustees to be exercised under its view.^ While the court will not interfere with the exercise of the discretion with which the trust has clothed the trus- tees, it will take account of their execution of the trust. It will require them to act within the limit of the po'^s'ers with which they have been vested, and to exercise that dis- cretion in a reasonable and fit manner. In this direction, as in others, they will be held responsible for any act that the court will construe as a breach of trust. ^ § 431. Discretionary Powers Continued, — Class First. — In that class of discretionary trusts in which trustees are empowered to execute the trust in favor of an individual, or of a class, in their discretion, and there is a failure to administer the trust, equity will grant relief by a distribu- tion of the estate. In a case of this character the court will act, on the ground that the property was conveyed to the trustee, not as a mere power, but as a trust which he is bound to execute, and that it would be manifestly unjust that the objects of the testator's bounty should fail to re- ceive it on account of the failure of the trustee, whether deliberately or by accident, to administer the trust. ^ But 1 Costabadie v. Costabadie, 5 trustees in the exercise of a Hare, 410. discretionary power reposed in 2 Cole V. "Wade, 16 Ves. 47; tliem, nor compel them to exer- Walker v. Walker, 5 Madd. 424; cise such discretion. Dillard v. Eaton V.Smith, 2 Beav. 236; Coch- Dillard (1895) (Va.), 21 S. E. ran v. Paris, 11 Gratt. 356 ; French Eep. 669. A devise in trust for the V. Davidson, 3 Madd. 396; Brere- benefit of children to be used ton V. Brereton, 2 Ves. 87, n.; wholly or in such parts and shares Clarke v. Parker, 19 Ves. 11; Gott as the trustees see fit, confers no V. Cook, 7 Paige, 538; Mason v. discretion on the trustees to dis- Jones, 2 Barb. 248; Mason v. criminate between the benefici- Mason, 4 Sandf. Ch. 631; Trustees aries, and whatever amount is used V. Northampton, 10 Allen, 498; must be used for the equal benefit Talbott V. Mansfield, L. R. 4 Eq. of all. Jones v. Jones, 8 Misc. Kep. 661. 660; S. C, 30 N. Y. Supl. 177. ^ Brown v. Higgs, 4 Ves. 708. Where a discretionary power is A court of chancery cannot control vested in a trustee under a will in 998 POWERS OF TRUSTEES. [§ 431. the court will interpose only where the discretionary power is a trust in distinction from a power. ^ In a leading En- glish case, Lord Cottenham, in his opinion, said: "Where there appears a general intention infavor of a class, and a particular intention in favor of individuals of a class to be selected by another person, and the particular intention fails from that selection not being made, the court will carry into effect the general intention in favor of the class. Where such an intention appears, the case arises, as stated by Lord Eldon, in Brown v. Higgs, of the power being so given as to make it the duty of the donee to execute it, and in such a case the court will not permit the object of the power to suffer by the negligence or conduct of the donee, but fastens upon the property a trust for their ben- efit."^ In Wisconsin it has been held that a bequest of a fund to a trustee, to pay the income to testatrix's daughter for life, and "so much of the principal as shall seem to him proper for her support and maintenance," does not create a mere naked power in the trustee in respect to the pay- ment of the principal, which he ma}' execute or not, in his discretion, but imposes an imperative duty on him to pay regard to paying over to legatees rule is applied at law to such pow- the principal of certain bequests, a ers, even when coupled with a court of equity will not abrogate trust. Hence, in the case sup- the trust by requiring the trustee posed, the trust would at law be to payover the principal, especially wholly gone. The trustees, if liv- in the absence of proof of miscon- ing, could not at law be compelled duct on his part. Merritt v. Cor- to execute the trust ; and by their ties. 71 Hun, 612; s. C, 24 N. Y. deaih the power would be entirely Supl. 561. extinguished. Butaoourt of equity 1 1 Story's Equity Jurispru- would treat the whole matter in a dence, §§ 105, a, 169, 176. "In the very different way. It would com- next place let us suppose the case pel the trustees, if living, to execute of a will giving power to trustees the power because coupled with a to sell an estate upon some spec- trust, although it would not com- ified trust, and they should all re- pel them to execute a mere naked fuse to execute the trust or should power not coupled with a trust." all die before executing it. Now 2 Story's Equity Jurisprudence, it is a well known rule of law that § 1061. See also § 1061, a. powers are never imperative; but ^ Bm-j-Qugij y_ pbilcox, 5 Myl. & the acts to be done under them are Cr. 73, 92; Brown v. Higgs, 4 Ves. left to the free will of the parties to 708. whom they are given. The same § 432-.] POWERS OF TRUSTEES. 999 over to the daughter so much of the principal as may be necessary for her support, and hence the trust may be ex- ecuted by a trustee appointed by the court on the death of the original trustee, under the statute, which vests in such trustee all the powers and duties of the original trustee.^ § 432. Discretionary PowerS Continued, — Class Sec- ond. — In this class of trusts the discretionary power of the trustees is limited to the selection of individuals as the ob- jects of the trust, from the class indicated, or the distribu- tion of the estate amongst the objects of the trust. Where property is left in trust to a class of individuals, as the children, or the nephews and nieces of the testator, and the trustees are authorized to appoint to one or more, as they shall see fit, from this class, and the trust is administered, the individuals appointed will take the estate to the exclu- sion of all the other individuals of the class, and the rule will apply where the trustees are empowered to determine the relative proportions to be received by individuals, or to fix the time and manner in which the shares of the estate shall be distributed. But where, for any reason, the dis- cretionary power is not exercised, the entire class of the objects of the trust will be entitled to the property, and they will share and share alike. The individuals vested with the discretionary power are the only persons by whom it can be exercised. In a case of this kind the court has no discretion.^ In England it has been held that where a per- iOsbornev.Gordon(1893),86"Wis. Leavitt v. Beirne, 21 Conn. 1; 92 ; s.c, 56 if.W. Kep. 334. See also Clark v. Parker, 19 Ves. 11 ; Wain- Nugent V. Cloon, 117 Mass. 219; wright v. Waterman, 1 Ves. Jr. Gibbs V. Marsh, 2 Met. 243; Cleve- 311; Keates v. Burton, 14 Ves. 434; laud v. Hallett, 6 Cush. 403 ; Leg- Cochran v. Paris, 11 Gratt. 356 ; gett V. Hunter, 19 JST.Y. 445; Chase Lambert v. Thwaites, L. K. 2 Eq. V. Davis, 65 Me. 102; Purdie v. 151; In re Jefferys, L. R. 14 Eq. Whitney, 20 Pick. 25 ; Sargent v. 136. See also as to cases in default Bourne, 6 Met. 32; Pink v. De of appointment, Briokenden v. Thuisey, 2 Madd. 157; Walker v. Williams, L. R. 7 Eq. 310; /re re Walker, 5 Madd. 424; Waller v. Davis, L.R. 13 Eq. 163; Bristowv. Weller, 2 Madd. 160, n.; French v. Skirrow, L. R. 10 Eq. 1. Davidson, 3 Madd. 396; Marl- ^ Loj,gji)Qrev. Broom, 7Ves. 124; borough V. Godolphin, 2 Ves. 61; Kemp v. Kemp, 5 Ves. 849; Ken- Lyman v. Parsons, 26 Conn. 493; 1000 POWEES OF TRUSTEES. [§ 432. son has a power of distribution among "poor relations" he may distribute amongst all poor relations, however re- mote ; but where the court is called on to distribute, on failure of the person so empowered, it will confine itself to relations within the statute of distributions.^ In a case nedy v. Kingston, 2 J. & W. 431 ; Keates v. Burton, 14 Ves. 434; Brown v. Higgs, 4 Ves. 708; s. C, 5 Ves. 495; Little v. Neile, L.J. 31 Ch. 627 ; Fowler v. Hunter, 3 Y. 6 J. 506; "Walsh y. Wallinger, 2 Kuss. & M. 78; Brown v. Pocock, 6 Sim. 257; Davis v. Davis, 1 Hem. & M. 255; Heard v. Sill, 26 Ga. 302; Collins v. Carlisle, 7 B. Mon. 14; Bull V. Bull, 8 Conn. 47. A testator devised his real estate and negroes to his son G W in trust (1) to apply the rents, issues and profits to the use of himself and family, and the education of his children; and (2) to give or devise by deed or will the said property (and the rents, issues and profits thereof, over and above what he should apply to the uses aforesaid) "unto all or any child or children by him begotten, or to be begotten, in such way or manner, and in such pro- portion, and for such uses, estates and interests as he shall see fit and proper." G W died, leaving a will whereby he devised the whole of his estate to his wife, with direc- tions to his executors (his wife and sons) to act under "his father's will in trust, and in every respect and manner intended by their grand- father." It was held (1) that the legal title was vested in G W, coupled with a power in trust to appoint at his discretion among his children, (2) but the power could not be delegated, and (3) that as G W had neglected to exercise the power, his children were en- titled to divide the property equally. Withers v. Yeadon, 1 Rich. Eq. 324. A testatrix gave certain prop- erty, real and personal, to her hus- band for life, with authority to use the same as he pleased in every re- spect. She then said: "At the death of my husband, or before, if he chooses to relinquish his rights, I give all the land and other prop- erty to one or more of the children of E (a step-daughter) as he may designate or authorize, should it be necessary, him to malie such other disposition of the same as he may deem proper, having full con- fidence in him that he will do what is right;" but no other disposition was made of the remainder in fee. The husband died in the lifetime of the testatrix. It was held under the circumstances, that no effect could be given to the provision for the children of R by reason of its uncertainty, and that they took no interest by way of trust or other- wise. Robinson v. Allen, 11 Gratt. 785. J Mahon v. Savage, 1 Sch. & Lef. Ill ; Harding v. Glyn, 1 Atk. 469 Bennett v. Honeywood, Amb. 708 Tytcher v. Byles, 1 T. R. 435 Cruwys v. Colman, 9 Ves. 435 Supplee V. Lowson, Amb. 728 Grant v. Lynam, 4 Russ. 392 ; Birch V. Wade, 3 V.&B.198. "Although the court may have acquired ju- risdiction over the trust property, by the institution of a suit for the administration of the estate, or to determine the construction of the will, yet, in making its decree, it will not interfere with a discre- § 433.J POWERS OF TRUSTEES. 1001 where there was a bequest of an annuity, to be applied for the support of the legatee, "in such manner" as the trus- tees, in their absolute and uncontrolled discretion, shall think fit, it was held that the direction to apply the annuity for the benefit of the legatee being absolute, the whole was to be applied for that purpose. The discretion of the trustees related to the manner of the application, not to any question whether there should be any application at all.^ § 433. Discretionary Powers Continued, — Class Third. — Trusts of this class are those in which trustees are au- thorized to exercise their discretion in regard to the man- agement of the trust estate. Where their management is not satisfactory to the beneficiaries they may appeal to the court for redress. The court will institute an inquiry in regard to their administration of the trust, and if it is shown to be arbitrary and capricious, or in any manner incon- sistent with the interests of the beneficiaries, the court will afford relief. In matters of this character it will be as- tionary power of selection or dis- tribution, if the trustees be liv- ing and competent to act, but the right and facility of exercising the power will be expressly reserved to them by the decree." Hill on Trustees, *493. See also Costahadie v. Costabadie, 6 Hare, 410; Horde v. Suffolk, 2 Myl. & K. 59; Waldo v. Caley, 16 Ves. 206; Mahon v. Savage, 1 Sch. & Lef. 711 ; Pope V. Whichcombe, 3 Meriv. 689 ; Bennet v. Honey wood, Amb. 708. 1 Stephens v. Lawry, 2 N. C. 0. ■87. A married woman was the donee of a power of appointment by deed or will over certain policy moneys payable upon her own death, but was unaware of the ex- istence of the power. She con- curred with her husband in settling certain family estates by an indent- ure which treated the policy moneys as the husband's own prop- erty, and settled them also. This concurrence was for a purpose en- tirely unconnected with the policy moneys, and under it she took a life interest in remainder after her husband's death, in the estates, but no interest in the policy moneys. She survived her husband, received in respect to the life interest in the estates a sum exceeding the amount of the policy moneys, and died, leaving a will whereby she gave all her property, over which she had any disposing power, to certain beneficiaries. Held, that her con- currence in the deed of settlement for purposes unconnected with the policy moneys subject to the power could not operate as an exercise of the powers, though the deed pur- ported to pass the policy moneys, and that the will was a valid exer- cise of the power. Griffith-Bos- cawen v. Scott, L. E. 20 Ch. D. 358. 1002 POWERS OF TRUSTEES. [§ 433. sumed that the court is at least as competent to judge of what is wise and proper as the trustees, and where the case is brought before it the court will restrain the trustees from any palpable abuse of their discretion. In the leading case of Lord Milsington v. Earl Mulo-rave, where trustees were empowered to renew church leases, "as occasion should require and they should think proper," and the trustees refused to make the renewal at the expiration of a term, a bill was filed by the parties in interest to compel them to renew the lease. To this bill the counsel for the trustees entered general demurrers, setting up in support of them the discretionary power with which the trustees were in- vested by the instrument by which the trust was created. The demurrers were overruled by the Vice Chancellor without hearing the counsel for the plaintiffs. In his opin- ion, the Vice Chancellor said: "I cannot allow these de- murrers without holding that the trustees have an arbitrary and capricious power, with respect to the renewal of this lease, and are not to be required to give any explanation why the lease has not hitherto been renewed. Such an arbitrary and capricious power may be given to trustees, but it is not conferred by this settlement, where the trustees are to renew as occasion may require and as they may think proper, by which it is to be understood, as they may think proper for the interests of their cestui que trust. The exercise of a power of renewal does, indeed, require a discretion, for otherwise a trustee would be bound to comply with any unreasonable demands on the part of the lessor, but not an arbitrary and capricious discretion. "^ In a recent case it iMilsmgtonv.Mulgrave,3Madd. Bq. 153; Lincoln v. Aldrich, 141 491. As to the right to seek in- Mass. 342; Treadwell v. Cordis, 5 structions of the court as to the Gray, 341; Reynolds v. Brandon, policy to be pursued, see Winthrop 3 Heisk. 593; Fraser v. Davie, 11 V. Attorney-General, 128 Mass. S. Car. 56; Tilly v. Tilly, 2 Bland, 258; Griggs v. Veghte, 47 N. J. 436; Trotter v. Blocker, 6 Port. Eq. 179 ; Traphagen V. Levy, 45 N". (Ala.) 269. Wherever there is a J. Eq. 448 ; Fraser v. Page, 82 Ky. bona fide doubt as to the true 73; Hayden V. Marmaduke, 19 Mo. meaning of the instrument creat- 403; Wheeler v. Perry, 18 N. H. ing the trust, and as to the course 307; Vanners v. Jacobus, 17 N". J. which the trustee ought to pursue. § 433. J POWERS OF TRUSTEES. 10U3 was held that where a will empowers a trustee to maintain testator's "son or his family" out of the income of the trust estate, or, if that be insufficient, then, in his discre- tion, to convert said estate into money to be used for such purpose, or, where it seems advisable, to convey such es- tate to said son, his heirs and assigns, the trustee may, in his discretion, sell the estate to reimburse himself for money advanced by him for the carrying out of such trust, and to repay a person who furnished necessaries to such son or his family.'- In a recent case in Massachusetts it he may always maintain a suit in equity, at the expense of the trust estate, to obtain a judicial con- struction of the trust instrument, and directions as to his conduct, and if he faithfully obeys such in- structions he will be relieved of all responsibility therefor. State V. ISTetherton, 26 Mo. App. 414. As to power to make leases, see Naylor V. Arnitt, 1 Russ. & M. 501; At- torney-General V. Owen, 10 Ves. 560; Fitzpatrick V. Waring, L. R. 11 Ir. Rep. 35; Droban v. Drohan, 1 B. & B. 185; Middleton v. Dod- son, 13 Ves. 268; Bowes v. Bast London Water Works Co., Jacobs, 324. Trustees with power to pay debts, etc., out of an estate, but not to sell, take by implication the power to lease the real estate on terms usual in the locality. In re Odell's Estate, 1 Conn. 94. Where a will empowers a trustee to make a lease for "twenty-one years from the making thereof," he must lease in possession, and if there is a valid outstanding term at the time a new lease is made "for twenty- one years from date," the lessee can enter only at the expiration of ihe existing term, and the new lease, being the grant of a rever- .■■ion, is void. Griffin v. Ford, 1 Bosw. 123. A trustee cannot di- rect the title of the cesttii que trust, or subject the trust property to the payment of his own debts or those of a third person, by permitting the property to be hired out by another, the donees being infants. Easly V. Dye, 14 Ala. 158. A trustee with power to lease for the best improved rent obtainable, must use reasonable diligence as well as good faith, and if it is shown that due diligence would have secured a much higher rent at the time the lease was made, the lease will be held void. Griffen V. Ford, 1 Bosw. 123. Where a lease by the trustee contained a covenant to renew the lease or pay for certain erections, which the lessee was to make, on the refusal of the trustee to renew at the ter- mination of the lease, the trust estate is liable to pay for the erections. Robinson v. Keteltas, 4 Edw. Ch. 67. 1 Smith V. Greeley (1893) (N. H.) 30 Atl. Rep. 413. See also Townsend v. Townsend, 156 Mass. 454, 456. A testatrix left her property to her husband in trust to hold and manage for his sup- port during life and for the sup- port and education of their children, with full power and au- thority to collect and dispose of the rents and profits "in such man- ner as he might think best" for 1004 POWERS OF TEUSTEES, [§ 433. was held that the fact that one of the trustees of a fund, the income of which is payable, in their discretion, to the beneficiary, resigned, and another was appointed in his place, does not give such beneficiary an absolute right to such income, since the statute provides that a new trustee has the same powers, rights and duties as if he had been originally appointed.^ the purpose of Scich trust, and to improve the real estate, and invest or reinvest the same at discre- tion. It was held that he was not vested with arbitrary power over the income and assets of the estate, hut that he could be controlled by a court of equity in his disposition thereof. McDonald v. McDonald, 92 Ala. 537. Where the trust is for the common support of a father and his family, and the father grossly fails to discharge his duty in dispensing the income for the purposes for which it was given, although he is made sole judge of the necessities of his family by the instrument creating the trust, the court will assume the distribution of the income so as to secure a just and equitable participation therein by the beneficiaries. Babbitt v. Babbitt, 26 N. J. Eq. 44. 1 Wemyss v. White, 159 Mass. 484; s. C, 34 ]Sr. E. Rep. 718. "The plaintiff further contends that, as one of the trustees resigned and another was appointed in his place, the present trustees cannot exer- cise any discretion, and that the interest of the beneficiary is there- fore absolute. By the express terms of the statute, the new trus- tee has 'the same powers, rights and duties * * * as if he had been originally appointed.' Fub. St. ch. 141, § 6. The discretion given to the trustees is a part of the trust, to be exercised by them as long as the trust shall continue. It cannot be considered as merely a personal confidence in the per- sons named as trustees." ' Ibid. 486. See also Nugent v. Cloon, 117 Mass. 219, 221; Bradford v. Monks, 132 Mass. 405, 407 ; Ex parte Schouler, 134 Mass. 426, 428. Where trustees are invested with a discretionary power of appoint- ing new trustees, if the court have acquired jurisdiction over the property by reason of a suit, it will in such a case assume a con- trol over the discretion of the trustees, and will not suffer them to appoint new trustees except with its own sanction. Webb v. Shaftesbury, 7 Ves. 480, 487; At- torney-General V. Clack, 1 Beav. 467. If there be a trust to invest at discretion on "some good or sufficient security," or "at discre- tion," the court will not allow the trustees to exercise any discretion as to the nature of the security, but will itself decide upon the suf- ficiency of the investment accord- ing to its own rules. See Booth v. Booth, 1 Beav. 125; DeManneville V. Crompton, 1 V. & B. 359; Po- cock V. Rediugton, 5 Ves. 794. A power of sale or of varying the nature of the trust securities, though in their nature disci-etion- ary, must be exercised for the bene- fit of the trust estate and not arbi- trarily or in a mischievous manner. The court, on a bill being filed, will investigate these matters and decide as to the manner of execut- § 434.] POWERS OF TRUSTEES. 1005 § 434. Discretionary Powers Continued, — Class Fourth. — In this class of trusts the discretion to be exercised is a matter of judgment, pure and simple, as where trustees are required to judge of the merit or conduct of an individual, to decide whether an annuity shall be paid, or to give or withhold their consent to a settlement. As the exercise of such powers usually implies especial confidence on the part of a testator, they cannot be delegated, and unless there is some special reason for so doing, trustees will not be con- trolled by the court in their exercise of this discretion. The court will presume that trustees vested with a power of this nature may have reasons for their acts of a confi- dential and delicate character, which they could not prop- erly disclose, and which they ought not to be required to disclose. 1 The rule is, and it is especially applicable to ing these powers. See Brioe v. Stokes, 11 Ves. 324; Lord v. God- frey, 4 Madd. 459 ; De Manneville v. Crompton, 1 V. & B. 359; Hitch v. Leworthy, 2 Hare, 205, 208 ; Broad- hurst V. Belgny, 1 N. C. C. 28. ' Clarke v. Parker, 19 Ves. 1. See also Trutch v. Samprell, 20 Beav. 116; Ingle v. Partridge, 32 Beav. 661; Chambers v. Minchin, 7 Ves. 196; Turney v. Corney, 5 Beav. 517; "Wilkinson v. Parry, 4 Enss. 272; Bayley v. ^Mansell, 4 Madd. 226; Cole v. Wade, 16 Ves. 27; Etonv. Smith, 2 Beav. 236; Walker V. Walker, 5 Madd. 424; French v. Davidson, 3 Madd. 376; Brereton V. Brereton, 2 Ves. 87 ; Crewe v. Decken, 4 Ves. 97; Sinclair v. Jackson, 8 Cow. 543; Newton v. Bronson, 13 N". Y. 587; S. c, 67 Am. Dec. 89; Pearson v. Jamison, 1 McLean, 199; Coquard v. Chari- ton County, 14 Fed. Rep. 203; Saunders V. Webber, 39 Cal. 290; Winthrop v. Attorney-General, 128 Mass. 258; Howard v. Thornton, 50 Mo. 291; Heyer v. Deaves, 2 Johns. Ch. 154; Fuller v. Q-Neill, 69 Tex. 849; s. c. 5 Am. St. Rep. 59; Seely v. Hills, 49 Wis. 473; Suarez v. Pumpelly, 2 Sandf. 156. The delegation will be absolutely void if trust is discretionary. Alex- ander v. Alexander, 2 Ves. 643; Bradford v. Belfield, 2 Sim. 264; Wilson v. Denison, Amb. 82; Sin- -gleton V. Scott, 11 Iowa, 589 ; Doe V. Robinson, 24 Miss. 688. See also article, '"Delegation of Discretion- ary Powers by a Trustee," by Arthur Biddle, in 12 Cent. L. J. 266. A delegation of ministerial duties on the part of the trustee will, however, be upheld. See Gillespie V.Smith, 29111.473; s. c, 81 Am. Dec. 328; Jones v. Ser- geant, 45 Miss. 332; Tyler v. Her- ring, 67 Miss. 169; s. c, 19 Am. St. Eep. 263. Any losses resulting from the. conduct of such agents, attorneys, etc., apppointed with prudence, will fall upon the trust estate. See Kennedy v. Dunn, 58 Cal. 339; Mason v. Wait, 5 111. 132; Gibson's Case, 1 Bland, 138; s. c, 17 Am. Dec. 257; McCieady v. Lansdale, 58 Miss. 877 ; Ea;> ner v. 1006 POWERS OF TEUSTEES. [§431 trusts of this class, that a court of equity will not, in gen- eral, assume the exercise of a discretionary power vested in a trustee, nor interfere to control a trustee acting hona fide in the exercise of his discretion, nor will a suit be entertained to compel a trustee to exercise his power. ^ § 435. Discretionary Powers Continued. — Discretion- ary powers which are absolute and uncontrollable are not favored in equity. While the right to confer such powers is recognized, there is a disposition not to extend the privi- lege, and wherever it is practicable to surround it by legal restraints. In the famous case of Topham v. Portland, Lord Justice Turner, in his opinion, said: "The absolute owner of property may, no doubt, subject the property to whatever power of appointment he may think fit, keeping, of course, within the proper limits ; but the donee of a Pearsall, 3 Johns. Oh. 578 ; Thomas V. Scruggs, 10 Yerg. 401; Van Buren v. Chenango County Ins. Co., 12 Barb. 672; Clough v. Bond, 3 Myl. & Or. 496; Stroud v. Gwyer, 6 Jur. (N. S.) 719; Edmonds v. Peake, 7 Beav. 239 ; Bacon v. Bacon, 5 Ves. 334. A trustee in a deed of trust given to secure a debt may employ a stranger to post the notices and conduct the sale, pro- vided for in the deed, provided he afterwards ratifies these acts, and in such case it is sufficient, to make the sale valid, that the trustee re- tains a supervision and control over the person so employed. Jones V. Sergeant, 45 Miss. 332. 1 Cochran v. Paris, 11 Gratt. 348. '•Where the testator gave his son who had been extravagant a sum of money, with a power to the executors to advance more, 'if they thought proper,' the courts have, I think, very properly refused to decide upon the propriety of the executor's withholding the legacy, holding that to do so would be to assume an authority confided solely to the discretion of the executors. But in a case like this, where the judgment and discretion of the executors are limited and directed to a specified inquiry, the reforma- tion of the conduct of the legatee, and where in the event of such judgment being favorable the will imperatively requires the executors to hand over the legacy. * * * It seems to me that a claim to the interposition of a court of equity is presented which it cannot reject without violating the principles which usually govern its action; that the executors stand before the court, not in the attitude of persons clothed with a mere power, but is charged with an acknowledged trust or duty which in equity and good conscience they are bound to per- form." Ibid. 361. Where execu- tors are authorized to advance to a legatee any sum or sums of money not exceeding an amount specified, an exercise of the power for a less amount will not preclude a further advance. Webster v. Boddington. 16 Sim. 177. § 435.] POWERS OF TRUSTEES 1007 power is not the absolute owner of the property which is subject to the power. He cannot delegate the authority which is given to him. In considering his acts regard must be had to the relation in which he stands, both to the author of the settlement and toward the objects of the power. "^ In the same case, on its appeal to the House of Lords, Lord St. Leonards said: "The rules on this subject are so well settled that it is quite unnecessary to go through any au- thorities on the subject. A party having a power like this must fairly and honestly execute it without having any ulterior object to be accomplished. He cannot carry into execution any indirect object, or acquire any benefit for himself directly or indirectly. It may be subject to limita- tions and directions, but it must be a pure, straightforward, honest dedication of the property, as property, to the per- son to whom he affects or attempts to give it in that char- acter. "^ Wherever trustees, vested with discretionary pow- 1 Topham v. Portland, 1 De G., J. & S. 517. 2 Portland v. Topham, 11 H. L. Cas. 55. In the' somewhat recent case of Tempest v. Lord Comoys, L. K. 21 Ch. D. 571, 578, Jessel, M. R.,says: "It is settled law that when a testator has given a pure discretion to trustees as to the ex- ercise of a power, the court will not enforce the exercise of the power against the wish of trustees, but it does prevent them from ex- ercising it improperly. The court says that the power, if exercised at all, is to be properly exercised. This may be illustrated by the case of persons having a power of ap- pointing new trustees. Even after a decree in a suit for administering the trusts has been made they may still exercise the power, but the court will see that they do not ap- point improper persons." Earl, J., in Ireland v. Ireland, 84 N. Y. 321, 326, says : "A court of equity by virtue of its general jurisdiction over trusts and trustees can, upon a proper state of facts, direct how their discretion shall be exercised ; in other words, how the trust funds shall be administered. It can, upon suflBcient grounds, remove a trustee and appoint another, and in case a trustee is proceeding to dis- pose of the trust fund improperly or inequitably, it can intervene and control his conduct. But when a trustee, with the powers conferred upon this trustee, is acting within the limits of a fair and reasonable discretion, a court of equity cannot interfere except for very peculiar reasons calling for the exercise of its jurisdiction." Wigram, V. C, inCostabadie v.Costabadie, 6 Hare, 410, uses this language : "The testator may limit and circumscribe the interests which he bequeaths to his children as he may think proper, and the court cannot en- large the interest which he has given. If the gift be subject to the discretion of another person so long 1008 POWERS OF TRUSTEES. [§ 435. ers, are subject to the control of the court, it will direct the administrator of the trust. ^ Equity will make a dis- tinction between the purpose with which an act is performed and the motive by which the act was prompted. The court will not sit in judgment upon the motives of a defendant, but it will inquire into the intention or purpose of his acts in the execution of a discretionar}" power. ^ as that person exercises a sound and honest discretion, I am not aware of any principle or authority upon which the court should de- prive the party of that discretionary power. Where a proper and honest discretion is exercised the legatee takes all that the testator gave or intended that he should have — that is, so much as, in the honest and reasonable exercise of that discre- tion, he is entitled to. But, con- sistently with the plaintiff having an interest subject to the mother's discretion, slie has a right * * * to a discovery of all the acts which have been done and the reasons for doing them, which the defendant may be able to give. She has that right in order that the court may be able to see whether the discretion which has been exercised by the party interested with it is within the limits of a sound and honest ex- ecution of the trust. Beyond that I am not aware that, because a per- son who takes an interest in prop- erty, subject to the discretion of another, is dissatisfied with the ex- ercise of that discretion, therefore the court will take it away from that party and assume itself to ex- ercise it. If a bill be filed the court will, of course, inquire into the acts which have been done in the ad- ministration of the trust, and may possibly (as has been done in many cuses) require the trustee to exercise the discretion under the view of the court."' Depue, J., in Read V. Pat- terson, 44 ]sr. J. Eq. 211, 222, says: "A court of equity will examine into the conduct of a trustee in the execution of his discretionary pow- ers, and will assume control over the trustee's conduct, and if need be will take upon itself the ex- ecution of the trust. But the court will exercise this prerogative with great caution, and will not displace the trustee from exercising his functions, unless, upon a consider- ation of the reasons and grounds upon which he has acted, it appears that he has abused his trust, and that his acts in the premises have not been within the limits of a sound and honest execution of the trust." See also Brophyv. Bellamy, L. R. 8 Ch. App. 798; French v. Davidson, 4 Madd. 396, 402. Where a fund is provided by a will which vests the fund in trustees, and gives them an absolute discretion, and '■uncontrollable authority" over its application, the court will not ex- ercise its ordinary power. The fund so specially provided will be left to the exercise (bona fide) of the dis- cretion of the trustees. Gisborne v. Gisborne, L. R. 2 App. Cas. 300. See also article "Trustee's Discre- tion," 79 L. T. 244. 1 Erisman v. Directors of the Poor, 47 Pa. St. 509. 2 Topham v. Portland, L. R. 5 Ch. App. 57. Courts of equity never favor a construction that con- fers upon the trustee absolute and § 436.] POWERS OF TRUSTEES 1009 § 436. The Execution of a Power. — In many instances the manner of the execution of a power may be a matter of vital importance. Where it is directed by the instrument the formalities required must be strictly followed. Any failure to comply with the requirements of the instrument will invalidate the act. It will be tantamount to the non- execution of the trust. As the rights of the objects of the trust may be affected by a failure to comply with the formalities prescribed, such compliance is necessary to the proper execution of the trust and to the carrying out of the intention of the grantor.^ In Holmes v. Coghill, the Mas- uncontrolled powers. Haydel v Hurck, 5 Mo. App. 267. 1 Hawkins V. Kemp, 3 East, 410 Ferry V. Laible, 31 N. J. Eq. 566 Day V. Thwaites, 3 Ch. Ca. 69, 107 Holmes v. Coghill, 7 Ves. 506; Thruxton v. Attorney-General, 1 Vern. 340. If the execution of the power is to be either by will or deed, the method must be followed strictly. Paul v. Heweston, 2 Myl. & K. 434. Where the number of witnesses is specified that are to witness the deed, that number must witness the deed. Bath v. Mon- tague's Case, 3 Ch. Ca. 55; S. C, 2 Freem. 193; Kibbett v. Lee, Ch. Ca. 90; s. c, Hob. 312; Doe v. Keir, 4Man. & Ry. 101; Wright v. Wakeford, 17 Ves. 459; Vincent v. Beshopre, 5Exc. G83; Burdett v. Spilsbury, 6 Man. & G. 386; Ladd V. Ladd, 8 How. 30. Where in ex- ecuting the power something is also stipulated which is not author- ized to be done, but which can be clearly distinguished from the rightful execution of the power, the execution so far as authorized is valid, and void as to the excess. Laskey v. Perrysburgh Board, etc., 35 Ohio St. 519. If the power is to be executed by will all the solemnities of making the will prescribed by 64 the statutes must be followed. 1 Sugden on Powers, 257. Wkere the creator of the power points out all the formalities prescribed in the power, a will will be held a valid execution of the power, although the instrument is Invalid as a will. Habergham v. Vincent, 2 Ves. Jr. 204 ; Day v. Thwaites, 3 Ch. Ca. 69 ; s. c, 2 Vern. 80; Wilkesv. Holmes, 9 Mod. 485; s. c., 16 Ves. 237; Goodhill V. Brigham, 1 Bos. & P. 198; Langford v. Eyre, 1 P. Wms. 740; Eyre V. Fitton, 1 Sugden on Powers, 155. A power to be ex- ecuted by a will cannotbe executed by a deed or any instrument to take effect during the lifetime of the donee of the power. Whaley V. Drnmmond. 1 Sugden on Powers, 257; Anderson v. Dawson, 15 Ves. 532; Eeid V. Shergold, 10 Ves. 370. But see Heatley v. Thomas, 15 Ves. 596. If the consent of any third person must be had to the execu- tion such consent must appear. Hawkins v. Kemp, 3 Bast, 410; Mansell v. Mansell, 2 P. Wms. 678. If notice is requisite it must also be shown. Dormer v. Thurland, 2 P. Wms. 506. If the power is to be executed by deed it cannot by will. Woodward v. Halsey, 1 Sugden on Powers, 255; Darlington v. Put- 1010 POWEES OF TRUSTEES. [§ 436. ter of the Eolls, Sir William Grant, in his exposition of this doctrine, said : "There is an evident difference between a power and an absolute right of property, not so much with regard to the party possessing the power as to the party to be affected by the execution of it. If our atten- tion is to be confined to the former entirely, there is no reason why the money he has a right to raise should not be considered his property as much as a debt he has right to recover. But the latter can only be charged in the manner and to the extent specified at the creation of the power. The compact is not to raise £2,000 absolutely, and in all events; but that it may be raised in a certain manner, namely, according to his appointment by deed or will, to be duly executed and attested by two or more witnesses. To say that without a deed or will this sum shall be raised is to subject the owner of the estate to a charge in a case, in which he never consented to bear it. The chance that it may never be executed, or that it may not be executed in the manner prescribed, is an advantage he secures to him- self by the agreement, and which no one has a right to take from him. In this respect there is no difference between a non-execution and a defective execution of a power. "^ In Pennsylvania it has been held that the intention of the donee of a power is the criterion to determine its execution, that the intention must appear in the instrument, which must refer to the power to be executed, or actually disj^ose of its subject. The intention to execute may be ascertained where the instrument cannot have any operation, except that the donee intended to execute the power. Positive legal presumptions cannot judiciously arise upon equivocal ney, Cowp. 260; Doe v. Cavan, 5 453, 466. The donee of a power T. K. 567; s. c, 6 Bro. P. C Taml. may execate it without expressly 175; Moore V. Demond, 5 R. 1. 130; referring to it, provided it is ap- Ally v. Lawrence, 12 Gray, 373. A parent from the whole instrument power to sell and change invest- that it was intended as an execu- ments gives no power to pledge tion of the power. Gindrat v. same investments in order to raise Montgomery Gaslight Co., 82 Ala. money to enter upon hazardous 596, 606. enterprises for the profit of Ihe ' Holmes v. Coghill, 7 Ves. 499, estate. Loring v. Brodie, 134 Mass. 506. §437. POWERS OF TRUSTEES 1011 or uncertain conditions of fact.^ A general devise of all the testator's estate will operate as an execution of a power over property which he had formerly owned, and of which he had the beneficial use as well as the power of disposal, unless a contrary intention appears in the will.^ § 437. Liimitations of the Power to Execute a Trust. — Where trustees are vested with a power, the exercise of which is limited to a fixed date, or by a contingency, and the period expires, or the contingent event occurs, the power determines, and if the trust has not been executed it cannot be thereafter executed. '"^ Where the time for the 1 Bingham's Appeal, 64 Pa. St. 345; Wetherill v. Wetherill, 18 Pa. St. 26.'); Thompson v. Garwood, SWhart. 287; MoKonkey's Appeal, 13 Pa. St. 259 ; Keefer v. Schwartz, 47 Pa. St. 508 ; Commonwealth v. Duffielcl,2 Jones,280; Hefternan v. Adams, 7 Watts, 116. "When the donee of a power refers to it, or when he disposes of the subject of it by such a description as identities it, the intent to execute it is free from uncertainty. A third mode of ascertaining tbe intention is when the instrument of execution cannot have any operation, except on the ground that the donee in- tended to execute his power; as where it is a power to dispose of real estate and be has none of his own. It is manifest the third mode is rather a legal presumption than a manifestation of intention — a positive inference drawn from a negative fact. But positive legal presumptions cannot judiciallj' arise upon equivocal or uncertain conditions of fact. Hence the mere fact that the bequests in a will ex- ceeds the testator's estate cannot draw after it an intention to ex- ecute the power. The excess may arise from a mistalien estimate, or from changes in the testator's property, a mistake common to that numerous class who keep no ac- counts, or imperfect ones, of their affairs. The evidence of this is the common occurrence of the abate- ment of legacies." Bingham's Ap- peal, 64 Pa. St. 345, 349. Amory v. Meredith, 7 Allen, 397. See also Blagge V. Miles, 1 Story, 445 ; Jones V. Tucker, 2 Mei'iv. 533 ; Hughes v. Turner, 3 Myl. & K. 688. "The intent miust be so clear that no other reasonable intent can be im- parted to the will ; and if the will does not refer to a power, or the subject of it, and if the words of the will may be satisfied without supposing an intention to execute the power, then, unless the intent to execute the power be clearly ex- pressed, it is no execution of it." 2 2 Story's Equity Jurisprudence, 1062a. 2 Kent's Commentaries (6th ed.), 335. 3 Wood V. White, 4 Myl. & Cr. 460. "With respect to Eliza's one- fifth, the case is very different. Upon her marriage under twenty- five the trustees were to settle and convey it upon trusts and for pur- poses not prescribed by the tes- tator, for the benefit of herself, her issue and husband, or absolutely, 1012 POWERS OF TRUSTEES. [§ 437. execution of the trust is not limited by the instrument the power will continue until the trust terminates, though there maybe unwarranted delay on the part of the trustees in the administration of the trust, or in conveying the trust estate, in accoi-dance with the directions of the instrument by which the trust was created.^ But even where the time for the execution of the power is not limited the power will terminate when the trust has been fully administered, or when the objects of the trust have been fully accom- plished.^ Where an estate was devised in trust for two daughters for life, with i-emainders in each moiety for their children at twenty-one, and a power of sale was given to the trustees, it was held that the power of sale continued, as she should appoint. And I agree with the master of the rolls in this, that the trusts under the will would thereupon determine; and if so, the power of sale under the will would, as to this one- fifth, have ceased from that time; be- cause it was not necessary, as was the ground of Sir John Leach's judgment in Trower v. Knightley, 6 Madd. 134, that the power as to one share should continue as to such parts, if any, of the premises as should be subject to continuing trusts. If, therefore, there be now any power or trust to sell the one- tifth of Eliza it must be found elsewhere and not in the will of the testator." 761^.479. A testa- tor gave equal shares of his estate to distinct trustees for the separate use of each of his daughters for life, and after the death of a daughter to go according to the intestate laws ; the "trustees" to have power when they thought advisable to sell and convey his real estate and invest the proceeds for the uses before provided ; two trustees were appointed by the orphans' court in place of one declining; two daughters died intestate, unmar- ried and without issue. Held, that the trustees, under the will and those appointed had power to sell the land so long as any of the trusts continued. The power of the trustees to sell was not limited to the particular share of which each was trustee, but extended to the whole land devised in trust. The power being beneficial was to be liberally construed. The power was limited to the continuance of the trusts, although some of the trusts had ceased, and was therefore not ob- noxious to the rule against per- petuities. Cresson v. Ferree, 70 Pa. St. 446. See also WoUey v. Jenkins, 23 Beav. 53; "Wheete v. Hall, 17 Ves. 86. ' Wood V. White, 4 Myl. & Or. 460. " Jlortlock V. Buller, 10 Ves. 31.5; Wheete v. Hall, 17 Ves. 86; Lants- berry v. Collier, 2 Kay & .J. 709; Wolley V. Jenkins, 23 Beav. 53; MeWhorter v. Agnew, 6 Paige, 111 ; Brown v. Meigs, 11 Hun, 203 ; Hetzel V. Hetzel, 69 N.Y. 1 ; Huek- abee v. Billingsby, 16 Ala. 417; Moore v. Shultz, 13 Pa. St. 101; Salisbury v. Bigelow, 20 Pick. 174. 438. J POWERS OF TRUSTEES. 1013 though one daughter had died and hex- children had attained their majority. ^ § 438. Power on Refusal of Trustee. — Where a power is conferred upon a body, or a number of trustees, and one or more of them decline the trust, the power may be ad- ministered by the remaining trustee or trustees.^ In a re- cent case. A, by his will, devised and bequeathed his estate to B and C, in trust to sell, to invest the proceeds, and to use the income for his daughters during their lives, with remainder over. In case of the death, refusal, or inability of one of the trustees, the testator desired the other to fill the vacancy. One of the trustees refused the trust; the other did not make an appointment in his stead, but alone made sales and gave deeds of the devised realty. It was held that the sales and deeds so made and given by the one trustee were valid.' It is well settled that where a power 1 Trower v. Knightley, 6 Madd. 134; Taite v. Swinstead, 26 Beav. 525. Where an estate was vested in trustees, one-half in trust for A for life, remainder to her children at twenty-one, and the other half in trust for B for life, remainder to her children at twenty-one, with power to the trustees to sell during the continuance of the trust, and the children of one had arrived at twenty-one, and the trnst had de- termined as to their share, it was held that the trustees had power to sell the whole under the terms of settlement; it heing necessary that the trustees should have the right to sell the whole, in order to pre- serve the trust for the full benefit of the other half. Trower v. Knightley, 6 Madd. 134. See also Jefferson v. Tyrer, 9 Jur. 1083; In re Brown, L. R. 10 Eq. 349; In re Cooke, L. B. 4 Oh. D. 454. 2 Crewe v. Bicken, 4 Ves. 97 Hawkins, V. Kemp, 3 East, 410 Cooke V. Crawford, 13 Sim. 96 Adams v. Taunton, 5 Madd. 435 Sands v. Nugee, 8 Sim. 130; Gran- ville v. McXeile, 7 Hare, 156; Bayley v. Cumming, 10 Ir. Eq. 410. See generally Coykendall v. Eutherford, 1 Green Ch. 360; Niles V. Stevens, 4 Denio, 399; Peter v. Beverly, 10 Pet. 532 ; s. c, 1 How. 134; Shelton v. Homer, 5 Met. 466; Treadwell v. Cordis, 5 Gray, 388; Gibbs v. Marsh, 2 Met. 2.52; Wells v. Lewis, 4 Met. (Ky.) 269 ; Osgood v. Franklin, 2 Johns. Ch. 19; Zeback v. Smith, 3 Binn. 69; Burr v. Sim, 1 Whart. 266; Jackson v. Burtis, 14 Johns. 391; Sharp V. Pratt, 15 Wend. 610; Wardwell v. McDowell, 31 HI. 364; Colder v. Bressler, 105 111. 419; Jackson v. Bates, 14 Johns. 391 ; Watson v. Pearson, 2 Exo. 594 n.; Parker v. Sears, 117 Mass. 513; Collier v. Grimsey, 36 Ohio St. 17; Gould v. Mather, 104 Mass. 283; Warden v. Bichards, 11 Gray, 277 ; Tainter v. Clark, 13 Met. 220. 3 Ex parte Bailey, 15 K. I. 60. When a power coupled with a trust is given to two or more per- 1014 POWERS OF TRUSTEES [§ 439. is conferred on a body of trustees, and not upon the indi- viduals by name, and one refuses the trust, the remaining trustee or trustees may execute the power. ^ § 439. The Power to Assign the Trust E'tate. — Where a personal trust and confidence are implied in the instru- ment the discretionary power cannot be delegated. But where the power is given to the donee and his assigns, the power will pass by the assignment, if it is annexed to an interest in the donee. ^ But, without this interest, the as- sons, to be executed by them jointly, and one renounces, the other or others may execute the power as if originally given only to them, that the trust may not fall nor suffer delay. A, by will, devised and bequeathed his estate to B and A in trust to sell, to in- vest the proceeds and to use the income for his daughters during their lives with remainder over. In case of the death, refusal or inability of one of the trustees, the testator desired the other to fill the vacancy. One of the trustees re- fused the trust; the other did not make an appointment in his stead, but alone made sales and gave deeds of the devised realty. Held, that the sales and deeds so made and given by the one trustee were valid. Ibid. ^ Worthington v. Evans, 1 S. & S. 165; Boyce v. Corbally, t. Plunkett, 102 ; Clark v. Parker, 19 Ves. 1; Wells v. Lewis, 4 Met. (Ky.) 269. A testator devised lands to his son for life, and after the death of his son to and amongst his children in such shares as he should appoint, and in default of appointment among such chil- dren equally ; and by a codicil de- clared that the devised premises should not descend to any child or children of his said son, unless to such child or children as he might have by such woman as he should marry with the approbation of the trustees in the will named. Seld, that the child of the testator's son by a marriage, to which the sanc- tion of one of the trustees named in the will, but who had never acted in the trust, had not been obtained, was not thereby disqual- ified from taking in default of ap- pointment under the devise in the will and codicil. White v. Mc- Dermott, I. K. 7 C. L. 1. 2 Cole V. Wade, 16 Yes. 27. But it is then said, the testator has in express words given the power, not only to the original trustees, but to the heirs, executors and ad- ministrators, of the survivor of them ; and certainly nothing can be more express than the declara- tion, that everything, relating to this disposition, as well who are, or are not, to be considered as re- lations and kindred, and the pro- portions they shall take, shall be entirely in the discretion of his said trustees, and the heirs, execu- tors and administrators of the sur- vivor. Though it seems very in- congruous and inconsequential to extend to unknown and unascer- tained persons the power, which personal knowledge and confidence had induced the testator to confide § 439. J POWERS OF TRUSTEES. 1015 signment of the ti'ust estate will not transfer the power to the assignee^ and it will be lost to the assignor, for where the instrument connected the estate and the power, the power is lost by a separation.^ In a recent case it was held that where a mortgage is executed to a trustee, "his assigns and successors," the trustee has implied power to assign the mortgage.'' In New Yorkit has been held that where a trust deed authorizes the trustee to sell and dispose of the trust property on the written request of the cestui que trust, an assignment of a bond belonging to the estate by the trustee, without such request, is unauthorized and confers no title on the assignee.^ Where the founder of a charity named as to his original trustees and execu- tors, yet I am not authorized to strike these words out of the will upon the supposition, though not improhable, that they were intro- duced in this part by inadvertence and mistake. Ibid. 45. It was the rule of the common law, that if a, testator, by his will, directed his executors by name to sell, and one of them died, the others could not sell, because the words of the tes- tator could not be satisfied. 4 Kent Commentaries (5th ed.), 325; Os- good V. Franklin, 2 Johns. Ch. 19; Peter v. Beverley, 10 Pet. 533. 1 Wilson V. Bennett, 5 De Q-. & Sm. 475; Burtfs Estate, 1 Drew. 319; Cole v. Wade, 16 Ves. 27. 2Giselman v. Starr (1895), 106 Cal. 651; s. c, 40 Pac. Kep. 8. "The first point presented by ap- pellant is that the transfer by Gis- elman to Hastings is void, since the note and mortgage are the only instrument creating and con- taining the terms of the trust, and there is nothing in them to show that G had the power to sell or as- sign. If the note and mortgage are the only instruments creating the trust, then is the trustradically defective in naming no beneficia- ries. Civ. Code, § 2221. But aside from this, and treating the instru- menls as defining the powers of the trustee, there is contained in tliem by necessary implication the power to the trustee to sell or as- sign; for the promissoiy note is made payable to G, trustee, or order, and the mortgage was also to G, trustee, his assigns and successors. jSTo evidence having been offered to overcome the presumption that H took the note and mortgage for value, the transfer to him was not in violation of the trust and was valid." Ibid. 3 O'Connor v. Waldo, S3 Hun, 489; S. c, 31 N. Y. Supl. 1105. "The rule has been too well estab- lished to need the citation of au- thorities here that a trustee has no general power of disposition of a trust estate, but must derive such power from the instrument creat- ing the trust, or in special circum- stances it has been held that such Ijower might be implied. But where there is a designation of the method in which the trust estate is to be sold, if at all, there can be no question but that the trustee cannot convey any title except in the manner provided by the trust 1016 POWEES OF TRUSTEES. [§ 440. trustees the holders of certain annual offices, and other trustees were appointed by the court to hold the funds, the selection of the objects was left to the trustees appointed by the settlor. ^ § 440. Powers of Trustees as Survivors. — Where a power is given to executors, as such, it is held to continue to a single survivor, and where it is limited to a number of trustees it may be exercised by the survivors, or by a single trustee. In Putnam Free School v. Fisher, Chief Justice Shipley, in his opinion, said: "Where an estate is devised to executors, eo nomine, in trust, the devise is made to the official, not to the individual persons, and the whole trust vests in tho-e who accept it and become executors of the will ; and where an estate is so devised, or where the execu- tors have by the will a power to sell, coupled with an inter- est in trust, a conveyance by survivors, or by those who alone accept the trust, will be good. ^" But this power can- deed. The provision in tlie deed necessarily excludes all other powers." Ibid. 1 Ex parte Blackburn, 1 J. & W. 297 ; Hibbard v. Lambe, Amb. 309. The wife of an administrator, who obtains the assignment of a judg- ment against the estate on payment of a sum less than its face value, cannot recover from the estate a greater amount than she paid for the judgment, since the rule against a trustee's profiting at the expense of the beneficiaries of the trust applies likewise to the trustee's wife. In re Cake's Estate, 1.57 Ta. St. 457; S. C, 27 Atl. Kep. 773. 2 Trustees Putnam Free School V. Fisher, 30 Me. 523. See Town- son V. Tickell, 3 B. & A. 31 ; Stacey V. Elph, 1 Myl. & K. 195; Knight V. Gould, 2 Myl. & K. 295; Zeback V. Smith, 3 Binn. 69; Taylor v. Galloway, 1 Ham. 232; Sharp v. Pratt, 15 "Wend. 610; Leavens v. Butler, 8 Port. 38. A testator de- vised land subject to payment of his debts to A and B, their heirs and assigns, and he authorized his executors, thereinafter mentioned, with theapprobationof his trustees for the time being, to sell any part of his estate. Held, that the sur- viving executor, with the assent of trustees appointed by the court of chancery (in whom the devised lands were vested by a vesting order), could make a good title. Brassey v. Chalmers, 4 De G., M. & G. 528. See also Williams v. Otey, 8 Humph. 563; Tainter v. Clark, 13 Met. 220,225; Shelton v. Homer, 5 Met. 462; Wilburn v. Spafford, 4 Sneed, 698; Gray v. Lynch, 8 Gill, 403; Conover v. Hoffman, 1 Bosw. 214; Muldrow v. Fox, 2 Dana, 79; Miller v. Meetch, 8 Barr, 417; Meakiugs v. Crom- well, 2 Sandf. 512; "Wardwell v. McDowell, 31 111. 364; Warden v. Kichards, 11 Gray, 277 ; Treadwell v. Cordis, 5 Gray, 341. § 440. ] POWERS OF TRUSTEES. 1017 not be exercised by one teustee during the lifetime of an- other who has not properly disclaimed the trust. ^ In a case where a testator devised his real estate to trustees upon trust to sell, and to hold the proceeds upon trust for his children and their issue, subject to a proviso that no sale should be made without the consent of his sons and daugh- ters, the testator left seven children, one of whom, a daughter, afterwards died, and her husband had become absolutely entitled to her share. The tx"ustees, with the consent of the surviving children and of the husband of the deceased daughter, put up the estate for sale, and it was held that the question, whether an effectual sale could be made without consent of all the seven sons and daughters, was too doubtful for the title to be forced upon a purchaser.^ In a case before the Supreme Judicial Court of Massachu- setts, where the trustees were empowered to sell the trust estate with the consent of a majority of the testator's children then living, and all the children had died, it was held that the trustees could execute the power by a sale of the trust estate and give a good title. ^ Where testator ap- ' Lancashire v. Lancashire, 1 De very nice distinctions concerning G. &Sm. 288; s. C, 2 Phill. 664. the survivorship of powers have 2 Sylses v. Sheard, 2 De G., J. & been taken in the ancient common S. 6. See also Barber v. Gary, 1 law, though, I apprehend that, Kern. 397; Norcum v. D'Oench, 2 even in those cases the only pur- Bennet (Mo.), 98; Williams v. pose of the court was to arrive at Williams, 1 Duvall, 221. "The the actual intention of the donor of thirteenth clause of her will con- 'the power. And, in modern times, fers the power to sell 'when the this is clearly the object in all major part of my children shall those cases which are not governed recommend and advise the same.' by statute law." Sohier v. Will- This makes the recommendation iams, 1 Curtis, 479, 488. In the and advice of a major part of her foregoing the conclusion of the children a condition precedent to court was that the consent of the the exercise of the power. If this major part of those living at the condition has not been complied time when the sale was made was with it is the same as if no power sufficient. See further on the point of sale existed, and no title can be of the intention as controlling, made. The question is, if it has Peter v. Beverly, 10 Pet. 532; s. c, been complied with. This is purely 1 How. 134; Osgood v. Franklin, a question of the intention of the 2 Johns. Ch. 19. testatrix, to be deduced by con- ^ Eeeds v. Wakefield, 10 Gray, struction from her will. Some 514. "The purpose of the testator, 1018 POWERS OF TEUSTEES. [§ 441. pointed three executors, with power of appointment in case of a wayward son, and one only of the executors accepted the trust, it was held that, as sole executor, he had right- fully exercised the power to appoint.' § 441. Powers of New Trustees. — In some of the States the powers of new trustees are regulated by statute. In a recent case before the Court of Appeals of the State of New York trustees appointed by a will refused to accept, whereupon the Supreme Court appointed one C to execute the trust. Afterwards C was discharged on his own peti- tion, and the court appointed defendants to hold the estate in trust for the beneficiaries, but without limiting their powers as such trustees, or defining the manner in which they should execute the trust. It was held that the ap- pointment of defendants was not an exercise of the general equity powers of the court, but was pursuant to the statute authorizing the court "to appoint a new trustee in place of we think, was to make a disposi- tion of liis whole estate, and the mode was by ordering his executOT- to sell, as soon as all the children should come of age and the widow decease; should she die before the youngest child was of age, the sale might then be postponed until the latter contingency should happen; it was then to be made. There might, therefore, be a case in which the sale should be made, when all or some of the children should be living and of age, and then it was the intent of the testator that such consent should be obtained. But if on the decease of the widow there were no children surviving, no children then living, there was no apparent purpose which could have affected the mind of the tes- tator, to prohibit 'a sale, when such consent of the children had become alike unnecessary to pro- tect their interests, and impossi- ble; we think the condition was annulled by the events of all the children dying, and, therefore, that the power became thereby un- conditional. Whether this would be the case with respect to a mere naked power, the right execution of which depends upon a strict compliance with all the terms on which it is given, or not, we have no doubt that it applies to a trust power, where the execution of the power is obviously a means only of carrying into effect the ultimate object of the testator, in providing for the benefits specially desig- nated for the declared objects of his bounty." Ibid. 519. See also Williams v. Williams, 1 Duvall, 374. 1 Eaton V. Smith, 2 Beav. 236. See also Bradford v. Belfield, 2 Sim. 264 ; Titley v. Wolstenholme, 7 Beav. 424 ; Granville v. McISTeal, 7 Hare, 156; Hall v. May, 3 Kay & J. 585; Cooke v. Crawford, 13 Sim. 91. § 441. J POWERS OF TKUSTEES. 1019 a trustee resigned or removed," and defendants took all the powers conferred by the will on the original trustees. ^ In a recent case in Cojmecticut it was held that where the first paragraph of a will conveys an estate in trust to certain persons named, "and their successors," and the entire scheme of the will requires that such successors should pos- sess the same powers and discretion as the trustees named, the powers conferred on the original trustees, though dis- cretionary, may be exercised by their successors in the trust. ^ In some of the States new trustees will be vested with all the powers of the original trustees by order of the court. In a late case before the Supreme Court of Georgia, it was held that the power of sale conferred by a trust deed on the original trustees passed to and could be legally ex- ercised by the new trustee appointed by the court, the order of appointment expressly providing that he was to be clothed with all the powers which they possessed.^ I Labey V. Kortright (1892), 132 IvT.Y. 450; s. C, SOisr.E.Kep. 989; "While a mere power of sale is discretionary and does not survive the donee of the power, it is other- wise when the power is coupled with a trust. Then it is taken by the trustees, and through the court of equity may be transmitted to their successors in the trust. In the present case the power of sale independent of, and disconnected with, the trust to receive and apply the rents and profits, would not have survived the renunciation of the persons named as executors. But by reference to the provisions of the will, as well as that creating the power of sale as other portions, to ascertain its applicability as con- templated by the testator, it seems that this power in its practical and essential purpose was intended to be applicable to the subject of the trust, which was to continue during the lives respectively of the bene- ficiaries, and being thus annexed to such trust in aid of its execution it would be taken by the trustees." Ibid. 456. See also Leggett v. Himter, 19 N. Y. 445. 2 Security Company v. Cone (1894), 64 Conn. 578; s. c, 31 Atl. Eep. 7. ^ Freeman v. Prendergast (1894), 94Ga. 369; s. c.,21 S. E. Kep. 837. "Their (the beneficiaries) equitable ownership in remainder of the Iden- tical property itself was exactly the same after the substitution of trustees as it was before; and ac- cordingly, under the doctrine as- serted by Calvert, they were not necessary parties to the proceed- ings by which the substitution was effected. After the appointment of the new trustee tbey were pro- tected by his bond, and, of course, he then became accountable to the cestui que trvat for all the trust property which came into his hands, and for the propermanage- ment and disposition of the same. Under the English practice, when 1020 POWERS OF TRUSTEES. [§ 442. § 442. Executors as Trustees Where an executor is also a trustee under the will the duties of the two offices are to be separately and distinctly discharged. Neither the offices nor the duties coalesce on account of meeting in the same person. In a recent case it was held that where ex- ecutors are also made . trustees under the will the two ca- pacities are distinct and separate, and the executors, having duly qualified as such, cannot assume the rights and duties of trustees until the court has approved their accounts as executors and ordered a distribution. ^ While the duties of executor and trustee are altogether distinct, the office of trustee may arise out of the duties belonging to that of the executor. In a recent case in Vermont it was held that an executor who, by virtue of his appointment, holds a certain part of the estate for distribution, the income of which, by the terms of the will and the order of the court, is to be paid to a designated person for life, is a trustee for the life beneficiary and liable to account to her, as such, for the disbursement of the income.^ there was a change of trustees, there was a formal conveyance from the old to the new trustee. * * * Under our system, how- ever, there is no formal conveyance from the old to the new trustee, but the title passes to the latter by virtue of his appointment." Ibid. 378. Where a will gave the trus- tees named power to sell the prop- erty devised to them in trust, "if they think proper, and it should so happen that some of the property ought to be sold for the benefit of the daughter, so as to buy her some negroes or other property to assist her." Seld, that the power was personal and discretionary in the trustees named, and on their resignation and the substitution of a new trustee, did not pass to him. Partee v. Thomas, 11 Fed. Kep. 769. 1 In re Higgin's Estate (1895), 15 Mont. 474; s. c, 39 Pac. Rep. 506. See also Hall v. Gushing, 9 Pick. 395; Fay v. Bradley, 1 Pick. 194; Parsons v. Mills, 1 Mass. 431 ; s. C, 2 Mass. 80; Newcomb v. Williams, 50 Mass. 525; Prior v. Talbot, 10 Gush. 1 ; Town v. Ammidown, 20 Pick. 535; Miller v. Gongdon, 14 Gray, 114. 2/ji re Hodges' Estate, 63 Vt. 661 ; s. c, 22 Atl. Bep. 725. "It is further contended that S H did re- ceive from the probate court an appointment as trustee and cannot be held to stand in that relation to the fund or its beneficiary. * * It is certain that S H, by virtue of his appointment as executor, held a certain part of this estate for future distribution, the income of which was, by the terms of the will and the order of the court, to be paid to P H during her life. * * After the ascertainment of the § 443. J POWERS OF TRUSTEES. 1021 § 443. Powers of Co-trustees, as Such. — In the case of a strict trust, not public, all the trustees must act to- gether, unless the power to act is given to a less number, either expressl}' or by fair and necessary implication.^ In a case before the Supreme Court of the United States, where there were two trustees of the property of insolvents, and one of them made an assignment, but the other neither joined in it, nor assented to it afterwards^ it was held that the assignment was void.^ In the case of Insurance Com- pany V. Chase, before the Supreme Court of the United States, Mr. Justice Davis, in delivering the opinion of the court, said: "It is true that in the administration of a trust, where there is more than one trustee, all must con- cur, but the entire body can direct one of their number to transact business which it may be inconvenient for the others to perform, and the acts of the one thus authorized are the acts of all and binding on all. The trustee thus acting is to be considered the agent of all the trustees, and not as an individual trustee."'* In Ex parte Eigby, amount of the residuum, and the named. This is the general rule, decree leaving it in the hands of In the application of the rule the executor to be applied to the there is difficulty sometimes in de- use of the widow In accordance termiuing whether the case under with the provisions of tlie will, the consideration is a private trust or a executor was under the obligations public trust." Ibid. ill. of a trustee as completely as if so ''- Wilbur v. Almy, 12 How. 180. named in the will and appointed by See also Brennan v. Wilson, 71 jST. the court." lUd. 665. See also Y. 502, 507; s. c, 4 Abb. (If. Cas.; Clark V. Powell, 62 Vt. 442. 279 ; Larned v.Welton, 40 Cal. 349 ; iSloo v. Law, 3 Blatchf. 459. Crave v. Decker, 22 Hun, 452, "If a trust is created, and two or One of two executors, to whom more trustees are appointed to ex- property is left in trust to carry on ecute it, and it is a public trust — a a partnership business cannot, trust for the benefit of the public, without the assent of his co-ex- in which the public are interested ecutor, execute a series of mort- — then, if it does not appear from gages on all the trust property for the instrument creating it, that it the purpose of finally distributing must be executed by the whole the same among certain firm cred- number of trustees named, and not itors. ■ Carr v. Hertz (1895), (N. by a less number, it can be executed J. Eq.) 33 Atl. Kep. 194. by a less number than the whole ^ jjQ^ya].,! f'ij'e jng. Cq. v. Chase, number named. It maybe ex- 5 Wall. 509, 514. SeeBlanchardv. ecuteJ by a majority of the trustees Waite, 28 Me. 59. 1022 POWERS OF TRUSTEES. [§ 444. l/ord Eldon distinguished the case of the trustee from that of the executor. He held that the signature of one trustee to a bankrupt's certificate, without authority to act for the other, is not suiEcient, and that one executor can do any act, but not one trustee. ^ In Massachusetts it has been held that where a part owner of a vessel effects in- surance for himself and the other owners, without their previous authority, they may ratify his acts after they ob- tain knowledge of the loss of the vessel, and the bringing of an action on the policy in their names is a sufficient rati- fication of his act.^ In a recent English case it was held that where a trustee of a fund, who has a beneficial interest in the fund, has concurred in a breach of trust, the loss must be borne by his share, and he cannot claim con- tribution from his co-trustee. It makes no difference that the beneficial interest only accrued to him subsequently to the breach of trust.* § 444. Powers of Feme Covert, or Infant, as Trustees. — An infant, or a feme covert, may hold the office of trus- tee and be held responsible for their acts as such. In a ^ Ex parte Rigby, 19 Ves. 463 ; own negligence. Darnaby v. Sinclair v. Jackson, 8 Cow. 643; Watts, 13 Ky. Law Kep. 457. A Bowers v. Seeger, 8 Watts & S. trustee who permits his co-trustee 222; Abbott v. American Hard to use funds of the estate, giving Rubber Co., 33 Barb. 579; Leggett his note for the amount, with a V. Hunter, 19 IST. Y. 445; Lewis v. railroad bond as collateral security Reed, 11 Ind. 239; Finney v. Fair- is accountable for the amount so haven Insurance Co., 5 Met. 192; used. where the co-trustee becomes Foster v. U. S. Insurance Co., 11 insolvent and the bond pledged as Pick. 85 ; Blanchard v. Waite, 28 collateral security is recovered by Me. 51, 59. a third person, claiming the same 2 Finney v. Fairhaven Insurance adversely to the co-trustee. In re Co., 5 Met. 192, 196. Cozzen's Estate, 2 Con. Surr. 622; 3 Chillingworth v. Chambers, 13 s. c, 15 N. Y. Supl. 771. If there Reports, 787. See also Bahin v. be two joint trustees with a joint Hughes, L. R. 31 Ch. D. 390. One power of attoi-ney to sell, the trust of several joint trustees is not cannot be executed by one alone, liable for the acts and defaults, or either in the lifetime of the other intentional and negligent breaches or after his death. A power of of trust, of a co-trustee, in which attorney becomes invalid by the he had not concurred and which death of the principal, except so he had not made possible by his far as the attorney has an interest § 444. J POWERS OF TRUSTEES. 1023 case where A, doing business under the shelter of the name of B, a feme covert, purchased land with his o^Yn money, the title being made to B for his own use. Subsequently he sold the land, conveying it, as attorney in fact for B, under a power of attorney from her. It was held that the conveyance was valid, notwithstanding the coverture of the trustee.^ Whatever doubts may have been entertained at an earlier day, it has long been settled that the deed of an infant, being an executed contract, is only voidable at his election, not essentially void. It serves to transmit the title, and there are cases in which it has been held that such a deed is not even voidable. In Irvine v. Irvine it was held by the United States Supreme Court that, although it is not necessary to the affirmation of an infant's voidable deed that there be an act of affirmance by him after he comes of age, as solemn in character as the original act itself, still mere acquiescence, without anything else, is not generally sufficient evidence of affirmance. Any ratification or affirmance of a clear and unequivocal character, showing an intention to affirm the deed, is enough.^ coupled with the power. Upon the and will therefore be sustained by death of one of two joint trustees, acourt of equity against her heirs." the trust does not survive to the Gridley v. Weygant, 23 How. 500. other, unless such a provision be See In re Campbell's Trusts, 31 inserted in the deed of trust. Boone Beav. 176. V. Clarke, 3 Cranoh C. C. 389. ^ Irvine v. Irvine, 9 Wall. 617. ' Gridley v. Westbrook, 23 How. "He (plaintiff) contended, and he 503. "Where a married woman asked the court to so instruct the became a trustee of land for the jury, that an act of affirmance must benefit of her son-in-law, and ex- be as solemn a character as the ecuted a deed (without joining deed itself. This instruction the her husband) to a bona fide pur- court declined in terms, stating, chaser, who had paid the purchase however, that mere acquiescence, money to the cestui que use, it was however long, if short of the stat- not necessary, under the circum- utory period of limitations, is not stances of the case, for her husband sufficient, and that an act of con- to join in the deed. These cir- firmation, if not equally solemn cumstanoes were, that by executing with the deed, must be of such a the deed she did not defeat an es- solemn and undoubted nature, of tate to which her husband was en- such clear and unequivocal char- titled, nor did he claim adversely acter, as to establish a clear inten- to the deed, but it was within the tion to confirm the deed after a full scope of her authority as trustee, knowledge that it was voidable. 1024 POWERS OF TRUSTEES. [§ 445. § 445. Power to Make Repairs and Improvements. — Under the general powers appertaining to the oiEce, a trustee who is authorized to manage real estate for a per- son incajDable, from infancy, lunacy, or other cause, of giv- ing directions, may make needful repairs. It is not per- mitted to him to make expensive improvements on his own responsibility, but he must not permit the estate to go to waste for lack of necessary repairs, and under his general powers he may do what is essential to the preservation of the trust property. In California it has been held that trustees with invested general powers of control and man- agement are not bound to the strict limitations placed on mortgagees in possession, but are justified in making ordi- nary repairs and improvements, and in insuring the prop- erty, and are allowed to hold the estate until reimbursed, and that this right does not depend upon the consent or Certainly this was all that the plaintiff had a right to demand. There is a well recognized dis- tinction between the nature of those acts which are necessary to avoid an infant's deed, and the character of those that are sufficient to con- firm it. The authorities frequently assert that such a deed cannot be avoided except by some act equally solemn with the deed itself. Some assert that it cannot be done by any- thing short of an entry; and this, whether the deed operates by livery of seizin, or transmits the title by virtue of the statute of uses. Others hold that it may be avoided, with- out a previous entry, by another deed made t© a different grantee. But all the authorities recognize the doctrine, that acts which would be insufficient to avoid such a deed may amount to an affirmance of it. While, generally, it has been held that mere acquiescence, though long continued, will not suffice, yet even that, in connection with other circumstances, may establish a ratification." Ibid. See also Cres- Inger v. Lessees of Welch, 15 Ohio, 193; Drake v. Kamsey, 5 0hio,251; Ferguson v. Bell, 17 Mo. 347; Bostwick V. Atkins, 3 Comstock, 53. "However, an infant may ex- ercise a power simply collateral over both real and personal estate, and as to personal estate he may exercise a power in gross, notwith- standing it may involve the appli- cation of discretion, but as to real estate it would seem that such a power could not be exercised un- less expressly authorized by the instrument creating the power. And where an intention appears that the power is to be exercisable notwithstanding the infancy, an infant may appoint even although his interest may be affected by the appointment. A trust which re- quires the exercise of discretion cannot be executed by an infant." 1 Lewin on Trusts, *37. See also Zouch V. Parsons, 3 Burrv 1794. § 445.] POWERS or TRUSTEES. 1025 knowledge of the cestui que trusts In a case in Massachu- setts where an estate, bought by a trustee, needed extensive 1 Woodard v. Wright, 82 Cal. 202; Parsons v. Winslow, 16 Mass. 361; Watts v. Howard, 7 Met. 478; Williams v. Smith, 10 E. I. 280; Mannis v. Piircell, 46 Ohio St. 102; s. c, 15 Am. St. Kep. 562; Sohier V. Eldredge, 103 Mass. 3.51 ; May- field V. Kilgour, 31 Md. 241 ; Smith V. Gibson, 15 Minn. 66; Kearney V. Kearney, 17 X. J. Eq. 59; Green V. Winter, 1 Johns. Ch. 26; s. C, 7 Am. Dec. 475; Herbert v. Her- bert, 57 How. Pr. 333 ; In re Odell, 1 Conn. 94; Randall v. Dusenberry, 63 ]Sr. Y. 645; Hepburn v. Hep- burn, 2 Bradf. 74; Downey v. Bul- lock, 7 Ired. Eq. 102; Gilliland v. Crawford, 4 Ir. Eq. 35; Bridge v. Brown, 2 Y. & Coll. 181 ; Attor- ney-General V. Geary, 3 Meriv. 513; Fontaine v. Pellet, 1 Ves. Jr. 337. A trustee with full power to manage the trust estate, which consists of realty, may so contract for repairs that the one furnishing them may acquire and enforce a mechanic's lien. Cheatham v. Eowland, 92 N. Car. 340. Where a trustee materially improves the estate, under the honest belief, with reasonable grounds for that ■ belief, that it is his own property, and the amount received from the sale of the land is increased in consequence of such improvements, he is entitled to the excess but no more. Pratt v. Thornton, 28 Me. 355. The testator's widow, a tes- tamentary trustee, who is author- ized and directed to licep his estate together, in her possession, and to apply the rents and profits to the support of herself and her chil- dren, until the youngest shall at- tain its majority, with the power to sell and reinvest in other prop- 85 erty, cannot erect permanent im- provements on a vUcant lot to the extent of four times its value. Dickinson v. Conniff, 65 Ala. 581. As to power to make improve- ments, see Cogswell v. Cogswell, 2 Edw. Ch. 231 ; L'Amoreaux v. Van Eensalaer, 1 Barb. Ch. 34; Wykoff v. Wykoff, 3 W. & S. 481; Tatum V. McLellan, 56 Miss. 3.52; Thomp- son V. Thompson, 16 Wis. 91 Ames V. Downing, 1 Bradf. 321 Myers v. Myers, 2 McCordEq.214 s. c, 16 Am. Dec. 648. The costs of improvements erected on a trust estate in reliance on the estate and followed by a promise of the trus- tee to pay for them, is properly chargeable against the trust prop- erty. Field V. Wilbur, 49 Vt. 157. A guardian who has erected birild- ings on his ward's land, without authority, will not be reimbursed. See Payne v. Stone, 7 Sm. & M. 367; Hassard v. Eowe, 11 Barb. 24; Bellinger v. Shafer, 2 Saudf. Ch. 293; Putnam v. Eitchie, 6 Paige, 390 ; Haggarty v. McCanna, 25 X. J. Eq. 51. See also Williams V. Smith, 10 E. I. 280; Spindler v. Atkinson, 3 Md. 409; s. C, 56 Am. Dec. 755. A mine was conveyed to a trustee to operate and apply the profits to its expenses and the payment of certain debts, and then to reconvey to the defendant. After the trustee had mined some $20,- 000, the vein which had been yielding abundantly suddenly failed, and in fruitless efforts to find the lost vein $52,000 indebt- edness was incurred. These efforts were all approved by the defend- ant. It was held that it was proper to charge these expenses upon the property, under the terms of the 1026 POWKRS OF TRUSTEES. [§ 445. tepairs, it was held that the expense of putting the estate into a tenantable condition should be a charge on the prin- cipal fund, and that the expense of keeping it in repair should be a charge on the income.^ In a recent case in New York, where the testator left two of his sons valuable warehouse and wharf property, in trust for themselves and others, the survivor to continue as sole trustee, and on his death the property to be sold and proceeds divided, and empowered them to improve the property if they saw fit, mortgaging it therefor if, in their judgment, needful, and to receive the earnings and account to the heirs therefor, less expenses and disbursements. The surviving trustee built a shed on the wharf, which was needed to retain busi- ness, and which increased annual earnings to the extent of nearly half its cost, and paid for it himself. It was held that the surrogate's order that he should retain such in- crease from the earnings until reimbursed was unobjection- able. ^ Where a tenant for life had expended large sums in comiDleting a mansion left unfinished by testatrix, and in other permanent and expensive improvements, and also in making payments to keep a foreign mine working so as to declaration of trust, and that the saith, 7(J Me. 173; Cheatham v. defendant having approved of such Rowland, 92 N. Car. 343. e:xpenditures could not complain. ^ j„ ,.g Xesmith (1S94), 140 X. Y. Gisborn v. Charter Oak Life Ins. 609; S. C, 35 X. E. Rep. 942. "A Co., 142 U. S. 326. discretionary power to make a dis- ^ Parsons v. Winslow, 16 Mass. bursement of income, in the course 861. See also Powys v. Bhigrave, of the management of the trust 4 De G., M. & G. 458; Harnett v. property, may be deemed to be Maitland, 16 Mees. & W. 257; At- within the testamentary intention, torney-General v. Geary, 3 Meriv. and if it is restricted to such mat- 513; Gower v. Eyre, Coop. 156; ters as tend to preserve it, or to Marlborough v. St. John, 5 De G. make it efficient for earning pur- it Sm. 181 ; Hibbert v. Cooke, 1 S. poses, there can be no violation of & S. 552; Caldecott v. Brown, 2 the statute. We should say that it Hare, 144; Bostock v. Blakeney, 2 is within the purview of the trust Bro. Ch. 653; Hamer v. Tilsley, that the trustee should expend its Johns. 486; Dent V. Dent, 30 Beav. income in maintaining its effi- 363; Nairn v. Majoribanks, 3Russ. ciency. Whether, in a particular 582; In re Barrington's Estate, 1 case, the application of the income John. &H. 142; Dunne v. Dunne, was for such a necessary purpose, 3 Sm. & Gif. 22; Veazie v. For- or not, is largely, if not wholly, a § 446. j POWERS OF TRUSTEES. 1027 prevent its forfeiture, it was held that ho was entitled to no allowance for these sums out of the personal estate of the testatrix held upon similar trusts, or to any inquiry respect- ing them, except those laid out in completing the mansion and for the foreign mine, as to which an inquiry was directed whether the outlay was for the benefit of the in- heritance. ^ § 446. Power to Lease Trust Estate The power to lease the trust estate belongs to the general official powers of a trustee where there is a general control of the prop- erty. And where this is necessary, in order to raise money for the preservation of trust property, or for the support of dependent beneficiaries, it becomes his duty to lease the estate. It may be a question to what extent or for how long a time a lease may be given. In England a lease for a long period, as ninety-nine years, will not be sustained.^ In another case it was held that a lease might be made for a term of ten years. ^ In a recent case it was held that where a will devises land to a trustee for the life of a third person, with power to sell, a lease executed by the trustee question to be determined by the ment a lease of a holding is au- facts." Ibid. QU. thorized to be made, provided that 1 Dent V. Dent, 30 Beav. 363. the best rent or reservation in the 2 Attorney-General v. Owen, 10 nature of rent is reserved, on a Ves. 555, 562. See also Fitzpatrick lease to the tenant of the holding, V. Waring, L. K. 11 Ir. K. 35; it shall not be necessary, in esti- Middleton v. Dodswell, 13 Ves. mating such rent or reservation, to 268; Drohan V. Drohan, 1 B. & B. take into account against the ten- 185; Bowes V. East London Water ant the increase (if any) in the Works Co., Jacobs, 324; Naylor v. value of such holding arising from Arnitt, 1 Euss. & M. 501; GrifHn v. improvements made or paid for by Ford, 1 Bosw. 123; Easly v. Dye, him." Lewin on Trusts, *595. 14 Ala. 158; Kobinson v. Kettle- Where land deeded in trust to rent well, 4 Edw. Ch. 67. and pay over the rents, and on the 2 Nay lor v. Arnitt, 1 Kuss. & M. happening of a certain event to 501; Middleton v. Dodswell, 13 deed in fee, is subject to the right Ves. 268. '"Trustees having power of another to a renewal of a lease to grant leases to 'any person or thereon, the trustee may be oom- persons' may lease to a limited pelled to execute the renewal company. By section 43 of the lease. Gomez v. Gomez, 147 N. Agricultural Holdings (England), Y. 195; s. c, 41 N. E.Eep. 420. Act 1883, when by any instru- 1028 POWERS OF TRUSTEES. [§ 447. for a certain term, with an agreement to renew at the end of the term for another term, cannot be renewed by the lessee after the death of the person during whose life the trustee was to hold, as such an agreement in the lease does not bind the remainder-man.^ In a late case in Kentucky it was held that where one deeds land to trustees for edu- cational purposes, with reversion to himself and heirs on a failure of trust, and after many years the buildings become dilapidated, and the trustees have no funds for repairs or for carrjdng on the trust, such trustees have power to lease the land for a term of years to any one agreeing to erect ample buildings thereon, and to use them solely for the purposes of the original trust. ^ § 447. Power to Insure Trust Property. — It is well established that a trustee may insure trust property to its full value on his own responsibility. In the case of Insur- ance Company v. Chase, before the Supreme Court of the United States, Mr. Justice Davis, delivering the opinion of 1 Bergengren v. Aldrich, 139 Mass. 259; s. C, 29 N. E. Eep.667. 2 Trustees fof Madison Academy v. Board of Education of Rich- mond (1894) (Ky.), 26 S. W. Rep. 187. If the donor took possession of the personal property as the agent, for the purpose of hiring the slaves to some other person, with the view of raising a fimd to free him from the claims of cred- itors, and did actually hire him under such agency, the transaction is not a loan, within the second section of the statute of frauds. Bank of Alabama v. Craft, 6 Ala. 622. A trustee cannot, by permitting the property of his cestui que trust to be hired out by another, devest the title of the donees, or subject the property to the payment of his own debts, or those of a third per- son, the donees being infants. Easly V. Dye, 15 Ala. 158. Trus- tees with power to pay debt, etc., out of ;an estate, but not to sell, take by implication the power to lease the real estate on tei-ms usual in the locality. In re 0"Deirs Es- tate, 1 Conn. (N. Y.) 91. See also Robinson v. Kettlewell, 4 Edw. Ch. 67; Perry on Trusts, § 484. Where a trustee, duly authorized, has rented a store belonging to the trust estate, and in the lease agreed to keep the shelving in the store in repair, the trust estate is liable for damages occasioned by his failure so to do. Miller v. Smythe (1893), 92 Ga. 134; s. C, 18 S. E. Rep. 46. A trustee of lands devised to a lunatic for life may be required to apply the rents and profits of such land to the payment of claims for the board and lodging furnished the lunatic, although the will con- tains no such direction. Humbers V. Cent. Kentucky Lunatie Asylum (1895) (Ky.), 30 S. W. Rep. 964. § 447.] POWERS OF TRUSTEES. 1029 the court, said: "That a trustee, having no personal inter- est in the property, may procure an insurance on it, is a doctrine too well settled to need a citation of authorities to confirm it. As early as 1802 the judges of the Exchequer Chamber held that an agent, trustee or consignee could in- sure, and that it was not necessary that the assured shoiild have a beneficial interest in the property insured, and the rule established by this case has ever since been followed by the courts of this country and of England.^ A trustee, therefore, having the right, is justified in insuring the 1 Columbian Insurance Co. v. Lawrence, 2 Pet. 25; s. c, 10 Pet. 510. "That a' trustee having no personal interest in the property may procure an Insurance on it, is a doctrine too well settled to need a citation of authorities to confirm it. As early as 1802 the judges of the Exchequer Chamber, in the case of Lucena v. Crawford (3 B. & P. 75), held that an agent, trus- tee or consignee could insure, and that it was not necessary that the assured should have a beneficial interest in the property insured, and the rule established by this case has ever since been followed by the courts of this country and England." Justice Davis in Insur- ance Co. v. Chase, 5 Wall. 509, 513. See also Swift v. Mutual Fire Ins. Co., 18 Vt. 313; Goodall v. New England Fire Ins. Co., 5 Foster (IST. H.) 18G ; Putnam v. Mercantile Ins. Co., 5 Met. 886; Crauford v. Hun- ter, 8 T. E. 13. Where a trustee has full power to select thp com- pany or companies in which to insure the trust property, he is to be held merely to the exercise of due care to select solvent com- panies or those generally so con- sidered and not as a guarantor of their solvency. Gettins v. Scud- der, 71 111. 86. It ons who holds real estate in trust for others dur- ing their life, with a reversion to himself after their death, procures insurance thereon in his name as trustee, to an amount not shown to exceed the value of the life inter- est, the money received by him upon such insurance, after a loss by fire, belongs to him as trustee, and is not liable to be attached by his private creditors. One who has received personal property by a conveyance which is fraudulent as against creditors has neverthe- less an insurable interest therein, and in case of loss by fire is en- titled to hold the money received upon such insurance as against the creditors. Lerow v. Wilmarth, 9 Allen, 882. "If these parties were trustees for the real owners, they were bound to keep the prem- ises insured." Garvey v. Owens (1890), 12]Sr. Y. Supl. 349. "In- suring the buildings against fire, was a proper precaution, especially when they were unoccupied; we have during the present term de- cided that it is a proper chai-ge." Baldwin, J., in Burr v. McEwen, Baldw. 154, 162. But see Bailey V. Gould, 4 Y. & C. 221; Ex parte Andrews, 2 Eose, 410; Dobson v. Land, 8 Hare, 216; Fry v. Fry, 27 Beav. 146. 1030 POWERS OF TRUSTEES. [§ M7. property, even to its full value, although there is no obliga- tion on him, in the absence of express directions, to insure at all."^ Where a trustee, who has insured trust property, is authorized by the cestui que trust to adjust the amount of loss and sue for its recovery, he may refer the matter to arbitration, and an award in pursuance of such reference will bind the cestui que trust? A distinction is made be- tween the case of a trustee, in the ordinary sense, and that of a mortgagee. It has been held that a mortgagee of property who is not, by an express agreement with the mortgagor, entitled to insure the property at his expense or to require the mortgagor to insure it, is not entitled to make the premiums which he paj's for such insurance a charge upon the property. The principle on which a court of equity restrains a person, sustaining a fiduciary relation, 1 Insurance Co. v. Chase, 5 Wall. 509. See Finney v. Falrhaven Ins. Co., 5 Met. 192. "A trustee would probably be justifled in insuring the property, and in case ol loss the insurance money would belong to the cestui que trust; but where there is a tenant for life entitled to the income, it would be safer to have such tenants consent before paying the premiums out of his income."' 2 Perry on Trusts, § 487. "A mortgagee is not to be re- garded as a trustee, and if in the absence of any stipulation on the subject he effects an insurance, it is on his own account, and he can- not claim to be entitled to the premiums under just allowances. It is the same as if the lessor or lessee insured, in which case the other would have no claim to the benefit of the policy." 1 Lewinon Trusts, *580. See Dobson v. Land, 8 Hare, 216 ; Ex parte Andrews, 2 Rose, 410; Phillips v. Eastwood, D. & G. t. Sugden, 289. 2 Brown v. Hartford Ins. Co., 11 Law Rep. (X. S.) 72G. "It does not appear that they had any in- terest in the property or in the in- surance except as trustees; they held the property and paid the premium in that capacity; by the express terms of the policy the amount of the loss was made pay- able to their cestui que trust; and it is not averred that they were em- powered by him to bring the ac- tion. Though it is sometimes true, that where insurance is effected by an agent or trustee in his own name, for his principal or cestui que trust, the former may, maintain the action, he cannot do so where it appears he has no interest in the insurance, and no authority from his principal or cestid que trust to sue, and the policy expressly makes the money payable to the principal or centui que trust." Curtis, J., in Brown v. Hartford Ins. Co., supra. See also Reed v. Pacific Ins. Co., 1 Met. 106; Jef- ferson V. Cotheal, 7 Wend. 72; Farrow v. Commonwealth Ins. Co., 18 Pick. 53. § 448.] POWERS OF TRUSTEES. 1031 from having any dealings with trust property for his own benefit, dyes not apply to the relation of a mortgagor and mortgagee.^ § 448. Power to Borrow Money. — The trustees of an ordinary trust may borrow money where the power to bor- row is conferred by the instrument, and where they have the management of the trust estate or are authorized to conduct the business of the estate. But he will be sustained in borrowing only in so far as it may be necessaiy to carry out the purposes of the trust, to preserve the estate from waste, or to meet the demands of creditors. Where bor- rowing is authorized by the instrument, the directions of the trust must be conscientiously followed. In a recent case, where a testator, who had large business interests and outstanding obligations, by his will devised and bequeathed all his estate to his executors in trust, for the term of five years, with full power to sell and mortgage, the will con- taining the further recital: "My object in creating the aforesaid trust is in order that my estate may be kept together in the manner therein provided, until my various business interests can be closed up advantageously to my said estate," it was held that the will created a trust, which authorized the trustees to extend and renew indebted- ness of the testator, and to execute new notes binding on the estate for money to pay maturing indebtedness in the legal discretion of the trustees.^ In England it has been ^ Dobson v. Land, 8 Hare, 216; pursue his remedy against the trus- ts; parte Andrews, 2 Rose, 412. tee. See generally, Short v. Porter, 2 Packard v. Kingman (1896) 44 Miss. 535; Woods v. Kedley, 27 (Mich.), 67 N. W. Rep. 551. Miss. 119; Bloom v. Wolfe, 50 Iowa, See also Ferry v. Laible, 31 N. 286; Norton v. Phelps, 54 Miss. J. Eq. 567; Mason v. Pomeroy, 471; S. C, 105 U.S. 393; Clopton 151 Mass. 164; s. c, 24 N. E. Rep. v. Gholson, 53 Miss. 471; Mason v. 202; Hewitt v. Phelps, 105 U. S. Pomeroy, 151 Mass. 166; s. c, 24 393; Burwell V. Garwood, 2 How. N. E. Rep. 202; Association v. Mc- 560; Willis v. Sharp, IISN.Y. 586; Allister, 1.53 Mass. 293; s. c, 26 N. s. c, 21 X. B. Rep. 705; Printup B. Rep. 862; Glenn v. Allison, 58 V. Trammell, 25 Ga. 243. The Md. 527; Day v. Brown, 2 Ohio, effect of these contracts is usually 345; Fowler v. Insurance Co., 20 to bind the trustee personally, and Hun, 195; Thiyer v. Wendell, 1 the other contracting party must Gall. 37. '-Where the p.arties ex- 1032 POWERS OF TRUSTEES. [§ 448. held that trustees or directors of a trading company or partnership have no power, whatever may be the circum- stances or necessities of the case, to borrow money beyond the capital prescribed by the act or deed of settlement, so as to give the lenders a remedy against the company. ^ In late cases, however, there has been some conflict of decis- ions and some modifications of the rule. In Troup's case. Sir John Eomilly, M. E.., stated the doctrine as follows: "Where the directors of a company have no power to bor- pressly contract that no personal liability shall attach to the trustee, the creditor would necessarily de- pend upon such liability as might be lawfully created against the estate, and it is possible that his remedy might be limited to a suit in equity." Packard v. Kingman, supra. The will creating the trust provided that the rents, issues and profits of the estate were to be dis- posed of as the trustee might think proper, for the maintenance, edu- cation and advancement of his children until the youngest child attained the age of twenty- one years, when the corpus of the estate was to be divided amongst them. During the latter part of the father's trusteeship receivers were appointed to manage the estate and sell and dispose of the crops, and receive and apply the income, rents and profits, under the direction of the court. On exceptions to auditor's report, distributing the trust fund, it was held: * * That a claim for money borrowed to en- able the trustee to carry out the purposes of the trust wus proper to be allowed out of the income. Burroughs v. Burroughs, 70 Md. 18. A grantor being indebted, con- veyed land to a trustee in trust to enable the latter "to sell such parts of said property as may be desired to settle and satisfy said debts, * * * and in order to settle said debts he may give his individual notes for the same and execute a mortgage, on the before described lands and lots, or any part thereof, to secure the same upon such terms and payable at such times as may to him seem proper and advisable." Held, that the deed authorized the trustee to borrow money to meet the debts and to execute his per- sonal note therefor, secured by a deed of trust on the land. Orr v. Rode, 101 Mo. 387. See also Loebenthal v. Raleigh, 36 ?f. J. Bq. 172; Bank v. McKnight, 2 Mo. 42; Warner v. Insurance Co., 109 U. S. 369; Cummiug v. William- son, 1 Sandf. Ch. 17; Mead v. Mc- Laughlin, 42 Mo. 198. The trustee may borrow money to pay off tax liens upon the estate and execute a mortgage to secure such loans. U. S. Trust Co. V. Roche, 116 N. Y. 120. 1 Burmesterv. Norris, 6 Exc. 796; Ricketts v. Bennett, 4 C. B. 686; Hawtayne v. Bourne, 7 Mees.& W. 595; Hawken v. Bourne, 8 Mees. & W. 703 ; In re Worcester Corn Ex- change Co., 3 De G., M. & G. 180; Ex parte Chippendale, 4 De G.. M. & G. 19; Australian, etc. Co. v. Mounsey, 4 Kay & J. 733; Troup's Case, 29 Beav. 353; Hoare's Case, 30 Beav. 225. § 449. POWERS OF TRUSTEES. 1033 row money, the repayment of money borrowed cannot be enforced by the lender against the company ; yet, if the money has been bona fide applied to the purposes of the company, the bona fide lender is entitled to payment as against the company. "'^ In a later case this decision was upheld by the same court. ^ § 449. Power of Sale. — The power to sell the trust estate is not inherent to the office of a trustee in an ordinary trust. Under ordinary circumstances this power cannot be exercised unless it is conferred by the instrument by which the trust is created, or by a decree of the court. It is or- dinarily maintained that there are circumstances under which a trustee will be upheld in selling the trust estate on his own responsibility.^ A court of equity has regard to 1 Troup's Case, 29 Beav. 353, 356. See Ex parte Chippendale, 4 De G., M. & G. 19; German Min- ing Co. V. jSTorwich Yarn Co., 22 Beav. ]43; Gillan v. Morrison, 1 De G. & S. 421; Cropper's Case, 1 De G., M. & G. 147; Zulneta's Claim, L. K. 9 Eq. 270; Manning V. Powning, L. E. 4 Ch. App. 365; Marlow v. Pitfield, 1 P. Wms. 558. 2 Hoare's Case, 30 Beav. 225. A provision in a deed of trust author- izing the trustee to borrow money to pay off certain enumerated liens on the property conveyed, and to repay the money so borrowed '-out of any money that may come into his hands as trustee," vested in such trustee a power to be exercised in his discretion, for the preserva- tion of the estate, and did not en- title the holders, of the liens named to require the trustee to apply to the payment of their liens, the money received from an insurance company for losses on property conveyed by the deed. First Nat'l Bank v. Michigan Trust Co. (1895) (Mich.), 63 N. W. Kep. 64. Where a trustee borrowed money for the beneficiaries on the credit of the trust estate and gave notes therefore signed as trustee, the trust estate was liable for the payment of the notes. Clark v. Flannery (1895), 96 Ga. 782; s. C, 22 S. E. Eep. 386. See also Gaudy V. Babbitt, 56 Ga. 640. 2 tlill on Trustees, 471. See also St. Louis V. Priest, 88 Mo. 612; Howard v. Thornton, 50 Mo. 291; In re Roe, 119 N. Y. 509; Graham V. King, 50 Mo. 22; s. C, 11 Am. Kep. 401; Kent v. Plumb, 57 Ga. 207; Fortescue v. Lyon, 55 Ala. 440.« A trustee may sell trust prop- erty to pay the expenses of litiga- tion sustained for its protection, and this, too,without authority from the court. White v. Dinkins, 19 Ga. 189. A power to sell will be implied where it is necessary to the proper execution of the trust. See Barker v. Devonshire, 3 Meriv. 310; Blatch v. Wilder, 1 Atk. 419; Eidsforth v. Armstead, 2 Kay & J. 333. Stall V. Cincinnati, 16 Ohio St. 170; Kankin v. Eankin, 36 111. 293; s.c, 87 Am. Dec. 216; Vallette V. Bennett, 69 111. 632; Winston v. 1034 POWERS or TRUSTEES. [§ 449. the intention of the settlor, and where an instrument creating a trust contains a power of sale, it will be liberally construed where that appears necessary to carry out the purpose of the grantor. But under ordinary circumstances a power of sale will not be sustained unless it confers all Jones, 6 Ala. .550; Curling v. Aus- tin, 2 Dr. & Sm. 129; Ames v. Ames, 15 K. I. 12. An Insolvent debtor appointed trustees to manage his property for the mutual benefit of all his creditors, upon an agree- ment by the creditors to talse a certain percentage of their de- mands, upon the payment of which the property was to be returned to the debtor; "otherwise said prop- erty to be sold for the benefit of all parties creditors hereto, and divided pro rata" between said creditors. It was held that the power to sell was given to the trus- tees, and that presumptively the trustees were accountable only for the actual proceeds of sale. Luigi V. Luchesi, 12 Nev. 306. The leg- islature has power to authorize the sale of real estate held by an exec- utor as trustee, for the benefit of the testator's children for their lives, then to go to the issue of such children in fee, when it ap- pears that such issue are minors, that the real estate is * not only unproductive but costly to them, and that it is for their best interest that it should be sold, and a conveyance in fee executed by the executor under such authority is valid and bind- ing, the purchasers will hold the real estate, both as against the issue in esse at the time of the sale, and as against those subsequently born. Leggett V. Hunter, 19 N. Y. 445. iSee also Kerr v. Kitchen, 17 Pa. St. 433. The legislature cannot authorize a trustee to sell the trust property to discharge debts in- curred by him without authority if the rights of the remainder-men will be prejudiced thereby. Mar- tin's Appeal, 23 Pa. St. 433. A court of equity will confirm a trus- tee's sale of land made to pay off an incumbrance upon the trust property, and will charge him with the proceeds. Morrison v. Bow- man. 29 Cal. 337. Where land was conveyed upon various trusts, with the power to sell free from the .-aid trust, and was reconveyed to the grantor, with the intention of annulling the said trust, and he reconveyed it to the trustees, to hold it for the same uses as by the first conveyance, it was held that the trustee's power to sell was re- vived, and that thoy could convey a perfect title. Salisbury v. Bige- low, 20 Pick. 174. Where land was conveyed in trust, to pay the debts of the grantor out of the rents and profits, and then for the support of himself and his wife and children, and at his death to be divided among his children, it was held that the trustees had no authority to sell for the payment of the debts or for any other purpose, however urgent the necessity. Mundy v. Vawter, 3 Gratt. 51S. See also Hunt v. Bass. 2 Dev. Eq. 292; S. C, 24 Am. Dec. 274; Por- ter V. Schofield. 55 Mo. 56; Littell V. Wallace, 80 Ky. 252; Norvell v. Hedrick, 21 W. Va. 523; Troy v. Troy, 1 Busb. Eq. 85; Thurston v. Thurston, 6 K. I. 296; Clarke v. Hayes, 9 Gray, 426. § 449. ] POWERS OF TRUSTEES. 1035 the powers essential to a valid disposition of the trust es- tate. ^ In a recent case in New York, where land was con- veyed to defendant, who orally agreed to hold it in trust for the use and benefit of plaintiff and subject to his direc- tion respecting the sale of it, or any part of it, and to pay him the proceeds of such sales, it was held that, though the trust was invalid under the statute of frauds and of uses and trusts, yet it was lawful for defendant to perform it, and that having fully performed the trust, as far as it required him to dispose of the land, he could not then refuse to deliver the proceeds to plaintiff.^ In a recent case before the Supreme Court of Georgia it was held that, under the code of that State, unless expressly authorized by the in- strument creating the trust, or by judgment of a court of competent jurisdiction, a trustee of a married woman and minor children has no power to sell land, except by virtue of an order of a judge of the Superior Court. ^ It was re- cently held that where a bishop of the Roman Catholic Church is invested with the legal title to land in trust for the benefit of the church, he can convey it through an at- torney in fact.* Where there is an emergency, or from any cause a sale becomes necessary in order to save the propei'ty, an unauthorized sale by a trustee that promotes the inter- ests of the beneficiaries will be upheld by the court. In a recent case a company, being in danger of losing the services of two of its chief executive oflScers and of falling into the control of a speculator, a trustee sold the stock owned by his trust for the best price then to be had. He, himself, and other stockholders, desired to sell at the 1 Eedfield on Wills, 137 ; Kinnan Emigration Society and B, assignee V. Guernsey, 64 How. Pr. 253. See of C." It was held that, assuming also 18 Am. & Eng. Encyclopedia that A appears on the face of the of Law, p. 940. patent to have been trustee for 2 Boi-k V. Martin, 132 N. Y. 280; both the Emigration Society and s. c, 30 K. E. Kep. 584. 0, he could not prima facie convey " Hufbrauer v. Jackson, 91 Ga. the interest of C in the absence of 298; s. c, 18 S. E. Kep. 298. authority from him. Brown v. ^Gabert v. Olcott, 86 Tex. 121; Harris, 7 Tex. Civ. App. 664; s. c, s.c, 23 S.W. Rep. 985. Certain land 27 S. W. Kep. 45. was patented to '-A, trustee of the 1036 POWERS OF TRUSTEES. [§ 450. same price, but could not, and so remained, and by their good management, and tlie interest of the buyer of the trust stock, largely increased the value of the stock. It was held that the cestuis que trust had no claim against him.^ § 450. Power of Sale by Implication. — A power of sale may be conferred in an instrument creating a trust by implication. It may be inferred from the general tenor of the instrument, or a trustee may be empowered and directed to do certain things of which the sale of trust property is a condition precedent.^ In a case in New Jersey it was held iQwen V. Campbell (1894), 100 Mich. 34; s. C, 58 N. W. Eep. 603. 2 ISTewton v. Bennett, 1 Bro. Ch. 187; Craig v. Craig, 3 Barb. Ch. 76; Lippincott v. Lippincott, 19 N. J. Eq. 121. No set form of words is necessary. Words that may fairly be construed as confer- ring the power will be so inter- preted if the circumstances show its necessity. Winston v. Jones, 6 Ala. 5.54; Dorland v. Borland, 2 Barb. 65; Moose v. Moose, 85 N. Y. 59; Hetzel v. Barber. 6 Hun, 540 ; Gersen v. Kiuteln, 2 Dem. 243 ; Jones V. Jones, 13 jST. J. Eq. 236; Cummins v.Carricks, (1887) (Ky.), 2 S. \V. Eep. 490; Fluke v. Fluke, 16 X. J. Eq. 478; Hyman v. Dev- ereaux, 63 N. Car. 624; Pratt v. Eice, 7 Cush. 209; Blatch v. Wil- der, 1 Atk. 420; Magruderv. Peter, 11 Gill & J. 217 ; Foster v. Craig, 2 Dev. & B. Eq. 209. In England when the will makes a general charge of the testator's debts upon the realty for such deficiency as the personal estate shall be insuffi- cient to pay, the executors take an implied power of sale, since the proceeds are to pass through their hands in the execution of their office, and since, as the executors are to apply the fund, the testator must have intended them to raise it. Colyer v. Finch. 5 H. L. Cas. 905; Eobinson v. Lowater, 17 Beav. 601; s. c, 5 De G., M. & G. 272; Hodkinson v. Quinon, 1 Johns. & H. 303, 309; Wrigley v. Sykes, 21 Beav. 237; Sabin v. Heape, 27 Beav. 553; Gosling v. Carter, 1 Coll. 644. See also Dewey v. Eug- gles, 26 N. J. Eq. 35; Haggerty v. Lanterman, 30 N. J. Eq. 37; In re Clay, 29 W. E. 5. Where the tes- tator directs the land to be sold, and the proceeds to be distributed to certain persons, without declar- ing by whom the sale shall be made, the executors have power to sell land of testator without decree of court of equity ; for such dispo- sition is to be regarded as a be- quest of a fund distributable to the legatees by the executors, who, therefore, take by implication the power to sell the land and convert it into money without a decree of court. The executor takes power of sale by implication where a testator directs his estate to be sold for certain purposes, without declaring by whom the sale shall be made, provided the proceeds are distributable by the executor. Eankin V. Eankin, 36111. 293; S.C., 87 Am. Dec. 205.' Where the tes- tator, after directing the payment of his debts and of some specific § 450. POWERS OF TRUSTEES. 1037 that the appointment of one as executor of a will that directs lands to be sold does not, of itself, confer on him the power to sell. But if the executor is directed by the will, or bound by law, to see to the application of the proceeds of the sale, or if the proceeds, in the disposition of them, are mixed up and blended with the personalty, — which it is the duty of the executor to dispose of and pay over, — then a power of sale is conferred on the executor by implication. ^ Where a testator directs realty to be sold and disposes of the pro- ceeds, but fails to name any person to make the sale, it will be held that the power was conferred on the executor by implication.^ But in a case where a testator gave the re- mainder of his real estate to his three children in fee-sim- ple, to be divided or sold, as two of the three heirs could agree, and appointed W S and B G executors of the will, one being a son-in-law and the other a son, it was held that as executors they had no power, express or implied, to sell legacies, devised and bequeatlied the residue and remainder of his estate, real and personal, to his executors in trust, to invest the same and pay the income to his wife during life, and at her death the balance to his heirs-at-Iaw, it was held that a power to sell and convey the real estate of the testator hy the executors is fairly to be implied. Livingstone v. Murray, 39 How. Pr. 102. See also Belcher v. Belcher, 38 X. J. Eq. 126; Ballentine v. Freling- huysen, 38 N". J. Eq. 266; Going V. Emery, 16 Pick. 107; s. c, 26 Am. Dec. 645. But see Seeger v. Seeger, 21 X. J. Eq. 90. ^ Lippincott v. Lippincott, 19 N. J. Eq. 121 ; Xewton v. Bennett, 1 Bro. Ch. 135; Bentham v. Wilt- shire, 4 Madd. 44; Elton v. Harri- son, 2 Swanst. 276, n.; Tylden v. Hyde, 2 S. & S. 238; FQrbes v. Peacock, 11 Sim. 152; Patton v. Eandall, IJ. & W. 189 ; Curtis v. Fulhrook, 8 Hare, 28; Watson v. Pearson, 2 Exc. 580; Gosling v. Carter, 1 Coll. 644; Jones' Appeal, 5 Grant, 19; Winston v. Jones, 6 Ala. 556; Anderson v. Turner, 3 A. K. Marsh. 131; Tainterv. Clark. 13 Met. 220; Gibbens v. Curtis, 8 Gray, 392; Chandler v. Eider, 102 Mass. 268; Hale v. Hale, 137 Mass. 168; Conklin v. Egerton, 21 Wend. 430 ; Jenkins v. Storffer, 3 Yeates, 163; Vaughan v. Farmer, 90 N". Car. 607; Lockhart v. Northing- ton, 1 Sneed, 318. 2 Meakings v. Cromwell, 2 Sandf . Ch. 512; s. clSeld. 136; Bogert v. Kertell, 4Hill, 492; Gray v. Hen- derson, 71 Pa. St. 368 ; Dunning v. Nat. Bank, 6 Lansing, 296; Davoue V. Fanning, 2 Johns. Ch. 254; Houck V. Houok, 5 Barr, 273 ; Lloyd V. Taylor, 2 Dallas, 223; Putnam Free School v. Fisher, 30 Me. 523; Robertson v. Gaines, 2 Humph. 378; Peter v. Beverly, 10 Pet. 53*. 1038 POWERS OF TEUSTEES. [§ 451. or to divide the real estate. ^ It has been held that where lands were directed by will to be sold at the death of testa- tor's widow, and the widow qualified as executrix, she had no power to sell and could not vest such power in her ex- ecutor.^ In some of the States the appointment of a trus- tee to sell, in cases of this character, is determined by statute.^ § 451. Power of Sale Continued. — Where lands are conveyed in trust, to two trustees, to sell, they can execute the trust only as they unite in conveying the estate. If one conveys without the other he will be held to have con- veyed simply his own legal estate, and it will remain subject to the trust. He cannot convey any beneficial interest in the estate.* Where a ti'ust estate is convej^ed to trustees, as trustees, and not as individuals, the power will continue as long, at least, as there are more than one x-emaining.^ In 1 Geroe v. Winter, 1 Halst. Ch. 655. 2 Walter y. Logan, 5 B. Mon. 516. 3 Carroll v. Stewart, 4 Kich. 200. In England by the statute 22 & 23 Vict., ch. 35, § 16, which provides that where there is a general charge of debts and no distinct provision is made as to the person by whom the sale is to be made, then the executors take an implied power to sell for the payment of debts. ■* Boston Franklinite Co. v. Con- dit, 19 N". J. Eq. 394, 399. See At- torney-General v. Gleg, 1 Atk. 356; Holcombe v. Holcombe, 3 Stookt. 286; Sinclair v. Jackson, 8 Cow. 553; Wilbar v. Almy, 12 How. 180; Chapin v. First Univ. Soc, 8 Gray, 580. Where a power is expressly given to an executor over one portion of the estate, and is not expressly given over another portion, the omission manifests an intention that the power shall not be exercised on that portion of the estate over which it is not ex- pressly given, although in another portion of the will general words are used broad enough to justify an implication that the whole esr tate should be subject to the power. Anderson v. Anderson, 31 X. J. Eq. 560; Craig v. Craig, 3 Barb. Ch. 76. 6 In re Bull, 45 Barb. 334, 337. "The bequest of the will is to all the executors who qualified, with the right of survivorship, should either die, become incapable of acting or be removed by the order of the court having jurisdiction. * * * Where one trustee resigns or is discharged from his office, the remaining trustees are vested with the entire estate." In re Grossman, 20 How. Pr. 350. An implied power of sale to two or more executors may be executed by the survivors, if the others die before executing the power. An- derson V. Turner, 3 A. K. Marsh. 131 ; Chandler v. Rider, 102 Mass. 208; Lloyd v. Taylor, 2 Ball. 223; § 451.] POWERS OF TRUSTEES. 1039 a leading case before the Supreme Court of the United States, Mr. Justice Thompson, delivering the opinion of the court, said: "When a power is given to executors, to be executed in their official capacity of executors, and there are no words in the will warranting the conclusion that the testator intended, for safety or some other object, a joint execution of the power, as the office survives, the power ought also to be construed as surviving; and courts of equit}' will lend their aid to uphold the power for the pur- pose of carrying into execution the intention of the testator and of preventing the consequence that might result from an extinction of the power, and where there is a trust charged upon the executors in the direction given to them, in the disposition of the proceeds, it is the settled doctrine of courts of chancery that the trust does not become extinct by the death of one of the trustees. It will be continued in the survivors, and not be permitted, in any event, to fail for want of a trustee. "^ This doctrine has been generally accepted in this country, and is sustained b}' numerous de- cisions of the English courts.^ But while this power con- Magruder v. Peter, 11 Gill & J. such power survives. This becomes 217. A deed from one of two ex- necessary for the purpose of effect- ecutors, where the other has not ing the object of the power. It is qualified, is a valid execution of not a power coupled with aninter- an implied power of sale. Meak- est, in executors, because they ings V. Cromwell, 5 N. Y. 136. may derive a personal benefit from ^ Peters V. Beverly. 10 Pet. 531, the devise; for a trust will sur- 564. "It may, perhaps, be consid- vive, though no way beneficial to ered as the better conclusion to be the trustee. It is possession of the drawn from the English cases on legal estate, or a right in the sub- this question, that a mere direction ject over which the power is to be in a will, to the executors, to sell exercised, that makes the interest land, without any words vesting in in question. And when an exeou- them an interest in the land, or tor, guardian or otlier trustee is creating a trust, will be only a invested with the rents and profits naked power, which does not sur- of land, for the sale or use of an- vive. In such case there is no one other, it is still an authority coupled who has a right to enforce an ex- with an interest and survives. " ecution of the power. But when Ibid. anything is directed to be done, in ^ Franklin v. Osgood, 2 Johns, which third persons are interested. Oh. 19; Zeback v. Smith, 3 Binn. and who have a right to call on the 69; Davoue v. Fanning, 2 Johns, executors to execute the power, Ch. 254; Wood v. Sparks, 1 Dev. 1040 POWERS or TRUSTEES. [§ 452. tinues in the trustees, it cannot be delegated by one or all of them, though they may employ an agent to act under their direction. In a recent case it was held that trustees of land, with discretionary powers to sell, cannot delegate such discretion to another, but, having exercised the dis- cretion and determined to sell, and fixed a price, they may authorize an agent to contract in their names on those terms. 1 § 452. Power to Consent to a Marriage. — There is a class of trusts in which a devise is conditioned upon the marriage of the devisee, with the consent of a trustee. The trustee is empowered to approve or to disapprove of a pro- posed marriage as he shall deem fit, and the marriage of the cestui que trufit without his approval works a forfeiture of the devise. Where this power is exercised in restraint of marriage, the act is not regarded with favor by courts of equity, and wherever it can be done without a plain viola- tion of equitable principles, such exercise will be held void as opposed to public policy. The subject involves a variety of questions, some of which are not easily settled, and in consequence the decisions, especially of the English courts, are not easily reconciled. The doctrine, as formulated from a careful examination of all the cases, is stated by Mr. Justice Story as follows : "The general result of the mod- ern English doctrine on this subject (for it will not be found easy to reconcile all the cases) may be stated in the following summary manner: Conditions annexed to gifts, legacies and devises in restraint of marriage are not void if &B. 389; Robertson v. Gaines, 2 son, 3 A. K. Marsh. 381; Mallet v. Humph. 367; Sharp v. Pratt, 15 Smith, 6 Rich. Eq. 22; Wood v. Wend. 610; Jackson v. Bates, 14 Sparks, 1 Dev. & Bat. 389; Chanet Johns. 391; Parker v. Sears, 117 v. Villepouteaux, 3 McCord, 29; Mass. 513; Collier v. Grimsey, 36 Shelton v. Homer, 5 Met. 462. Ohio St. 17; Taylor v. Morris, 1 ' Keim v. Lindley, (1895) (X. Comst. 341; In re Van Wyck, 1 J. Eq.), 30 Atl. Rep. 1063. See Barb. 565; Hutchins v. Baldwin, also Young v. Hughes, 32 N. 7Bosw. 236; Woodbridge V. Wat- J. Eq. 372; Milne v. Kleb, 44 kins, 3 Bibb, 350; Clay v. Hart, 7 IST. J. Eq. 378; s. c., 14 Atl. Rep. Dana, 1; Bartlett v. Sutherland, 2 646; Hamer v. Sharpe, L. K. 19 Cush. (Msiss.) 401; Brown v. Hob- Eq. 108. § 452.] POWERS OF TR' STEES. 1041 they are reasonable in themselves, and do not directly or virtually operate as an undue restraint upon the freedom of marriage. If the condition is in restraint of marriage gen- erally, then, indeed, as a condition against public policy and the due economy and morality of domestic life, it will be held utterly void, and so if the condition is not in restraint of marriage, but still the prohibition is of so rigid a nature or so tied up to peculiar circumstances that the party upon whom it is to operate is unreasonably restrained in the choice of marriage, it will fall under the like consideration. Thus, where a legacy was given to a daughter on condition that she should not marry without consent, or should not marry a man who was not seized of an estate in fee-simple of the clear yearlj^ value of £500, it was held to be a void condition as leading to a probable prohibition of marriage. "^ 1 1 Story's Equity Jurisprudence, § 280. "Wliere property is settled in trust for a woman until stie marry a man with an income of not less than £500 a year, or until she marry any person of a particular trade, and then over in trust for another, the latter trust is bad, as its object, as gathered from itt; probable result, is to restrain mar- riage altogether. If, however, the trust over is to take effect only upon the first beneficiary marry- ing a particular person, it would be good, as it would not be in gen- eral restraint of marriage." Un- derhill's Trusts & Trustees, 87. See also Scott v. Tyler, 2 Bro. Ch. 487; s. c, 2 Dick. 718; Stackpole V. Beaumont, 3 Ves. 95 ; Harvey v. Aston, 1 Atk. 361 ; Morley v. Ren- naldson, 2 Hare, 570; Keiley v. Monck, 3 Kidg. 205, 244, 247, 261; Long V. Dennis, 4 Burr. 2052; Daley v. Desbouverie, 2 Atk. 261 ; Semphill v. Hay ley, Pr. Ch. 562; Garrett v. Pritty, 2 Vern. 293; S. c, 3 Meriv. 120; Jervoise v. Duke, 1 Vern. 20; Wheeler v. Bing- ham, 3 Atk. 364; Lloyd v.Branton, 3 Meriv. 117; Poole v. Bats, 11 Hare, 33; Marples v. Bainbridge, 1 Madd. 317; Keynish v. Martin, 3 Atk. 330; Berkley v. Kyder, 2 Ves. 535; Stratton v. Grimes, 2 Vern. 357 ; Mcllwaine v. Gether, 3 VPhart. 575; Hooper V. Dundas, 10 Pa. St. 75 ; Maddox v. Maddox, 11 Gratt. 804. As to restraints on second marriages in Allen v. Jackson, L. R. 1 Ch. D. 399, Mellish, L. J., says: "It has been said with re- spect to this rule against restraint of marriage, that it has no founda- tion on any principle, that it has nothing to do with public policy, but that it is a positive rule of law, nobody can tell why ; and that be- cause it is a positive rule of law, adopted nobody can tell fer what reason, and without any regard to public policy, therefore it is im- possible to make an exception to it, and that the court can do noth- ing with it but carry it out. I can- not agree with that. It may be, no doubt, that in these modern times we should not for the first 1042 POWERS OF TRUSTEES. [§ 452. Where the donee has attained his majority and has come into full possession of the estate, he is not bound to secure the assent of trustees where that was made a condition. As the legacy vests in the donee at twenty-one, the condi- tion is no longer operative. And where an infant marries during the lifetime of the testator with his consent, but after the execution of the will, this condition is not binding, and it will not apply to a second marriage. ^ time establish such a rule of pub- lic policy; but of course if a rule has been established as a rule of law, because it was thought agreeable to public policy and to the interest of the nation at the time it was estab- lished, it may be that the court cannot alter it because circum- stances have altered. » * * if^ then, there was such a rule of pub- lic policy, we are to consider how does that rule apply to second mar- riages? It has never been decided that it applies to second marriages. * * * It appears to me very obvious that, if it is regarded as a matter of policy, there may be. very essential distinctions between flrst and second marriages. At any rate there is this, that in the case of a second marriage, whether of a man or a woman, the person who makes the gift may have been influenced by his friendship towards the wile in the one case, and towards the husband in the other case. That is to say, regarding the case of some member of the husband's family, he may make a gift to the husband for life, and then make a gift to the wife because she is the wife of that particular husband, and because he thinks it is more for the benefit of the children, that the wife should have the money while the children are young, rather than that the children should have it." In accordance with these views he held the gift over to be good. See also Holmes V. Lysaght, 2 Bro. P. C. 261. The right to impose the condition on the gift as to the donee remaining a widow is generally upheld by the court. See Little v. Birdwell, 21 Tex. 597; Vance v. Campbell, 1 Dana, 22fl; Phillips v. Medbury, 7 Conn. 5G8; Chapin v. Marvin, 12 Wend. 538; Commonwealth v. Stauffer, 10 Pa. St. 350; Bannerman V. Weaver, 8 Md. 517; Gough v. Manning, 26 Md. 347; Bedding v. Rice, 171 Pa. St. 301; s. C, 35Atl. Bep. 330; In re McLaughlin, L. B. 1 Ir. 421 ; Trew v. Perpetual Trus- tees Co. (1895), 11 Bep. 423. Where a testator having by his will given certain property to his daughter for life, and afterwards to her chil- dren, in a codicil expressed a wish that his daughter should not marry, and directed that on her marriage or death the gifts to her and her children should go over. Held, on the construction of the will and codicil, that the gift over of the children's interest was a condi- tional gift in general restraint of marriage, and therefore void. Mor- ley V. Bennaldson (1895), 12 Bep. 158. iPullen V. Beady, 2 Atk. 587; Kn'app V. Noyes, Amb. 662; Des- body V. Boyville, 2 P. Wms. 547; Osborn v. Brown, 5 Ves. 527; §453.] POWERS OF TRUSTEES. 1043 § 453. The Subject Continued. — Where the will makes the marriage, with the consent of the trustee, a condition of the devise, the property will not vest in the donee until there is a compliance with the condition. In a case of this kind, whether there is a gift over, is immaterial. ^ It has Stackpole v. Beaumont, 3 Ves. 89; Malcolm v. O'Callaghan, 2 Madd. 354; Crommelln v. Crommelin, 3 Ves. 227; Parnell v. Lyon, 1 V. & B. 479; Wheeler v. Warner, 1 S. & S. 304; Smith v. Cowdery, 2 S. & S. 358 ; Coventry v. Hlggins, 8 Jur. 182; Graydon v. Hicks, 2 Atk. 18; Clarke v. Parker, 19 Ves. 8. 1 Eeeves v. Heme, 5 Vin. Abr. 343, pi. 41; Freye v. Porter, 1 Ch. Ca. 138; s. c, 1 Mod. 300; Bertie V. Falkland, 3 Ch. Ca. 129 ; Holmes V. Lysaght, 2 Bro. P. C. 261 ; Hem- mings V. Munckley, 1 Bro. Ch. 303; Scott V. Tyler, 2 Bro. Ch. 489 ; s. c, 2 Dick, 712; Knight v. Cameron 14 Ves. 289; Creagh v. Wilson, 2 Vern. 572; Gillett v. Wray, 1 P. Wms. 284; Harvey v. Aston, lAtk. 375 ; Newton v. Marsden, 2 Johns. & H. 356; Stratton v. Grimes, 2 Vern. 357 ; Barton v. Barton, 2 Vern. 308; Phillips v. Medbury, 7 Conn. 568; McCullough"s Appeal, 2 Jones, 197; Commonwealth v. Stauffer, 10 Pa. St. 350; Bennett v. Eobinson, 10 Watts, 348 ; Hawkins v. Skeggs, 10 Humph. 31. "It may be said, however, that as the restriction in the residuary clause is in the nature of a condition precedent no estate can vest. If it be not complied with, whether it be valid or void. This is undoubtedly true in reference to devises of real estate with a prec- edent condition in restraint of marriage; for though void, yet if it be not complied with no estate arises in the devisee. If It be a legacy of personal estate,'however, under like circumstances, the legacy will be held good and ab- solute as if no condition whatso- ever had been annexed to it, and there would be every reason for applying the same doctrine to a restriction like that in this case." Maddox V. Maddox, 11 Gratt. 804, 816. A testator directed his ex- ecutors to pay his niece £5 per month if she resided with her hus- band and £15 per month if she lived apart from him and with her mother. The lord keeper in this case held that the condition was contra bonos mores and the legacy pure and simple. The legatee was consequently entitled to the larger sum, although she had not com- plied with the terms prescribed. The principle is the same whether the object is to prohibit marriage or to separate husband and wife. But as to land a court cannot treat a devise as absolute, although the condition on which it is limited to take effect contravenes the rules or policy of the law. See Taylor v. Mason, 9 Wheat. 350. A testator bequeathed an annuity to his daughter, a married woman, '-in case she should be living apart from her husband, and should con- tinue so to do" during the life of his widow, with a direction that if at any time the annuitant should co- habit with her husband the annuity should cease. At the date of the will the daughter and her husband were living apart, but before and at the date of the testator's death they were reconciled and living together, and so contimiod to live. 1044 POWERS OF TRUSTEES. [§ 453. been held that the word against, as applied to the consent of the trustee, is equivalent to the word luithoui. In such a case the gift over will pass on the marriage of donee without consent.^ Where there is one marriage without consent and a second with consent, the rule is in doubt, but where the trustee has given his consent to one marriage, or to a first marriage, his power is exhausted. The donee may marry a second time without consent.^ A devise in re- straint of marriage, in a general sense, is illegal and void as against public policy. A devise in trust with the condition that it shall not take effect if the donee shall marry, or shall marry out of a particular class, will not be sustained. It will be held that the condition is void, and the estate will vest in the donee. So any condition which points to an actual or probable prohibition of marriage will be treated as void.^ A condition in restraint of marriage until twenty- one, without consent, will be sustained.* There are cir- Bruce, V. C, said: "It is impos- sible to read tlie will without per- ceiving that the testator's wish and object were to obstruct a recon- ciliation and prevent the wile from living with her husband; and that, by that wish, by that object, its provisions to her were influenced and directed. The weight of authority, and the principles of the civil law, so far as I consider them applicable, seems to me to render a decision in this case in the daughter's favor consistent at once with technical equity and moral justice." Wrenn v. Bradly, 2 De G. & Sm. 39. In Clarke v. Berk- eley, 2 Vern. 720, under a devise upon trust to convey to the tes- tator's daughter, in case she mar- ried with the consent of two of the trustees and her mother, but if she died before marriage, or married without such consent, to other uses ; the daughter having married in her father's lifetime with his consent, Lord Cowper decreed a conveyance according to the will, declaring that the condition was dispensed with by having the testator's own consent, which was more to be regarded than any con- sent of trustees to whom he had delegated a power to consent, in case of marriage after his decease. 1 Smith V. Cowdery, 2 S. & S. 3i5S; Coventry v. Higgins, 8 Jur. 182; Wheeler v. Warner, 1 S. & S. 304; Crommelin v. Crommelin, 3 Ves. 227 ; Parnell v. Lyon, 1 V. & B. 479. 2 Hutchison v. Crammond, 8 Bro. Ch. 128; Low v. Manners, 5 B. & Aid. 967; Malcolm v. O'Callaghan, 2 Madd. 349. 3 Maddox v. Maddox, 11 Gratt. 804; Keiley v. Monek, 3 Eidgw. P. C. 205; Kishton v. Cobb, 9 Sim. 615; Connelly V.Connelly, 7 Moore, P. C. 438; Morley v. Rennaldson, 2 Hare, 570. ^ Creagh v. Wilson, 2 'P'ern. 573; Chauncey v. Graydon, 2 Atk. 616; Yonge V. Purse, 3 Jur. (N". S.) 603; § 454. j POWERS OF TRUSTEES. 1045 cumstances under which the consent of the trustees will be presumed, as where a courtship proceeds for a considerable period with the knowledge of the trustee and without any objection on his part, and terminates in marriage. ^ In a recent English case a son, who had been left a personal estate subject to this conditton, made a verbal request of the trustees for their consent to his marriage, and they re- plied by requesting him to present his request in writing. The son complied with this request, to which the trustees made answer that they had taken no action as they had been told that the lady had declined his proposal. The mar- riage took place, and in the course of proceedings to de- termine whether there had been a consent within the terms of the bequest, the trustees deposed that at the time of the son's verbal application they had no objection to the mar- riage, but were of opinion that it was not at that time de sirable. It was held that the consent of the trustees had been substantially given within the principle of Daley v. Desbouverie,^ and that the son was absolutely entitled to the estate.^ § 454. Tlie Same Subject. — As a rule this power is conferred on trustees, or executors, in their official charac- ter, and not as individuals, and in that case the power will Pearce v. Loman, 3 Ves. 130 Stackpole v. Beaumont, 3 Ves. 96 Duggan v. Kelly, 10 Ir. Eq. 295 Jervoise v. Duke, 1 Vern. 19 Randall v. Payne, 1 Bro. Ch. 55 "That if there had not been such a letter, inasmuch as the formal con- sent In writing would have been executed by him but for the acci- dental delay occasioned by the Perrin v. Lyon, 9 East, 170 ; Dash- other trustee, and not from any wood V. Bulkeley, 10 Ves. 230; change of purpose, the court would Hemmings v. Munckley, 1 Bro. have coasidered his consent . to Ch. 304. have been substantially given, ac- 1 Mesgrett v. Mesgrett, 2 Vern. cording to the will; because he 580; Clarke v. Parker, 19 Ves. 12; had expressed his full approbation O'Callaghan v. Cooper, 5 Ves. 126; of the marriage, and only did not Harvey v. Aston, 1 Atk. 375. Sir sign it for a reason personal to John Leach, in Worthington v. himself." Evans, 1 S. & S. 165, where a letter 'Daley v. Desbouverie, 2 Atk. written by the trustee the day be- 261. fore the wedding was held to be a ^ Keeley v. Smith, L. R. 44 Ch. sufficient consent in writing, said : D. 654. 1046 POWEKS OF TRUSTEES. [§ 455. remain if one or more disclaim the trust, but if the power is personal the consent of the individual named will be nec- essary, though he may have declined the trust. ^ Where the execution of the power becomes impossible on account of the death of one or more of the trustees, a literal carrying out of the intention of the testator will not be required, and if all the trustees die before the trust is executed, the power is lost.'* This power is gf so peculiar and delicate a char- acter that courts of equity will take account of its exercise, and where there is evidence that it has been abused they will grant relief.^ And where the consent of trustees has once been given and the parties have acted upon it, the con- sent cannot be withdrawn.* In a case where a trustee re- fused to act, the court submitted the case to a Master to inquire whether the proposed marriage should be sanctioned by the court. ^ It is now well established that courts of equity will not permit the manifest object of the testator to be defeated by the fraud, or by the unreasonable refusal of the party whose consent is made a condition of the mar- riage.^ § 455. The Power to Compromise. — The power to com- promise a debt due to the trust estate is not a part of the general powers of a trustee, but if he makes a compromise of such a character that it plainly promotes the interests of the cestui que trust, and would have received the sanction of the court, if application had been made, it will be upheld in equity.'' It has been held, in general, that a trustee may 1 Worthington v. Evans, 2 S. & Smith, Arab. 264; Merry v. Eyves, S. 165; D'Aguilar v. Drinkwater, 1 Eden, 6; Peyton v. Bury, 2 P. 2 V. & B. 225; Clarke v. Parker, Wms. 628; Daley v. Desbouverie, 19Ves. 12; Graydon v. Graydon, 2 2 Atk. 261; Clarke v. Parker, 19 Atk. 16. Ves. 12. ,2 Peyton v. Bury, 2 P. Wms. 626; * Mesgrett v. Mesgrett, 2 Vern. Jones v. Suffolk, 1 Bro. Ch. 528; 580; s. c, 10 Ves. 243; Dashwood Aislabie v. Rice, 3Madd.256; s.c, v. Bulkeley, 10 Ves. 245. 8 Taunt. 459; Grant v. Dyer, 2 ^ QoMsmid v. Goldsmid, 19 Ves. Dow. 93; Clarke v. Parker, 19 Ves. 368. 15; 7)1 re Birch, 17 Beav. 358. " 1 Story's Equity Jurisprudence, 3 Dashwood v. Bulkeley, 10 Ves. § 257. 245; Mesgrett v. Mesgrett, 2 Vern. ' Mills County v. Burlington, etc. 580; s. c, 10 Ves. 243; Strange v. K. Co., 47 Iowa, G6; Pool v. Dia §455.] POWERS OF TRUSTEES. 1047 compromise a debt where he acts in good faith, or acts under the conviction that he is doing what is best for the estate and what the court would approve, and whether he acted in good faith is a question to be settled by the jury.^ In some of the States the power has been conferred by statute.^ But where the power is exercised without good 10 S. Car. 440; Clarke v. Cordis, 4 Allen, 466; Mayer v. Foulkrod, 4 Wash. 349; Blue v. Marshall, 3 P. Wms. 381; Katcliff v. Winch, 17 Beav. 216; Forshaw v. Higginson, 8 De G., M. & G. 827; Jevon v Bush, 1 Vern. 342; Georges v Chancie, 1 Ch. Cas. 125; Wiles v Gresham, 5 De G., M. & G. 770: In re Alexander, 13 Ir. Ch. 137 Baoot V. Hayward, 5 S. Car. 441 Where a creditor assigns a debt to trustees in trust to pay debts due the trustees, and for other purposes, and to pay the surplus to the assignor, the trustee has power to compromise the debt and execute a release. Allen v. Ran- dolph, 4 Johns. Ch. 693. An as- signee for the payment of debts, discharged a disputed debt, re- ceiving thereon the amount ad- mitted by the debtor to be due. It was held that, in the absence of proof to the contrary, the trustee must be presumed to have acted properly in settling the debt. Meacham v. Sternes, 9 Paige, 398. ^ Maynard v. Cleveland, 76 Ga. 52. 2 Clarke v. Cordis, 4 Allen, 466. Bigelow, J., in the case cited, re- marks as follows, upon the stat- utory enactment conferring the right to submit controversies to arbitration, as follows: "That the statute under which the agreement of compromise set out in the bill was entered into is a reasonable and wholesome law, there is no room for serious doubt. It is foanded on the well established maxim of public policy, interest republicos ut finis sit litium. It en- ables persons holding property in trust to adjust controversies con- cerning it in the same manner as parties acting in their own right compose and settle disputes affect- ing their own estates. It furnishes an easy, convenient and equitable mode of determining difficult and doubtful questions arising in the administration of trusts, the settle- ment of which is indispensable to the farther and complete fulfill- ment of the purposes for which the trusts are established. It cre- ates a general rule applicable alike to all cases in which the rights of the cesjra que trust to property, when drawn in question, may be ascer- tained, and conflicting claims may be put at rest without the risk, de- lay and expense of tedious litiga- tion. It provides, in effect, for a course of procedure to be carried on under judicial inspection and sanction, by which not only present existing rights may be speedily and finally settled, but future and contingent interests may be care- fully protected and secured against improvident or collusive adjust- ments and compromises by those who have the possession and the immediate disposition of property. A statute so carefully framed and so manifestly calculated to produce benignant results ought to be sus- tained, unless it clearly conflicts with some express provision of the constitution." 1048 POWERS OF TEUSTKES. [§ 456. reason for the act the trustees will be held liable for the full amount of the debt, and the beneficiaries will be heai'd in action to recover their loss, even after the lapse of a considerable time.^ In Alabama it has been held that where the deed confers no authority on the trustee to compromise the debts, he cannot compromise them without the consent of the beneficiaries.^ § 456. Power to Arbitrate. — There is no universal rule by which to determine where one person may bind another by the submitting of a case to arbitration. This power does not belong to the general powers of a trustee. Lord Eldon appears to have held that a trustee may submit a matter in controversy relating to the trust estate to arbitration, and he decided that such submission did not make the trustee personally liable.^ But in New Jersey it has been held that 1 Wiles V. Gresham, 5 De G., M. & G., 770; In re Alexander, 13 Ir. Oh. 137; Jevon v. Bush, 1 Vern. 342. 2 Royall V. McKenzie, 25 Ala. 363. " Davies v. Ridge, 3 Esp. 101 ; Hutchins v. Johnson, 12 Conn. 376 ; s. C, 30 Am. Dec. 622. As to the right of corporations, munic- ipal and private, through their of- ficers to submit controversies to arbitration, see Kane v. Fond du Lac, 40 Wis. 495; Brady v. Mayor of Brooklyn, 1 Barb. 584; Dix v. Dummerston, 19 Vt. 262; Hine v. Stephens, 33 Conn. 504; Griswold V. North Stonington, 5 Conn. 367; Buckland v. Conway, 16 Muss. 396; Schoff V. Bloomfield, 8 Vt. 472; Remington v. Harrison County Court, 12 Bush, 148. As to private corporations see the following : Alexandria Canal Co. v. Swann, 5 How. 83; Proprietors v. Frye, 5 Greenl. 38; Isaacs v. Beth Hame- dash Society, 1 Hilt. 469 ; Memphis, etc. R. R. Co. V. Scruggs, 50 Miss. 284; Woodv. Auburn, etc. R. R. Co., 8 N. Y. 160; Furbish v. Hall, 8 Me. 315. "Corporations, sole and aggregate, may, if not disabled, submit disputes relating to the corporate property to arbitration, and their successors will be bound thereby, but in the case of corpo- rations aggregate, it must be the act of the whole corporate body, as by the dean and chapter, the mayor and commonalty, the mas- ter and his fellows."' Dillon on Municipal Corporations (3d ed.), § 478; Billings, Law of Award, 42. Where one has submitted his claim against a town to arbitration, and has appeared before, and been fully heard by the arbitrators, he cannot, after an adverse decision, dispute the authority of the select- men of the town to enter into the submission on its behalf. Camp- bell V. Upton. 113 Mass. 67. Exec- utors and administrators have by power of their ofSoe the right to submit to arbitration matters re- garding the estate under their ad- ministration as a result of their power to bring and defend suits. § 456.J POWERS OF TRUSTEES. 1049 equity will restrain by injunction a trustee from submitting to arbitration a question in which the cesluis que trust alone are interested, without their consent. Although, as a gen- eral rule, an administrator may submit claims against the estate to the award of arbitrators, yet if he be in fact the mere trustee of another, having the legal title, but no ben- eficial interest in the matter in controversy, the coui't will control his action and protect the interest of the cestui que trust} In Alabama it has been held that where a deed See Wood v. Tunnicliff, 74 X. Y. 3S; Eussell v. Lane, 1 Barb. 519; Kietzell v. Miller, 25 111. 67 ; Strodes V. Patton, 1 Brook. 228; Wheatley V. Martin, 6 Leigh, 62; Lattier v. Raohals, 12 La. Ajin. 693; Weston V. Stewart, 2 Fairf. 32li; Clarlj v. Hogle, 52 111. 427; Eaton v. Cole, 1 Fairf. 137; Yarboroiigh v. Leg- gett, 14 Tex. 677; Ailing v. Mun- son, 2 Conn. 691; Chadbouro v. Chadbourn, 9 Allen, 173; Cotfin v. Cottle, 4 Pick. 454; Bean v. Far- nam, 6 Pick. 269; Jones v. Dyer, 16 Ala. 221 ; Merchants' Bank v. Kawls, 21 Ga. 334; Overly v. Overly, 1 Mete. 117; Logsdon v. Koberts, 3 T. B. Mon. 256; Keodall V. Bates, 35 Me. 357. This power extends only to matters over which they have control. When an ad- ministrator has no control over the real estate of the deceased he can- not submit matters concerning such real estate. Bridgham v. Prince, 33 Me. 174. 1 Crum V. Moore, 14 !N". J. Eq. 436. See also Legh v. Legh, 1 B. & P. 447 ; Winch v. Keeley, 1 T. R. 619; Henry v. Milham, 1 Green, 266; Johnson v. Bloodgood, 1 Johns. Gas. 51 ; Wardell v. Eden, 2 Johns. Cas. 121; Littlefleld v. Storey, 3 Johns. 425; Briggs v. Dorr, 19 Johns. 95; Timan v. Leland, 6 Hill, 237; Jackson v. Blodgett, 5 Cowen, 202. "It may be affirmed as a universal princi- ple that a trustee will not be per- mitted to prejudice the rights or interests of his cestui que trust by a submission to arbitration. If the submission be made without the approbation of the cestui que trust, he will not be bound. It is an utter subversion of the whole theory and policy of arbitrations, that a party's rights should be sub- mitted to the decision of arbitra- tors not of his choosing. He is bound by the award because it is a decision by a tribunal of the party's own choice, to whose judg- ment he has voluntarily submitted the adjudication of his rights. So far as I am aware, either under the common law, or the law of this State, no case can be found in which a party has been, or can be compelled to submit to arbitration against his will, or in which he is bound by the award of arbitrators not of his own choice. He Is en- titled, as of right in all other cases, to have his rights determined by the appropriate judicial tribunals of the State. It is upon this ground that courts of equity will not de- cree the speoitic, performance of an agreement to submit to arbi- tration, deeming it against public policy to exclude from the appro- priate judicial tribunals of the State any persons who in the ordi- 1050 POWERS OF TRUSTEES. [§ 457. conveys to trustees, for the use of a daughter, an undivided half of real and personal estate of great value, the grantor and trustees cannot assent to a division of it through the medium of arbitrators, so as to prevent the creditors of the former from selling under execution his half of any part of the property. But it is competent for a court of chancery to cause a division to be made, or to arrest the action of the execution until the rights of the ce.ftui que trust are equitably adjusted.^ The right of executors and adminis- trators to submit to arbitration a demand against the estate of his intestate is well established.^ § 457. Power to Satisfy Incumbrances. — A trustee holding realty as a trust estate may, at his discretion, pay off any incumbrance on the property, and where he makes a.personal advance of the money for the discharging of a mortgage, he may reimburse himself from any funds of the estate coming into his hands which are not subject to a prior claim. ^ But whatever is done in this direction is for the sole benefit of the cestui que trust. He cannot apj)ro- priate any profit that may arise from the transaction.^ The nary course of things have a right § 1211. "He is undoubtedly at to sue there. Crum v. Moore, liberty first to deduct from the supra. avails of the property the amount ^ Thomas v. Davis, 6 Ala. 13. paid in the discharge of the mort- 2 Bean v. Farnam, 6 Pick. 269. gage; that was a charge upon the "There are numei'ous cases in estate, which he could in the ex- which the right of executors and ercise of his discretion, as trustee, administrators to submit to arbi- remove; then proceed in the sale tration has been sustained ; and, of an indefeasible estate, instead of indeed, it does not appear to have an equity of redemption. But as ever been denied. So a guardian he accepted the trust, he cannot may submit for his ward, which, now contend that any of his acts however, was formerly doubted, touching the estate were for his The general principle is, that every own benefit; all that he did in cme having the capacity to con- reference to the property the law tractor to release his right may treats as done for the cesteigueJoisj. make a submission to an award." The taking of the lease of the es- Ibid. 272. tate of the mortgagee in possession, - Pratt v. Thornton, 28 Me. 355 ; the leasing of the same to another s. c, 48 Am. Dec. 492; Harrison v. at an advanced rent, the payment Mock, 10 Ala. 185. of the sum necessary to redeem the ■* 2 Story's Equity Jurisprudence, estate from the mortgage, notwith- § 458. J POWERS OF TRUSTEES. 1051 trustee cannot acquire a title adverse to his cestui que trust by buying the trust estate under a prior mortgage, lien, or other incumbrance, but he is clothed with all the power that is essential to the protection of the trust estate, and in the exercise of this power he may discharge an incumbrance for the benefit of the cestui que trust. Without this power he would be unable to afford adequate protection to the estate.! § 458. Power to Confess Judgment. — The powers of trustees in this direction are chiefly negative. In the main, the decisions on this subject relate to what trustees are not permitted to do. Their power to confess judgment against the trust estate is such, and only such, as is conferred by the instrument creating the trust. The power to confess judgment is not in the trustee virtute officii, and can be ex- ercised only as it is specifically conferred. The general rule covering cases of this character is that the provisions and conditions of an instrument by which a trust is created make the law by which the conduct of the trustees, in the management and disposition of the trust property, must be regulated and controlled. Trustees accepting a trust upon the terms and conditions of the deed creating it have no standing they may have been in- ecution of the trust which he has tended by the defendant for his undertaken — he must act with own benefit, the law regards as reasonable diligence and be vlgi- performed in his character as trus- lant in the discharge of the duties tee." Pratt v. Thornton, supra. he has assumed. Some discretion 1 Crutchfield v. Haynes, 14 Ala. he must necessarily havs in the 49. See also Van Home v. Fonda, performance of his duties, and 5 Johns. Oh. 409; Kellogg v. Wood, when he acts in such a manner asa' 4 Paige, 578; Harrison v. Mock, 10 prudent man would act in relation Ala. 185. "Having ascertained to his own property, he is entitled that there was a violation of duty to the protection of the court. On on the part of the trustees, neces- the other hand if he omits to act sarily injurious to those whose in- when dutyrequires him to be active, terests he had undertaken to pro- or, if he is wanting in the neces- tect, we proceed to consider the sary care or diligence, he is per- consequences to him of such willful sonally responsible for the conse- neglect. It is the duty of a trus- quences." Harrison v. Mock, 10 tee to do all acts which are nee- Ala. 185, 193. essary and proper for the due ex- 1052 POWERS OF TRUSTEES. [§ 458. power to alter, change or dispense with those terms or con- ditions. They have no power to confess a judgment bind- ing the trust estate and creating a lien upon it, in disregard of such terms and conditions, nor unless such power is specifically conferred by the instrument. Where such judg- ment is confessed by the trustee it is not a lien upon the trust propert}', and is binding only on the individual prop- erty of the party confessing it.^ In a case in Pennsylvania A articled to sell to B, in trust for the children of C, a part of the purchase money to be secured by B's judgment note. A conveyance having been made pursuant to the articles, B gave his note, on which judgment was entered. It was held that this judgment is no lien on the land, nor is it material that the residue of the purchase money had been advanced by C, against whom the judgment was revived as terre- teyiant, or that B had verbally agreed, at the time he gave the note, that the judgment should bind the land.^ But it has been held that a trustee for the separate use of a ferne covert, taking subject to the lien of a judgment, may con- tinue the lien by voluntarily appearing to a scire facias to revive, and confessing judgment.^ 1 Hunt Y. Townshend, 31 Md. the vendor was entitled to look 336; s. C, 100 Am. Dec. 63. The alone to defendant thei'ein for pay- general power given to the trustee ment. Ibid. 301. to sell and reinvest, does not carry ^ Dickerson"s Appeal, 7 Pa. St. with it the povifer to settle various 255. "But it is further objected ejectment suits pending against against the validity of tlie judg- him, hy agreeing to allow judg- ment of revival that Huber, who ments to be taken for the plaintiff was the trustee of Elizabeth Gibler, in some, and against him in others, was not invested with power, by Lemon y. Jennings, 52 Ga. 452. the instrument creating the trust, See also Cassell v. lioss, 33 111. 244; to confess such a judgment. There s. c, 85 Am. Dec. 270. are two answers to this objection. •i Wilhelm v. Folmer, 6 Pa. St. The first is, that none but the 296. "It results from what has cestui que ti-ust could set it up for been said, that as the trustee the protection of her estate; and lacked power to charge the trust the second, that Huber, as well as by way of lien, the judgment sub- the other alienees of the land, took sequently entered by virtue of the it by the express terms of the deeds warrant of attorney, bound not made to them, subject to this the estates of the cestuis que trunt, judgment. The legal estate being who are not parties to it, nor in in Huber he was the proper party privity with it, and consequently to the scire facias, and the ben- § 459. J POWERS OF TRUSTEES. 1053 § 459. Power to Bring Suit. — The general principle of equity relating to this subject is that a person with whom, or in whose name, a contract is made for the benefit of an- other, may bring an action thereon in his own name.^ In a suit instituted in behalf of a trust estate the trustee is the only proper plaintiff. Though the suit may be brought at the instance of the cestui que trust, it should be brought in the name of the trustee and with his consent and co-oiiera- tion. In the States which have adopted the code practice, one in whose name contracts are habitually made for a cor- poration or company may be held to be a trustee by impli- cation, and an action may be brought in his name.^ A eficial interest "being thus expressly incumbered, the cestui que trust could with no show of reason object to the action of the trustee ; much less can a stranger who is in nowise injured hy it." Ibid. 258. 1 Lake v. Albert, 37 Minn. 458 ; Wetmore y. Hegeman, 88 N. Y. 69; Winters v. Rush, 34 Cal. 136; Harney v. Dutcher, 15 Mo. 89; S. C, 55 Am. Dec. 131; Pearce v. Twichell, 41 Miss. 344; Weaver v. Wahash, etc. Canal, 28 Ind. 112; Piatt V. Iron Exchange Bank, 83 Wis. 358; Dis v. Akers, 30 Ind. 481. "When the contract sued on has been made with the trustee in his own name, or when an agent merely, or other person, becomes an obligee or promisee, though for the benefit of another, no intrinsic facts need be alleged. The de- scription of the obligation and its breach shows, not only the wrong, but the person who, under the statute, has a right to apply for its redress. And when property in specie or when contracts have been assigned to a trustee for any purpose, little need be said in re- gard to the plaintiff's right. In enforcing the contract, or in pro- tecting the property, he must show his title, and whether it be his in trust or in his own right, his right to sue in his own name is the same. This will cover most of the actions which may be brought by trustees of an express trust, as it does those when the promise is made to one for the benefit of another. But trustees may be called on to pro- tect trust property; or, otherwise, to bring an action for the benefit of the beneficiary when no con- tract has been made with him in his own name, and when his right to represent the beneficiary will not appear without showing the facts which create the trust. In such cases theJfacts must be stated, and with such certainty that they can be traversed." Bliss on Code Pleading (3d ed.), § 262. See also Marston v. Eowe, 43 Ala. 271; Clark V. Fosdiok, 118 lSr.Y.7; s. c, 16 Am. St. Rep. 733; Phillips v. Ward, 51 Mo. 295 ; Givens v. Daven- port, 8 Tex. 451 ; Mordecai v. Parker, 3 Dev. 425 ; Poage v. Bell, 8 Leigh, 604; Ponder v. Magruder, 42 Ga. 242; Binney v. Plumley, 5 Vt. 500; s. c, 26 Am. Dec. 313; Ingersoll v. Cooper, 5 Blackf. 426. 2 Merchants' Bank v. McClelland, 9 Colo. 60S; Beardslee v. Horton, 1054 POWERS OF TRUSTEES. [§ 459. trustee may bring a suit in behalf of the trust estate in his own name, or he may associate with it that of the cestui que trust.^ The cestui que trust may bring a suit in the name of the trustee without his consent.^ In all actions arising out of wrongs that were formerly cognizable by common law courts, and in which the possession of the legal estate was not a condition, the trustee is the proper person to bring the suit.'* A person to whom a note is 3 Mich. 5G0; Planters' Bank v. Bass, 2 La. Ann. 430; Budd v. Hiler, 27 X. J. Law, 43; Moale v. Buchanan, 11 Gill & .J. 314. See generally on the power of the trus- tee to sue, Corning v. Greene, 28 Barb. 33; Beach v. Beach, 14 Vt. 28; s. c, 39 Am. Dec. 204; Lahy V.Holland, 8 Gill, 445; S. C, 50 Am. Dec. 705; Oatman v. Barney, 46 Vt. 594; Ryan v. Bibb, 46 Ala. 323; O'Neill V. Henderson, 15 Ark. 235; s. c, 60 Am. Dec. 568; Worthy v. .Johnson, 10 Ga. 358; S. C, 54 Am. Dec. 393; Leach v. Thomas, 27 111. 457; Governor v. Woodsworth, 63 111. 2.^4; Kirk- patrick v. Clark, 132 111. 342; s. C, 22 Am. St. Eep. 531; Bardstovvn, etc. K. Co. v. Metcalfe, 4 Mete. 199 ; s. c, 81 Am. Dec. 521. Upon suit being instituted, under the Burnt Records Statute of Illinois to es- tablish title to real estate, the trus- tee may sue with the consent of the beneficiary, without making him a party. Harding v. Fuller, 141 111. 308. See also Richardson V. Frederitze, 35 Mo. 206. While a trustee who has wrongfully mortgaged trust property is liable to the cestui que tnist for the loss sustained thereby, even though in the honest belief that he was acting for the be?t, yet he has such a pecuniary interest as will authorize him to bring a suit to restrain a statutory foreclosure of the mort- gage. Brown v. Cherry, 56 Barb. 635; s. C, 38 How. Pr.352; 38 Am. Dec. 433. Where a husband had in- cumbered his real estate by an ante- nuptial decree, his widow who was administratrix of his estate was held to possess such an interest in the land so incumbered as to en- title her to institute proceedings in a court of equity to restrain the administrator of the deceased trus- tee from intermeddling with it or with the trusts connected with it. Ready v. Ham, 46 Miss. 422. If the trustee refuses to bring suit in a proper case, the beneficiary may sue. Owens v. Ohio Cent. E. Co., 20 Fed. Rep. 10. ' Mebane v. Mebane, 66 N. Car. 334. See also Rankin v. Allison, 64 N. Car. 673; Biggs v. Williams, 66 X. Car. 427; Somerville v. John- son, 36 N. J. Eq. 211; Smith v. Gaines, 39 N. J. Eq. 545; Jennings V. Davis, 5 Dana, 127; Chambers- burg Ins. Co. V. Smith, 11 Pa. St. 120; Macy v. Williams, 55 Hun, 489. Under the Delaware procedure, the eldest male heir of a deceased trustee is the proper plaintiff in a suit in ejectment to recover the land claimed under the trust. Mc- Mullen V. Lank, 4 Houst. 648. 2 Chambersburg Ins. Co. v. Smith. 11 Pa. St. 120. s May V. Taylor, 6 M. & Gr. 261. See also Underbill, Trusts and Trustees, 243. § 460.] POWERS OF TRUSTEES. 1055 made i^ayable as a trustee may sue on it in his own name after the death of the beneficiary, where no administrator has been appointed. ^ The survivor of several trustees may main- tain a suit in his own name, whether he can or cannot alone continue to execute the powers and to discharge the duties of the trust. ^ In New York it has been held that upon the death of a plaintiff trustee, "who has joined with his cestui que trust in an action to protect the trust fund, the action can only be continued by the substitution of the successor in trust as a co-plaintiff in the place of the deceased.^ It has been held that a cestui que tr'ust may bring an actioii at law in the name of his trustee whenever necessary for the protection of the trust property, and the trustee can neither release the right of action nor discontinue the suit, but he may ask indemnity against costs. ^ § 460. Power to Act through Agents. — It is well settled that a trustee may employ agents so far as may be necessary to the proper execution of the trust, but emphasis is to be placed upon the qualifying clause of this proposition. He may have such assistance in his proper work of admin- istering the trust as may be needed. He may employ agents, collectors, accountants, and any other assistants, the service of which is essential to a proper and efficient administration of the trust, and he may pay the salary of such assistants from the funds of the trust estate.^ A trustee who is acting ^ Beck V. Haas, 111 Mo. 264; power to appoint and act through s. c, 31 Mo. App. 183. agents, Raynerv. Pearsall, 3 Johns. 2 Eicheson v. Kyan, 15 111. 13. Ch. 578; Berger v. Duff, 4 Johns. s Paget V. Pease, 23 Abb. X. Cas. Ch. 368; Newton v. Bronson, 13 290. See also Tompkins v. Mose- N. Y. 587; s. c, 67 Am. Dec. 89 man, 5 Kedf . 402 ; In re Waring, 99 Hawley v. James, 5 Paige, 487 N. Y. 114; ire re Valentine, 3 Dem. Sinclair v. Jackson, 8 Cow. 542 563; 7ra )-e Whitehead, 3 Dem. 227. Niles v. Stevens, 4 Denio, 399 See N. Y. Code Civ. Proc. §§ 758, Williams v. Mattocks, 3 Vt. 189 759. ISTeal v. Patten, 47 Ga. 73; Floyd ^ Commissioners of Somerville V. v. Johnson, 2 Litt. 109; s. c, 13 Johnson, 36 N. J. Eq. 211. See Am. Dec. 255; Bales v. Perry, 51 also Lund v. Blanshard, 4 Hare, Mo. 449; Taylor v. Hopkins, 40 111. 290. 442; Whittlesey v. Hughes, 39 Mo. 5 Parker V. Johnson, 37 N.J. Eq. 13; Graham v. King, 50 Mo. 22; 366. See also generally on trustees' s. c, 11 Am. Rep. 401; Howard v. 1056 POWERS OF TRUSTEES. [§ 460. under adiscretionary power cannot confer upon an agent a general power to execute the trust, unless he has been spe- cifically empowered so to do by the instrument creating the trust. Thus authority cannot be given to an agent by a trustee to make an absolute sale of land belonging to a trust estate. But an agent may be authorized to make a conditional sale of trust property, his act being subject to ratification or rejection by the trustee. And where such sale has been ratified by the trustee the agent may be au- thorized to make a conveyance of such property, and his act will be valid ; but in such a case the proper course is a conveyance by the trustee.^ A trustee will be sustained in the employment of agents only in so far as this may be shown to be necessary. In the appointment of a trustee it is presumed that if he accepts the trust he will give it his personal attention, and he is held personally responsible Thornton, 50 Mo. 291; Hawkins v. Kemp, 3 East, 410; Attorney-Gen- eral V. Scott, 1 Ves. 417 ; Ingham v. Ingham, 2 Atk. 88; Comb's Case, 9 Coke, 75; Bostock v. Floyer, L. K. 1 Eq. 26; Adams v. Clifton, 1 Euss. 297 ; Hardwick v. Mynd, 1 Anst. 109; Charitable Corp. V. Sutton, 2 Atk. 405; Tur- ney v. Carney, 5 Beav. 515. In the leading case of Hawley v. James, 5 Paige, 318, in discussing the point in the text, Chancellor "Walworth says : "A trustee who has only a delegated discretionary power can- not give general authority to an- other to execute the same, unless he is specially authorized so to do, by the deed or will creating such power. A general authority to an agent to sell and convey lands be- longing to the estate or to contract absolutely for the sale of such land*, cannot, therefore, be given by the trustees. * * * The bet- ter course in a case of this kind, therefore, is to intrust the agent with a discretionary power to con- tract, subject to the ratification of the trustees upon his report of the facts, and that they should them- selves execute the conveyance, when the terms of the sale have been complied with, and transmit it, properly acknowledged, to the agent to be delivered to the pur- chaser." See also Sebastian v. Johnson, 72 111. 283; s. c, 22 Am. Rep. 144; Merrill v. Farmers' L. & T. Co., 24 Hun, 297; Newton v. Bronson, 13 N. Y. 587; S. C, 67 Am. Dec. 89. 1 Oliver v. Piatt, 3 How. 333; Hawley v. James, 5 Paige, 487. There must be a good reason for the appointment of the agent. Pistor V. Dunbar, 1 Anst. 107 Matthews v. Brice, 6 Beav. 239 Clough V. Bond, 3 Myl. & Cr. 496 Tebbs V. Carpenter, 1 Madd. 290 Salway v. Salway, 2 Kuss. & M 218; Kilbee v. Sneyd, 2 Moll. 186 Green V. Hamburg, 2 Brock. 403 Raynor v. Pearsall, 3 Johns. Ch 578. § 461. J POWERS OF TRUSTEES. 1057 for its execution. AVhere there is unnecessary intrusting of the estate to agents, the trustee will be held accountable for any losses that may be incurred through their acts.^ § 461. Power to Employ an Attorney. — Where it is essential to the proper administration of a trust, a trustee may employ legal counsel, and he will be sustained in the payment of attorney's fees from the trust funds. It is not necessary that the deed should contain any provision for such an expense.-^ In Pennsylvania it has been held that a trustee may charge the trust with fees paid for professional advice relating to the execution of the trust, but not for professional services rendered in the litigation of his ac- counts.^ In Kentucky it has been held that a trustee will 1 Pistor V. Dunbar, 1 Anst. 107 ; Clough V. Bond, 3 Myl. & Cr. 498; Rowland v. Witherden, 3 M. & a. 568; Hapgood v. Parkin, L. K. 11 Eq. 74; Tyler v. Herring, 67 Miss. 169; S. C, 19 Am. St. Eep. 263; Singleton v. Scott, 11 Iowa, 589; Calhoun's Estate, 6 Watts, 185. Where he employs others to look after the investment of his trust funds in the ordinary and custo- mary course of business, or from the necessities of the case, and is free from neglect or imprudence, he will not be compelled to make good a loss of funds by reason of the embezzlement by the agent chosen. See Carpenter v. Carpen- ter, 12 R. I. 544; S. C, 34Am.Kep. 716; Marshall v. Moore, 2 T. B. Mon. 69; In re Speight, L. E. 22 Ch. D. 727; Eaynor v. Pearsall, 3 Johns. Ch. 578; Stroud v. Gwyer, 6 Jur. (N. S.) 719; Belchier v. Parsons, Ambl. 219; Bacon v. Bacon, 5 Ves. 334. But see In re Litchfield, 1 Atk. 87. Shortly after the trustees appointed to sell land for the payment of debts had en- tered on the execution of their trust they appointed an agent to 67 collect rents and take charge of the land until it should be sold and the agent turned over the rents to one of the trustees. Held, that such trustees were chargeable with having had joint possession of the rents while in the agent's hands, and that the agent's subsequent payment to one must be deemed to have been done by the direction of all. Purdy v. Lynch, 72 Hun, 272; s. C, 25 N. Y. Supl. 585. 2 Green v. Putney, 1 Md. Ch. 262; Gooding v. Gibbes, 17 How. 274; In re Autenreith, 3 Dem. 200; Wood V. Burnham, 6 Paige, 513; Western R. Co. v. Nolan, 48 N". Y. 513; Burr v. MoEwen, Baldw. 154. It will be held neglect for the trus- tee to employ an ignorant attorney to foreclose. Wakeman v. Hazle- ton, 3 Barb. Ch. 148; Sutton v. Wilder, L. E. 12 Eq. 373; s. C, L. J. 41 Ch. 30. 3 Burr V. McEwen, Baldw. 154; Chamberlin v. Estey, 55 Vt. 378; Dow V. Memphis, etc. E. Co., 23 Blatchf. 84; Grimball v. Cruse, 70 Ala. 534; Brady v. Dilley, 27 Md. 570; Williams Y. Smith, 10 E. I. 280; Walker's Appeal, 140 Pa. St. 1058 POWERS OF TRUSTEES. [§ 462. be allowed fees paid to counsel employed by him to repre- sent the interests of the trust estate, although the cestui que trust employed counsel to represent the same interest.^ § 462. Power to Convey for Public Uses. — Trustees, as the holdei's of the legal title, may decUcate land to public uses not inconsistent with the character of the trust. In a recent case in New York it was held that the trustees of an 124; Perkins' Appeal, 108 Pa. St. 314; s. C, 56 Am. Kep. 208; Mc- Elhenny's Appeal, 46 Pa. St. 347 ; Wilson's Appeal, 41 Pa. St. 94; Ingham v. Lindeman, 37 Ohio St. 218; Biddle's Appeal, 83 Pa. St. 340; s. c, 24 Am. Rep. 183; Down- ing V. Marshall, 37 N. Y. 380; Wetmore v. Parker, 52 X. Y. 450 ; Cherry v. Jarratt, 25 Miss. 221; Shirley v. Shattuck, 28 Miss. 26 ; Perrine v. Newell, 49 N. J. Eq. 57 ; Woodruff V. New York, etc. R. Co., 129 N. Y. 482. 1 Clark V. Anderson, 13 Bush, 11] . See also Jones v. Stockett, 2 Md. Ch. 262; Bentley v. Shreve, 2 Md. Ch. 215; Ohio Co. v. Winn, 4 Md. Ch. 253. See the following cases where allowances were made for counsel fees to the trustee who was an attorney. Lowrie's Appeal, 1 Grant Cas. (Pa.) 373; Perkins' Appeal, 108 Pa. St. 314; s. C, 56 Am. Rep. 208; Babcook v. Hub-- bard, 56 Conn. 284. Contra: See Mayer v. Galluchat, 6 Rich. Eq. 1 ; Lock V. Gilmore, 133 111. 139; Ed- monds V. Crenshaw, Harp. Eq. 232; New v. Jones, 1 H. & Tw. 632; Lincoln v. Winsor, 9 Hare, 158; Christophers v. White, 10 Beav. 523; Mathison v. Clarke, 3 Drew. 8; In re Taylor, 18 Beav. 165; Holcombe v. Holoombe, 13 N. J. Eq. 415; Vaccaro v. Cicalla, 89 Tenn. 63. As to the effect of a re- quest in a will that certain solic- itors be employed, see Foster v. Elsley, 30 W. R. 596; Williams v. Corbet, 8 Sim. 349; Hibbert v. Hibbert, 3 Meriv. 681 ; Lawless v. Shaw, 1 D. & G. 154; s. c, 5 CI. & F. 129; Finden v. Stephens, 2 Phil. 142. In Foster v. Elsley, supra, where a testator declared that "my solicitor, William Ed- ward Foster [the plaintiff], shall be the solicitor to my estate and to my said trustees in the manage- ment and carrying out of the pro- visions of this, my will," Mr. Justice Chitty held that "the ques- tion before the court had been set- tled in former cases, which were direct authorities against the con- tention that the declaration in the will created a trust which the plaintiff could enforce." The trustee is not bound to afford the cestui que trust gratuitous legal assistance. But it must not be un- derstood that he can make himself the solicitor of the trust estate in the sense of making the trust es- tate his client. The client of the solicitor is the trustee, and his claim for costs will be against the trustee personally, and not against the trust estate. Worrall v. Har- ford, 8 Ves. 4, 8. See Langford v. Mahony, 2 Conn. & L. 327; Weiss V. Dill, 3 Myl. & K. 27; Harben v. Darby, 28 Beav. 325; Fearns v. Young, 10 Ves. 184; Poole v. Pass, 1 Beav. 605; Walters v. Wool- ridge, 26 W. R. 470; Courtney v. Rumley, Ir. R. 6 Eq. 112. 462, j POWERS or TRUSTEES. 1059 active trust may grant an easement over lands belonging to the trust estate which will be valid during the life of the' ti'ust, and where such trustees are given a power of sale, this will support the grant of an easement beneficial to the trust estate and made necessary in order to give access to lots into which the property has been subdivided for the purpose of disposing of it as sites for villas. ^ It has been held that an adverse public use for the purposes of a high- way of land so held in trust, continuing for twenty years, will establish the highway against both trustees and cestui que trust, whether consistent with the trust or not, and al- though the trust be for the benefit of a portion of the public.^ ' Valentine v. Schreiber, 3 Hun, App. 235. "The validity of this agreement is next challenged on the ground that the trustees under the will of Samuel Wood had no power to execute it. To support this claim is cited the rule often stated : 'That no one can grant an easement out of land, in favor of another, unless he has the entire interest in the soil.' I am frank to say that I do not under- stand the exact meaning of the doctrine thus pronounced. If it be intended to assert that no one can grant an easement greater in extent or duration than can be carved out of the estate which the grantor has, the rule is plain and unquestionably sound. But if it is intended to go further and assert that no easement, valid against any person, can be granted except by the owner of the entire fee, I think It unsound. * * i cer- tainly can see no reason why a life tenant cannot create an easement extending during his life as well as convey the land itself, or a part thereof, for the same period. * * I think the authority of the trus- tees to execute this agreement can also be upheld under the power of sale granted to them by the will. * * If such were the advanta- geous way of disposing of the prop- erty, the trustees had the power to adopt it, even though as to the land unsold they would create easements in favor of the lands they might dispose of." Ibid. 239. See also Orippen v. Morss, 49 K. Y. 63. 2 Prudden v. Lindsley, 29 JT. J. Eq. 615. "The trustees are the legal owners of the land, but, as the purposes for which they own it are expressed in the deed by which they hold the title, their acts cannot be allowed to violate the trust. That trust, however, is of a somewhat indefinite character, and, therefore, a discretion is vested in the trustees as to the mode in which it may be best sub- served; and within the range of this discretion their acts are lawful and binding. These plain prin- ciples, so easily stated, but per- haps not so easily applied, are the criteria for testing the power to dedicate. If the highway claimed by the complainant could be laid out by the trustees in furtherance 1060 POWERS OF TRUSTEES. [§ 463. § 463. Power to Apply to the Court for Instructions. ■ — Where trustees are in doubt in regard to the construction to be put upon the instrument by which the trust is created, or in regard to the manner in which the trust is to be ex- ecuted, it is their privilege and their duty to apply to the court having jurisdiction for instruction and direction. ^ of the trust, then their dedication is valid. It cannot be asserted as a principle of law, that the devotion of part of a school plat to the pur- poses of a highway, is inconsistent with the trusts impressed upon it, for, manifestly, circumstances may be imagined where a public road would be convenient, or even nec- essary for the enjoyment of the school; and, therefore, the ques- tion whether such dedication can be made is one of fact, to be de- termined by the conditions of each case." Ibid. 616. Where land is vested in fee in trustees for certain public purposes, they may dedi- cate the surface to the use of the public as a highway, provided such use be not inconsistent with the purposes for which the land is vested in them. Rex v. Inhabit- ants of Leake, 5 B. & Ad. 469. 1 Traphagen v. Levy, 45 N. J. Eq. 448; Winthrop v. Attorney- General, 128 Mass. 258 ; Fraser v. Page, 82 Ky.73; BuUard v. Chand- ler, 149 Mass. 532; Bullard v. Attorney-General, 158 Mass. 249; Griggs V. Veghte, 47 N. J. Eq. 179; Lorillard v. Coster, 5 Paige, 172; Hawley v. James, 5 Paige, 318. Where the trustee has a reasonable doubt as to the dis- position of the funds, he may apply to the court for directions, making the parties interested parties to the suit. Wheeler v. Perry, 18 N". H.307; Vanness V. Jacobus, 17 oST. J. Eq. 153; Haydenv. Marmaduke, 19 Mo. 403. Where a will under which the trustee is appointed directs him to make investments upon trusts and limitations of doubtful validity, and ambiguous in their terms as to the rights of the parties, he may appeal for direction to the court of equity. Heald v. Heald, 56 Md. 300. See also Tilly v. Tilly, 2 Bland, 436. Wherever there is a bona fide doubt as to the true meaning of the in- strument creating the trust, and as to the course which the trustee ought to pursue, he may always maintain a suit in equity, at the expense of the trust estate, to ob- tain a judicial construction of the trust instrument, and directions as to his conduct, and if he faithfully obeys such instructions he will be relieved of all responsibility there- for. State V. Netherton, 26 Mo. App. 414. The supreme court has jurisdiction of a bill filed by the executors to obtain the direction of the court in the execution of trusts arising under the will when the same property is claimed under the will by different parties. Tread- well V. Cordis, 5 Gray, 341. On a bill filed to define the powers of a trustee, the court will define only the trusts and will not order a sale of the property where no adverse right is asserted. Wiswell v. First Cong. Church, 14 Ohio St. 31. Where a dispute arises as to whether a deed of trust has ever become operative, a trustee is justi- fied in seeking instructions from the court of equity as to his rights § 463. J POWERS OF TRUSTEES. 1061 But, as a rule, the court will instruct only in regard to matters which trustees cannot properly decide on their own responsibility. Where the point in question is left by the testator to the discretion of the trustees the court will de- cline to direct. In Proctor v. Heyer, the Supreme Judicial Court of Massachusetts said: "The judgment of this court cannot be substituted for the discretion of the trustees reasonably and fairly exercised," and the court held that if a trustee under a will is therein authorized to sell real estate on such terms and in such manner, and at such time or times, as he may think most advisable, this court will not control his discretion in these respects in the absence of evidence that he is likely to abuse his trust by an arbi- trary or capricious exercise of authority.^ In a similar case the same court said: "The cases cited to show that a court of equity will control the exercise of the discretion of trus- tees, where there is cause for such intervention, undoubtedly support that proposition. The discretion given them con- fers no arbitrar}^ or capricious authority, and we should take care that a power confided to trustees be honestly ex- ercised for the benefit of the cestui que trust. In this case , however, there is nothing to show that they are not ready and competent to do their duty considerately, kindly and wisely. "2 But the right of trustees to ask direction is well established, and where any trustee has a reasonable doubt as to the proper disposition of trust funds or trust property, he may properly, from a due regard to his own safety and and duties as between the settlor expressly confided to the wise dis- and the cestui que- trust. Frazer v. cretion of trustees selected by him- Davie, 11 S. Car. 56. But the self. There is no suggestion from trustee will not be permitted to any quarter that they are likely to seek advice of the court upon a abuse that trust, by an arbitrary mere question of law about which or capricious exercise of authority, he should have consulted at attor- The judgment of this court cannot ney, or, if necessary, tested the be substituted for the discretion of question by an action at law. the trustees, reasonably and fairly Green V. Mumford, 4 K. I. 313. exercised." Ibid. 529. See also 1 Proctor V. Heyer, 122 Mass. 525. Walker v. Shore, 19 Ves. 387. "The questions relate to the ad- ^ Amory v. Green, 13 Allen, 418, ministration of a trust, in respect 416. to matters which the testator has 1062 POWERS OF TRUSTEES. [§ 463. for his own protection, api^ly to the court for directions, and he may make those who are interested beneficially par- ties to the proceeding. 1 Where a will is so ambiguous that a trustee appointed under it is unwilling to take the respon- sibility of its administi'ation, it is the proper course for him to seek the instruction of the Court by a suit in equity.^ 1 Hayden v. Marmaduke, 19 Mo. 403. See also Talbot v. Earl of Radnor, 3 Myl. & K. 252; Curtis V. Candler, .6 Madd. 123. But a proceeding in equity to obtain the direction of the court will not be entertained if needlessly or pre- maturely instituted. Dodge v. Morse, 129 Mass. 423. A trustee cannot maintain a bill in equity to obtain the instructions of the court as to what will be his powers and duties in case a corporation in which the stock of which the trust fund is invested shall carry out a contemplated sale of all their property to a new corporation tak- ing payment in shares of the new corporation, to be distributed among the old stockholders, and to restrain the corporation from making such sale. Treadwell v, Salisbury Mfg. Co., 7 Gray, 393; s. c, 66 Am. Dec. 490. A trustee for infants will be permitted to seek the direction of the court in reference to a compromise which called for the raising of funds not provided for in the trust deed. Keynolds v. Brandon, 3 Heisk. 593. 2 Lincoln v. Aldrich, 141 Mass. 342. See New England Trust Co. v. Eaton, 140 Mass. 532. Chancery will assist and protect trustees in the performance of trusts com- mitted to them whenever they seek the aid and direction of the court as to the establishment, manage- ment or execution of them. See Trotter v. Blocker, 6 Port. 269; Jones V. Stockett, 2 Bland, 409. CHAPTER XXII. THE POWEK TO SELL THE TKUST ESTATE. § 464. Introductory. § 477. 465. In What Manner Conferred. 466. Form of Words Required. 478. 467. Power to Sell by Implica- 479. tion. 480. 468. Limitations of Power. 469. The Subject Continued. 481. 470. Limitations in Regard to Exchange. 482. 471. Power of Sale by Consent 483. of Parties. 484. 472. Consent of Parties Con- tinued. 485. 473. Power of Sale by Order of Court. 474. How the Power of Sale is to be Executed. 486. 475. The Rule in Case of a Con- tingency. 487. 476. Power of Sale in Survivor. Power of Sale for Payment of Debts. Sale by Tenant for Life. Incidents of the Sale. Manner of Conducting Pub- lic Sale. Adjournment of Public Sale. Conditions of Sale. Sale Without Notice. Restraint upon Power of Sale. Where a Trustee may be Required to Sell the Trust Estate. Conveyance of the Trust Estate. How a Sale by a Trustee may be Avoided. § 464. Introductory — Authority to sell the trust estate is not among the essential or general powers of trustees. Such authority may be conferred by the instrument by which the trust is created, and there are circumstances under which it will be conferred by the court, and also by the legislature. But where a trustee has not been authorized by the instru- ment, by the court, or by legislative enactment, to sell the estate, he has no power to sell, unless it is plain that a sale is imperatively and urgently demanded by the interests of the beneficiaries. In a recent case in New York it was held that where a testator, in creating a trust in real estate, has withheld from the trustees a power of sale and organized the trust for a fixed period, it amounts to a direction that the land, not its procee Is, shall be held for the beneficiaries, 1064 POWER TO SELL TRUST ESTATE. [§ 464. and a sale by the trustees would be in contravention of the trust, unless an emergency has arisen in which funds are required to save the estate from threatened loss, to improve it where authority to improve is given, or to prevent serious and increasing injury. ^ Where an emergency of this char- 1 In re Roe (1890), 119 N. Y. 509. Where the testator has withheld from the trustees power of sale, and organized the trust for a fixed period, it amounts to a direction that the land shall be held for the beneficiaries and not its proceeds, and any sale by the trustees would be in contravention of the trust. But emergencies might arise in which funds would be required to save the estate from threatened loss, or to improve it where au- thority to improve was given, or it should be needed to prevent serious and increasing injury. To meet that emergency power was con- ferred upon the court to order a mortgage or sale, but not at all to sell for the mere purpose of rein- vestment and with a view only to increase the annual income. That in a given case may be what an adult owner in the free exercise of his ownership would do as a profit- able business measure, taking his own risk in the exercise of his own judgment, but such is not the condition or the duty of a trustee holding land for an infant, even though it be productive. The land will not run away or burn up or be stolen, and will be sure to await the infant when the period of pos- session arrives, while if turned into money for reinvestment risks of loss arise, although the trustee be entirely honest. The court, there- fore, always hesitates to sell the land of an infant, even where no trust envelojies and protects it, and surrounds the process with all manner of guards and protection, and where it is put in trust and its enjoyment postponed during a period of infancy without a power of sale given to the trustee. It should only be to meet an emer- gency, to answer a clear and ap- parent necessity, that authority to sell should be given by the court. And that, we think, is' the plain meaning of the statute." Ibid. 513. Where a trustee has expended money in necessary repairs and improvements of the trust estate, and the outlay has been approved by the cestui que trust, he may hold the land on which the money was expended till the sum is repaid. Woodward V. Wright, 82 Cal. 202; s. c, 22 Pac. Eep. 1U5. Under Code, Tenn. §§ 1776, 1777, provid- ing that the sale of lands adversely holden shall be utterly void, cov- enant will not lie at the suit of a vendee of such land for breach of warranty, nor will equity decree compensation where the sale is in gross, and not by the acre, and the deed conveys by apt description so many acres, "more or less," and the land claimed to have been lost was not estimated by either buyer or seller in fixing the price. Waters V. Button, 85 Tenn. 109; s. C, 1 S. W. Rep. 787. In the absence of an enabling statute, either general or special, a railroad or other cor- poration cannot purchase and hold real estate indefinitely without re- gard to the uses to be made of it. Case V. Kelly. 133 U. S. 21. § 464. J POAVER TO SELL TRUST ESTATE. 1065 acter, not anticipated by the settlor, has arisen, a trustee will be sustained in the sale of the trust estate, or of such a portion of it as may be necessary to meet the difficulties of the case. In the case above cited it was farther held that under the provisions of the statutes which authorize a sale of real estate held in trust, whenever it appears "that it is for the best interest of the estate so to do, and that it is necessary and for the benefit of the estate to raise * * * funds for the purpose of improving or joreserving such es- tate," to justify an order of sale some necessity must be shown to exist for the use of the money in preservation or improvement of the property which the estate is not a con- dition to supply, and which can only be supplied by bor- rowing upon a mortgage or selling a part and using the proceeds. A sale may not be ordered for the purpose of reinvestment and with a view only to increase the income, even though the real estate be unproductive. ^ In New York it has been held that the legislature, in the exercise of its tutelary power over the persons and property of infants and others under disability, may provide, by public or pri- vate acts, for converting real estate, in which thev have vested or contingent interests, into personal property or securities where necessary for their benefit, and may exer- cise this power as well in respect to the rights of persons in esse as to the contingent interests of persons yet to be born.^ 1 7n re Koe (1890), 119 N. Y. 509. brances upon the trust property, ^ Leggett V. Hunter, 19 N. Y. or in repairing or Improving the 445. Accordingly it was held, that unsold portions, or invested for the an act of the legislature (ch. 442 benefit of those who might become of 1853) is constitutional, author- interested under the will ; and all izing the supreme court, upon the conveyances under the act, if ex- petition of the cestui que trust, to ecuted by the trustee, should vest direct the sale of any part or parts in the grantee a fee-simple abso- of the trust estate from time to lute against all persons, whether time, as might be judged, calcu- in being or not, who might have or lated to promote the interests of acquire any interest under the will, the infants, whether yet in being The trustee's conveyance under the or not; providing that the pro- act conveys an indefeasible title ceeds should be applied by the against anybody who might other- trustee in paying taxes and incum- wise at any time claim an interest 1066 POWER TO SELL TRUST ESTATE. [§ 465. § 465. In What Manner Conferred. — The power of sale may be given in express terms in the instrument as an expression of the purpose of the grantor in the devise of the estate, and as belonging essentially to the devise, or apart from this, but directly connected with the devise, it may be conferred as a collateral authority. It is held that powers of this character are either appendant, or in gross, or altogether collateral. They are appendant where the exercise of the power is in the first instance to interfere with, and to a certain extent to supersede, the estate of the donee of such power. They are in gross where they do not commence until the determination of the estate of the donee. They are collateral where the donee has no estate at all in the property which is the subject of the power. ^ under the will, Irrespective of the power of sale conferred on him by that instrument. Ibid. See also on legislative power, Lion v. Bur- tiss, 20 Johns. 487 ; Jackson v. Van Zandt, 12 Johns. 169; Vanderhey- den V. Crandall, 2 Denio, 9 ; Wen- dell V. Crandall, 1 Comst. 492; Lott V. Wycoff, 2 Comst. 357; Baum- baugh V. Baumbaugh, 11 Serg. & K. 193; Holbrook v. Finney, 4 Mass. 568; Jackson v. Babcook, 16 N. Y. 249; Blakely v. Calder, 15 N. Y. 617; Sergeant v. Kuhn, 2 Pa. St. 393; Estep v. Hutchinson, 14 Serg. & K. 435; 4 Kent's Commentaries, 11, 15. iReid v. Gordon, 35 Md. 184; Bolton V. Jenks, 6 Rob. 166; Pratherv. McDowell, 8 Bush, 46; Bergen v. Eennall, 1 Caine's Cases, 18; .Jackson v. Schauber, 7 Cow. 187; Peck v. Henderson, 7 Yerg. 18 ; Peter v. Beverly, 10 Pet. 532 ; s. c, 1 How. 132; Ferebee v. Proctor, 2 Dev. & Bat. 432; s. C, llred. Eq. 143; .Jackson v. Burr, 9 Johns. 104; Tainter v. Clark, 13 Met. 220 ; Haskell v. House, 3 Brev. 242; Zebach V. Smith, 3 Binn. 69; White V. Howard, 52 Barb. 294; Yates V. Comptou, 2 P. Wms. 308; Stafford v. Buckley, 2 Ves. 179; Warneford v. Thompson, 3 Ves. 513; Forbes v. Peacock, 11 Sim. 152. A provision in the contem- poraneous written agreement that the grantee may sell whenever she had an opportunity to do so, at a fair price, did not vest in her the absolute discretion to determine whether or not she would sell the property at all, or whether she would keep it for her own use and enjoyment. Her duty was to offer the property for sale within a rea- sonable time after the debts were paid, and to use all reasonable diligence to obtain the best price. Kintner v. Jones, 122 Ind. 148. Grantor executed a trust deed of real and personal property to his three sons. The deed recited that he had purchased a farm known as "G's Delight," the title of which was in his daughter and her hus- band, and that unless they con- veyed the farm to the trustees they should receive nothing under the trust. The deed provided that the §466.] POWER TO SELL TRUST ESTATE. 1067 In New Jersey it has been held that where a power to dis- pose of property is conferred upon a person to whom a life estate or some other interest in it is given, this is a power in gross, and can be relinquished or surrendered ; but where such power is given to one who has no interest in the prop- erty it is a power simply collateral and cannot be sur- rendered. ^ Where there is a devise of the land to be sold by executors, and no direct gift of the land to executors or trustees which vests the title in them, the land descends to the heir and the executors have only a naked power. ^ § 466. Form of Words Required. — In considering the question whether an instrument confers the power of sale. grantees should have as full con- trol over the property as if the conveyance had been made free from any trust, and should have full power to sell and dispose of the same, and said "G-'s Delight, if conveyed to them, except said G's Delight shall not be sold until after the death of" the grantor; that the grantor should have the net profit of all the property, and the use and occupation of the real estate, and should pay all taxes and assessments, and keep down all incumbrances. The deed further stated that it was the in- tention of the parties that the grantor should have a life interest in the benefit arising from the trust, at his death the property was to be divided among his chil- dren. Held, that the deed vested the legal title of the realty in the grantor, and the trustees had no power to sell it until his death, and that the legal title of the personalty was vested in the trustee. Byrne V. Gunning (.1891)i 75 Md. 30; s. c, 23 Atl. Eep. 1. Where land is con- veyed to trustees as security for a loan of trust funds, and they lease it to the grantor, they can consent to a sale of it divested of their in- terest, in proceedings to subject the grantor's interest to claims of creditors. Eobb v. Voss, 155 U. S. 13; s. C, 15 S. Ct. Kep. 4. 1 Norris v. Thompson, 4 Green Ch. 314. See also Smith v. Death, 5 Madd. 317; West v. Berry, 1 Russ. & M. 440; Horner v. Swann, 1 T. ifc R. 430 ; Bickley v. Guest, 1 Russ. &M. 440; Miles v. Knight, 12 Jur. 666; Albany's Case, 1 Rep. 111. 2 Cobb V. Riddle, 14 Pa. St. 444; Schwartz's Estate, 14 Pa. St. 49; Guyer v. Maynard, 6 Gill & J. 4-:!0 ; Blight V. Ewing, 26 Pa. St. 135 ; Carpenter v. Cameron, 7 Watts, 51 ; Haskell v. House, 3 Brev. 242. The statutes of the State of New York have established a different rule for the State. In all the States there are statutoiy provisions for the sale of real estate by executors and administrators for the payment of debts and legacies. The appli- cation is made in these States to the courts having jurisdiction of probate matters. On the ISTew York statute, see White v. Howard, 52 Barb. 294; Ford v. Belmont, 7 Rob. 97; Bolton v. Jenks, 6 Bob. 166; Pennoyerv. Sheldon, 4Blatoh. 316. 1U68 POWER TO SELL TRUST ESTATE. [§ 466. the court will have supreme regard to the intention of the settlor. No form will be required and none has been pre- scribed. The simple question is : Did the grantor intend to confer a power of sale? In construing an instrument, especially a will, the coui't will be guided by a very indulgent and considerate regard for the weaknesses and infirmities of human nature. In a recent case before the Court of Appeals of the State of New York, Mr. Justice Earl quoted with approval the following passage from a standard text book: "In the construction of wills the most unbounded indulgence has been shown to the ignorance, unskillfulness and negligence of testators. No degree of technical in- formality, or grammatical or orthographical error, nor the most perplexing confusion in the collection of words, will deter the judicial expositor from diligently entering upon the task of eliciting from the contents of the instrument the intention of its author, the faintest traces of which will be sought out from every part of the will, and the whole carefully weighed together. "^ A devise or deed in trust to pay debts confers a power of sale though no power is ex- pressly given. ^ In a case where the testator in his will di- 1 Weeks v. Cornwell, 104 N. Y. dition, it is, in legal effect, rather 325,337; 1 Jarman on Wills, 643; a charge than a technical condi- 1 Sugden on Powers, 116. tion; it binds the land to such pay- ' Wood V.White, 4 Myl. & Cr. ment, and the trustee takes it suh- 460. See also Sheldon v. Dormer, ject to this charge. In order to 2 Vern. 310; Ivy v. Gilbert, 2 P. execute his trust and save the es- Wms. 13; Mills v. Banks, 3 P. tate from forfeiture, for the benefit Wms. 1; Shrewesbury v. Shrews- of his cestui que trust, he must raise bury, 1 Ves. Jr.234; Allen v. Back- the money for the payment of such house, 2 V. & B. 65; Wilson v. debt, and this can only be done by Halliley, 1 Russ. & M. 590; Will- a sale; therefore he must sell. It iams V. Otey, 8 Humph. 563; is part of his duty as trustee, and Goodrich v. Proctor, 1 Gray, 567. of course within the scope of his "In the present case, the estate was fiduciary authority. Take the conveyed to the trustee in fee familiar case of a conveyance of charged with the payment of one- real and personal property to trus- half of the grantor's debts, not tees for the payment of the settlor's specified, nor could they be spec- debts; of necessity the estate must ified, because they were the debts be sold to raise money for such which might be due at the time of payment, if the estate is vested in his decease, and though this charge the trustees by the deed of an is expressed in the form of aeon- owner, it is within the scope of § -iOB.] POWER TO SELL TRUST ESTATE. 1069 rected his fax'm to be disposed of to the very best advantage, either in a body or divided into lots, and the proceeds thereof to be divided into five equal parts and given to cer- tain specified persons, but the will did not declare by whom the sale should be made, it was held that it was to be con- sidered as a bequest of money, that it was a fund distribu- table by the executors to the legatees, and, therefore, that they had power to make the sale without invoking the aid of a court of equity.^ In an English case, where a settle- ment of personalty upon the usual trusts contained a power for the trustees to sell the trust funds and invest in the purchase of real estate, to be held upon such trusts as would best correspond with the subsisting trusts, and that such real estate should be considered as personal estate for the purposes of the settlement, there was no express power of sale over the real estate so purchased. It was held that the trustees had a power of sale over purchased real estate.* In Missouri it has been held that the trustees of a local church of the Methodist Episcopal Church in the United States have authorit}^, under its book of discipline, to mort- gage or sell the church premises for the pajaiient of money their flduoiary authority to sell, 174. Where a testator devises prop- therefore they have no occasion to erty to trustees with the direction obtain license to sell, their own that they manage the same so as to deed transfers a good title to the produce income which shall re- purchaser." Goodrich V. Proctor, main in their hands or under their 1 Gray, 567, 570. See also Purdie control and management until the V. Whitney, 20 Pick. 25; Gould v. eldest child of this daughter shall Lamb, 11 Met. 84; Walker v. Brun- arrive at the age of 21 years, or gard, 13 Sm. & M. 723. But an shall marry, and shall then divide unsealed instrument of writing the original property among the conveying land in trust to secure children of such daughter then the payment of p, debt is not suffi- living, any power to sell inferable cient per se to authorize a sale and from the direction to manage the conveyance of the land by the trus- property so as to produce an in- tee. An equitable lien is created come is annulled by the directions upon the land which can be en- to divide the original property forced by a court of equity. Lin- among the children of his daughter ton V. Boly, 12M0.567. SeeJIundy after the oldest becomes of age. v. Vawter, 3 Gratt. 518. Blanton v. Mayes, 58 Tex. 422. ' Rankin v. Rankin, 36 III. 293. See al?o Andei>oo v. Anderson, 31 2Tait V. Lathbury, L. K. 1 E'|. X. .1. T ;. .Vl. 1070 POWER TO SBLL TRUST ESTATE. [§ 4fi^ which the trustees have advanced or become responsible for to build the church, and where the trustees refuse to exercise such power to sell a court of equity will enforce the sale.i § 467. Power to Sell by Implication. — Where the lim- itations of an instrument creating a trust include obliga- tions, the discharge of which requires an estate in the realty and the power of sale, such estate and power will vest in the trustee, though not expressly conferred by the deed. He will hold by implication such power as may be required to enable him to execute the trust. In New Jersey it has been held that where property is given to executors in trust, to be equally divided among testator's children, with a direction to pay the sons their share, and to hold the daughters' shares and pay them the income thereof in half- yearly payments for life, the executors have power to sell the testator's lands. ^ In a late case it was held that where ' Bushong V. Taylor, 82 Mo. 660. "Where a power of sale exists in a trustee or trustees, a court of equity may enforce a sale for the payment of the deht, and this is of common occurrence in cases of ordinary trust deeds, and a fortiori, where the trustee proves recalci- trant, and fails to exercise the power given him. No case appears to have been found where the point of the power of trustees to charge the church property has been di- rectly passed upon, hut several in- stances have occurred where such powers have passed unchallenged and formed the basis of judgments of courts of last resort." Ibid. 668. See Trustees M. B. Church v. Shulze, 61 Ind. 511; Price v. M.E. Church, 4 Ohio, 515; Trustees M. B. Church v. Garvey, 53 111. 401; Van Houten v. Dutch Church, 17 jST. J. Eq. 126; South Scituate Savings Bank v. Eoss, 11 Allen, 443. 2 Belcher v. Belcher, 38 N. J. Eq. 126. Where a trustee is authorized to sell the land conveyed in trust when the beneficiaries come of age, and pay the proceeds to them, a conveyance of the land to such beneficiaries is equivalent to a sale thereof, and divested the trustee of all title, passing the fee to them. Gibson v. Gains (1894) (Ky.), 28 S. W. Kep. 781. Under a trust to permit the beneficiary to use and enjoy the said property and take the rents, issues and profits thereof as long as he shall live," the trustee has an implied power to sell per- ishable property, and to convert into money transient securities, for the purpose of making permanent investments ; and a bank purchas- ing a promissory note from the trustee in good faith acquires a valid title. Mason v. Bank of Com- merce (1887), 90 Mo. 452; S. C, 3 S. W. Kep. 206. "If a testator directs that his lands shall be sold. § 467.J POWER TO SELL TRUST ESTATE. 1071 a testator imposes upon his executor trusts to be performed which cannot be executed or performed without an estate in his lands, or a power of sale, although no estate or power be expressly given by the will, the executor will take by implication an estate in the lands, or at least a power of sale, sufficient to enable him to execute the trusts or per- form the duties imposed upon him, and in either event his deed will convey the legal title. And if such a conveyance be prematurely made, or for an inadequate consideration, in breach of trust, the title will nevertheless be good at law, and the relief will be in equity, and at the instance only of the cestui que trust, whose interests have been and the proceeds be distributed by his executors, they have the power to sell, though no such power is in terms given to them. So if a testator merely charges his lands with the payment of his debts, this is so equivalent to a trust for that purpose, that a purchaser is not bound to see to the applica- tion of the purchase money. In both cases the power and trust are implied for the purpose of carry- ing into effect the declared inten- tion as to the purchase money." Wood V. White, 4 Myl. & Or. 460, 481. Testator devised his house to a church for a parsonage, pro- viding that if the church suffered the premises to go to decay, so as not to be fit for the minister's fam- ily to live in, for one year, the town should take possession, and dispose of them for the benefit of its poor. Held, that the church, with the concurrence of the town, when authorized by an act of the General Assembly, could convey the property and invests the pro- ceeds in a house-lot better situated for a parsonage, and that the pur- chaser would not take it charged with the equity of seeing that such lot was taken for the same pur- poses and held under the same trusts as the property sold, as pro- vided by such act. In re Van Home a893),18 R. I. 389; s. C., 28Atl.Rep.341. Three stockholders executed an instrument whereby they professed to sell their stock to the fourth stockholder in the same corporation, "for and during the period of six months, in trust for the use and benefit of the grantors, " with power to sell the same on cer- tainspecified terms. Held, that such instrument did not prevent the latter from selling his own stock on such terms as he chose, it not appearing that his so doing in any way prevented the sale of the stock named in said instrument. Levi v. Evans, 57 Fed. Rep. 677 ; S. c, 6 C. C. A. 500. Where land was conveyed in trust to pay the debts of the grantor out of the rents and profits and then for the support of him- self, his wife and children, and at his death to be divided among his children, it was held that the trus- tees had no authority to sell for the payment of the debts or for any other purpose, however urgent the necessity. Mundy v. Vawter, 3 Gratt. 518. 1U72 POWER TO SELL TRUST ESTATE. [§ 468. prejudiced thereby. ^ In Texas it was recently held that where a bishop of the Roman Catholic Church conveys land to which he holds the fee-simple title in trust for the church, it will be presumed, in the absence of evidence to the contrary, that such conveyance was made by authority.^ § 468. Lilmitations of Power. — A trust containing a power of sale must be executed in strict conformity to the limitations of the instrument. Such a power does not give the trustee authority to dispose of the estate in some other manner, even though he may suppose that another method would promote the interests of the estate. This rule, how- ever, is subject to certain modifications. Where the power is conferred for the purpose of raising a charge, the trus- tee may be sustained in raising the money by a mortgage on the estate. In England it has been held that while a power of sale out and out, and having an object beyond the rais- ing of a particular charge, does not authorize a mortgage, yet when the power is for raising a particular charge, and 1 Lindley v. O'Eeilley, 50 N. J. Law, 636; s. c, 7 Am. St. Rep. 802. See also Doe v. Haslewood, 6 Ad. & E. 167 ; Doe v. Pratt, 6 Ad. & E. 180; Doe v. Gillard, 5 Barn. & Aid. 785; Stevenson v. Mayor of Liverpool, L. B. 10 Q. B.81; Shaw v. Weigh, 2 Str. 798; Davies v. Jones, L. K. 24 Ch. D. 190; Gibson v. Montfort, 1 Ves. Sr. 489 ; Vanness v. Jacobus, 17 N. J. Eq. 153; Dewey v. Ruggles, 25 N. J. Bq. 35; Haggerty v. Lanter- man, 30 N. J. Eq. 37; Craig v. Craig, 3 Barb. Ch. 77; Tucker v. Tucker, 5 N. Y. 408; Curling v. Austin, 2 Dr. & S. 129; Eidsforth V. Armstead, 2 Kay & J. 333; Blatch Y. Wilder, 1 Atk. 419; Win- ston V. Jones, 6 Ala. 550; Vallette V. Bennett, 69 111. 632; Barker v. Devonshire, 3 Merlv. 310; Davis v. Hoover, 112 Ind. 423; Bond v. Zeigler, 1 Ga. 324; s. C, 44 Am. Dec. 656; Will of Fox, 52 X. Y. 530; s. o., 11 Am. Eep. 751. "When trustees are directed to do anything for the performance of which the legal estate is requisite, then they are to have the legal es- tate. * * If trustees are to pay out of lands there are many cases which show that they must take the legal estate." Anthony v. Eees, 2 Cromp. & J. 75. "If a tes- tator, having a right to dispose of his real estate, directs that to be done by his executor, which necessarily Implies that the estate is first to be sold, a power is given by this implication to the execu- tor to make such sale and execute the requisite deed of conveyance." Goings V. Emery, 16 Pick. 107,112; S. C, 26 Am. Dec. 645. See also Ames V. Ames, 15 R. I. 12; State V. Cincinnati, 16 Ohio St. 170; Porter v. Springfield, 55 Mo. 303. 2Gabert v. Olcott, 86 Tex. 121; s. c, 23 S. W. Rep. 985. § 468. J POWER TO SELL TKUST ESTATE. 1073 the estate is settled or devised subject to that charge, it may be proper to raise the money by mortgage, and such a mortgage will be supported as a conditional sale.^ In its essential features this doctrine is sustained by the courts of this country. In Virginia it has been held that where a deed of settlement empowers a married woman to change the investment of the estate, and the trustees, on her writ- ten request, to sell the trust property and to invest the pro- ceeds in other property upon the same trusts, this does not authorize those trustees to mortgage the trust property for payment of bonds given for other property bought by those trustees as such, nor is the woman empowered to authorize them to do so ; and a mortgage executed by them under such circumstances is ultra vires and void.^ A power to sell the estate and to dispose of the proceeds confers the power to mortgage, and a power to raise money by sale or mortgage has been held to authorize a mortgage with a ' Stroughill V. Anstey, 1 De G., M. & G. 035. There is conflict of authority on the question whether authority to sell implies a power to mortgage. The following hold that the power is not iaiplied: Hubbard v. German Catholic Cong., 34 Iowa, 31 ; Dolan v. Baltimore, 4 Gill, 394; Patapsco Guano Co. v. Morrison, 2 Woods, 395; Tyson v. Latrobe, 42 Md. 325; Payne v. Barnes, 100 Ma?s. 470; Hoyt v. Jaques, 129 Mass. 286; Stokes v. Payne, 58 Miss. 614; s. c, 38 Am. Rep. 340; Ferry v. Lalble, 31 N. J. 567; Constant v. Servoss, 3 Barb. 128; Waldron v. McComb, 1 Hill, 111 ; Cumming v. Williamson, 1 Sandf. Ch. 17; Russell v. Russell, 36N. Y. 581; s. c, 93 Am. Dec. 540; Albany F. Ins. v. Bay, 4 N.Y. 9; Bloomer v. Waldron, 3 Hill, 361 ; Head v. Temple, 4 Heisli. 34; Eland v. Baker, 29 Beav. 137; Devaynes v. Robinson, 24 Beav. 86 ; Page V- Oooper, 1(5 Beav. 400; But- ler V. Duncomb, 1 P. Wms. 448; Davey v. Durraut, 1 De G. & J. 535; Shaftesbury v. Marlborough, 2 Myl. & K. 111. Contra: Wayne V. Middleton, 2 Ga. 383 ; Watson v. James, 15 La. Ann. 386; Williams v. Woodard, 2 Wend. 492; Penn. Ins. Co. V. Austin, 42 Pa. St. 257; Mills V. Banks, 3 P. Wms. 9; Allen V. Backhouse, 2 V. & B. 65; Ball V. Harris, 4 Myl. & Cr. 264; Wood V. Goodridge. 6 Cush. 117; s. c, 52 Am. Dec. 771. A power to mortgage does not imply a power of sale. Drake v. Whitmore, 5 De G. & Sm. 619. 2 Green v. Claiborne, 83 Va. 386, 391. See also Tyson v. Latrobe, 42 Md. 325; Loring v. Brodie, 134 Mass. 453. Under a power to sell lands given by a will with direc- tions to reinvest the moneys arising from the sale, the trustee may not mortgage the lands. Such amort- gage is void. Bloomer v. Waldron, 3 Hill, 301. 1074 POWER TO SELL TRUST ESTATE. [§ 469. power of sale.^ Where an order is given by the court to raise money out of a trust estate for the payment of debts, costs or other charges, a power of sale in a mortgage will be given if there is a necessity for making use of it.^ Where a trust was created to sell an estate which was sub- ject to a mortgage, and the trustee was instructed to pay off the mortgage out of the proceeds and to pay the sur- plus to the mortgagor, it was held that a sale subject to the mortgage was valid. ^ § 469. The Subject Continued. — The doctrine of the English courts, as generally upheld in this country, has been expressly rejected by the Supreme Court of Pennsyl- vania. In a leading case before that court it was held that the absolute and unrestricted power to sell includes a power to mortgage.^ In his opinion in this case, Mr. Justice Sharswood gave the following exposition of the pinnciple involved as maintained by that court: "The whole case, then, is resolved into the question whether, in this State, an absolute and unrestricted power to sell includes a power to mortgage. We cannot regard this as an open question. It was expressly decided in Lancaster v. Dolan that a power to sell does include a power to mortgage, which is a condi- tional sale.^ It was not a mere obiter dictum, but the very 1 Waterman v. Baldwin, 68 Iowa, from a judicial sale, at a time when 255. In construing a power it is an absolute sale of the equity of proper, in ascertaining the object redemption by the trustee could and intent of the maker, to con- not, on account of the depression sider, not only the words used in of ralues, have been made without the instrument, but also the cir- great sacrifice. Ibid. See also cumstanoes surrounding the maker Bridges v. Longman, 24 Beav. 27; at the time of its execution. So Leavitt v. Pell, 25 N. Y. 474; Page where the vital power conferred v. Cooper, 16 Beav. 400. upon the trustee was to "sell and ^ Selby v. Cooling, 23 Beav. 418. dispose" of the property to pay the ^ Manser v. Dix, 8 De G-., M. & debts of the grantors, held that the G. 703 ; Fluke v. Fluke. 1 Green language was broad enough to Ch. 478. cover a disposition of the property ^ Zane v. Kennedy, 73 Pa. St. by mortgage, and that such dis- 182. See also Duval's Appeal, 38 position was justifiable, and thatthe Pa. St. 118; Pennsylvania Life mortgages would be enforced, Ins. Co. v. Austin, 42 Pa. St. 263. where it was given to borrow ^ Lancaster v. Dolan, 1 Kawle, money to redeem the property 231. § 470. j POWER TO SELL TRUST ESTATE. 1075 point upon which the judgment hinged as to the remainder of the estate, over which there was a general power of ap- pointment. It has since been recognized as the settled law in several cases. ^ It is of no consequence whether the case of Mills V. Banks, ^ cited in support of the ruling in Lan- caster V. Dolan, has or has not been subsequently disap- proved in England. We are bound to adhere to a determi- nation of this court settling a rule of property which has been so often recognized and affirmed."^ § 470. Liimitations in Regard to Exchange. — A sim- ple and unconditional power of sale does not authorize any sort of barter or exchange of the estate. The consideration must be money, and only money. Any exchange of this character made by a trustee under a power of sale, how- ever excellent his intentions may be, will render him re- sponsible for the full value of the estate with which he has parted.* In an early case it was held that a power to sell and exchange implied a power to make a partition. But at a later period Lord Eldon doubted whether the point was well established by this case, and declined to decide it as not coming properly before him in the case under consider- ation. ^ In a case in Pennsylvania, where a testator left an estate in trust, and in the instrument provided that "at the expiration of ten years, or at any time thereafter, if, in the opinion of my trustees, it will be for the benefit and advan- tage of my estate, and for the interest of my said children, that the said estate be divided among my children, I hereby 1 Presbyterian Corporation v. Goodridge, 6 Cusli. 117; s. c, 52 Wallace, 3 Rawle, 109; Zane v. Am. Dec. 771. Kennedy, 73 Pa. St 182. * Ringgold v. Ringgold, 1 H. & 2 Mills V. Banks, 3 P. Wms. 1. Gill, 11; s. c, 18 Am. Dec. 250; 3 Zane v. Kennedy, 73 Pa. St. Taylor v. Galloway, 1 Hun, 232; 182. One in whom the legal title s. c, 13 Am. Dec. 605; School v. to property is vested, subject to a McCully, 11 Rich. 424; Cleveland trust created in favor of others by v. State Bank, 16 Ohio St. 236; deed of trust executed in another King v. Whi ton, 15 Wis. 684; Man - State, has full power to mortgage ser v. Dix, 8 De G., M. & G. 703; the property. Watson v. Sawyer, Cox v. Cox, 1 Kay & J. 251. 15 La. Ann. 386. See also Wayne ^ Abel v. Heathcote, 4 Bro. Ch. V. Middleton, 2 Ga. 383; Wood v. 278; s. c, 3 Ves. 98; Attorney- 1076 POWER TO SELL TRUST ESTATE. [§ 470. authorize the same to be made so th'at the share of each may be set out in severalty," it was held that the opinion of the trustees was the only test of the propriety of a division. The trustees had no power to make partition ; no more was committed to them than determining whether a partition was advisable.^ It has been held that the power to "sell and exchange" includes the power of conveying an undivided interest in the whole of the estate in return for a sole and separate interest in a divided part of the estate, or to make partition, and though a power of sale does not au- thorize a partition, yet a power to "exchange" is well exe- cuted by a "partition."^ In an English case it was held General v. Hamilton, 1 Madd. 214; 2 Sngden on Powers, 506. 1 In re Naglee's Estate, 52 Pa. St. 154. A power of exchange of lands is properly executed by par- tition. Accordingly where an in- dividual moiety of lands vested in A, B and C, as trustees of a settle- ment which expressly authorized a partition, and the other moiety was vested in D, E and F, as trustees of a settlement with power to sell, dispose of, convey and assign the said hereditament for such price in money, or for such an equivalent or recompense in lands and hered- itaments as to the trustees should seem reasonable, and for that pur- pose to revoke the old uses and to limit other uses and trusts, and a partition deed, purporting to be in exercise of said powers, was exe- cuted by the trustees of the two mollies. Held, that the partition was properly affected by D, E and P under their power. Semble, a partition between any number of persons might properly be effected under a similar power. In re Frith and Osborn, L. E. 3 Ch. D. 618. '■' Phelps V. Harris, 51 Miss. 789. "The expression 'to dispose' of is very broad and signifies more than 'to sell.' Selling is but one mode of disposing of properly. It is argued, however, that the subse- quent direction to invest the pro- ceeds indicates that a sale was meant. But this does not neces- sarily follow. Proceeds are not necessarily money. This is also a word of great generality. Taking the words in their ordinary sense, a general power to dispose of land or real estate, and to take in return therefor such proceeds as one thinks best, will include the power of disposing of them in exchange for other lands. It would be a disposal of the lands parted with; and the lands received would be the proceeds. It is to be consid- ered that the words used are con- tained in a will, to which the rules of construction applicable to ordi- nary speech are to be applied, ex- cept where technical terms are employed. * * * Taking the whole clause in the codicil to- gether, it is equivalent to an au- thority to dispose of the property as the trustee should deem for the interest of his children; and this would include the power to barter or exchange as well as the power to sell." Phelps v. Harris, 101 U. § 471. J POWEK TO SELL TRUST ESTATE. 1U77 that the donees of a power of sale and exchange may pay money for owelty of exchange, although they are not ex- pressly authorized to make such payment. ^ § 471. Power of Sale by Consent of Parties. — Where the instrument places no restriction upon the powers of the trustee, and there is no limitation over to children or other third persons, the trustee may sell the trust estate with the consent and approval of the cestui que, trust, provided he is sui juris? Where land is sold for the purpose of investing S. 370, 380. But see also Brassey V. Chalmers, 4 De G., M. & a. 582; s. C, 16 Beav. 223; Bradshaw v. Fane, 3 Drew. 536. 1 Bartram v. Whlclicote, 6 Sim. 86. 2 Arrington v. Cherry, 10 Ga. 429. Where a trustee is given power to sell land, at the request of his cestui que trust, simply for the purpose of reinvestment, a mortgage executed by him and his cestui que trust will convey to the mortgagee no greater interest than the cestui que trust has in the lands, even if this be only an estate for life or years. Butler v. Gazzam (1886), 81 Ala. 491; s. c, 1 So. Rep. 16. Where land owned by a woman was conveyed to a trustee in trust for her children, her hus- band joining in the deed, which gave the trustee power to sell the land during the minority of the cestuis que trust, upon a request from their ' 'legal and natural guardian," held that a request to sell made by their father was sufficient to authorize the trustees to sell. Harris v. Petty, 66 Tex. 514; s. C, 1 S. W. Eep. 525. The trustees of a settlement of real estate were empowered to sell and sold the property comprised therein, with the consent of the tenant for life. The tenant for life was bankrupt and had incumbered his life es- tate. Meld, that the concurrence of the incumbrancers and the trus- tee in bankruptcy of the tenant for life was essential in order to make a good title. In re Bedingfield, 3 Reports, 483; (1893) 2 Ch. 332. T voluntarily conveyed land to H in trust for T's wife, her child then born, and after-born children. T, his wife and H, being parties to the deed, which stipulated that said land might be sold if all the parties joined in the conveyance, but should not be subject to T's debts. Thereafter T and his wife conveyed part of the land, H join- ing, "to release any claim he may have on said trust property."' Held, that his release conveyed his title as trustee for the children, as well as the wife's life interest. Taylor V. Kleier (1894) (Ky.), 26 S. W. Rep. 3. Certain real estate conveyed in trust for the benefit of grantor's minor children, with full power in the trustee to sell the same upon the written request of the beneficiaries, was, on request, sold by the trustee, a written con- tract entered into with the pur- chaser and a conveyance tendered. On suit by the trustee against the purchaser it appeared that said property would rent for but little more than sufficient to pay taxes and keep up repairs; that it was depreciating in value; and that 1078 POWER TO SELL TRUST ESTATE. [§ 471. the proceeds the consent of the court should be secured. In a recent case it was held that where all the parties in in- terest in unimproved property, held in trust under a will, unite in a desire to have it sold, the proceds invested for the benefit of the life tenant and those in remainder, and there is no prohibition of such sale in the will, the Chancel- lor can authorize such sale in his discretion. ^ In the lead- ing and very instructive case of Mortlock v. Buller, where there was a power of sale in the instrument "at the request and with the approbation" of the beneficiaries, the pro- ceeds to be devoted in the first place to the paying off of the incumbrances, and afterwards the residue to be invested in other lands to be settled to the same uses, Lord Eldon, in his opinion, said: "The object of the sale must be to invest the money in the purchase of another estate, to be settled to the same uses, and they are not to be satisfied with probability upon that; but it ought to be with refer- ence to an object at that time supposed practicable ; or, at least, this court would expect some strong purpose of fam- ily prudence, justifj'ing the conversion, if it is likely to continue money. "^ In a recent case it was held that where a deed conveys land in trust for the use of the grantor's wife during her life, and after her death to such children as she may have living by the grantor, with power in the wife "to empower the trustee, in writing under hand, to sell any part or the whole of said trust estate, and to reinvest the proceeds by her written consent in such other property, subject to the above described trusts," as he shall deem best, the trustee, with the written consent of the wife, may convey the land in fee.^ Where a deed conveying land in trust gives the trustee power to sell the same upon the joint there were no other funds with Safety Vault Co. (1889) (Ky.), 11 which to support said beneficiaries. S. W. Kep. 806. See also Gossom Held, that a decree of specific per- v. MoFarran, 79 Ky. 236. formance of said contract against ^ Mortlock v. Buller, 10 Ves. 292, the purchaser should be sustained. 309. Harris v. Jackson (1891) (Ky..), ^ Headen v. Quilliam (1898), 92 17 S. W. Kep. 441. Ga. 220; s. c, 18 S. E. Rep. 543. 8 Kobinson v. Fidelity Trust & §471.J POWER TO SELL TRUST ESTATE. 1079 written request of the beneficiaries, and provides that such request shall be signified by their joining in the deed made by the trustee, a purchaser from the trustee, who receives one deed from him and another at the same time from the beneficiaries, acquires the legal title. ^ In a case where trustees were empowered to sell real estate, but not without the consent of seven tenants for life of the produce, after the death of one of the tenants for life the trustees entered into a contract to sell, with the consent of the surviving six and of the absolute owner of the seventh share, it was held that a sale required the assent of all the seven tenants for life, and that a good title could not be made.^ ' Franklin Savings Bank v. Tay- lor (1890), 131 111. 376; S. C, 23 N. E. Rep. 397. 2 Sykes v. Slieard, 33 Beav. 114. "One of the daughters has died without having consented, and the question is, whether under these circumstances a good title can be made. I am clearly of opinion that, it she were now alive and re- fused to consent, a good title could not be made. Suppose she had been incompetent to consent, and had died without having had the power of consenting, how could I execute the trust. The testator has declared that the trust shall not be executed without the consent in writing of all his sons and daugh- ters ; and you can get the consent only of those who are living, but that will not make a good title to the property, for that would not be sufficient under the power. The trust is incapable of being exercised except with the consent of every one of a class of persons, one of whom does not consent, and cannot con- sent, and although the testator has made a very absurd disposition of his property, he had the power of doing so." Ibid. This case was affirmed by the lord justices. See also Bateman v. Davis, 3 Madd. 98; Wright v. Wakeford, 17 Ves. 459; Kissam V. Dierkes, 49 jST. Y. 602; Green v. Green, 2 Jon. & La. 529; Dame v. Annas, Dyer, 219; Mansell v. Mansell, 2 P. Wms. 678 ; Holdsworth v. Goose, 29 Beav. Ill; Eisdell v. Hammersley, 31 Beav. 255 ; Taylor v. Ponica, 32 W. R. 335; Alley v. Lawrence, 12 Gray, 373. However, where it is clear that a sale at some time is necessary to accomplish the pur- poses of the trust as where the trustee is directed to sell the trust property and to distribute the pro- ceeds among the testator's chil- dren, and the children of his de- ceased children, and all the persons have died whose assent to the sale is required, a sale by the trustee without such assent is within his power, because the purposes of the creator of the trust will not be permitted to be thwarted and the trust to become unavailing by the accident of the failure of the per- sons named by him, in their life- time, to give their assent to the sale of the property. Leeds v. Wakefield, 10 Gray, 514; Sohier v. Williams, 1 Curt. 479. 1080 POWER TO SELL TEUST ESTATE. [§ 472. § 472. CoDsent of Parties Continued. — In a case where land was vested in a trustee for the separate use of a feme covert, and the deed gave the trustee a power to lease at her request in writing, and the trustee and cestui que trust agreed by parol to let the' property to the plaintiffs, but before the lease was executed the cestui que trust re- called her assent, it was held that there was no contract binding on the cestui que trust and no part performance, and that the plaintiffs could not enforce the agreement.^ In his exposition of the principle of equity involved in this decision the Master of the Rolls, Sir John Romilly, said : "I am of opinion that there exists a locus penitentioe in the lessor, and that he may, at any time before the solicitor or his agent has delivered over the lease to the lessor, coun- termand the delivery of it and refuse to be bound by it. I am of opinion that such execution does not constitute a contract."^ In a suit for specific performance, where a written consent is required, the writing must be produced. Evidence of such part performance as might serve to take the case out of the statute of frauds will not be held sufficient.'* 1 Phillips V. Edwards, 33 Beav. the settlement required the consent 440. of the person who should be heir- 2 Phillips V. Edwards, 33 Beav. at-law of A, such consent was dis- 440, 445. pensed with. Beloley v. Carter, 3 Adams v. Broke, 1 Y. & C. Ch. L. K. 4 Ch. 230. Where the tenant 627; Phillips V. Edwards, 33 Beav. for life is protector of the settle- 440; Sykes V. Sheard, 33Beav. 114; ment and acts as such in barring Blackwood v. Burrowes, 2 Conn, the entail, he may still give his &L. 459; Martin v. Mitchell, 2 J. consent to a sale. Hill v. Pritchard, & W. 425. The alienation of his Kay, 394. Trustees for sale of two- interest by a tenant for life does thirds of a leasehold being plaint- not destroy the validity of his con- Iff 's in a partition action were held sent to a subsequent sale by the to sutfloiently represent the ben- trustees with the concurrence of eficiaries to obtain an order of sale the alienee. Alexander v. Mills, without notice to them. Stace v. L. R. 6 Ch. 124; Simpson v. Gage, L. R. 8 Ch. D. 451. A trus- Bathurst, L. R. 5 Ch. 193; War- tee may, without the consent of the burton v. Farn, 16 Sim. 325. Under beneficiaries, sell land devised "to § 17 of the Settled Estates Act (19 be fairly and equally divided" if it & 20 Vict., ch. 120), re-enacted by is necessary to sell to give effect to § 34 of the Settled Estates Act, the intention. Li re Cooke, L. R. 1877 (40 & 41 Vict., oh. 18), where 4 Ch. D. 454. A settlement con- 473. J POWER TO SELL TRUST ESTATE. 1081 § 473. Power of Sale by Order of Court. — Where the instrument creating the trust does not authorize the sale of the trust estate a court of equity may confer such authority upon the trustee, but, as a condition precedent, the parties in interest must be brought before the court, and it must be shown that there is a good and sufficient ground for such action.^ Where the trust is brought under the control of the court by a bill for its execution, the power of the trustees to make a sale, conferred by the instrument, is so far suspended that they are not permitted to sell the estate without the order or permission of the court. ^ Where the objects of the trust cannot be accomplished without vex- atious delay or inconvenience under the directions of the instrument, the court will direct a sale or mortgage of the estate in order to enable the trustees to carry out the inten- tion of the grantor.^ tained a power which was to be executed by A with the consent of B, "such consent to be signified by some deed to be duly executed by him, and not otherwise," to release certain estates from charges in favor of the younger children of A, and substitute others in their stead. The donee of the power executed it by deed, which was not, however, executed by B till nine months after its execution by A, but evidence was produced that a draft of the deed, purporting to be an execution of the power byA, had been shown to B before it was ex- ecuted by A, and that B had then given his parol consent thereto. Held, that the power had been validly executed. ■ Offen y. Har- man, 1 De G., F. & J. 253. One who holds an equitable interest in land is bound by a sale of the land by the trustee at his request, even though such request is not in writ- ing. Rogers v. Tyley (1892), 144 111. 652; s. c, 32 N. E. Kep. 393. iKeeside v. Peter, 35 Md. 222; Bush v. Bush, 2 Duvall, 269 "Walker v. Smallwood, Amb. 676 Drayson v. Pocock, 4 Sim. 283 Raymond v. Webb, Lofft. 66; Cul- pepper v. Aston, 2 Ch. Gas. 116; East Rome Town Co. v. Cothran, 81 Ga. 351. 2Reeside v. Peters, 35 Md. 222; Downs v. Grazebrook, 3 Meviv. 208; Matthie v. Edwards, 2 Coll. 480. 3 Conklin v. Washington Uni- versity, 2 Md. Ch. 498. It is now settled, that if the purpose of a trust cannot be accomplished with- out the most serious delays and inconveniences, the court will di- rect a sale or mortgage of the es- tate, though a power is only given to raise money for these purposes in a different way. Ibid. Under 4 Rev. St. (Sth ed.), p. 2439, § 65, providing that an order to sell land held in trust shall not be granted unless a notice in wi-iting stating the time and place of making the application for leave to sell has been served on the "beneficiary or 1082 POWER TO SELL TRUST ESTATE. [§ 474. § 474. How the Power of Sale is to be Executed. — It is a well settled principle of equity that the creator of a trust has the right to impose such limitations, terms and conditions relating to the execution of the trust as may seem to him good. He may guard the trust against viola- tion or abuse in any manner that he may deem tit and proper, and all directions and instructions of this character must be literally and exactly obeyed. However unnecessary or even unreasonable they may appear, the person who ac- cepts the trust must execute the trust, and to execute the trust is to carry out the intention of the grantor to the minutest particulars. The trustee will not be permitted to substitute any act or course of procedure, suggested by his own wisdom, for the directions of the trust. He may de- cline the trust, but he is not clothed with any power to re- form it, or to modify it in any respect. It has been, well said that "the courts have been uniformly and severely exact on this point. "^ This rule, in its full length and breadth, is applicable to the power of sale by the trustee. The creator of a trust may impose any restraint upon the power of sale that he may think proper, and unless it re- quires a violation of law, its execution must be in obedience to such restraint or it will be void. Thus, where there is a power and trust to be executed at or after a given time, it cannot be executed before the time appointed.^ In Massa- chusetts it has been held that lands conveyed by a marriage settlement to trustees, with power to sell^with the consent of the husband and wife, or the survivor of them, and after beneficiaries," at least eight days In re Vandervoort, 1 Eedf. Sur. before making the application, a 370; Alley v. Lawrence, 12 Gray, notice served on the life beneficiary 373; Hunt v. Townshend, 31 Md. of a trust estate, but not on the re- 336; Booraem v. Wells, 19 ^N". J. mainder-men, is insufficient. Duffy Eq. 87; Bakewell v. Ogden, 2Busli, V. Durant Land Imp. Co. 78 Hun, 265; Mills v. Taylor, 30 Tex. 7; 314; s. c, 29 N. Y. Supl. 165. Young v. Van Benthuysen, 30 Tex. 1 Wright V. Wakeford, 17 Ves. 762 ; Palmer v. Williams, 24 Mich. 454; Hawkins v. Kemp, 3 Bast, 328; Berrien v. Thomas, 65 Ga. 410; Bloomer v. Waldron, 3 Hill, 61. 366 ; Ives v. Davenport, 3 Hill, 373 Kodman v. Munson, 13 Barb. 63 Sweigert v. Berk, 8 Serg. & K. 304 2 Kodman v. Munson, 13 Barb. 63. § 474.] POWER TO SELL TRUST ESTATE. 1083 their deaths to hold in trust for the use of their children, for -such estates and interests, in such shares and in such manner as the wife shall by deed or will appoint, cannot be authorized by her will to be sold.^ Where a debtor con- veys to his creditor a tract of land to be sold at not less than a certain price, and the proceeds applied in payment of the debt, and the creditor, without the debtor's consent, sells the land for less than the limited price, this consti- tutes a breach of trust, and the creditor thereby renders himself liable to account to the debtor for the limited price. ^ Where the instrument directs that the sale of land ^ Alley V. Lawrence, 12 Gray, 373. 2 Caldwell v. Brown, 36 111. 103. Defendant who owned an un- divided one-third interest in land, and held the balance as trustee, sold it without notice to the cestuis que trust as ordered by the court. Shortly thereafter he filed a report with the court in which the estate was being administered, and on notice to the cestuis que trust, such sale was confirmed. Held, a valid sale, the irregularity in fail- ing to give notice to the cestuis que trust of intent to sell being cured by the ratification and affirmance. Dorsey v. Banks (1S93), 88 Iowa, 595; S. c, 55ISr. W. Rep. 57f. A deed conveying land to a trustee who has no beneficial interest. with power to sell and lease, will be most strongly construed against the trus- tee and most favorably to the ben- eficiary under the trust. When a conveyance is made to a trustee, with power to sell and convey the trust lands, subject to the ap- proval of the cestui que trust, the deed of the trustee to a pur- chaser will not pass the legal title without the approval of the cestui que trust in writing. Sprague v. Edwards, 48 Cal. 239. Where the deed creating the trust empowers the trustees or the survivor of them, "with the approbation or at the request of" the cestui que trust "ex- pressed in writing, to sell and dis- pose of the trust estate, or any part of it," such approbation is mani- fested by joining in the execution ^nd acknowledgment of a deed by which the trustee effects the sale and conveyance of the estate. Wel- ton V. Palmer, 39 Cal. 456. Where lands are conveyed to a trustee (1) for the sole and separate use and benefit of his mother during life, (2) then for his brother and two sisters during life, and (3) on their death the property to vest in their children then living, and power is given to him to sell, with the ad- vice and consent of his father, "on cash or for credit, as they may think proper," with a further pro- vision, that if the father should die "leaving any portion of said trust property undisposed of in the hands of said trustee, then it shall be necessary for s;iid trustee, be- fore disposing of said property, to obtain the assent in writing of said cestui que trust;" the assent of the mother only is required, after the death of the father, and the assent of the brother and sisters. 1084 POWER TO SELL TRUST ESTATE. r§ 474. shall not be made on credit no credit can be given, but in a case where, after a sale by a trustee under a deed of trust, which forbade the sale to be made upon credit, and the creditor for whose benefit the sale was made loaned to the purchaser a portion of the money with which to pay the amount of his bid, it was held that this was not a sale upon credit by the trustee. ^ A positive direction in a deed or will maybe modified to a certain extent by other directions, either express or implied, that are inconsistent with it, or that by implication annul the positive requirement. In a case before the Supreme Court of Pennsylvania this rule is stated by Mr. Chief Justice Gibson, as follows: "As a general rule it is not to be disputed that a power to sell on the happening of an event cannot be well executed before the event, but there may be exceptions to it. Executors can sell only at the time intended, but the intention may be discoverable, not only from the words of the power, but from the whole will. Where an event turns up which the testator had not contemplated, a court is compelled to in- quire how he would have provided for it had it been fore- or their children, is Bot necessary, price or in any wise injure plaint- Gindrat v. Montgomery Gas Light 1ft in error. The trustee swears he Co., 82 Ala. 596. See further Kis- sold for cash, and that was what sara V. Dierkes, 49 N. Y. 602; the deed of trust required, and Berrien v. Thomas, 65 Ga. 61 ; nothing more." Ibid. 429. De- Hunt V. Townshend, 31 Md. 336; fendant as trustee purchased land Bakewell v. Ogden, 2 Bush, 265 : for the estate, paying part of the Palmer V. Williams, 24 Mich. 328; purchase price with trust funds, Mills V. Taylor, 30 Tex. 7 ; Water- and gave a mortgage for the bal- man V. Spauldlng, 51 111.425; Alley ance. It was held, that it was a V. Lawrence, 12 Gray, 373 ; West breach of trust to purchase prop- V. Fitz, 109 111. 425; Kussell v. erty and incumber It with a mort- Grinnell, 105 Mass. 425; Cherry v. gage, this being the same as pur- Greene, 115 111. 592; "Sales by chasing property already incum- Trustees," 56 L. T. 192. bered with a mortgage, and the ' Waterman v. Spaulding, 51 111. vendor knowing of the breach be- 426. "If he [the trustee] was came a trustee for the cestuis que willing after the sale was made, to trust, and on forclosing his loan his money to these purchasers, mortgage, he must first account to how did it affect the price that was them for their money before apply- bid? We do not see that it could, Ing the proceeds to the mortgage, or did in the least depress the Bomar v. Gist, 25 S. Car. 340. § 475. J POWER TO SELL TRUST ESTATE. 1085 seen, — in short, to suppose an intention for him where he had none."i § 475. The Rule in Case of a Contingency Where an instrument contains a power of sale to be executed upon the occurrence of a contingent event the power is operative only as the event occurs. It is in abeyance until the arising of the contingency, and without the occurrence of the con- tingent event the power will not be effective. Whatever period of time may have elapsed, in the absence of the con- tingency there is no present power of sale. Where a trus- tee is authorized to sell the trust property, with the con- sent of the grantor, or with that of the beneficiary, or of the tenant for life, in the absence of such consent the power is not operative, and any sale by the trustee is unauthor- ized and void.^ Where a trustee is empowered to sell the estate in the event that the income shall prove insufficient for the comfortable maintenance of the widow of testator, the power can be exercised only in that event. ^ Where there is a power of sale in case the personal estate proves insufficient to meet the chai'ges, and such contingency actually arises, the trustees not only may, but must sell the estate as directed in such an event, and it has been held that under such a power a sale will be valid, though the personal estate be shown to be in fact sufficient.* Where a 1 Styer V. Freas, 15 Pa.' St. 339, s Minot v. Trescott, 14 Mass.4:»j; 342. See also Blacklow v. Laws, Griswold v. Perry, 7 Lans. 103. 2 Hare, 40; Jackson v. Lignon, 3 ^Coleman v. McKinney, 3 J. J. Leigh, 161; Cassell v. Eoss, 33 111. Marsh. 246. Where lands conveyed 244; Ervin's Appeal, 16 Pa. St. in trust for the benefit of third 256; Loomis v. McClintock, 10 parties and their children (yet un- Watts, 274; Truell v. Tysson, 21 born), such trust cannot be revoked Beav. 439 ; Gast v. Porter, 13 Pa. or annulled, though the trustee and St. 533 ; Pearce v. Gardner, 10 Hare, all the beneficiaries who are in be- 290; Cuff v. Hall, 19 Jur. 973; ing unite in reconveying the lands Davis V. Howcote, 1 Dev. & Bat. to the donor free of the trust. Ch. 460; Jackson v. Jansen, 6 Where the lands are held in trust Johns. 73 ; Shari^steen v. Tillon, 3 with power and under a direction Cow. 651; Ward v. Barrows, 22 contained in the trust deed to sell Ohio, 241 ; Stroughill v. Anstey, 1 after a certain time, and in the De G., M. &G. 635. meantime to lease them and dis- ^ Sprague V. Edwards, 48 Cal. 239. pose of the rents in a certain way. 1086 POWER TO SELL TEUST ESTATE. [§ 475. power to sell is contingent upon the assent of a majority of the children of the testator, and one or more dies before the power is exercised, the consent of a majority of the children living at the time of the sale will be held suflScient. But a power to sell, with the consent of a number of per- sons designated by name, cannot be exercised after the death of one of the persons named, unless the power is given to such persons as executors or trustees and virtute officii.'^ But the person or persons exercising such right of consent will not be permitted to withhold it for selfish or arbitrary reasons. Where this is done a court of equity will afford relief.^ A power of sale, contingent upon the consent of a majority of the children of the testator living at the time of the execution of the trust, has been held valid without such consent where all the children are dead.^ the trustee cannot sell the lands before the appointed time without breach of trust, and if he attempt so to do, either the sale will be void, or the grantee will hold the property subject to the trust; but it seems that the trustee may con- firm the sale after the appointed time for selling has arrived. Isham V. Del., L. & W. K. Co., 11 N. J. Eq. 227. If a will direct executors to sell a certain tract after the death of a certain legatee and con- tains no other power of sale, a sale in the lifetime of such legatee is void. Booraem v. Wells, 19 IST. J. Eq. 87. ' Sohier v. Williams, 1 Curtis, 479. In general a power to sell with consent of named or specified persons cannot be exercised after the death of any one of those per- sons, but otherwise if the discre- tion or power of consent is given to them in the character of exec- utors or trustees and virtute officii. See Barber v. Gary, 11 N. Y. 397; Byam v. Byam, 19 Beav. 58; s. C, L. .J. 24 Ch. 209; Sykes v. Sheard, L. J. 33 Ch. 181. 2 Norcum v. D'Oench, 17 Mo. 98. In the case cited the reason for re- fusing consent was the fear that the parcel of land would be used for a graveyard, and he did not want a graveyard near his home. The court said : "The withholding of his consent for such a reason was conduct unworthy of the trust reposed in him by his friend. ISTone can doubt but that a court of equity, under the circumstances, would have authorized a sale, had application been made for that purpose." 2 Leeds v. Wakefield, 10 Gray, 514. "The purpose of the testator, we think, was to make a disposition of his whole estate; and the mode was by ordering his executor to sell as soon as all the children should come of age and the widow decease ; should she die before the youngest child was of age, the sale might then be postponed till the latter contingency should happen; it was then to be made. There might therefore be a case in which the sale should be made, when all or some § 476.] POWER TO SELL TKUST ESTATE, 1087 In New York it has been held that a condition attached to a power of sale, contained in a trust deed, that the trustee shall only sell by and with the consent of the grantor, to be manifested by his uniting in the conveyance, is valid. It is an essential condition and cannot be dispensed with. If no provision is made for the execution of the power in case of the death of the grantor, it is extinguished by such death. 1 § 476. Power of Sale in Survivor. — At law, where an estate is devised or granted to two or more trustees in trust, they take as joint-tenants, with the right of survivorship, so that if one of the number dies the survivors take the whole estate, and with the estate the power to execute the trust. Of course this rule will not apply where the instru- ment contains a provision that in the event of the death, resignation or refusal to act of one or more of the trustees, the vacancy thus occasioned must be filled before any fur- ther action is taken ; but it has been held that where the surviving trustees have the power to fill the vacancy a sale of the trust property made by them, without first supplying the vacancy, is valid. ^ Where a personal trust or confidence of the children should be living Ch. 20; s. C, 7 Am. Dec. 513; and of age, and then it was the in- Peter v. Beverly, 10 Pet. 564 ; Burr tent of the testator that such con- v. Sim, 1 Whart. 206; .-•. c. 29 Am. sent should be obtained. But if, Dec. 48; Jones v. Piice, 11 Sim. on the decease of the widow, there 557; s. c, 10 L. J. (N.S.) Ch. 195; were no children surviving, no 5 Jur. 719. "Thus where there children then living, there was no was a devise and bequest of free- apparent purpose which could hold and other property, and all have affected the mind of the tes- other the testator's real and per- tator, to prohibit a sale, when such sonal estate to two persons, their consent of children had become executors and administrators, upon alike unnecessary to protect their trust, by sale, to raise and Interests, and impossible ; we think invest certain money and ap- the condition was annulled by the ply the interest as therein di- event of all the children dying, rected, and one of the trustees and, therefore, that the power be- died, and the other proceeded to came thereby unconditional." Ibid, sell the estate; it was held, on an 519. objection to the title, that the sur- 1 Kissam v. Dierkes, 49 N. Y. viving trustee might exercise the 602. power of sale. The vice chancellor 2 Osgood V. Franklin, 2 Johns, said : 'The argument proceeds, 1088 POWER TO SELL TRUST ESTATE. [§ 476. is reposed in two or more as trustees, one cannot delegate his authority to another. In New York it has been held that where A authorized his executors, B and C, to sell certain lots of land, if under the circumstances of the times they should deem it prudent, and C, having gone abroad, sent a power of attorney to B, his co-executor, to sell the land on such terms as he should deem expedient, it was held that an agreement for the sale, entered into by B for him- self and C, was not valid, and a bill filed for a specific per- formance of it was accordingly dismissed.' In many of as it appears to me, on an entire disregard of the distinction be- tween powers and trusts. No doubt where it is a naked power given to two persons, that will not survive to one of them unless there be express words, or a necessary implication. * * f 'When, on the other hand, a testator gives his property, not to one party subject to a power in others, but to trustees upon special trusts, with a direc- tion to carry his purposes into ef- fect, it is the duty of the trustee to execute the trust. If an estate be devised to A and B upon trust to sell, and thereby raise such a sum, it is, I think, a novel argument, that after A's death B cannot sell the estate, and execute the trust.' And now by the 22d section of the Trustees Act, 1893, it is enacted that where, in the case of a trust created after the 31st of December, 18S1, a power or trust is given to or vested in two or more trustees jointly, then, unless the contrary is expressed in the settlement (if any) , the same may be exercised or performed by the survivor or survivors of them for the time be- ing." Undfcrhill on Trusts and Trustees (4th ed.), 464. See also Lane V. Debenham, 11 Hare, 188; In re Cooke's Contract, L. R. 4Ch. D. 454; Colder v. Bressler, 105 111. 41f). Where a deed, in trust to three persons, provides that in the event of the death of either of them the survivors might, "with the consent of the cestui que trust, appoint a trustee in place of the deceased, and that there- upon the survivors and the substi- tuted trustee should hold the trust estate with the same powers con- ferred on the original trustees. Held, that on the death of one of the trustees, the survivors, without appointing a successor, could exe- cute the powers expressed in the trust deed. Belmont v. O'Brien, 12 N. Y. 394. 1 Berger v. Duff, 4 Johns. Ch. 388. "The executors cannot sell by attorney. The power given to them, by the will, was a personal trust and confidence, to be exer- cised by them jointly, .according to their best judgment, under the circumstances contemplated by the will. One executor in this case cannot commit his judgment and discretion to the other any more than to a stranger; for, delegatus non protest delegari, the testator intended that his representatives should have the benefit of the judgment of each of the executors applied to the given case, so long- as both of them were alive. The agreement to sell was not valid, § 476.J POWER TO SELL TKUST ESTATE. 1089 the States statutes have been enacted with a view to setting aside the common law doctrine in regard to joint-tenanc}', or of limiting its operation to devises or grants in which it is expressly provided that the devisees or grantees shall hold as joint-tenants. Some of these States expressly ex- cept from their operation trust estates. But aside from any provision of this character, it has been held in some in- stances, though not universally, that such statutes do not iipply to trust estates, and that, in consequence, the sur- viving trustees are competent to execute the trust. ^ In Pennsylvania it is held that where real estate is conveyed to several trustees they take as joint-tenants, and on the death of one of them the estate survives to the others at common law, such cases being excepted from the operation of the statute. It is held, also, that under a later statute, on the death of one of two or more trustees, a power of sale is well executed by the survivor or survivors.^ being made by one executor, with- out the personal assent of the other. The power was not capa- ble of transmission or delegation from one executor to the other, and the rule of law and equity, on this point, is perfectly well set- tled." Ibid. 369. See also In- gram V. Ingram, 2 Atk. 88; Alex- ander V. Alexander, 2 Ves. 643; Attorney-General v. Scott, 1 Ves. 417; Hawkins v. Kemp, 3 East, 410; Crewe v. Dicken, 4 Ves. 97. 1 Freeman on Co-Tenancy, § 43 ; Parsons v. Boyd, 20 Ala. 118; Gray V. Lynch, 8 Gill, 423; Phila. & R. K. K. Co. V. Lehigh, C. & N. Co., 36 Pa. St. 204; Shortz v. Unangst, 3 Watts & S. 45; Stewart v. Pettus, 10 Mo. 755. But see Boston F. Co. V. Condit, 19 N. J. Eq. 398; San- ders V. Morrison, 7 T. B. Mon. 54 s. c, 18 Am. Dec. 161. See further Sharp V. Pratt, 15 Wend. 610 Robertson v. Haines, 2 Humph 367 ; Miller v. Meetoh, 8 Pa. St. 417 Muldrow V. Fox, 2 Dana, 79 Wardwell v. McDowell, 31 111. 364; Niles V. Stevens, 4 Denio, 399; Woodv. Sparks. 1 Dev. & Batt. 389. 2 Phila. & R. R. E. Co. V. Lehigh, C, etc. Co., 36 Pa. St. 204. "The only remaining question relates to the power of the surviving trustee to convey. 'The trust was con- ferred on the trustees by name and did not in terms require the whole number to act. Without entering into an elaborate discussion of this point, we are of opinion that the Act of 5th of May, 18G5. P. L. 415, which was a supplement to the Act of 14th of June, 1S36, P. L. 630, covers its fully. It was held in the Philadelphia & Reading Railroad Company v. The Lehigh Coal & iSTavigation Co., 36 Pa. St. 204, that in case of the death of one of several of the trustees, a power of sale under the Act of 3d of May, 1855, is well executed by the sur- vivors." Hunter v. Anderson, (1893), 1.52 Pa. St. 386, 390. But 1090 POWER TO SELL TRUST ESTATE. [§ 477. § 477. Power of Sale for Payment of Debts. — Where a trust is created for the payment of debts the instrument should prescribe the mode by which the trust is to be ex- ecuted. But in the absence of specific directions, if it is plain from the general tenor and scope of the deed that it was the intention of the grantor that the estate should be sold, the trustees have the power of sale.^ A conveyance in trust to pay debts, with power to sell, to two persons, one of whom disclaims, vests the title in the one that accepts, and takes the estate with full authority to discharge all the duties imposed by the trust. ^ It is held that the conveyance of property in trust to pay debts of itself implies the power to sell and convey.^ Where lands were conveyed in trust, first that the debts of the grantor should be paid out of the rents and profits, second for the support of the grantor, his wife and children, and third, at his death, to be divided among his children, it was held that the trustees had no see also Sinclair v. Jackson, 8 Cow, 553; Learned v. Wei ton, 40 Cal 349 ; Ridgeley v. Johnson, 11 Barb 527; Wilbur v. Almy, 12 How. 180 1 Sheldon v. Conner, 2 Vern. 310 Ivey V. Gilbert, 2 P. Wms. 13 Wilson V. Halliley, 1 Euss. & M 590; Allen v. Backhouse, 2 V. &B, 65; Shrewsbury v. Shrewsbury, 1 Ves. 234. In Porter .v. Schofield, 55 Mo. 303, the purposes of the trust were to have and to hold real estate for the purpose of receiving and collecting the rents, issues and profits, and after paying taxes and necessary expenses of repairing the same, to pay certain mortgages and judgments designated in the deed of trust. The trustee having sold the property for the purpose of realizing moneys with which to pay the Indebtedness described in the deed of trust, the validity of the sale was affirmed, and the opin- ion of the supreme court express- ing its views on the subject was stated as follows : "The language of the deed does not, in express words, create the power to sell for the payment of the debts, but it is manifestly implied from the fact that the debts were charged upon the land, and the trustee was di- rected to pay them out of the rents and proflits. As the rents and profits were wholly insufficient for that purpose, they must be looked upon only as one means of pay- ment, and not as the only means. The property itself being bound for the debts, an implied power exists in the trustee to make the sale for that purpose, without re- sorting to the tedious and expen- sive process of a suit in chancery." 2 Robertson v. Gaines, 2 Humph. 367. See also Williams v. Otey, 8 Humph. 566; Osgood v. Franklin, 2 Johns. Ch. 20; Goodrich v. Proctor, 1 Gray, 567. 3 Ibid. §§ 478-479. ] POWER to sell tkust estate. 1091 power to sell for any purpose.^ Where a trustee for the payment of debts sells without express authority but with the acquiescence of the beneficiary, it is held that he can give a good title. ^ Triists of this class are regarded with favor in equity and will be sustained wherever it is practi- cable, notwithstanding there may be informalities that would render them invalid at law.' § 478. Sale by Tenant for Life. — Where an instrument confers upon the trustees the power of sale, with the con- sent of the tenant for life, and the estate, having been sold and the purchase money received by the tenant for life and invested by him in another estate, it is held that his act is the act of the trustees, as well in the purchase of the new estate as in the sale of the original, and that the estate purchased will be held subject to the trusts of the settle- ment, although the title is taken in his name.* § 479. Incidents of the Sale. — In general it may be said that the trust estate must be sold in the manner pre- scribed in the instrument by which the trust is created. Where the course to be pursued is plainly indicated by the instrument the directions of the grantor must be strictly 1 Mundy v. Vawter, 3 Gratt. 518. and divided among his children, 2 Spencer V. Hawkins, 4 Ired.Eq. except his estate at M, which he 288 ; Baker v. Crookshank, 1 gave to A for life, and at A's death Whart. Dig. (6th ed.) Debtor and to be disposed of among his chil- Creditor, pi. 370. In Mather v. dren. It was held that the execu- Korton, 16 Jur. 309; s. c, 21 L. J. tors had the power of sale over the Ch. 15, a testator by his will ap- -whole estate including M, and that pointed A, B and C to be his ex- it was not necessary to show that ecutors in trust to dispose of his the debts were unpaid. In this property in the following way: the vice chancellor remarked He directed that all his just debts "there was a charge of debt on the and funeral expenses be dis- whole real estate, with a devise to charged by his executors, and the them of the whole real estate, and residue of his property, both real the trustees had the power to dis- and personal, to be held for the pose of it for the payment of sole benefit and use of maintaining debts." and educating his children, until ^ Spalding v. Shalmer, 1 Vern. the youngest child arrived at the 301 ; Ball v. Harris, 8 Sim. 485. age of twenty-one, when it was to ■* Price v. Blakemore, 6 Beav. be disposed of by his executors, 507. 1092 POWER TO SELL TRUST ESTATE. [§ 479. followed. But if the instrument contains nothing more than a power of sale expressed in general terms, the mode of conducting it is within the discretion of the trustee, and anj method of sale not out of the usual order of business will be sustained in equity. ^ The rules by which such sales are regulated are to some extent prescribed by statute, and the decisions under the various jurisdictions are by no means uniform, so that no defiinite principles applicable to all cases can be given. In general it is to be said that whether the sale shall be by public auction, or in private, if not determined by the instrument, is a question to be settled by the trustee. If the sale is public, due notice of the time and place must be given, and it must reach all the 1 Haack v. Wiecken, 118 N. Y. 67; Thornton v. Boyden, 31 111. 200; O'Xeill v. Vanderburgh, 25 Iowa, 104; Huntt v. Townshesd, 31 Md. 336; s. C, 100 Am. Dec. 63 ; Blanton v. Mayes, 58 Tex. 422 ; Quarles v. Lacey, 4 Munf. 251; Xorman V. Hill, 2 Patt. & H. 676; Alley V. Lawrence, 12 Gray, 373; Young V. Van Benthuyseu, 30 Tex. 762; Berrien v. Thomas, 65 Ga. 61; Scott v. Sierra Lumber Co., 67 Oal. 71 ; James v. Cowing, 17 Hun, 256; Loring v. Salisbury Mills, 125 Mass. 138 ; "Waterman v. Spaulding, 51 111. 425; Barrett v. Bamber, 81 Pa. St. 247 ; Green v. McBeth, 12 Kich. Eq. 254; Bunner V. Storm, 1 Sandf. Oh. 357; Cres- son V. Ferree, 70 Pa. St. 446; Sharpsteen v. Tillon, 3 Cow. 651 ; Ward V. Barrows, 2 Ohio St. 241; Murdock v. Johnson, 7 Coldw. 605 ; Loomis V. McClintock, 10 Watts, 274; Goddard v. Brown, 12 R. I. 31; Cocke v. Minor, 25 Gratt. 246; Hamilton v. Crosby, 32 Conn. 342; Wilson V. South Park Commis- sioners, 70 111. 46. Where property was conveyed in trust to secure the payment of a promissory note, dated November 11, 1858, the trus- tee being empowered, if the note was not paid at maturity, to adver- tise the land for twenty days, and then sell the same and make pay- ment, and upon default the trustee sold the land on December 1, 1859, the sale was held void as to the maker of the deed, since the sale was not made after the lapse of twenty days from the default of payment, such default not occur- ring until the first minute of No- vember 12, 1859. Young v. Van Benthuysen, 30 Tex. 762. The court has no power, upon the pe- tition of the grantor, the cestui que trust, and the trustees, to order a sale of real estate held in trust and partly for the benefits of infants, although a state of facts is shown, from which it appears that a sale would be beneficial to the cestui que ti~ust, where such a sale would be contrary to tbe provisions of the grant, and where the remainder- men were uncertain and could not yet be ascertained. In re Turner, 10 Barb. 552. See also Carter v. Abshire, 48 Mo. 300; Sumrall v. Chaffin, 48 Mo. 402; Swoyer's Ap- peal, 5 Pa. St. 377. §479. J POWER TO SELL TRUST ESTATE. 1093 parties in interest, and it should locate and adequately de- scribe the property to be sold.^ Where the instrument authorizing a sale provides that notice shall be given for a specified time in some newspaper published in the county, the publication of the notice in a weekly paper for the time required will be held a compliance with the requirement, though a daily edition of the paper is published at the same time.^ A notice of sale under a power that required the place of sale to be described, was held to be sufficient where iReeside v. Peter, 33 Md. 120; Burke v. Adair, 23 W. Va. 139; Leffler v. Armstrong, 4 Iowa, 482 ; s. c, 68 Am. Deo. 672; Minuse v. Cox, 5 Johns. Ch. 441; s. C, 9 Am. Dec. 313. A trustee directed to sell at public auction and pay cer- tain debts, has no authority to sell except at public auction, although the grantor's interest be promoted by a private sale. Greenleaf v. Queen, 1 Pet. 138. Where a, trus- tee was appointed by a decree to sell property at public sale, and so offered it, but without success, and finally after unusual efforts found a purchaser at private sale, it was held that if the sale was for a fair price and in good faith, it would be ratified by the court. Tyson v. Mickle, 2 Gill, 376. Where a trus- tee has advertised the property as prescribed by the decree of sale, without succeeding in making a sale, he may sell at private sale, or otherwise, in his discretion. Gib- son's Case, 1 Bland, 138; s. c, 17 Am. Dec. 257. See also Fairfax v. Hopkins, 2 Cranch C. C. 134; Johnston v. Eason, 3 Ired. Eq. 330. It is the established doctrine of Maryland, that a sale made by a trustee, under a decree of a court of chancery, is a transaction be- tween the court and the purchaser, and the report of the trustee and the order of the court ratifying the sale must be regarded as the evi- dence of the contract between the parties. Goldsborough v. Eing- gold, 1 Md. Ch. 239. 2 Singleton v. Scott, 11 Iowa, 589; Campbell V. Tagge, 30 Iowa, 307; Pursley v. Hayes, 22 Iowa, 21 ; Johnson v. Dorsey, 7 Gill, 269 ; Sears v. Llvermore, 17 Iowa, 297; s. c, 85 Am. Dec. 564; Leffler v. Armstrong, 4 Iowa, 482; S. C, 68 Am. Dec. 672. Where twenty days' notice of the time and place of sale are required, the publication must continue up to the date of the sale, one Insertion is insufficient. Stine v. Wilkinson, 10 Mo. 75. The naming of an impossible day for the sale will invalidate the notice. Thacker v. Tracy, 8 Mo. App. 318. Where the notice was published in a locality required by the deed, and all the parties concerned in the sale had actual notice thereof, the publication was held sufficient, although the certified copy of the record of the deed, from the re- corder's office, made it appear that the notice was to be published elsewhere. Jones v. Moore, 42 Mo. 413. Where three weeks' notice was required, it was held that an advertisement inserted once a week for three weeks, and once on the day of sale in two daily news- papers was sufficient. Johnson v. Dorsey, 7 Gill, 269. 1094 POWEIi TO SELL TRUST ESTATE. [§ 479. the property Avas advertised to be sold at the town of A, the town being small and the sale being on the premises in the business part of the town.^ Where a definite time for giving notice is required by the instrument, it is necessary that the notice should remain posted during the whole of the period, but the law does not contemplate that notices of sales will be read on Sunday, and where a notice was posted in a post office which was closed on Sunday, this was held not to invalidate the sale.^ In most of the States there is no prescribed foi'm of notice for a public sale by trustees, but even where such a form is prescribed by statute, a mere informality will not invalidate the sale.^ In the ab- sence of any proof that competition was prevented and that the property was sacrificed by such neglect, the sale will not be held invalid because the notice failed to give the names of the parties to the suit in which the decree of sale iBeatie v. Butler, 21 Mo. 313; s. c, 64 Am. Dec. 234; Powers v. Kueckhoff, 41 Mo. 430. Where the names of the trustees were cor- rectly printed in the advertise- ment, a mistake in the name of one of them, at the bottom of the instrument, will not vitiate the sale. Stephenson v. January, 49 Mo. 466. See also McDermot v. Lorillard, 1 Edw. Ch. 273; Sears V. Livermore, 17 Iowa, 297; Cush- man V. Stone, 69 111. 516; Harper V. Hayes, 2 Gif. 216; Newman v. Jackson, 12 Wheat. 570; Chesley V. Chesley, 49 Mo. 540. 2 Graham v. Fitts, 53 Miss. 307. -" Boston Safe Deposit & Trust Go. V. Mixter, 146 Mass. 100. "The defendant contends that a valid sale cannot be made under this decree, because the notice given of the petition was insufficient. We can see no force in this claim. Upon such a petition notice is to be 'given in such manner as the court may order, to all persons who are or may become interested in such estate, and to all persons whose Issue, not then in being, may become so interested,' Pub. St. ch. 141, § 21. The caption of the order of notice issued by the court did not follow the words of the statute, but the words used 'heirs-at-law, next of kin, and all other persons interested in the real estate, ' embrace and describe all liv- ing persons who are or can become interested, or whose issue may be- come interested, and was suffi- cient." Ibid. 105. See also New- man V. Jackson, 12 Wheat. 570. Trustee's deed which recites that the sale had been made after giv- ing notice as required by the deed of trust establishes prima /acie that proper notice has been given; but the effect of the deed in this re- spect may be overcome by any competent evidence, which, not- withstanding the deed and its re- citals, leaves the jury unable to say that the notices were given. Tyler V. Herring, 67 Miss.. 169; s. C, 19 Ani. St. Eep. 263. § iSO.J POWER TO SELL TRUST ESTATE. 1095 was rendered.^ The notice of sale should set forth such facts in regard to it as will afford the public all necessary and suitable information relating to the time and place of sale, to the property to be sold, and to the terms of the sale. But mere informalities, or inaccuracies, and even omissions in the notice, provided they work no injury to the parties in interest, will not be held to invalidate the sale.^ § 480. Manner of Conducting Public Sale. — No form- alities or specific rules for conducting a public sale of trust property have been prescribed, but where property is put up at auction to be sold to the highest bidder the trustee must see to it that the sale is fairly and conscientiously conducted. The sale must be made in such a manner as to permit and encourage the freest competition. Any failure to do this will invalidate the sale.^ Where the instrument Cunningham, 1 Md. 341; 540; 425; 1 Gibbs V. Ch. 44. 2 Gray v. Shaw, 14 Mo. Chesley v. Ghesley, 49 Mo. Powers V. Kueckhoff, 41 Mo. S. C, 97 Am. Dec. 281; Beatie v. Butler, 21 Mo. 313; s. C, 64 Am. Dec. 234. 3 Fairfax v. Hopkins, 2 Cranch C. C. 134; Goodwin v. Mix, 38 111. 115; Kellogg v. Carrico, 47 Mo. 157. The rights of a bona fide pur- chaser, who has conveyed the property to another, will not be vitiated by the fact that the prem- ises included in the deed were sold en masse, instead of In parcels, or for only one-third of their value, or when there was only a small at- tendance at the sale, or that the notice of sale erroneously stated that all the interest was unpaid. Shine v. Hill, 23 Iowa, 264. Every trustee for sale is bound by his office to bring his estate to a sale under every possible advantage to the cestui que trust, and when there are several persons concerned, with a fair and impartial attention to the interests of all concerned. He is bound to use not only good faith, but also every requisite dili- gence and prudence, in conducting the sale. If such trustee Is want- ing in reasonable diligence in con- ducting the sale, as if he contract under circumstances showing haste and improvidence, or so manage the sale as to advance the interests of one of the parties, to the injury of another, he will be personally liable, to make good to the party suffering from his mis- conduct the amount of his loss. Nor will equity in such case assist a purchaser, however innocent, in compelling a conveyance of the title. When a trustee sells at auction he must make due adver- tisement, and give due notice to the parties interested; otherwise, the sale will be avoided. Johnston V. Bason, 3 Ired. Eq. 330. See also Hunt v. Bass, 2 Dev. Eq. 292. 1096 POWEK TO SELL TEUST ESTATE. [§ 480. directs a public sale the trustee has no authority to sell in any other manner, even though it may be made plain that the interests of the estate would be promoted by a private sale. But it has been held that where property has beeia offered at public sale, in accordance with the provisions of the instrument creating the trust, and no sale was effected, the trustee may sell at private sale, or in such manner as he shall deem best for the interests of the estate.^ In a In determining whether a sale by a trustee was fair, and free from col- lusion, a subsequent offer by the purchaser's disappointed competi- tors, who formerly offered a much smaller amount, and absolutely refused to give more, is no true criterion of value, and no weight should be attached to their state- ments of a secret purpose to give a much larger sum, rather than los« the property. Wickersham v. Kicker, 58 Fed. Eep. 282. 1 Greenleaf v. Queen, 1 Pet. 138. Where a trustee has advertised the property as prescribed by the de- cree of sale, without succeeding, in making a sale, he may sell at private sale, or otherwise in his discretion. Gibson's Case, 1 Bland, 138; s. c, 17 Am. Deo. 257. If the instrument prescribing the duties of the trustees contains di- rections concerning any act or acts to be done, at or before the sale, which are so specific that the trustee has no discretion to exer- cise with reference to them, but must simply comply with such di- rections, he may have them com- plied with by his agent with the same effect as if done by himself. See Singleton v. Scott, 11 Iowa, 589: Pearson v. Jamison, 3 Mc- Lean, 197; Gillespie v. Smith, 29 111. 473; s. C, 81 Am. Dec. 328 Kennedy v. Dunn, 58 Cal. 339 Jones V. Sergeant, 45 Miss. 332 Hawley v. James, 5 Paige, 487. But see Taylor v. Hopkins, 40 111. 442, where it was held that in order for the trustee to know that the sale had been fairly conducted he must be present, and that a sale made in his absence would be set aside. See to the same effect: Puller V. O'Neal, 69 Tex. 349; s. c, 5 Am. St. Eep. 59; Spurlock v. Sproule, 72 Mo. 503. In Bricken- kamp V. Rees, 69 Mo. 426, a case where a sale by an auctioneer was declared invalid, when the trustee was present just before the sale, and also just after it was com- pleted, but was on the opposite side of the street when it was act- ually made, the court said: "The counsel for the plaintiff contends, however, that such absence from the place of sale, as that testified to by the trustee, will not avoid the sale; that he was present at its conclusion to do all that he would have done had he been present at the actual crying of the sale. In this, we think, the learned counsel for the plaintiff is in error. It was the duty of the trustee to be pres- ent during the crying of the sale, to observe the progress thereof, protect the interests of the parties concerned, to reject fraudulent bids made to frustrate the sale, and, if necessary, to adjourn the sale." See also Bales V. Perry, 51 Mo. 452; Graham v. King, 50 Mo. § 480. J POWER TO SELL TRUST ESTATE. 1097 case where property was advertised for sale, and was offered as advertised without effecting a sale, the trustees and par- ties in interest agreed to sell at private sale at a fixed price ; after special effort a sale was effected at the price upon which the parties had agreed ; the sale was ratified by the court on the ground that the circumstances were such that it would have authorized the sale, in the absence of any proof to impeach it, had application been made before the sale.^ Where a trustee is authorized in a trust deed to sell for cash upon default of payment of the sum for which the deed was given, he cannot sell the property on credit, and if he does sell it on credit the sale may be set aside as void.^ In a case where there was an application to the Chancellor by a trustee for leave to sell real estate belong- ing to the trust estate, and it was stated in the petition that the trustee had been offered $7,000 for the property by one A B, and this was a fair offer, and the Chancellor passed the following order: "Read and sanctioned; the petitioner has leave to sell," it was held that a private sale to A B for $7,000 was a lawful sale under the order. ^ It has been held that a trustee may be directed or allowed to report two or more persons as the highest bidders, upon 22; Vail v. Jacobs, 62 Mo. 130; suance of the sale could not endow Gray v. Viers, 33 Md. 18; White y. it with validity. Powell v. Tuttle, Watkins, 23 Mo. 427. In New York 3 N. Y. 396. under the statute which provided ^ Tyson v. Mlckle, 2 Gill, 376. that upon default, in the payment ^ Cassell v. Boss, 33 111. 244; of certain loans, the title to the s. c, 85 Am. Dec. 270. See also property should vest in the loan Waterman v. Spaulding, 51 111. commissioners, who should adver- 425. tise and sell, it was decided that ^ Shacklett v. Hansom, 54 Ga. both of the commissioners must he 350. "This court held in the ease present, and that a sale made by of Maddox v. Eberhart, 38 Ga. 581, one of them, in the absence of the that under the will giving the exec- other, though after due notice, was utor power to sell or exchange the not a valid execution of their power lands of the testator, the executor of sale ; that one of the commis- had power to sell at private sale, sioners could not authorize the since by the use of the word ex- other to represent or act for him; change, which could not be done and that the fact that both com- at public sale, the power of private missioners united in a conveyance sale was included." Ibid. 354. purporting to be made in pur- 1098 POWER TO SELL TEUST ESTATE. [§ 481. the express condition that if the highest bidder does not comply with the terms of sale, the next bidder may be re- ceived as the purchaser, where there is just reason to be- lieve that there is a combination of bidders to embarrass the sale, or the highest bidder has no ostensible means of payment.^ § 481. Adjournment of Public Sale. — A trustee em- powered to sell a trust estate at public auction may adjourn the sale, if in his opinion such adjournment is required by a regard for the interests of the estate. In Richards v. Holmes, before the Supreme Court of the United States, Mr. Justice Curtis, in delivering the opinion of the court, said: "We consider that a power to a trustee to sell at public auction, after a certain public notice of the time and place of sale, includes the power regularly to adjourn the sale to a different time and place, when, in his discretion, fairly exercised, it shall seem to him necessary to do so in order to obtain the fair auction price for the property."^ ' Murdock's Case, 2 Bland, 461 ; S. c, 20 Am. Dec. 381. 2 Richards v. Holmes, 18 How. 143, 147; Tinkom v. Purdy, 5 .Johns. 345; Kussell v. Richards, 11 Me. 371 ; Lantz v. Worthington 4 Pa. St. 153; Warren v. Leland, 9 Mass. 265. "But we consider that a power to a trustee to sell at pub- lic auction, after a certain public notice of the time and place of sale, includes the power regularly to adjourn the sale to a different time and place, when, in his dis- cretion, fairly exercised, it shall seem to him necessary to do so in order to obtain the fair auction price for the property. If he has not this power, the elements or many unexpected occurrences may prevent an attendance of bidders, and cause an inevitable sacrifice of the property. It is a power which every prudent owner would exer- cise in his own behalf under the circumstances supposed, and which he may well be presumed to in- tend to confer on another. This power of sale does not undertake to prescribe the particular manner of making the sale. It is to be at public auction, and 'after having given public notice of such sale by advertisement at least thirty days,' but it assumes that the sale will be conducted as such sales are usually conducted. A sale regularly ad- journed, so as to give notice to all persons present of the time and place to which it is adjourned is, when made, in effect the sale of which pi-evious notice was given." Richards v. Holmes, 18 How. 143, 147. See also Sayles v. Smith, 12 Wend. 57; s. c, 27 Am. Dec. 117; Jackson v. Clark, 7 Johns. 225; Patten v. Stewart, 26 Ind. 395; Montgomery v. Barrow, 19 La. Ann. 169; Dana v. Farrington, I Minn. 433; Enloe v. Miles, 12 § 481.] POWER TO SELL TRUST ESTATE. 1099 The courts have held that a trustee may adjourn a sale to a different time and place for the purpose of obtaining a better price for the property. Where a sale is adjourned a new notice of the sale must be given, and in the giving of the second notice there must be a strict compliance with all the requirements relating to the first. The rule in this re- gard is not affected by the circumstance that the instru- ment contains a clause authorizing an adjournment, for, as above stated, the trustee holds this power virlute officii.^ Where a purchaser at a trustee's sale refuses, or, for any reason, fails to complete the contract, and there is no sale, it is held improper to resell the property on the same day. It is the duty of the trustee to give new notice of a sale as required in the first instance, to see that the bidding is open to competition, and to make every reasonable effort to sell the property at a fair price. ^ Where a sale is set aside by the Court of Appeals on the ground that the property was Sm.&M. 147. A power of sale con- ferred in a deed of trust must be strictly pursued as to the time of giving notice of the sale. So if the deed requires thirty days' notice to be given, such sale cannot be ad- journed for a less number of days; should the sale be adjourned, full thirty days' notice of the time and place of the sale must be given. It is the right and duty of a trus- tee, or a sheriff or other officer, or commissioner, to adjourn a sale, whenever from any cause a reason- ably advantageous price cannot be had, and when it is necessary, to prevent a great sao'ifice of the property, but in case of such ad- journment the same notice must be given as was originally re- quired. Thornton v. Boyden, 31 111. 200. The case cited contains a review of the case of Richards v. Holmes, supra, and the conclusion of the court that the opinion of the higher court is not well sustained. See also Hawkins v. Alston, 4Ired. Eq. 137; Bennett v. Brundage, 8 Minn. 432; Penny v. Cook, 19 Iowa, 538. Where trustees were authorized to postpone sales, but not beyond ten years, it was held, that on proof that a sale within that time would have been mis- chievous to the estate, the trustees might be ordered to sell after that time. Cuff v. Hall, 1 Jur. (N. S.) 973. ' Griffin v. Marine Co. of Chi- cago, 52 111. 131. Counsel attempt to distinguish the case at bar from the one cited, by the fact that, in the mortgage to the Marine Com- pany, there was a clause authorizing an adjournment. But the court in Thornton v. Boyden (31 111. 200), say, it is immaterial ; that the deed should provide for an adjournment, as the power exists without it, but when an adjournment is made there must be a new advertisement such as was first required." Ibid. 141. 2 Judge V. Booze, 47 Mo. 544. 1100 POWER TO SELL TEUST ESTATE. [§ 482. not properly described in the notice of the sale, and the case is remanded in order that the property may be resold, and the necessary steps are taken by the court below in conformity with the order of the Appellate Court, the trus- tee may resell without an order from the court. ^ § 482. Conditions of Sale. — In a sale of the trust es- tate the trustees may impose conditions of sale, but such conditions must be reasonable and necessary, and not such as unnecessarily to depreciate the property at the sale. If conditions are imposed, or representations made, that de- preciate the property and cause a sacrifice of the interests of the estate at the sale, the sale will be set aside. ^ In a iReeside v. Peter, 35 Md. 220. See also Tyson v. Mickle, 2 Gill, 376 ; Cunningham v. Schley, 6 Gill, 208; Gray v. Lynch, 8 Gill, 404. 2 Do\vns V. Grazebrook, 3 Merir. 208; Eedev. Oakes, 10 Jur. (N. S.) 1246; Falknerv. Equitable Society, 4 Drew. 352; Wilkins v. Frye, 1 Meriv. 268; s. c, 2 Bose, 375. As to conditional powers, Sugden says: "They tend only to expense and trouble in practice, as a pur- chaser in general could not be com- pelled to complete his purchase without the sanction of a court of equity ; and there are few cases in which he could be advised to accept the title without a decree. It would be much better wholly to omit a power of sale in a settle- ment than to fetter its operation by requisition like these. ' ' 2 Sugden on Powers, 503. A deed of trust, made to secure a debt, contained a power of sale for the payment of any balance that might be due them, '-upon oath made before any justice of the peace by both the trustees, or in case of the death of either by the survivor, as to the amount of the balance due." This provision was held to constitute a condition precedent, and to be strictly complied with, and that the oath of one of the trustees, the other being alive, was insufficient to justify a sale. Mason v. Martin, 4 Md. 125. See also Goodwin v. Mix, 38 111. 115; Barnard v. Dun- can, 38 Mo. 170. By a deed of the year 1858, lands were conveyed to trustees on the usual trusts for sale. The trustees were unable to find a deed of 1819, through which the conveying parties to the deed of 1858 derived their title; and put up the lands for sale by auction under a condition that the title should commence with the deed of 1858, and that no earlier title should be called for except at the pur- chaser's expense. The lands were sold at the auction, the object of the condition being explained in the auction room. A suit to restrain completion was instituted by one of the cestuis que ti'ust against the trustees and the purchaser. Some time after the institution of the suit the deed of 1819 was found. Held, that this condition was cal- culated to depreciate the property at the auction, and was inserted without any reasonable ground, and that the court would, at the suit of a cestui que trust, restrain § 482. ] POWER TO SELL TRUST ESTATE. 1101 case where there was a reasonable ground for the conten- tion that a legacy was a charge upon an estate vested in trustees for sale, and the trustees in the exercise of a bona fide discretion, for the purpose of satisfying a purchaser who refused to compete unless the legacy was discharged, paid it, it was held that, whether the objection would have been tenable or not, the payment ought to be allowed to the trustees as between them and the persons beneficially interested.^ While trustees cannot sell without a power of sale, either expressed or implied, such power, if possessed* does not justify him in going beyond his powers in other respects. If the power of sale authorizes a sale on credit, the trustee may give such credit as he is empowered to give by the instrument, but he may not go beyond it. It is a well established doctrine that trustees must not invest trust funds in notes, or other personal securities. In an English case Lord Eldon said: "A promissory note is evidence of a debt, but it cannot be considered as security for money, for it should have been on some such security as bonds, land, or something to be answerable for it."'' On this principle a trustee is not jjermitted to convert trust property into notes, or into any personal obligations. In another English case Lord Kenyon, M. R., said: "It was never heard that a trustee could lend an infant's money on private security. This is a rule that should be rung in the ears of every person who acts in the character of a trustee, for the purchaser from completing the son v. Bell, 2 Beav. 17. A sale is title. Dance v. Goldingham, L. K. not void merely for inadequacy of S Ch. App. 902. Every device price (even though the property is which a trustee may adopt to sold for less than one-half its value) bring about a sale in the interest unless so gross as to raise the pre- of himself, or in any way to stifle sumption of fraud. Lallance v. competition or to prevent the Fisher, 29 W. Va. 513. realization of the full value of the ^ Forshaw v. Higginson, SDeG-., property, is fraudulent, and there- M. & G. 827. See also Ward v. fore demands a decree setting aside Ward, 2 H. L. Cas. 784; Darke v. the sale. See Saltmarsh v. Beene, Williamson, 25 Beav. (J22; Hutton 4Port.(Ala.)283; s. C, 30 Am. Dec. v. Wei-ms, 12 Gill & J. 83. 525; Towlev. Ambs, 123 111.410; MValker v. Symonds, 3 Swanst. Cassell V. Koss, 33 111. 244; Hazel- 81. tine V. Fourney, 120 111. 493; Hob- 1102 POWER TO SELL TRUST ESTATE. [§ 483. such an act may very probably be done with the best and honestest intention, yet no rule in a court of equity' is so well established as this.''^ It is not sufficient that several persons join in the obligation. The property cannot be sold on cx'edit unless that is authorized by the trust. ^ § 483. Sale without Notice. — Touching the right of the trustee to sell trust property without notice there is some conflict of opinion. In the case of Minuse v. Cox, before the Court of Chancery of New York, where land was conveyed to a trustee to sell either "at auction, or otherwise, in whole or in parcels, on giving thi-ee weeks' notice thereof," it was held that he could sell at jjrivate sale, and the requirement in regard to notice was held to refer only to a sale at public auction. In his opinion in this case, Mr. Chancellor Kent said: "But if that notice did apply to all and e^-ery sale, public and private, I should concur in the opinion with the Master that the sale, with- out the notice, would be valid and confer a good title on the purchaser, and that the only consequence would be that the trustee might be responsible for any deficiency in the 1 Holmes V. Dring, 2 Cox, 1. See Clarke v. Garfield, 8 Allen, 427; also Wynne v. "Warren, 2 Heisk. Moore v. Hamilton, 4 Fla. 112; 118; Dunn v. Dunn, 1 S. Car. 350 Darke v. Martyn, 1 Beav. 525 Vigrass v. Binfield, 3 Madd. 62 Harden v. Parsons, 1 Eden, 149 Spear v. Spear, 9 Rich. Eq. 184; Barney v. Saunders, 16 How. 545; Knowlton v. Brady, 17 N. H. 458; Judge of Probate v. Mathes, 60 N". Anon., Lofft, 492; Keblev.Thomp- H. 438; In re Foster's Will, 15 son, 3 Bro. Ch. 112; Wilkes v. Hun, 387; Cocker v. Quayl, 1 Euss. Steward, G. Coop. 6; Clough v. &M. 535; Pickard v. Anderson, L. Bond, 8 Myl. & Cr. 496; Focock v. K. 13 Eq. 608; Stickney v. Sewell, Kedington, 5 Ves. 799; Collis v. 1 Myl. & Cr. 814; Francis v. Fran- Collis, 2 Sim. 365; Blackwood v. cis, 5 De G., M. & G. 108; De Jar- Borrowes, 2 Con. & Law. 477; nette v. De Jarnette, 41 Ala. 708. Watts V. Girdleston, 6 Beav. 188; ^ Forbes v.Koss, 2 Cox, 118; s. C, Graves v. Strahan, 8 De G., M. & 2 Bro. Ch. 430; Child v. Child, 20 G. 291; Fowler V. Eeynal, 3 Macn. Beav. 50; Watts v. Girdleston, 6 & G. 500; Smith v. Smith, 4. Johns. Beav. 188; Styles v. Guy, 1 Macii Ch. 281; Nyce's Estate, 5 Watts & & G. 423; Mills v. Osborne, 7 Sim. S. 245; Swoyer's Appeal, 5 Pa. St. 30; Wynne v. Warren, 2 Heisk. 377; Willes' Appeal, 22 Pa. St. 118; Swoyer's Appeal, 5 Pa. St. 330; Gray v. Fox, Saxton Ch. 259; 377. Harding v. Larned, 4 Allen, 426; §483.] POWER TO SELL TRUST ESTATE. 1103 price for whicli it sold below the real value of the land.''^ This position was subsequently sustained by the Supreme Court of the United States.^ But in Thornton v. Boyden it was held that where one acting as an agent is empowered to sell land at public auction at a particular time and place, and on certain terms, such time, place and terms must be strictly observed.^ In Tennessee it has been held that where by the terms of a trust assignment the trustee is re- quired, before making a sale, to give notice to the bar- gainor of the time and place of sale, the giving of such notice is in the nature of a condition precedent, and, if not complied with, the sale is void.* ' Minuse v. Cox, 5 Johns. Ch. 441. "The trustee under this deed, as well as under the will, had a discretion to sell at public or pri- vate sale, and the direction to give three weeks' public notice in the daily papers, evidently alluded to sales at auction and not private sales. The direction was to give three weeks' notice thereof, that is, of the auction. To give three weeks' notice of a private sale would be absurd; and it would be equally so to suppose the testator, when he gave to his trustee a dis- cretion to sell at auction or other- wise, that he meant to debar him from accepting of an advantageous offer, because there had not been three weeks' notice of the time of accepting it. These words must be construed according to the thing, and the usages of business applicable to the case ; and there can be no possible doubt of the in- tention of the deed, that the notice should be applied to the auction sales and not to any other." Ibid. 446. 2 Taylor v. Benham, 5 How. 233, 272. 8 Thornton v. Boyden, 31 111. 200. Trustees should all join in the ap- pointment of an agent. Sinclair v. Jackson, 8 Cow. 582. A trustee for creditors may convey by attor- ney. Blight V. Schenck, 10 Pa. St. 285. Generally all deeds should be executed by the trustees and not the agent or attorney. Cranston v. Crane, 97 Mass. 415; Hawley v. James, 5 Paige, 487. Where trus- tees advertised and sold the whole of a tract of land and the purchaser supposing only a part was sold, took a deed of that part. On the discovery of the mistake it was held that the trustees might con- vey the rest to him by a second deed. O'Day v. Vansant, 3 Mackey (D. C.),196. ^ Henderson v. Galloway, 8 Humph. 692. "When by the terms of the deed, the trustee is required before making sale to give notice to the bargainor of the time and place of sale, the giving of such notice is in the nature of a condi- tion precedent, and if not com- plied with the sale is unauthorized and void, and will communicateno title to the purchaser. And if the requirement be that personal notice shall be given, the trustee cannot substitute notice by advertisement in a newspaper, or at some public 1104 POWER TO SELL TRUST ESTATE, [§ 484. § 484. Restraint upon Power of Sale. — Where the in- strumeut creating the trust simply confers upon the trus- tees the authority to pay the debts of the grantor, and in addition empowers them to adjust any claims that may be presented, no power of sale is conferred. In a recent lead- ing and instructive case a testator devised and bequeathed his real and personal estate to trustees upon trust to pay the rents of the real estate and the income of the personal estate to his wife for life, and after her death to sell and convert and to divide the proceeds among his children. He then proceeded to "authorize" his trustees to "adjust and pay all claims upon my estate, and, generally, to act in the premises as my said trustees shall, in their discretion, think fit." He appointed his trustees executors of his will. It was held that this authority did not, like a direction to pay debts, make it the duty of the trustees to pay debts out of whatever property of the testator was vested in them, and did not charge the debts on the real estate, and that the trustees, therefore, had not, during the life of the widow, any power to sell the real estate. ^ In a recent case in New place or places because not within payment, or to take security for the scope of his authority, and also payment, and to adjust and pay all because such a departure on the claims made upon his estate, and part of the trustee might be made generally to act in the premises as to defeat the very object of the re- the trustees or trustee should in quirement by enabling him to sell their or his discretion think fit. It the property without the knowl- is obvious that in its general scope edge of the party making the that clause is what is sometimes deed." Ibid. 695. See also Gin- described as a management clause, drat v. Montgomery Gaslight Co., The general object is to authorize 82 Ala. 596; s. C, 60 Am. Rep. and to facilitate the action of the 769. trustees in the management and 1 In re Head's Trustees (1890), L. winding up of the estate. The ques- R. 45 Ch, D. 310. In this case Fry, tiou we have to consider is whether L. J., at page 316, says: "The these words, authorizing his trus- testator in this case creates first a tees to pay all claims upon his es- life interest in his wife, and, after tate amount to a charge upon his her death, directs the property to real estate. I have come to the be sold and distributed amongst conclusion that they do not oonsti- his children, and then he author- tute such a charge, that their true izes his trustees to release or com- object is to authorize the trustees pound any debt owing to him or to determine what claims ought to to his estate, or to give time for be paid, and to enable them to pay § 4«5.J POWER TO SELL TRUST ESTATE. 1105 York it was held that a conveyance executed by a trustee and beneficiar}' in derogation of a trust created by a will, which contains no power, express or implied, to sell and convey title, is absolutely void under the statute declaring that where a trust is expressed in an instrument creating an estate every sale in contravention thereof shall be absolutely void.^ § 485. Where a Trustee may be Required to Sell the Trust Estate. — A person vested with a naked power may execute such power, or decline to execute, as he shall see fit, but where a trustee has accepted a power coupled with a trust, he is no longer at liberty to decide whether he will execute the trust. It is his duty to execute the trust, and he will be held responsible in equity for a discharge of the claims, though, perhaps, there may be no legal evidence of them, out of the fund which by law was ap- plicable to the payment of such claims. Therefore, I think if a claim had been made on the real estate, they might have paid that claim out of the realty, and a claim made upon the personal estate they might have paid out of the per- sonal estate. I cannot find in this clause any intention to enlarge the funds out of which debts were to be paid, and, therefore, I think we should be doing wrong if we held that this amounted to a charge of the debts on the realty. It is not unworthy of observation that no case can be produced, although cases of this description are very numerous, in which a mere author- ity of this description has been held to create a charge." 1 Priessenger v. Sharp, 14 N. Y. Supl. 372. The legislature cannot authorize a trustee to sell the trust property to discharge debts in- curred by him without authority, if the rights of remainder-men will be prejudiced. Martin's Appeal, 70 23 Pa. St. 433. But the legislature may authorize a trustee of the legal estate in the land to convert it into money, for the purpose of distributing the proceeds among the parties entitled. Kerr v. Kitchen, 17 Pa. St. 433. Land de- vised in trust to pay the income, during the life of the testator's sons and the survivor of them, to them and the heirs of those who should die first, and, on the sur- vivor's decease, to convey the land to their heirs, may, under author- ity of the legislature, be sold, upon giving security to invest the pro- ceeds upon the same trust. Clarke V. Hayes, 9 Gray, 426. See also Zimmerman v. Kinlde, 108 INT. Y. 282; Kussell v. Kussell, 36 N. Y. 581 ; Fitzgerald v. Topping, 48 N. Y. 438 ; Wetmore v. Parker, 92 K. Y. 76; Douglas v. Cruger, SO N. Y. 15; Cruger v. Jones, 18 Barb. 467; Griswold v. Perry, 7 Lans. 105; Swarthout v. Curtis, 5 X. Y. 301 ; s. c, 55 Am. Dec. 345; Briggs V. Davis, 20 :N'. Y. 15; S. c, 75 Am. Dec. 363. 1106 POWBE TO SELL TRUST ESTATE. [§ 486. obligation. Where the trust contains a power of sale and the estate is to be sold for the benefit of third parties, or if there are third pai'ties who have a beneficial interest in the sale, a court of equity will enforce the execution of the trust. ^ It is well established that the non-execution of a trust by a trustee will not be permitted to prejudice the in- terests of the beneficiary, if it is possible for a court of equity to execute it.^ § 486. Conveyance of the Trust Estate. — Trustees holding the legal title, with power of sale, have th^ sole power to convey the trust property, but their conveyance will be subject to the terms of the instrument creating the trust. They can exercise only such power as the trust con- fers. If the trust is limited by a life the trustees cannot convey in fee, and where they hold simply the power to sell and pay debts they cannot convey after the debts are paid.^ ' Kintner v. Jones, 122 Ind. 148. 2 Brown v. Higgs, 5 Ves. 505; Falkner v. Davis, 18 Gratt. 651; Saunders v. Schmaelzle, 49 Cal. 59. '-Having seen that the grantee took the conveyance subject to certain expressed trusts, the in- quiry remains whether or not she was possessed of an uncontrollable discretion as to the management and disposition of the estate con- veyed? The obligation which arises when a mere power is con- ferred, is not to be confounded with the duty imposed where the power is coupled with an express or implied trust. Mere naljed powers are purely discretionary, and the donee of such a power is not subject to the compulsory power of a court of chancery. Where, however, the power is coupled with a trust for the ben- efit of third parties, or in the exe- cution of which third parties are interested, it becomes imperative and its execution may be coerced. Kintner v. Jones ,(1889), 122 Ind. 148, 152. 3 Walton V. Follansbee, 131 111. 147; Rogers v. Pace, 75 Ga. 436; West V. Fitz, 109 111. 425. Where the trustee of a life estate malces a conveyance of the land under an order of the court granted in term upon his ex parte petition, the life tenant alone consenting, the re- mainder-men not being repre- sented, or made parties to the pro- ceeding, only an estate for life passes, though the deed purports to convey the fee and the purchaser pays full value. Lamar v. Pearre, 82 Ga. 354; s. C, 14 Am. St. Rep. 168. lu a case where a testator by his will left all his real estate to trustees with power to sell and to pay certain specific debts, and in the same will devised all his estate to his children, it was held that, after the debts had been satisfied, the trustees had no power to sell, and any conveyance by them there- § 486.J POWEK TO SELL TRUST ESTATE. 1107 Where an estate is conveyed in fee the trustee is not bound to warrant the title beyond the effect of his own acts and those of parties claiming under him.^ In a sale of the trust estate all the rights which the trustee had acquired in it pass to the vendee, and an instrument conveying the right, title and interest of the cestui que trust will not be held an adequate conveyance.^ Where trustees, with power of sale, hold as joint-tenants, and one of them dies, the survivors may sell and convey the legal title. As the es- tate descends to the survivors, so also the power conferred by the trust devolves upon them as such.^ A contract by trustees under a power of sale, though in consequence of subsequent events it cannot be executed by the power, will be made good in equity by the effect of the interest acquired in the estate, bound by the contract.* A contract that is a breach of trust will not be enforced in equity, even where the purchaser is without fault. His remedy will be a suit at law.^ A trustee of real estate, appointed by the court after was void. Murdock v. John- son, 7 Coldw. 605. ' Kirten v. Spears, 44 Ark. 166; Worthy v. Johnson, 8 Ga. 236; S. C, 52 Am. Dec. 399 ; Fleming v. Holt, 12 W. Va. 143; Ennis v. Leach, 1 Ired. Eq. 416; Dvvinel v. Veazie, 36 Me. 509. Where land was conveyed to a trustee, to sell and pay certain debts, and pay the balance to one of the grantors, and the trustee sold such title as was vested in him, without warranty, it was held that the trustee was not liable to the pui'chaser for any defect in the title to any part of the premises, and that the pro- ceeds in his hands ought not to be refunded to the purchaser. Sutton v. Sutton, 7 Gratt. 234. A warranty against his own acts is all that should be required of the trustee. Hoare v. Harris, 11 III. 24. 2 Titcomb v. Currier, 4 Gush. 591 ; Saunders v. Schmaelzle, 49 Gal. 59. A purchaser at the sale of a trustee in a deed of trust takes thereby the right to use the name of the grantor, in the deed of trust, to enforce by action a right accru- ing under the deed to such grantor. Alexander v. Schreiber, 13 Mo. 27. 2 Saunders v. Schmaelzle, 49 Gal. 59. * Mortlock V. Buller, 10 Ves. 292. 6 Ord V. Noel,5Madd.438; Wood V. Richardson, 4 Beav. 174; Mort- lock V. Buller, 10 Ves. 292 ; Thomp- son V. Blackstone, 6 Beav. 470; Dawes v. Betts, 12 Jur. 709; John- ston V. Eason, 3 Ired. Bq. 334. If a conveyance by an executor is prematurely made, orfor an inade- quate consideration, in breach of trust, the title will nevertheless be good at law; the relief being in equity, and at the instance only of the cestuis que trust, whose in- terests are prejudiced thereby. 1108 POWER TO SELL TRUST ESTATE. [§ 487. and subject to its control and order, cannot give a good title to the trust estate by a deed made without the consent of the court. 1 § 487. How a Sale by a Trustee may be Avoided. — In a sale and conveyance of property by a trustee the pre- sumption is in favor of its validity. In the absence of statutory enactments abrogating or modifying the operation of the common law a conveyance by a trustee, whatever may be true of his authority for the act, vests the legal title in the grantee. Though it may be voidable, it is not essentially void. Where the conveyance is voidable, the remedy for any wrong on the part of the trustee connected with the sale and convej'ance is the filing of a bill in equity asking that the conveyance may be vacated and the prop- erty declared to be still subject to the trust. Evidence of fi'aud, of unfairness, of a lack of capacity, or of due regard for the interests of the beneficiaries, a disregard of the di- rections of the trust, or any essential irregularity in the manner of conducting the sale, will be regarded as a ground for avoiding the conveyance.^ The trustee cannot call in Lindley v. O'Keilly (1888), 50 N. Mo. 461; s. c, 64 Am. Dec. 197; J. Law, 636; s. c, 15 Atl. Kep. Hannibal, etc. K. Co. v. Green, 68 379; 7 Am. St. Rep. 802. Mo. 177; Dykes v. McVay, 67 Ga. iKenady V. Edwards, 134 U. S. 502; Taylor v. King, 6 Miinf. 358; 117. S. C, 8 Am. Dec. 746; Wilson v. 2 Bank of U. S. v. Benning, 4 South Park Commissioners, 70 111. 4 Cranch C. C. 81; Taylor v. Ben- 46; Thompson v. McDonald, 2 Dev. ham, 5 How. 272; Beeee v. Allen, & B. Eq. 463; Stine v. Wilkson, 10 10 111. 236; s. C, 48 Am. Dec. 336; Mo. 75; Prouty v. Edgar, 6 Iowa, D'Oyley v. Loveland, 1 Strobh. 45; 353; Hazeltine v. Fourney, 120 111. Miniise v. Cox, 5 Johns. Ch. 441; 493. By standing by and assenting S. C, 9 Am. Dec. 313; Yarner v. to the sale even though the sale Gunn, 61 Ga. 54; Den V. Troutman, were unauthorized, the cestui que 7 Ired. 155; Pownal v. Myers, 16 t7~ust waives his right to object. Vt. 408; Blaisdell v. Stevens, 16 Spencer v. Hawkins, 4 Ired. Eq. Vt. 179; Dawson v. Hayden, 67111. 288. Where property was devised 52; Koester V. Burke, 81 111. 436; to a trustee, with directions to sell Martin V. Clark, 116 III. 654; Wal- the principal only, for reinvest- ton V. Follansbee, 131 111. 147; ment in more profitable securities, Prather v. McDowell, 8 Bush, 46; s. bona fide conveyance by him in Thatcher v. St. Andrew's Church, exchange for Confederate bonds 37 Mich. 264; Gale v. Mensing, 20 was held to pass title to the pur- § 487.] POWER TO SELL TRUST ESTATE. 1109 question the regularity of his own sale, and it cannot be questioned by a stranger.^ In Missouri it has been held that a notice stating that the property would be sold for cash, at the court house door, in the town of H, but omitting to name the county, and that the property would be sold to the highest bidder at public vendue, is sufficient.^ In his opinion in this case, Mr. Justice Wagner said: "Public polic}', as well as the stability of rules of property, demand that sales, and titles founded thereon, should not chaser. Schley v. Brown, 70 Ga. 64. Where it was expressly de- clared on the back of a deed that defendant held the land conveyed thereby for the joint benetit of himself and plaintiff's intestate, and that it was "to stand as secu- rity" for certain notes and for the balance of the purchase money paid by plaintiff's intestate, and that the profits realized above these sums should be equally divided between defendant and plaintiff's intestate, such declaration did not create a power of sale in the trustee, or impose such duties as could not be performed without such power, and such a sale would be void. Maxwell v. Barringer, 110 N. Car. 76; s. c, 14 S. E. Rep. 516. Where a son-in-law and housekeeper of a trustee purchase trust property from one to whom it had been fraudulently conveyed by the trus- tee, the taking of a deed therefor from the trustee is insuiRcient to charge them with notice of a breach of trust, if the price paid is inade- quate. Hawley v. Tesch (1894), 88 Wis. 213; s. c, 59 N. W. Kep. 670. ' Larco v. Cassanueva, 30 Cal. 560; Prouty v. Edgar, 6 Iowa, 353; Gary V. Colgin, 11 Ala. 514; Her- bert V. Hanrick, 16 Ala. 581 ; Lee v. Parker, 5 Whart. 350; Coxe v. Blanden, 1 Watts, 533; s. C, 26 Am. Dec. 83; Hunt v. Crawford, 3 Penr. & W. 426 ; Eeid v. MuUins, 48 Mo. 344; Quesenbury v. Bar- bour, 31 Gratt. 491. 2 Powers v. Kueckhoff, 41 Mo. 425; s. c, 97 Am. Dec. 281. See also Dana v. Farrington, 4 Minn. 433; Stine v. Wilkson, 10 Mo. 75; Thornburg v. Jones, 36 Mo. 514; Jackson v. Clark, 7 Johns. 217; King V. Duntz, 11 Barb. 192; Sher- wood v. Reade, 7 Hill, 431 ; Miller V. Hull, 4 Den. 104; Gray v. Shaw, 14 Mo. 341 ; Stall v. Macallester, 9 Ohio, 19. The fact that a trustee was an alien when the deed was made to him, and when he con- veyed the land to the purchaser, furnishes no ground for setting aside his sale and conveyance of the land. Ferguson v. Franklin, 6 Munf . 305. See Bscheator v. Smith, 4 McCord, 452. A sale will not be set aside because bankruptcy pro- ceedings have been commenced against the grantor, which have not reached adjudication. The purchaser would have a legal title, available in ejectment. McGready V. Harris, 54 Mo. 137. Nor where the sale was held on the day of a a general State election. Bank of Commerce v. Lanahan, 45 Md.396. Nor because it was made after the death of the grantor. Spencer v. Lee, 19 W. Va. 179. 1110 POWER TO SELL TRUST ESTATE. [§ 487. be avoided for slight and trivial reasons, but where the power has not been executed in accordance with essential conditions the sale and deed will be held to be utterly void, both at law and in equity."^ In the absence of any indica- tion of fraud or collusion, inadequacy of consideration, though it may be a real inadequacy and work injury to the beneficiaries, will not be held as a ground for avoiding the conveyance.^ Where a debtor, or other person interested in the sale, is prevented by any misrepresentation or device on the part of the trustee from attending the sale, or from taking any other steps essential to the protection of his in- terests, equity will afford relief.^ 1 Powers V. Kueckhoff, 41 Mo. 425; s. c, 97 Am. Dec. 281. 2 Booker v. Anderson, 35 111. 66 ; Hoosey v. Hough, 38 Md. 130; Warfleld v. Koss, 38 Md. 85; Gibbs V. Cunningham, 1 Md. Oh. 44; Johnson v. Dorsey, 7 Gill, 269; Hintze v. Stingel, 1 Md. Ch. 283; Meath v. Porter, 9 Heisk. 224. The proof of gross inadequacy of con- sideration must be conclusive, be- fore one who purchases trust prop- erty from a trustee who has author- ity to sell, will be held liable in equity to account to the cestui que trust on the ground of fraudulent collusion with the trustee in the purchase, where the sole basis of this claim is an inference of fraud arising from the inadequacy of consideration, and uliere is no evi- dence of actual fraud. Carpenter v. Eobinson, 1 Holmes (U. S.), 67. But see also Singleton v. Scott, 11 Iowa, 589 ; Franklin v. Osgood, 14 Johns. 527; Hoppes v. Cheek, 21 Ark. 585. s Clarkson v. Greeley, 35 Mo. 95; Goode V. Comfort, 39 Mo. 313; Gillespie V. Smith, 29 111.473; s.c, 81 Am. Dec. 328. In a case where a statute forbade the enforcement by a trustee of any claim purchased after his appointment, it was held that a trustee's sale could not be avoided on the ground that at the time of the sale he was the assignee of the debt for the payment of which the sale was made, there being no claim that the purchaser was aware of such assignment. Carey v. Brown, 62 Cal. 873. See also Williams v. Otey, 8 Humph. 563; S. C, 47 Am. Rep. 632; Loughmiller v. Harris, 2 Heisk. 559. CHAPTEE XXni. THE GENEKAL DUTIES AXD OBLIGATIONS OF TRUSTEES. § 488. Introductory. § 506. 489. To Reduce the Trust Estate to Possession. 507. 490. To Assume the Control of 508. Personalty. 509. 491. Duty to Obey the Direc- tions of the Instrument. 510. 492. Duty to Act in Good Faith. 511. 493. The Duty of Joint Action. 512. 494. The Duty of Joint Action Continued. 513. 495. The Subject Continued. . 514. 496. Responsibility of Co -trus- 515. tees in Regard to Checlis. _ .516. 497. The Rule In its Application ' to Public Trusts. 517. 498. To Act in Accordance with the Instructions of the 518. Court. 499. Duty to Exercise Diligence and Care. 519. 500. The Duty of Trustees Touching the Exercise of 520. Discretionary Powers. 501. To Preserve and to Protect the Trust Estate. 521. 502. The Subject Continued. 522. 503. To Collect Outstanding Claims. 523. 504. To Pay Debts and Charges. 505. Primarily from Personal Property. 524. The Subject Continued. Duty to Collect Rents and Profits. Duty to Make Repairs. With Respect to Insur- ance. The Subject Continued. To Renew Leases. The Subject Continued. To Convert and Invest Trust Property. The Subject Continued. The Use of Trust Funds. The Mixing of Trust and Private Funds. Duty to Dispose of Prop- erty Liable to Waste. Concerning the Purchase of Trust Property from Beneficiaries. Concerning the Giving of Information. Purchasing at His Own Sale. Duty to Deposit Money in Bank. To be Prepared to Render an Account. To Distribute Trust Prop- erty. The Subject Continued. § 488. Introductory. — The relation of settlor and trus- tee is constituted as a matter of confidence on the part of the settlor, and its acceptance by the trustee is a purely volun- tary act. Any person appointed a trustee is altogether free, at the proper time, to disclaim the trust, and in that 1112 DUTIES AND OBLIGATIONS OF TRUSTEES. [§ 488. event he is subject to no obligation in relation to it. But, having voluntarily accepted the office, he is bound to dis- charge its duties. He cannot, by his own act, free himself from the obligations which the relation imposes. Thi'ough the consent of all the parties in interest, or by a decree of the court, he may obtain a release, but without this he must discharge the duties which belong to the oiEce. In general, the duties of the office are a full, complete and faithful execution of the trust. It is an equitable and con- scientious carrying out of the intention of the settlor, as that is expressed in the instrument by which the trust is created. It involves the reducing of the estate into pos- session, the vigilant care of all trust property, including the collection and disbursement of trust funds, with the discharge of any obligations relating to the cestui que trust that may be imposed by the instrument, and the ultimate distribution of the estate and the determination of the trust. In the discharge of these duties the conduct of the trustee must be conformed not only to the precepts of the law, but also to the principles of righteousness and justice. For any failure in the discharge of these duties he is to be tried, not simply by legal, or even by strictly equitable, principles and rules, but in foro conscieniice. A court of equity will require of him what his moral reason pronounces to be right and just.^ ^ Speaking of the general char- errors of judgment; and you will acter and duties of the trustee a be liable to refund money paid, on writer in 21 Solicitor's Journal and the best legal advice you can ob- Keporter, 872, says: "Readiness to tain, to persons who turn out not become a trustee is usually pro- to be entitled to it.' There can portioned to ignorance of the duties be little doubt that the proposal of a trustee. If one business man would be declined. But people are were to say to another, 'I wish you led blindfold into the position of to take the nominal ownership of trustee, and find out too late that my property, and in return for that they have been placed in a region honor you will have to manage it of legal pitfalls, where few steps gratuitously, yet in some respects can be taken without risk. Lord with more care and foresight than Harvvioke stated the nature of the you bestow on your own concerns ; trustee's liability very inadequately you will become personally re- when he said that 'a trust is an sponsible for losses resulting from office, necessary in the concerns § 4s|t. DUTIES AND OBLIGATIONS OF TEUSTEES. 1113 § 489. To Reduce the Trust Estate into Possession. — Having accepted the trust, in accordance with the conditions of the instrument, the first duty of the trustee is to assume control of the trust estate. He must address himself to the work of obtaining possession without unnecessarj^ delaj', and with due diligence. In a recent case, where the trustee of a voluntary settlement had accepted the trust, it was held that he was under the same oblis;ation to execute it as between man and man, and which, if legally discharged, is attended with no slight degree of trouble and anxiety.' He thought it im- politic to add to this trouble and anxiety and risk of unavoidable loss, because that would tend to diminish the supply of responsible trustees, but his successors have not been deterred by this consider- ation from visiting on the trustee losses which he can neither foresee nor provide against.'' In Hun v. Cary, 82 X. Y, 65, 72, it was said by Earl, J. : "It seems to me it would be a monstrous proposition to hold that trustees intrusted with the management of the property, in- terests and business of other peo- ple, who divest themselves of the management and confide in them, are bound to give only slight care to the duties of their trust, and are liable only in case of gross inatten- tion and negligence; and I have found no authority fully upholding such a proposition, It is true that authorities are found which hold that trustees are liable only for crassa negligentia, which literally means gross negligence; but that phrase has been defined to mean the absence of ordinary care and diligence adequate to the particu- lar case." In Crabb v. Young, 92 iSr. Y. 56, 66, it is said : "Trusts of property are generally created for the benefit and support of the young, helpless and inexperienced, and depend for their proper ad- ministration upon the honesty and capacity of those to whom they are confided. From the fact that those who are most interested are usually incapable of properly guarding their own interests, and must nec- essarily depend so much on the good faith of others, the court will guard their rights with jealous care and scrutinize closely the con- duct of trustees with the view of holding them to a high degree of responsibility in the management and control of trust estates." "Some cases are referred to in which trustees have been held not to be liable for losses sustained dur- ing their dealings with trust funds, and it has been said, perhaps truly, that of late the courts have been less severe than they were in former times in fixing trustees per- sonally with such losses ; but there is one clear, homely, intelligible but infiexible rule which has never been departed from in times ancient or modern, viz., that a trustee is bound to act in the execution of' his trust as a prudent man would in dealing with his own property." Smethurst v. Hastings, L. K. 30 Ch. 1). 490, 498. See also Godfrey V. Faulkner, L. R. 23 Ch. D. 483; Woodruff V. Snedecor, 68 Ala. 442; In re Cornell, 110 N. Y. 351, 357; King V. Talbot, 40 X. Y. 76, 85. 1114 DUTIES AND OBLIGATIONS OF TRUSTEES. [§ 489. a trustee under a will, a guardian of a lunatic or infant, or an assignee in insolvency or bankruptcy. He must execute it actively and must not wait upon the motions of the cestuis que trust to incite and prompt his action. Such a trustee must use the same diligence in seeking for and reducing to possession the trust property, and the same care in preserv- ing it, that an ordinarily diligent and careful man would exercise and take in respect to his own property. ^ With reference to this rule the Vice Chancellor, in his opinion, said: "It would be highly dangerous to adopt any other rule, or to abate its rigor in the least. "^ From the time at which the trustee accepts the trust and becomes responsible for the management and care of the property, he will not be heard to say in his own defense that the property was not in his possession. If he had not reduced it to possession at a time when he had the power to do so, he had neglected a plain duty, and for this neglect the court will hold him responsible.^ As a trusteehe holds thelegal title, and hisi-ight, as such, may ^ Hpeakraan v. Tatem, 48 X. J. Eq. 136. See also Taylor v. Mill- ington, 4Jur. (N. S.) 204; Youde V. Cloud, L. R. 18 Eq. 634; Ex parte Ogle, L. R. 8 Ch. App. 711, 716; Butler V. Carter, L. R. 5 Eq. 27G; Exparte Graves, 2 Jur. (N. S.) 651; Young V. Miles, 10 B. Mon. 290; Mayfleld v. Kilgour, 31 Md. 241 ; Wickham v. Berry, 55 Pa. St. 70; Hairs Appeal, 133 Pa. St. 351; Campbell v. Preston, 22 Gratt. 396; Matthews v. MoPherson, 65 X. Car. 189; Mosely v. Marshall, 22 N. Y. 200; Reece v. Allen, 10 111. 236; s. C, 48 Am. Dec. 336; Kirkland v. Cox, 94 111. 400; Kirk- patriok v. Clark, 132 111. 342; s. C, 22 Am. St. Rep. 531 ; Essex County V. Durrant, 14 Gray, 447 ; Guphill v. Isbell, 1 Bailey, 230; s. c, 19 Am. Dec. 675; Sedgwick & Wait on Trial of Title to Land, § 222. Where the trust deed provided that '■■upon default of payment of the debt secured, the trustee shall im- mediately take possession, and, having given notice, sell the land conveyed," this language it was held intended to give the trustees the right of possession, but did not make sucb taking possession a con- dition precedent to the power of sale. Tyler v. Herring, 67 Miss. 169; s. C, 19 Am. St. Rep. 263. See also Vaughn v. Powell, 65 Miss. 402. 2 Speaktnan v. Tatem, 48 X. J. Eq. 136, 149. s Young V. Miles, 10 B. Mon. 290. But where from the nature of the trust, the ownership of the cestui que trust is not immediate and ab- solute, and it would defeat, or put in his power to defeat or endanger, a legitimate ulterior limitation of the trust, he is not entitled to call for the legal estate. Battle v. Pet- way, 5 Ired. 576; s. C, 44 Am. Dec. 59. § 489. j DUTIES AND OBLIGATIONS OF TRUSTEES. 1115 be enforced, if necessary, in a court of law. If the party in possession refuses to deliver it to him on his demand, he may bring a suit for the possession of the property, and an action in ejectment will be sustained, even against the cestui que trusts And having obtained possession of the estate, he is not at liberty to permit it to pass out of his possession or to ]olace it beyond his direct and immediate control, and if he does this he will be held personally responsible.^ In a recent case in England it was held that it is the duty of trustees to press for the payment of the trust funds to them, and if they are not paid within a reasonable time, to enforce payment by legal proceedings, and it is especially their duty to take action promptly if, by the terms of the trust, payment has been deferred to the expiration of a specified time. The only excuse for not taking action to enforce payment is a well founded belief on the part of the trustees that such action would be fruitless, and the burden of proving the grounds of such belief is on the trustees.^ 1 Sedgwick & Wait on Trial of Title to Land, § 222. See Beach v. Beach, 14 Vt. 28; s. C, 39 Am. Dec. 204; Koe v. Keade, 8 T. R. 118; Eeece v. Allen, 10 111. 236; S. C, 48 Am. Dec. 336; Cearnes v. Irving, 31 Vt. GOG. 2 Salway v. Salway, 2 Kuss. &M. 218; White v. Baiigh, 2 Riiss. &M. 215; s. C, 9 Bligh, 181; 3 CI. & F. 44; Matthews V. Brice, 6 Beav. 239; Cloiigh v. Bond, 3 Myl. & Cr. 496; Kinloch v. I'On, 1 Hill Erj. 190; s. c.,26Am. Dec. 196; Har- rison v. Mock, 10 Ala. 185; Ingle V. Partridge, 32 Beav. 661 ; Row- land V. Witherden, 3 Macn.,& G. 568; Ghost v. Waller, 9 Beav. 497; Stoker v. Yerby, 11 Ala. 322. Al- though the terms of the trust may seem to contain an unqualified di- rection to the trustee to pay over the money to the cestui que trust, yet the trustee is to exercise dis- cretion on that subject, and he is not to place money, or whatever he may furnish, directly in the hands of a beneficiary, who is incapable of using it for himself. Mason v. Jones, 2 Barb. 229. A trustee holding an insurance policy as security for a debt, is bound to hold the money received on the policy until the debt is due. Fer- gus v. Wilmarth,17 111. App. 98. See also Vose v. Trustees, etc., 2 Woods (U. S.), 647. 3 In re Brogden, L. R. 38 Ch. D. 546. "If there is reasonable ground for considering that the legal steps to be taken to collect assets by the executor would have been ineffect- ual, then the failure of the execu- tor, acting in good faith, to take them does not render him liable as for a devastavit. * * * Active vigilance is a relative term, and what it is depends upon the facts appearing in each case. As to where the omis lies in making 1116 DUTIES AND OBLIGATIONS OF TRUSTEES. [§ 490. § 490. To Assume the Control of Personalty. — Where the trust estate consists in part of personal property, as stocks, bonds, notes, policies of insurance, or other choses in action, it is the duty of the trustee to proceed at once to reckice them to possession. And where there is sxny delay, notice should at once be given to the obligors, or makers of such instruments, of the legal right of the trustee in them. Any failure to discharge this duty may result in litigation and costs for which the trustee will be held personally re- sponsible. This doctrine is well established in England, and to some extent it has been adopted in this country. ^ In proof of the facts, there can be but littie qviestion. A debt being proved, the presumption is that it is collectible, as solvency, and not the contrary, is to be presumed. But where the onus being shifted to the executor, is met by proof on his part of the absolute, irretrieva- ble and hopeless insolvency of the debtor, does any rule of active vig- ilance demand the institution of legal proceedings by the executor against such insolvent debtor? Does active diligence require the commencement of an action to ob- tain possession of property which the executor claims belongs to the estate, although at the same time he does not kno\y how he can prove that the property does belong to it, and he is also advised by his counsel, in good faith, that he cannot make such proof and he really believes it? All these facts being in, the question arising for determination is whether the con- duct of the executor has been guided by good faith, reasonable judgment and an intention to fairly and fully discharge his duty. If so, it cannot be that he should still be held liable for devastavit. No duty of active vigilance would make it necessary to sue an abso- lute and hopeless insolvent, nor to commence an action when he was entirely ignorant as to where to find the proofs to maintain it." Peckham, J., in O'Connor v. Gif- ford, 117 N. Y. 275, 278, 279. See also Schultz V. Pulver, 11 Wend. 363, 366; Clack v. Holland, 19 Beav. 262, 271; Stiles v. Guy, 16 Sim. 230; Harrington v. Keteltas, 92 N". Y. 40; Tudball v. Medlioott, 59 L. T. (N. S.) 370; s. c, 36 W. E. 886. 'Jacob V. Lucas, 1 Beav. 436; Thompson V. Spiers, 13 Sim. 469; Waldron v. Sloper, 1 Drew. 193; Ex parte Boulton, 1 De G. & J. 163; Pierce v. Brady, 23 Beav. 64; Martin v. Sedgwick, 9 Beav. 333; Evans v. Bicknell, 6 Ves. 174; Dunster v. Glengall, 3 Ir. Eq. 47; Forsterv.Cockerell,9Bligh(X.S.), 332; s. c, 3 CI. & Fin. 456; Fel- tham V. Clark, 1 De G. & Sm. 307; In re Atkinson, 2 De G., M. & G. 140; Mangles v. Dixon, 18 Eng. L. & Eq. 82; Wright v. Dorchester, 3 Euss. 49, n.; Timson v. Eams- bottom, 2 Keen, 35; Forster v. Blackstone, 1 Myl. & K. 297 ; Eoofer V. Harrison, 2 Kay & J. 86 ; Lover- edge V. Cooper, 3 Euss. 30; Dearie V. Hall, 3 Buss. 1; Meux v. Bell, 1 Hare, 73; Stocks v. Dobson, 4 De § 490. J DUTIES AND OBLIGATIONS OF TRUSTEES. 1117 Massachusetts it has been held that "it is not necessary that this notice should be given immediately upon the as- signment's taking place, for between the assignor and the assignee the contract is complete, without any notice to the debtor. But if the debtor should pay over his debt to the assignor, to any subsequent assignee, or to any creditor, who has obtained judgment against him as trustee, before such notice is given, he will be protected against a second payment to the assignee. But this notice, in order to be effectual against the claim of a creditor of the assignor, who has summoned the debtor as trustee, must, when given, be full and accompanied with the evidence of the transfer; or, at least, this evidence must be in the debtor's possession, when he answers interrogatories, in order that the court may judge M'hether the assignment is legal and valid, or not."^ In New York it has been held that the assignee of a bond and mortgage must give notice of the G.. M. & G. 11; Voyle v. Hughes, 2 Sm. & Gif. 18; Ryall v. Rowles, 1 Ves. 348; s. C, 1 Atk. 165; Dow V. Dawson, 1 Ves. 331 ; Jones v. Gibbons, 9 Ves. 410; Lloyd v. Banks, L. K. 4 Eq. 222 ; s. C, L. R. 8 Ch. 488; In re Brown's Trusts, L. R. 5 Eq. 88; Bridge v. Beadon, L. R. 3 Eq. 664; Scott V.Hastings, 4 Kay& J. 633; Barr's Trust?, 4 Kay & J. .219; Clack v. Holland, 19 Beav. 262; Beavan v. Oxford, 6 De G., M. & G. 176; Brashear v. West, 7 Pet. 608; Stewart v. Kirkland, 19 Ala. 162; Cainmings v. Fullam, 13 Vt. 134; Northampton Bank v. Balliet, 8 Watts & S. 311; Beau v. Simpson, 4 Shep. 49; Phillips v. Bank ol Lewiston, 17 Pa. St. 394; Laughlin v. Fairbanks, 8 Mo. 367; Campbell v. Day, 16 Vt. 356; Barney v. Douglas, 19 Vt. 98; Ward V. Morrison, 25 Vt. 593; Loomis v. Loomis, 2 Vt. 201; Adams v. Leavens, 20 Conn. 73; Van Buskirk v. Ins. Co., 14 Conn. 145; Foster v. Mis, 20 Conn. 395 Bishop V. Halcomb, 10 Conn. 444 Woodbrldge v. Perkins, 3 Day, 364 Judah V. Judd, 5 Day, 534; Mur- dock V. Finney, 21 Mo. 138; Clad- fleld V. Cox, 1 Sneed, 330; Fisher V. Knox, 13 Pa. St. 622; Jiidson v. Corcoran, 17 How. 614; Fortescue V. Barnett, 3 Myl. & K. 36; Knye V. Moore, 1 S. & S. 65. The la\\- is now well settled that until posses- sion of the trust subject is taken by the trustee, or by proper judicial authority, the grantor is entitled to the profits. When possession is thus taken, the trustee becomes en- titled to the profits, but only to such as thereafter accrue. Frayser V. R. & A. R. R. Co., 81 Va. 388. See also Trout v. R. R. Co., 33 Graft. 645. ' Perkins v. Parker, 1 Mass. 117; Foster v. Sinkler, 4 Mass. 450; Dix V. Cobb, 4 Mass. 508; Corn- stock V. Farnham, 2 Mass. 96; Jones V. Witter, 13 Mass. 304. 1118 DUTIES AND OBLIGATIONS OF TRUSTEES. [§ 491. assignment to the mortgagor, if he wishes to protect him- self against a bona fide payment by the latter, to the as- signor, or his authorized agent. ^ § 491. Duty to Obey the Directions of the Instrument. — The general rule relating to this subject is that, in every express trust, the directions and provisions of the instru- ment, by which the trust is created, must be fully and strictly obeyed. The instrument, whether a will or a deed, is the basis of the power and authority of the trustee in the execution of the trust, and, subject to the rules of equity, it determines his duties and responsibilities. But in all forms of implied trusts, in which the trustee becomes such by op- eration of law, the legal and equitable rules under which the fiduciary relation is established, are the guide to his conduct in the administration of the trust. In this regard these principles take the place of the instrument in the ex- press trust. ^ It has been well observed that this is the ' Reed v. Marble, 11 Paige, 409. "Even the recording of an assign- ment of u. mortgage is only con- structive notice to subsequent pur- chasers or assignees of, or from the mortgagee, or the original assignor. But by the express provisions of the revised statutes, the recording of the assignment is not of itself to he deemed notice of such assign- ment, to the mortgagor or his heirs or personal representatives, so as to invalidate any payments made by them, or either of them, to the mortgagee." Ibid. 413. 2 Underbill on Trusts and Trus- tees, 252. For examples of the rule stated in the text, see the fol- lovi-lng cases : Mortlock v. BuUer, 10 Ves. 292, 308; Ord v. Noel, 5 Madd. 438 ; Wilkins v. Fry, 1 Meriv. 244; Penny V. Cook, 19 Iowa, 538; Adiiir V. Brimmer, 74 N. Y. 539; Boulton v. Beard, 3 De G., M. & G. 608; Lord v. Wightwick, 4 T)e G., M. & G. 803; In re Woodburn's Will, 1 De 6. & J. 333; Brunskill V. Caird, L. R. lGEq.493; Carlyon v. Truscott, L. R. 20 Eq. 348; Thompson v. Hudson, L. K. 2 Ch. 255; Talbott v. Marshfield, L. R. 3 Ch. 622 ; Dance v. Goldingham, L. E. 8 Ch. 309; O'Halloran v. Fitz- gerald, 71 III . 53 ; Roberts v. Mosely, 64 Mo. 507; Hill v. Den, 54 Cal. 6; lies V. Martin, 69 Ind. 114; Bow- man V. Pinkham, 71 Me. 295; In re Lewis, 81 N. Y. 421 ; James v. Cow- ing, 82 N. Y. 449; Sharp v. Good- win, 51 Cal. 219; Kekewichv. Mar- ker, 3 Macn. & G. 310; Barnettv. Sheffield, 1 De G., M. & G. 371; In re Peyton's Trust, L. R. 7 Eq. 463; In re Chawner's Will, L. K. 8 Eq. 569; Messeena v. Carr, L. R. 9 Eq. 260; In re Lord Hotham's Trusts, L. R. 12 Eq. 76 ; In re Shaw's Trusts, L. E. 12 Eq. 124; Arm- strong V. Armstrong, L. R. IS Eq. 541 ; Hayward v. Pile, L, R. 5 Ch. 214; Astley v. Earl of Essex, L. E. 6 Ch. 898; Hayes v. Oatley, L. R. § 492. j DUTIES AND OBLIGATIONS OF TRUSTEES. 1119 most important of all the rules relating to the duties of the trustee. It constitutes the primary and basal obligation which attaches to the office. The spirit of obedience to this rule, and a fixed determination to execute the trust in accordance with its requirements, is the cardinal virtue of the trustee. But like many other rules, it is subject to certain modifications. Where all the parties in interest are sid Jiiris, they may relieve the trustee, either wholly or in part, from this obligation. They are competent either to terminate or to amend the trust. The rule is subject to the power of the court in its relation to beneficiaries who are not sui Juris, and where the operation of the rule would be plainly injurious to the beneficiaries the court will afford relief. And where the requirements of the instrument are either illegal or impracticable, the trustee is absolved from his obligation to obey them.^ § 492. Duty to Act in Good Faith — This duty is of the essence of the fiduciary obligation. The work of the 14 Eq. 1 ; Goddard v. Brown, 12 K. I. 31; Aldrich v. Aldrich, 12 K. I. 141 ; Phelps v. Harris, 51 Miss. 789 ; Eammelsberg v. Mitchell, 29 Ohio St. 22; Vallette v. Bennett, 69 III. 632. As to the power of the court to control the discretion of the trus- tee generally, see la re Beloved Wilkes' Charity, 3 Macn. & G. 440; Brophy v. Bellamy, L. R. 8 Ch. 798 ; In re Hodges, L. E. 7 Ch. D. 754; Tabor V. Brooks, L. B. 10 Ch. D. . 273; Thomas v. Bering, 1 Keen, 729 ; In re Coe's Trusts, 4 Kay & J. 199; Walker v. Walker, 5 Madd. 424; Cowley V. Hartstonage, IDow. 361; Potter v. Chapman, Amb. 98; Attorney-General v. Mosely, 2 De G.&Sm.398; Prendergast v. Pren- dergast, 3 H. L. Cas. 195; Starr v. Moulton, 97 111. 525; Aldrich v. Aldrich, 12 K. I. 141; Arnold v. Gilbert, 3 Sandf . Ch. 531 ; Pulpress V. Afi'ican Church, 48 Pa. St. 204; Cochran v. Paris, 11 Gratt. 348. If trusteap are, by the settlement, di- rected to call in trust moneys, and to lay them out on a purchase, and they fail to do so, and the fund is lost, they are liable for the loss so sustained. Craven v. Craddock, W. N. (1868) p. 229. 1 Underbill on Trusts and Trus- tees, 254. It is a breach of trust to apply property conveyed in trust, to support the preaching of a par- ticular religious doctrine, to the support of the preaching of any other doctrine, though the differ- ence between such doctrines is very slight. Combev. Brazier, 2 Desaus. Eq. 431. See Feizel v. First Ger- man Soc, 9 Kan. 593. A guardian or executor lending trust money in violation of the requirements of the statute, does so at his own risk, and must make it good in case of loss. Wadsworth v. Connell, 104 111. 369. 1120 DUTIES AND OBLIGATIONS OF TRUSTEES. [§ 492. trustee is a service for the benefit of the ceshii que trust. In accepting the trust he engages to perform this service, and the supreme obligation arising out of the fiduciary' re- lation is that of ]:)romoting the interests of the beneficiary. It is chiefly for the discharge of this obligation that he is held responsible in equity. Hence, where there is evidence of absolutely good faith, — where it is plain that a trustee has been animated by a conscientious regard for right,— he will be sustained by the court wherever it can be done with- out a violation of equitable rules. ^ And where he has made a mistake, and his course has been in a degree illegal, he will be treated in equity with great indulgence. Where there is no evidence of carelessness, or neglect of duty, the trustee will not be held responsible for loss of trust funds. ^ 1 Putnam v. Kitchie, 6 Paige, 391. 2 Chase V. Lockerman, 11 Gill & J. 185; S. C, 35 Am. Dec. 277; Bryant v. Kussell, 23 Pick. 540; Perrine v. Freeland, 33 N. J. Eq. 102 ; s. C, 33 N. J. Eq. 596 ; Cromle V. Bull, 81 Ky. 646; Mattocks v. Moulton, 84 Me. 545; Stewart v. Kissam, 11 Barb. 271 ; Crabb v. Young, 92 N. Y. 56; Denton v. Sanford, 103 N. Y. 607; Thompson V. Brown, 4 Johns. Ch. 619; Hart V. Ten Eyck, 2 Johns. Ch. 76; Eead v. Patterson, 44 N". J. Eq. 211; s. C, eOAm. St. Kep.877. A trustee who had a large number of houses belonging to the trust es- tate, in good faith and in pursuance of a definite policy, demanded such high rents that many of the houses remained emjpty. It was held that he was not to be charged with what he might have received had he let the houses on the best terms ob- tainable. Pleasanton's Appeal, 99 Pa. St. 362. Where a trustee has, in good faith and at a fair price, taken land from a debtor to an es- tate, in satisfaction of a debt which cannot be collected in money, such land becomes trust property, and the trustee cannot sell it without an order of the court. For this reason if he, a few days after the transfer, has refused an offer made to him by a third person to take the land off his hands at the same price, this refusal will not operate to charge him with any subsequent depreciation in its value. Foscue v. Lyon, 55 Ala. 440. Where a debt intended to be secured .by a trust deed, is not correctly described in the deed, though the creditor may, by identifying it, recover it out of the trust fund, while that remains; yet if the trustee has in good faith paid out the trust fund to discharge other debts, without any notice of the mistake by the creditor to the trustee, the creditor cannot make the trustee personally responsible. Almond v. Russell, 5 Ired. Eq. 183. See also King v. Wise, 43 C.al. 628; Dorsett v. Frith, 25 Cal. 537; Kim- ball V. Keding, 31 N. H. 352; s. C, 64 Am. Dec. 333; Bound v. South Carolina K. E. Co., 50 Fed. Eep. 853; Juzau v. Toulmin, 9 Ala. 662; s. C, 44 Am. Dec. 448; Ellig v. Nagle, 9 Cal. 683; Coltou v. Stan- ford, 82 Cal. 3.-il ; s. C, 16 Am. St. § 493.] DUTIES AND OBLIGATIONS OF TRUSTEES. 1121 But trustees are held in equity to great strictness in their dealings with trust property, and where there is evidence of a lack of good faith, this, of itself, will be held to create a presumption of wrong doing. ^ Where the conduct of a trustee is shown to be fraudulent, either in itself or in its tendency, it is held to be a personal act, and where the con- sequences of such act are detrimental to the trust estate, he will be held personally responsible.^ § 493. The Duty o£ Joint Action. — Where an estate is vested in two or more trustees it is their duty to act as a body. Where there are only two the act of one is void, and the same rule applies to the act of a majority where there are more than two co-trustees. In the creating of the trust there is a confidence reposed in all the members of the body of trustees, and the estate is conveyed equally to all. The title vests in the trustees, not as individuals, but as a body. Hence, it becomes the duty of each and all of the trustees to unite in the execution of the trust. The beneficiaries are entitled to the united judgment and discre- tion, and to the united action of all the members of the body.'* For the reason above given trustees cannot delegate Eep. 137; Fraser v. Davie, 11 S. quent application of the proceeds Car. 56; First Nat. Fire Ins. Co. v. to the debts, the trustees would be Salisbui-y, 130 Mass. 310; Fairman answerable for the difference be- V. Bavin, 29 111. 75 ; Diffenderfer v. tween the full value at the time. Winder, 3 Gill & J. 311. and the price brought, with interest. 1 Snyder v. McComb, 39 Fed. Cleghorn v. Love, 24 Ga. 590. The Kep. 292. rule that the burden of proving the 2 Findley v. Wilson, 3 Litt. 390 ; perfect good faith of any transao- Waldrop v. Leaman, 30 S. Car. 428 ; tion between the trustee and the MoCook v. Harp, 81 Ga. 229; Dee- beneficiary is upon the trustee, gan V. Capner, 44 N. J. Eq. 339; applies to a. mortgage by a legatee Wayman V. Jones, 4 Md. Ch. 500; and her husband of her residuary Thayer V. Swift, Harr. (Mich. )430; legacy, given to an executor to JTichol's Appeal, 157 Mass. 20; secure a debt of the husband to the Jones V. Knauss, 31 N. J. Eq. 609; executor; also to a subsequent deed s. c, 32 K. J. Eq. 323. Trustees of trust from the life annuitant to to sell and pay debts, when they secure the same debt. Pairo v. sell within a reasonable time and Vickery, 37 Md. 467. See also apply the proceeds to pay the debts, Snyder v. McComb, 39 Fed. Rep. execute their trust; but in case of 292. a fraudulent sale and the subse- s -vfiUjui. y. Almy, 12 How. 189; 71 1122 DUTIES AND OBLIGATIONS OF TEUSTEES. [§ 493. their discretionary powers to agents, or to one of their own number, and they cannot divide their responsibility by dis- tributing their duties among themselves, and thus dividing Patterson v. Leavitt, 4 Conn. 50; s. c.,10Am.Dec.98; Sloov. Law, 3 Blatchf. 459; Smith v. Wildman, 37 Conn. 384; Ex parte Griffin, 2 Gill& J. 116; Cox v. Walker, 26 Me. 504; Heard v. March, 12 Cush. 580 ; Lipse v. Spear, 4 Hughes (U. S.), 535; Low v. Perkins, 10 Vt. 532; s. c, 33 Am. Dec. 217; Blin V. Hay, 2 Tyler (Vt.), 304; s. c, 4 Am. Dec. 738; Vandever's Ap- peal, 8 Watts &S. 405; s.c.,42 Am. Dec. 305; Wilder v. Ranney, 95 N. Y. 7; Sinclair v. Jackson, 8 Cow. 543; De Peyster v. Ferrers, 11 Paige, 13 ; Sherwood v. Reade, 7 Hill, 431; Shook v. Shook, 19 Barb. 653; Green v. Miller, 6 Johns. 39; s. C, 5 Am. Dec. 184; King V. Stow, 6 Johns. Ch. 323; Crane v. Hearn, 26 N. J. Eq. 378; Hill V. Josselyn, 13 Sm. & M. 597; White V. Watkins, 23 Mo. 423; Shaw V. Canfield, 86 Mich. 1; Austin V. Shaw, 10 Allen, 552; Town V. Jaquith, 6 Mass. 46; Ames V. Armstrong, 106 Mass. 15; Town- send v. Wilson, 1 B. & Aid. 608; Xailor v. Goodall, L. J. 47 C'h. 53; Lee V. Sankey, L. R. 15 Eq. 204; Fellows v. Mitchell, 1 P. Wms. 83; Churchill v. Hobson, 2 Vern. 241 ; Leigh v. Barry, 3 Atk. 584; Belchier v. Parsons, Ambl. 219; Chambers V. Minchin, 7 Ves. 198; Down v. Worrall, 1 Myl. & K. 561; Cole V. Wade, 16 Ves. 44; Right V. Cuthell, 5 East, 491; Ex parte Rigby, 19 Ves. 463. A lease given by a part of the trustees can give the lessee no better right to disposition than the residue of the trustees have, though they are in the minority. Cox v. Walker, 26 Me. 504. A majority cannot, by the adoption of any rule or resolu- tion, exclude one of their number, and so divest him of his rights as to make his subsequent act of ob- taining possession of the trust fund a tort. Church v. Stewart, 27 Barb. 553. All of several trustees must join both in receipts and convey- ances ; their power over the trust estate being equal and undivided, they cannot act separately. La- trobe v. Tiernan, 2 Md. Ch. 474; Ridgeley v. Johnson, 11 Barb. 527. One trustee is not exempted from liability by the fact that the duties of the trustees have been exclu- sively performed by his co-trustees with his concurrence and consent. He is accountable for the manage- ment of the co-trustees, to whom he has thought proper to delegate his power, to the same extent as if they had been executed by him- self. Maccubbin v. Cromwell, 7 Gill & J. 157. Generally as to the liability of trustee for act of co- trustee to whom he has suffered the trust funds to pass, see Joy V. Campbell, 1 Sch. & Lef. 341; Robard v. Cooke, 36 L. T. 504; s. c, 25W. R. 555; Williams v. Kfixon, • 2 Beav. 472 ; Langford v. Gascoyne, 11 Ves. 333; Breen v. Gillett, 115 N. T. 10; s. c, 12 Am. St. Rep. 764; Royall v. Mackenzie, 25 Ala. 363.; Fox v. Tay, 89 Cal. 339; s. C, 23 Am. St. Rep. 474; Porter v. Moores, 4 Heisk. 25; Hughlett V. Hughlett, 5 Humph. 474. The rule that where trustees unite in the execution of a power of sale and one receives the money all will be liable, does not govern where the one receiving was al- lowed to hold the money for twenty § 4:1)3.] DUTIES AND OBLIGATIONS OF TRUSTEES. 1123 the responsibilities which appertain to them as a body.^ It sometimes occurs that one of the number performs, in the main, the active duties of the trust, and is referred to as "the acting trustee." If this implies that he acts on his own responsibility, and is simply indorsed by his co-trustees, it is a method of procedure that will not be sustained in equity.^ It is only as the act is the united act of all the trustees that it is binding on the trust estate.^ Where one of a number of trustees, having accepted the trust, refuses to join in the execution of the trust, or to participate in a particular act, the remainder of the board cannot act with- out him, but they must make application to the court for an order that shall enable them to act.* By an express pro- vision of the instrument creating the trust, or by a decree of tlie court where the trust has been brought before it, a majority of the board of trustees, or even one or more of their number, may be empowered to act for the entire number.^ years with the consent of the cestoi, who was sui juris, and the other trustee received no benefit. Laurel Co. Ct. V. Trustees, etc., 93 Ky. 379; s. c, 20 S. W. Rep. 258. 'Crewe v. Diclcen, 4 Ves. 97; Sadler v. Hobbs, 2 Bro. Ch. 114; Chapin v. First Univ. Soc, 8 Gray, 583; Holcomb v. Holcomb, 11 N". J. Eq. 281; Sinclair v. Jaclcson, 8 Cow. 544; State v. Guilford, 15 Ohio, 593; Graham v. Davidson, 2 Dev. & Bat. Eq. 165; McMurray v. Montgomery, 2 Swan, 324. Where trustees divide the amount of the trusffund between them, they are both responsible for the whole amount and not each for the amount received by him only. Thomas v. Scruggs, 10 Yerg, 400. See also Graham v. Austin, 2 Gratt. 273; Monoll v. Monell, 5 Johns. Ch. 283; s. c, 9 Am. Dec. 298; Johnson v. Johnson, 2 Hill Eq. 277; s. c, 29 Am. Dec. 84; McKira V. Aulbach, 130 Mass. 484; s. c, 39 Am. Dec. 473; Deaderick v. Cantrell, 10 Yefg. 263; s. c, 31 Am. Deo. 578. 2 Munch V. Cockerell, 5 Myl. & Ct. 179. 3 Luke V. South Kensington Hotel Co., L. R. 11 Ch. D. 121; Exparte Griffen, 2 Gill & J. 116. ^ Smith V. Wildman, 37 Conn. 384; Ridgely v. Johnson, 11 Barb. 527; Guyton v. Shane, 7 Dana, 498. Ill re Van Wyck, 1 Barb. Ch. 565; ^z parje Belchier, Amb. 219; In re Cong. Ch. v. Smithwick, 1 W. N. 196; Scruggs v. Driver, 31 Ala. 274; In re Wadsworth, 2 Barb. Ch. 381; In re Mechanics' Bank, 2 Barb. Ch. 446; Burrill v. Shiel, 2 Barb. 457 ; Davis v. McNeil, 1 Ired- Eq. 344. 5 Attorney- General v. Cunning, 2 Y. & C. Ch. 139; Taylor v. Dick- inson, 15 Iowa, 483. 1124 DUTIES AND OBLIGATIONS OF TRUSTEES. [§ 494. § 494. The Duty of Joiut Action Continued. — It is well established in England that all the members of a board of trustees must join in a receipt for money, unless the in- strument authorizes one or more of them to act for the en- tire number. In that case a receipt and discharge from such trustee, or trustees, will, of course, be valid. The rule, as established in England, is clearly and forcibly stated by Mr. Justice Kay, in his opinion in Flower v. The Metro- politan Board, as follows: "The theory of every trust is that the trustees shall not allow the trust money's to get into the hands of any one of them, but that all shall exer- cise control over them. They must take care that they are in the hands of all, or invested in their names, or placed in a proper bank in their joint names. It is quite clear that if, by their acts, they enable one of themselves to receive the moneys, they are liable for the receipt of them just as much as if they all received them, because they enabled the one trustee to do that which, but for their special authority, he would not have been enabled to do. The reason why more than one trustee is appointed is that thej^ shall take care that the moneys are always under the power and con- trol of every one of them, and they have no right, as be- tween themselves and the cestuis que trust, unless the cir- cumstances are such as to make it imperatively necessary to do so, to authorize one of themselves to receive the money."' Where a board of trustees consists of a number of persons, and it is plain that it can be done with safety, the court will make an order that money may be paid to two or more of 1 Flower v. Metropolitan Board, With bank stocks, one trustee may L. K. 27 Ch. D. 592, 596. See also receive the dividends. Williams v. Hall V. Pranok, 11 Beav. 519; Nixon, 2 Beav. 472. So also with Walker v. Symonds, 3 Swanst. 63. rents. Townley v. Sherborne, In bankruptcy all the trustees must Bridg. 35; Gouldsworth v. Knight, join in proving a debt against a 11 Mees. & W. 337; Husband v. bankrupt, though under special Davis, 1 C. B. C45; Webb v. Led- circumstances the court may order sam, 1 Kay & J. 385; Mendes v. the proof to be made by one or G-uedalla, 2 Johns. & H. 259. All, more, even when payment must be however, must join in conveyances made to all the trustees. Ex parte of this class of property. Morville Smith, 1 Dea. 191; S. C, M. & A. v. Fowle, 144 Mass. 109, 113; Ham 506; Ex parte Phillips, 2 Dea. 334. v. Ham, 58 jST. II. 70. § 494. J DUTIES AND OBLIGATIONS OF TRUSTEES. 1125 the number. 1 In this country this rule has not in all cases been sustained. It has been held that the payment of a mortgage to one of two trustees is a valid payment.^ It has been held, also, that a case of urgent necessity may be an exception to the rule.^ In his opinion in this case, Mr. Justice Rogers said: "The validity of the contract is put on the ground of necessity and the benefit which the fund derived from the agreement. It is said that the act of the assignee, in this instance, was not so much in furtherance of the trust as to prevent its utter frustration by a sacrifice of the property. The exercise of such a power is inherent in each of the trustees from necessit}^ and, being for the advantage of the cestui que trust, the assent of the co- trustee would, if necessary, be presumed in order to sustain a procedure essential to the continued existence of the trust, at least in the absence of an express negative, on the ground that it is the duty of each of the trustees to do everything proper and necessary to the promotion of the interest of the cestui que trust, and equity, in the absence of proof to the contrary, will take it for granted he has so done."* 1 Attorney-General v. Brickdale, tion to the suggestion It must be 8 Beav. 223. shown that a court of equity would 2 Bowers v. Seeger, 8 Watts & S. compel the trustee to enter into 222. this contract. But as no court of - Vandever's Appeal, 8 Watts & equity would interfere in such a S. 405; s. c, 42 Am. Dec. 305. case, the application of this prin- ^ Vandever's Appeal, 8 Watts & ciple is not very obvious. It is S. 405, 409; s. C, 42 Am. Dec. 305. urged that if instead of a promise In the course of the opinion the to pay there had been a payment court qualifies the quotation in the of the rent by one of the assignees text in the following language: in avoidance of the distress, it "To say that the validity of the would scarcely be questioned, he contract depends on its being after- would be entitled to a credit for wards deemed advantageous to the the amount thus paid. Without trust would, in fact, abrogate the expressing any positive opinion on rule, and would lead to perplexing this point, I would barely observe inquiries and to questions which in that it seems to me to be stating many cases it would be difficult to the same question in a different settle. It is a rule in equity as is form and that it would be more said, that what is compellable by prudent at least to refrain from do- suit is equally valid if done by the ing so without the assent of the trustees without suit. And this is other trustees. It is strongly urged true, but to give force and applica- that the creditors have the benefit 1126 DUTIES AND OBLIGATIONS OF TRUSTEES. [§ 495. § 495. The Subject Continued The rule relating to the joint action of trustees applies with special force to that of co-executors. An executor is held to a stricter accounta- bility than an ordinary trustee for any act by which he re- duces any part of an estate, of which he holds the title, into the sole possession of a co-executor. The rule is stated by Sir John Romilly, M. R., in Candler v. Tillett, as fol- lows: "If an executor does any act which enables his co- executor to obtain sole possession of money belonging to the testator's estate, which, but for that act, he could not have obtained possession of, and this money is afterwards misapplied, the executor, who thus enables his co-executor to obtain possession of the money, is liable to make good the loss."^ One or more trustees may leave documents of of the consideration on which the promise of the trustee was based, and that it is ungracious in them now to dispute it. This argument addresses itself rather to the gen- erosity of the creditors than any legal right arising from the con- tract ; but the latter is the question now under consideration. Besides, it assumes a matter admitting of some doubt, and which the trustees must determinefor themselves,viz. : whether the contract may not have been a detriment rather than a ben- efit to the fund." Ibid. 410. In a, case where a deed was ex- ecuted by two of the three trustees, the burden of showing that the other trustee was dead was put upon the purchaser. See Ridgley V. Johnson, 11 Barb. 527; Learned V. Welton, 40 Cal. 339; Bumgarner V. Coggswell, 49 Mo. 259. Where there is a mortgage to trustees, and such trustees execute a satisfaction of the mortgage, the presumption arises from that fact, in the ab- sence of evidence to the contrary, that it was done in the proper dis- charge of their duties. Bendheim V. Morrow (1893), 73 Hun, 90; s. c, 25 N. Y. Supl. 900. 1 Candler v. Tillett, 22 Beav. 263. If one executor possess part of his testator's estate, and pays it over to another execatorwho embezzles it, the former, or in case of his death, his assets shall make it good. Townsendv. Barber, 1 Dick. 356. "Co-executors, even though numerous, are regarded in law as but one person. The acts of one, within the scope of his authority in the administration of the estate, are the acts of all, with this qual- ification, that at common law each was responsible only for such assets as came to his own hands. Under ordinary circumstances, one of two or more executors was not to be held accountable for waste or other misconduct on the part of an asso- ciate. The misplaced confidence of the testator in the integrity or ca- pacity of one of the number was not allowed to operate to the prejudice of another. But even according to the common law, whenever any part of the estate, by any act or agreement of one executor, passes § 495.] DUTIES AND OBLIGATIONS OF TRUSTEES. lll^T title in the hands of one of their co-trustees and allow him to receive the income. This will not invest the trustee holding such document with any authority to deal with the property. No such authority will be implied even in favor of a bona fide purchaser from such trustee. The contrary of this has been expressly held in a case where the title deeds of a mortgage to trustees were allowed to remain in the hands of one of the trustees, who also received the in- terest. In that case it was held that no agency to receive the principal could be implied from the permission to re- ceive the interest, and that no laches could be imputed to the trustees for suffering one of their number to hold the deeds. The ground for this rule is stated by Vice Chan- cellor Wood, in Cottam v. The Eastern Counties Railway Company, as follows: "The reason is that the deeds must be held by some one person, unless they are deposited with bankers, or placed in a box secured by a number of differ- ent locks, of which each trustee should hold one of the or is intrusted to the custody of a co-executor, they are thereby ren- dered jointly responsible. In such a case it would be inferred that there had been a joint possession or custody, and that one executor, having power and opportunity to make it secure, had yielded the control to the other." Ames, J., in Ames v. Armstrong, 106 Mass. 15. "As a general rule, co-trustees are responsible for their own acts. They may by agreement to that effect or by co-operation with or connivance in the act of another in violation of the trust, become them- selves in one sense responsible for the act of a co-trustee. In the dis- charge of their trust, they must join in giving receipts and dis- charges for money paid them ; but such joint receipts are open to ex- planation, and those only into whose actual possession and con- trol the ■ jney has come, will be , liable for its subsequent misappli- cation. It is said that this does not apply to executors whose concur- rence in acts relating to the estate is not necessary." Colt, J., in Stowe V. Bowen, 99 Mass. 1 94. See also Kipp V. Deniston, 4, Johns. 23; Leigh V. Barry, 3 Atk. 584 ; Sadler V. Hobbs, 2 Bro. Ch. 117; Hall v. Boyd, 6 Pa. St. 270 ; Stell's Appeal, 10 Pa. St. 149; Wilson's Appeal, 115 Pa. St. 95; Fesmire's Estate, 134 Pa. St. 676; S. C, 19 Am. St. Rep. 676; Worth v. McAden, 1 Dev. & Bat. Eq. 199; Ducommon's Appeal, 17 Pa. St. 268; Griffin v. Macaulay, 7 Gratt. 476; Fellows v. Mitchell, 1 P. Wms.81; Chambers V. Minchin, 7 Ves. 198; Brice v. Stokes, 11 Ves, 324; Shipbrooke v. Hinchinbrooke, 16 Ves. 479; In re Fryer, 3 Kay & .J. 317; Terrell v. Matthews, L. J. 11 Ch. (N". S.) 31; Adair V. Shaw, 1 Sch. & Lef. 272; Hovey v. Blakeraan, 4 Ves. 608. 1128 DUTIES AND OBLIGATIONS OF TRUSTEES. [§ 496. keys, and negligence cannot be imputed to trustees for not taking such precautions as these. "i But in a case where each of two trustees retained possession of a moiety of bonds, held in trust, and which passed by delivery, and one of the two committed a breach of trust, it was held that his co-trustee was liable to make good the loss sustained.^ § 496. Responsibility of Co-trustees in Regard to Checks. — The beneficiaries of a trust fund are entitled to the protection afforded by the rule in regard to the joint action of trustees. Where such fund is deposited in bank, subject to the order of two or more trustees, they cannot authorize the bank to honor a check signed by one only of their number. In effect such an act would place the trust fund at the disposal of one trustee, and that would be in direct contravention of the rule. In a case where two trus- 1 Oottam V. Eastern, etc. Ry. Co., IJ. & H. 243, 247. "It would be a very serious doctrine if thie fact that one of three trustees is allowed to have possession of the title deeds of the trust, should be held to create such an interest in him as to enable him to give a title to any other person with whom he may deposit the deeds. The contrary of this was expressly held by ^ir J. Leach in an unreported case, Goldney v. Bower, where title deeds of a mort- gage to trustees were allowed to remain in the hands of one of the trustees who also received the in- terest. There it was held that no agency to receive the principal could be implied from the per- mission to receive the interest, and that no laches could be imputed to the trustees for suffering one of their number to hold the deeds. Ibid. 247. 2 Lewis V. Nobbs, L. R. 8 Ch. D. 591. If a check be sent in the ordinary course to a co-trustee, who cashes it and steals the money. his co-trustees are not liable, if his credit was unimpeached at the time. Wackerbath v. Powell, Buck, 495; Ex parte Griffin, 2 Gl. & J. 114. Money should not be given to a co-executor without some proof of the purpose for which it is re- quired; for all will be liable for what is not used for such ascer- tained purpose. Shipbrooke v. Hinchinbrook, 11 Ves. 252 ; Under- wood V. Stevens, 1 Meriv. 714; Williams v. Nixon, 2 Beav. 472. In a, case where the solicitor was trusted by the testator and of good repute, trustees were held not to be liable for committing to him money for the purpose of settling debts. In re Bird, L. R. 16 Eq. 203 ; Kilbee V. Sneyd, 2 Moll. 199; Bacon v. Bacon, 5 Ves. 331 ; Churchill v. Hobson, 1 P. Wms. 241. Dividends and rents are receivable by one trustee. But his co-trustees will be liable in a case of a misappro- priation. Gough V. Smith, W. N. (1872; pp. 18, 66. § 496. J DUTIES AND OBLIGATIONS OF TKUSTEES. 1129 tees, having properly disposed of a trust fund and received a checlc for tlie proceeds, one of them handed the check to the other, who misapplied it. It was held that both the trustees were liable to the estate. ^ In his exposition of the equitable rule involved in this case, the Master of the Eolls said: "As to the principles applicable to this case there can be no question. This is one of those painful cases, which, unfortunately, this court has constantly to deal with, where trustees, innocent of any desire to benefit themselves, have failed to perform their duties, and the court is com- pelled to make them responsible. It is constantly argued by counsel, but the conclusion is as constantly rejected by the court, that a person who acts is not an active trustee, and is not liable, because he has only acted for conformity's sake. It is a contradiction in terms to say that a trustee who acts is not an active trustee ; by taking upon himself the office of trustee, and acting, he becomes in that trans- 1 Trutch vi Lamprell, 20 Beav. 116. On the death of an intestate, administration to her estate was granted to her sou and daughter. The daughter then being under coverture, the assets were, in May, 1831, paid into a banking house, to the joint account of her husband and her brother, the administrator; and the whole of the fund, with the exception of the share of one of the nest of km, who was abroad, was soon afterwards paid away among the several parties entitled, by means of checliS signed by the two persons in whose names the account stood. The husband of the administratrix died in Decem- ber, 1831, and, ten months after- wards, her brother and co-admin- istrator drew out the balance, and, having applied it to his own use, absconded; it was held, that the estate of the husband of the ad- ministratrix was answerable for the loss. Whether the administra- trix was not also personally liable, qucere. Clough v. Bond, 3 Myl. & Cr. 490. A testator died in March, 1823, and in January, 1S24, and January, 1825, the executors and trustees deposited part of the the assets in the hands of bankers on their notes carrying interest; the bankers failed in JTovember, 1825, and no necessity having been shown for such deposit, the trus- tees were held personally respon- sible liable for the loss. Darke v. Martyn, 1 Beav. 525. Where an ex- ecutor puts bonds and notes due to the testator, in the hands of an at- torney to collect, and after the death of the executor the attorney collected the money, and applied it to his own use and became in- solvent, it was held that the estate of the executor was not chargeable with the loss, especially after the lapse of more than six years. Eay- ner v. Pearsall, 3 Johns. Ch. 578. 1130 DUTIES AND OBLIGATIONS OP TRUSTEES. [§§ 497-8. action, at least, an active trustee, and is bound properly to perform all the duties appertaining to his office. "^ § 497. The Rule in its Application to Public Trusts. — In general, a majority of the trustees of a public trust are competent to act. Where there are more than two trustees, and there is no provision of the instrument requir- ing that the trust shall be executed only by the joint action of the entire body, the action of a majority is valid. In cases of this character the intention of the grantor deter- mines the rule. If the instrument of a public trust requires the joint action of all the members of a board of trustees, the act of any less number will not be legal or binding, but without such provision the general rule is operative. In private trusts the legal presumption is that the trust can be executed only by the joint action of all the trustees, and in public trusts the presumption is that a majority may act; but in either case the rule may be modified by the direc- tions of the instrument. 2 § 498. To Act in Accordance with the Instructions of the Court. — It is a well settled principle of equity that where property is vested in a trustee, and the trusttee is honestly in doubt in regard to the proper construction to 1 Trutch V. Lamprell, 20 Beav. 180; Attorney-General v. Shear- 116, 118. man, 2 Beav. 104; Ex parte Green- 2Sloo_v. Law, 3 Blatchf. 459; ville Academies, 7 Eich. Eq. 471; Chambers v. Perry, 17 Ala. 726; Baltimore Turnpike Case, 5 Binn. Beall V. State, 9 Ga. 367; Hill v. 481. As to a special power in the Josselin, 13 Sm. & M. 597; Com. v. case of sale of a meeting-house, see Canal Com'rs, 9 Watts, 470 ; Alle- In re The Congregational Church gheny County v. Lecky, 6 Serg. of Smethwick, 1 W. N. 196. As to &K. 166; s. c, 9 Am. Dec. 418; joint mortgages, see Stickney v. First I^at. Bank v. Mt. Tabor Tp., Sewell, 1 Myl.